UK Departure Tax Rise Increases Long-Haul Burden

Peak tourism industry groups in Australia and New Zealand are calling for a joint top-level approach to the British government over its plans to raise its airport departure tax.

Tourism & Transport Forum Australia (TTF) and Tourism Industry Association New Zealand (TIA) are concerned at the prospect of an 8 per cent rise in the Air Passenger Duty, announced overnight by the UK Treasury, and its impact on UK visitors.

TTF Chief Executive John Lee has called on the Australian and New Zealand Prime Ministers to raise the issue with the British government.

“We’re urging Prime Ministers Gillard and Key to raise our concerns directly with British Prime Minister David Cameron,” Mr Lee said.

“The Air Passenger Duty (APD) is a discriminatory, arbitrary tax which impedes tourism, travel, trade and economic growth. This will be the fourth APD rise since 2007 and now takes the tax paid by an ordinary British traveller to more than A$140,” said Mr Lee.

“It unfairly penalises British residents wishing to visit long-haul destinations like Australia and New Zealand, as well as impacting visitors to Britain from long-haul source markets.

“It’s a tax on tourism which reaps billions of pounds in revenue for the British government masquerading as environmental policy.”

TIA CEO Tim Cossar said the latest rise is an unfair burden on long-haul tourism.

“The UK already has the highest departure tax in the world and this latest rise means a family of four will pay more than NZ$736 in taxes just to leave the country,” Mr Cossar said.

“It will simply price more potential visitors to Australia and New Zealand out of the market.

“Poor economic conditions in Europe are already affecting consumer confidence and reducing the likelihood of people to take a long-haul holiday, so now is not the time to introduce another barrier.

“The number of passengers passing though UK airports fell 7.4 million in 2010, which means lower tourism spending, and this is likely to exacerbate that decline.

“Both TIA and TTF are concerned at the potential impact of this increase on British arrivals in our two countries and we believe this issue deserves attention at the highest level.”

New Zealand’s Ministry of Foreign Affairs is preparing an urgent brief for Prime Minister Key and Foreign Minister McCully. The Australian government is urged to follow suit.

TIA has the support of the Inbound Tour Operators Council (ITOC), Travel Agents’ Association of New Zealand (TAANZ) and the New Zealand Airports Association in its efforts to combat the APD increase.

Editors’ notes:
Since 2009 the APD has been split into four distance bands, with both Australia and New Zealand falling into the highest band, for destinations over 9,650 kilometres (6000 miles) from London.

On 6 December 2011, the UK Treasury announced Band D would rise in April 2012 from £85 for each economy class passenger to £92 and from £170 for premium class passengers to £184. This is the fourth rate rise since 2007 and represents a five-fold increase. The new rate equates to £368(A$560/NZ$736)for a family of four travelling to Australia or New Zealand.

Air Passenger Duty from the UK* for travel to Australasia
Pre-2007 Feb 2007 - Oct 2009 Nov 2009 - Oct 2010 Nov 2010 - Dec 2011 April 2012
Economy class £20
£40 £55 £85
(A$130/NZ$171) £92
(A$140/NZ$184)
Other classes £40 £80 £110 £170
(A$260/NZ$341) £184
(A$280/NZ$368)
Source: HM Treasury. *APD distance bands apply to all UK airports except Belfast International and Belfast City

Further reading:
In March the UK Treasury launched a review into its air passenger excise tax, the Air Passenger Duty, and you can read TIA’s and TTF’s submissions by clicking the links below.
Read the Tourism Industry Association of New Zealand’s submission to HM Treasury here.
Read Tourism & Transport Forum’s submission to HM Treasury here.

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