US carriers are estimating the new aviation departure tax proposed by the Obama administration will cost each airline approximately $100 million every year. As the world slips towards another recession, airlines especially cannot afford a further tax burden. Gary Kelly, CEO of Southwest Airlines, says the tax would cost his company $140 million a year on top of already substantial increases in fuel costs. US Airways Group says the tax could cost $110 million a year, while AMR Corp.'s American Airlines estimates it to cost $124 million. The proposals will charge a $100 tax on each flight departure, which including corporate jets and commercial aircraft that require federal air-traffic-control services. The federal security surcharge will also double under the proposals to $5 for a one-way trip. Annual increases would triple the fee to $7.50 by 2017. US carriers along with labour unions, aircraft manufacturers and others are lobbying Congress to withdraw this tax proposal, maintaining that the aviation industry is being unfairly singled out as an “easy target”, says Delta Air Lines’ chief Richard Anderson. The aviation industry contributes $17 billion a year in fees and taxes into the government coffers – a substantial rise over the $3.7 billion it paid in1993.
Revenues from the new taxes - $10 billion over 10 years – will go toward the Transportation Security Administration to cover security costs, and $15 billion to debt reduction.