The UK travel industry gave a hostile reception to the Autumn Statement from Chancellor George Osborne yesterday after he confirmed that Air Passenger Duty (APD) will be increased from next April, against the recommendation of airport operators, airlines and travel agents.
Britain’s travel association ABTA said that the government’s decision “flies in the face of basic economics”, with chief executive Mark Tanzer warning that the increase could jeopardise the cheap holidays sector’s recovery, especially since the tax increase will occur at a period of reduced demand at UK airports – last year, there were 7.4 million fewer Britons passing through the airports hubs compared with 2009, he noted.
“This double-inflation increase will damage UK growth and drive down UK air passenger numbers when we need to stimulate the economy,” Mr Tanzer insisted.
“APD is a tax on tourism and a tax on business travel. The Chancellor said today that he wants to support British companies and not tax them out of business or the global economy but his actions on flight taxes do not match his words.”
The ABTA supremo was backed by four of the UK’s leading airlines. British Airways, easyJet, Ryanair and Virgin Atlantic make up the so-called “Axe the Tax” group and they said that the APD increases were an “own goal” for the government.
In a joint statement, the carriers’ four bosses said: “By increasing this tax by double the rate of inflation, he is further deterring inbound tourism and foreign investment, and choking off yet more job opportunities for young people.”
“APD has no international parallel and has already cost the UK economy 25,000 jobs – that is what the government should focus on.”
The four called on the Chancellor to commission an independent study of APD and its genuine economic value, which they predicted “would confirm that APD’s negative impact on UK GDP significantly outweighs its revenue benefit for the Treasury.”
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