Scrapping Air Passenger Duty (APD) could benefit the UK economy by more than the £2.8 billion the UK Treasury expects to collect in revenue in the next year.
The World Travel and Tourism Council (WTTC) released the results of research on the impact of APD today and called on the government to scrap the tax.
The research, conducted by Oxford Economics, suggests removing APD could add £4.2 billion to the economy over 12 months and create up to 91,000 jobs.
APD on UK flights is due to rise by more than double the rate of inflation from April, increasing by an average 8%.
The WTTC study concludes abolishing APD would boost the aviation and tourism sectors by between £1.8 billion and £2.9 billion over the next year. An additional £1.3 billion could be added to consumer spending if passengers no longer face paying APD.
WTTC president and chief executive David Scowsill said: “APD is a completely disproportionate tax on people’s holidays and is hitting business travel hard.
“It is illogical to continue with a tax that costs the country some 91,000 jobs and as much as £4.2 billion.”
Scowsill added: “UK travel and tourism grew by 4.1% last year but is forecast to slow to 1.3% [growth] in 2012. This is partly due to the impact of APD dampening demand. We urge the UK government to reduce APD.”
The industry’s Fair Tax on Flying coalition threw its weight behind the WTTC demand.
British Air Transport Association chief executive Simon Buck, a spokesman for the coalition, said: “This research shows the tourism industry could provide thousands more jobs if only the government broke out of its commitment to ratchet up the cost of flying.”
He called on the Chancellor to freeze APD in the Budget later this month.