Air France-KLM Chief Opposes Airline Ticket Tax

Ben Smith, the Chief Executive Officer of Air France-KLM , has opposed the recently proposed taxes on airline tickets, warning that the newly proposed levy would make France have the highest airfare taxes in Europe. Opposing increasing taxes In an interview with France’s La Tribune , Smith, the Chief Executive Officer (CEO) of Air France-KLM, said that raising the solidarity tax on airline tickets (a taxe de solidarité sur les billets d’avion, TSBA) would be irresponsible. Smith said that a similar bill had already been attempted by the previous government, which collapsed in December 2024.

Now, as François Bayrou, the new Prime Minister of France, who also survived a no-confidence vote last week, is searching for ways for the state to cut its budget deficit by slashing public spending and increasing taxes, will aim to collect up to €1 billion ($1.031 billion) from the proposed taxes on French flyers, according to La Tribune . The Franco-Dutch group’s CEO added that if the new tax proposal is approved by the French Parliament, France will have the highest airfare taxes in Europe.



However, if the country’s legislators do approve the levy, Smith would like the revenues to go toward decarbonizing France’s aviation industry. KLM has previously said that due to its inability to use Russian airspace, its Asian network would remain the same compared to the previous winter. Passing the bill to its customers In November 2024, Air France had already warned that while the then-current French government had submitted an amendment to significantly increase the TSBA, it would have gone into effect on January 1.

Airlines would have had to pay the tax to the French government on all flights starting January 1. “For Air France-KLM, having to pay an uncollected tax to the French government would represent a loss of several tens of millions of euros.” As a result, Air France said that on October 24, Air France-KLM, which also has two low-cost carrier brands, Transavia and Transavia France, as well as Air France Hop, the regional arm of the French airline, decided to pass the tax increase on its customers in advance starting October 24, 2024, for all travelers flying from January 1.

The new taxes were supposed to be as follows: Type of flight Economy/premium economy cabin Business class/First class (La Première) Domestic and intra-European Economic Area (EEA) Increased from €2.63 ($2.71) to €9.

5 ($9.79) Increased from €20.27 ($20.

89) to €30 ($30.92) Less than 5,500 kilometers (2,969 nautical miles) Increased from €7.51 ($7.

79) to €40 ($41.51) Increased from €63.07 ($65.

45) to €120 ($124.53) However, the bill did not pass, and on December 6, 2024, Air France issued a statement that it had suspended the advanced collection of the TSBA, with the suspension having been in effect since December 7, 2024. The airline said it would honor its commitment to amend the final ticket price if the TSBA remained the same or increased by less.

As such, it has been refunding passengers the difference between the price and the TSBA based on the current taxation level. According to French media, the French government hopes to reap more than $1.1 billion per year through tax increases as of next year.

Industry-wide anti-tax movement However, Smith is not the only airline executive who has opposed taxing air travel in Europe . Carsten Sphor, the CEO of the Lufthansa Group , told Bild in October 2024 that increasing airline costs result in further traffic reductions from/to Germany. Meanwhile, in May 2024, the International Air Transport Association (IATA) criticized Germany’s government for increasing aviation taxes, namely the German Aviation Tax Act (Luftverkehrsteuergesetz, LuftVStG), by 19% to between €15.

53 ($16.14) and €70.83 ($73.

63), depending on the distance. In June 2024, Lufthansa Group introduced the ‘Environmental Cost Surcharge,’ which became effective on flights departing from the European Union (EU), Norway, and Switzerland on January 1. The charges range from €1 ($1.

04) to €72 ($74.82). At the same time, German Federal States have called on the government to lower the taxes since the country cannot afford state-imposed competitive disadvantages, according to Boris Rhein, the head of the State of Hesse, per a report by Reuters in December 2024.

The environmental surcharge will range between between €1 ($1.07) and €72 ($76.95), depending on the route and fare.

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