France’s aviation sector has been hit hard by the new tax

The French aviation sector is struggling, arguably from a self-inflicted wound: a significant increase in taxes on air travel. This obviously resulted in reduced traffic, lower profits, and a significant blow to business aviation.

Both airlines and airport authorities – even parts of the Ministry of Transport – express concern about the consequences of the 2025 budget, in particular the tripling of the “Air Ticket Connection Tax” (TSBA), which came into effect in March. Initially presented as a financial boon, the tax is now largely hurting the travel industry, an important part of Europe’s second-largest economy.

The tax introduces an additional €4.77 for each family or intra-European flight departing from France, potentially reaching €120 for long-haul business class tickets. A study by the Directorate General of Civil Aviation (DGAC), which is part of the Ministry of Transport, indicates a negative impact. According to the report, airlines have passed the full cost of the tax on to passengers, contributing to an additional two percentage points of inflation in air fares. The impact also affects “touchdown costs”—fees for landing, taxiing, parking, and passenger services—potentially undermining the competitive advantage of French hubs such as Paris-Charles de Gaulle.

In the report, the numbers paint a clearer picture. Since the second quarter, seat capacity on flights originating from France has increased by just 1.4%, clearly lagging behind the 4.7% increase seen across Europe. Optimism for increased travel after the Paris Olympics has apparently waned, with DGAC data suggesting that French airports are losing ground on medium- and long-haul routes. Transit traffic, essential to international hubs, is diverted to competing airports outside Europe, as higher taxes increase the cost of transit in France.

These developments confirm the warnings expressed in the budget debates in the autumn of 2024. The National Federation of Aviation and its trade (FNAM) has criticized the tax as a self-defeating measure that not only harms France’s aviation sector but also harms France’s appeal as a destination. The DGAC apparently agrees, noting the “poor competitive position of French airports” that threatens jobs and routes.

According to Air France-KLM CEO Benjamin Smith, TSBA has negatively impacted the entire travel sector, including tourism and hospitality. The Association of Autonomous Airlines (SCARA) shares this view, arguing that higher ticket costs drive travelers to other European markets and harm national flag carriers.

The impact is particularly significant in business aviation, where taxes have increased significantly, leading to a significant drop in demand. French operators recorded a significant decrease in activity during the third quarter, while foreign companies experienced an increase. EBAA France, the sector’s leading association, has called the system unfair.

The tax is estimated to generate 850 million euros per year, most of which is allocated to the general government budget. However, environmental groups suggest that passenger numbers are more affected by changing attitudes and aviation policies than by costs alone, citing recent economic analyses.

As French lawmakers consider revisions to the 2026 budget, there is a growing call for change in France’s aviation sector. Without assistance, the sector is potentially in decline. For a country dependent on tourism and trade, the skies may soon be friendly elsewhere, at France’s expense.