To stimulate recovery in its declining aviation sector Sweden has decided to scrap air passenger tax.
Sweden’s government hopes to rejuvenate the country’s commercial aviation sector by abolishing air passenger taxes.
The government will scrap passenger taxes of up to SEK 517 (USD 54) for flights – depending on the distance flown. This came into effect on July 1.
ENTICING AIRLINES TO FLY TO SWEDEN
Sweden saw a significant decline in air traffic over the last 6 years, particularly to smaller airports. This is due to airlines axing or reducing services.
Sweden is indeed the largest Scandinavian economy. The government hopes that the elimination of air passenger tax will entice airlines which dropped Sweden from their networks, to return to the country.
The country, known for picturesque scenery, untouched natural landscapes and the famous Northern Lights has seen fewer tourists due to reduced passenger numbers.
INCREASE IN AIR PASSENGER TAX, DECREASE IN FLIGHTS
Sweden introduced steep aviation taxes in 2018 – in response to growing calls for improved climate action.
According to data provided by Cirium, flights to Sweden have declined by almost a third since 2018.
In fact, 2018 was the year that young activist Greta Thunberg began her climate protests and flight-shaming emerged.
Bloomberg reports that domestic air travel in Europe has been in decline for a number of years.
This is due to various factors, including new environment taxes, lower demand for business travel after the Covid-19 pandemic and also because of greater incentives to use to rail services.
CARRIERS EYE RETURN TO SWEDEN
Airlines including Ryanair, which scrapped all flights to Sweden last year, have praised this decision.
EasyJet has welcomed the news. It said, “we strongly welcome the abolition of taxes on passengers to help keep flying affordable and will keep our network under constant review for new opportunities.”
Norwegian Air Shuttle said it intends restarting flights to Sweden and could recruit more Swedish crew.
Ryanair says it will resume Swedish services. It says it will introduce two aircraft to its Swedish fleet and add 10 direct routes.
The airline also says it plans to axe flights to Denmark. The country is considering introducing an aviation tax before the end of the year.
Ryanair says it will terminate flights at Aalborg and Billund airports in response to the changes in tax policy.
BENEFITS FOR AIRPORTS
Stockholm’s airports (excluding its primary hub: Arlanda) stand to benefit from Sweden’s revised aviation tax policy.
Bromma, Skavsta and Vasteras airports (located in the Stockholm catchment area) are set to gain from the abolition of passenger taxes as they could indeed see the return of more low-cost airlines.
These airports handled a number of low-cost carriers, which stimulated local economies through tourist spend, by way of local transport, accommodation, food and beverage purchases and other ancillary services.
An increase in flights to these airports should also result in increased employment opportunities for locals.
