IATA boss warns of deadly mix of higher taxes and austerity measures
Tuesday, 27 Oct, 2010
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IATA director general and chief executive officer Giovanni Bisignani has used the UK as an example of how austerity measures and higher taxation can lead to the economic recovery stalling.
The aviation boss made the warning as he was unveiling September’s international passenger traffic figures, which showed an encouraging 10.5% year-on-year increase, and the less positive freight numbers – a 14.8% year-on-year increase which is weaker than the August rise of 19%.
He said: “The industry’s situation is volatile. Passenger traffic represents about three quarters of the industry’s revenues. While September’s passenger growth is reassuring, the accelerating decline of air freight, including in Asia, is an early indicator of some turbulence ahead.”
“It is good news that the recovery in passenger markets continued in September. But the freight numbers are worrying. Freight activity has fallen 6% since May’s post-crisis peak. What we see in air cargo markets is inevitably reflected in the broader economy.”
“Government actions can impact the sustainability of the recovery. Austerity measures will dampen demand. When combined with new or increased taxation, as we have seen in Germany and the UK, the challenges are even greater.”
Bisignani went on to underline the importance of the aviation sector on the economy in general for countries around the world.
He said. “Governments must understand that air transport is an economic catalyst. Last year, we saw that a EUR312 million departure tax in the Netherlands cost the Dutch economy EUR1.2 billion. Further taxing the industry makes no sense when the focus of governments should be on making the recovery sustainable.”
Broken down by international regions, passenger traffic for September saw its greatest rise in the Middle East where there was a 23.9% increase compared to 2009.
North American airlines had their traffic numbers return to pre-recessionary times with a 11.1% increase in passenger demand compared to last September during a time when capacity expanded at a rate of 7.2%. The strongest passenger load factors were recorded in North America at 84.1%.
Latin America saw the weakest growth at 6.6% with a 0.5% increase in capacity. IATA says this was largely down to Mexicana ceasing operations.
by Dinah Hatch
Dinah
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