Sweden to Abolish Airline Ticket Tax in 2025

The Swedish government has announced plans to abolish its airline ticket tax starting July 1, 2025, as part of the country’s 2025 budget. The move, aimed at improving flight accessibility and competitiveness, has been met with approval from Swedavia, the operator of Sweden’s main airports.

The tax, introduced in 2018 by Sweden’s previous left-wing government, was intended to reduce air travel demand and minimize aviation’s contribution to climate change. However, the tax led to a significant decline in passenger growth and slowed the country’s recovery from the COVID-19 pandemic, especially when compared to neighboring Scandinavian countries.

Jonas Abrahamsson, president and CEO of Swedavia, welcomed the government’s decision to scrap the tax, arguing that it had hindered Sweden’s aviation sector. “The aviation tax has hampered Swedish flight accessibility, competitiveness, and growth,” Abrahamsson said. He also noted that the tax failed to promote environmental sustainability since it applied equally to all fuels, including bio-based jet fuel, which is considered a cleaner alternative. He called for a broader focus on competitive and sustainable air travel, pointing out that existing EU policies and innovations could be more effective in driving the necessary changes in the aviation industry.

Impact of the Tax on Sweden’s Aviation Industry

The airline ticket tax, which ranges from SEK76 ($7.40) for domestic and European Union flights to SEK315 ($30.60) for longer routes like those to the United States, had a noticeable impact on Sweden’s aviation industry. According to OAG Schedules Analyser, Sweden’s airline capacity in September 2024 totals approximately 2.1 million seats, a decline of 23% compared to pre-pandemic levels in 2019. When compared to September 2017, before the tax was introduced, the capacity has decreased by 25.2%.

In contrast, neighboring countries like Denmark and Norway have experienced stronger recoveries in their aviation sectors. Denmark’s airline capacity has returned to 99% of 2019 levels, while Norway’s capacity has recovered to 92.4%. The slower recovery in Sweden is largely attributed to the effects of the tax on both domestic and international travel, which has impacted the competitiveness of Sweden’s airlines and airports.

Looking Ahead: Innovation and Sustainability in Focus

With the tax set to be removed, Swedavia and other industry leaders are looking forward to renewed growth in Sweden’s aviation sector. However, Abrahamsson emphasized that the focus should not only be on growth but also on sustainability. “Policy instruments already exist at the EU level, and Sweden now needs to promote innovation and effective tools,” he said. He pointed to the importance of promoting bio-based jet fuels and other technological advancements that can reduce the environmental impact of air travel without stifling growth.

The government’s decision to end the tax also comes as part of broader efforts to increase spending on infrastructure. This commitment to infrastructure investment could further support the recovery of Sweden’s aviation industry by enhancing the country’s overall connectivity and competitiveness.

In conclusion, the removal of Sweden’s airline ticket tax marks a significant shift in the country’s aviation policy. As the sector looks to recover and grow, both Swedavia and the government will need to balance the demands of increased air travel with the ongoing need for sustainable and innovative practices. The industry will now look to capitalize on the removal of the tax to boost passenger numbers and ensure long-term growth and sustainability.