The Obama Administration’s proposed tripling of the passenger security tax will do little to improve the security of airline passengers and likely will lead to the loss of air service and thousands of industry jobs, the Air Transport Association (ATA) warned.
As part of a proposed debt-reduction plan, the Administration is proposing two new taxes on airlines and their customers. The first would add a $100 departure tax to all flights; the second would double the passenger security tax to $5 per one-way trip in 2012, and triple the tax to $7.50 by 2017, the ATA says.
“Paying more taxes doesn’t mean safer travel. There is no clear plan of how security will be improved, nor is there any accountability for whether the additional resources will be used efficiently or effectively,” said ATA President and CEO Nicholas E. Calio in a speech to the AeroClub of Washington.
Calio said that aviation is again being singled out with security and departure taxes that combined would cost airlines and their customers $36 billion over the next 10 years on an industry that during one of its best years collectively posted a $3.6 million profit or a 2.1 percent margin.
“It makes absolutely no sense for the Administration – or Congress – to propose two huge new taxes on aviation, a key creator of jobs growth that is among the least profitable industries and pays among the highest federal taxes while other profitable industries and transportation modes are left untouched,” Calio said.
Within Congress, there is a growing bipartisan group opposed to the Administration’s proposed tax hike, ATA said. Calio commended congressional members who are rejecting the Administration’s tax plan. “We have been meeting with congressional members to convince them that further taxes on the airlines are the wrong answer. Airlines will have no choice but to offset the higher taxes by trying to adjust airfares or reducing service.”
To increase awareness and educate consumers and Congress, ATA recently launched a new website, www.stopairtaxnow.com, where visitors can urge Congress to reject punitive taxes against airline passengers and save American jobs and air service to their community.