ATA Writes in Opposition to the Federal Republic of Germany’s Recently Adopted Air Transportation Tax

Commercial aviation helps drive more than 10M American jobs and 5 cents of every dollar of U.S. GDP
Commercial aviation drives more than $1 trillion per year in economic activity
In 2012, U.S. airlines moved more than 48,000 tons of cargo per day
In 2012, the value of a kilogram of U.S. merchandise exported by air averaged 121 times the value exported by sea
For every 100 airline jobs, some 360 are supported outside of the airline industry
Federal taxes constitute $61 – or 20% – of the price of a typical $300 domestic round-trip ticket
In 2011, U.S. airlines carried 16 percent more passengers and cargo using 10 percent less fuel than in 2000
Domestically, airlines drive 5% of economic activity but account for 2% of man-made GHG emissions
From 2000-2011, airlines reduced GHG emissions by 11% while transporting 16% more passengers and cargo
From 1975-2011, U.S. airlines and their partners reduced significant noise exposure by 99%
Commercial air travel is the safest form of intercity transportation in the United States
In the most recent decade, scheduled air service on U.S. airlines was seven times safer than in the 1970s
From 2000-2012, U.S. airlines improved the on-time arrival rate from 72.6% to 81.9%
From 2000-2012, U.S. airlines reduced the flight cancellation rate sharply from 3.30% to 1.29%
Airfares are a bargain: From 2000-2012, U.S. CPI rose 33% while average domestic fare rose just 14%
Adjusted for inflation, the average round-trip domestic airfare fell 15% from 2000
2007 domestic flight delays cost the United States approximately $31 billion
In 2012, the value of U.S. merchandise exported by air reached an all-time high of $427B
In 2012, U.S. exports of air-travel services reached an all-time high of $39.5B, driving a $5.1B trade surplus
In 2012, U.S. passenger and cargo airlines spent more than $50B on fuel, averaging 36% of operating expenses
In 2012, U.S. airlines posted the lowest annual rate of mishandled baggage ever recorded
FAA projects U.S. air travel demand to top 1 billion passengers in 2027
In 2012, US airlines flew 83.4 million passengers in scheduled international service - a record high
In 2012, the total value of merchandise exported from or imported to the United States by air exceeded $927 billion
In 2012, 7.15 teragrams of merchandise was exported from or imported to the United States by air

	ATA Writes in Opposition to the Federal Republic of Germany’s Recently Adopted Air Transportation Tax
	PubZone1 September 15, 2010 Mr. Volker Kauder MdB Vorsitzende der CDU/CSU-Bundestagsfraktion German Bundestag Platz der Republik 1 11011 Berlin Germany Re: Airline Tax Dear Mr. Kauder: On behalf of the Air Transport Association of America (ATA), I write to express our strong opposition to the Federal Republic of Germany’s recently adopted air transportation tax.1 This tax is bad for the airlines, the traveling public, the economy and the environment. We urge you to take all legislative action necessary to rescind the measure. While we respect that Germany – like many countries today – has a budget gap to close, this should not be done on the backs of the airlines and their passengers. The airlines are tremendous economic enablers, accounting for 8 percent of the global economy and 8 percent of German employment. Despite this, airline finances remain precarious; U.S. airlines alone have lost $56 billion in the last decade. In such an adverse environment, any new tax will be keenly felt. The steep tax that has been adopted, to be levied against U.S. airlines at €45 per passenger, the highest level of the three-tiered taxation proposal, may mean the difference as to whether a particular airline is able to even provide service involving German airports. The economic effect on airlines, their passengers, the airports and businesses that rely on air services will be severe, very possibly doing more harm to the German economy than any near-term good from the revenue the tax may bring the country’s coffers. We have seen various statements out of Germany attempting to justify the tax on environmental grounds, as means of incentivizing airlines to improve fuel efficiency or to move airline passengers onto trains. This attempted justification is not supported by the facts. The airlines already are extremely fuel efficient, which – given the relationship between fuel burn and greenhouse gas (GHG) emissions – equates to GHG efficiency. Driven by high and volatile fuel prices coupled with razor-thin profit margins in the best of years (and losses in many), the airlines for many years have pushed airframe and engine manufacturers to provide ever more fuel-efficient aircraft, which we fly as efficiently as possible. Indeed, U.S. airlines improved their system wide fuel efficiency by 110 percent between 1978 and 2008, saving 2.7 billion metric tons of carbon dioxide (CO₂). Pushing people onto other transport modes is not the answer. Obviously, there are many places that trains do not go – such as overseas. But even for available trips, trains can often be less environmentally friendly than air travel. In 2009, University of California-Berkeley analysts conducted the most comprehensive study on the total life cycle emissions (including GHGs) from various transport modes. They correctly stated that, when all GHG emissions associated with construction and operation of passenger rail systems are included, the life cycle GHG footprint of rail increases by 155 percent – compared to only 31 percent for aviation. Notably, the highly subsidized nature of train transport also calls into question its economic efficiency relative to the air transport sector, which funds its own infrastructure. While the airlines have a strong fuel and GHG record, we are committed to doing more. In concert with the airlines of the world, as endorsed by airports, air-navigation service providers and airframe and engine manufacturers, the U.S. airlines have proposed a “global sectoral approach” for addressing aviation GHGs. This framework includes targets for further fuel efficiency improvements through 2020, followed by carbon-neutral growth beyond 2020 and a 50 percent reduction in aviation CO₂ emissions in 2050, relative to 2005 levels. The German tax will be counterproductive to our efforts, however, as it will siphon away the very funds the airlines need to continue to invest in new aircraft, retrofits, alternative fuel and other upgrades to meet our targets. It also will add to the proliferation of disparate and overlapping measures, further exacerbating the harm. Rather than working against us with such a measure, the government should rescind the tax and work with us, by prioritizing air traffic control improvements and other activities within the government’s purview to complement our efforts, and supporting an agreed, multilateral framework of rational regulation under a global sectoral approach. Although the economic damage that the German tax will inflict is considerable, we also question whether the tax could be found to be consistent with international law. The “distance band” approach – with greater tax levels on longer haul flights – raises questions of discrimination and of respect of sovereignty. The tax more generally raises questions of consistency with internationally agreed limits on aviation taxes and charges. Moreover, we have significant legal and practicability concerns about the application of the tax to flights beginning as soon as 1 January 2011. This is insufficient notice for any new tax. Further, there simply is no legal or practicable way to apply a new tax to tickets already sold for flights from that date. In light of the above, we urge you to take measures to rescind the airline tax. Sincerely, James C. May cc: Chancellor Angela Merkel Dr. Wolfgang Schäuble, Federal Minister of Finance Dr. Peter Ramsauer, Federal Minister of Transport, Building and Urban Affairs Dr. Rainer Brüderle, Federal Minister of Economics and Technology Mrs. Birgit Homburger MdB Mr. Joachim Poss MdB Ambassador Klaus Scharioth U.S. Secretary of State Hillary Rodham Clinton U.S. Secretary of Transportation Raymond H. LaHood U.S. Secretary of Commerce Gary Locke 1 ATA is the principal trade and service organization of the U.S. scheduled airline industry, and ATA airline members transport more than 90 percent of all U.S. airline passenger and cargo traffic. The airline members of ATA, many of whom provide air services to Germany, are: ABX Air, Inc.; AirTran Airways, Inc.; Alaska Airlines, Inc.; American Airlines, Inc.; ASTAR Air Cargo, Inc.; Atlas Air, Inc.; Continental Airlines, Inc.; Delta Air Lines, Inc.; Evergreen International Airlines, Inc.; Federal Express Corporation; Hawaiian Airlines, Inc.; JetBlue Airways Corp.; Southwest Airlines Co.; United Airlines, Inc.; UPS Airlines and US Airways, Inc. Associate members are: Air Canada, Air Jamaica Ltd. and Mexicana. PubZone2	A4A advocates measures to support aviation safety, security and well-being.