IATA, the national association of air transports, has announced that a government proposal to charge a €3 green tax on all passengers leaving Portugal could have devastating effects on the economy.
In a press release, IATA claims as many as 1,500 people could lose their jobs in the industry, while flight carriers could lose as many as 265,000 passengers.
More to the point, IATA stresses: “The proposal to charge €3 for each passenger that leaves Portugal will have no impact on the reduction of aviation’s carbon footprint.
“The government should remember that 82% of passengers to and from Portugal have already paid for carbon usage through the European Union’s Emission Trading Scheme,” added the release, revealing that IATA has undertaken economic impact studies into the proposed tax and found that it would add 1.36% to all flights out of the country.
In cash terms, this points to sums of around €43 million.
While the thought of this pouring literally from the skies into government coffers will have finance chiefs rubbing their hands with delight, IATA stresses that its studies point to quite the opposite.
“Increased costs to flights would lead to a reduction in numbers of around 1.86%,” it says. “In other words, close to 256,000 passengers less every year. This would impact on airline companies, airports and Portugal’s tourism in general.”
With a final sting in its message, IATA added that tourism and the airline sector currently account for €3 billion worth of GDP. The government’s tax would reduce this figure by at least €52 million a year, which in turn would “destroy more than 1,500 jobs – most of them in tourism”.
It should be simple maths: a quick €43 million in return for a slow loss of €52 million and rising every year, and more people on the dole.
For now, the government will be digesting IATA’s release which was sent this morning.
