Monday, September 19, 2011

Over-taxed: British Airways cuts flights to Caribbean over high Air Passenger Duty rates.

British Airways has announced it is set to cut the capacity of its flights to the Caribbean because of the UK’s sky-high Air Passenger Duty tax.

The airline has called on the Government to scrap its ‘destructive tax juggernaut’ and says the UK tourism industry suffers from the ‘heaviest tax burden in global aviation’.

As a result, BA has decided to reduce its flights to the Caribbean, and increase its service to Florida, a holiday destination that currently has a 20 per cent lower tax rate than the Caribbean islands.
Enlarge British Airways plane

BA is set to cut Caribbean flights owing to the UK's extortionate APD rates

Currently, a family of four of flying in economy class from the UK to Florida pays £240 in APD, while the same family travelling to the Caribbean would shell out £300.

BA points out that these rates are more than double what a family from Germany would pay, while a family jetting out from France would be charged just £15.

And, in fact, there is no aviation tax at all in a total of 22 EU countries.

The reason the Caribbean in particular loses out is because countries are placed into band for the taxation, based on how far their capital is way from the UK.

So, although Florida and Hawaii are further away from Britain, New York is closer than many Caribbean capitals, so passengers are charged less tax.

British Airways CEO Keith Williams told delegates at the Caribbean Tourism Organisation (CTO) annual conference in St Maarten that the strict tax regime was 'jeopardising routes to the Caribbean'.

He said: ‘The Caribbean is a very important destination for us and we have a long and proud heritage of serving the region.

‘However, we can’t deny the reality that demand is not as high as it has been.

‘Taxation is most certainly a factor in this and sadly, a factor in our decision to reduce our frequency to the Caribbean next summer.

‘It is no coincidence that our reduction in the number of services to the Caribbean is accompanied by a rise in services to Florida – another desirable holiday destination for UK sun-seekers, and a destination that is taxed at a rate 20 per cent less than the Caribbean.'

The Government is currently reviewing its Air Passenger Duty (APD) levels for customers flying from the UK, and is expected to announce its findings at the end of November.

Mr Williams added: ‘We continue to protest against the rises in APD and I hope that the Government’s recent consultation will lead to a more equitable banding system that does not unfairly penalise the Caribbean.’

Mr Williams has also called on the Government to consider the likely financial effect of the new European Union Emissions Trading Scheme, which starts in January 2012, as part of its review.

He said: ‘We will be fighting for the costs associated with the EU ETS to be offset by a decrease in APD. It is only fair given that both are levied for environmental purposes and the sums we pay in APD are already twice the equivalent of our actual carbon costs.’

The company told TravelMail that it will decrease its flights from Gatwick to Barbados from 10 flights a week to seven flights a week, while its twice-weekly service from Gatwick to Montego Bay in Jamaica will be cancelled.

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