Sunday, October 13, 2019

The Likely Scenario of Taxes for In-Country German Flights

If you'd gone and suggested that taxes would be created in Germany for in-country airline flights back in the 1990s, folks would have laughed at you and the scenario.  Currently, with the amount of discussion going on, it's likely with in the next five years that some type of taxation will be created, and I would suggest it'll be a two-step tax.

So to explain this.  The environmental folks and journalists have gone to hype up the amount of C02 for in-country flights, and how this simply doesn't make sense....that you'd be so much better off using a train rather than a plane. 

You (being a resident of Berlin) go and study the issue of getting to Munich for a engagement with business associates.  The train would require four hours of travel (under ideal weather and with no delays).  The odds of getting that?  Most will suggest that a third of all Bahn long-trips are delayed between 15 and 60 minutes.  Others will tell you a disaster story of getting an hour into the trip, and the train breaking down. 

Then you add on drive to reach the Berlin station, getting to the platform, and the end-situation in Munich....so this is really more about a six-hour total trip. 

Then you sit and do the comparison with the plane.  It's a 70-minute flight with Lufthansa.  You admit that the security business and getting to the airport will require 90 minutes.  On arrival at Munich, you can probably be out of the airport in 30 minutes after arrival.  Chances of delay?  Oddly, they do have late departures but it's rarely more than 20 minutes unless it's a lightning storm approaching.  Break-downs?  They rarely ever occur.

With the plane option, you tend to see no real advantage either way.  So you start to look at the secondary issues.

HVAC working in summer period onboard the ICE train to Munich?  Marginally so.  On a eight-car train, there's probably always one car with air conditioning just not working. 

Security?  It's an odd thing to bring up in Germany these days.  You feel safer at airports on planes, than in railway stations and trains.  Back in the 1980s, the only thing at stations that you worried about were pick-pockets.  Now?  Drug sales goes on and strange characters occupy the shadows of train stations. 

In simple terms, you'd rather than these people keep their nose out of your preferences.  If it made sense to get people 'forced' into rail use for Berlin to Munich.....why not Berlin to Amsterdam and Berlin to Madrid as well?  In a matter of a decade, you could be jacking the prices of airline trips throughout all of Europe, convincing people that only rail travel was now possible. 

So you take this scenario, and apply the first wave of taxation to airline tickets, and observe what happens for in-country flights.  After six months, you begin to notice that sixteen flights from the Berlin region to airports like Munich, Frankfurt, or Hamburg have been cut.  Then you gaze over at Munich, and notice that 32 flights there have been cut. 

Some airport analysts begin to talk about personnel cuts, and downsizing.  Forty people cut at Munich, and twenty-five people in Frankfurt.  All due to the in-country airline changes.  There is worry, but only marginal talk.

So two years pass, and the second part of the taxation business occurs.  In four months time, almost half the flights between Munich and Berlin are trimmed off the the schedule.  Same for Hamburg to Frankfurt flights.  Nationally, it's around 5,000 jobs lost in this second wave. 

Worry about long-term losses on jobs?  Well, the political chatter is mostly about re-training people....maybe teaching them to write code, or taking up green jobs in the future.  Public cynicism starts to occur....with people no longer believing in this taxation agenda. 

It's not really a 'if' situation now on this in-country flight deal....it's more of a question of when it will occur, and just how much the initial tax will be, with the second wave being the 'hurt-factor'.

FYI on current pricing for Berlin to Munich flights....roughly 100 Euro for a Lufthansa flight, 63 Euro for discount flights, and 40 Euro for a one-way railway second-class ticket.  Even if you make a 15 Euro tax on each leg....no one would really flinch with the 130 Euro RT ticket.  So it's the second wave of 20 to 35 Euro for each leg that would begin to flip off travelers. 

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