Excerpted from The Jet Fuel Report
The Air Transport Association of America came out firing Tuesday, warning that nearly 10,000 airline industry jobs could be cut in the next 12 months if two new proposed passenger security and airline departure taxes are implemented.
The ATA said over the long term, nearly 181,000 jobs could be lost across the economy related to reductions in aircraft manufacturing, airports and supporting businesses.
“The job-killing equation is simple: Add taxes and lose jobs,” ATA president and CEO Nicholas Calio said in a statement. “Tripling the passenger security fee and creating a new $100 departure tax will have a devastating effect on the U.S. economy and our customers, who already pay more in taxes for air travel than they do for alcohol, tobacco and firearms. The proposed new taxes will impact fares and reduce service, which equates to a one-way ticket to the unemployment line for thousands of Americans.”
The ATA cited a new study from the Oliver Wyman management consulting firm estimated the potential job loss based on the cost of these taxes on the industry and expected capacity cuts to accommodate the additional costs. The study notes that airlines have limited ability to pass through cost increases and said it could lead to a domestic capacity cut of 2.3%.
“The president is proposing a huge new tax on the least profitable and most highly taxed industry in the economy while all its competitors are left untouched,” Calio said. “Airlines and their passengers should not shoulder the burden to pay for the country’s security, or even worse, to pay off the national debt.”
