The French Aviation Sector Threatened by a New Ticket Tax Increase

To reduce the public deficit in the coming years, the French government plans various measures, including a significant increase in taxes on airline tickets. This initiative aims to generate an additional billion euros and will have direct consequences for both the aviation sector and passengers, who are already facing rising costs.

This measure primarily affects long-haul flights and business-class travel, which will bear the brunt of the tax burden. Current projections suggest that the tax on a business class ticket for flights over 5,000 km could rise from €63 to €200. Economy class passengers will also be impacted, with the tax for long-haul flights potentially increasing to €60 per ticket.

Intra-European flights, and those to overseas departments and territories could also be affected, although the final rates are still under discussion. This decision has raised concerns among airlines, especially Air France, which is the primary contributor to this tax. In 2023, Air France collected more than €140 million on behalf of the government, representing 30% of the total revenue from this tax. With the planned increase, airlines fear they will have no choice but to pass the additional costs onto passengers through higher ticket prices.

This tax hike is part of the 2025 finance bill and aligns with the government’s broader effort to consolidate public finances. The goal is to reduce the public deficit, which currently exceeds the European Union’s target of 3% of GDP. By targeting the aviation sector, the government aims to both raise funds and address environmental concerns by discouraging air travel.

However, this increase adds to an already heavy fiscal burden. France’s aviation sector is among the most heavily taxed in Europe, with approximately 40% of ticket prices consisting of various taxes. These include the Solidarity Tax on Air Tickets (TSBA) and an eco-contribution introduced in 2019 to support the rail network. The TSBA was introduced in 2006 under President Jacques Chirac to fund the fight against AIDS in Africa. Over time, the tax has been adjusted to address additional objectives, including environmental and social issues. In 2019, a portion of its revenue was allocated to rail infrastructure development.

The planned increase for 2025 represents a major shift: the government aims to triple the current revenue generated by the TSBA, which stands at €460 million annually. Long-haul flights and private jets are the primary targets, reflecting the government’s intention to tax activities considered environmentally harmful or exclusive to wealthy individuals. Taxes on long-haul private jet flights could reach up to €3,000 per passenger, addressing calls from environmentalists and left-wing political parties to curb private aviation.

The additional tax burden could further weaken the already fragile position of French airlines. In 2023, the Air France-KLM group paid €3 billion in taxes and fees. Combined with the rising costs of environmental compliance, these new charges could jeopardize the competitiveness of French airlines against foreign competitors.

Currently, only 38% of flights departing from France are operated by French airlines, and this share has been steadily decreasing. French carriers face intense competition, particularly from Gulf and Asia-Pacific airlines, which benefit from lower costs and less restrictive tax regimes. In addition, many passengers in France's provinces prefer flying from foreign airports like London Heathrow or Brussels, where taxes are lower. This trend could accelerate with the new TSBA increase, leading to a loss of passengers and revenue for key hubs such as Paris Charles de Gaulle Airport.

The challenges faced by the French aviation sector reflect broader trends across Europe. According to the International Air Transport Association (IATA), while passenger numbers in Europe are projected to grow at 2.3% annually, this rate remains significantly lower than that of other regions. The Middle East is expected to grow by 3.9%, and the Asia-Pacific region by 5.3%.

By 2043, Europe’s share of global air traffic is expected to drop from 26% to 19.5%, while the Asia-Pacific region’s share could rise to 46%. This shift underscores the need for European airlines to boost their competitiveness, an increasingly difficult task amid rising taxes and operating costs.

The increase in the Solidarity Tax on Air Tickets is part of the French government’s broader strategy to find new sources of funding. While the measure aims to promote fiscal fairness and address environmental concerns, it raises serious questions about the competitiveness of French airlines.

Already heavily taxed, these companies fear that additional financial burdens will further erode their ability to compete in both domestic and international markets.

The challenge for the government will be to strike a balance between financing public projects and preserving the competitiveness of a key sector in the French economy. Without this balance, the risk is that the French aviation sector will continue to lose market share to foreign carriers, which operate under more favorable conditions.