Says Increases Will Burden Passengers, Impact Demand, Cost Jobs

The Air Transport Association of America (ATA), representing leading US airlines, has joined the chorus calling on lawmakers to oppose President Obama's proposals to impose a new $100 departure tax on every flight and to triple the passenger security tax to reduce the deficit. ATA predicts hiking aviation taxes would hurt economic recovery, further burden airlines and customers and cost jobs.

"We oppose any new taxes on airlines or their passengers," ATA President and CEO Nicholas E. Calio (pictured) said. "We already pay more than our fair share of taxes – more than the alcohol and tobacco industries, whose products are taxed at levels to discourage their use. Today, taxes and fees on a typical $300 round-trip ticket already account for more than $60 of the total cost."

ATA says the industry's non-income tax burden has grown from $3.7 billion in 1993 to approximately $17 billion today. In 2010, a year in which the entire industry's profit was under $4 billion, US airlines and their passengers contributed $3.4 billion in taxes and fees to the Department of Homeland Security, including $2 billion in taxes and fees to the Transportation Security Administration (TSA) – a 50 percent increase from the amount collected in 2002.

"TSA costs are not all related to aviation. Yet, no other industry or mode of transportation pays for its security as airlines do, even though it is clear that the terrorists targeting commercial aircraft are not attacking the airlines themselves but, rather, the US economy and the American way of life," Calio said.

"Since 9/11, the US airline industry has lost $55 billion and 160,000 jobs – over a third of its workforce. Adding to that burden is not 'reform,' it is a jobs eliminator. The President's proposals will significantly impact traveling consumers and give yet another leg up to US carriers' foreign competitors. We should advance a tax policy that encourages air service to grow, not contract," added Calio. "Airlines are critical to the nation's economic health. Commercial aviation drives more than $1 trillion in economic activity and more than 5 percent of US gross domestic product each year – and is responsible for more than 10 million jobs. Every 100 airline jobs support about 388 jobs outside of the industry."

FMI: www.airlines.org