IATA demands tax relief for ailing airlines

Governments have been urged to rethink aviation taxes as latest figures show that ailing global economies are hitting airline traffic.

Global results for November showed a softening in passenger business, according to IATA. While passenger traffic was 4.3% above levels a year earlier, this was skewed as November 2010 was a particularly weak month.

The softening in passenger markets becomes apparent when compared with October 2011, showing a 0.5% decline on a seasonally-adjusted basis, IATA said.

Director general and chief executive Tony Tyler said: “Weak global economic performance is being reflected in air transport markets.

“Although passenger markets have had some growth relative to the beginning of the year – about 2% – the trend has been both soft and volatile. Continuing economic uncertainty will likely mean market shortcomings deepening as we enter 2012.”

Passenger load factors fell sharply to 76.3% from 78.5% in October, showing that the weakness in passenger demand is outpacing airlines’ ability to adjust capacity accordingly, IATA data shows.

But there were sharp regional differences. While North American carriers saw a 0.8% decline in travel, carriers in the Middle East experienced a 10.1% increase, followed by 9% for Latin American airlines.

Tyler said: “The year-end holiday season reminds us all of the importance of connectivity and how aviation is a force for good in the world. Global supply chains bring holiday goods to markets.

“Millions of people are reunited with family and friends. Millions more embark on journeys of discovery or rest and relaxation.

“Early in the New Year they will be joined by business travellers seeking to grow their businesses by exploring new market opportunities.

“This year the story of aviation’s importance is even more compelling as governments around the world seek solutions to economic uncertainty.

“Economic growth is the only durable solution. Aviation can be a catalyst for that growth. But that depends on governments allowing airlines to get on with the business of providing global connectivity.

“The New Year’s resolution for every government with respect to aviation should be to stop over-taxation or mis-regulation of this vital economic driver,” said Tyler.

IATA estimates the airline industry will make a collective profit of $6.9 billion in 2011 from a net margin of 1.2%.

It forecasts that this will fall to $3.5 billion in 2012 (0.6% net margin). But the association warns that the downside risk of the eurozone crisis failing to be resolved could lead to losses of more than $8 billion.

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