Air France rejects French government's proposed ecotax

The French government has plans to introduce an "ecotax" on nearly all flights out of France, starting in 2020.

READ MORE: Air France cuts single-use plastics

An announcement was made yesterday afternoon (July 9) by French Transport Minister Elisabeth Borne. In a statement posted to Twitter, Borne writes that "Ecocontribution on the air transport: there will be no disadvantage for the French airlines, the modalities chosen aim not to penalize them."

The new tax would represent a cost varying from 1.5 to 18 euros (roughly $2.20 to $26.56 CAD) on tickets for all flights departing from France as from 2020.

#Écocontribution sur le transport aérien : il n’y aura aucun désavantage pour les compagnies aériennes françaises, les modalités retenues visent à ne pas les pénaliser.

➡️ Mon interview ce soir sur @Europe1  https://t.co/MfZCiN7TKR pic.twitter.com/RYyNoxumpf

— Elisabeth BORNE (@Elisabeth_Borne) July 9, 2019

However, not all airlines agree.

Air France is against the move put forth by the French government, citing that introducing such a tax would penalize its competitiveness.

Costs, and competition, will rise

According to Air France, France is one of the countries with the most heavily-taxed air transport industry in Europe. These taxes are in addition to the particularly high burden of employer payroll taxation on airlines, whereas Air France’s activity contributes 1.1 per cent of French national GDP, generates more than 350,000 jobs and Air France is the leading private sector employer in the Paris region.

The airline states that "this tax would represent an additional cost of more than 60 million euros per year for the Air France group, i.e. the equivalent of the measures adopted during the French Air Transport Conference, aimed at strengthening the French flagship carrier’s competitiveness."

Air France currently operates 50 per cent of its flights out of France, meaning millions of passengers would be forced to pay extra, too. The airline argues that last month, the government had ruled out taxation at national level due to the unfair competition that this would cause. They also point out that new air transport tax would reportedly finance competitive modes of transport including road transportation and not the energy transition in the air transport sector, which "could have been facilitated by supporting the implementation of sustainable biofuel industries or disruptive innovations."

IATA also disagrees with the decision, stating:

"This tax is misguided. Since 1990, airlines have reduced carbon emissions per passenger 50 per cent, and from 2020 will be paying to offset all the growth in emissions. A tax will not help the industry to invest in cleaner fuels and technology. It will also damage EUR 100 billion that aviation generates for the French economy, and 500,000 new jobs are at risk from the lack of competitiveness of French aviation. Eighty-one per cent of French people don’t trust their government to spend environmental taxes on environmental action. On their behalf, we will hold the French government to account to spend this tax on accelerating aviation sustainability, especially prioritizing more efficient air traffic control and promoting sustainable fuels."

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