As a result of the increase in the prices that air tickets will have in Colombia due to a higher VAT from 2023, the International Air Transport Association (Iata, for its acronym in English) foresees a possible contraction of demand that could contribute to a loss of the socio-economic benefits that aviation brings to the country.

For this reason, he called on the Colombian authorities to review the market conditions so that «the aviation sector and tourism do not lose competitivenessdynamism, and the strong recovery process they have had so far after the pandemic».

Also read: Airlines would be willing to lay off staff to lower costs in 2023)

As of January 1st, the VAT reduction that the rule for air tickets cease to be in force, causing an increase of 14 percentage points in this tax, which affects the entire rate. Similarly, there will be an increase in other indexed charges such as airport taxes and other taxes that the traveler must pay. The carbon tax will also end as a result of the tax reform approved in November.

Additionally, macroeconomic factors such as the inflation and devaluation of the Colombian peso they are impacting the cost structure of the sector, since most of the obligations of the airlines are agreed in dollars.

Aviation fuel, which is not part of the security fund, has suffered an increase close to 50 percent. This, coupled with items such as charges for air navigation services and landing fees at airports, has made air operations significantly more expensive, according to Iata.

(Also read: Inflation, oil and taxes make 2023 look difficult: Avianca)

Likewise, he assured that average ticket fares have been falling in recent years significantly, but taking into account the difficult current scenario and the one that is glimpsed for 2023, there will be an increase in values ​​that would not respond to a decision by the airlines, but to the tax burden and external factors .

«Before discussing the next National Development Plan, it is important to lay the foundations that allow Colombia and its citizens to get the most out of the essential public air transport service, through a proper tax framework that allows the sector to remain competitive, that the aeronautical industry can continue contributing to social and economic development, to the connectivity of the regions and to the consolidation and democratization of transport and tourism”, the union stated.

Due to the Covid-19 pandemic, airlines based in Colombia reported losses of around 1.55 trillion pesos in the first half of 2022. For this reason, according to Iata, companies have made great optimization efforts that if added to «those who can do the State to have a simpler, more efficient and equitable tax systemwill strengthen the social protection network and increase investment in infrastructure».

Por admin