Air France, motorway operators criticise French government’s new tax plans

PARIS, Sept 28 (Reuters) – Air France (AIRF.PA), airport group ADP (ADP.PA) and motorway operators criticised the French government’s plans to levy a new tax on the transport sector, saying that it would hurt their profits and make travel costlier.

The 2024 budget bill, unveiled on Wednesday, introduced the tax on road operators such as Vinci (SGEF.PA) and Eiffage (FOUG.PA), as well as on airport operators such as ADP, seeking to raise an estimated 600 million euros ($629.9 million) annually.

The transport sector taxes are also aimed at showing that the government is keen to protect the environment and tackle climate change, while also raising money for the French state.

ADP, which operates Paris’ two main airports, said it would transfer part of this new tax to airlines, by raising the latter’s fees over a two to three-year period.

The tax is “not at all good news … as the airport operators will pass on this extra cost on airlines,” Air France CEO Anne Rigail told RTL Radio.

Given that within the airport sector, this tax will principally hit ADP, Rigail deemed it unfair since smaller airports used by Air France’s low-cost rival airlines would not be impacted in the same way.

“It poses problems for us. For us, it raises new competitive distortions which will hurt us,” she said.

With the fight against inflation high on the agenda of a government that has also promised not to increase taxes on households, there was much debate on the impact of the budget plans.

Highway operator Vinci Autoroutes said the tax was contrary to both the spirit and letter of highway concession contracts and that it would use all available means of appeal.

It told Reuters that the taxes would “inevitably” lead to an increase in toll fees.

But Finance Minister Bruno Le Maire ruled it out, saying highway operators would not be allowed to pass on the tax to clients.

Motorway operator and construction company Eiffage (FOUG.PA) said the new tax would result in a decrease of around 117 million euros ($122.9 million) in the group’s consolidated operating profit on ordinary activities.

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