Industry launches last-minute offensive as APD-Day arrives

The travel industry has voiced a last-ditch protest against the rise in Air Passenger Duty, which came into force today.

TravelMole has been inundated with statements from airlines, tour operators, agents and industry bodies wanting to voice their opposition to the further rises.

The only correspondence in support of the rise has come from the environmental group WWF.

It said the rise was "necessary" and "realistic" and said it would like to see aviation taxed in line with other industries.

“The aviation industry is under-taxed in comparison with most other goods and services. And in times of austerity and tax rises, aviation cannot be exempt from helping to reduce the deficit. Further reform of aviation taxation needs to be considered alongside Government plans, announced this week, to review aviation policy,” said Jean Leston, transport policy officer for WWF-UK.

"If aviation were taxed at the same rate as road transport, it would net the Exchequer around an extra £10 billion each year. Even with increased rates of APD, the tax charge on air travel remains cheaper than by road.”

But those within the industry argued a very different case.

British Airways chief executive Willie Walsh has appeared on national news broadcasts outlining how the tax will impact the industry and the wider UK economy.

Using the announcement of the airline’s half-year results as an opportunity to air his opposition, he said: "We’re talking about paying almost £450m on an annual basis to the Exchequer through this tax.

"That’s £450m that British Airways does not have. I don’t believe easyJet has the money to pay this tax and take it on.

"These are very significant tax burdens that need to be addressed by the Government if we are to contribute to the economic recovery that everybody wants to see."

The economics editor of The Times summed it up nicely when he told Sky News: “The airline industry needs this like it needs a kick in the teeth.”

Here are some of the other comments:

Colin Matthews, chief executive of BAA: “While we must all play our part in the recovery, we need sensible tax policy that doesn’t stunt growth and damage our competitiveness as this does. Ultimately, increasing APD will hurt consumers and businesses alike as it makes it more expensive to fly from the UK compared with other countries. The knock-on effects of this will be longstanding and bigger, more environmentally-efficient jets will not be able to fly from our airports if passengers decide they can only afford to fly long-haul from our European neighbours instead."

Virgin Atlantic’s chief commercial officer Julie Southern: "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 10 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."

Bmi chief executive officer Wolfgang Prock Schauer: “We are extremely disappointed that the Government has chosen to increase tax on air travellers at a time when we should be encouraging people to travel. UK businesses and leisure travellers depend on good connectivity on shorter and longer routes. This tax increase will seriously disadvantage air travellers departing from the UK.”

ABTA chief executive Mark Tanzer: "For too long our customers have been taken advantage of with successive governments seeing flying as a convenient cash cow. These latest huge increases in APD will disproportionately affect families on tight budgets when they are under considerable financial pressure. Increasing taxes will make taking holidays and visiting friends and relatives unaffordable for many. Not only is this tax increase pricing people out of taking holidays it also is putting the UK at a clear competitive disadvantage when compared to our European competitors.

EasyJet: "APD is a bad environmental tax as there is no relation between the level of the tax and the level of emissions," said the budget airline on Friday. Transfer passengers joining flights departing from the UK pay no tax and those travelling on private jets remain exempt, while ordinary passengers bear the full burden of the tax."

ETOA director Tom Jenkins: "This tax is a crude assault on one of Britain’s thriving industries. What the protests must not do is deflect attention away from a more useful discussion on how tourism is taxed."

Cheapflights global sales director Francesca Ecsery: “APD is a regressive tax and it is evident that it hurts not only those consumers least able to afford it, but also all those economies dependent on tourism from the UK."

Mike Carrivick, chief Executive of BAR UK:  “The effect of the increases on destinations such as the Caribbean have now reached the point where it is the equivalent of a family group paying for four tickets but only receiving three. BAR UK has campaigned tirelessly against these excessive and unfair taxes. Air passengers are being discriminated against and the economy will suffer."

Scottish Passenger Agents’ Association: "The rise will see a family of four visiting relatives in Australia paying a punitive £340 in tax – and then there are the fuel surcharges and other security taxes; £340 is simply the UK Government collection. The tax, which must be near its breaking point, will also further damage incoming trade and tourism, since all travellers coming to the UK are affected. At this stage we can only give people the facts, and ask that they take up the case with their local MPs."

The new APD rates are as follows:

Band A (Europe) £12 economy £24 premium

Band B (Africa, Middle East, and US) £60 and £120

Band C (Caribbean and some African countries) £75 and £150

Band D (Australia and Asia) £85 and £170

By Bev Fearis