Austria's flight tax under scrutiny as airlines demand cuts

Austrian Airlines CEO Annette Mann and Ryanair chief Michael O'Leary, despite their contrasting communication styles, share a common demand: a reduction in Austria's flight tax. The two airlines, holding a combined 66.3% market share at Vienna Airport, argue that the 12-euro tax per ticket, along with rising operational costs, makes Austria an uncompetitive location.

Ryanair has been vocal in its campaign for tax reduction since the government change in 2024, praising countries like Sweden and Hungary for lowering or eliminating similar levies. The budget airline aims to pressure the Austrian government by highlighting its expanded service from nearby Bratislava Airport. Ryanair has promised substantial growth in Austria, pledging a $1 billion investment to increase passenger numbers by 70% to 12 million annually by 2030 if the tax is cut.

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Without noticeable cost reductions and relief on taxes and fees, a shrinkage of Austrian Airlines and the discontinuation of unprofitable federal state connections threaten.

Austrian Airlines also faces increased pressure. CEO Mann has long advocated for cost reductions, warning that without tax and fee relief, the airline might shrink and cut unprofitable domestic routes. She noted that inflation and labor costs have risen disproportionately, making Austria's location costs "twice as high as the EU average" and "eight times higher than in Spain." Mann cautioned that without improvements, Austrian Airlines could "die a beautiful death."

The unified stance of both airline leaders underscores the serious challenges facing Austria's aviation sector. Reports suggest that the flight tax has been a subject of behind-the-scenes discussions within government ministries, with a potential reduction being considered.

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We will perhaps really die a beautiful death at some point.