Taxes sending Britons to Florida
Published:Tuesday | September 20, 2011 | 12:00 AM
Janet Silvera, Senior Gleaner Writer
MARIGOT, St Martin:
AS THE Caribbean wobbles from the effects of the United Kingdom's (UK) Air Passenger Duty (APD), British sun seekers are opting for a less taxed destination - Florida.
"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 United Kingdom sun seekers, and a destination that is taxed at a rate of 20 per cent less than the Caribbean," British Airway's (BA) CEO, Keith Williams, told delegates at the State of the Industry conference in St Martin last Friday morning.
Under the APD, a supposed 'green tax' on long-haul routes, it is cheaper to travel to any US territory, including Hawaii, because of the band that the Caribbean falls in. The tax has tripled in four years and the region has suffered disproportionately due to the anomalies of the banding structure.
Now a family of four travelling to the Caribbean is taxed a hefty £300 before they even leave the UK.
To compound the problem, Williams noted that the islands in the region have also introduced further taxes, which have to be collected as an additional surcharge.
The airline executive said, with the reduction in demand, particularly among leisure travellers, BA has been forced to reduce the number of flights to the region by six per cent. Jamaica's Sangster International Airport is one of the casualties. Come March 25, 2012, the airline will move one of its two flights to Norman Manley, Kingston and VC Bird International, Antigua.
Demand is not as high
"The Caribbean remains a very important destination for BA. However, there is no denying the reality that demand is not as high as it has been," Williams reassured stakeholders.
He, however, added, "Taxation is most certainly a factor in this and, sadly, a factor in our decision to reduce our frequency to the region next summer. "We do hope to put some capacity back in for winter 2012."
The good news is that BA remains the biggest European carrier to the Caribbean with 62 flights to 15 destinations every week.
Sadly, APD is not the only cost burden that the aviation industry faces. From the beginning of next year, BA, along with all airlines operating to and from the European Union, will be part of the Emissions Trading System. "While we have always supported emissions trading in principle as the most effective economic instrument for reducing aviation's impact on climate change, there is no denying that it will have an impact on our business. Particularly so if the scheme is introduced in the flawed way the EU proposes and it is coupled with further rises in APD," the BA executive argued.
Like Williams, the Caribbean is bracing itself for a further increase in APD to be announced in the UK autumn budget, if not before. "This will further jeopardise routes from the UK, and to the Caribbean in particular," said the BA CEO.