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Europe’s airlines: over-taxed and unsupported

VIENNA: As the European Commission announces plans to improve European productivity by adopting a circular economy, IATA CEO Tony Tyler has called for a halt on using the airline industry as a short-term tax cash cow while ignoring long-term infrastructure inefficiencies.

“In 2014, European governments will collect nearly $40 billion in taxes from airlines and passengers. To put that into perspective, that is more than double the taxes collected in the Asia-Pacific region. Many governments there value aviation more for the long-term economic value that the industry makes possible, than for short-term tax receipts,” he said.

FRAport T.2The IATA head pointed out that Europe’s airlines - expected to realize a post-tax net profit of just $2.8 billion this year - are financially the weakest amongst the world’s major regions.

“Among the biggest obstacles faced by European airlines are the competitive disadvantages placed in their way by Europe’s governments. The region’s airlines are over-taxed and onerously regulated. Moreover, they suffer from a chronically mismanaged air traffic management system, insufficient airport capacity and infrastructure costs that are simply too expensive. It’s time to do something about it,” he said.

Top of Tyler’s wish list is implementing the Single European Sky (SES) – advocated by the Association of European Airlines for over 30 years and continuously ignored by politicians: “The SES will reduce delays, cut emissions, raise safety levels and contribute to the creation of 320,000 jobs across Europe,” he declared.

As a result of an historic air traffic control patchwork of turf-protecting monopolies, he said consumers lose an annual €6 billion in time and productivity on top of a €3 billion cost of operations. Tyler called the June strike by French air traffic managers worried about jobs and pensions as malicious.

“All [governments] have done so far is to provide a fig-leaf to cover a complete lack of forward progress on the part of Europe’s community of air navigation service providers,” he said.

Noting there is a “very long list of things that Europe can and should do to improve the operating environment for its aviation sector,” Tyler said the motivation is because aviation generates jobs, grows the economy and improves European competitiveness – apparently the same reasons for the Commission’s new avocation of a circular economy.

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