IATA expresses disappointment over misguided Solidarity Levy proposal

THE International Air Transport Association (IATA) has expressed its deep disappointment at the recommendation of the Global Solidarity Levies Task Force (GSLTF) to target air transportation in its aim to "improve domestic revenue mobilisation of developing countries and support international solidarity (in particular with regards to climate change mitigation and adaptation, pandemics and other development challenges).

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An initial assessment of the GSLTF's proposals reveals severe deficiencies, including that:

■A competitive airline industry does not generate excessive profits: The GSLTF announcement, while lacking any meaningful detail, quotes a CE Delft estimation that a premium flyer levy could generate € 78 billion (over $90 billion) per year. That is approximately three times the airline industry's global estimated profit of $ 32.4 billion in 2024. Airlines' structurally thin net profit margin (estimated at an average of 3.4% industry-wide for 2024 and approximately half the global average for all industries) must also be considered in any policy deliberation.

■The airline industry has a multi-trillion-dollar commitment to sustainability: Airlines have committed to achieving net zero carbon emissions by 2050—an effort that is expected to cost $ 4.7 trillion over the period 2024-2050. This will ensure that aviation can deliver its direct contribution of 3.9% of global GDP and 86.5 million jobs globally while addressing its estimated 2.5% share of global carbon emissions. Increasing aviation taxes on airlines as proposed will limit the industry's ability to invest in solutions that deliver long-term emissions reductions.