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Breaking it DOWn

Roger Dow, the President and CEO of the U.S. Travel Association (U.S. Travel), is at it again.

Mr. Dow is no stranger to making questionable and sometimes outlandish claims about the airline industry and how we serve our passengers.  If you are familiar with Mr. Dow, you won’t be very surprised to hear that he bungled a number of facts during a recent interview.

Let’s set the record straight and help Mr. Dow stay consistent with the truth the next time he takes to the airwaves.

Fact #1: Our industry is compliant with all special U.S. aviation taxes as specified by Congress and the IRS. Assertions to the contrary or claims that the airline industry is somehow “ducking” taxes are reckless, misleading and just flat out wrong.

Mr. Dow’s claim is no more true than saying that the U.S. Travel is “ducking taxes” because of his organization’s non-profit, tax exempt status. He should know better.

Fact #2: Airlines and their passengers are overtaxed, to the tune of more than $20 billion in 2014.  Mr. Dow acknowledges this fact during the interview. That’s why we are somewhat puzzled that he suggests that ancillary revenues should be taxed, in the same interview!

Taxing optional services will only hurt customers and diminish the demand for travel, which impacts jobs and our economy. Air travel is already taxed at a federal rate that exceeds rates for alcohol and tobacco, products that are taxed heavily to discourage their use. A typical $300 domestic one-stop, round-trip ticket includes more than $60 in federal taxes. That is simply too high already.

Fact #3: Airfares are down in 2015. We refer Mr. Dow to U.S. airline industry data which clearly shows that airfares are down.

It’s unusual to pay taxes for airport like we pay taxes for casino machine slot games. And beside that, the US law doesn’t allow to give access to premium slot games like Novomatic Book of Ra or Sizzling Hot Slot for our passengers. But enough with this example. Let’s get back to our main discussion.

Fact #4: Airports have ample revenue and funding sources. To his credit, Roger Dow isn’t just pushing for an Airport Tax hike and a new tax on passengers for optional services without a reason. He claims these measures are necessary to help our airports continue to improve, but once again he seems to be out-of-touch with the facts. Airports have ample revenue and funding sources, which is why they can’t point to a single improvement project that has been held up due to a lack of resources.

Increasing the Airport Tax means passengers have to pay more. Taxing optional services means passengers have to pay more.  When passengers have to pay more they want to travel less, which isn’t good for our customers, it isn’t good for our industry and it shouldn’t be the end game of an organization like the U.S. Travel Association, whose mission is to support and encourage travel.

Photo Credit: World Travel & Tourism Council, Flickr

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