- Hon James Meager
A proposed reduction to flight passenger security levies will generate millions of dollars in annual savings for the aviation sector and meets the Government's commitment to reduce levies once the sector's regulator had stabilised post-Covid, Associate Transport Minister James Meager says.
The Civil Aviation Authority (CAA) is consulting on a proposed 5% reduction to domestic and international passenger security levies following faster than expected recovery of its cash reserves.
"Improvements in CAA's security operations and its overall financial position means it is now in the position to charge airlines less while continuing to meet aviation security expectations and performance targets," Mr Meager says.
"On current projected passenger volumes, CAA estimates the proposed reduction would reduce levy collections by a cumulative $70.935 million by 2032. The impact of a saving like that for airlines and wider aviation sector would be huge."
The proposal would reduce the domestic passenger security levy from $10.91 to $10.36 per passenger and the international levy from $22.30 to $21.19 per passenger, excluding GST.
"At an individual passenger level, the amount may feel modest, but when considered collectively the benefit to airlines of being able to invest that money elsewhere will be significant," Mr Meager says.
The passenger security levies are paid by airlines and calculated according to passenger numbers. Any decision about whether or how a reduction is reflected in airfares is a decision for individual airlines.
Mr Meager says CAA will consider the feedback it receives, then provide advice on possible levy reductions, and timing.
"Maintaining effective aviation security outcomes remains fundamental. Where those outcomes can be delivered more efficiently, it is appropriate that CAA considers whether the amount it collects from the aviation sector can also reduce," Mr Meager says.
