Does the Dutch travel tax cost too much?
October 8, 2007 by Evan Sparks
The Dutch government has decided to impose an additional tax on all passengers departing or arriving in the Netherlands (primarily affecting Amsterdam’s Schiphol Airport and the airline that hubs there, KLM). Like Britain’s Air Passenger Duty (APD), the Dutch tax differentiates between European flights (€11.45 per segment) and longer-haul flights (€45). The levy is part of what the Dutch finance ministry calls “the greening of taxation,” according to ATW Daily News. But the tax might not actually quell flying from Schiphol (ostensibly the reason for an environmentally friendly tax)–it may just push a lot of it to nearby airports in Belgium and Germany.
So how much will this set back travelers to the Netherlands? I did some research to compare flights to Amsterdam and to Brussels from the same airports on the same airlines on the same days, and here are my results. All total fares below are inclusive of taxes and fees.
In this case, one can save almost €30 in tax by flying to Brussels.
Again in this case, one can save more than €30 by flying from Belgium rather than Holland.
- Brussels-JFK on Delta
10/18-10/21
Total: €411.34
Tax: €41.00
No tax breakdown offered
- Amsterdam-JFK on Delta
10/18-10/21
Total: €478.34
Tax: €52.61
No tax breakdown offered
Total tax after “greening”: €142.61
Remarkably, the Dutch tax puts a €100 transatlantic premium on this flight. If I lived in the southern part of Holland, Brussels would be sounding pretty good right now.
Britain’s APD increase has driven air traffic to continental European airports; the Netherlands now seems to want to replicate that feat. For now, KLM’s large hub operation will remain intact. Unlike APD, the proposed Dutch tax exempts passengers merely changing planes at Schiphol. But how green is that? Do planes carrying mostly transfer passengers somehow emit less carbon dioxide or nitrous oxide? Such an exemption lends credence to the Association of European Airlines’s claim that this is a revenue measure masquerading as a pro-environment measure.
Regardless of motivation, my brief analysis shows that passengers will experience dramatic increased costs. Some will simply stop flying; others will seek cheap flights from other nearby hubs. Brussels is only 130 miles from Amsterdam, a two-hour drive; Dusseldorf is only 145 miles away; and low-fare hub Charleroi is 170 miles away. There are many other airports intruding in the Dutch “catchment area” for airline passengers, and “the greening of taxation” will drive many passengers away.
The tax will be debated next month in the Dutch parliament. One can be sure that these calculations will figure into the debate.
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Does the Dutch travel tax cost too much?
October 8, 2007 by Evan Sparks
The Dutch government has decided to impose an additional tax on all passengers departing or arriving in the Netherlands (primarily affecting Amsterdam’s Schiphol Airport and the airline that hubs there, KLM). Like Britain’s Air Passenger Duty (APD), the Dutch tax differentiates between European flights (€11.45 per segment) and longer-haul flights (€45). The levy is part of what the Dutch finance ministry calls “the greening of taxation,” according to ATW Daily News. But the tax might not actually quell flying from Schiphol (ostensibly the reason for an environmentally friendly tax)–it may just push a lot of it to nearby airports in Belgium and Germany.
So how much will this set back travelers to the Netherlands? I did some research to compare flights to Amsterdam and to Brussels from the same airports on the same airlines on the same days, and here are my results. All total fares below are inclusive of taxes and fees.
10/18-10/21
Total: €271.96
Tax: €90.96
Tax breakdown:
10/18-10/21
Total: €335.29
Tax: €95.29
Tax breakdown:
Total tax after “greening”: €117.79
In this case, one can save almost €30 in tax by flying to Brussels.
10/17-10/21
Tax: €16.42
Tax breakdown:
10/17-10/21
Tax: €27.20
Tax breakdown:
Total tax after “greening”: €49.70
Again in this case, one can save more than €30 by flying from Belgium rather than Holland.
10/18-10/21
Total: €411.34
Tax: €41.00
No tax breakdown offered
10/18-10/21
Total: €478.34
Tax: €52.61
No tax breakdown offered
Total tax after “greening”: €142.61
Remarkably, the Dutch tax puts a €100 transatlantic premium on this flight. If I lived in the southern part of Holland, Brussels would be sounding pretty good right now.
Britain’s APD increase has driven air traffic to continental European airports; the Netherlands now seems to want to replicate that feat. For now, KLM’s large hub operation will remain intact. Unlike APD, the proposed Dutch tax exempts passengers merely changing planes at Schiphol. But how green is that? Do planes carrying mostly transfer passengers somehow emit less carbon dioxide or nitrous oxide? Such an exemption lends credence to the Association of European Airlines’s claim that this is a revenue measure masquerading as a pro-environment measure.
Regardless of motivation, my brief analysis shows that passengers will experience dramatic increased costs. Some will simply stop flying; others will seek cheap flights from other nearby hubs. Brussels is only 130 miles from Amsterdam, a two-hour drive; Dusseldorf is only 145 miles away; and low-fare hub Charleroi is 170 miles away. There are many other airports intruding in the Dutch “catchment area” for airline passengers, and “the greening of taxation” will drive many passengers away.
The tax will be debated next month in the Dutch parliament. One can be sure that these calculations will figure into the debate.
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Posted in Evan's Commentary | Tagged airports, competition, environment, europe, tax, travel |