Air Passenger Duty tax in the UK is the burning issue for most of the airline industry.
The small matter of the new runway or runways for the capital London is of concern but even if that decision goes ahead in the next few months the reality is that the tarmac will not likely to be laid for perhaps 10 years.
Airport and airline key players were at a special conference organised by the Airport Operators Association in London and debated both of these issues for two days.
APD… three letters that add up according to the airports and airlines to a huge disincentive for outbound air travel. According to the industry experts it should be subtracted in order to allow a growth in employment and boost a greater tourism spend rather than putting them off with this tax that drives them to other destinations.
Fees, some other countries in Europe have axed including Ireland and Holland, with even Scotland ready to slash the charge by 50% as soon possible. Such a change could impact on airports like Newcastle that could be affected by its fairly close neighbours in Glasgow and Edinburgh.
Although the treasury in the UK has made small changes recently these charges are still some of the “highest of such taxes in the world” according to Keith Brown a north of the border Government Cabinet Secretary for Infrastructure Investment and Cities who vows to make the cut for Scotland as soon as they can.
This type of potential in-balance of taxes could have a huge effect on where tourists decide to fly from.
In Ireland where the Southern Irish Government scrapped the tax leading to a surge of tourists heading south from Northern Ireland and Belfast to save money by flying from an APD tax free Dublin. In Newcastle’s case they would be heading north rather than south.
‘Cut Air Passenger Duty Now’ says Willie Walsh
Both bosses of the competing London airports Stuart Wingate and John Holland Kaye are in agreement for once that Air Passenger Duty needs to be reduced or thrown out.
Agreement also comes from organisations like the CBI with more vocal opponents like Willie Walsh the boss of British Airways and his IAG consortium saying “scrap it now”! Leading members of the UK tourism industry add to the debate and say that we need to encourage tourism and make huge cuts or scrap APD but also reduce VAT within the tourism industry, in places like hotels and restaurants where tourists often spend, big time.
Ufi Ibrahim, Chief Executive of the British Hospitality Association said, “The UK had dropped down the world tourism league from 6th to 8th place, tourism brings in £22bn the 4th largest export in the services economy. However with APD and VAT so high in the tourism sector in the UK therefore we are not competing equally with our European neighbours”.
Airline spokespeople like that of Sophie Dekkers of easyJet say that they have charges levied here in the UK but not at other destinations they fly from. Monarch Airline boss Andrew Swaffield said, “The tax is too high. It would be some help if it went back into the industry”.
Even organisations like that of NATS the National Air Traffic Control service can track patterns in aviation growth and airports like Dublin since its APD was scrapped were noticing an increase in flights from there according to Martin Rolfe its Chief Executive.
Governments over the last 40 years came in for criticism and not just about APD (introduced in 1993) but the very fact that the UK is so far behind in terms of runway capacity and linked up transport infrastructure another area where tourism growth is affected.
With CBI President, Paul Drechsler saying to the Government “Get this runway built now! We have an obligation to the next generation. Lets not add this to a what-if list”. He added: “The cost of not having that new runway meant that UK PLC was losing £10,000 per minute in lost trade!”
Much of the benefits from tourism translate into jobs and the CBI claim a new runway could create 5,000 new apprenticeships and a report commissioned by Birmingham Airport claims that by totally scrapping APD 12,000 new jobs would be created by 2025 with over 7,000 in their immediate West Midlands area.
With big spending tourists coming from China, India and the US the UK needs to ease the way with its visa policy, reduce or scrap Air Passenger Duty.
Plus with at least one new runway many of the speakers agreed if we do not take positive action now then our competitors in Europe, whom are ahead on most of these tourism fronts anyway will be even further ahead as the UK fails to get off the ground with its new runway and also failing to ditch its tax on tourism too.
For example the UK’s closest rival hub airports are Amsterdam ‘Schiphol’ and Paris ‘Charles de Gaulle’ whom between them have 10 runways… need I say anymore?
APD Charges from 1st April 2016
Band A (0-2000miles) charges in various classes run from £13 to £78
Band B (Over 2,000 miles) charges in various classes run from £73 to £438
Also see: http://www.afairtaxonflying.org/facts/