The new per plane APD could heap further damaging taxes on an airline industry that already pays its fair share, speakers at the Abta Travel Matters conference said this week.
Abta chief executive Mark Tanzer urged the new coalition UK government to be fair in its taxation policies that impact the travel industry.
“We need to be able operate in a fiscal regime which takes a fair level of tax,” he said. “As a successful industry we want to pay the taxes that are needed to address the Treasury’s current problems, but fair taxes structured and implemented following proper industry engagement.”
Tanzer called on all stakeholders in the industry to press government on what it contributes to the UK economy and what they want from government.
But he said the situation has “gone backwards” since October, when Abta held its annual Travel Convention in Barcelona, with the decision to reverse planned expansion of UK airports including Heathrow and Stansted.
Tui Travel UK managing director Dermot Blastland did not hide his distaste for APD although he said he preferred the per plane suggestion rather than the existing per passenger arrangement.
“We would urge the government not to use the reform as an opportunity to tax the aviation industry more heavily than is already the case,” he said.
Blastland claimed, despite aviation fuel not being taxed, the sector actually contributes 32.5% of the wealth it generates in taxes, before APD is taken into account, 54.5% once it is included.
“Aviation is actually, relative to the rest of the economy, highly taxed,” Blastland said. He highlighted Tui’s decision to invest $750 million in the new Boeing 787 Dreamliner which will emit 20% less CO2 and 40% less Nitrus Oxide.
“How are we meant to be expected to invest in environmentally friendly aircraft and then have taxation doubling,” added Blastland.
“The last government’s approach to this [CO2] was dreadful. The aviation industry was allowed to become the whipping boy to cover up the superficial and incoherent approach to the management of carbon in the UK.”
Benedict Brogan, deputy editor of The Daily Telegraph, the mainstream media partner for Travel Matters, said APD was a major issue for readers of the paper.
An anti-APD campaign has been signed by 40,000 people. “This really is a tax that has left fairness far behind. This is a tax that’s long overdue a second look.
“The new coalition government has made it clear they are keen to adopt this per plane tax which will raise £3.5 billion extra, which is a lot of money.
“Our great fear is that this will find its way into the prices for our readers. This comes at a difficult time for the industry, our readers and people who travel.”