US travel industry unites against APD hike

Nov 09, 2011 08:00AM GMT

US travel industry unites against APD hike

The US travel industry has put on a united front to call on the UK government to drop plans to hike rates of Air Passenger Duty.

Almost 30 US travel organisations have signed an Air Transport Association letter urging Chancellor George Osborne to “begin a progressive reduction of this burdensome tax”.

Describing APD as a “tax grab” on airline passengers to aid deficit reduction, the letter calls for a freeze in the levy as a prelude to it being phased out.

“We believe that there are more economically sound ways to reduce the UK budget deficit than strangling tourism and air-service trade between our two countries,” it says.

With signatories including the American Society of Travel Agents and the Association of Corporate Travel Executives, the letter comes ahead of speculation that a further rise in APD will be announced in late November for introduction in April 2012.

The letter says high rates of APD affect travel both to and from the UK and US and “significantly reduce demand” for flights between the two countries.

“The adverse impact of APD harms everyone. It punishes consumers, it harms foreign and UK airlines, it causes economic injury to countries and cities that welcome UK visitors arriving by air, and it hurts the UK hospitality and tourism industry by discouraging air travel to your country,” the letter warns.

“We understand the government is considering increasing the existing APD rates by double the inflation rate, or approximately 10%. If such an increase occurs, a family of four flying from the UK to the United States would be faced with £260 in APD taxes, up from £80 in 2006.

“A party of four business travellers in premium economy seats travelling to the United States would be faced with £520 in APD taxes, up from £160 in 2006.

“A 225% increase in taxes clearly impacts the propensity of individuals 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.

“Not only do the high APD tax levels affect the travel decisions of UK travellers, they also affect the decisions of potential travellers to the UK.”

It says a family of four from Florida considering a holiday in the UK would be faced with total APD of about $419 at current exchange rates – up from $129 in 2006.

Sourced from Travel Weekly

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