Wednesday, September 21, 2011

Industry reacts to U.S proposal to double passenger security fee

Neelam Mathews
Sept 21, 2011

The International Air Transport Association (IATA) has expressed its opposition to the proposal by the Administration of US President Barack Obama to double the 9.11 passenger security fee and then to raise it in successive years through 2017 as part of the Administration’s deficit reduction plan.

The Air Transport Association of America, the industry trade organization for the leading U.S. airlines, too, has called on lawmakers to oppose the proposals to impose the new departure tax on every flight and to triple the passenger security tax to reduce the deficit, saying that hiking aviation taxes would hurt economic recovery, further burden airlines and customers and cost jobs.

Passengers traveling from US airports currently pay a security fee of $2.50 per flight segment with a cap of $5 one-way and $10 per round trip. The proposal would raise the fee to $5 for all one-way trips and $10.00 per round trip. For the majority of passengers who do not connect or change flights during their journey, this represents a doubling of the charge. Furthermore, under the proposal, the round trip charge would increase by $1 per year between 2013 and 2017.

 “Airlines and their passengers are being asked to pay for national security, although it clearly is a responsibility of government,” said IATA Director General and CEO Tony Tyler. “To add insult to injury, more than half of the increased revenue from the higher fee will be diverted into the general fund and will not be used to make air travel more secure.”

 "We oppose any new taxes on airlines or their passengers," ATA President and CEO Nicholas E. Calio said. "We already pay more than our fair share of taxes – more than the alcohol and tobacco industries, whose products are taxed at levels to discourage their use. Today, taxes and fees on a typical $300 round-trip ticket already account for more than $60 of the total cost." 

"TSA costs are not all related to aviation. Yet, no other industry or mode of transportation pays for its security as airlines do, even though it is clear that the terrorists targeting commercial aircraft are not attacking the airlines themselves but, rather, the U.S. economy and the American way of life," Calio said.

 “This is absolutely the wrong approach. Aviation is a catalyst for growth in the worldwide economy. The economic outlook is uncertain and confidence among both businesses and consumers is low. Making air travel progressively more expensive is not a sound economic strategy. A similar per-passenger tax in the Netherlands cost the economy more than it collected in revenues,” said Tyler, adding that, “globally aviation supports $3.5 trillion in economic activity and 33 million jobs.” 

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