A rising number of French companies are expressing their opposition to the government’s proposal to tax long-distance transport infrastructure, including airports and highways. The aim behind this taxation is to encourage rail travel over air or private cars whenever possible.
The Council of Ministers, an organization that convenes all ministers on a weekly basis, has recently approved a draft bill. If passed, this bill would impose a 4.6% levy on the revenue of companies operating long-distance transport infrastructure within the country. The bill will soon be presented to the National Assembly (France’s lower house of parliament) and undergo review and voting by lawmakers. If approved, the law would become effective next year.
Air France and Transavia are expected to be the airlines most severely affected by this measure, which poses a significant threat to their ability to regain profitability. Moreover, there are concerns about the unfair competition that would arise between French airlines and foreign carriers such as Ryanair, which operates from airports like Beauvais and would be exempt from this tax.
While Air France-KLM supports the government’s goal of accelerating the decarbonization of the economy, it emphasizes the need for a level playing field to maintain the competitiveness of the French airline industry.
Vinci Challenges Proposed Law
Vinci, a company that manages airports and highways, has expressed its disagreement with a proposed law that could cost them a hefty sum of 260 million euros ($273.1 million) in 2022. They have vowed to utilize all available avenues of appeal against this legislation, stating that it goes against the terms and conditions of concession contracts.
Aeroports de Paris Faces Revenue Losses
Aeroports de Paris, an airport operator, anticipates a significant impact on its earnings before interest, taxes, depreciation, and amortization if the proposed tax were to be implemented. A rough estimation suggests a loss of around EUR100 million. To mitigate this loss, the company plans to implement higher tariffs next year, offsetting approximately half of the tax’s effects.
Eiffage Foresees Decline in Profits
Eiffage, a civil-engineering company that manages highways, expects a decline of approximately EUR117 million in operating profit from ordinary activities due to the proposed tax. In light of this estimation, the company assures its shareholders that it will take every necessary action to defend its rights.
