French transport minister Elisabeth Borne has disclosed plans for an eco-tax on tickets for flights from the country.

The move comes amid an intensifying debate over whether aviation should continue to benefit from a decades-long exemption on tax on kerosene, given increased awareness of climate change. France is one of the countries pushing the European Union to look at changes to aviation taxation.

"We have decided, like other countries, to implement an eco-tax on flights from France," Borne said during a press conference broadcast online today.

The announcement has drawn criticism from national carrier Air France, which notes that it operates 50% of its flights from France.

"This new tax would significantly penalise Air France's competitiveness, at a time where the company needs to strengthen its investment capacity to more rapidly reduce its environmental footprint, notably as part of its fleet renewal policy," complains the carrier, which is part of the Air France-KLM group.

The tax will come into effect gradually and will involve a charge of €1.50 ($1.65) per ticket on domestic and intra-European flights in economy class, rising to €18 per ticket for business-class flights outside of the EU, says Borne.

Those figures are lower than aviation taxes in other European countries. In the UK, the standard rate air passenger duty starts at £26 ($32) and rises to £172 per ticket for long-haul. In Germany, an aviation tax of €7.38 is added to short-haul tickets, €23.05 for medium-haul flights and €41.49 for long-haul, which brings in over €1 billion for the German government each year.

By comparison, Borne expects the tax to raise around €180 million per annum from 2020. Air France's share of that would exceed €60 million, it says.

The proceeds from the tax are to be used to fund investment into cleaner forms of public transport, including rail and on the roads.

"We want to enable everyone to travel with cleaner forms of transport," says Borne.

Air France says it finds the government decision even more "incomprehensible" because the proceeds would not be used to help the aviation industry itself transition to less polluting forms of energy. "Such a transition could have been facilitated by supporting the implementation of sustainable biofuel industries or disruptive innovations," it argues.

While the new eco-tax will apply to all airlines flying out of France, regardless of their nationality, there will an exemption for connecting flights and flights to Corsica and French overseas departments.

Shares in Air France-KLM, EasyJet – which has a strong presence in France – and Lufthansa were all down around 3% following Borne's announcement.

Updated to include Air France reaction and additional context

Source: Cirium Dashboard