The International Air Transportation Association (IATA) recently published a report on the Italian air transport market, focusing on the developments that would occur if more efficient conditions were introduced.

According to IATA, civil aviation is competitive in terms of air transport support, but airport and passenger ticket taxes make Italy the seventh most expensive country at the continental level. This is having an adverse effect on Italy's attractiveness as a location for both business and tourism.

IATA highlighted that the costs for leisure and business passengers make Italy more expensive as a destination for business and less attractive for tourists. In order to maximise the available economic and social benefits, IATA has strongly recommended that the municipal tax be reduced and that Italy avoid adopting a tax on negative externalities created by aircraft noise. Italy is also advised to focus on the modernisation of national airspace strategies and ensure the transparent and correct application of airport tariffs in line with international best practices.

Further, given that the export of productive enterprises, services and tourism largely depends on air transport, a reduction of the applicable taxes by the government would generate the conditions necessary to achieve market growth and improve the efficiency of the air transport sector.

Also of note is the finding that Italian air transport generates 714,000 jobs and contributes €46 billion to the Italian economy (ie, 2.7% of the country's gross domestic product (GDP)). Data regarding the Italian market suggests that should the government adopt some of the abovementioned corrective measures, it could create an additional 200,000 jobs and increase the country's GDP by almost €20 billion by 2037.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.