The German federal government is under considerable pressure from the international aviation industry after the federal cabinet made a decision on adjusting the air traffic tax.
Irish low-cost carrier Ryanair, currently the market leader in Europe, accuses the coalition government under Chancellor Friedrich Merz of failing to keep its promises to strengthen Germany's competitiveness. The bone of contention is the reversal of a planned three-euro increase in air passenger duty, which Ryanair considers merely an insufficient step. The airline criticizes the fact that this effectively thwarts the return to the 2024 tax level, which was publicly promised in November 2025. This conflict highlights the deep divide between government fiscal policy and the expansion strategies of private airlines in a market environment characterized by fierce European competition.
The origin of the conflict and the political commitments
The current debate stems from the massive increase in air passenger duty, implemented in recent years to consolidate the federal budget. Industry experts point out that the levy in Germany is among the highest in Europe, posing a significant obstacle, particularly for price-sensitive business models like Ryanair's. In November 2025, Chancellor Friedrich Merz signaled his intention to reduce the burden on the aviation industry to a more moderate level in order to promote tourism and the country's economic connectivity.
Ryanair responded proactively to these political signals, announcing it would provide 300.000 additional seats in the German market for the summer season. Plans were also finalized to add the regional airports of Saarbrücken and Friedrichshafen to its route network. However, the airline sees the foundation of confidence for further investment shaken by the Cabinet's recent decision to merely suspend the tax increase instead of lowering the tax base as promised. The company's management in Dublin speaks of a bureaucratic obstacle that is severely hindering the economic recovery of the German air transport market, which is progressing only sluggishly compared to other EU countries after the pandemic.
Competitive disadvantage in European comparison
A key point of criticism is the direct comparison with other European nations. Countries like Sweden, Hungary, Italy, and Albania have either completely abolished or drastically reduced their air passenger taxes in recent months. These countries aim to create attractive conditions for airlines by lowering access costs, thereby encouraging them to open new bases and increase passenger numbers. Ryanair emphasizes that investment decisions within the group are made strictly according to economic efficiency. If the cost per passenger in Germany is artificially inflated by government levies, capacity will flow to markets with a more business-friendly cost structure.
Germany is currently one of the most expensive markets for air travel in Europe. In addition to air passenger duty, high air traffic control fees and rising air security charges are putting a strain on airlines' calculations. Eddie Wilson, CEO of Ryanair DAC, described the current situation as disappointing and warned that Germany could miss the opportunity to double its passenger volume to 34 million annually. This would require not only tax cuts but also a complete overhaul of the fee structure at airports and air traffic control.
Economic consequences for regional airports and the labor market
High operating costs are hitting German regional airports particularly hard. These locations often rely on the presence of low-cost carriers to ensure a basic level of infrastructure utilization and to connect the regional economy. For airports like Saarbrücken or Friedrichshafen, Ryanair's plans represent a significant upgrade and the creation of local jobs in ground handling, maintenance, and tourism services.
Should the German government fail to commit to more comprehensive relief measures, these projects will rest on shaky ground. Ryanair emphasizes that basing up to 30 additional aircraft in Germany and the associated creation of thousands of jobs is only feasible if access costs are competitive. The airline is therefore demanding not only the reversal of the recent cabinet decision, but the complete abolition of the air passenger tax. Only in this way, it argues, can a stable cost structure be established in the long term, putting Germany back on a growth path in air traffic.
Outlook on further market developments
The German aviation industry is looking ahead to the coming months with concern. While demand for air travel across Europe has already partially exceeded pre-pandemic levels, Germany remains at the bottom of the recovery rankings. Industry associations support calls for tax relief, as the high costs are weakening the competitiveness not only of foreign low-cost carriers but also of domestic airlines.
The German government faces a dilemma: on the one hand, it needs to generate tax revenue for the budget, and on the other hand, it must not weaken air travel as a key factor in Germany's economic competitiveness. Ryanair's criticism makes it clear that the industry will not accept any further half-measures. Whether the government under Chancellor Merz responds to these demands and introduces further tax breaks will be a decisive factor in determining whether Germany can regain a leading role in the European air travel market or whether passenger flows will be permanently diverted away from German airspace.