Budget Measure: Tour operators to fight air levy: 'Discriminatory' measure seen as barrier to free trade within EU

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The Independent Online
TOUR operators were holding an emergency meeting last night to prepare their campaign against the airport departure tax the Chancellor plans to levy from next October.

Airlines have already warned that the new air passenger duty will force up fares because they will be unable to absorb the tax.

Passengers on flights to destinations elsewhere in the UK or European Union will have to pay a pounds 5 levy; the surcharge on flights elsewhere will be pounds 10.

A spokesman for the Tour Operators Study Group, which represents 17 of Britain's biggest air travel companies, said: 'What to do about the tax will be a commercial decision for each operator. It is rather early, too, for anyone to be saying they will not pass it on since it does not come in until next October.

'When next year's brochure prices are set the tax will be part of the overall cocktail that influences prices. You won't necessarily see it identified separately.'

The group, whose members include Airtours, Thomas Cook, British Airways Holidays, Thomson and Owners Abroad, is seeking an urgent meeting with Kenneth Clarke to argue that the tax be abandoned. It also plans a protest to the European Commission on the grounds that the tax represents a barrier to free trade within the EU.

British Airways has warned it will mean higher air fares for 'virtually everyone' and has attacked the discriminatory nature of the levy, which does not apply to road, rail and ferry passengers or to the Channel tunnel.

A spokesman for British Midland, the country's second- largest scheduled carrier, said it would cost the company pounds 17m- pounds 20m a year to absorb the tax, which it could not afford.

Customs and Excise, which will receive the income when airlines have collected the levy from passengers, estimates that the measure will raise about pounds 115m in 1994-95, pounds 330m in 1995-96 and pounds 355m the following year.

In his Budget speech Mr Clarke defended the levy on the grounds that air travel faced relatively low indirect taxation. He also announced a number of exemptions for children under two, transit passengers and people flying in small aircraft operated on regional routes.

(Photograph omitted)

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