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WTM 2012: Caribbean fears APD impact on air capacity

Caribbean islands are concerned that airlines are set follow British Airways in reducing seat capacity from the UK due to the impact of Air Passenger Duty.

New Caribbean Tourism Organisation’s new chairwoman and commissioner for the US Virgin Islands Beverly Nicholson-Doty said that the impact of the tax would be one of the main areas she will focus on.

She welcomed recent moves by MPs in the UK parliament earlier this month to try to force a full review of the impact of APD on the UK economy, but said the impact on the Caribbean was already clear.

This followed an online campaign over the summer that saw support from over 200,000 people who wrote to their MPs about APD following the high level backing of Virgin Group chairman Sir Richard Branson.

Overall UK arrivals to the Caribbean region are down around 12%, more than is being seen in other source markets suggesting it is not just down to the global recession.

Speaking to Travel Weekly at World Travel Market this week, Nicholson-Doty said: “APD is a vexing issue for the industry because it’s so onerous. It’s one of the areas in which the CTO plays a major role for the region.

“APD is one of the areas we are working on on behalf of our members but equally important is the area of sustainable development, collaborative marketing and looking at issues that pertain to aviation.

“Many of the areas affected by APD are accustomed to direct air services from their main source markets to the region. The other concern is the fact that we are hearing from airlines themselves that air lift to the region is being reassessed and in some cases reduced.”

Hugh Riley, CTO secretary-general and chief executive, said BA had already indicated that its decision to move capacity to nearby Florida was related to the impact of APD.

“What we are asking for is not being put at a disadvantage to other regions. We’re realistic enough to accept we’re not going to get rid of APD entirely. The whole basis of our strategy is to remove the discriminatory nature of the tax. Re-banding would remove the discrimination.”

Due to the way APD is calculated, based on the distance from London to other capital cities, the Caribbean is placed in a higher bracket that some destinations many thousands of miles further away from Britain, like Hawaii.

Nicholson-Doty added: “We are not just talking about vacationers. In many cases these are families that would like to go back to the region.

“When you think about the diaspora markets in the UK, you have huge Bajan and Jamaican populations and there are certainly people who are voting British citizens in the UK for whom this is a huge issue.”

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