Grenada: caribbean gets another blow

ST GEORGE'S, Grenada (CMC):

While Caribbean tourism ministers are in Britain lobbying London to change its air passenger duty (APD), the German government has implemented a new levy on airline tickets that will result in an increase in prices to the Caribbean.

Initially announced earlier this year, the charge will add eight euros (US$10) on tickets to 52 European destinations, €25 (US$31) to destinations in Asia and Africa, and €45 (US$57) to all other destinations, including those in the Caribbean.

The German-based Condor airlines provide a weekly service to Grenada.

Effective for sept 3 bookings

Chancellor Angela Merkel's government confirmed the tax will be imposed on all flights out of the country from January 1 next year, but will take effect for passengers booking tickets from September 3, this year.

The levy is part of a proposed budget designed to save the German exchequer €80 billion (US$101 billion) in the period to 2014.

"We are implementing the measure with immediate effect following today's Cabinet resolution. Otherwise, there will be a rush in ticket-buying aimed at preempting the tax," Finance Minister Wolfgang Schaeuble said.

The tax has been greeted with hostility from Lufthansa and Air Berlin - the two largest carriers in the country.

"Such unilateral action will weaken Germany as a base for the aviation industry, and will massively distort competition. The relationship between the level of the tax and the distance flown will put Germany - a leading export nation that relies heavily on global connections - at a special disadvantage," Lufthansa said in a statement.

"The aviation tax will give momentum to foreign airlines and airports, as the experience in the Netherlands has shown."

The British government's plans to increase an air passenger tax for travellers to the region.

Currently, each economy class traveller to the Caribbean pays £50 (US$77) in APD. But from November 1, this will increase to £75 (US $115) - the second in as many years.

The levy for premium economy, business and first class passengers will rise from £100 (US$154) to £150 (US$291).

Dutch authorities abolished a similar tax in 2008, conceding the revenue raised was far less than the revenue lost due to a decrease in traffic as customers switched to competing airports.