Airlines applaud as US spending bill drops travel tax

WASHINGTON (AFP) - Air travelers will avoid new taxes this year after the United States Congress dropped the plans in its final budget bill, a move the industry cheered as a victory for passengers.

Congressional negotiators earned the ire of US airlines last month when they unveiled a deal that would end billions of dollars in crippling automatic spending cuts, but chose to raise air travel fees to help pay for it.

That deal would have jacked up the "9/11 Aviation Security Fee" from US$2.50 (S$3.17) per flight segment to US$5.60, and doubled the fee for a return trip to US$10.00, generating some US$13 billion over the next decade.

But the measure disappeared in the final bill introduced on Monday that appropriates funding for fiscal year 2014 ending September 30.

"We appreciate the leadership (of House and Senate budget appropriators) for recognising the importance of commercial aviation to the economy and jobs by putting forward a funding bill that will help ensure that air travel can continue unfettered," said Mr Nicholas Calio, president and chief executive of industry trade group Airlines for America (A4A).

"We also thank House Speaker John Boehner and House Majority Leader Eric Cantor for their support in moving an appropriations bill that does not increase taxes or fees on airlines or our customers."

The massive, US$1 trillion omnibus measure is expected to pass both chambers of Congress this week, although Congress could still opt to insert such a fee hike in legislation later in the year.

A4A had mobilised a lobbying effort late last year to oppose the fee hikes, arguing it would be a drag on the massive industry.

Passengers are already paying an average of US$61 in taxes and fees on a typical US$300 domestic round-trip ticket.

But the Transportation Security Administration tasked with protecting airports nevertheless got hit hard in the new spending omnibus.

Funding to the Department of Homeland Security will shrink by US$336 million, with most of those reductions reportedly at TSA.

Join ST's Telegram channel and get the latest breaking news delivered to you.