Treating transport sector like a milch cow, the state shirks its duty to ensure security
 It is no surprise to discover that "dirigisme" is a French word that means a system in which the government has a lot of control over a country's economy.
Nor is this much of a surprise because it is in France where one finds it the practice is most pronounced. Yet at the same time one finds it disheartening to also learn that its diametric opposite, "laissez-faire", is also a French word if only because France is the country where "laissez-faire", that is, economic freedom is most absent.
True to form, France has now introduced an aviation tax which the International Aviation Transport Association (IATA), which represents commercial airlines worldwide, says an unmitigated disaster.
Not surprisingly French aviation is already heavily taxed and the "French Eco Tax" is not the first. In France, commercial aircraft operators are also subject to a Civil Aviation Tax, a Solidarity Tax, an Airport Tax and a Noise Tax.
While the first three taxes apply to commercial operations only, the last one is also levied on private non-commercial flights.
The French aviation tax is a per passenger. The rate of the taxation depends on the passenger's final destination. The tax for flights to destinations in the European Economic Area (EEA), United Kingdom and Switzerland is currently at EUR4.93 (US$5.39) and to all other destinations EUR8.87. The per passenger rate for class 1 airports amounts to EUR11.80, while class 2 airports charge between EUR7.80 and EUR8.55 per passenger.
The rate for most of the class 3 airports is EUR16 per passenger. The tax rates for economy and business class flights are economy flights of under 2,000km EUR30 one-way, economy flights of over 2,000km:EUR60 one-way, business class flights of under 2,000km EUR180 one-way and business class flights of over 2,000km EUR400 one-way.
It is widely expected, says IATA, that the French government will significantly increase taxes on air passengers as part of a general package of new taxes aimed at closing France’s budget deficit.
But the evidence is that countries with higher aviation taxes have recovered the slowest from the pandemic shutdown. Increases in French aviation taxes will further damage its recovery and the ability of aviation to drive wider economic benefits and tax revenues.
“If these tax proposals are implemented, it will be a disaster for France," says IATA. "You cannot tax yourself to prosperity. Aviation is a driver of employment and prosperity, as well as a proven accelerator of growth in other parts of the economy."
Said IATA: "It is essential that the French government instigate an impact assessment of these taxes. The proposal smacks of panic and a lack of joined up thinking. Is the government aware that France has fewer passengers and serves fewer destinations than it did before the pandemic?
Said IATA director general Willie Walsh: "Isn’t the Minister for Tourism concerned that the target of reaching 100 million tourists will be undermined by these taxes? How does the Environment Minister think that extracting EUR1 billion from French aviation will help with the massively expensive transition to sustainable aviation fuels? What has the Prime Minister to say about these taxes falling hardest on French businesses and French jobs?"
The Swedes, he said, have responded to their sluggish growth by abolishing their aviation tax. "France should learn from their example. The only answer for France’s deficit is to grow its economy and widen the tax base, not tax the productive parts of the economy to a standstill.” said IATA director general Willie Walsh.
Plainly, Mr Walsh expressed the hope that the government would interfere less with the economy and pay more attention to its proper function of providing greater security to the aviation sector in time of heightened geo-political conflict.
“Civil aviation fulfils a purpose that transcends politics to create and preserve friendship and understanding among the nations and peoples of the world," IATA said citing clauses of the Chicago Convention, signed 80 years ago.
"They are a timeless reminder of civil aviation’s essential and unique role in connecting people and delivering goods over vast distances. In the turbulent world of 2024, the truth of the Chicago Convention’s preamble rings loudly," IATA said.
Civil aviation does not take sides in political conflicts. As an industry that requires the effective implementation of global standards to operate, aviation upholds global standards and the international rules-based order on which they rely.
As the name implies, IATA continues, civil aviation serves the civilian population. "It must be kept out of harm’s way by all actors in a conflict. This is the firm belief of IATA. More importantly, it is the unquestionable obligation of governments under international law.
"Article 13 of the Universal Declaration of Human Rights protects the freedom of movement domestically and internationally.
Article 48 of the Fourth Geneva Convention holds that combatants must not target civilian objects.
Basic norms of customary international law require that all parties to a conflict allow and facilitate the rapid and unimpeded passage of humanitarian relief for civilians in need and ensure the freedom of movement of authorised humanitarian relief personnel.
These international legal obligations will be unfulfillable should the line between military and civil aviation blur, even in the slightest. That would bring deeply troubling consequences for innocent populations trying to survive through conflict, and especially for those in need of humanitarian aid.
Moreover, the Chicago Convention explicitly obliges states to protect civil aircraft and passengers in flight, refrain from the use of force against civil aircraft, and by corollary coordinate and communicate any activities potentially hazardous to civil aviation. These are essential to keep flying safe.
As the world works towards more peaceful days, aviation will support the effort by connecting people and goods. In the meantime, combatants must know and abide by the rules of conflict and humanitarian assistance as laid out in international law. To simplify: do no harm to civilian aircraft, airports or air navigation services. This is non-negotiable and must be respected, even at the height of hostility.”
For too long aviation, indeed the entire international transport sector, has been regarded as a milch cow by governments worldwide, and more particularly, by dirigist regimes like France.
International shipping interests do not represent a powerful voting bloc as their workers, though numerous live offshore and less able to retaliate politically. One can now see tax-revenue hungry governments are likely to emulate France in taxing a vulnerable sector that cannot fight back.
Meanwhile the government could do a lot more to keep trade lanes safe at sea and in the air than it does today. |
