Tuesday, January 16, 2018

AAAT approves 100% hike in departure tax

Devant: Increased security costs

The cost of leaving Trinidad and Tobago by plane has increased from $100 to $200.

The 100 per cent increase in the passenger service charge (PSC), commonly referred to as departure tax, was approved by the board of the Airports Authority of Trinidad and Tobago (AATT) on February 2.

The cost is added to airline tickets.

Transport Minister Devant Maharaj has justified the increase, saying tighter security demands at the airport have increased the cost of operations at Piarco International Airport.

"Management's recommendation that in order for the Authority to fulfil its mandate to provide safe and secure aviation facilities and to generate additional revenue to meet increased salaries and maintenance costs that the Passenger Service Charge be changed from $100 to $200 per international passenger was accepted and approved by the board," said Maharaj.

The AATT is in a desperate position—it is owed some $154 million by several of its tenants.

Caribbean Airlines, alone, owes about $60 million.

For the 2011-2012 financial year, AATT's expenditure is estimated at $65 million and is projected to have a $46.8 million deficit.

Its security fees have increased from $17.9 million in 2010 to $18.3 million for the 2011-2012 financial year.

Maharaj provided the Sunday Express with a document last week, prepared by AATT, which showed it has never fully recovered the cost of the provision of security at the international checkpoints and has never collected any fees for the provision of security checks at the domestic facilities at the country's airports.

The document raised concerns that the projected increase in the salaries of security officers, explained the Airports Authority, will further deteriorate the unacceptable financial position.

The departure tax of $100 per passenger originally comprised of a security fee of $25 and a payment of $75 to the Consolidated Fund. 

The Airports Authority was paid a commission of five per cent by the Ministry of Works and Transport on the collection of the $75. But with effect from October 1, 2007, the Airports Authority discontinued the remittance of the $75 to the Consolidated Fund through the then ministry of works and transport.

In September 2007, the document stated, AATT acted on the Airports Authority of Trinidad and Tobago (Amendment) Act 1993, which gave it power to "impose as it thinks fit dues, charges and fees for the use of the airport facilities".

The $100 fee was then introduced, effective immediately.

"The events of September 11, 2001 in the United States of America and the increased requirements on the Airports Authority to invest in capital equipment for security, training of security manpower and the upgrade of security systems to meet constantly changing international standards and recommended practices in security have increased our need for increased revenue. The passenger traffic at our airports has not shown significant growth in the last three years," the report read.

The Authority subsequently utilised a financial model developed by Birk Hillman for the allocation of cost to develop cost estimates of providing the border security service at the airports. 

"Based on a current estimate of international passenger movement through the airports, the break-even charge for the security charge is estimated at $73.90 per passenger. This will result in an increase of the passenger service charge from $100 to $160, ie, current facility charge of $75, plus the break-even figure of $73.90, plus 15 per cent VAT," the document stated. —Asha Javeed