14 Jun

ABTA calls for a Fair Deal on Aviation Tax in Final Week of Consultation on Air Passenger Duty

In the final week of the Government’s review of reform of Air Passenger Duty (APD), ABTA is calling on the Government to rethink the overall level and structure of aviation tax which is the highest in the world and which is set to increase again by double the rate of inflation next April.  Under the current structure, a family of four flying from the UK to Florida pay £240 in flight tax while if they fly to Australia they can expect to pay an eye-watering £340. These are economy rates which double for customers flying in business class.

ABTA is part of the Fair Tax on Flying www.facebook.com/afairtaxonflying alliance that has united the travel industry to raise awareness of the high levels and illogical structure of APD, which is damaging UK travel and tourism and adding an additional tax burden to holidaymakers and business travellers at a time when fuel prices are reaching record levels.  The Government has instituted a review of a reform of Air Passenger Duty with a deadline for responses of this Friday 17 June.

An ABTA delegation is visiting Northern Ireland this week, where the case for reviewing the level and structure of APD is particularly pressing.  Northern Ireland is in danger of losing more international routes as customers and airlines vote with their feet and cross the border to the Republic which has announced it is eliminating aviation tax altogether to encourage overseas visitors. The Republic currently charges only €3 per passenger.  This compares with passengers flying from Belfast who pay up to £120 flight tax per passenger to fly direct to the US.  And latest figures indicate that air passenger numbers from Belfast are suffering compared with Dublin. In the first four months of 2011 Dublin has seen an average growth of 26% whilst Belfast’s two airports collectively saw virtually zero growth. Governments in Denmark, Sweden, Malta and the Netherlands have all axed their versions of aviation tax after assessing the negative economic impacts on their economies.

The Government postponed an in line with inflation increase in APD this April but has scheduled a double increase next year which will result in a rise of up to 10%. In addition the EU’s emission trading scheme (ETS) comes in which the Government has said it will levy on top of APD. ABTA and the Fair Tax on Flying alliance are calling on the UK government to follow the example of Germany, which has announced that it will offset any ETS revenue raised against current aviation tax revenue.

Mark Tanzer, ABTA Chief Executive, said: “It is vital that the Government understands the damaging impact that APD is having on the tourism industry in the UK.  We already pay the highest levels of aviation tax in the world, and if the Government goes ahead with its double-inflationary increase and levies an ETS tax on top of this in 2012, we will see another eye-watering increase in the tax burden on the industry and on holidaymakers and business travellers flying in and out of the UK. The industry is willing to pay its way, but this clearly puts us at a competitive disadvantage when compared with our European neighbours and punishes the travelling public unfairly.”

Uel Hoey, Business Development Director, Belfast International Airport, said: “We need to nurture key air routes for investment and tourism directly into Northern Ireland, in order that the NI market is easily accessible for potential investors and tourists. That is why we must assume control at a local executive level over our Air Transport strategy via the ongoing UK Air Passenger Duty Consultation and why we are encouraging all those bodies involved in the promotion of investment and tourism within Northern Ireland to make the voice of NI plc heard on this crucial issue.”

Peter Long, Chief Executive, TUI Plc said: “We continue to strongly lobby the government for a more equitable banding system in the interest of customers. We ask the Government to consider not only the geographic banding but also how the current “APD Premium” taxes a family travelling with a few extra inches of legroom the same amount as a businessman travelling in first class on a flat bed. We also continue to urge the Government to use monies raised from this taxation for research and development on environmental projects instead of being lost into a general tax pot.”

Mike Greenacre, Managing Director of The Co-operative Travel, said: “APD has already had a significant impact on tourism.  A survey of over 30,000 holidays carried out earlier this year by The Co-operative Travel revealed a 17 per cent reduction year-on-year in holidays for destinations that are between 4,000 and 6,000 miles from London, with sales to the Caribbean (down 20 per cent) and India (down 34 per cent) hit particularly hard.”

Our research also shows that consumers will look at alternative airports to fly from to lessen the impact of APD, and this is bound to have a major impact on UK airlines. Quite clearly what is required is a far more equitable method of taxation that does not damage the tourism industry and which does not discourage travellers from flying, but at the very least we would urge the Government not to make any further increases to APD in the immediate future.”

Jonathan Bailey, External Affairs Director for the Manchester Airports Group (MAG), said: "This is the last chance for passengers to have their say on the proposed changes that could seriously affect their future holidays and business trips. Many UK travellers are unaware that they pay the highest levels of flight tax in Europe but they have an opportunity to have their say and make their voice heard to Government.”

ABTA encourages all of its Members and any others who feel strongly to make their own submissions to the treasury at