24 November 2008

Aviation must not be treated as a 'cheap tax grab'

Chancellor Alistair Darling must not treat British aviation as a cheap tax grab, industry leaders warned ahead of todayÃ¢â¬â¢s pre-Budget Report.

Responding to industry speculation that the Chancellor is preparing to impose a further increase to Air Passenger Duty (APD), Flybe reacted by calling upon Darling to think again.

Cheapflights also called for a halt to a "decade long obession with using aviation as a prime target for taxation".

Flybe chairman and CEO Jim French made a plea to Darling to support the aviation industry by freezing or lowering the amount of tax taken from holidaymakers and business travellers.

He said: Ã¢â¬ÅâœThe government has spent billions of pounds of taxpayersÃ¢â¬â¢ money on bailing out the bankers in London and surely now itÃ¢â¬â¢s the turn of hard-working families who save up for their annual holiday.

Ã¢â¬ÅâœSlapping a further tax on holiday flights and business travel will be the clearest message yet that the government will support the Square Mile while the UK regions are hung out to dry.Ã¢â¬~

He added: Ã¢â¬ÅâœWhen the then-Chancellor Gordon Brown doubled APD in March 2007, there was an immediate drop in air travel by some 4%.

Ã¢â¬ÅâœIt cannot be right that, at a time when even the governmentÃ¢â¬â¢s own statistics show that aviation is more than covering its climate change costs, the Chancellor piles further pressure on one of the countryÃ¢â¬â¢s most successful industries and places further a burden on suffering UK businesses.

Ã¢â¬ÅâœSuch a move will mean only one thing Ã¢â¬' fewer passengers and the inevitability of job losses. Remember, airlines have had to contend with record fuel prices, reducing demand and now the collapsing value of the pound which is even more of a problem than the high cost of fuel.Ã¢â¬~

Online price comparison site Cheapflights described the proposed Aircraft Duty replacement for Air Passenger Duty as even more damaging to the UK economy by extending the tax burden to transfer passengers, cargo flights and business jets - increasing the tax burden by Ã&#pound;250 million a year.

CEO Chris Cuddy warned: "Should the Chancellor fail to seize the opportunity to remove the debilitating taxes on the UK aviation industry, he will create severe unemployment in the sector.

"Moreover, he will also undermine London's already failing position as a leading international hub; he will penalise businesses whose employees need to travel; and fail to help leisure travellers, especially those at the lower end of the income spectrum who more than anyone else are feeling the cold winds of the recession."

*See linked story

by Phil Davies