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Airline ticket prices on the raise

In spite of the reduction in the value added tax (VAT) on personal transport which gives the companies some extra money, the airlines increase the ticket prices for customers all the same.

The introduction of a 6 percent VAT on personal transport as of March 1 was going to give the traffic companies a profit of NOK 500 million (USD 71.4 million). But airlines, among others, still increased the ticket prices March 1.

«It is very disappointing that the transportation companies are not following up on this,» said Torbjørn Hansen, the Conservative’s tax political spokesperson at Stortinget, to the Norwegian paper Bergens Tidende. «If the tickets don’t get cheaper, the politicians must respond with measures, like for example, increased competition exposure in the transportation sector in order to keep the prices down.»

According to the paper, the airlines SAS, Widerøe and Braathens increased prices on domestic tickets with about 3.5 percent March 1, while Norwegian increased with 6 percent.

According to calculations, the airlines are going to make about NOK 500 million (USD 71 million) due to the fact that they will get 24 percent of the VAT they pay on all their purchases returned, while they collect 6 percent from the travellers.

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