By value, airlines deliver a third of goods traded internationally. They support some $2.7 trillion in GDP and about 69 million jobs. But de Juniac warned that high taxes and charges dampen demand, which carries an economic cost.
“That is why IATA spends a lot of time fighting taxes and charges,” he said at IATA’s Global Media Day. “And sometimes enlightened government policies are the result. When the Cartagena [Colombia] airport fee was reduced from $92 to $38 in 2015, international passengers increased 30%.”
Given the price sensitivity of customers and that airlines are predicted to make just $7.54 per passenger in 2017, every aviation tax or charge is extremely important. But many governments are still short-sighted in their policies.
- Australia plans to increase its passenger movement charge to AUD60.
- The Maldives plans to add $25 to its airport development fee without committing to use the money to develop its infrastructure.
- Germany will add EUR50 cents to its departure tax that already collects EUR1 billion per year.
- Norway introduced a new passenger tax in 2016 and will increase the cost in 2017.
- Sweden is considering a $47 passenger tax.
- The United Kingdom continues to increase its air passenger duty in line with inflation despite evidence that it has cost the economy £16 billion
- The United Arab Emirates and Qatar are risking their success with $700 million in new costs.
“Global connectivity promotes prosperity,” said de Juniac. “But it is a constant battle to get governments to see the long-term value of aviation.”