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FUEL TAX WOULD BE A 'MAJOR STEP BACKWARD' FOR THE AIRLINE INDUSTRY, SAYS USAIR CHAIRMAN

 ARLINGTON, Va., June 23 /PRNewswire/ -- "A major step backward for the U.S. scheduled airline industry" is the way USAir Chairman, President and CEO Seth E. Schofield described the proposed transportation fuels tax.
 "This tax would be particularly devastating to an industry that has lost huge amounts of money and thousands of jobs during the recession and is struggling mightily to regain stability."
 Schofield said the proposed 4.3 cents per gallon tax on transportation fuel would cost USAir about $51.5 million annually, based on its current usage of approximately 1.2 billion gallons per year.
 "Our industry has taken a number of initiatives to increase fuel efficiency over the years, including massive investments of capital in modern engines and aircraft and improved operating techniques," Schofield said. "These efforts over the past 10 years have produced a 42 percent improvement in passenger miles flown per gallon of fuel for USAir."
 Schofield also pointed out that airlines have no alternative fuels: "There are no electric, coal, steam, oil or nuclear powered aircraft engines."
 The airlines have been a major tax collector for the federal government for many years. In 1992 USAir alone remitted excise taxes collected from passengers totaling about $600 million, which equates to a 51 cent-per-gallon fuel tax.
 "Our customers have told us very clearly that there is precious little elasticity left in airline pricing, which virtually eliminates our ability to pass tax increases along to the consumer," Schofield said. "Our own studies have shown that a 1 percent increase in passenger fares produces a drop of about seven-tenths of a percent in passenger bookings."
 -0- 6/23/93
 /CONTACT: USAir Corporate Communications, 703-418-5100/
 (U)


CO: USAir ST: Virginia IN: AIR SU:

MH-KD -- DC006 -- 4979 06/23/93 11:41 EDT
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Publication:PR Newswire
Date:Jun 23, 1993
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