British Airways was obliged to increase its fuel surcharges last week because of soaring crude oil prices.
Unfortunately, air passengers leaving the UK are facing the prospect of even higher inclusive air fares over the next year due to further costs and taxation, and potentially even higher fuel prices. Air Passenger Duty charged by the UK is now the highest such tax charged anywhere in the world.
In January 2012 the EU Emissions Trading Scheme will include international aviation and will cost airlines using EU airspace an estimated $1.9 billion in the first year alone. Given the razor-thin margins that airlines operate on, it is inevitable that such costs will be passed on to consumers.
At a time when the government claims it wants to stimulate growth, we are seeing some of the highest-ever tariff barriers to inward investment, not to mention outbound tourism, which supports economies that depend on hard currency such as those of the Caribbean.
On top of that, government policy is resisting calls for increased airport capacity in the southeast. This is needed to keep up with the global expansion of aviation and to exploit overseas trade opportunities to aid the economic recovery of UK plc.
Clearly the government needs to address the deficit. but surely the best way to do that is to stimulate growth in the economy – not to put up tax barriers that discourage growth. Britain is an island nation whose success has been founded on trade and an international and pioneering perspective.
We are told that small and medium-sized enterprises (SMEs) form the engine room of the economy and that the UK will have the best corporate environment for such businesses to thrive in. Yet this message and the reality just don’t add up.
At a time when we need to encourage trade and tourism, as well as to keep aspiring for the good things in life, the affordability of holidays is slipping away from most hardworking people.
A family of four flying economy return to Orlando, which just falls into the nine-hours-plus flight time fuel surcharge band, will now pay a whopping £1,024 in APD and fuel surcharges. This is over and above the ‘normal’ seat fare.
I therefore have to ask the question ‘Why is Britain’s perspective on aviation policy so out of kilter with the commonsense approach of other nations?’