The head of the International Air Transport Association on Thursday urged Japan to catch up with industry trends by speeding up implementation of e-ticketing and getting rid of its fuel tax on domestic flights.
“We’re a bit disappointed with Japan,” IATA Director General Giovanni Bisignani told a news conference in Tokyo, referring to its low market penetration of 50 percent in e-ticketing.
He also called for the abolition of Japan’s fuel tax imposed on fuel used for domestic flights — a rare practice.
Bisignani is here on a four-day trip through Friday to meet with industry and government officials.
This year’s global target for e-ticketing is 70 percent and IATA, which groups 261 airlines worldwide, aims to have passenger travel completely paperless by the end of 2007.
A complete e-ticketing network worldwide would mean $3 billion in annual savings for the global industry and would improve customers’ convenience, the director general said.
However, he said, differences in computer systems, including reservation systems, are hindering Japanese airlines from advancing in e-ticketing.
Bisignani also said Tokyo needs to abolish its fuel tax for domestic flights.
“Only a few countries have fuel tax for domestic flights — Japan, China and the U.S.,” he said, adding that China is set to eliminate its tax by the end of the year.
Bisignani said Japan should follow suit and conform to the global standard.
The tax rate in Japan is 26,000 yen per kiloliter of jet fuel. Japan Airlines Corp., the biggest domestic airline, pays about 50 billion yen per year.
Meanwhile, Bisignani said the global aviation industry, which has been facing hard times with soaring oil prices, is on track to generate profits, thanks to airlines’ efforts to reduce nonfuel costs and increase productivity.
IATA estimates that its member airlines will log a total net loss of $1.7 billion for 2006, with a fuel bill of $115 billion. For 2007, however, it forecasts a net profit in the range of $1 billion to $2 billion.
“We are still in the red and in a difficult moment,” the IATA chief said. “But we are working to improve efficiency and revenues are boosting backed by the strong (world) economy.”
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