Washington Wire - 1997-04-28

USNTO Seeks Departure Fee

Board members of the fledgling U.S. National Tourism Organization, formed to stimulate inbound international travel to the United States, plan to seek congressional approval of a departure user fee on international airline passengers to help fund USNTO programs.

The 48-member board met in Washington April 18 to review progress in government funding, industry funding and international marketing issues. President Clinton in October 1996 signed the legislation providing USNTO with a federal charter to carry on the mission of the defunct U.S. Travel and Tourism Administration. The new organization is charged with creating a marketing and permanent funding plan as first priorities.

The fee would be levied on departing international visitors-other than to Canada, Mexico and the Caribbean-and possibly on departing U.S. citizens. Depending upon the level of the fee and the breadth of its application, it could raise as little as $20 million annually or in excess of $100 million, according to a statement from the USNTO.

American Airlines chairman Robert Crandall, who is vice chairman of the World Travel and Tourism Council's executive committee, said at a WTTC media briefing that the notion is "crazy, just crazy." Crandall pointed out that the United States can't effectively promote travel to the United States if visitors are charged added fees.


Business Traffic To Increase

Business travelers will find the nation's skies a lot more crowded as the new century gets under way, with the Federal Aviation Administration predicting that traffic carried by major airlines will grow from 546.2 million passengers in 1998 to 827.1 million by the year 2008. The FAA also forecasted increased business use of corporate-owned aircraft over the next several years due to the increased availability of more sophisticated, long-range private aircraft.

For the first time in the 22 years it has been releasing its predictions, the FAA this year included total air traffic, including foreign flag carriers, between the United States and the rest of the world in its estimates. The FAA expects total traffic to and from the States to almost double, from 100.4 million travelers this year to 183.6 million in 2008. International boardings will reach 53.1 million this year and grow 5.8 percent a year over the 12-year forecast period to 98.5 million in 2008. Pacific routes will display the most healthy increases, growing from 15.3 million boardings in 1996 to 32.6 million in 2008, a gain of 6.5 percent annually.

The smaller regional and commuter airlines will share in the domestic traffic growth over the next 12 years as well, the FAA said. Boardings for these airlines are expected to reach 62.5 million this year and average a 5.3 percent increase per year thereafter, reaching 106.9 million travelers in 2008.


DOT Awaits Agency Bids

The Department of Transportation has finally released its innovative travel management proposal, with bids due May 29. The winning bidder will assist in developing DOT travel policies and will be paid incentives based on achieving quality levels and savings.

The two-year contract (with three one-year renewals) will be fee based, with a menu of services and their charges established by the contractor (BTN, June 24, 1996). DOT is the first federal department to propose fee-based pricing for its travel program, which is valued at just over $10 million annually in official air sales. SatoTravel holds the current DOT travel contract.


Bill Would Slate Aviation Tax For Intended Purpose

A California lawmaker has sponsored legislation to ensure that the existing system of aviation excise taxes would be tied to congressional spending of the revenue that is collected.

Currently, revenue from the taxes-including a 10 percent domestic ticket tax-is not fully spent for aviation purposes, leaving the Federal Aviation Administration short of funds for its programs. The legislation, sponsored by Rep. Ron Packard (R-Calif.), would retain the existing taxes on aviation fuel, airline tickets and air cargo and continue to deposit them in the aviation trust fund. Each year, however, the level of those taxes would be determined by the amount Congress had appropriated for FAA use in the previous year.

If the FAA's budget increased, more money would be collected for the trust fund, but the taxes could not exceed an upper limit set by Congress.