Passenger tax - a tax on their vacation dreams

What the Caribbean region needs is so simple: rapid, reliable mobility at reasonable rates. What makes it so difficult? It is almost just as short and simple to explain. There are two players; the aviation industry and the governments. The aviation industry is not really the problem. They have the equipment and the crews.  They have fixed costs and calculate what is needed to make a profit.  One could argue about how cost-effective they are and what is considered a reasonable profit margin. And that’s it. Yet, one should also consider the entrepreneurial risks they are taking.

On the other side, you have the governments. For one, they have no risks in the aviation operation. Just benefits. Yet, they want a random tax contribution per passenger; no particular calculation needed, any round number is good enough for them. Mind that landing fees are different than taxes, and they do have a particular justification. So, what justifies the passenger tax? Inter-island or international, it doesn’t make a difference.

Major airlines are polite to governments. They listen politely when representatives of tourism or airport authorities are courting, or flirting, and trying to convince them to come on over to their destination. However, the operators don’t open a can of airplanes and just put the destination on their schedule. You cannot tell them where to come or go. Except for one airline, or rather one airline boss, who is well-known for telling anyone where to go, or in clear text expressing ‘that otherwise they can shove it’. Ryanair decided in in the past that it would drop 16 routes and 600 jobs after an Italian government’s tax hike. It would also result in 800,000 client losses according to their calculations. Their explanation: "Ryanair had no choice but to close two of its 15 Italian bases, and move its aircraft, pilots and crews to countries that have lower tourism costs. The tax increase would seriously damage Italian tourism, and it would hand a golden opportunity for growth to destinations in Spain, Portugal and Greece that have lower tourism costs.”

Governments love Low Cost Carriers because they lure tourists with low fares. Exactly for that reason, they believe that the LCC will bring the oh-so desired passengers by the masses. Yet, then they slam the air passenger duty on top of the fares, to the extent that those are nearly double. Does that make sense? So, before the passengers don’t show up and seats remain empty, the airline doesn’t open a route or terminates it. That does make entrepreneurial sense!

“Once you have tasted flight, you will forever walk the Earth with your eyes turned skyward, for there you have been, and there you will always long to return," according to a quote attributed to Leonardo da Vinci. Anyone who is less than a genius may tell you that when the taste of flight fare turns from sweet to bitter, one will not turn his eyes skyward in all directions anymore.


Governments can argue until they turn blue or green why a passenger tax is needed or why they believe it is justified. They may even feel proud and protzy when they believe that they won the argument.  However, the tourists have the last word in determining what price is acceptable for their vacation budget. Monies that they had to work for, and save over a whole year, to make their annual dream retreat come true. Taxes are not a dream incentive; they are a repellent. For tourists, there are plenty of options near and far in the geography, where the temperatures are warm, the platinum beaches are lined with palm trees, and where they are received with open arms. Governments can try to have it their way; but tourists for sure will find it their way…., somewhere else.