British Airways has blamed Air Passenger Duty for its decision to cut capacity to the Caribbean, announced today, and called on the government to stop its “destructive tax juggernaut”.
BA chief executive Keith Williams told a Caribbean Tourism Organisation (CTO) conference in St Maarten that current APD rates are jeopardising routes to the Caribbean. He announced the carrier has decided to reduce capacity to the region next summer while increasing flights to Florida. The Caribbean suffers a higher rate of APD on UK departures than flights to the US.
Williams said: “The Caribbean is an important destination for us and we have a long heritage of serving the region. However, we can’t deny the reality that demand is not as high as it has been.
“Taxation is most certainly a factor in this and, sadly, a factor in our decision to reduce our frequency to the Caribbean next summer.
“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 destination for UK sun-seekers, and a destination that is taxed at a rate 20 per cent less than the Caribbean.”
He told the conference: “We continue to protest against the rises in APD and I hope the government’s recent consultation will lead to a more equitable banding system that does not penalise the Caribbean.”
The government is currently reviewing APD and is expected to announce any changes in the Chancellor’s autumn budget statement at the end of November. Current Treasury plans allow for a double-the-inflation-rate increase in APD next April.
Williams added: “We will be fighting for the costs associated with the European Union’s emissions trading scheme (ETS) to be offset by a decrease in APD. It is only fair, given that both are levied for environmental purposes and the sums we pay in APD are already twice the equivalent of our carbon costs.”
Among the reductions in capacity to the Caribbean, BA is expected to cancel its two weekly flights from Gatwick to Montego Bay, Jamaica, next March. One service may be re-routed to Kingston.