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Published on Friday, May 27, 2016

Norwegian government set to defy airlines with launch of air tax

Airlines for Europe has slammed the Norwegian government for the planned introduction of a new air tax this summer.

The International Air Transport Association claims the tax, to be set at around €8.5 per person for both domestic and international flights, threatens to reduce demand by 5%, equal to 1.2 million passengers a year.

It estimates airlines will lose €150 million a year as a result.

"We are astonished about the unwavering approach of the Norwegian authorities on implementing the Air Passenger Tax while almost all comments during the public consultation period contained objections to it," said A4E chairman Thomas Reynaert.

"Instead of preventing economic growth and job creation by imposing unreasonable taxes, European governments should create a supportive regulatory environment."

"Unavoidably, the proposed tax will lead to fewer operators in the Norwegian aviation market and reduced competition.

"If already the Norwegian competition authority states that airports may have to consider ceasing their operations due to reduced traffic the government deliberately wants to stifle the travel sector."

A4E said the Dutch government's decision to remove its ticket tax in 2009 led to 'strong growth' in passengers; the Irish government's removal of traffic tax in April 2014 led to 'extensive traffic growth' at Irish airports and an 8% increase in tourism last year, while the number of Northern Ireland residents flying from Dublin increased by 52% in the first year, it said.

Accountants PwC claims its economic analysis shows that removing UK Air Passenger Duty would boost British GDP by 1.7% and create 60,000 new jobs by 2020.

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