Airlines are pushing back on a plan by a state-backed group to impose heavy taxes on premium cabin and private jet travel.
Supported by the European Commission, the Global Solidarity Levies Task Force says it could raise $150 billion a year to ensure a fairer contribution from the aviation sector to climate resilience. But IATA says the plan, that has few details, would make airlines less efficient and more financially strained—and mean higher costs for travellers and for items shipped by air. Director general Willie Walsh says aviation is an economic catalyst and shouldn’t be treated like a ‘cash cow’ and airlines were already making strides to cutting their environmental impact.
. . . Financial Impact
The levies sought by the task force are three times the forecast profit of airlines for 2025. “Airlines’ structurally thin net profit margin (estimated at an average of 3.4% industry-wide in 2024 and approximately half the global average for all industries) must also be considered in any policy deliberation,’’ he says.
. . . The Taskforce
Set up last year, the taskforce has some heavyweight backing and the moves on premium flyers have the support of France and Spain, Kenya, Barbados, Somalia, Benin, Sierra Leone and Antigua & Barbuda. French President Emmanuel Macron says having Spain (in the premium flyers coalition) is ‘very good news’ and that the push needs more backing from countries that benefit from globalisation.
. . . Misunderstood
IATA’s Walsh says while the task force says its targeting premium travel, it fails to recognise the critical importance of the segment to make route networks viable. Punishing premium travellers or burdening the sector with excessive taxes would upend route dynamics which enable the connectivity that nearly five billion travellers will rely upon this year and mean higher costs for travellers and air cargo, he says.
