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Austrian fears tax will damage Vienna hub

Austrian Airlines has appealed to the Austrian government to scrap a planned "ticket tax" that the carrier says will harm the competitiveness of Vienna International Airport as a hub.

It denies reports that it is seeking financial compensation or subsidies to allow it to compete against Emirates Airline, which last week received permission to almost double its number of weekly flights to Vienna to 13.

"We don't want money. we don't ask for subsidies," says an Austrian spokesman. However, "from our point of view this [tax] does not make sense."

The tax, which is to be levied from 1 April on all flights originating in Vienna, will impose a charge of €8 ($11.25) for short-haul flights, €20 for medium-haul and €35 for long-haul. It is already being imposed on tickets bought for travel after 1 April.

The spokesman says not only will the tax not bring in the sums the government is anticipating, it will harm Vienna's standing as a hub.

He points to a similar tax imposed in the Netherlands that was discontinued after a year because of its detrimental effects on traffic: "It was disastrous; we say it will be the same here."

He confirms comments made last week by the airline's joint chairman Peter Malanik to Austrian newspaper Kurier in which Malanik said of competition with Emirates: "It's not a match of airline against airline - it's a game between a state and AUA [the Austrian Airlines group]."

The business model in Arab countries such as Dubai, where there is no clear separation of management between functions such as airlines, airports and air traffic control, makes it a very different type of organisation from European or US airlines, says the spokesman. "There should be a clear separation between government functions and the commercially-run business."

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