Rudy Maxa's World Radio Interview with Air Transport Association President and CEO Nicholas E. Calio on Taxes and Fees RM: On the more serious side of the airline business, frequent fliers know that the price of an airline ticket can sometimes be exceeded by the total of fees and taxes added on to that ticket. The taxes you and I pay on a typical three hundred dollar domestic round trip ticket -- sixty one dollars -- that's a twenty percent tax bite. That's three times what we paid in 1972. Nick Calio is the President and CEO of the Air Transport Association of America, that's the airline industry's trade group headquartered in DC, and he and his members aren't the least bit happy about these high taxes on airlines tickets. Welcome to the show, Mr. Calio, nice to have you aboard. NC: Hello Rudy, thanks for having me. RM: Let's start with this -- how did we get in this situation in the first place? NC: Well I think we got into this situation by what I would call benign neglect of the industry, or really taking the industry for granted because people figure that planes are always going to be around and they can always hop on a plane. Multiple agencies assess taxes against the industry and they're not coordinated at all. There's really no tax policy, the industry is viewed more like a cash cow. And every time you have a good year, and we had a good year for the first time in 2010, for the first time in ten years, after losing fifty billion dollars in the previous ten years, and all of a sudden people are talking about more taxes? The taxes have really gone on unchecked, there's a total of 16 billion dollars a year assessed against the airline industry. Twenty years ago it was 3.7 billion dollars. So the taxation of the industry has been on autopilot, rising steadily without interruption, you know, gone up 38 percent. It hurts all of us really because passengers and packages cost more to ship as prices go up so the passengers pay, the airlines pay, and we're in a situation where the industry is not profitable, and that prospect can't continue really. RM: I would also gather that since passengers aren't really a unified group it's easier for politicians to levy taxes on a diffused group than say, oh, the City of Milwaukee for example, where people might say "hey, wait a minute, what's going on here" NC: I think that's absolutely right, and I think that members of Congress and policy makers here in Washington do it without regard for the overall impact on the industry. And I think it's a question that we have to face, that's why ATA, the Air Transport Association, is calling for a national airline policy. There's been four commissions, started by Presidents and Congress over the last 18 years, all have come to the same conclusion, that the industry has a problem, it's overtaxed, it's overregulated and the infrastructure isn't there to allow it to grow. There's been no action on those four commissions. We think that it's time for action, and somebody's got to start paying attention to it, otherwise the industry is gonna be in a bad way. Basically for the last ten years, everybody, again I think, takes the industry for granted, but you can't keep flying passengers for less than it costs the airline to fly them. And that's exactly what's been happening, Rudy. RM: Is anybody paying attention in Washington? NC: Kind of, to be honest, but only kind of, and what we're trying to do is force a focus on the difficulties in the industry. We're not asking for any kind of handout, we're asking Congress to take a look, and our regulators to take a look at the situation in the industry, and to finally take some action to put the industry in a place where it can be more competitive with our foreign rivals, and do the kind of things for the economy that it really can do. You know, right now the industry does more for the economy than almost any other industry. It drives jobs, it drives Gross Domestic Product, and it provides really good paying jobs. But we're at an inflexion point here. Unless we start to take action and pay attention this industry is gonna go the way of the maritime industry. There is no U.S. maritime industry. That didn't happen on purpose; it happened because nobody in Congress, and none of the regulators really wanted to pay attention to it. RM: Nick, I second your emotion, and I thank you for joining us today. NC: Thanks so much Rudy, I appreciate it.

• published: 20 Jun 2011
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