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TMC's and Agents Welcome U.K. Passenger Tax FreezeMarch 23, 2011 By: George Dooley Travel Agent
The Business Travel Coalition and some 70 corporate travel departments and travel management firms – joined by tour operators - welcomed the United Kingdom’s Chancellor of the Exchequer George Osborne’s decision not to increase the Air Passenger Duty until 2012.
The BTC and signatories to a letter opposing the tax, noted that Osborne’s comment to the House of Commons that there will be no increase in the Air Passenger Duty (APD) until 2012, stopped short of a cut in the APD that the coalition views as necessary.
“It is no doubt welcome news for the viability of the UK national transportation system and for foreign destinations heavily dependent upon British holidaymakers that the Air Passenger Duty will not be increased,” said Business Travel Coalition chairman Kevin Mitchell.
“However, the current levels of duty still represent a huge problem and they must be radically reduced to bring the UK back into competitive alignment with other countries for meetings, incentive trips and conventions. The next order of business is to expand the coalition of concerned parties outside the UK and deepen communications with UK government officials, ” Mitchell said.
Earlier, corporate travel departments, travel management companies and tour operators from around the world transmitted a letter to Osborne urging a reduction in the APD. Signatories to this letter included Makino, Inc., from Japan, Dnata Travel Services from Dubai, Argo Travel from Greece, Qiagen Group, from The Netherlands, Alfa Laval from Sweden, Travel Leaders from the U.S., Li & Fung Group from Hong Kong and UNIGLOBE Normark Travel Inc. from Canada.
“Whether a convention in London, or an incentive trip to the golf venues of Scotland, our companies and clients are choosing France, Ireland and other destinations to avoid the highest aviation taxes that can be found in all of Europe. To be clear, the UK is a coveted destination; however, budgets are tight around the world and just a few hundred pounds difference in cost can cause the UK to lose significant business that sustains jobs and powers the UK economy,” the signatories said in their letter to Osborne.
“This letter and the declarations of the signatories powerfully demonstrate that the UK is on the decidedly wrong track in pricing itself out of many segments of the travel market,” said Brian Potter, President, Scottish Passenger Agents' Association. "Not only are we losing foreign exchange revenues and associated jobs, but the viability of our national air transportation system is quickly eroding with profound implications for regional airports and the economies they support.
“This deterioration of inbound demand, caused by a counterproductive tax policy will cause airlines to use smaller aircraft, reduce frequencies, and in some cases withdraw service altogether from regional UK airports. For Scotland, the APD tax together with under capacity at Heathrow really does threaten the viability of connections from London on to the UK domestic air network,” Potter said in the letter.
Mitchell argued that demand is being impacted and that if not reversed the “UK will acquire a long-term and hard-to-shake image of being too expensive a destination for many business-travel related activities.”