IATA says cut 'is an important step in the right direction'

IATA has hailed the Austrian government’s decision to halve Air Travel Tax from the start of 2018 — and called for other countries to take similar measures.

The Austrian Ministers Council said the decision was taken to increase the attractiveness of Austria as a business and tourism destination, to secure the future of Vienna Airport as an international aviation hub, and to create jobs and boost the economy.

Other countries should take note, particularly Germany and the UK

“This is great news for Austrian air travelers and for everyone thinking of visiting Austria for tourism or business,” said IATA Director General and CEO Alexandre de Juniac.

"The Austrian government has taken an important step in the right direction. Other countries should take note, particularly Germany and the UK, which continue to heavily tax air passengers.“

The new structure of the Austrian tax will be €3.50 (US $3.70) for short haul, €7.50 (US $7.90) for medium haul, and €17.50 (US $18.50) for long haul. The cuts will create economic benefits, but these would be maximized if the tax were reduced to zero.

Analysis by IATA in 2015 revealed that completely removing the tax would increase international travel by 2.7% and create 1,700 jobs in the country.

While the tax cut is good news, it is not the end of the story. Ultimately, the tax should be scrapped completely

De Juniac has called for the Austrian government to take this additional step, and to seize a “golden opportunity” by pressing ahead with plans for a third runway in Vienna.

The plans have been delayed by environmental concerns, but de Juniac says the development can be achieved while hitting the industry's tough emission reduction targets.

“While the tax cut is good news, it is not the end of the story,” he said. “Ultimately, the tax should be scrapped completely.

“And Vienna Airport needs a third runway. With expansion seemingly blocked in Munich and Zurich, the region is suffering from a lack of airport capacity.

“Austria has a golden opportunity to take a leadership position if it can put a vision forward for Vienna to be a major hub.

“And with the industry's strong environmental commitments, this can be done sustainably.”