Headlines
German coalition agrees to lower costs for airlines
Published by Global Banking & Finance Review®
Posted on November 14, 2025
2 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on November 14, 2025
2 min readLast updated: January 21, 2026
Germany's coalition reduces airline costs with tax cuts and efficient security checks, aiming to boost competitiveness.
BERLIN (Reuters) -The leaders of Germany's governing coalition agreed to reduce costs for airlines late on Thursday, including tax cuts and more efficient security checks.
WHY IT'S IMPORTANT
Germany's aviation sector has long complained that high costs put it at a disadvantage to European rivals.
CONTEXT
Low-cost carriers like Ryanair and EasyJet have reduced capacity in Europe's largest economy, citing high costs.
While passenger numbers in the European Union have recovered and were up 3% last year compared to pre-pandemic levels, they were still down 19% in Germany, which is home to airline group Lufthansa with key hubs in Frankfurt and Munich.
BY THE NUMBERS
Germany's coalition, led by Chancellor Friedrich Merz, agreed several measures aimed at saving 350 million euros ($408 million):
* Rolling back a tax on tickets to 2024 levels. Forlong-haul flights that's a reduction from 70.83 euros to 58.06euros per passenger. * Cutting air traffic control fees by well over 10% by 2029 * Reducing security check costs through more efficientprocessesRESPONSES
"The federal government has kept its word and put an end to years of spiralling costs for taxes and fees for air traffic in Germany," the head of industry association BDL, Joachim Lang, said.
A Lufthansa spokesperson called the decision an important step "because flying in and out of Germany has become too expensive".
REACTION
Lufthansa shares rose by around 2.5% on Friday morning.
($1 = 0.8575 euros)
(Reporting by Klaus Lauer and Thomas Seythal. Editing by Mark Potter)
Corporate tax is a tax imposed on the income or profit of corporations. It is calculated based on the company's taxable income and is typically a percentage of that income.
Tax cuts refer to a reduction in the amount of tax that individuals or businesses are required to pay. This can stimulate economic growth by increasing disposable income and encouraging spending.
The aviation industry encompasses all aspects of air travel, including airlines, aircraft manufacturing, airport operations, and air traffic control. It plays a crucial role in global transportation and trade.
Security checks in aviation are procedures designed to ensure the safety of passengers and aircraft. These checks typically involve screening luggage and passengers for prohibited items before boarding.
Economic planning involves the process of setting goals and determining the best strategies to achieve them within an economy. It includes resource allocation, budgeting, and policy development to promote economic growth.
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