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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’s campaigns are aimed at infrastructure providers (airports, air navigation service providers (ANSPs) and fuel suppliers) as well as regulators and governments
  • Airlines and passengers are estimated to have paid at least $92.2 billion for the use of airport and air navigation infrastructure globally in 2011, equivalent to 14.4% of the cost of transport. 
  • 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, remain a threat
    • Unilateral increases in charges introduced by civil aviation authorities (such as in Mozambique and the UAE) have been part of a worrying trend. 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
    • 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
    • At London Heathrow, the regulator’s proposed annual price cap of RPI+0% for the 2014-2018 pricing period is a disappointment. While strong IATA and airline arguments were successful in reducing the operator’s initial proposal of RPI+5.8%, we continue to push for a lower cost of capital and higher OPEX reduction target.
    • 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
    • So-called ‘solidarity taxes’ on air transport are proliferating in Africa; the industry prefers voluntary schemes
    • 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 2013, IATA’s successful campaigns include: 
    • Brazil: following large increases in ATC charges in 2012, a strong working relationship formed between the Brazilian authorities and IATA means that further increases of some $215 million have been avoided in 2013.
    • Ghana: the government’s 75% reduction of a stabilization fund cross-subsidy element in the country’s jet fuel price formula will save the industry an estimated $37 million annually.
    • ICAO 6th Air Transport Conference: a joint IATA-ACI working paper calling for the elimination of taxation on air travel where revenue is not reinvested in infrastructure was supported by states and resulted in a Conference recommendation that states avoid imposing discriminatory taxation on aviation and avoid double taxation of the industry. 
    • Ireland: the government announced the abolition of the air travel tax from April 2014, saving air passengers $47 million annually.
    • Japan: a long-term charges reductions agreement at Kansai airport will save airlines $124 million up to 2015. An extension of the current fuel facility charges at Narita airport up to March 2016 will also save $64 million.
    • Sri Lanka: together with the Arab Air Carriers Organization (AACO), IATA persuaded the country’s fuel supplier, Ceypetco, to reduce their jet fuel price add-on to 2011. Since October 2011, the monopoly fuel supplier had increased the add-on by an average of 41 US cents per gallon. 
    • Tanzania: IATA was able to lower the rate of increases in air navigation charges announced by the civil aviation authority for 2014 by 78%.
    • Uruguay: following the exemption of jet fuel from the IMESI tax (similar to VAT) in 2012, saving airlines $2.5 million annually, the government further reduced the country’s jet fuel price by 8% in January 2013.
    • USA: IATA and Airlines for America opposed a bill presented to the California Senate that would have revoked the tax exemption for jet fuel for international operations, avoiding $150 million in extra costs annually.
      Aviation must not be treated as a cash cow for providers or an easy target for taxation by governments
  • Aviation must not be treated as a cash cow for providers or an easy target for taxation by governments
  • 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 2013

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