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Air tickets will go up because passengers will have to provide for the public institutions which so far have been financed by the Treasury

According to the latest draft amendment to the Aviation Law, as submitted by the Government, the Treasury will no longer finance the operation of the Civil Aviation Office (CAO). Instead, an additional tax of 3 or 4 zlotys will be charged on each air ticket. At the same time, the Treasury is going to assign the financing of Airport Security Service, responsible for security at Polish airports, onto the shoulders of airports, which - to crown it all - will have to hire private security companies to do the job. In addition, the fees paid to the CAO by the companies operating in the aviation market are going to be raised dramatically, their rates to be set rather arbitrarily - depending on the current needs of the budget. A number of other additional financial burdens are also proposed, such as: creating and operation of civil & military air rescue coordination centre at the Polish Air Navigation Services Agency, creating and financing by airlines a passenger data transmission system, etc. As a consequence, all these additional charges and fees will increase the operating costs of the businesses involved in the air transport market, not only successfully killing the competitiveness of Polish airports and air carriers compared to the adjacent countries, but also causing a significant growth of air ticket prices. How much? The regulatory authority does not specify because no reliable estimates as to the effects of the proposed regulations have been prepared.

According to the regulator's philosophy, if an airline passenger is wealthy enough to afford air travel, which is more expensive than railway or road transport, he or she will certainly afford extra fees, thus contributing to the growing budget hole without much fuss. Or has the Polish regulator been inspired by the philosophy of the former head of European Parliament, Hans-Gert Poettering, who proposed an extra fee of 1 or 2 dollars to be charged on each air ticket worldwide to support the combat against HIV, malaria and other diseases in the poorest countries?

It's a good idea to follow the examples of others, but this has to be done carefully and always with the public interest as a top priority. I remember an anecdote on the UK changing to the right-hand traffic, which was to be done gradually - first for the trucks, and only if this proves successful, other cars will follow. We're building our another Ireland in a similar way - gradually: first the regulator wants to raise the costs up to the Irish level, while postponing the growth of revenues until later.

The opinion of the European Economic and Social Committee (EESC) dated 17 December 2009 makes it very clear that "European aviation sector as a whole is considered to be of strategic importance for Europe" and that particularly at the time of crisis "the resilience of the European aviation, and therefore its international competitiveness, is at stake".  The opinion then reads: "European aviation sector represents an essential part of the economy, in that it contributes greatly to one of its fundamentals, i.e. mobility (of goods and of people). It represents also an important share of the strong industrial base, of technological development and of economic growth. To keep this base on a long term perspective is of paramount importance and must be encouraged. It is also a cogwheel for the economic recovery, in these times of globalisation. Therefore the primary objectives of governments should be to ensure that the supporting pillars of their ailing economies, including aviation, are maintained afloat."

It would be to the best interest of all the citizens if the regulator drew on the above expert analysis rather than tuning to Mr Poettering's ideas.

When an underground line or a fast commuter train connects a small suburban town to Warsaw, the area starts to grow rapidly - with the prices of land going up, new housing projects being launched and the service sector growing. This is because the area has become more accessible. This causality is so obvious that it comes as a real surprise why the regulator seems to ignore the fact that the development of a country under globalization conditions depends on its accessibility by air as the fastest means of transport. Economic accessibility of such a big country with remarkable potential can be attained through Polish airports and Polish carriers, offering a well-developed network of direct flights between Poland and major destinations worldwide. At present, despite its favourable geographical position, Poland is accessible mainly through connecting flights via airports in the countries that perfectly understand and follow the obvious idea expressed in the EESC's opinion. Foreign carriers operating from Poland take good care of the growth of their own bases in their home countries, which is enhanced by the aviation development strategies adopted by their governments. In Poland, no such strategy for aviation sector development has been worked out so far and there have been no evaluations of its strategic role in the development of Polish economy either. Therefore, most of the economically significant destinations worldwide are accessible from Poland through connecting flights via Zurich, Vienna, Frankfurt, Düsseldorf, Berlin or Paris.

To sum up, imposing additional taxes and fees on businesses operating in the air transport market, reducing the competitiveness of airports, airlines and service providers in the air transport sector, which is the price to be eventually paid by a passenger, is in fact an anti-development policy, detrimental to the entire national economy, thus to the public interest in its broad sense. The need to narrow the state budget deficit may not be synonymous to a consent to have all possible costs of financing public institutions shifted onto the shoulders of passengers. Moreover, one cannot be sure whether this discrimination policy against the aviation sector compared other sectors of economy is just an isolated idea or a precedence which will result in escalation of such schemes in which other public institutions (railway and road transport, or even police and revenue services) will be financed through additional taxes and fees.

CHARTER FLIGHTS MARKET - an alternative source of revenue, in lieu of the policy of higher taxes and additional fees?

In view of the reasonable need to narrow down the budget gap, it is really surprising that the regulator would rather drain the pockets of citizens than use the resources of the country. The air transport market, in particular the dynamically growing charter flights market, which is based on the growing volume of outbound holiday travels, is certainly a resource like other natural resources of Poland. While most European countries have been experiencing stagnation, Poland has showed a dynamic growth (e.g. by 40% in 2008) in the charter flights market over the last few years, regularly increasing its market share in the total volume of air transport. In 2009, almost 3 million passengers were carried on charter flights (which is 15.6% of the total volume of air traffic). Based on this figure, the value of the charter flights market was estimated at over 3 million zlotys (of which only 20% is earned by the businesses licensed in Poland under the supervision of the CAO). The forecasts are that this market is going to grow by at least 100% in the next decade, provided that it is not hampered by the above described actions. For the key to the development of this market are mainly holiday travels, the expansion of which depends on the growth of the purchasing power of people, the affordability of holiday packages (strongly related to exchange rates) and the sense of economic stability (employment in particular).

With such potential, the charter flights market could be the source of revenues from levies (including from the growth of employment), if the carriers operating in this sector are required, on a reciprocity basis, to contribute an investment in return for unlimited access to the marketplace. For it should be absolutely unquestionable that such a big and potential marketplace will attract a sufficient number of carriers (the principle of supply and demand), particularly those seeking new developing markets vs. their own, already saturated ones. Besides, it is not charter carriers but travel agencies which, depending on the travel market, determine the destinations for charter flights and the carriers to operate them. Therefore, charter carriers themselves hardly contribute to the development of new connections or the growth of charter flight traffic.

To operate a flight an air carrier needs a crew, maintenance team, administration staff, related services providers, back-up facilities, etc. The idea is to have these investments located here in Poland, thus generating new jobs and revenues from levies instead of allowing for seasonal exploitation of the market by foreign businesses, paying taxes in their home countries. Even the government of Nigeria understands this, offering to purchase Honker (an outdated utility truck, recently reanimated in Poland) provided that an assembly line is located in Nigeria (thus creating new jobs and collecting taxes). So, why the Polish regulator seems not to understand?

It's not the question of shutting off the marketplace or cutting down competition - the market would be equally accessible to everyone. On the other hand, what is the sense in making investments into the Polish charter flights market if one can exploit it at no investment requirements, just for minor administrative fees? As a result, the state budget is short of money and the regulator drains the pockets of citizens.

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Air Italy Polska is a member of Air Italy Group. This carrier operates short and long distance charter flights. Air Italy Polska, with its base in Warsaw, cooperates also with regional airports.

For Air Italy Polska, the principal business guidelines are: keeping high safety standards, on-time performance and quality of services, as well as making sure that our partners do so.