US Urges UK to Scrap Air Travel Tax
US travel and tourism industry bosses have added their signatures to a letter urging Chancellor George Osborne to abandon current plans to increase Air Passenger Duty (APD) next year, and ultimately to phase out the tax altogether.
The Government plans to increase APD by 10 per cent in 2012, and US signatories of the letter, headed up by the Air Transport Association, have asked the UK Government to put a hold on the tax. In the letter, the APD increases are described as a "tax grab" on air passengers, aimed simply at "deficit reduction." The letter stated the belief that APD "unfairly penalizes airlines and their customers."
The letter pointed out that although taxes similar to APD had been planned in countries such as Belgium, the Netherlands and Ireland, they had been scrapped after the governments found that the damage the tax would inflict on jobs and taxable economic activity was not worth the level of revenue generated by the tax itself. The letter highlighted how taxes such as the APD reduce demand for flights and negatively affect the economic stability of a country.
"The APD tax significantly reduces demand for air transportation today and any increase will worsen that situation," stated the letter. "Demand for air services will inevitably suffer. A 225 per cent increase in taxes clearly impacts the propensity of individual to travel by air, as has been evidenced by the well-documented decrease in traffic from UK airports, particularly when compared to other EU airports."
Signatories of the letter included various US tourist boards, the IATA and the American Society of Travel Agents, who all expressed concern that the APD tax was deterring US travellers from visiting the UK.
Travel Industry news posted by Jan Moys on 09 November 2011
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