BA in favour of scrapping new air travel tax

British Airways Chief Executive Officer Willie Walsh says he does not support the decision of the British government to introduce an Air Passenger Duty (APD) tax that will be further increased at the start of next month.

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).

Addressing the opening of the Caribbean Tourism Organisation (CTO) Leadership Strategy Conference on Sunday, Walsh said the region has a right to raise concerns about the increase in the tax.

"The latest rises range between 50-112 per cent, compared with APD levels last summer. Because of the unfair distance banding on which the tax is based, Caribbean destinations suffer disproportionately," he said.

"A family of four flying economy-class to Hawaii from London, involving a distance of more than 7,200 miles, would incur an APD charge of £240. Yet the same family travelling to Nassau in the Bahamas, which is not much more than half as far, pays £300 - and double that if they sit in premium economy."

Walsh said that since November 2009, when APD to the Caribbean was increased, arrivals from Britain fell by 12 per cent to as much as 25 per cent in some Caribbean countries.

"Some of this sudden drop could be attributed to economic recession, but it seems clear that APD has played a major part, because the majority of Caribbean countries have seen larger decreases from the UK than from anywhere in Europe," he said while pointing out that even if families find the extra money to pay the tax, they will have less to spend when they arrive here.

"So they may stay for shorter periods, eat out fewer times in restaurants, take fewer excursions and spend less on local goods and services," he said.

Last month, a high-level CTO delegation travelled to London to meet with members of David Cameron's coalition government; urging a reconsideration of the new tax. But the delegation, which included Caribbean tourism ministers returned home without getting Britain to reduce the tax and warning that it could have disastrous effects on the regional tourism industry.

Walsh warned that the new tax could also affect the socio-economic development of the region.

"I am not sure how much the policy-makers have considered the impact on developing nations in terms of jobs and their ability to provide social infrastructure, let alone their ability to invest for themselves in green technologies.

"Some airlines will go out of business. Aviation is a low-margin industry at the best of times. If surpluses are swallowed up in taxes, airlines will not only be unable to invest in cleaner, emissions-reducing aircraft, they will ultimately go bankrupt - and the social and economic benefits they bring will disappear with them," he said.

Walsh said the tax not only 'massively overstates' the carbon impact of flights to the Caribbean but threatens the very fabric of the tourism sector on which so much of the regional economies depend.

"It threatens jobs and opportunities - and the ability of the islands" governments to maintain funding levels for the education, health and welfare programmes they expect to provide for their citizens. Many other island economies in the developing world find themselves penalised in the same way," he told the delegates.

CMC