The U.S. Travel Association has proposed the elimination of five passenger aviation taxes in order to offset an increase to the Passenger Facility Charge (PFC).

The association on Tuesday presented a plan to Congress "to fix the country's struggling air travel infrastructure and promote a healthy, well-functioning passenger aviation system,” as part of the reauthorization of the Federal Aviation Administration bill, which expires in September.

U.S. Travel contends that it is necessary to raise the PFC, a federally regulated tax currently capped by Congress at $4.50 per passenger per flight, in order to finance airport projects.

"We continue to believe that the PFC, as a pure user fee, is the ideal means to address our severe infrastructure challenges,” said U.S. Travel CEO Roger Dow. "But finding the math to be able to include an airfare tax cut is a critical new piece, and has been expressly designed to address the concerns of some who have attacked the PFC approach."

The plan calls to eliminate the Domestic Passenger Ticket Tax; the tax on international arrivals and departures; the Domestic Commercial Fuel Tax; the tax on mileage rewards; and the tax on flights between the continental U.S. and Alaska or Hawaii.

The group said today that the net effect of its plan on the average federal ticket taxes and fees would be a reduction of between $9.50 and $25.50, based on an average roundtrip airfare of $340.

U.S. Travel and airports have been lobbying for an increase in the PFC cap from $4.50 to $8.50 per passenger segment, while airlines, which collect PFCs at the time of the ticket purchase, have lobbied to keep the cap at its current level on the grounds that higher fees would make air travel more expensive.

"This plan would take care of the price sensitivity argument and take it off the table,” said Dow on a conference call on Tuesday with media.

U.S. Travel also said that the tax changes would eliminate airlines' incentive to collect "inordinate amounts of revenue through ancillary fees, such as for bags and ticket changes.” 

Dow noted that a 2009 ruling by the IRS that ancillary fees are not subject to taxation “unleashed" the current trend toward fees by airlines. 

"Eliminating the Domestic Passenger Ticket Tax would remove the airlines' incentive to shelter mass amounts of revenue in fees,” the statement said.


From Our Partners

From Our Partners

Seabourn Updated Logo
Rediscovering Seabourn’s Extraordinary Worlds
Register Now
Hawaiian Airlines Airplane
Hawaiian Airlines
Read More
2019 Celebrity Cruises Webinar December
Exciting News from Celebrity Cruises you will not want to miss!
Watch Now

JDS Travel News JDS Viewpoints JDS Africa/MI