Aéroports de Paris Shares Fall on French Proposal to Hike Infrastructure Tax

Shares in Aéroports de Paris (ADP) fell as much as 4.4% on Tuesday after the French government proposed a sharp increase to a tax levied on long-distance transport infrastructure operators.

Details of the Proposed Levy

The French government's proposal would raise the tax on long-distance transport infrastructure, known as the TEITLD, from its current rate of 4.6% to as much as 12.2%, according to the source material. The final rate would depend on an operator's profitability.

This measure, slated for inclusion in the 2027 budget, is projected to generate approximately €800 million in additional annual revenue. This would bring the total proceeds from the tax to around €1.4 billion, up from the current €600 million. The tax applies to companies with more than €120 million in infrastructure revenue and average profitability exceeding 10%.

Market Impact and Sector Implications

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Investor reaction was swift, with ADP's stock declining sharply in early trading before paring some of its losses. The proposed tax hike is seen as particularly relevant for airport operators compared to motorway companies.

The government has indicated that motorway concessionaires would be prevented from passing the additional cost on to consumers through higher toll prices. In contrast, airport operators like ADP are perceived to have greater flexibility to reflect higher costs in their pricing, though the tax directly impacts their bottom line.

Rationale for the Tax Increase

The government stated that the additional tax revenue is intended to fund its "Ambition transports" program. This initiative is focused on the maintenance and modernization of France's existing transport infrastructure.