Associated Press

Tokyo, May 30:

Governments need to lower taxes and relax restrictions on air travel to help airlines stay competitive amid increasing pressures for cost cuts, officials at a gathering for commercial aviation industry said on Monday. “Governments must give us the freedom to run our business like any other business,” Giovanni Bisignani, director general and chief executive of the International Air Transport Association, said at this year’s World Air Transport Summit.

The two-day long meeting draws representatives from airlines, civil aviation groups, manufacturers and airports. Government taxes remain a burden on the industry, with taxes on a $200 plane ticket in the United States averaging 26 per cent, Bisignani said. Governments must also encourage competition, and stop doling out privileges to low-cost airlines, according to the association, which didn’t mention specifics. IATA represents 265 airlines from 136 countries, including some low-cost carriers. The discount airlines have increasingly become seen as a threat to the so-called traditional carriers that form the bulk of the organization.

“Governments must stop treating air transport like a cash cow,” Bisignani told reporters at a Tokyo hotel. Topping the agenda for the association, is the pressing need to cut costs and boost efficiency. Needs for security measures have surged while fuel costs are rising. Last year, airlines lost $4.8 billion, and they expect to lose another $6 billion this year. The fuel bill is expected to rise to $83 billion this year from $44 billion in 2003, said Air France CEO Jean-Cyril Spinetta, who is also an IATA official. But governments have not kept up with the times and continue to levy high taxes and overregulate the industry, officials said. The association expects oil prices to remain at about $50 a barrel, with little likelihood they will fall below $40.