Court signals will uphold German air travel tax

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KARLSRUHE, Germany, May 20 (Reuters) - Germany's constitutional court on Tuesday signalled the country's 1 billion euro per year air travel tax would likely withstand a legal challenge brought by a regional state.

The German state of Rhineland-Palatinate, which owns the majority of loss-making regional airport Hahn, one hour's drive from Germany's main hub Frankfurt, had filed for a judicial review of the tax.

After the levy was introduced in 2011, no-frills carrier Ryanair, which operates from small regional airports such as Hahn, slashed the number of flights out of Germany.

A ruling is not expected for a few months but judge Michael Eichberger said in a court hearing that German lawmakers had acted "very craftily but also skilfully" when drafting the law.

The state of Rhineland-Palatinate has argued the tax would hurt airports in border regions in particular as passengers switch to cheaper flights from foreign airports.

The court said that posing a burden on airports was not enough to declare a tax unconstitutional and that the federal government's motives would have to be acknowledged.

Berlin introduced the levy in 2011 as a green tax aimed at discouraging people from flying and to boost tax receivables. It gets around 1 billion euros ($1.37 billion) from the fee per year, with about a third coming flag carrier Lufthansa

Airlines must pay the tax for each plane taking off from a German runway. The levy ranges from 7.50 euro ($10.29) per passenger for short trips to 42.18 euros for long-haul flights.

Ireland (Other OTC: IRLD - news) scrapped its air tax of 3 euros per passenger and flight in April to help the tourism industry.

The Netherlands abandoned a similar tax in 2009. Britain and France have air travel taxes. ($1 = 0.7302 Euros) (Reporting by Norbert Demuth; Writing by Kirsti Knolle and Ludwig Burger, editing by David Evans)

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