European Charter Operators Under Attack By Taxes

GENEVA—Increasing taxes on the European charter market is a top concern of the industry. “There are some knee-jerk reactions” from governments, says Glenn Hogben, Air Charter Association CEO, especially in France, which imposed the “solidarity tax” on commercial charter, effective March 1.

For instance, a charter flight on a business jet with 19 seats or less flying 1,000-5,500 km now could face a tax rate per passenger of €1,050 ($1,179).

The UK increased air passenger duty rates in April by 13% for most flights and is considering a second round for next year. The London-based Air Charter Association is working with the UK treasury to make sure it understands the benefits of the industry and doesn’t increase the rates so much that the taxes become a penalty, Hogben says. While the increase is significant, he says it is not unreasonable so far, like the ones in France. However, “We’re trying to prevent the next round.”

He says the Netherlands and Spain are also talking about charter taxes but “haven’t put anything through yet.” Germany and Italy already have historical taxes but they don’t negatively impact flights.

Part of the association’s advocacy is educating governments about private charter’s use, which includes business, humanitarian, medical and practical trips. “Part of the trickiness is that the industry can exude one of luxury and extravagance” and “it doesn’t sell the breadth of its benefits very well,” he notes.

Ensuring taxes do not escalate to unreasonable amounts also has a safety implication.

Penalizing the commercial charter operators, the ones the association represents, is problematic because “they’re already paying significant amounts more than private aircraft operators to make sure they meet all of the maintenance, aircraft, pilot training and oversight requirements. What if you tax those people because they are doing it properly,” Hogben asks.

“Our concern is that that drives people toward not doing it properly, and that could lead to an increase in illegal charter flights,” he says.

So far the association is not seeing a big influx of illegal charter but it does spend significant time “trying to stop them.”
Illegal charter flights are not unique to Europe. The Air Charter Association’s standards and training packages are in demand by U.S. Part 135 operators, which is one reason it is expanding its there. Its multi-national charter operators have also requested for the expansion.