John Evans, chief financial officer for Wings Travel Management, which specialises in offshore, marine and corporate travel, outlines his concerns about future rises in Air Passenger Duty.
“The latest Treasury forecasts show APD revenue is expected to rise from £2.2bn last year to £3.1bn in 2013, an impressive increase of over 40%.
Where is this increase expected to come from, considering the prevailing economic conditions in the UK, and in light of the fact that total passenger travel numbers have actually declined throughout each of the past three years since the introduction of this controversial tax?
It seems clear to us that the only way to reach the forecast goals will be through significant rate increases in 2012 and 2013.
Although we acknowledge the relationship of the APD initiative to the Government’s heralded Green Agenda, we question the logic of penalising UK aviation and the UK corporate traveller at a time when key UK hubs are suffering at the hands of more competitively priced mainland European transit options.
We’re warning our clients to brace themselves for significant APD increases next April. We also believe the increases in the total taxes imposed on travellers to the UK may have unintended consequences.
Raising APD taxes on top of already high taxes on air travel in the UK may begin to change the travel dynamics in the UK as it becomes increasingly expensive for business and holiday travellers.
For outbound travel on longer hauls, we can reroute travellers through Europe, via Schipol, Amsterdam, for example, where we know there currently are no APD tariffs.â€
