Blog by Claire Tucker
May 26, 2011

Critics have lashed out at proposed changes to the British air passenger duty scheme, saying that they will have a detrimental effect on economies both in the UK and abroad – especially the Caribbean.

Air passenger duty, or APD, is a set amount payable depending on the length of the journey and the seating class. APD is currently divided into distance bands; A being up to 2000 miles from London, B between 2001 and 4000 miles, C and D following the same pattern.  A family of four currently pay £240 in APD to holiday in the Caribbean, but planned changes will see these costs rising. With air fares decreasing, and with the advent of sites like Tripbase encouraging Britons abroad, there could not be a more critical time for the tourism-dependant Caribbean.

Floella Benjamin OBE, a Liberal Democrat Lord in the British parliament, has called for a debate in the House of Lords. “I believe that the APD banding system introduced in 2009 was not intended to damage Caribbean tourism,” she said, “but the law of unintended consequences has come in to play and evidence suggests that it is having a negative impact on the most tourism dependent region of the world – the Caribbean.”
She went on to add that “evidence from the Caribbean is that the current punitive levels of tax are hurting economies and families alike.”

There are other criticisms of the new structure of the scheme. Flight distance is measured from London to the capital city of the destination country, which means that some passengers will be penalised arbitrarily. The scheme does not take into account the age or efficiency of the aircraft: an airline using a modern, efficient airliner will incur the same charges as an airline using older, more polluting planes. And an independent report commissioned by budget airline Easyjet suggests that that the British economy could shrink by £2.6bn each year as a result of the changes.

Carolyn McCall, CEO of Easyjet, is among those demanding changes. She advocates a per-plane charge, saying that passengers will be adversely affected by further rises to APD.

“EasyJet is in favour of a move to a per plane tax,” she said. “Four out of five British passengers would be better off under such a tax and, more importantly, it would encourage the industry to fly more efficiently.”

Virgin Atlantic echoes the sentiments felt by Easyjet. “We share concerns about the impact of further increases on APD on family holidays, British business, and tourism alike,” said a Virgin Atlantic spokesperson. “In Britain we already have the highest flight tax in Europe, with a family of four travelling to Florida paying £240 in APD alone.

“However, if the Government is determined that increases are necessary, then these should be apportioned fairly. Historically the percentage increase in this tax has been much higher for long haul flights than it has for short haul flights where alternative forms of travel often exist. This is illogical for a tax that is claimed to be an environmental one.”