Austria’s air travel tax will be cut in half on Jan. 1, 2018, following a confirmation by the Austrian Council of Ministers, as the country seeks to increase its attractiveness as a business and tourism destination. 

Under the new plan, Austria’s air travel tax will be amended to €3.50 ($3.70) for short-haul, €7.50 for medium-haul, and €17.50 for long-haul flights.

Additional motives for the tax cut, as confirmed by the Council of Ministers, included “[securing] the future of Vienna airport as an international aviation hub, [creating] jobs and [increasing] economic development.”

“In cutting its travel tax, the Austrian government has taken an important step in the right direction,” IATA DG and CEO Alexandre de Juniac said. “Other countries should take note, particularly Germany and the UK, which continue to heavily tax air passengers.”

Plans for a third runway at Vienna international Airport were blocked by an Austrian court in February over environmental concerns. In the ruling, the court concluded the new runway construction would have resulted in a 2% increase in greenhouse gas emissions. Austria has pledged to reduce emissions by 2.25% by 2020 in the transport sector. The airport said it would appeal the decision.

“Ultimately, the tax should be scrapped completely,” de Juniac said. “With expansion seemingly blocked in Munich and Zurich, the region is suffering from a lack of airport capacity. Austria has a golden opportunity to take a leadership position if it can put a vision forward for Vienna to be a major hub.”

“While the tax cut is good news, it is not the end of the story,” de Juniac said. “There is more that the government can do to strengthen air transport in Austria.”

According to a 2015 IATA analysis, if all Austrian air travel taxes were eliminated, international travel to the country would increase 2.7% and 1,700 jobs would be created.

Mark Nensel mark.nensel@penton.com