IATA concerned about taxes and the aerospace industry supply chain

The issues of concern to the International Air Transport Association (IATA) are the taxes that have been imposed in some countries, as well as those on the aerospace sector's supply chains, said the organization's director general, Willie Walsh.

During IATA Media Day, held on Tuesday in Geneva, Switzerland, the executive expressed his disagreement with the implementation of taxes that are disguised as environmental measures.

“For me, taxation is a crucial issue; I have always argued that if taxes are introduced for environmental reasons, it is a sham. There is no evidence that taxation improves environmental performance,” he said.

He explained that one of the things the industry has successfully achieved is to become more efficient. We now use the fuel that generates the CO2 for which it is responsible. This is mainly due to a significant increase in the average number of seats.

“So, we are filling more seats on planes. We are more efficient in how we operate. Taxes do not reduce CO2. Taxes reduce the number of people who can fly. Flights continue to operate, just with fewer passengers on board,” he said.

The IATA director general commented that the environmental benefit is nil and there is abundant evidence to prove it.

“I think it is encouraging that some governments recognize that the introduction of environmental taxes and subsidies has caused economic damage and have made the decision to reverse the taxes they introduced,” he said.

On the other hand, the IATA director general recalled that throughout the year there has been much talk about the aerospace sector's supply chain and the challenge this has posed for airlines.

He mentioned that last Friday they had a board meeting, where executives highlighted their frustration with the supply chain problems in this sector and the continuing delays in resolving them.

“To be fair, I think there is a greater awareness that addressing this will take much longer than we had anticipated, as I think almost everyone would have expected it to be resolved at this stage,” he said.

Walsh said that the most frustrating thing for the industry is the cost it is bearing, as this disruption to the chain is just over $11 billion, according to his estimates, and he lamented that supplier companies are making higher profits, while airlines are being imposed with enormous additional costs.