A proposed 100 percent increase in the
security fee charged to airline passengers must be rejected before it gouges
airline travelers and pushes the U.S. airline industry further into the red,
Continental Airlines (NYSE: CAL) said today.
Raising the security fee to $5 per flight segment will bring the
total cost for a typical round-trip, connecting flight itinerary to $20 per
ticket. This would bring the total taxes on a $100 ticket to a record $53
at a time when economic conditions are weak and airlines are struggling to
eliminate catastrophic losses.
"Having the effect of a consumption tax, the higher fees will
further diminish the current lackluster demand for airline travel," said
Continental Chairman and CEO Gordon Bethune. "Legislators have justified
taxes on cigarettes and alcohol of up to 18 percent because they are trying
to discourage their use. Unfortunately, imposing taxes as high as 53
percent on airline tickets will have the same effect as the sin taxes,
thereby threatening the livelihoods of the millions of people working in
this industry."
Continental said that airline security is a national safety issue and the
Transportation Security Agency should be funded from a broader tax base -
just like the armed forces, the FBI, the Federal Emergency Management
Agency, and the Environmental Protection Agency.
The airline also expressed concern that Congress is considering
rescinding a portion of the Airline Stabilization Act by limiting payments
intended to partially compensate airlines for their $7.7 billion in losses
last year, which stemmed mostly from the Sept. 11 attacks and the
government-mandated shut-down of the industry.
Continental called on the House Appropriations Committee to refrain
from raising taxes on airline travelers at a time when the aviation industry
is so vulnerable to the nation's weak economy.
When Congress adds $10 to the cost of your airline ticket, the
airlines have to eat that cost unless the traveler ponies up the extra
money," Bethune said. "The economic reality is that neither the aviation
industry nor the American consumer is in the position to be paying more, as
we have discovered in our own efforts to try to break even on our ticket
sales." |
