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Innovative financing

THE AIR TICKET LEVY

UNITAID has raised over half of its funds in the last five years through the 'air ticket levy'. A painless addition to the cost of a ticket, the levy is a leading example of globalisation working for the poor. The simple act of catching a plane turns passengers into contributors to the cause of saving lives – it is responsible travel on an enormous scale.

Ten countries have implemented the air ticket levy: Cameroon, Chile, Congo, France, Guinea, Madagascar, Mali, Mauritius, Niger and the Republic of Korea. Norway allocates part of its tax on CO2 emissions. The air ticket levy promotes South–South cooperation by allowing new actors from Africa and Latin America to participate in financing international development.

Since the first countries adopted the levy in 2006, the world has witnessed a crippling economic crisis. And yet, UNITAID's funding has remained stable –clear evidence that financing for poverty eradication through innovative means can weather an economic storm. Sustainable, additional, secure – the air ticket levy represents every facet of what is now known as "innovative financing for development" - the mobilisation of non-traditional means to raise more money for global poverty eradication.

HOW DOES IT WORK?

The air ticket levy can range from US$ 1 for economy-class tickets to approximately US$ 40 for business and first class travel. Passengers in transit are exempt and countries themselves can decide what rate and ticket class they would like to include. The levy is implemented through the adoption of a law or decree and simply added to an existing airport tax, with all or some of the funds going to UNITAID. It respects countries' tax sovereignty – no international regulations prohibit the introduction of such a measure.

FRANCE

When France applied the air ticket levy in July 2006, there were worries that its travel and tourism sector could be adversely affected. Contrary to those concerns, the French National Assembly released a report in July 2011 calling the air ticket levy a "French success" and found that it "had no negative effect on traffic or on air sector jobs". Revenue did not suffer from the financial crisis either. Despite the ailing global economy and events such as the Eyjafjallajökull eruption in Iceland, revenue is stable at around €160 million per year, according to the report.

The French Civil Aviation Authority (DGAC), responsible for collecting the proceeds of the levy in France, agrees. The Authority's Director General, Patrick Gandil, was clear in his support:

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France applies the levy to every departing flight, yet this has not deterred visitors. According to 2006–2010 figures from the United charlesdegaulle-paris-enNations World Tourism Organization, France was the world's top tourist destination a year after the air ticket levy was implemented in 2007. In 2010, it still was the most popular destination.

At the end of 2010, France pledged a yearly sum of €110 million from the levy to UNITAID for the period 2011–2013 – an important commitment to sustainability. France's experience has since spurred other countries to adopt the air ticket levy. One encouraging development has been the adoption by African states, the "other side of the ticket."