The aviation industry faces 17 different taxes, comprising about 20 percent of a typical $300 roundtrip domestic ticket, and federal tax rates exceed those for alcohol and tobacco, products that are taxed to discourage use.
Policymakers could help improve travel by eliminating inefficient and costly rules that do not improve safety or the customer experience. Even though the industry was deregulated in 1978, today it is still one of the most regulated sectors of our economy. There are several existing and future government regulations that are projected to cost the U.S. economy billions annually – with no clear benefits for travelers. That needs to change.
The U.S. air traffic control system dates back to the 1950s. Implementing new policies and procedures would enable airlines to leverage technology investments they have already made and would reduce flight delays, missed connections and cancellations, while also lowering fuel consumption and related emissions.
Reducing fuel use is critical, as fuel is the single largest cost for airlines – and the most volatile. Supporting a balanced and comprehensive national energy policy would improve U.S. energy security with more predictable and stable energy supplies and costs.
U.S. airlines face increased competition from foreign carriers that operate in much more favorable policy environments in their home countries. We need to level the playing field so that American carriers can better compete with these foreign competitors.
A national airline policy is the right move. And there’s precedent for such action. In the 1970s, the federal government enacted policy changes that helped revitalize our freight railroads, making them the envy of the world.
We have a real opportunity to grow our economy and create jobs with a National Airline Policy that benefits passengers and shippers, businesses and communities. And the time to do so is now.
Calio is president and CEO of Airlines for America.