Let’s talk about taxes and fees a little bit.  I’m not going to spend too much time on baggage fees and such because it’s a subject that has been already flogged enough for now.

What I want to talk about is how we, as a nation, have decided to treat the aviation industry and even the travel industry.  Currently, we treat them like chain smokers wanting to go to a bar in New York City.  In other words, we don’t welcome or foster either the travel industry or aviation industry.  We really don’t. 

It’s become popular to view certain industries as pariahs that should bear an ever increasing burden because at the end of the day, those same industries can’t fight that treatment and remain in business.  In the airline business, lawmakers realize that airlines have very few alternatives available to them when it comes to flying to a destination.  Yes, on occasion, there are 2 or more airports to choose from but those are generally controlled by the same government agencies. 

So what am I talking about?  Landing fees.  Because airlines recognizeably can’t avoid paying these fees and because they are incremental to adding costs to an airline fare, it’s popular to fund projects by simply raising these fees.   Occasionally these become so high that airlines go looking elsewhere for their revenue but it’s really quite unlikely to happen in most major cities that trunk routes are based upon.   Example:  Look at just how expensive it is to fly into Toronto.  It’s agregious in price but airlines continue to fly those routes although the rather high air fares that result certainly must contstrict the markets for those routes.

Airlines use airports and airports really are public assets and, yes, they should pay a reasonable fee to use those assets.  However, often airports are built and upgraded with these fees without ever asking the airlines if they’re interested in paying those increased fees for what are often very marginal improvements they get to experience.  Occasionally a really large airline strong arms an airport into funding improvements and new construction and that results in increased landing fees that negatively impact smaller airlines serving the airport with less frequency and who get to experience really none of the benefits.

The thing is . . . airports are economic engines that cities both need and should really want.  Artificially constricting service or growth at these airports has a severe impact on cities and metroplex areas.  Who wants to locate a corporate headquarters in a city that raises airfares through vanity projects that are funded via fees and taxes?  That has a real impact on a company’s travel budget.

In addition, it has become popular to add visitor taxes to things like hotels and car rentals that are insanely over the top in price.  In some cities, we now see taxes and fees making up as much as 40% of the cost to rent a room or a car.   That is abusing the good will of visitors to a city who are already injecting economic value with their visit.  Just because they don’t live in that area and can’t vote against such things doesn’t mean that we should get away with it either.

Transportation, tourism and particularly aviation are strong economic pumps for regions.  It is wrong to overly tax these just because you can get away with it.  It is akin to continually raising taxes on cigarettes just because users are largely addicted and they’ll pay almost any incremental increase in price to meet that addiction.  It would be far better to look upon these areas as opportunities to invest for the local and regional economies rather than an opportunity to rape and pillage visitors in support of the local and regional economies.

Filed under: Airports by ajax