Strategic Meetings Summit London, 26 September,
September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
Airlines and travel organisations have criticised chancellor George Osborne for his decision to keep raising the rates of Air Passenger Duty.
APD is to be further increased from April 2014 on top of next month’s planned 2.5 per cent rise in the aviation tax.
Four of the UK’s leading airlines (British Airways' owner IAG, Virgin Atlantic, Easyjet and Ryanair) commissioned Pricewaterhouse Coopers to look at the economic impact of APD on the British economy. PWC argued that abolishing the tax could create around 60,000 new jobs in the UK but this conclusion cut no ice with the Treasury.
The bosses of the four airlines said in a joint statement: "We are very disappointed that the government’s tax on flying, already the highest in the world, will increase yet again this year and next. These rises in APD show the emptiness of rhetoric on boosting exports to emerging economies and building the most competitive tax system in the world.
"Increasing this alarmingly uncompetitive tax on business, trade, and inbound tourism beggars belief when the evidence clearly suggests that abolition would deliver growth, create 60,000 jobs and pay for itself through higher receipts from other taxes."
Simon Buck, chief executive of BATA, added: “Given that there is now incontrovertible evidence that scrapping the highest tax on flying in the world would benefit the UK economy by at least £16 billion over the next three years and create 60,000 new jobs, the missed opportunity to help kick start our economy is a shocking own goal. 1p off a pint of beer won’t do much to help those who might otherwise have been looking forward to new jobs.
“According to PWC’s detailed economic analysis, abolishing APD would provide an immediate and lasting boost to economic growth and, crucially, not cost the exchequer a penny. The Treasury’s response to this – turning a blind to the new compelling data – is exceptionally short-sighted and ill-advised.”
GTMC chief executive Paul Wait said that the latest rise in APD would create "additional financial burden on companies trying to build trade and export overseas".
“We are concerned that the practice of using European hubs to travel to critical long-haul business destinations and emerging markets to lower costs and avoid higher APD charges will significantly increase,“ added Wait.
A report by the World Economic Forum earlier this month also found that the UK had the second highest aviation taxes in the world.
Darren Caplan, chief executive of the Airport Operators Association, said: “These year-on-year rises in APD are fundamentally damaging the UK’s competitiveness with our European counterparts – the recent World Economic Figures show we are now 139th out of 140 countries in the world for ticket taxes and airport charges (only Chad was placed lower).”
Dale Keller, chief executive of the Board of Airline Representatives in the UK, added: “All the evidence is there that APD sucks more money out of the economy than it generates.
“We have now passed the tipping point where lasting damage to the UK’s aviation sector is now a certainty.”