Airline Asks UK Government for Shift in Tax Burden

Airline Asks UK Government for Shift in Tax Burden
The Antigua Observer

Virgin Atlantic is asking the UK government to force short haul flights to take a greater share of the tax burden as industry stakeholders continue to protest the unbalanced air passenger duty (APD). Virgin said long-haul flight passengers travelling to regions like the Caribbean are subsidizing short-haul travel by around US $360 million a year.

The airline said APD rates increased by 20 per cent on short-haul travel but 50 per cent on long- haul travel in the past four years.

To end this disparity, Virgin is proposing that the tax on short-haul flights almost double to deal with the disparity in taxation rates. Or if the tax is to be maintained, it is asking the government to redress the imbalances that promote short-haul travel at the expense of long-haul travel.

Virgin’s stance puts it in direct opposition to European regional airline easyJet, which argues short-haul APD should be reduced at the expense of long-haul APD to discourage the most environmentally unfriendly forms of flying.

Meanwhile the Association of British Travel Agents (ABTA) has called on the industry to concentrate its efforts on opposing next year’s planned APD increase. Stephen D’Alfonso, ABTA research and public affairs manager, said “the key challenge with APD is its massive overall level.

“The simple fact is that no other European family is facing this stealth tax at the high level that British families are, whether they are holidaying in Spain or the Caribbean.

“We need to concentrate our energies on getting the Government to backtrack on next year’s double-inflation increase which could add as much as 10 per cent to the current levels of APD and that doesn’t even include money collected from the [EU] Emission Trading Scheme.”

ABTA is leading a coalition of travel industry companies under its “A Fair Tax on Flying” campaign, although a rival “Hands off our holiday, Mr. Taxman” campaign has now been launched by the Airport Operators Association (AOA).

The AOA believes it can thwart next year’s planned rise and ultimately its campaign could see the tax, which it argues is damaging to the UK economy, being scrapped altogether. The UK treasury minister Justine Greening has said that a decision on the future of air passenger tax will be taken “well before Christmas.”

The Caribbean Tourism Organization (CTO) has been lobbying for the tax to be scrapped or redesigned to be less discriminatory against the Caribbean region. The Caribbean is currently placed in Band C and so travelers pay a higher rate to travel here than they do to the US, including far away states such as Hawaii and California, which are placed in Band B.