Travel Industry unites against Proposed Aviation Tax

Following the G8 summit last week, travel industry associations are continuing their united opposition to a proposed new aviation tax to fund development in poor countries. The group says aid for developing countries is laudable, but funding it through a new tax on aviation is misguided and counterproductive.

Airports Council International, the Asia Pacific Travel Retail Association, Association of Asia Pacific Airlines, Duty Free World Council, International Air Transport Association, Pacific Asia Travel Association, and the Tax Free World Association jointly denounce the taxation proposal.

The group says any additional tax would decrease airline efficiencies and reduce demand for travel and tourism, which is a major driver of economic development in many poor countries.

The travel industry also believes the proposal would put an unnecessary burden on the travel sector, in particular airlines, which have sustained billion dollar losses over the past four years and must now absorb record-breaking oil prices.

Pacific Asia Travel Association (PATA) Chairman Mr Nobutaka Ishikure (who is also Japan Airlines Chief Industry Affairs Officer), said, "We must remind governments that airlines are not under-taxed, but are over-charged. Airlines play a critical role as a catalyst for economic development. Development is a serious issue in need of a serious solution. More tax on air travel is not the way forward."

IATA Director General and CEO Mr Giovanni Bisignani slammed the proposal, which has divided the governments of Europe. He said, "We are not an industry of millionaire customers able to travel at any price. Air transport is an essential part of the fabric of modern life. If governments are truly serious about development, there are glaring opportunities to generate billions for aid simply by removing trade barriers."

Travel industry research shows that, with related industries, the air transport sector supports US$1.4 trillion of economic output, or 4.5% of global GDP.

The US Chamber of Commerce head office in Washington DC and the Geneva-based Air Transport Action Group have also vehemently opposed the aviation tax proposal.

ACI Director Mr Robert J Aaronson said, "Airports are catalysts for economic development by creating jobs, encouraging new business development and building capacity to underpin travel, trade and tourism. Airports have demonstrated their long-term commitment to relevant assistance for developing nations."

Mr Aaronson cited the ACI Fund which finances training for airport personnel to ensure a self-reliant and skilled aviation work force in developing markets. "This is a targeted contribution that is far more meaningful than a new tax," he said.

AAPA Director General, Mr Andrew Herman, said, "Aviation's significant contributions to overall economic development is more widely understood in the Asia Pacific region. Governments should be creating economic opportunities, not imposing barriers in the form of new taxes." 

The travel associations opposing the proposed tax believe that development needs commitment, not political grandstanding and that air transport needs common-sense policy and a level playing field, not more taxation.

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