Germany to cut air traffic tax to shore up sector

BERLIN, April 1 (Reuters) - German Chancellor Friedrich Merz's cabinet approved plans on Wednesday to reduce air traffic tax from July, taking it back down to May 2024 levels in an attempt to boost the aviation sector.

International airlines have long complained that flying to and from German airports was too expensive and threatened to reduce their presence here.

• Move fulfils a pledge in the coalition deal between Merz's conservatives and Social Democrats

• Reverses a 2024 tax increase made by previous government as it sought to fill a budget gap

• Duty is part of costs paid by airlines at German airports, along with airport charges and fees

• Aviation industry had warned tax meant Germany would lag other countries as an air hub

• Tax will be reduced by 2.50 euros ($2.90) per ticket for short-haul flights, 6.33 euros for medium-haul, 11.40 euros for long-haul

• Takes effect from July 1

• Cost to federal government will be around 170 million euros for second half of this year and 355 million euros in subsequent years

• For passengers to benefit, airlines will have to pass on reductions

• Aviation lobby says move is a step in right direction but wants further steps to cut cost of doing business in Germany

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