Global Aircraft Scarcity Trumps German Air Tax Cut, Forcing Budget Carrier Pullbacks
The intended financial relief from Germany's recent reduction of its air transport tax is being significantly mitigated by a pervasive global shortage of commercial aircraft, which is simultaneously exerting upward pressure on airfares. Industry experts identify this scarcity, rather than the tax burden itself, as the primary constraint driving network reductions by major budget carriers such as Ryanair and EasyJet in the German market. German aviation, historically burdened by high operating expenses ranging from ticket taxes to aviation security fees, witnessed a political effort to alleviate this financial strain. However, Gerald Wissel, the founder and managing director of the Hamburg-based aviation consultancy Airborne Consulting, characterized the newly announced cut to the ticket tax for airlines operating in Germany as "purely symbolic." Wissel stated his expectation that this tax reduction "will not reach the passengers." While airlines could theoretically save approximately $17.50$ (around 15 Euros) per ticket, potentially reaching up to $50$ Euros in specific fare classes, Wissel contends that the prevailing dynamic pricing structures make it improbable that these savings will be passed on directly to consumers, informs by NT24.
The Federal Government, as part of the coalition agreement between the governing alliance of the CDU, CSU, and SPD, announced in November that the air transport tax would revert to its pre-May 2024 level, effective July 1, 2026. This adjustment represents a reduction ranging from nearly 3 Euros to almost 13 Euros per ticket, depending on the flight distance. Joachim Lang, CEO of the German Aviation Association (BDL), welcomed the measure as an "important signal," emphasizing that it halts the "years-long upward spiral of taxes and charges." Lang calculated that this move would reduce state-imposed site costs by approximately $10$ percent. Nevertheless, he stressed that further relief is essential for Germany to fully capitalize on the current boom occurring in the broader European air traffic sector.
According to Gerald Wissel, the real bottleneck restricting airlines is not the level of government fees but the severe deficit of available aircraft. He maintains that low-cost carriers like EasyJet and Ryanair are scaling back their German route networks simply because they lack the necessary planes to sustain growth. Wissel views complaints about Germany’s high airport fees as a diversion from this more profound structural issue. Frank Fichert, an expert in tourism and transport at Worms University of Applied Sciences, conceded that while passenger taxes are a significant consideration, they are "not the only factor influencing the attractiveness of a location."
The growth in European passenger traffic remains robust: data from the Airports Council International Europe (ACI) indicated that passenger traffic across Europe increased by $7.4$ percent in 2024, surpassing pre-COVID-19 pandemic levels for the first time. Passenger volumes are also rising within Germany. Figures from the Federal Statistical Office (Destatis) revealed that $81$ million passengers were subject to the air transport tax last year, a notable increase from $62$ million in 2022, though still below the $96$ million recorded in 2019. Furthermore, revenues generated by the air transport tax have nearly doubled since its introduction in 2011, escalating from 963 million Euros to 1.88 billion Euros last year.
Frank Fichert observed that air transport taxes have become a standard fixture in budgetary planning not only in Germany but across Europe, with revenues typically flowing into national treasuries. Any reduction in the tax would therefore have to be "compensated for elsewhere," which presents a considerable challenge given tight government finances. Beyond taxes, airlines face increasing operational hurdles. A recent report from the industry body IATA issued a warning about a global record backlog of $17,000$ unfilled orders for new aircraft. At current delivery rates, fulfilling this order book would take $14$ years, which is double the average delivery time recorded between 2013 and 2019.
Gerald Wissel underscored that this capacity crunch particularly impacts Europe's low-cost airlines. Ryanair, for instance, has about $400$ aircraft on order—$100$ for replacement and $300$ intended for growth. A similar situation applies to EasyJet. Until these substantial deliveries materialize, airlines will be compelled to "concentrate the precious capacity where the highest profitability is generated." This business necessity is directly responsible for Ryanair's decision to cut $76$ out of $246$ weekly flights in Berlin and cease $44$ routes operating from Cologne in January. EasyJet is forecasting only $2$ to $4$ percent capacity growth for 2026, significantly below its corporate target of approximately $7$ percent. Despite these retrenchments, Germany maintains its position as Europe’s largest air travel market.
Stay connected for news that works — timely, factual, and free from opinion — and insights that matter now: Berlin, Ukraine, and the world: German Chancellor Merz in Israel: Reaffirming Friendship Amidst Gaza Policy Tensions