Taxes too high on airline tickets
High taxes on airline tickets are leading to a decline in travel in the Caribbean.
Regional Vice-President for the Americas of the International Air Transport Association (IATA), Peter Cerdá, underlined that overtaxation, regulatory barriers and inefficient infrastructure were creating issues with the aviation sector in the region.
Speaking to the findings of a recent study between IATA and the Caribbean Development Bank (CDB), he said that in the region, taxes often represented more than 30 per cent of airline ticket prices.
For example, he illustrated that half of the ticket price between Castries and Bridgetown was just taxes.
Speaking on the new departure taxes set to come on stream in Barbados come October 1, he said that while governments may be tempted to use taxation to generate revenue quickly, it could be harmful to the industry in the long-run.
“According to the study, each $1 of ticket tax could lead to over 40 000 fewer passengers, $20 million reduced tourist expenditure and 1 200 less jobs and while we understand the budgetary challenges facing many of our partners in the region, imposing these heavy fees and charges on aviation affects level of tourism and business travel,” he stated.
In contrast, Cerdá showed that those countries which have reduced taxes benefited in some cases by a 50 per cent increase in visitors overtime.
He highlighted that unless something is done, Barbados and the rest of the region will begin to lose out more on tourist arrivals to competitors like Dubai, Abu Dhabi and Singapore, which offered the sun, sea and sand experience as well as other activities in more luxurious settings, but at much cheaper prices.
In fact, he illustrated that currently it costs a family in the United Kingdom £200 less to travel to Dubai, than to come here.
According to Cerdá, while the rest of the world was thriving with higher levels of connectivity to unique destinations, in the Caribbean there was an obvious lack of intra-connectivity, as persons often had to take a flight with several stops before reaching their destination.
He outlined that those 20 000 passengers travelling between Bridgetown and Kingston were required to fly between five to eight hours on one or two-stop itineraries as no direct flight was available.
“Often, it is cheaper to fly back to Miami to reach another Caribbean des-tination from the other island in the Caribbean. Unfortunately, air connectivity growth in the region has been relatively weak, limited only to a few countries. Those are the countries that are prospering in the region while the others are struggling to stay competitive,” he said. (JMB)