Published On: Wed, Sep 17th, 2014

IATA’s Regional Vice President: “Taxation does not support development of aviation industry”

CerdaSAINT THOMAS – During the second Caribbean Aviation Day, the Regional Vice President of the International Air Transport Association (IATA), Peter Cerda said that his organization urges and reminds authorities to adhere to the key principles set out by ICAO on taxation, charges and fees in the aviation industry.

“Unfortunately, many governments choose to ignore them. This is a global issue, but it seems to be particularly acute in the Caribbean,” Cerda said.

According to the IATA executive aviation taxes increase the cost of travelling to the Caribbean and make the islands less competitive relative to other destinations. Taking the islands as a whole, each $1 of ticket tax could lead to over 40,000 fewer foreign passengers, 20 million dollars of reduced tourist expenditure and also 1,200 fewer jobs.

Cerda stressed that the Caribbean countries must consider the aviation industry as a key element for tourism development.

“In terms of charges, two airports in the region, Montego Bay and Kingston, recently proposed airport tariff increases of over 100%, to attain a return of capital of around 20% a year in US dollars. Measures such as these do not encourage or support the development of the industry in the region,” Cerda said in his speech.

According to the IATA executive, the regulators must act strongly and swiftly against such big increases. Governments have to foster positive business environments through consultation with the industry and transparency in order to ensure win-win situations for all.

The issue of taxes and charges in the region transcends the formal breaches of global standards and recommended practices.

“The simple truth is that this region is a very expensive place for airlines to do business.”

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