UPDATED: Industry reaction to Budget inaction

The travel industry has reacted with anger and dismay after the Government failed to scrap plans for a rise in Air Passenger Duty.

In his Budget announcement today, the Chancellor Alistair Darling made no reference to the travel tax, which is due to increase in November and again in 2010.

Airlines, agents, ABTA and other industry associations had urged the Chancellor to scrap the tax altogether, or at least cancel the second phase of increases.

But despite their pleas, and evidence to show the negative impact on the tourism industry, the Government has refused to back down.

Here’s how the industry reacted to the news:

* Thomson Holidays managing director Dermot Blastland said: “We find it outrageous that despite clear briefings explaining why this tax is unfair and unjust, the Government continues to carry on regardless.

"Many holidaymakers will not now be able to afford a few inches of extra legroom on their holiday flight. A family travelling to the Caribbean will have to fork out an extra £600 – a ludicrous amount by anyone’s standards.

"We are also incredibly disappointed that they chose not to address the fact that some of the world’s poorest countries will suffer from a decrease in tourism for the sake of a badly thought out tax.”

* Co-operative Travel MD Mike Greenacre said: "It is scandalous that APD has gone from zero to its existing level in such a short period of time.

"Whilst we accept that the industry has to pay its share of tax on fuel, the impact of this draconian increase could be catastrophic."

* Mark Tanzer, ABTA chief executive, said: "This unfair tax already costs air travellers from the UK £2 billion and covers its environmental costs.

"This holiday tax represents a heavy and growing burden on families at a time when they are being forced to reconsider whether they can afford to take a well-earned break.

“As one of the few successful sectors in the UK economy, the Government has targeted the travel industry to plunder, without regard to the damaging impact to jobs."

He said ABTA will continue to challenge the increases, and its anomalies.

"The rise in APD to destinations such as the Caribbean, dependent on tourism, will be as much as 87%, equating to a tax bill of £600 for a family of four travelling to the Caribbean in premium economy in 2010 compared with today’s £160.

"A survey by one of the UK’s largest tour operators shows that 22% of passengers travelling to the Caribbean have a household income of less than £25,000."

* John McEwan, chief executive of Advantage Travel Centres, said the industry should not give up its fight.

"Just because he hasn’t mentioned it in the Budget doesn’t mean we should give up. We need to keep the momentum going," he said.

"The Chancellor has chosen to ignore the experts and press on regardless. I think he has under-estimated the impact on tourism jobs and the economy."

* Toby Nicol, easyJet’s communications director said: “The Chancellor of the Exchequer has missed the opportunity to give air passengers a much-deserved shot in the arm by refusing to ditch his planned £1 billion raid on the airline industry over the next two years.

"Last year the Chancellor bottled the planned reform of Air Passenger Duty which would have made it a fairer, greener tax and instead simply announced a huge tax raid on hard-working families while continuing to exempt private jets and cargo planes.

"In today’s Budget he should have waived the planned increases in order to help an industry which will be at the forefront of dragging the economy out of recession, but he bottled that as well.”

* Mike Rutter, Flybe’s chief commercial officer, said: “As a former transport minister, Mr Darling knows that aviation will play its part in dragging the country out of recession.

"The Government’s own figures show that aviation already pays its own way. By slapping another tax on a British success story like aviation, the Chancellor runs the risk of endangering a recovery that could be led by aviation.”

*Here’s how the phased increases will impact travel costs:

For flights to Europe, APD will go up by 10% to £11 and to £12 in 2010.

US travellers, the UK’s key market for tourism, will see their taxes rise from £40 to £60 in 2010.

For long-haul visitors travelling over 6,000 miles (including Australia, New Zealand and Malaysia, three key inbound markets), taxes will rise from £40 to £85 in 2010.

Business visitors will also be severely affected with taxes for travellers on any flights above economy rising to anything up to £170 from 2010.

By Bev Fearis