Airline Groups Oppose Obama's Budget Plan

The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, earlier this week called on lawmakers to oppose the President Obama's proposals to impose a new departure tax on every flight and to triple the passenger security tax to reduce the deficit. Airline groups maintain that hiking aviation taxes would hurt economic recovery, further burden airlines and customers, and cost jobs.

The measures included in the President's proposal would raise the passenger security fee from its current rate of $5 to $10 per round trip to $15 by 2017 and impose a $100 per flight surcharge to help pay for air traffic control.

“We oppose any new taxes on airlines or their passengers,” says ATA President and CEO Nicholas E. Calio. “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.”

The airline 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, U.S. 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).

“Since 9/11, the U.S. 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 U.S. carriers’ foreign competitors. We should advance a tax policy that encourages air service to grow, not contract,” adds 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 U.S. 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.”