Ramon Lopez/WASHINGTON DC
US AIRLINES have begun paying an extra $1.5 million each day for fuel since the implementation of an aviation-fuel surcharge on 1 October - even though lawmakers are considering extending a tax deferral which has been in place for the past two years.
President Clinton's 1993 airline commission had recommended that the ¢1.1/litre tax be deferred, while the US Air Transport Association (ATA) has been lobbying to extend the two-year deferral, which expired on 1 October.
The ATA estimates that the tax would cost an extra $530 million a year. The airline group, urging lawmakers to repeal the tax, says that the return to profitability will be impeded by the surcharge.
The House Ways and Means Committee voted to extend the tax exemption by another two years, but the Senate Finance Committee has yet to take up the matter. If both sides agree, the exemption would become part of the stalled Federal budget reconciliation.
Debate focuses on whether the industry can afford to pay the tax. The US Department of Transportation (DoT) says that the 11 major US carriers reported a combined operating profit of more than $2 billion and net profits of more than $1 billion in the second quarter of this year.
The DoT says that the financial gains resulted from cost-cutting and a 4% jump in passenger traffic. The industry had lost $13 billion in the previous five years.
The ATA says that the quarterly profit is only "...a drop in the bucket. We need a string of these to make a dent in repairing industry balance sheets."
Source: Flight International
