Sweden's new air tax may be a boon for Denmark

 

Sweden added a new tax on air passengers last week, and Denmark is hoping it means good news for Danish airports as airlines and passengers re-route to avoid the tax, which runs as high as €39.

The charge, which is less for shorter flights, is per passenger, but is unlikely to be reflected in ticket prices in most cases, because of the competitive nature of air travel today means that airlines will absorb much of it, at least initially. A Danish bank analyst who tracks the industry estimates the one-year cost to SAS, for instance, as about €13 million, and could go higher.

For airlines such as SAS and Norwegian Air, Denmark hopes, it will result in shifting numbers of longer-distance flights to Copenhagen from Swedish and Norwegian airports. Norway also has instituted a similar tax; Denmark used to have one, but dropped it over 10 years ago. 

Other countries have also tried and dropped air passenger taxes, often in the name of encouraging 'green' transportation, but most have ended up dropping the scheme, or, as in the case of the UK, sharply reduced it.

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