ABTA Aviation Tax Survey

Airport Passenger Duty Tax Survey conducted for ABTA published 3 March 2011

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Date Published
03 Mar 2011

Further Description

 Tourism Industry Unites to call for a Fair Tax on Flying

UK Holidaymakers Pay By Far the Highest Flight Tax in Europe

Two thirds of consumers think that aviation tax is currently too high

                                                                                  

The leading names in the UK travel and tourism industry have today announced they are uniting for the first time behind a campaign calling for a Fair Tax on Flying from the UK Government. 

 

The campaign is calling on the Government to halt any further rises in aviation tax, with revenue from Air Passenger Duty (APD) having increased by 2600% since it was first introduced in 1994. This year £2.2 billion of holidaymakers’ and business travellers’ money will pour into the Treasury’s coffers. The Government has stated that it intends to raise the revenue generated by a further £1.4 billion by 2015.

 

In a new survey conducted by ComRes for ABTA, who is spearheading the Fair Tax on Flying campaign, the British public has overwhelmingly indicated that the current level of taxation is “too much”. Almost two thirds of consumers [63%] believe the current level is too high, 21% say it is at about the right level, and only 5% think it is too low¹.  Moves to further increase the rate of aviation tax are therefore likely to be met with significant consumer opposition.

 

In an open letter to the Chancellor, George Osborne, the campaign sets “Five Tests” of fairness for the Government to take into account as it prepares its March Budget.  Today it launches a social media campaign, inviting members of the public to sign up and get behind the call for a Fair Tax on Flying (www.facebook.com/afairtaxonflying). 

 

Holidaymakers or business travellers flying from the UK pay by far the highest levels of flight tax in Europe. Five European countries currently levy versions of an aviation tax but all at significantly lower rates than the UK. For example, a family of four flying from the UK to Florida pay £240 in flight tax while if they fly to Australia they can expect to pay an eye-watering £340.  That compares with just £11 for an Irish family flying to the same destinations or £15 for a French family.  Even on European flights, UK passengers are being stung: a family of four pays twelve times as much in tax as its French counterpart.

 

Additional research commissioned by ABTA shows that three in four air passengers have no idea how much tax they’re paying.² It is thought this lack of awareness among consumers has left the door open for the Government to introduce successive increases. All APD rates paid by passengers were doubled in 2007, and massive rises hit passengers again in 2009 and 2010.

 

Also worrying is the impact that the increasing level of aviation tax is having on the UK economy.  Since 2007, when the Government began introducing a series of significant hikes in the tax, air passenger numbers from the UK have fallen by 22% from more than 81 million per annum in 2007 to 63 million per annum in 2010.  Heathrow Airport, our busiest and main international hub, has fallen from 1st to 5th place in Europe in terms of destinations served in the last twenty years.  As visitors to the UK are liable to pay the tax when they fly home it is feared that holidaymakers and business travellers may simply by-pass the UK altogether, an issue of real concern in the run-up to the 2012 Olympics.  Governments in Denmark, Sweden, Malta and the Netherlands all axed their versions of aviation tax after assessing the negative economic impacts on their economies.

 

Mark Tanzer, ABTA Chief Executive, said: “When it comes to the future of tourism in the UK, the government’s words and deeds simply do not match up.  The Prime Minister has identified tourism as one of the top five industries to drive growth, yet aviation tax has become a punitive stealth tax. It is vital that the Government understands the impact it is having on the health of the tourism industry in the UK.  The industry is willing to pay its way, but a 26-fold increase since 1994 puts the UK at a competitive disadvantage when compared with our European neighbours and punishes UK holidaymakers and business travellers unfairly.  Air passenger numbers have decreased by 22% since 2007 when the tax was last increased, and increasing it yet further will cause significant strain on hard-pressed family budgets and hamper the UK economy’s growth.”

 

Keith Williams, British Airways Chief Executive, said: “We recognise the exceptional difficulty of the country's fiscal position and we are content to pay our fair share.  But the UK airline industry is already the most heavily taxed in the world and any further tax burden will be counterproductive to the country's economic recovery."

 

Mary Rance, Chief Executive UKinbound, said: “We feel that it is vital for UKinbound to join forces with colleagues in the inbound and indeed outbound industries to stand united against this damaging tax, which only works to make the UK uncompetitive and unattractive as a destination. It acts directly against the wider objective of making the UK one of the top five tourism countries and is certainly a barrier to growth in inbound tourism, the third largest export industry to the UK. Our contribution to the UK economy could be even greater with a fairer tax on aviation.”

 

 

 

-ends-

 

About a Fair Tax on Flying

 

The Fair Tax on Flying (www.facebook.com/afairtaxonflying) campaign is an alliance of more than 25 airlines, airports, tour operators, destinations and trade associations who are uniting to call on the Government to make the system of aviation tax in the UK fairer.  We already pay the highest levels of aviation tax of any nation in Europe.  The alliance have set five tests that they are asking the Government to take into account as they review the overall structure or level of aviation tax:

1.         Will any revision increase the overall amount travellers pay to fly to and from the UK?

2.         Will any change be designed to be offset by the income from the UK’s inclusion in the European Union Emissions Trading Scheme (ETS)?

3.         Will a new approach remove the unfairness that travellers buying a premium economy ticket for a few extra inches of legroom are classed the same as first class travellers and pay double the rate of tax? 

4.         Will any new policy address concerns that defining bands by national capital cities creates unhelpful exceptions that are unfair to passengers and damage destinations?

5.         Has the policy’s impact on destinations, trade and tourism been adequately understood and considered?

 

Fair Tax on Flying campaign members: ABTA, AOA, ANTOR, British Airways, BAA, BATA, BMI, Bristol Airport, ETOA, Gatwick Airport, Jet2, Lastminute.com, London City Aiport, Luton Airport, Manchester Airport Group, Monarch, Newcastle Airport, The Caribbean Council, The co-operative travel, Thomas Cook, Tourism Alliance,TUI Travel PLC, ukinbound, Virgin Atlantic.

 

Additional information

 

¹Comres surveyed 2046 British adults online between 18th and 20th February 2011. Data were weighted to be representative of all adults.  The question asked was:

“At present, the UK government collects Air Passenger Duty (APD) from every passenger flying through a UK airport. The amount of APD paid depends on the distance of the flight

and whether you are travelling in economy or business class. As an example, a British family of four flying from a UK airport to Florida in economy class will pay £240 to the British government in flight tax. Do you think that this tax on flights is, too much, about right, not enough?”

² The ABTA Consumer Trends survey was conducted by Arkenford Ltd (www.arkenford.co.uk), who specialise in tourism and leisure market research.  It generated response from a nationally representative sample of 2,028 consumers using an online research methodology.  Fieldwork was conducted in September 2010.

 

Comparative European APD or equivalent tax rates for a Family of Four travelling in economy class in sterling [Euro rates converted at £1 – 1.1 Euros]

From:              To:

Europe

USA

Australia

UK

48

240

340

Germany

30

90

164

Austria

30

90

127

Ireland

11

11

11

France

4

14.5

14.5

All Other 22 EU Member States

0

0

0

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