Tourism and travel leaders slam UK air passenger duty

.Tourism and travel leaders slam UK air passenger duty

New Zealand tourism and travel leaders have told the UK government that its Air Passenger Duty (APD) is a barrier to long-haul travel and is nothing more than a blunt taxation instrument to help reduce debt.

In a joint submission to the UK Treasury on the Reform of its APD, the Tourism Industry Association New Zealand (TIA), Inbound Tour Operators Council (ITOC), New Zealand Airports Association and Travel Agents Association of New Zealand (TAANZ) argue the APD when combined with other air travel taxes is a strong disincentive for UK visitors considering flying here.

Passengers to long-haul destinations pay seven times more APD than to short-haul European destinations, says TIA Chief Executive Tim Cossar.

"As a percentage of the average economy class return fare between London and New Zealand, APD equates to approximately 10% of the ticket price. When this is combined with already existing taxes, it brings the total tax on the ticket to more than 20% of the airfare."

Mr Cossar says the industry leaders believe the APD is being disguised as a "green tax" and the UK government intends to use it to generate £520 million (NZ$1.04 billion) without any specific environmental initiatives in mind.

The UK is New Zealand's second largest inbound visitor market with almost 223,000 annual arrivals. Most come on holiday or to visit friends and relatives. They stay on average just over one month and have a combined spend of NZ$600 million (year ending March 2011). Almost 80% travel beyond the main tourism centres.

NZ Airports Association Chief Executive Kevin Ward says the APD in any form is an arbitrary and unjustified tax, an impediment to tourism, travel, trade and economic growth and should be abandoned in its entirety.

"If the UK government proceeds with the APD it should be in the form of a flat per person levy across the board, irrespective of destination or class of travel undertaken."

TAANZ Chief Executive Andrew Olsen says feedback from travel agent members reveals the APD is also having a greater impact on New Zealanders travelling to the UK than originally thought.

"More and more passengers are electing to use other hubs in Europe as their main entry and exit points, which generally means they spend less time in the UK. Others are avoiding the UK altogether to avoid paying the APD."

ITOC Chief Executive Lesley Immink says the tax is compounding the already tough tourism environment.

"It is well established that the volume of air travel is affected by fare levels. While the APD on its own may not be a deterrent to travel, it is for long haul travellers when combined with exchange rate impacts, increased fare prices and less discretionary spending across the whole UK economy."

Tim Cossar says the joint submission also points out the APD is undermining the strong ties between the UK and New Zealand that have seen a high level of two-way travel between the two nations for decades.

"The APD that is currently applied to long haul destinations shows little regard for the status of the Commonwealth relationship, which aside from its economic benefits has resulted in social and cultural ties that have been both rich and enduring."

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