Willie Walsh, Chief Executive of the International Airline Group IAG, called today for the Government to look at the full negative effect that Air Passenger Duty is having on the economy and look past its fixation with deficit reduction as he spoke to leading travel industry figures at The Travel Convention in Palma Mallorca.
He said that the Government “must get weaned off the revenue raised by the Flying Poll Tax", and that "the tax should be withdrawn", stating that "APD is having a hugely negative impact on the economy.”
Mr Walsh urged the Government to follow the example of the Dutch who scrapped their version of APD as they saw less than expected revenue streams as people chose to fly from other countries and overall, the tax cost the Dutch economy four times the revenue raised. In the UK, APD´s negative impact can clearly be seen with a reduction in passenger numbers in the UK of 7.4 million in 2010 against a 4% growth in the rest of Europe. Mr Walsh said that the Government cannot say that the loss of 7.4m passengers “was ok”.
Mr Walsh also stated that not having a coherent Government tourism policy until 2013 is unacceptable and the Government´s decision to refuse permission for a third runway at Heathrow makes no environmental sense in the light of China and other developing nations´ decision to build new airports. Instead the rest of the world would continue to benefit economically from aviation as the UK lost out.
Mr Walsh also praised ABTA and others in the industry for the work they had done in raising public awareness of APD through their work as part of the Fair Tax on Flying Alliance.
He went on to criticise the European Union´s decision to impose the ETS scheme on all flights in and out of Europe as already other countries were considering ways to retaliate. Instead the EU should recognise the trillions being invested in new technology to lower emissions not damage businesses and their ability to continue that investment.
4 October 2011
The Government intends to raise APD by twice the level of inflation in April 2012 having postponed an increase in April 2011. In addition the European Union intends to introduce an Emission Trading Scheme for aviation in 2012, revenue from which will go directly to the Treasury. ABTA wants the Government to cancel its plans for an increase in APD and offset revenue raised from ETS against APD revenue which currently raises 2.2 billion pounds a year. The Government has previously stated that it intends to increase APD revenue by 1.4 billion pounds by 2015.
Holidaymakers or business travellers flying from the UK pay by far the highest levels of flight tax in Europe. Five European countries currently levy versions of an aviation tax but all at significantly lower rates than the UK. For example a family of four flying from the UK pays 240 pounds while if they fly to Australia they can expect to pay 340 pounds. That compares with just 11 pounds for an Irish family or fifteen for a French family. Since 2007 when APD was last increased passenger numbers departing the UK have fallen by 22%.