Travel industry unites against ‘punitive tax’

Travel industry heavyweights have united with ABTA for the first time to back a campaign against further increases in air passenger duty.

British Airways, airports operator BAA and UKinbound have all endorsed the Fair Tax on Flying campaign launched today.

They are calling on Chancellor George Osborne to ditch plans for further rises in aviation tax, which has increased 26-fold since it was introduced in 1994, in his March budget.

In a survey conducted by ComRes for ABTA, almost two-thirds of consumers believed the tax is already too high, 21% said it was about the right level and 5% said it was too low.

In an open letter to the Chancellor, the campaigners point out that UK has the highest levels of aviation tax in Europe. Only five other countries in the EU tax passengers and their rates are much lower. Denmark, Sweden, Malta and the Netherlands have axed aviation taxes.

Since 2007, air passenger numbers in the UK have fallen 22% and Heathrow Airport has slipped from the world’s largest European hub in terms of destinations served to the fifth largest, which, says ABTA, is down to increases in APD.

ABTA chief executive Mark Tanzer said: "When it comes to the future of tourism in the UK, the Government’s words and deeds simply do not match up. The Prime Minister has identified tourism as one of the top five industries to drive growth, yet aviation tax has become a punitive stealth tax.

"It is vital that the Government understands the impact it is having on the health of the tourism industry in the UK. The industry is willing to pay its way, but a 26-fold increase since 1994 puts the UK at a competitive disadvantage when compared with our European neighbours and punishes UK holidaymakers and business travellers unfairly. 

"Air passenger numbers have decreased by 22% since 2007 when the tax was last increased, and increasing it yet further will cause significant strain on hard-pressed family budgets and hamper the UK economy’s growth.”

British Airways chief executive Keith Williams said: “We recognise the exceptional difficulty of the country’s fiscal position and we are content to pay our fair share.  But the UK airline industry is already the most heavily taxed in the world and any further tax burden will be counterproductive to the country’s economic recovery."

UKinbound chief executive Mary Rance said: “We feel that it is vital for UKinbound to join forces with colleagues in the inbound and indeed outbound industries to stand united against this damaging tax, which only works to make the UK uncompetitive and unattractive as a destination.

"It acts directly against the wider objective of making the UK one of the top five tourism countries and is certainly a barrier to growth in inbound tourism, the third largest export industry to the UK. Our contribution to the UK economy could be even greater with a fairer tax on aviation.”

Managing director of The Co-operative Travel Mike Greenacre said: ”APD has already had a significant impact on tourism.  A survey of over 30,000 holidays carried out last month by The Co-operative Travel has seen a 17 per cent reduction year-on-year in holidays for destinations that are between 4,000 and 6,000 miles from London, with sales to the Caribbean (down 20%) and India (down 34%) hit particularly hard.

“Our research also shows that consumers will look at alternative airports to fly from to lessen the impact of APD, and this is bound to have a major impact on UK airlines.

“Quite clearly what is required is a far more equitable method of taxation that does not damage the tourism industry and which does not discourage travellers from flying.”

The campaign includes a new site on Facebook, afairtaxonflying, inviting members of the public to sign up.

By Linsey McNeill