Fact Sheet: Aviation Charges, Fuel Fees and Taxes

• IATA drives cost reductions and long-term improvements in cost efficiencies in airport and air traffic control charges, fuel fees and taxation
• IATA campaigns with infrastructure providers (airports, air navigation service providers (ANSPs) and fuel suppliers) as well as regulators and governments
• Airport and air traffic control (ATC) charges amount to the equivalent to 11% of airline revenues annually
• In all its work, IATA emphasizes the key principles of infrastructure charges:
• Transparency
• Cost-relatedness of charges
• Consultation with airlines
• Equitable charges structure
• Single till
• Productivity improvements

Recent Developments

• As the economic situation continues to be critical in many parts of the world, increased taxes, together with rising charges and fees, have remained a threat in 2012
• Unilateral increases in charges introduced by civil aviation authorities in Brazil, Mongolia and Pakistan have been part of a worrying trend this year. IATA has therefore put renewed emphasis on urging providers to hold meaningful consultation on proposed changes
• Some airports continue to undertake large infrastructure development programs without adequate user consultation or justification
• The peril of flawed concessions agreements, evident in the 346% increase in airport charges for Delhi airport, demonstrates the need for more responsible privatization on the part of governments
• The latest increase in UK Air Passenger Duty at double the rate of inflation means it maintains its position as the single highest aviation tax in the world
• The Single European Sky, which would make European air navigation more cost-efficient, needs significantly more ambition and commitment from states
• Lack of open access to fuel supply and the continued imposition of various taxes on jet fuel for international operations is increasing the industry’s cost burden
• As of November 2012, IATA’s successful campaigns include:
• Angola: the reduction of fuel fees has resulted in $109.6 million in savings for airlines operating to the country. This is the first step in a long-term campaign to tackle the relatively high price of fuel in parts of Africa
• Australia: local industry efforts to avoid an automatic inflation-linked increase in the government’s Passenger Movement Charge will save airlines $144.7 million between 2013-2016
• Canada: enhanced surveillance and navigation procedures with NAV CANADA, delivering increased route flexibility. This has resulted in significant fuel burn savings, while not causing any charges increases. Also secured an overall 10% reduction in charges at Toronto airport, saving airlines $355 million between 2013-2015
• China: the removal of VAT on jet fuel for international operations at Hangzhou, Qingdao, Chongqing and Nanjing airports will save airlines $24.4 million annually
• Dominican Republic: reduction of ad valorem (ITBIS) tax on jet fuel from 16% to 6.5%, saving airlines $44.7 million annually
• Jordan: IATA action at Amman airport secured a reduction in proposed increases from 10% to 7%, which combined with a four month delay in its implementation amounts to savings of $13.3 million between 2012-2014
• Japan: long-term charges reductions at Narita airport will save airlines $46.3 million up to 2016. Successful campaigns at Kansai and Haneda airports have also yielded substantial charges reductions
• US: the signing into law of the Federal Aviation Administration (FAA) Reauthorization Bill without any reference to a rise in the cap on the Passenger Facility Charge (PFC) from the current $4.50 to $7.00 per passenger marked the successful end of a long-term IATA campaign. Since the FAA’s previous authorization expired in 2007, US airports had been lobbying strongly for an increase in the PFC cap
• West Africa: secured a freeze in charges from the region’s ANSP, L’Agence pour la Sécurité de la Navigation aérienne en Afrique et à Madagascar (ASECNA), for a ninth consecutive year
• Aviation must not be treated as a cash cow for providers or an easy target for taxation by governments
• Infrastructure stakeholders should not compromise progress made in recent years by returning to previous patterns of cost increases
• Providers should continue to build on the collaborative relationships established with airlines
• The industry must continue to seek opportunities for cost reduction and efficiency improvements

 Updated: December 2012