Monday, February 8, 2016

Why tax passengers?

In what can only be described as hubris, the General Authority of Civil Aviation (GACA) announced the other day that effective Jan. 1 it would levy SR87 tax on international passengers using airport terminals.
The fees will be recovered from airlines and would not apply to transit passengers who remain aboard planes. Any passenger leaving the plane is considered an arrival and will be subject to the new tax.
Even with its announcement, GACA was typically vague on the particulars of this fee, such as whether the SR87 is a hike in costs from the current SR50 tax or is it an additional cost to passengers. The agency also doesn’t explain what the new fees will pay for.
But never mind that for the moment. The fact that GACA has seen fit to implement any fee on international passengers seems to be a bit over the top. The international terminal for non-Saudia flights where most airline passengers disembark is the first impression visitors and expats receive when they land in Saudi Arabia. And it’s a poor impression.
Concessions at the international terminal are few. The duty-free shop offers the minimum, although for some reason it has an extensive inventory of dates, and the food is subpar. Even the business and first class lounge barely meets the international standard of what such lounges should offer. And worse, the toilets are generally filthy. The Saudia terminal is much better, but pales in comparison to Dubai and more of an equal to Cairo’s airport facilities. 
Jeddah’s King Abdulaziz International Airport is undergoing a massive expansion project scheduled to be completed sometime in 2016 with upgrades to runways to accommodate the Airbus A380. The ultimate goal is to handle as many as 80 million passengers a year. However, funds for the project have already been allocated.
Although Jeddah’s airport has been undergoing expansion since about 2006, passengers have seen little in the way of improvements that make their arrivals more efficient through customs, security and baggage handling.
Perhaps the revenue generated from the fees will be used to upgrade the facilities, but following years of complaints from passengers there is little confidence that any new fees will solve the problem. Further, Saudi Arabia is scheduled to privatize its airports in the first quarter of 2016, starting with Riyadh’s King Khaled International Airport. According to GACA, the goal of privatization is to streamline operations and ease the financial burden of the government. The government has also privatized Saudi Airlines Catering and the Saudi Ground Service companies.
With the already funded expansion projects and privatization plans, much of the financial burdens placed on the government to operate the facilities will be significantly eased, so it stands to reason that the implementation of the new airport terminal fees appears ill-timed, and at best — unless there is a better explanation forthcoming — ill-considered.
At the end of the day those additional fees will be camouflaged by airlines that are paying those fees, but will pass them along to passengers with higher air ticket prices. At a time when air travel is stressful and often subject to hidden fees, these additional costs will do little to endear passengers to Saudi Arabia’s already struggling airports.

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