ABTA will coordinate an industry campaign against a sharp rise in Air Passenger Duty (APD) on long-haul flights from November 2010.
But industry leaders accept the change in APD this November, when the tax on flights will be applied in four bands, is unstoppable.
APD on long-haul economy fares will rise on November 1 from £40 to £45 to the US, £50 to the Caribbean and £55 to Singapore. However, the rates will rise again within a year to £60 to the US, £75 to the Caribbean and £85 for Singapore and beyond.
Duty on premium economy seats will be double these rates – the same as on business and first class – leading TUI Travel head of regulatory affairs Eddie Redfern, to suggest airlines may consider removing them.
The decision to put ABTA at the centre of a campaign against what the British Airline Pilots’ Association calls “the poll tax of the skies” came at a meeting at ABTA headquarters on Monday with representatives of airlines, tour operators, airports and destinations.
ABTA head of development Andy Cooper described the banding as nonsensical – it will cost more in APD to fly to the Caribbean than to Florida – and the increases are challenging the viability of premium economy. But he said: “The increases will happen. The problem is the government needs the revenue and the opposition is flying a green [environmental] flag.”
The Treasury had failed to respond to lobbying in advance of the Chancellor’s Budget in April, said Cooper, and has since refused to re-examine the duty on premium economy, while justifying the banding as “coherent”.
British Air Transport Association secretary general Roger Wilshire said: “These are huge increases and the industry was not even consulted. We should ensure the public understands we are the only country with this tax.” The Dutch government will withdraw a similar tax on flights in June.
The Co-operative Travel Group managing director Mike Greenacre said: “It is a scandal the Caribbean is affected in this way. But it illustrates how ineffective the industry is when it comes to lobbying. We should talk to the Treasury about unemployment and the impact on consumers.”
Board of Airline Representatives chief executive Mike Carrivick said: “The November 2009 rises are a done deal – November 2010 is the issue. We need to consider the impact on the inbound market and say [to ministers], ‘This may cost you votes [in an election]’.”
ABTA chief executive Mark Tanzer agreed the association would take the lead in marshalling arguments against the change in APD, targeting the increases in 2010.