Higher Fees To Go Into Effect By 2010
The Air Transport Association of America (ATA), trade
organization for most US airlines, expressed its stiff opposition
Monday to the United Kingdom government's decision to revise and
greatly increase the amounts collected under its air passenger
duty.
The airline lobbying group termed the move an "extraterritorial"
decision by the UK government, adding it was "counterproductive to
the airlines' environmental progress and is in conflict with
established law."
Under the new law, the per-passenger duty in economy class will
increase from around $60 to $90 by 2010, according to ATA. The UK
government said it held back on the fees due to the global economic
crisis, but ATA said the fees are still "substantial."
"The decision to revise and further increase the UK duty is a
revenue raiser for the government under the guise of environmental
protection," said ATA President and CEO James C. May. "The funds
collected do not go to environmental projects, and yet the taxes
take money from airlines that they could otherwise invest in more
fuel-efficient and greenhouse gas (GHG)-efficient technologies.
This is an illegal action, which we expect to be settled in the
courts."
ATA asserts the revised duty is in violation of various
provisions under the Convention on International Civil Aviation
(commonly known as the Chicago Convention) and the relevant
bilateral air services agreements that regulate extraterritorial
actions and taxes and charges.
Among other things, the duty asserts regulatory jurisdiction
over flights far outside UK airspace, by taxing flights according
to various distance bands arbitrarily set by the UK government. And
a lesser tax is imposed on those flights within the U.K. and the
European Union, even though a flight from the United States is not
in UK airspace for any longer (and often less) than such
flights.
ATA also believes the tax increase is bad policy because it
siphons funds away from aviation -- "the very funds airlines have
invested into technology and fuel efficient operations."
"No other industry is more motivated by market forces to improve
fuel and GHG efficiency than the airlines," May said. "Our track
record proves that we do not need any further environmental
incentives. Even with the recent drop in oil prices, fuel continues
to be our highest cost center. With jet fuel averaging between 30
and 50 percent of total airline operating expenses and accounting
for well over a third of airline ticket prices, there is no need
for any further price signal to reduce fuel burn and resulting
emissions."