Rhett D. Workman Managing Director Government & Airport Affairs

8500 Essington Avenue Terminal B, 3rd Floor Philadelphia, PA 19153 610-362-2124 Office 610-362-7529 Fax Rhett.workman@aa.com

June 16, 2016 Senator Majority Office Senator Jennifer Beck P.O. Box 099 Trenton, NJ 08625-0099 RE: New Jersey -- Proposed Aviation Fuel Tax Dear Senator Jennifer Beck, American Airlines is writing to register our opposition to recent attempts by New Jersey lawmakers to raise the aviation fuel tax. Increasing this tax risks making flying more expensive for consumers, increasing the cost for airlines to operate in the state and jeopardizing valuable aviation jobs. Commercial aviation is vital to the health of New Jerseys economy, supporting almost 150,000 jobs and driving $22 billion in economic activity. Americans part of this is significant as we have the second highest level of operations in New Jersey. This level of operation supports hundreds of direct airline jobs and thousands of aviation related jobs across the state. A massive tax hike like the one being proposed will jeopardize these jobs and affect air service options to the state. Such taxes also impact the affordability of airfare and shipping for New Jersey families and businesses. American Airlines has a broad network across the U.S. and we work hard in all states to lower the aviation fuel tax burden. We do this because we understand that our industry helps create 11 million U.S. jobs and $1.5 trillion in economic activity. Part of what makes New Jersey a strong market for commercial aviation is the states current competitive tax climate. Current legislative proposals put New Jerseys aviation economic engine at risk and potentially bolster the competitive footprint of hubs in nearby states, including Americans own global gateways in New York and Pennsylvania. Both New York and Pennsylvania have low effective tax rates on fuel, which would put New Jersey at a serious competitive disadvantage in trying to expand air service. New Yorks effective rate is .5 cent per gallon (cpg) (43rd most burdensome), and Pennsylvanias is 3 cpg (32nd). If the proposed 7 cpg effective rate for New Jersey, the state would jump to 17th on the list for most burdensome jet fuel tax in the nation; it is currently 44th. Increasing the cost of jet fuel and the tax burden on airlines could lead to less revenue to the government, reduced tourism and less economic growth.

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The trend in other important aviation states is to lower taxes on jet fuel. Florida recently reduced its excise tax on jet fuel from 6.9 cpg to 4.27 cpg; North Carolina exempted jet fuel from its sales tax in 2015; and Ohio, which does not tax jet fuel at all, rejected a proposal in 2015 to begin taxing jet fuel. American encourages New Jersey to follow this trend. Sincerely,

Rhett D. Workman Managing Director Government & Airport Affairs