October 8, 2018 / 1:20 PM / 7 months ago

UPDATE 1-Norway proposes increased tax on long haul flights, cut for short haul

(Adds Norwegian Air comment)

OSLO, Oct 8 (Reuters) - The Norwegian government proposed on Monday to raise the tax on airline tickets to non-European destinations to 200 Norwegian crowns ($24.13) from 80 crowns currently.

On travel in Europe, it proposed a cut to 75 crowns per ticket from 80 crowns.

“The passenger fee is given an environmental profile by introducing distance differentiation with higher rate from EEA/Europe,” the government said in its 2019 fiscal budget proposal.

Overall, the proceeds from airline ticket fees is expected to be neutral. If approved by parliament the changes will take effect from April 1.

Norwegian Air and SAS have the largest market shares in Norway.

“It’s positive that the government reduces taxes on flights in Europe but the increase on international flights is bad news for Norway’s aviation industry, tourism and business,” Norwegian Air spokesman Lasse Sandaker-Nielsen said.

The budget carrier has expanded rapidly with overseas flights between European and U.S. cities, as well as from Europe to Asia.

“To suggest that taxes do not mean anything (for demand) has no root in reality,” he added. ($1 = 8.2874 Norwegian crowns) (Reporting by Ole Petter Skonnord, editing by Terje Solsvik)

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