IATA: Caribbean losing competitive edge due to high airline fees
The International Air Transport Association has weighed in on the issue of high aviation taxes in the Caribbean, claiming growth is being stymied by unnecessary fees.
Fees amount to more than 30% of typical airline ticket prices and in some cases, can be as much as 50%, says Peter Cerd, IATA regional vice president for the Americas.
Governments are using the industry as a ‘cash cow’ for tax revenues, which is stalling growth and making the region less competitive, according to findings in a recent study by IATA and the Caribbean Development Bank.
"According to the study, each $1 of ticket tax could lead to over 40 000 fewer passengers, $20 million reduced tourist expenditure and 1,200 less jobs. While we understand the budgetary challenges facing many of our partners in the region, imposing these heavy fees and charges on aviation affects level of tourism and business travel," he said.
When high aviation taxes and fees start to bite, ‘first passenger travel begins to diminish and airlines begin to exit the market.’
That is something we certainly don’t want to happen in this part of the world," he said.
Cerda was speaking in Barbados after the government recenty announced an Airline Travel and Tourism Development fee which could add up to S$70 for longer flights starting from October this year.
The region as a whole is losing out to more competitive destinations like Dubai and Abu Dhabi for key European markets.
As an example, it costs about $300 less for a typical UK family to fly to Dubai than to the Caribbean, Cerd claims.
Lack of inter-island connectivity is also a barrier to the region’s tourism and air travel growth.
"Often, it is cheaper to fly back to Miami to reach another Caribbean destination from the other island in the Caribbean. Unfortunately, air connectivity growth in the region has been relatively weak, limited only to a few countries. Those are the countries that are prospering in the region while the others are struggling to stay competitive," he added.
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