Friday, October 29, 2010

Ryanair Reducing Operations in Germany because of Ill-Conceived German Tourist Tax

Government greed for new tax monies, from whatever source, is endless. The new German tourist tax, however, threatens to cost much more money than it will bring in. We read:

Ryanair axes 1,000 jobs at German airport - Business News, Business - The Independent
(Hat tip to CaryGEE.)

We fly Ryanair in Europe.

Ryanair makes travel affordable and permits air travel to European destinations which in the old days of outrageous air fares were impossible to reach by airplane because of the usurious flight costs.

We say, leave Lufthansa and their inflated fares to the business passengers who can charge their flights to their companies as tax write-offs as a cost of doing business. Many private people on the other hand can not afford the high Lufthansa (and other carrier) rates for domestic European travel and every extra Euro hurts.

Now Germany is planning to tax the cheap airfare business by assessing a flight surcharge on tourists.

There are any number of things that a nation could or should tax to raise money, but tourists and tourist travel would not seem to be the right thing.

Who came up with this crazy scheme in Germany?
Whoever came up with the idea should lay down his or her political career and go do something useful.

Ryanair already wrote the following news release in June (24 June, 2010), warning the German government of the consequences of the tourist tax:

"Ryanair Concerned That Proposed German Tourist Tax Will Damage German Tourism, Jobs & Economy


Ryanair, the world’s favourite airline, today (24th June) called on the German Govt to abandon its plan to introduce a tourist tax on flights which will inevitably lead to steep declines in German air traffic and tourism particularly in the German regions. Independent research (by RDC Aviation) proves that seat capacity (and traffic) grew strongly in those EU countries which do not impose tourist taxes (Belgium and Holland), while countries which impose tourists taxes such as the UK and Ireland continue to suffer steep traffic and tourism declines.

At the conference, Dutch economist Jan Veldhuis, of Amsterdam Aviation Economics, presented a report on the Dutch ‘Eco’ tax which resulted in the Dutch govt scrapping the tax after it estimated the tax would result in up to 10,000 jobs losses, €1.2bn is lost tourism, airport and airline revenues and cost the govt up to €200m in unemployment payments while generating as little as €260m in its first year.

Ryanair warned that any proposed tourist tax in Germany would have a similar impact and cause steep declines in traffic at German airports and lead to tourism declines and job losses.

Speaking today in Berlin, Ryanair’s Michael O’Leary said,

The German Govt’s proposed tourist tax will make Germany an uncompetitive, expensive tourism destination which will result in lost visitors, lost jobs, lost tourism revenues and end up costing Germany far more than the tax will generate.

“Independent analysis by RDC Aviation proves that countries which impose tourist taxes continue to see capacity, traffic and tourism declines. Growth has returned throughout Europe except in countries such as Ireland and the UK which continue to tax tourists instead of welcoming them.

“As the Dutch experience proves, tourist taxes are deeply damaging and self-defeating and we hope that the German Govt will see sense and scrap their plans for a tourist tax.”"

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