AF Air FranceKLM

   By Mauro Orru 
 

A growing number of French companies are protesting plans to tax long-distance transport infrastructure such as airports and highways, as the government of President Emmanuel Macron seeks to encourage rail travel over air or cars when possible.

The Council of Ministers, the body that brings together all ministers each week, on Wednesday adopted a draft bill that would impose a 4.6% levy on revenue for companies that operate long-distance transport infrastructure in the country. The bill must be submitted to the National Assembly--France's lower house of parliament--by early October for lawmakers to review and vote on the law for it to become effective next year.

"Air France and Transavia would be by far the airlines most affected by this measure, which would negatively impact their capacity to return to profitability," an Air France spokesman said. "This is all the more worrying considering that this project creates unfair competition between French and foreign airlines like Ryanair, which serves France from airports like Beauvais and would not be affected by this taxation."

The French flag carrier, part of Franco-Dutch carrier group Air France-KLM, said it shares the government's ambition to accelerate the decarbonization of the economy, but cautioned that there should be a level playing field to preserve the competitiveness of the French airline industry.

Vinci, which operates a number of airports and highways, said it would use all available avenues of appeal against the proposed law that would have resulted in a charge to the tune of 260 million euros ($273.1 million) in 2022 if the tax had been in force at the time.

"Vinci takes issue with this draft, which is contrary both to the spirit and to the letter of concession contracts, particularly those signed between the state as grantor and the motorway concession companies, and it intends to use all available avenues of appeal," the company said.

Aeroports de Paris said its earnings before interest, taxes, depreciation and amortization would have suffered a hit of roughly EUR100 million if the tax had been applied last year. The airport operator said it would resort to higher tariffs next year to offset around half of the impact from the tax, if the bill were to go through.

Civil-engineering company Eiffage, which operates a number of highways, estimated that the tax would have caused a decline of roughly EUR117 million in operating profit on ordinary activities last year.

"Eiffage commits to its shareholders that it will use all appropriate means and all appropriate avenues to assert its rights," the group said.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

September 28, 2023 10:12 ET (14:12 GMT)

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