Air travel tax 'bad for economy'

Plane taking offAbolishing air passenger duty would create 91,000 jobs and add £4.2 billion to the economy in 12 months, according to a report.

The boost to employment and the economy would mainly come from increased passenger numbers following the removal of the airport departure tax, a report for the World Travel & Tourism Council (WTTC) said.
Lower-priced airline tickets would also boost consumer spending, said the report, which was prepared for the WTTC by forecasting consultancy Oxford Economics.

Introduced in 1994, APD is set to rise again next month. The WTTC said this would result in a family of four flying to southern Spain paying an extra £52 for their tickets. For the same family to fly to Florida will cost £260 more, while a family trip to Australia will cost £368 more.

The WTTC said that in the next 12 months the Government would collect £2.8 billion in extra tax from air travellers, far more than any other country in the world.

WTTC president and chief executive David Scowsill said: "APD is a completely disproportionate tax on people's holidays and is hitting business travel hard. When the economy needs help, it is economically illogical to continue with a tax that costs the country some 91,000 jobs and as much as £4.2 billion."

The chief executives of four airlines - easyJet, British Airways' parent company IAG, Ryanair and Virgin Atlantic - also called for action to reduce APD.

The respective bosses - Carolyn McCall, Willie Walsh, Michael O'Leary and Steve Ridgway - said: "These endless cumulative increases in APD are pricing families out of flying - both from and to the UK. That means fewer visitors to the UK, which destroys jobs in our tourism, aviation and hospitality industries and chokes off opportunities for young people at a time of exceptional youth unemployment."

A Treasury spokesman said: "The Government took action by freezing Air Passenger Duty last year and has always been clear that APD would go up this April. The majority of passengers will only pay an extra £1 as a result of the rise. As announced at the Autumn Statement, we are also extending APD to private business jets for the first time.

"It is also worth noting that, unlike some other European countries, the UK does not levy VAT on domestic flights and aviation fuel is not taxed. The aviation industry will also benefit from the cut in corporation tax."
Read Full Story