Bundestag lowers air travel tax from july

The Bundestag passed a reduction of the air travel tax in the evening. Lower rates from before May 2024 will apply starting July 1.

The German Bundestag passed a law change introduced by the Union and SPD parties. In addition to the coalition factions, the AfD also voted in favor, while the Greens and Left opposed the plan. The tax on flight tickets falls by amounts between 2.50 and 11.40 euros depending on the route.

For short-haul flights up to 2,500 kilometers, the rate will be 13.03 euros instead of 15.53 euros. Medium-haul routes between 2,500 and 6,000 kilometers will cost 33.01 euros instead of 39.34 euros. Long-haul flights will be taxed at 59.43 euros instead of 70.83 euros.

The measure fulfills a promise from the coalition agreement. The state will lose 185 million euros in revenue this year. By 2030 the annual shortfall rises to 355 million euros. Whether airlines will pass the savings on to customers remains uncertain.

Before the new rules can take effect, the Bundesrat still needs to approve them.

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German gas station at midnight displaying reduced petrol and diesel prices after the government's 17-cent-per-litre tax cut takes effect.
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Fuel tax cut on petrol and diesel takes effect

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The German government's fuel discount took effect at midnight. Taxes on petrol and diesel drop by about 17 cents per litre for two months. It remains unclear how quickly pump prices will reflect the cut.

Indonesia's government has capped domestic flight ticket price increases at 9 to 13 percent amid rising jet fuel costs. The measure provides government-borne VAT relief for economy class tickets. It applies for 60 days to protect consumer purchasing power.

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EU member states have agreed on a new deal for air passenger rights. Airlines will be banned from charging extra fees for seating children together with parents.

Dutch airline KLM announced on Thursday the cancellation of nearly 1% of its European flights over the coming month due to rising kerosene costs. It will offer 80 fewer round trips from its Schiphol base in Amsterdam. KLM justified the move by the financial unviability of these routes while denying any fuel shortage.

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The Tidö parties announced on Tuesday that the price of monthly public transport passes will be halved from July 1 until year-end. The 6.5 billion kronor measure is loan-financed in response to the energy crisis.

The government's temporary reduction of the carbon tax from July 1 is expected to lower petrol and diesel prices by around three kronor per liter.

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The federal government agreed on a package of more than 30 reform measures on Wednesday evening. Chancellor Friedrich Merz presented it on Thursday.

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