Industry reacts to Osborne’s budget
Tuesday, 23 Jun, 2010
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The travel industry has reacted with cautious optimism to chancellor George Osborne’s emergency budget.
ABTA says it “welcomes George Osborne’s move to examine aviation taxes more closely, but is disappointed that the November increases in Air Passenger Duty will still go ahead.”
This means that the revenue raised will increase from £1.9 billion this year to £3.8 billion in 2015-16.
ABTA chief executive Mark Tanzer said: “It is now up to us to make sure we brief and have full and detailed discussions with government ministers and civil servants before George Osborne reports back in the autumn.
“While we broadly welcome the proposed switch from Air Passenger Duty to per plane duty, it is essential that the levels and the mechanisms are set correctly so that ordinary people are not taxed out of flying.
“We have already held a meeting with Justine Greening – the Treasury Minister taking the lead on aviation taxes – and we will ensure that we continue to meet with her team to fully brief them on our sector.”
“Tax on aviation – through Air Passenger Duty – in this country has risen disproportionately over the past five years. We all know that George Osborne has to balance the books, but to maximise the tax take on aviation, they must set it at a level where people can still afford to fly – not tax people out of the skies.”
Meanwhile Easyjet has interpreted the chancellor’s words this lunchtime, when he said he would defer per plane levy discussions until the autumn, very positively.
Said the budget airline’s chief executive Andy Harrison: “Four out of five British travellers would be better off under a per plane tax as private jets, cargo aircraft and travellers changing planes in Heathrow will start paying their fair share.”
“We applaud the Government’s intention to end this daft poll tax on passengers, despite fierce resistance from airlines with old aircraft who argue that inefficient flying should continue to be subsidised by efficient airlines who have invested in greener, cleaner aircraft.
“The increase in the overall tax take from November is self-defeating. Aviation is at the heart of international trade and tourism and will be crucial in getting the economy back on the road to recovery."
“Air tax is already higher in the UK than anywhere else in Europe, and there is simply no scope to increase it further.”
Flybe chairman and CEO Jim French said: “‘Flybe is in favour of a per plane tax providing it is based on the emissions of the actual aircraft type and then is banded by the distance travelled.
“It should also reflect allowances for the lower load factors predominant in the areas outside of London and provide lower rates for start up routes.
“This would reward those airlines like Flybe who have invested in cleaner modern aircraft technology and incentivise those who have not!”
But he added: “Flybe believes it is vital that any consultation on PPD must be meaningful and engage with all industry and external stakeholders and we look forward to the process between now and any decision being very clearly laid out.
“We stand ready to help the Treasury achieve these policy goals while still powering the regional economics of the UK.”
He went on: “Flybe would however be concerned if a uniform per plane tax was brought in, as this would disproportionately affect the economics of the UK regions.
“A uniform per plane tax would disproportionately impact the UK regions as they represent 44% of passengers but 62% of flights.
"Dozens of routes relied upon by British businesses and families who don’t live in London are only feasible as a day return by air, but can only be flown economically on the right size aircraft.
“A blanket per plane tax would incentivise the use of large, inefficient, polluting aircraft and artificially stimulate discretionary travel on these aircraft, which use old technology but as a result have a low capital cost and a high environmental impact.
By Dinah Hatch
Dinah
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