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 aeronautical charges in Brazil, Mongolia and Pakistan have contributed to a worrying trend this year. IATA has put renewed emphasis on urging providers to hold meaningful consultation on proposed changes.
Some airports continue to undertake large infrastructure development programs without adequate consultation with airlines or justification. Moreover, the peril of flawed concession agreements, as evident in this year’s 346% increase in charges at Delhi airport, demonstrates the need for more responsible privatization by governments.
Worsening government finances around the world indicate that the taxation threat remains. The latest increase in UK APD at double the rate of inflation means it maintains its position as the highest single aviation tax in the world.
IATA also continues to tackle jet fuel pricing issues, lack of open access to fuel supply and the taxation of jet fuel for international operations.
As of November 2012, some examples of IATA’s successful campaigns include:
- Africa: reduction in fuel fees in Angola, resulting in $109.6 million in savings - the first step in a long-term campaign to tackle the relatively high price of fuel in parts of Africa. We also secured a freeze in charges from the West African region’s ANSP, ASECNA, for a ninth consecutive year.
- Asia: secured long-term charges reductions at Narita airport which will save $46.3 million up to 2016. Successful campaigns at Kansai and Haneda airports have also yielded substantial charges reductions.
- Europe: IATA worked to ensure any proposals to remove international air transport’s exemption from VAT in the EU was not considered during the EC’s ongoing review of the VAT Directive.
- Middle East & North Africa: IATA avoided an attempt by the Algerian ANSP to increase air navigation charges by 66% and airport landing charges by 35%.
- Latin America: the conclusion of a multi-year campaign in Dominican Republic to allow the reduction of ad valorem (ITBIS) tax on jet fuel from 16% to 6.5% will save $44.7 million annually.
- North America: in Canada: IATA pushed for improvements to surveillance and navigation procedures, resulting in significant fuel burn savings, while not causing any charges increases. In the USA, the passing of the 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