Air passenger duty rise warning

Passengers could be paying an extra £1 billion a year in increased Air Passenger Duty (APD) airport departure tax, Sir Richard Branson's airline Virgin Atlantic warned today.

The carrier said APD raised £2 billion in 2010 but that this figure could rise to £3 billion a year under proposals for APD being consulted on by the Government.

Led by Virgin's chief commercial officer Julie Southern, 35 of the airline's cabin crew today handed in to the Treasury in London the company's submission on APD ahead of tomorrow's ending of the consultation period.

Virgin, other airlines and the travel industry are calling for a rethink of APD, which they say is too high and unfair.

Of particular concern is the fact that Caribbean destinations have been included in a higher band of APD charges than the US and Canada, even though flights to, say, the west coast of the US are much longer than those to popular West Indies islands such as Barbados and Antigua.

Another worry is that the Irish Republic is scrapping APD, which could lead to Northern Ireland losing international routes as travellers cross the border to take flights.

At present, a family of four flying in economy class to Florida will pay £240 in APD, while a trip to Australia would cost them £340 in APD.

The travel industry is concerned about the effect of extra charges from the introduction of the EU's emission trading scheme (ETS) being lumped on top of possible future rises in APD.

A Virgin Atlantic survey of 35,000 passengers and 1,500 Facebook followers showed 89% of respondents believed APD rates were already too high.

In London today, Ms Southern said: "Aviation has a crucial role to play in UK tourism and the wider economic recovery through encouraging visitors to these shores ahead of the Olympic and Paralympic Games.

"But this economic potential is being stifled by ever increasing levels of air passenger duty which is already the highest in Europe.

"We already know that more than half of long-haul flyers say they would consider cutting down their number of long haul flights if there were further rises in APD."

Mark Tanzer, chief executive of travel organisation Abta, said: "It is vital that the Government understands the damaging impact that APD is having on the tourism industry in the UK.

"We already pay the highest levels of aviation tax in the world, and if the Government goes ahead with its double-inflationary increase and levies an ETS tax on top of this in 2012, we will see another eye-watering increase in the tax burden on the industry and on holidaymakers."

Uel Hoey, business development director at Belfast International Airport, said: "We need to nurture key air routes for investment and tourism directly into Northern Ireland."

Peter Long, chief executive of tour operators Thomson and First Choice's parent company Tui, said: "We continue to strongly lobby the Government for a more equitable banding system in the interest of customers."

A spokesman for BAA, whose six UK airports include Heathrow, said: "Long-haul connections to India, China and other major economies can only be supported by a hub airport like Heathrow.

"Penalising passengers flying from Heathrow would only benefit Paris, Frankfurt, and Amsterdam and would damage jobs and growth across the whole of the UK. The important point is not to get into an argument about differential rates but to recognise that the UK as a whole pays the highest rates of APD in Europe."

British Airways said APD should not be increased beyond present levels and should start to be phased out in 2013.

It added that the four distance bands of APD should be reduced to two and that first-class and business-class seats should be taxed at the same APD rate as economy-class seats.

BA chief executive Keith Williams said: "Aviation in the UK is the most undervalued and overtaxed industry in Britain. We want to play our full part in assisting Britain's economic recovery, but we are held back by levels of tax on flying which are higher than anywhere else in the world."

A Treasury spokesman said: "The Government launched a consultation on APD at this year's Budget to achieve a tax system for aviation that is fair, simple, and efficient.

"The Government has made clear that that any restructuring of APD will be achieved on a revenue-neutral basis. We will consider the views and evidence submitted by interested parties and will publish a summary of responses in the autumn."