BAA: Aviation chiefs condemn tax hike as Treasury doubles consumer charges
29-Oct-2010 An increase to travel taxes for air passengers will damage our economy and make Britain a less competitive place to fly from, according to aviation chiefs.
Air passenger duty (APD) is levied on air travel from any UK airport and Britons pay the most of any nation. A family of four will pay over £600 in tax on a long haul trip while Denmark, Sweden, Norway and the Netherlands pay nothing. The amount of APD collected by the government is set to double by 2015/16 from £1.9bn per annum now to £3.8bn.
In 2007 the levy was doubled for most flights when ministers claimed the tax would pay for environmental measures to mitigate emissions from air travel, but now Treasury keeps every penny.
The rise on 1 November will undermine the government's policy of strengthening trading links with the rest of the world. It could also mean more passengers transfer for long-haul flights from Amsterdam rather than Heathrow, as fliers pay no tax there. This could lead to direct routes disappearing from British airports.
The increases in duty will also make the UK less attractive as a tourist destination, damaging inbound tourism. At present, it costs a family of four at least £300 more to travel from China to London than China to Paris or Frankfurt, which may explain why France received 688,000 Chinese visitors in 2008, while the UK managed only 108,000.
Colin Matthews, chief executive of BAA, said: "While we all need to play our part in recovery, we need sensible tax policy that doesn't stunt growth and damage our competitiveness. Ultimately, this policy will hurt consumers and businesses alike as it makes it much more expensive to fly from the UK. The knock on effects of this will be longstanding and bigger, more environmentally-efficient jets will not be able to fly from Heathrow if we do not have enough transfer passengers to make the flights viable."
Virgin Atlantic's chief commercial officer, Julie Southern said:
"Holidays are an essential part of our lives and are valued even more in these difficult economic times. With passengers now being asked to pay up to ten times more tax since APD's introduction, the annual family holiday will become unaffordable for many.
"Given the forecasted rises in APD over the next five years, all travellers will be more than paying their fair share and in fact contributing more to the treasury than the banks via the new banking levy. Our message to Government is that this absolutely has to be the last time that the travelling public faces APD rises."