18 July 2008

THE HAGUE - The environmental flight tax introduced on 1 July will be upheld.

A court in The Hague has ruled that the tax on airline tickets does not contravene European law or the international Chicago Convention on civil aviation which exempts air fuels from tax.

When the tax measure was announced in March this year, Maastricht Airport, Ryanair and the Board of Airline Representatives in the Netherlands appealed against it.

The tax means an extra charge of EUR 11.25 on a flight with a European destination, and EUR 45 on intercontinental flights.

KLM chief Peter Hartman has underlined the "far-reaching unfavourable consequences" of the environmental tax, not only for his airline company but for Schiphol Airport which has already reported a decrease of some 50,000 passengers this summer compared with 2007, a result worse than the zero percent growth forecast.

One quarter of KLM's passengers are business travellers, but the remaining three quarters are less loyal when it comes to pricing.

The KLM CEO estimates a loss of between 500,000 and 1 million passengers each year. Transavia, KLM's budget daughter company, is particularly hard hit. "Price-conscious customers are looking for alternatives abroad. We had warned about this, but now it's a reality".

Ever-mounting oil prices are adding fuel to the fire, as many airlines are finding it difficult to stay financially healthy.

KLM had already seen a significant decrease in the number of passengers flying to and from the US because of increases in fuel prices, some of which were passed onto the customer.

Delta Air Lines, Air France's American partner, has just published its second quarter figures showing a loss of EUR 629 million.

In the newspaper De Telegraaf, Hartman speaks about the "disastrous situation on intercontinental flights" as more and more people flock to Germany and Belgium.

Some Air France-KLM flights will be moved from Amsterdam to Paris.

The airline chief is concerned about diminishing KLM influence within the alliance.

Hartman thinks the government is underestimating the damage to the Dutch economy, including potential job losses. He regards environment flight tax as a case of short-term thinking.

[Radio Netherlands / Expatica]

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