A study by the World Bank (WB) indicates that to encourage a greater demand for flights between the countries of Central America, it could be promoted that the airport tax paid for each ticket be reduced from US$50 to US$15 dollars.
Airlines and economic authorities in the region are seeking the conditions for a new regional airport tax that will reduce the price of air tickets between Central American countries by up to US$55 dollars.
A study by the World Bank (WB) indicates that to encourage a greater demand for flights, between the countries of Central America, it could be promoted that the airport tax paid for each ticket be reduced from US$50 to US$15 dollars, as explained to EFE by a source from that institution.
Currently, tickets between Central American destinations can cost between US$250 and US$1,200 dollars.
These high costs do not allow medium and small companies to fly, tourists prefer to travel to other destinations such as Mexico or the United States, and European tourism is limited to visiting a single Central American country, according to the World Bank.
“If they dramatically reduce taxes that are around US$50 dollars to US$15, a price of US$55 dollars per segment can be offered, which compared to traditional rates that are above US$250 dollars, would be a significant reduction in the region,” Enrique Beltranena general director of the airline Volaris told EFE.
Beltranena assured that Volaris proposes to increase the necessary flights on regional routes to compensate for the tax burdens due to the reduction of taxes and they are in talks with the authorities of El Salvador so that reforms can be approved and the model can be launched soon.
The initiative was known by businessmen and economy ministers from the region during the event “Facilitación del Comercio: la ruta de la reactivación” (Trade Facilitation: the reactivation route), organized with the support of the Central American Economic Integration Secretariat (Sieca) and the World Bank Group, November 10 in Guatemala’s Ciudad de Antigua.
“I congratulate the governments, the private sector, and the entities involved for the most recent advances in the integration of the Central American economies,” Carlos Felipe Jaramillo, World Bank Vice President for Latin America and the Caribbean, declared during the event.
“It’s not just about tourism, if we lower costs we can increase exports,” Viviana Martín, director of government relations for the airline Avianca, told EFE.
“The reduction in taxes is offset by the increase in our operations and medium-sized companies will be able to streamline their trade,” added Martín, who has analyzed that this long-term average could encourage Central American governments to invest in the infrastructure of their airports and customs.
World Bank authorities have been in talks with the economic authorities of the region to expose the functionality of the model.
For his part, Guatemalan economy minister, Hanio Rosales, described the rate reduction proposal as “favorable in economic terms.”
“The initiative must be analyzed by the Guatemalan Institute of Tourism, Civil Aeronautics and the Superintendency of Tax Administration, and if the regulations must be changed, it would be time for Congress to approve it,” Minister Rosales told EFE.
Currently, the average charges and taxes for international flights in the region are 10% higher than the rest of the Latin American countries.
Both the World Bank and the airlines point out that the new migratory dynamics in the region open up a space to invigorate the point-to-point air commerce model.
“The airport tax reduction initiative is important for regional trade and political support is not an option, it is a requirement and my impression is that there is a lot of positive interaction between authorities and private companies,” Secretary General Francisco Lima told EFE. from Sieca.
It is expected that this initiative can be implemented in the coming months in El Salvador and Costa Rica, countries where there are advanced talks, a WB managerial source explained to EFE. (https://qcostarica.com/flights-between-central-american-could-be-as-low-as-us55/)
