The Congressional Super Committee is currently considering a proposal that would raise federal taxes and fees on the airline industry (and you, the passenger). Passengers and airlines are already subject to 17 taxes and fees accounting for approximately 20% of the cost of a typical round trip ticket. Follow the link above to save jobs, your air service options, and your pocketbook; you can send an e-mail to your government representatives with just a click or two–tell them 18 is too many!
The Impact of Additional Air Taxes
Job Loss. Nearly 11 million U.S. jobs are tied to commercial aviation. Increasing airline taxes and fees would kill hundreds of thousands of them. At at time when 25 million Americans are out of work, the White House plan to increase airline taxes and fees is an irresponsible strategy to tackle the deficit.
The economic firm of Oliver Wyman estimates that in 2012 alone, the new set of fees and taxes will result in almost 10,000 direct passenger and cargo airline job losses, costing the entire economy 181,000 lost jobs. By 2021, these taxes and fees would result in more than 17,000 direct passenger and cargo airline job losses, costing the entire economy 329,000 lost jobs.
Airline Industry and Supply Chain
You’ve felt its effects first-hand: Since 9/11, economic pressures have cost the airline industry $55 billion and 160,000 jobs – more than a third of its workforce – creating ripple effects throughout the economy in businesses like yours.
To further burden this already financially challenged industry is both illogical and a job destroyer. If adopted by the Congressional Super Committee, the commercial aviation taxes and fees in the White House deficit-reduction proposal would deliver another blow to employment dependent on commercial aviation. Instead, we should be working together to encourage job growth in the aviation industry and throughout the economy.
Economy. Just when we need it to take off, Congress and the Administration want to ground the economic engine behind American business. Deficit reduction should not happen on the backs of those who drive the economy-airlines and their customers.
Annually, commercial aviation drives more than $1.2 trillion in economic activity, or more than 5 percent of U.S. GDP. With every 100 airline jobs supporting roughly 388 jobs outside of the industry, commercial aviation supports more than 10 million well-paying American jobs.
Slowing Economic Growth
To grow the economy, the President has called for the nation to double exports in five years. Yet his proposed new taxes on the airline industry will unequivocally reduce capacity – making his own goal nearly impossible to attain. Instead, these new taxes will have the unintended consequence of harming the economy as fewer people travel and fewer goods are shipped.
Of the industries that contribute most to the economy, aviation is number three – behind energy and farming. Yet, among the 53 principal industries that make up the nation’s economy, Fortune magazine ranked airlines dead last in profitability. With these razor-thin margins of profitability, the industry doesn’t have room to absorb these new taxes and fees.
Service. The new taxes and fees being considered by Congress and the Administration – levying taxes on each additional connection – will hit businesses in America’s smaller cities hardest as airlines reduce service to save costs.
Given a razor-thin profit margin of slightly more than one percent last year, airlines will have no choice but to try to offset these higher taxes by raising airfares or reducing service. Customers will be left with fewer choices of when and where they fly. In particular, the reduction in service will hit the less-profitable routes and small and rural communities the hardest.
It’s hard enough to compete right now. This is the wrong time to cut off businesses in smaller cities from their clients and customers in larger ones. This proposed increase is a tax on business, hitting businesses operating in smaller communities the hardest and dampening competition.
With reduced service, many travelers in America’s smaller cities will be cut off from larger ones. Year-round, American tourism will suffer. During the holidays, fewer Americans will have the travel choices necessary to make spending time with loved ones an option.
Cost. The new taxes and fees being considered by Congress and the Administration will make it more expensive to fly, leaving passengers out in the cold.
With a razor-thin profit margin of slightly more than one percent last year, airlines will have no choice but to try to offset these higher taxes by raising airfares or reducing service. Customers will be left with fewer choices of when and where they fly, and how much they’ll spend to do it.
This proposed tax increase is a tax on business and consumers.
Just when we need the economy to take off, Congress and the Administration are considering grounding American business with new airline taxes and fees that could cut them off from the clients they need to see.
New taxes on air travel would ground a significant number of commercial fliers, negatively impacting American tourism. During the holidays, spending time with loved ones would become prohibitively expensive for many American families.
This is a great opportunity to step up and do your civic duty–please follow the link and contact your representatives today. Encourage your friends, family, co-workers, and fellow travelers to do the same.