ROUNDTABLE REPORT
WORDS MAT THEW PARSONS
IATA WARNS OF ECO-TAX AND REGULATORY RISKS
IATA’s Rafael Schvartzman and Brian Pierce (centre) say current policies harm growth
IATA says aviation taxes are the wrong way to tackle carbon emissions, while its new study claims 120,000 aviation jobs are at risk in the UK due to government red tape
IATA HAS VOICED ITS DISAPPOINTMENT at the French government’s introduction of an eco-tax of up to €18 per business class ticket for outbound flights. The association, which represents 290 airlines, or 82 per cent of total air traffic, made its views heard during a media roundtable it held to unveil a new study into how regulations and taxes affect the aviation sector. New fees of €1.50 will apply to every economy class ticket on flights within France or the EU and €9 for business class tickets. For a business class ticket on flights outside of the EU region, the new fee is up to €18. At the roundtable, BBT asked whether
IATA had been consulted over the tax by the French government, and Rafael Schvartzman, regional vice-president, Europe, at IATA replied: “No, we were not,” adding the new tax contradicted consultations France previously carried out related to making transport more competitive. “France is not as competitive as other countries, like Germany or the Netherlands. [The eco-tax] is not going to help their competitiveness. How can you tackle carbon? You need to have a healthy industry,” Schvartzman said. “The cost of efficient aircraft we need to put in place for the offsetting; that’s a concern. We have not seen that money in the past invested in environmental solutions.” IATA’s chief economist Brian Pierce agreed,
saying the eco-tax could lead to a loss of traffic. “The connecting passenger market is
28 SEPTEMBER/OCTOBER 2019
price-sensitive, so that is a key possibility. But our issue with France is that we don’t see it as an effective way of reducing CO2. It’s much better to physically invest in taking CO2 out of the atmosphere rather taxing it,” he said. “We’re frustrated because clearly the industry does want to be sustainable, but we think there are better ways of doing it.” Air France is also opposed to the eco-tax, and has said it will cost it €60 million a year.
JOBS UNDER THREAT IATA is also frustrated at the UK’s regulatory burdens, and its new Air Transport Regulatory Competitiveness Indicators (ATRCI) study criticises the government’s high level of regulatory burdens and poor supply chain management. The study claims 120,000 jobs are at risk due to the UK aviation sector’s lack of competitiveness. The association said jobs
supported by air transport could be at risk from an “erosion of UK air transport competitiveness”. But it said employment in the industry could rise by 200,000 if the UK invests in infrastructure, makes changes to taxes and reduces red tape. “This launch is not just an academic study, but also recommends clear steps to take,” Schvartzman added.
IATA claims the aviation sector contributes £89 billion to the UK GDP, supporting 1.56 million jobs, but said there is a risk employment could fall to 1.44 million by 2037 unless policies are adopted to facilitate continued growth of aviation. It has slammed the UK’s taxes, and said the
UK ranks “last out of 148 nations for the level of passenger and airport charges and taxes”. IATA makes three recommendations: additional airport capacity in the south-east of England due to Heathrow operating at 99 per cent capacity; removal or reduction of APD; and quicker border entry times. Pierce added: “We need to build bridges
between key cities to stimulate trade post- Brexit. London is the sixth biggest economy, and the best connected city. Do policies help or hinder?”
Most flights departing Charles de Gaulle will be hit by the new eco-tax
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