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Abolishing Air Passenger Taxes in Italy Would Increase GDP by €1.74 Billion Per Year and Create 7,500 New Jobs by 2030

Study reveals boost for Italian tourism & aviation

  • Aviation sector is €480 million (+2.5%) larger in 2020;
  • 8.7 million new tourist arrivals; €2.5 billion in additional tourism spending between 2018–2020.

New results from a PricewaterhouseCoopers LLP (PwC) study, The economic impact of abolishing aviation taxes in Italy reveal sizeable increases in Italian GDP in the years following the abolition of the Council City Tax (“Addizionale Comunale”). Most notably, GDP would increase by €880 million in the first year alone, growing to reach €1.74 billion per year by 2030 (compared with no changes to the current baseline/taxes levied). The study additionally found that more than 3,750 jobs across all sectors of the economy would be created in the first two years following the implementation, with 7,500 new jobs created by 2030. Finally, Italy’s aviation sector would also see an uplift — reaching €480 million per year in 2020, and €590 million per year by 2030.

Tax cut benefits could also positively impact other associated industries, including Italy’s agriculture, transportation and manufacturing sectors. Agriculture would see a €205 million annual increase and non-aviation related transport would see a €295 million annual increase by 2030, according to the report.

“These results should serve as an eye-opener for the Italian government in realizing the far-reaching economic impact eliminating these taxes could achieve”, said Thomas Reynaert, A4E’s Managing Director.

Currently, Austria, Croatia, France, Germany, Greece, Italy, Latvia, Luxembourg, Norway and the UK levy air passenger taxes. Sweden (2018) and the Netherlands (2021) are planning to introduce them in the future.

In fact, a wider PwC study on the impact of abolishing aviation taxes across the whole EU as of January 2018 reveals that Europe’s tourism industry would be the largest beneficiary. Under this scenario, the full abolition of all air passenger taxes in Europe could add more than 45 million arrivals between 2018–2020, some 25.4 million of them tourists, according to the study.

“This is in line with the European Commission’s Aviation Strategy for Europe, which sees aviation as a catalyst for economic growth and connectivity”, Reynaert added.

From 2006–2016, the average ticket prices in Europe fell by 8 per cent while the average taxes paid doubled: from €6.00 to €14.00, per ticket.Source: IATA economics Beyond air passenger taxes, which are used by national governments to raise revenue – airlines and their passengers are also subjected to airport charges for access to infrastructure and the use of airport services Between 2006–2016, airport charges also more than doubled: From €16.00 to €33.00 per ticket.Source: IATA economics

New regulatory models were introduced in Italy in 2014, however airport charges have continued to follow a dramatic upward trend. A comparison of the airport charges at a representative sample of Italian airports (Bologna, Catania, Cagliari, Palermo, Torino, Verona, Napoli and Olbia) shows a projected 27 per cent increase in airport charges for the period 2013–2019.

“We continue our efforts to work with the relevant authorities to create the best possible conditions for Italy’s travelling public”, said Luciano Neri, Secretary General of IBAR, the Italian Board of Airline Representatives. “The airlines have already done their share, now it is time for the others to do the same”, Neri added.

Note to Editors

This report is part of a broader set of reports commissioned by Airlines for Europe in which PwC provides an independent overview of the current air passenger taxes in Europe and an assessment of their economic impact using a Computable General Equilibrium (CGE) model, which is used by institutions such as the IMF, World Bank, OECD and several national governments to quantify the economic impact of policy changes.

About IBAR

The Italian Board of Airlines Representatives (IBAR) is a non-profit association established in 1986 to liaise with local institutions, regulators and airport management companies. Its current membership consists of 52 carriers operating in the country.