Warning of loss of market share, some 70 corporate travel departments, travel management companies and tour operators from around the world urged a reduction in the Air Passenger Duty (APD) imposed by the United Kingdom. The duty has become a burden on the competitiveness of the UK for meetings, incentive trips, conventions and tourism, the companies said in a letter to George Osborne, Chancellor of the Exchequer and Michael Moore, Secretary of State for Scotland.
“Whether a convention in London, or an incentive trip to the famed 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.
Signatories to the letter include major organizations as 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.
Comments from specific signatories are illustrative of the problem that the UK faces:
“We have eliminated the UK from any consideration for incentive groups and meetings due to the high taxes.” Gary Silverstein, Mann Travels
“It is so expensive to fly to the UK now with all the taxes that our clients are seeking other destinations.” Steve Crandall, Discount Travel
“When flying to / from the USA to the Middle East over Europe, I try to avoid London specifically because of these taxes. That means as a matter of tax-costs only I typically avoid flying BA or Virgin even though they are both great airlines.” Chris Tomseth, Global Travel Strategies
“If additional taxes were to be added to the already high taxes, we would not promote and publish any more tours to Great Britain.” Othmar G. Grueninger, Grueninger Tours/Ambassadair Travel
“In addition to traffic from regular business activities, meetings and conventions, the impact on leisure travel is significant.” Virginia Peterson, Travel Leaders
“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.
U.S.-based Business Travel Coalition chairman Kevin Mitchell, who helped organize the signatory letter, commented: “The world’s travel community is indeed paying keen attention to and advising clients based upon aviation taxation developments in the UK. Demand is clearly being impacted by this growing tax burden. If not reversed soon, the UK will acquire a long-term and hard-to-shake image of being too expensive a destination for many business-travel related activities.”