Published On: Wed, Nov 19th, 2014

Airport taxes up, arrivals down

Increase of airport tax main reason for passenger drop 

Insel AirWILLEMSTAD - According to statistics of Curacao Airport Partners (CAP), there is a 2 percent decrease in the total number of passengers compared to the same period last year, and 23 percent fewer passengers have made a transfer on Curacao compared to the same period last year. In addition, the number of passengers that have traveled by air from Curacao to one of the Dutch Caribbean Islands have, according to CAP, also declined by 11 percent in the last quarter. InselAir however, reports for the same period, an increase in its passenger numbers. In addition, multiple studies and research indicate that the primary factor for a decline in passenger numbers is the increase of airport tax.

The passenger chooses
Statistics of InselAir show that the total number of passengers transported by InselAir via its hubs in Curacao and in Aruba, in that specific period, have increased significantly. However, it is up to the passengers to choose through which airport they want to transit, and they often choose Aruba due to the convenient pre-clearance service and well-equipped airport.

Drop in arrivals due to high airport taxes
InselAir is the largest passenger carrier between the Dutch Caribbean Islands. Both local and international, InselAir transports most passengers to Curacao (57% of all passengers are transported by InselAir). A drop in arrivals at Hato Airport is something that can be attributed to the airport itself. InselAir sees, as mentioned above, a significant increase in passengers. In the third quarter of 2014, there was a growth of 16% between Aruba and Curacao (v.v.) and a 14% increase between Bonaire and Curacao (v.v.). And despite the challenges InselAir had, due to delayed payments from Venezuela, all flights were always executed and may therefore have had no effect on the number of arrivals. But the most important point to note is that several times conclusively, in various publications and studies, it was found that the primary reason for a decrease in 'arrivals' at an airport has a direct correlation to the increase of airport taxes. ‘Taxes on aviation will reduce the wider economic benefits available from aviation, resulting in a negative impact on economic growth and overall government revenue bases. Taxes on aviation charges will negatively impact tourism, an industry that is essential to the economy of many countries*’. In addition, Tony Tyler, General Director of IATA, said during his speech at the ALTA Airlines Leaders Forum 2014: "If we look at this region and the Caribbean more broadly, there is a clear trend to burden airlines and their passengers with taxes and user charges. Some are meant to foster tourism, but this makes no sense since in the end what taxes do is exactly the opposite: taxes harm tourism and the economy of the states imposing them**.” And these taxes have risen exorbitantly at CAP in recent years. The rates of the Dutch Caribbean Air Navigation Service Provider (former NAATC) have also doubled in recent years. Furthermore, Tyler says that research shows that there is ‘no transparency in the determination of increasing taxes and charges, almost none consultation is done with airlines regarding the operational needs of the investments and that the depreciation time of the investments applied by airports is too short’. As a result, the amount of taxes is disproportionate to the quality and service provided by airports.

Foreign examples
There are numerous examples from other countries where the above took place in practice; increasing taxes with a drastic reduction in the number of passengers as a result, but also where the reduction of taxes proved to be an enormous impulse for visitors to visit a country or island. In the end, all increases are being paid for by the consumers and this clearly affects his/her travel patterns in a negative way.

* source:
** source: /Pages

Download documents



Click Tag(s) for Related Articles: