Flummoxed that air travel remains cheaper than rail travel in many shorthaul markets, some German politicians want to place punitive tariffs on cheap flights.
Alexander Dobrindt, leader of the Christian Social Union (CSU), a party that is part of Germany’s center-right governing coalition, wants a price floor.
I want climate protection instead of predatory pricing. Nine euro tickets for flights within Europe have nothing to do with market economics or climate protection. There needs to be a minimum flight price and rail journeys need a VAT cut.
On the one hand, this idea makes a lot more sense than taxing prices based upon distance or whether in the EU or outside the EU. Sure, the longer flight, the more carbon emissions. But think about it: what are the alternatives to flying across oceans and continents? If there is going to be punitive taxes, shouldn’t those fall on the sort of shorthaul routes in which rail and bus travel is actually a viable alternative? In that sense, Dobrindt’s idea is not so far-fetched if the German government sees discouraging shorthaul air travel or promoting Deutsche Bahn (the rail system) as a policy goal.
But on the other hand, can you imagine the public outcry? The headlines of out-of-touch leaders aiming to exclude the poor and middle class from air travel? As Germany faces economic uncertainty and potential recession, perhaps raising airfare prices and hurting airlines and the commerce such airlines foster is precisely the wrong recipe at this time.
The CSU is a conservative party. Of course conservative means different things across the Atlantic and in the era of Trump, but the party and certainly the governing coalition with Angela Merkel’s Christian Democratic Union (CDU) has generally stood for lower taxes. The VAT cut seems more in-line with party policies than a price floor on budget airlines.
I find the concept of a price floor on airline tickets an interesting one. I’m not in favor, but I do think it makes more sense than taxing longhaul flights…
What are your thoughts on mandatory minimum pricing for airline tickets?