Aviation Taxes: Analysing Impacts and Interactions with Other Instruments
Frank Fichert, Worms University Of Applied Sciences, Hans-Martin Niemeier, University Of Applied Sciences Bremen, Peter Forsyth, Monash University
In this paper, a critical assessment of specific taxes on the aviation industry is provided from a theoretical and an empirical perspective.
Several European countries, as well as Australia and South Africa, apply specific taxes on the aviation industry. These passenger taxes have generated controversial debates, focusing on their aims, their design and their effects. In this paper, a critical assessment of specific taxes on the aviation industry is provided from a theoretical and an empirical perspective.
After an overview of the different designs of aviation taxes, we discuss their potential effects in a theoretical framework. We focus on particular aspects of the air transport industry, especially price differentiation, determinants of airport choice, and the role of congested airports. After this, we evaluate different studies of the empirical effects of aviation taxes. These studies apply methods such as Economic Impact Analysis and Computable General Equilibrium Analysis. In the paper we discuss the theoretical framework of the different studies, and the methods used for the empirical assessment. Finally, policy recommendations are derived, dealing also with the interactions between aviation taxes and other instruments, especially their interaction with Emissions Trading Schemes (ETS).
Association for European Transport