Transport association attacks passenger tax rise
The International Air Transport Association (IATA) has attacked the increase in the UK Air Passenger Duty (APD), labelling it "an enormous mistake."
Giovanni Bisignani, IATA's director general and ceo, said the tax reforms announced on Monday would disadvantage UK carriers compared to their rivals.
He said: "The highest travel taxes in the world reduce the UK's competitiveness for businesses that depend on global connectivity.
"Increases in economy fares are a step backwards to the days when world travel was only accessible to the wealthy."
According to Mr Bisignani, adding to the cost of travel would put the UK's 200,000 aviation jobs at risk.
"The only one smiling is the Chancellor as the Treasury counts its billions," he said.
Mr Bisignani called the proposal "another cash grab by the Treasury, thinly disguised as an environmental measure."
"The UK Government already admits that the current £2bn take from APD more than covers the cost of aviation's climate change impact," he said.
The plan was announced to the House of Commons by Alistair Darling in his pre-budget "recession package".
Despite abandoning a "per plane" Aviation Duty, the announcement met with criticism from across the industry.
Andy Harrison, ceo of easyJet, said: "All Parties agreed that APD needed to be changed to a tax on planes not people, but now the Government has succeeded in bodging-up the reform of an already bodged tax."
BA said: "There can be no environmental justification for this, and extra taxation is a further blow to the industry at a time when it is reeling from the combined effects of rising costs and falling demand."
The Board of Airline Representatives in the UK (BAR) and Virgin Atlantic also spoke out against the plan.
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| Giovanni Bisignani |
Under Band A, for flights in the EU, APD will rise to £11 from November 1, 2009 and to £12 in November 2010.
Under Band B, for flights 4,000 plus miles including some transatlantic trips, the levy will increase to £45 next year and £60 the following.
Band C flights, including those to the Caribbean, will incur a £50 charge in 2009 and to £75 in 2010.
The tax on the longest flights, under Band D, to Asia and Australia, will stand at £60 next year and £85 the year after.
These figures are for economy seats each way. The cost to premium passengers will be much higher.
For example on Band D flights, business class travellers paying £80 will instead pay £110 next November and £170 in 2010.
www.iata.org [1] www.hm-treasury.gov.uk [2] www.easyjet.com [3] www.bar-uk.org [4] www.virgin-atlantic.com [5] www.ba.com [6]