Dutch drop air passenger tax today

London, June 30 2009:  Cheapflights Ltd, the pioneer and an international leader in independent online flight price search and comparison has been a long-term opponent of the UK’s regressive Air Passenger Duty.  Cheapflights believes the tax to simply be a revenue generator to fill Treasury coffers rather than an environmental tax.   The Dutch Government have recognised that their version of the tax was actually counterproductive for their economy as a whole and that since aviation is a global industry, it also had no meaningful environmental impact on the industry’s global carbon foot-print. 

Chris Cuddy, Cheapflights’ CEO said:  “We applaud the Dutch Government’s willingness to drop a tax that they recognised as having serious knock-on and un-looked for negative effects on their aviation industry and national economy.  We again call on the UK Government to follow the Dutch Government’s lead – the planned November increases in APD are a tax too far which will actively hinder the UK’s economic recovery.”

The huge increase in UK APD planned for November 2009 and 2010 has caused UK aviation and Tourism bodies to recently publicly spell out the dangers to employment and to the UK’s position as a major European hub and business centre.  As an island trading nation Aviation is a key component in our commercial and cultural links with the rest of the world; not only cultural but historical links with Commonwealth and other countries.  Furthermore, by taxing passengers for mid and long-haul destinations dependent on tourism, the Government is actively penalising the very emerging economies it is pledged to lift from poverty.  A recent Caribbean delegation has strongly represented this to the UK this month.

The global aviation industry as a whole is engaged in seeking to reduce its effect on climate change since it has a vested interest in flying fuel efficient and environmentally friendly aircraft.  This is witnessed by the UK aviation industry “Sustainable Aviation” initiative  www.sustainableaviation.co.uk.  This has clear environmental objectives  in its Roadmap to 2050, by which time UK aviation’s CO2 emissions can be curbed to below 2000 levels – even with a trebling in passenger growth.                    

The UK Government is firmly engaged internationally with the climate change issue and recognises this to be a global issue.   It is ironic therefore that the Government believes the onerous unilateral APD “environmental” tax on flights from the UK affecting  both outbound and inbound tourism will make any significant difference to global aviation’s 2% carbon footprint.

 It will however put British travel and tourism jobs at risk and puts huge tax burdens on airlines already struggling to survive - as the current problems at BA evidence.  Finally, as we have repeatedly said, it will drive international carriers, who also have to pay the tax,  away from Heathrow to the Continent.  UK and visiting travellers on a budget will have the option to take lower tax short haul trips to continental airports and pick up “APD free” long distance flights from there.  Whilst will this save consumers’ money, it will add hours to their journeys.  On the other side of the coin it will also create more pollution from two short haul hops.  It will also put the City of London at a disadvantage as routes are switched to the Continent by cash strapped airlines thus potentially denying Heathrow of the many important direct routes vital to its pre-eminent international position. 

The Dutch Government has wisely recognised the need to entirely lift their version of the tax in the current world economic climate.  APD, is a short term and ill-thought-out part-solution to the Government’s major fiscal problems  and is a tax that will create long-term damage to the UK economy.  The Government should definitely reconsider the wisdom of increasing APD in November if not removing the tax entirely.  

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