German government aims to cut flight ticket tax from July

The German government plans to cut taxes on flight tickets from July in a bid to bring down costs, though it remains unclear whether the cuts would be passed on to consumers.

The planned reductions would bring down air passenger tax to the level of 2024, according to the plans agreed during a Cabinet meeting on Wednesday.

The plans still have to be approved by parliament before they can take effect.

Whether the cuts would lead to cheaper ticket prices remained unclear. While the Finance Ministry stressed that this was an important aim of the measure, the government cannot force airlines to pass on the savings to passengers.

Ticket prices are calculated based on a complicated system taking into account multiple variables, including levies, the day of the week and capacity.

Soaring oil prices due to the Iran war have recently led to a massive hike in ticket prices.

Ticket tax is calculated based on the distance of the destination to Frankfurt Airport, Germany's main aviation hub.

Air passenger tax on domestic flights and flights of up to 2,500 kilometres is set to be lowered from €15.53 ($18.01) to €13.03 under the plans.

Tickets for flights between 2,500 and 6,000 kilometres will see a reduction from €39.34 to €33.01, while taxes on long-distance flights of more than 6,000 kilometres would be cut from €70.83 to €59.43.

The tax cuts would mean a total of €185 million in revenue loss for the German state in 2026, which the government plans to compensate through cuts to other areas of the transport budget from 2027, according to the draft plans.