The airline industry could lose 19,000 jobs and $1.5 billion under the Bush administration's proposed increase in security taxes on airline tickets, representatives of the travel and airline industries said yesterday.
Fifteen industry groups urged members of Congress to reject the White House's proposal to raise the federal security tax to $5.50 per flight from $2.50 each way and cap multiple-leg flights at $8 each way instead of $5.
The airlines collectively lost more than $10 billion in 2004 and have lost more than $33 billion since 2001. James C. May, president and chief executive of the Air Transport Association, said the industry's expected $5 billion loss this year will climb to $6.5 billion if the fee increase passes. The industry has eliminated about 123,000 jobs in the past three years.
"This tax threatens aviation and the U.S. economy," May said. "The tax burden is killing the industry."
In a letter to the Bush administration, May wrote that while the federal government is focusing on improving national security, the taxes are "undermining our economic security."
The airlines said they are unable to raise ticket prices to cover the increase and could be forced to cut services and jobs.
"We want good security. We just don't feel we should have to pay for it when the entire country benefits," said David S. Stempler, president of the Air Travelers Association.
Department of Homeland Security officials said recently that travelers were willing to pay as much as $10 more per flight for better security.
May said the extra $1.5 billion that would be collected from the tax is not needed. "There's a huge amount of waste going on at the [Transportation Security Administration] and the DHS," he said.
Caleb Tiller of the National Business Travel Association said the fee increase would cost U.S. businesses more than $400 million.
Industry officials said they plan to accelerate their lobbying against the proposal and called for congressional hearings in which they could detail their arguments.
Deborah C. McElroy, president of the Regional Airline Association, said regional airlines that serve smaller communities could be forced to cut service because of the fee increase.