The "Chirac Tax" Controversy: Ryanair’s Fight Against French Policy

Ryanair recently issued an urgent appeal to the French government to abandon its plan to increase the air passenger solidarity tax, known as the "Chirac tax," by 260% starting January 1, 2025. According to the airline, this decision could have severe consequences, including a 50% reduction in its capacity to and from regional French airports. While this measure aims to generate an additional €1 billion for the state, Ryanair describes it as a "short-sighted project" that risks severely impacting the French aviation sector, particularly in regional areas.

Context and Stakes

The Chirac tax, introduced years ago to fund humanitarian projects, is now at the center of a heated debate due to the planned increase. Ryanair argues that the hike not only undermines economic growth but also amounts to a "targeted attack" on French citizens and rural areas, where regional flights play a crucial role in mobility and economic vitality. Paradoxically, this increase would exempt long-haul passengers, often wealthier individuals flying from Paris.

Comparisons with Other Countries

Ryanair emphasizes the stark contrast between France and other European countries regarding aviation taxes. While nations like Sweden, Hungary, and Italy are abolishing or reducing such taxes to boost their competitiveness, France appears to be moving in the opposite direction. Countries such as Spain and Poland, which have no aviation taxes, are cited as examples of economic success driven by robust connectivity and foreign investment. Ryanair insists that maintaining a competitive tax framework is essential for fostering economic growth and regional development.

Impact on French Regions

One of Ryanair’s strongest criticisms targets the disproportionate impact this tax increase would have on French regions. Rural areas and regional airports, already vulnerable, rely on low-cost carriers like Ryanair to sustain a steady flow of tourists and business travelers. Higher taxes would raise ticket prices, making French destinations less attractive compared to their European counterparts. Consequently, many routes could become unviable, further isolating these regions and threatening their economic prosperity.

Ryanair's Response

In response, Ryanair has announced that it is reassessing its operations in France. If the plan to triple passenger taxes goes ahead, the airline intends to significantly reduce its capacity at regional airports starting in January 2025. This mirrors actions taken elsewhere: in Germany, where similar tax hikes were implemented, Ryanair has ceased operations in cities like Dortmund, Dresden, and Leipzig, and drastically reduced connections to Hamburg and Berlin. Jason McGuinness, Ryanair’s Commercial Director, described the tax hike as "poorly thought-out" and warned that it would hinder the recovery of the French aviation sector post-pandemic.

A Call to the French Government

In its statement, Ryanair urges the French government to reconsider its position. The airline argues that the planned increase is not only unjustified but will exacerbate the challenges faced by the already struggling French and German aviation markets. Ryanair advocates for a more balanced fiscal policy, aligned with countries that have scrapped or reduced aviation taxes to promote economic recovery.

Potential Consequences

If France proceeds with this plan, the repercussions could be significant. Fewer air connections would lead to a decline in tourism, particularly in rural areas, and limit investment opportunities. Moreover, this situation could set a concerning precedent, discouraging other airlines from expanding their operations in France.

In conclusion, the decision to increase the air passenger tax raises critical questions about balancing the need for state funding with the economic impact on regions and airlines. Ryanair, a major market player, warns of the risks of such a measure, not just for its operations but for France’s overall attractiveness. This debate highlights the importance of a coordinated and thoughtful approach to taxation, ensuring sustainable economic growth while addressing the state’s financial needs.