American Travel Industry Adding Pressure Against UK APD

Through an open letter to chancellor of the United Kingdom, George Osborne, a coalition of over 30 American travel industry organisations has challenged the air passenger duty (APD) levelled by the British government on travellers to and from the UK as “excessively high and counterproductive” and urged it to abandon plans to raise the APD in 2012.

The letter issued on Monday and signed by over 30 leading US travel industry organizations called the APD nothing more than a “tax grab” for the purpose of reducing the UK’s budget deficit and charged that it unfairly penalised the airlines and their customers. Instead, the organisations including the Air Transport Association, America’s largest and oldest and largest airline trade association, called for the UK authorities to not only abandon plans to increase the APD rate, but instead to begin a progressive reduction of the tax.

Using many of the same arguments progressively put forward by Caribbean tourism officials, the coalition noted that the 225% tax increase was not only an onerous burden on a family of four travelling to or from the UK, but a party of four business travellers as well. The American travel industry representatives indicated that this was clearly having fallout for the UK as the decline in traffic from UK airports, when compared to other EU airports, was well-documented.

The 31 signatories strongly condemned the APD has detrimental to “everyone”, saying that it punished consumers, harmed both foreign and UK airlines alike, caused economic injury to countries and cities that welcomed UK visitors arriving by air, and hurt the UK hospitality and tourism industry by discouraging air travel to that country. The industry representatives argued that there had to be “more economically sound ways” to reduce the UK’s deficit than “strangling” tourism and the air travel trade.

The coalition letter follows a strong lobby put forward last month by Jamaica’s Tourism Minister, Edmund Bartlett, at the United Nations World Tourism Organization 19th General Assembly in South Korea for travel industry officials across the world to band together to pressure the UK to rethink the APD.

With 2012 around the corner, the US-based Business Travel Coalition (BTC) has also noted the urgency in breaking down the “silos” in the world travel industry to address the issue given that not only could the APD increased again next year, but also that the EU Emissions Trading System will kick in during 2012 effectively taxing the UK twice for its role in protecting the environment, which would likely be passed on to consumers.