ADP shares fall 4% as France proposes higher transport infrastructure tax

Paris airport operator Aeroports de Paris shares plummeted by up to 4.4% on Tuesday following the French government's proposal to significantly increase a tax on long-distance transport infrastructure. The hike would raise the tax on such infrastructure, called TEITLD, to as high as 12.2% from the current 4.6%, contingent on operators' profitability.

This proposed measure is anticipated to generate an additional €800 million annually, elevating total revenue to roughly €1.4 billion from the existing €600 million. The higher tax is slated for inclusion in the French government's 2027 budget proposal.

The proposed tax is particularly pertinent to airport operators rather than motorway companies due to the government's stance that motorway concessionaires are barred from passing the additional cost to toll prices. Airports, however, possess a greater ability to incorporate higher costs into customer pricing. Currently, the tax applies to firms generating over €120 million in infrastructure revenue with average profitability exceeding 10%.

The government asserts that the extra tax revenue will be channeled towards its Ambition transports program aimed at preserving and modernizing existing transport infrastructure.