Once again there are plans on the table to replace the US ticket tax. There are even hopes that, this time around, the US Federal Aviation Administration will actually be able to see them into law.
It is not before time. The US Congress, the FAA and the airline industry have spent much of the past three years engaged in a tortuous dance around the issue. At points it has lapsed into low farce as the existing 10% ticket tax repeatedly lapsed and was then re-instated for want of an alternative.
As FAA administrator Jane Garvey presented the latest proposals to Congress on 18 March there was a growing optimism that a solution may at last be in sight.
The proposals are themselves barely new, based on recommendations from the National Civil Aviation Review Commission (NCARC) presented at the end of last year. That committee in turn had sprung from the Gore Commission findings a year before
Basically, the aim is gradually to phase out a tax on tickets in favour of a fee per passenger per flight segment. Better still, Garvey has added a proposal of her own, planning to present legislation to transform the FAA's Air Traffic Services (ATS)arm into a standalone commercialised business, or in the official language of these things, a "performance based organisation". Best of all, both plans are squarely linked to improving and upgrading the management of US air space.
It has been the lack of this link that is at the heart of the problem with the existing US ticket tax, and many other forms of airline charges around the world. Too much of the cash has simply disappeared into government coffers, rather than going towards improving a creaking aviation infrastructure.
If Garvey's proposals succeed in ring-fencing the user charge to fund spending on modernising US ATS, then airlines will have more cause to thank her than complain. Without a change in funding,and spending, US airspace faced gridlock within a few years.
On the face of it, the FAA proposals are anyway hardly revolutionary. Virtually every other country around the world from Botswana to Belgium already imposes user charges to help fund their air services. More countries are also beginning to concede the good sense of splitting off ATS from their civil aviation authorities to concentrate on their job away from the distractions and inefficiencies of a governmental department.
Inevitably, there will be losers as well as winners from the US user fee. Already there are plans for a fudge to soothe the general aviation community, panicked by the prospect of a massive increase in their costs. They will not pay user fees but instead continue to contribute through a tax on fuel.
The low-fare airlines, too, will want their say. The last time a user-fee plan was floated more than a year ago, it caused howls of complaint from the low-cost sector, led by Southwest Airlines, which helped to torpedo the proposals.
They have a point. The ticket tax was only a small percentage of their low fares. The user fee will, in principle, be the same for all. They argued that the extra cost burden, upward of $500 billion a year, would jeopardise their ability to compete - a point not lost on the major network carriers as they pushed for user fees.
It would certainly be a bonus if the shift to user charges could avoid major turbulence for the low cost airlines, especially given their current fragile state.
If the USA, or come to that the world, airline industry want to make a stand on taxes then it should do so not on the basis of how much cash is collected, but on the grounds that so little of it has actually been used to provide badly needed infrastructure modernisation. The US war of independence began with demands for no taxation without representation. Perhaps the airline slogan during this smaller revolution should be "no taxation without implementation".
Source: Flight International
