The operators have joined forces to campaign against UK Government plans to increase APD on April 1, with further plans to grow the tax by 46% by 2016.
They claim it would mean a family flying economy class to the Caribbean would pay £440 in taxes, compared to £80 in 2005.
A joint statement from the CEOs of the firms claims the increase would be “job-destroying”.
The statement read: “These endless cumulative increases in APD are pricing families out of flying – both from and to the UK.
“That means fewer visitors to the UK, which destroys jobs in our tourism, aviation and hospitality industries, and chokes off opportunities for young people at a time of exceptional youth unemployment.”
A Treasury spokesman said: “The majority of passengers will only pay an extra £1 as a result of the rise. Unlike some other European countries, the UK does not levy VAT on domestic flights, and aviation fuel is not taxed.
“The aviation industry will also benefit from the cut in corporation tax.”
Scrapping Air Passenger Duty would ‘boost Britain’s economy by £4.2 billion’
12 March 2012 (Daily Mail)
The government is today urged to scrap Air Passenger Duty (APD) – after a new report claimed that abolishing the tax would create 91,000 jobs and boost the UK economy by £4.2 billion in the next 12 months.
British travellers are facing yet another hike in APD from April 1, when the tax is due to rise by eight per cent.
The WTTC calls APD a ‘disproportionate tax on people’s holidays’. A family of four will pay an extra £368 to fly to Australia from next month
The increase means that a family of four flying to southern Spain will pay an extra £52 for their tickets. The same family will pay £260 more to fly to Florida and £368 more to fly to Australia.
The government is expected to collect £2.8 billion in extra tax from air travellers over the next 12 months.
But the World Travel & Tourism Council (WTTC) says that abolishing the tax would increase passenger numbers – which, in turn, would boost employment and the economy.
Its report, which was prepared by forecasting consultancy Oxford Economics, claims this would generate an extra £4.2 billion for the economy.
WTTC president and chief executive David Scowsill says that APD is a ‘disproportionate tax on people’s holidays’ and is ‘hitting business travel hard’.
He says: ‘When the economy needs help, it is economically illogical to continue with a tax that costs the country some 91,000 jobs and as much as £4.2 billion.
‘This tax is damaging the economy at a crucial time, and is having a negative effect on trade with countries in the Caribbean, Africa and Asia.
‘We urge the UK government to recognise the impact on the overall economy and reduce APD.’
The chief executives of four airlines – easyJet, British Airways’ parent company IAG, Ryanair and Virgin Atlantic – have also called for action to reduce APD, claiming that the tax is damaging the UK’s tourist industry.
Chancellor George Osborne announced the APD rise in autumn last year
The respective bosses – Carolyn McCall, Willie Walsh, Michael O’Leary and Steve Ridgway – say: ‘These endless cumulative increases in APD are pricing families out of flying – both from and to the UK.
‘That means fewer visitors to the UK, which destroys jobs in our tourism, aviation and hospitality industries and chokes off opportunities for young people at a time of exceptional youth unemployment.’
The airlines say that UK passenger numbers in 2011 are at the same level as in 2004, and blame APD for a lack of growth in the industry.
They say: ‘Aviation wants to, and should be, playing a leading role in economic recovery – as it does in so many other countries.
‘But the UK imposes the highest aviation taxes in the world, and keeps on increasing them without any analysis whatever of their overall economic impact.
‘We are exporting economic growth, and jobs, to competitor countries. How much longer must this madness go on?
‘We call on the Chancellor to suspend the April 1 rises in APD, and those planned up to 2016, while the Treasury commissions an independent study of the economic effects of this job-destroying tax.
‘We are confident such a study would show that APD’s damage to economic activity outweighs the revenue obtained. It is irresponsible of the Treasury, if it is serious about pursuing economic growth, to keep piling on APD increases without conducting a study of this kind.’
The Treasury has responded by saying that the government had taken action by freezing APD last year and had always been clear that the tax would increase this April.
A Treasury spokesman says: ‘The majority of passengers will only pay an extra £1 as a result of the rise. As announced at the Autumn Statement, we are also extending APD to private business jets for the first time.
‘It is also worth noting that, unlike some other European countries, the UK does not levy VAT on domestic flights and aviation fuel is not taxed. The aviation industry will also benefit from the cut in corporation tax.’
Read more: http://www.dailymail.co.uk/travel/article-2113822/Air-Passenger-Duty-rise-Scrapping-tax-boost-Britains-economy-4-2-billion.html#ixzz1oujOH5Ku
“£2.8 billion air stealth tax is doing more harm than good”
[Earlier title was “Air tax: doing substantial damage to the UK economy”]
( Press release from The World Travel & Tourism Council )
The UK’s controversial air tax costs 91,000 jobs and is acting as a brake on the economy.
New research by the World Travel & Tourism Council (WTTC) shows that removing Air Passenger Duty would result in an additional 91,000 British jobs being created and £4.2 billion added to the economy in 12 months.
The research comes as Britain is about to face yet another rise in Air Passenger Duty. Increases planned from April mean a family of four flying to Malaga will pay £52 extra on the price of their tickets. [That means just £13 each person, and the WTTC has to multiply it by 4 to make it look like a noteworthy number !]. This rises to £260 for the same family to fly to Florida [i.e. £65 per person] and £368 to fly to Australia. [The fares contain no VAT and no fuel duty. The amount of fuel used on a trip to Florida or Australia is huge. The cost of the rest of a holiday for a family of four will be several thousand ££s minimum. See below . The APD component is likely to be tiny, in relation to total cost].
David Scowsill, WTTC President & CEO, said “Air Passenger Duty is a completely disproportionate tax on people’s holidays and is hitting business travel hard. When the economy needs help, it is economically illogical to continue with a tax that costs the country some 91,000 jobs and as much as £4.2 billion.”
In the next 12 months, the UK Government will collect £2.8 billion in extra tax from air travellers, far more than any other country in the world.
David continued: “Travel & Tourism grew by 4.1% in the UK last year, but is forecast to slow to 1.3% in 2012. This slowdown is partly due to the impact of Air Passenger Duty, which is dampening demand.
This tax is damaging the economy at a crucial time, and is having a negative effect on trade with countries in the Caribbean, Africa and Asia. We urge the UK Government to recognise the impact on the overall economy and reduce Air Passenger Duty.”
Martin Craigs, CEO of the Pacific Asia Travel Association (PATA), said: “The UK is an island trading nation, air services are the vital lifeblood of modern global commerce. The UK Air Passenger Duty is now the world’s highest by a wide margin. It is certainly turning away tourism and trade from the world’s fastest growing economic region Asia Pacific.
Airport Passenger Duty started in1994 at £5 and some worthy intentions to offset aviations carbon footprint. Today at £85 to zone D (Asia/Pacific) it’s a ‘detention tax’ that’s restricting job growth, alienating important trade partners and not being transparently directed to green projects. Airport Passenger Duty maybe easy to collect but it’s also easy to see its macroeconomic damage.”
Note on the research:
The research was conducted by Oxford Economics for the World Travel & Tourism Council. The research examined how sensitive passengers are to changes in fares, based on statistics from the Department for Transport and Intervistas. DFT estimates show a lower sensitivity than estimates by Intervistas.
Oxford Economics concluded that:
- Abolishing Airport Passenger Duty would raise the UK “gross value added” by between £1.8 billion and £2.9 billion in 2012 due to the boost to aviation and tourism sectors from increased passenger numbers This would create an extra 38,000 to 61,000 jobs. [How about the reduction in jobs, caused by all those travellers from UK going abroad and spending their money abroad instead of UK? Larger numbers of Brits travel abroad than foreigners come to the UK.]
- The extra income available for consumers from lower airline ticket prices provides a stimulus to consumer spending, and could raise the UK “gross value added” by £1.3 billion and 30,000 jobs. [sic !! They could boost the UK economy even more if they did not spend so much on taking cheap flights to trips abroad]
- The overall benefit to the UK economy could be up to 91,000 jobs and £4.2 billion