TUI could absorb APD increase
TUI Travel has not decided whether to pass the increase in air tax on to customers who have already booked for travel after April next year when air passenger duty will rise by twice the rate of inflation.
The operator said it won't announce until the New Year if it will pass the 8% to 10% increase on to customers.
The Treasury will confirm tomorrow the new rates for APD as part of its review of the tax, but Chancellor George Osborne confirmed last week that he was pressing ahead with a proposed double-inflation increase.
TUI distribution director Nick Longman said: "We are extremely disappointed the Government hasn't listened to our campaign against further rises in APD. This increase is really damaging to the consumer and to UK business as a whole. In the longer term it could be damaging because people will avoid UK hubs."
He said TUI had not "done the sums" to work out the cost of the tax to Thomson and First Choice and it has not decided whether to absorb the increase or pass it on to customers who have already booked. "We have really been focused on getting out our financial results and we will decide what to do about APD in the New Year," added Longman.
TUI today announced an 18% increase in operating profits for 2011 of £471m.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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