Talking air ticket taxes in the Caribbean

For a region as tourism-dependent on airlift as the Caribbean, there’s not been much attention paid to taxes on airline tickets among tourism planners, according to JetBlue CEO Robin Hayes.

Hayes raised the point during his keynote speech at the Caribbean Tourism Organization’s recent State of the Industry Conference in Curacao.

Hayes said that in the region “between U.S. and [Caribbean] taxes and fees, travelers can easily be hit with an extra $150 on top of their airfare.”

He said that JetBlue was “very much thinking about the relative tax burden on our customers as we allocate capacity.”

Hayes referenced figures provided by the trade association Airlines for America, of which JetBlue is a member, which reported that the average federal tax on a $300 airline ticket in the U.S. is $63, meaning that the airline receives only $237 of  the ticket price. A cursory examination of Caribbean ticket taxes revealed that they range from $55 per ticket in the U.S. Virgin Islands and Puerto Rico, up to $155 per ticket in other Caribbean countries.

If a passenger has a budget of $300 per ticket, airlines would be more inclined to serve destinations that deliver higher yields for a given airfare, according to Hayes.

Additional fees in the ticket prices, including landing fees, ground handling fees and fuel costs that vary from island to island, compound the matter.

Emil Lee, president of the Caribbean Hotel and Tourism Association (CHTA), who attended the conference, said that “while there is no federal government of the Caribbean, CHTA will do its part to inform Caribbean governments of their relative position concerning their taxes on tickets.”

One outcome of the conference was a commitment from Lee to establish a close working relationship with the global government affairs division of Airlines for America, the airlines and other stakeholders to address how to make Caribbean countries more competitive with airfares.

“All Caribbean governments should know that CHTA is not a proponent of reducing government income,” Lee said. “We are proponents of increasing government income by finding ways to increase visitor numbers and visitor spend that increase taxes and employment.”