Evaluating the Impacts of the Swedish Aviation Tax

Sammanfattning: The 1st of April 2018 an aviation tax was implemented in Sweden. With an event study approach this paper aims to provide an understanding of the outcome of the new policy. This by investigating if the tax causes significant effects on the stock returns of concerned flight carriers and whether the policy causes a significant change in the number of air passengers travelling from Sweden. By calculating the expected normal performance using the mean model, the market model and the Holt-Winters model, the abnormal behaviour is established and tested for significance. Previous literature provide insights from aviation taxes implemented in other European countries. A negative impact on concerned flight carriers and a decline in the number of air passengers travelling are mainly concluded. The results of this paper indicate no market reaction related to the introduction of the aviation tax. Significant changes are observed when considering the air passenger data. The tax may be an explanation to the results. Yet, there may be other influencing aspects such as economic and environmental considerations.