According to the trade group Airlines for America, U.S. airlines earned less than half a penny for every dollar of revenue generated in 2011, making for a second consecutive year of dismal profits. In fact, last year’s combined profit of $390 million represented a 86-percent free-fall when compared to 2010′s profits. The organization argued that the only way to turn this profit trend around is to create a national airline policy.
With the creation of a national airline policy, A4A president Nicholas Calio wants the U.S. government to pursue “a holistic approach that addresses the fundamental tax, regulatory and infrastructure challenges that consistently undermine this industry in the United States.” This is the perfect time to address the issue, he said in a statement, because of the recent passage of a long-term reauthorization bill for the Federal Aviation Authority.
One of the first steps to increase profitability, according to the organization, is to eliminate the jet fuel tax, among other taxes. A policy change like this would be taking a move out of the government of British Columbia’s play book; the government will eliminate its tax on April 1 in order to increase the flow of freight into the province.
The measured imposition of U.S. aviation regulations and the repeal of unnecessary rules is also important to the overall health of the U.S. industry. Modernization of the domestic aviation infrastructure and the tamping down of rising jet fuel costs would work wonders for aviation profitability.
After all, creating a national aviation policy is about ensuring the competitiveness of U.S. carriers by encouraging cross-border investment and continuing opposition to the EU ETS and other taxation schemes. According to the organization, “Without a national airline policy, U.S. airlines will continue to lose ground to their competitors around the world.”