UK hospitality sector offers mixed response to air passenger duty freeze

UK hospitality sector offers mixed response to air passenger duty freeze

UK hospitality operators have offered a mixed response to the decision to freeze air passenger duty on short-haul and economy class flights.

The move was revealed earlier by Phillip Hammond, chancellor of the exchequer, in the autumn budget.

UKinbound welcomed the decision to freeze air passenger duty, but called for the impending review on the impact of the levy and VAT on tourism in Northern Ireland to be expanded to the whole of the UK.

UKinbound, chief executive officer, Deirdre Wells, commented: “It is encouraging to hear air passenger duty feature on the government’s agenda and that this tax on trade will be frozen on all short-haul and long-haul economy flights.

“We’re also pleased to hear that a review will be undertaken regarding the impact of air passenger duty and VAT on tourism in Northern Ireland.

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“However, the detrimental effect of air passenger duty on businesses across England, Scotland, and Wales should also be investigated.

“The government’s commitment to a Brexit ready Britain will be undermined if the review does not cover all four corners of the UK.”

However, the decision to increase air passenger duty for premium class long-haul passengers has not delivered the global Britain message that the government keeps talking up, according to the Board of Airline Representatives in the UK.

Dale Keller, chief executive of BAR UK, said: “Whichever way the chancellor chooses to present it, this is essentially an increase in the world’s highest air passenger tax despite some relief from further increases for economy class passengers.

“There is no getting away from the fact that the UK still has double the rates of Germany, the next highest in Europe, and that leaves the UK isolated on its air tax policy as Brexit looms.

“Only aviation can provide the global connectivity the UK needs to thrive economically, and it cannot be right that air passengers remain singled out as the only transport users paying such a tax.”

He added: “APD is a tax on trade and the chancellor’s failure to address the fundamental failings of this tax is clearly a major missed opportunity within his budget for a Brexit-ready Britain.”

American Express Global Business Travel was more damning in its assessment of the budget, arguing it would damage the UK economy in the long run.

Jason Geall, vice president, northern Europe, American Express Global Business Travel, said: “We are extremely disappointed by the chancellor’s decision to increase air passenger duty on long-haul business travel.

“On one hand the government talks about forging new trade relationships with non-EU marketplaces, while on the other it increases the cost for businesses to travel and trade.

“What was initially introduced as an environmental tax has become a stealth tax on trade.

“This is a massively short-sighted decision made by a chancellor who purports to be pro-business.

“Much has been said about the post-Brexit UK being an outward-facing, export-led economy; but these words must be matched by action on airport expansion in the south-east, improving transport links to regional airports and the removal of air passenger duty.”