Last week I wrote about the Trump Administration’s proposed FY2018 budget that proposes raising airline taxes used to fund airport security, passport control, and customs. Not surprisingly, airlines have expressed strong opposition.
Airlines for America, the lobbying arm of eight major U.S. airlines, has issued a letter to U.S. Transportation Secretary Elaine Chao arguing against the tax increase. You can read the full letter here.
The letter signed by CEOs from:
- Alaska Airlines
- American Airlines
- Hawaiian Airlines
- JetBlue Airways
- Southwest Airlines
- United Airlines
Here are the arguments the letter makes:
- Look at the progress being made – the last decade has witnessed over $100BN in airport infrastructure upgrades with private/public dollars.
- These efforts will flourish without fee increases
- The Airport and Airway Trust Fund still has $6BN that can be used to fund infrastructure and $9BN has already been taken from it to fund non-airport projects
- Airlines are already overburdened with taxes akin to “sin” taxes on cigarettes and alcohol
- Federal income tax cuts should be followed by tax cuts for airlines too
Look, these arguments are hardly news. The sun rose from the east and airlines don’t want to pay more in taxes/fees…I get it.
But I wonder if this year will be different. And not in the direction airlines want. Congress has traditionally brushed away these fee increases. Trump proposed the same increases last year and Congress said thanks but no thanks. This year, however, the budget deficit is up and the Administration’s tax cuts and infrastructure plan will require offset from other sources.
I have no desire to pay more for my airline tickets or put the burden of a broader infrastructure plan on the traveling public. On the other hand, I do not dismiss that nice airports, roads to airports, and reduced air traffic congestion routinely require a significant investment. Let’s see who wins this annual battle.