Norway Adds Nasty New Airport Tax

The UK is notorious for their Air Passenger Duty, which is the highest passenger tax levied anywhere in the world. If you’re on a premium cabin ticket originating out of the UK, you’ll pay $200+ for that tax alone. It’s worth keeping in mind that this tax is separate from airport taxes, security taxes, etc.

UK-APD

Well, unfortunately it looks like another European country will be soon be adding a national tax on aviation.

For flights as of June 1, 2016, Norway will begin charging a new nationwide air passenger tax of NOK 80 (~$10) for passengers traveling out of any of their airports. The tax won’t be levied on passengers under two, and on transit and transfer passengers, so only the first flight will be taxable.

SAS-A330

Now, in fairness this tax isn’t as horrible as what’s charged out of the UK, but it still has the potential to have a huge impact on passengers and airlines. Keep in mind that there are lots of low cost carriers operating out of Norway (most notably Norwegian Air Shuttle), and they often have extremely low fares. In some instances, this tax alone could be as much as the base fare airlines charge for certain flights.

A4E (Airlines For Europe), the lobbying group for several major European airlines, is of course against this new tax:

“We are astonished about the unwavering approach of the Norwegian authorities on implementing the Air Passenger Tax while almost all comments during the public consultation period contained objections to it. Instead of preventing economic growth and job creation by imposing unreasonable taxes, European governments should create a supportive regulatory environment”, said Thomas Reynaert, Managing Director of A4E.

It’s interesting to hear the economic impact of this change, which could reduce the demand for travel by 5%, equating to 1.2 million fewer passengers per year:

According to IATA analysis, the tax risks reducing the overall demand for air transport by 5%, which equals roughly 1.2 million passengers per year. In addition, the tax would lead to a reduction in the direct and indirect output of the aviation sector by an estimated NOK 1.4 billion (EUR 150 million).

According to analysis by PwC, here’s the huge economic impact of the UK APD:

Economic analysis by PwC shows removing UK Air Passenger Duty (APD) would boost British GDP by 1.7% and create 60,000 new jobs by 2020.

Bottom line

It’s unfortunate to see another country tax air travel across the board. Flying has become so much more accessible than before, and that’s largely thanks to the introduction of low cost carriers, which have greatly brought down fares. Adding taxes, even if it’s “just” $10 per trip, can greatly impact demand.

What I’m curious about is that the tax is apparently being levied for those flying as of June 1, 2016, rather than for those who book their tickets as of June 1, 2016. That means airlines will have to pay the government starting in a couple of weeks — will they try to retroactively collect the tax from passengers, or will they swallow the cost?

(Tip of the hat to Economy Class & Beyond)

Comments

  1. $10? Big deal. You know those airports and infrastructure aren’t free, Ben? Just because US airports are in shambles compared to its peers (and even less than its peers) doesn’t mean the rest of the world should come down to their level.

  2. $10 is a “Nasty New Airport Tax”? Give me a break. Especially in a “premium travellers forum” such as this one. You probably spend twice as much on your capuccino.

  3. WTF? An additional $10, one-way, only for originations, is going to alter people’s travel plans? I call BS. I also note that there’s lots of “wiggle words” here: “potential, risks, can” (hard to believe a “slippery slope” argument wasn’t used as well).

    I also note that neither you nor the link thought it was important to report what the tax is to be used for. That shows the de rigueur ‘every tax is bad’ mentality.

    I wish I could send the entire lot of vehement “anti-taxers” to live in a nice Libertarian country like Sudan.

  4. I’m sorry lucky, but I disagree with you.
    First of all, this is such a click-bait article or your interpretation of $10 is completely overblown.
    $10 tax is not “nasty” or will impact any flight demand significantly.
    It’s just $10. A fairly close cost that you paid for your French toast in the Centurion Lounge in Mexico. Even if the LCC’s base fare was $10, it would increase to $20. Big deal. Norway is a rich country, so their citizen’s demand won’t have much impact. And Norway is a very expensive country to travel. So if $10 increase in fare discourages people to travel there, I think Norway is doing them a service. If they’ll complain about $10, go and see their price in McDonald. They’ll faint.

  5. They’ll collect it off you at checkin no doubt if it’s anything like when it was increased in the UK a few years back.

    Made an excellent start to my trip to Thailand standing in a massive queue to pay the extra money stressing about if I’d make it through security in time!

  6. Not once have you mentioned WHY this tax will be implemented. How can you be so negative about it, without even knowing what kind of tax this is…

    – A Norwegian

  7. Wow, I really wanted to go to Norway this Autumn, but due to the new tax I won’t be able to afford it. I suppose I’ll go to Sweden, instead.

  8. Would love to see this PwC analysis and what they put into their economic models. As an economist myself, it sounds so bogus as to be ridiculous. The removal of an air duty leading to a GDP boost of 1.7% is absurd. That blurb–and your article–also don’t mention what the negative effects of removing the tax would be.

    Somewhat related, I’d just like to point out that GDP growth figures often mask a much more complex story, and short-term increases in GDP often don’t signal much about the long run. Take a look at the Wikipedia page for countries with the highest GDP growth rate, and tell me if these are countries you’d like to live in.

  9. BA disaster at LAX. First disruption on the new system. We have been waiting 90 minutes with an agent (not including time in line) to get a new connection. And we are in business. The line for economy is out the door, and it’s taking at least 30 minutes per passenger

  10. $10 is less than US September 11th Security Fee.

    Take a domestic flight in economy from JFK to LAX and on top of the 11th Security Fee you pay four other fees more than $10 (US Transportation Tax, US Passenger Facility Charge and US Flight Segment Tax).

    Take flight from Oslo to Copenhagen and you pay just Norway Passenger Charge, $13.20 (110 NOK) and similar fee for Denmark.

  11. Just noticed on the image, you’re on a BA flight and have a fare for the ticket AND they charge you YQ charge (called scam-charges in Canada :)) as well?

  12. The high premium taxes out of LHR are certainly enough to get me to route through somewhere else in Europe. That lost spend on hotels, dining, and shopping goes elsewhere. Surely I’m not the only one who feels that way. As far as this $10 tax goes, seems pretty minor.

  13. I know you’re not a journalist but you could engage your critical faculties a little more before quoting wholesale from an airline industry press release.

    $10 seems fairly reasonable to cover some of the direct costs of the air travel but if argue the British system is better as it more fully values the externalities of air travel.

  14. You’ve lost some credibility with a rant over $10. Nasty? Really???

    I’m hoping you forgot to put in the sarcasm emoticon.

  15. I would love to see the list of assumptions that were used to derive the estimated 5% drop in demand based on a new tax of NOK 80. Because frankly, as far as taxes go, that is nothing, irrespective of why it’s being raised or how it will be used.

    Frankly, the figures released by IATA make me raise an eyebrow – no, BOTH eyebrows – at them; they damage their own credibility with that 5% / 1.2 million pax choosing not to fly garbage. Figures so dramatic that they expose IATA’s number crunchers as nincompoops.

  16. For those of you who wonder, the new air travel tax in Norway are not for funding airports or any other air travel related infrastructure(directly). The purpose is mostly to balance the national governments budget(I won’t start a debate on the governments spendings however), and partly for a change towards a “green future”. But for most of us living in Norway 10$ shouldn’t make a big difference in wether we travel on air planes or not. Our national infrastructure is heavily dependent on air travel due to geography and relativly few options.

  17. i agree with @everybody – 10 usd will barely be noticed.

    and i agree with @QR that the claims about economic growth sound bogus.

    @BillS – that extra 10 usd was the straw the broke the camel’s back ?!

  18. Oh, that horrible nasty $10 tax. How in the world can you compare this to the UK APD? It’s not even remotely the same thing.

    Saying this is going to have a drastic negative impact on the number of people travelling from Norway is like those in the US that say a 5 cent increase in gas prices will stop them from taking a vacation. Forgo a single drink or dessert with a meal and you’ve covered the added cost.

    Yes, truly a horrible, nasty, rotten, no-good tax.

  19. Yup, this was click-bait and a non-issue, as nearly all the previous comments have pointed out. Disappointed to see it happening on this blog.

  20. Funniest article you’ve done in ages – I trust you’re note being serious in calling this nasty? You probably give more than that to a doorman who flagged down a cab, now tipping – that’s a nasty tax!

  21. No one wants to see $10 extra taxes. But this is far from “nasty”. This is a total click bait.

  22. Remember that Norway, whose wealth in recent years has been from oil, is taking a huge economic hit as energy prices shift. Considering how expensive everything in Norway is, I can’t get too excited about an 80 NOK surcharge.

  23. They range from $5-$40 in Canada. Obviously those who fly the most from that airport will pay more but is $10 really that big of a deal? I would argue that a user pay system is better than a general tax that is paid by that community that may not use the airport and benefit from the services, I.e expedited security, more washrooms, etc.

  24. 10$ isn’t a big deal for the legacy carriers, but it is a big deal for the lowcost carriers like Ryanair and Wizzair. They sell at the moment often tickets for less than 10$ ex-Norway, so that could mean that they’ll have to double some of their fares.

    Ryanair already threatened to close their base at Oslo Rygge airport, and as they’re the only significant airline there, that would mean a closure of the airport.
    https://www.google.be/search?hl=en&gl=be&tbm=nws&authuser=0&q=ryanair+rygge

  25. The slippery slope is a valid concern. $10 here $20 there, etc… My guess is that these taxes will expand to other countries and rise significantly over time.

  26. @Paul, slippery slope is NEVER a valid concern. Move to Sudan if you don’t like paying taxes.

  27. Did nobody read the article? It clearly syas it has a effect on many low cost carriers. 10$ won’t make a difference in a 80$ flight? Yeah it would.

  28. I’m right there with you lucky. Seems you have a lot of readers that didn’t go to business school. Socialist countries love to pretend tax dollars rain from the sky to bestow treats on their citizens. All taxes are bad…always…governments are inefficient.

  29. @Ben

    Evidently most of your readers are in favor of any tax. I had to read to the end of the comments section to find 3 readers that agree that this apparently arbitrary tax is just the beginning of another UK travel tax scheme. I am reminded of the old Arabian proverb: “If the camel once gets his nose in the tent, his body will soon follow.” Most of the comments fail to recognize the government’s “small steps to big change” system of business as usual. It is wise of Mr.Thomas Reynaert, Managing Director of A4E, to resist additional unreasonable taxes. As pointed out, a flat 80 NOK surcharge tax is hardly an equitable tax when considering the range of airfares collected. I’m confident that most carriers would gladly exchange their profit per passenger ticket for the taxes charged per ticket.
    I agree with you completely that this is indeed another “nasty” tax.

  30. Airlines has already begun collecting the tax as per 1. april – not knowing if the law would pass better safe than sorry.

    And the tax dont include VAT (transport tarif) that’s 10% on top. Travelers already pays CO2 taxes in Norway and whatever tax – welcome to Scandinavia.

    Airlines in Norway is already fighting whit bad economy on some routes – the ones not used by oil industries , and in Norway the infrastructure its like Alaska but in smaller scale, so you need those birds.

  31. @Bruno

    The case of Rygge is not that clear cut, yes the routes out of there is heavily dependent on price since a lot of them are filled with east Europeans coming to working in Norway and budget tourists.

    However there is the case of Ryanair have applied and got landing slots in OSL last year inline with their new strategy of flying to primary airports instead of secondary ones like Rygge.

    Also their crew base in Rygge was probably on the way out any way, there is case making it’s way true the Norwegian court system that might end up with Ryanair having to stop their practice of paying the cabin crews stationed in Norway Irish level of wages. Ryanair closed their base in CPH last year for the same reasons.

    So this is just the case of Ryanair doing what they were going to do anyway and blaming the Norwegian government and getting some free press in the making. Remember this is the airline that once said they had raped Boeing.

    I would be more concerned about effect on the Norwegian economy long term than the jobs lost at Rygge, on a cheap Y ticket inside southern Norway this tax means in effect almost a 10% increase in the sales price.

  32. Yea it is a big deal. Baggage fees are only $25 more. However, it means billions to airlines. People do anything to avoid it. For those on a budget it makes a big difference.

    You know, I avoid LHR whenever possible because the tickets are more expensive because of the taxes.

    It reminds me of the early years of Air Asia in Thailand. If you bought in advance, the tickets were so cheap, like $25 dollars, I used to purchase them for insurance. Pure profit for the airline, because often I did not bother to fly and would cancel so they could give the seat to someone else.

    Now at the time, you had to pay an airport tax when you left BKK. Well, BKK decided that they would start including the airport tax in the ticket. Now it wasn’t a lot of extra money, but it mean that it was beyond my throw away price. So I stopped doing throw away tickets in advance.

  33. I don’t think I have ever seen so many people go after Lucky. Honestly, it’s kind of amusing since he really stepped in it on this one.

  34. What commenters are missing is the cumulative cost of such taxes. For example, take a look at your next car rental receipt–if it’s like most airport car rental locations, there’s a huge percentage of the cost in miscellaneous “taxes” (usually not really taxes, but fees disguised as taxes). I’ve had car rentals for $19 per day, with $19 per day in taxes! SFO, DCA, IAD, LAS, Florida, most of the Northeastern US are especially egregious.

    Take a look at your cell phone bill….again, each incremental tax was “minor” or pitched as “just a small fee to pay for (insert your special interest). As time goes on, your cell phone bill has increased to an outrageous amount.

    My objection to every tax is the cumulative effect–it’s “just $10” or “just 1%”….”$5 per day” but then before you know it, there’s a massive cost to a once-reasonably priced good/service. I’ve moved my cell phone service to low-cost states, avoid airport car rental locations when at all possible, and tend to avoid airports with high-cost transfers. Why bother with paying a silly fee/tax when there is little benefit in doing so? (does anyone believe in “government efficiency”? There’s little to indicate these taxes/fees/charges are being properly directed to the programs intended–remember the “temporary” telecom tax from the Spanish-American War?…it was simply going to the general fund and spent elsewhere.)

    Pay high taxes on cell phone service? Nope, move it to a low-cost state (and keep your number no matter where your service is billed)

    Connecting through the UK? No way, haven’t done that in years.

    Rent a car at DCA? Uber got my business (or Uber to Alexandria, then rent at Enterprise located in car dealership–new cars, always upgraded!)

    Citizens need to vote with they wallets and let our governments know the constant addition of taxes, fees and charges will not be tolerated. I’ve had enough of the “it’s just $10” b.s. This is a small charge….but so is the tax on my phone bill, electric bill, alcohol, cable bill, automobile, airline flight, groceries, gas, etc. etc. etc…….ENOUGH.

  35. I was in Norway last week. Paid NOK 70 ($8.4) per person for a five minute shuttle ride from the airport hotel at Gardermoen to the airport… Would have been free state-side.

  36. @John although the driver would have no doubt expected a tip 😉 By comparison in Luxembourg I had free hotel shuttle to/from the airport (about 15-20 min ride), no cost, no tip.

  37. I just found out about this tax today (June 8). I flew out of Bergen, Norway, on June 3, the end of an 11-day Scandinavian vacation. I received an email today from Norwegian (the airline) informing me about this tax, saying that it was retroactive to June 1, and letting me know that they would be charging my credit card for the 80 NOK to pay the tax. No, it’s not a huge amount of money, but it is not exactly the way I would like to remember my vacation in Norway: “Yeah, they took another $10 from me after I had already gone home.”

  38. I just recieved an email from Norwegian Airlines, telling me that they would charge the tax from my flight on June 8th (flight that I had payed Months ago). They said they would charge this retrospectively with my booking reference Number. How is this possible? How can they take money from my card, without my authorization? I Dont mind to pay this tax, since is not a big amount of money, but still, I Dont think is fare. It’s like I’d buy a t-shirt ir something and suddenly they’d change the price and charge the difference to my card. It does not make any sense.

  39. Norwegian will not swallow the costs.. they will charge you… even worse, they say that the tax will be collected by the government, and not by them? Ridiculous..

  40. Ten dollars isn’t a big deal. But I am annoyed that they are charging it retroactively for a fare which I already paid. And on their website, I cannot change the credit card number nor pay in anything but Euros. The money isn’t the issue, but I should be able to pay in NOK, and I should be able to use the credit card of my choice. And I just found out via the very small print that they charged me a 2% fee for using a credit card in the first place, again not a big deal but I’d have used a debit card without a fee if they’d made it clear.

  41. I found this post because I had to double check that the email I received from Norwegian RETROACTIVELY charging me this tax for a flight I booked in October 2015. So to answer your question at the end of your post– anyone flying after June 1, 2016 will be charged. Despite the charge being relatively though, the unexpectedness (and unwarrantedness imo) makes this much more frustrating.

  42. Forgot to finish my first sentence (ha!)! I had to double check that the email wasn’t a scam, but this post confirms its unfortunate truth…

  43. Norwegian has just sent an email asking me to pay the tax for a flight I’ve already taken. The email states that I may either “[p]ay by credit card online within 1 August 2016” or, if I “do not pay by credit card within 1 August 2016, [I]’ll automatically receive an invoice. Please note that in order to cover the cost for the invoice, an additional charge of 1 EUR will apply.”

    I am a US. citizen living in the US. Does Norwegian actually have any recourse against me if I opt not to pay?

  44. I have received an email yesterday asking me to pay the outstanding amount for the tax, nearly one month after the flight I’ve taken. I will consider this nasty tax. How could they collect extra after everything done? They should charge it to those who make new booking from 1 June onwards, not those who already paid long time ago. I’m very dissappointed. Too bad

  45. Well, about Norway: I am one of the ‘lucky’ (living in Norway and flying from there) and YES they (Norwegian) force me to pay these taxes, where they were not communicated in advance nor mentioning the possibility of retrospectively charged taxes at the moment of booking.

  46. By the way: I had a 50 minute chat with Norwegian employee. Yes, they still want to blame the government. They had no obligation warning me. And yes, the government collects, which isn’t. Airline companies have to pay, in order if they collect (retrospetively) the tax.
    I think it is very strange that I read only about Norwegian collecting. What is the policy if SAS (for example) on this item? I think they pay and take the loss. Does anybody have experiences with SAS?
    And next question arises: Does Norwegian have the right to collect since they did not mention it in advance? In the booking conditions they say passengers do have to pay for taxes, but no word about taxes to charge after a flight was paid and executed. Personally I think in court they will loose, but no one goed to court for just 80 Crowns (or in my case 160 Crowns).
    This is really no good advertisement for Norwegian. Do they have this right?

  47. Perhaps Norwegian authorities should first work to fix a glaring error in the design of the Oslo terminal. On Monday this week I left Oslo on the afternoon BA flight to London. Most all “Intl” flights depart from the same concourse and the early afternoon is chaotic with Thai, Emirates, SAS, and many others all departing in the same period. All seems fine at duty free and security and there is nothing to warn you of what comes next. When you finally round the corner to go to the gate you will face a line of 600 people (not an exaggeration) for passport control with room only for 3 customs agents. Emirates, BA and others had to hold flights and try and get people out of the line to the front – I was in it for over an hour and nearly missed the flight. The gate agents response “we deal with it every day…no one will do anything.”

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