Airlines Urge Change to Tax and Regulatory Policy

Underlining growing dissatisfaction with federal tax and regulation policies, Airlines for America (A4A) called on the U.S. government to reform federal taxes and regulations to enable U.S. airlines to compete globally on a level playing field and help grow the country’s economy.
“We can work together in creating a business environment that will allow for future growth and global competitiveness,” said A4A President and CEO Nicholas E. Calio in a speech to the International Society of Transport Aircraft Trading (ISTAT) Annual Conference. “Or our government can ignore the future ramifications of an uncompetitive U.S. airline industry to our medium and small communities and ignore the benefits of the industry to our own economy.”
Calio detailed the excessive tax and regulatory burden faced by the airline industry and its passengers, making it one of the most highly regulated businesses in America, even though Congress deregulated the industry nearly 35 years ago.

The 17 different federal taxes and fees have grown significantly over the same period with passengers now paying 20 percent of a typical domestic round-trip ticket price to the government. The Department of Transportation (DOT) recently enacted a rule reducing transparency of taxes paid on air travel, A4A noted.
A4A warned that DOT is drafting a third consumer protection rule and already proposed a separate rulemaking that would require airlines to report revenue information related to 19 separate items, including how much they collect for meals, drinks and upgrades.

The third consumer protection rule could require airlines to make all of their products available through global distribution systems, a requirement unique to air travel.
A4A noted that it has recently unveiled details of the five components necessary for an effective National Airline Policy (NAP). In addition to reform the tax structure and regulatory environment to ensure global competitiveness, the NAP identifies ways to improve the infrastructure and accelerate the deployment of the most cost-beneficial parts of NextGen.