airberlin’s CEO: Economic forecasts make compelling case for rethink.
Hartmut Mehdorn, airberlin’s CEO, has demanded the immediate abolition of the aviation tax. “The tax distorts competition, it is damaging to the economy and it does not make any ecological sense either,” stated Mehdorn in Berlin today. “In view of the current economic forecasts published by the OECD, priority must be given to strengthening economic power in the business sector and consequently to the safeguarding of jobs.” The OECD believes that next year the economic upturn in the eurozone will come almost to a standstill; the OECD’s estimates in May had still been based on 2.0 per cent growth. Mehdorn welcomed the German government’s discussions regarding tax cuts. “Cutting taxes could also mean abolishing taxes.” He went on to emphasise that the aviation tax was causing dramatic distortion of competition, thereby putting jobs at risk and that this year alone airberlin would have to pay 170 million euros, which, in relation to its turnover, was almost four times as much as its largest competitor in Germany.
A few years ago, when it became apparent that airlines would be included in the European emissions trading scheme, airberlin had acted speedily and effectively. As a result of large-scale fleet renewal to achieve a current fuel consumption of just 3.6 litres per 100 passenger kilometres, which is the lowest among Europe’s scheduled carriers, the potential burden imposed by emissions trading had been reduced to around 28 million euros, achieving a saving of well over ten million euros in comparison with the original fleet prior to modernisation. Mehdorn continued by saying that although airberlin was now paying more for its aircraft due to the higher leasing or financing costs, the investment in the environment had also proved cost-effective below the line. Moreover, he pointed out that year after year the share of emission certificates to be obtained by the airline was increasing as a result of legislation. This concept had been completely frustrated by the aviation tax. Furthermore, the aviation tax, which had been announced in 2010 as a measure to bring forward emissions trading, had reduced any action with a view to sustainability ad absurdum, since it did not take CO2 emissions into account. In addition the tax was raising considerable doubts in terms of constitutional law. Mehdorn believes that it is unlikely to bear examination by the German constitutional court.
The German government’s plan to reduce aviation tax due to additional costs incurred as a result of the upcoming emissions trading scheme was, according to airberlin’s CEO, a step in the right direction, but given the background of the poor economic outlook, it was far from sufficient. The tax is due to be evaluated next year, which will be too late. The rise in fuel prices and the current pressure from competition are making it impossible to pass on the full amount of aviation tax to customers. “The aviation tax must be abolished as soon as possible to prevent further damage to the low-margin airline industry in Germany,” demanded Mehdorn.