AACO turns to IATA for support over new proposed U.S. taxes

The Arab Air Carriers Association (AACO) has turned to the International Air Transport Association (IATA) to intervene in new taxes proposed by the U.S Administration which some observers believe is intended to target the ‘Big Three’ Gulf carriers, Emirates, Qatar Airways and Etihad Airways.
The proposed taxes are to be levied on carriers headquartered in countries which do not have an income tax treaty with the U.S. and which fly routes which are not flown more than twice a week by “major passenger airline carriers headquartered in the United States”, effective after December 31, 2017.
The amendment to the Taxation Bill was proposed by US Senator Johnny Isakson from Georgia (R-GA) – where US carrier Delta is headquartered, and was passed by the House of Representatives, so it will now head to the Senate for consideration.
However, it is not just the three Gulf Carriers who will be affected by this amendment. Saudi Arabia has no treaty exemption, nor does Singapore, Kuwait, Malaysia and the majority of South American countries, excluding Mexico and Venezuela.
Speaking at the annual general meeting of AACO in Sharjah, the Secretary-General, Abdul Wahab Teffaha described this as a “dangerous move”, adding: “This could develop into reciprocal taxation and other countries may begin doing the same. Taxation is a suppressor to aviation and we call on IATA and ICAO to be vocal in opposing such a move and helping to stop a proliferation of such a move that will be a burden on passengers.”
Mohammad Al Bakri, regional senior vice president for IATA, told the assembly that IATA opposes taxation arguing that “excessive taxes and charges affect the ability of aviation to meet demand and impede economic growth.