How much airfare would cost if the EcoDelta tax is eliminated

This tax is charged to each air ticket to travel from Ecuador to abroad.

The EcoDelta tax (ED) was created in 2009 -according to what was argued at the time- to boost domestic tourism and promote the Ecuador destination in a sustained way.

When this tax was created, the value to be canceled was $5, then it went to $20 and finally in 2016 the Government raised it to $50, for the issuance of each air ticket to travel from Ecuador to abroad. In the same sense, the ED was set at $30 for each passenger trip on a charter flight from Ecuador abroad.

The rate in question generates about $60 million annually. The funds go to the State and a part is for the Ministry of Tourism. In any case, weeks ago, Tourism Minister Niels Olsen said that of the $60 million raised in 2019, only $1.9 million came for promotion.

Precisely 2019 was a good year for the transport of passengers by air; then several airlines arrived in the country to offer regular services, especially in Guayaquil. A year later, the COVID-19 pandemic put world aviation in check and Ecuador was no exception.

“My business was growing and I wanted to scale markets and needed the help of mentors… We wanted to learn how the other markets behaved,” says Zamriver.

It is estimated that some $2.3 billion represent the losses that the airline industry in the country has had during the global health crisis, according to Peter Cerdá, regional vice president of the International Air Transport Association (IATA, for its acronym in English) for the Americas.

In this way, Cerdá proposed to the government of Guillermo Lasso the elimination of the ED, as well as the tax on the outflow of foreign currency (ISD), which companies pay. According to him, by eliminating ED, fares could be improved and travel demand stimulated.

The official added that the elimination of the ISD, which is not only paid for by companies, but also by individuals, would also be necessary to push the reactivation and point towards open skies with the United States.

Theopen skies policy allows frequencies and routes to be liberalized, and agreements between companies that are feasible once those agreements have been signed, optimizing the capabilities of the airlines. Users also benefit, since they have more chances of traveling to different routes, of connections, but the issue of ticket prices depends on other economic factors.

In any case, if the EcoDelta is suppressed, the passenger will see a reduction of $50 in the value of the ticket to go abroad. For example, a passage that was in$ 340 para Fort Lauderdale(Florida, USA), without the ED youit would cost $290.

For IATA, if Ecuador does not restrict flights and maintains operations as now, it could obtain a positive recovery between 2022 and 2025.

The national government has not yet ruled on a possible elimination or reduction of the EcoDelta tax.