IATA’s Walsh Calls for End to ‘Price Gouging’ on Covid Testing

 - May 4, 2021, 9:41 AM

International Air Transport Association (IATA) director general Willie Walsh on Tuesday called on governments to intervene against the alleged practice of price gouging by Covid testing entities. Speaking during the latest in a series of IATA briefings on the effects of the crisis on the airline industry, Walsh decried what he characterized as the emergence of a cottage industry led by companies that have taken advantage of the virus crisis by charging as much as $400 for tests he said should cost no more than $15.

An IATA study into the costs of PCR testing from a sampling of 16 markets showed an average minimum cost of $90 per test and an average maximum cost of $280.

“We’ve seen an incredible variation,” noted Walsh. “Clearly this is unjustifiable. We’ve talked about evidence of profiteering. Credit to France, because France has implemented the [World Health Organization] recommendation that the cost of testing should be borne by the country.”

IATA’s research showed that, before the pandemic, the average one-way airline ticket with taxes and fees cost $200, meaning a $90 PCR test raises the cost by 45 percent. Add another test on arrival and the one-way cost would leap by 90 percent, to $380. Assuming the need for two tests in each direction, the average cost for an individual return trip could balloon from $400 to $760, according to IATA. 

“The real risk here is that these prohibitive costs will prevent people from exercising their freedom to travel, to visit friends, to take a holiday,” said Walsh. “As a society, we cannot allow a situation to develop where only the rich can afford to travel again.

“We also need to highlight the fact that governments continue to mandate these tests but are taking their big slice of the pie through VAT charges. There’s no evidence other than to demonstrate that people are being gouged.”

Walsh referenced specifically the UK, where he said he had to buy PCR testing for a recent trip there. A number of new companies that administer tests and send the swabs to a lab, he said, have emerged as a result of the opportunity to profit from the pandemic in recent months. “If you look at the UK government website, you can see that many of these identifying that they’re working with the same lab,” he noted. “So I think what we’ve got to do is understand how these companies come about, who’s behind them, why are they charging such exorbitant prices given that we know in many cases they’re offering discounts of up to 50 percent. If they can offer a discount of up to 50 percent to some people, why can’t they reduce the prices by 50 percent to all people?”