Air tax damaging to the UK economy

Removing Air Passenger Duty would result in an additional 91,000 British jobs being created and £4.2 billion added to the economy in 12 months, it has been revealed.

The research, by World Travel&Tourism Council (WTTC), shows that comes as Britain is about to face yet another rise in Air Passenger Duty. Increases planned from April mean a family of four flying to Malaga will pay £52 extra on the price of their tickets. This rises to £260 for the same family to fly to Florida and £368 to fly to Australia.

David Scowsill, WTTC President&CEO, said: “Air Passenger Duty is a completely disproportionate tax on people’s holidays and is hitting business travel hard. When the economy needs help, it is economically illogical to continue with a tax that costs the country some 91,000 jobs and as much as £4.2 billion.”

In the next 12 months, the UK government will collect £2.8 billion in extra tax from air travelers, far more than any other country in the world.

David continued: “Travel and tourism grew by 4.1 percent in the UK last year, but is forecast to slow to 1.3 percent in 2012. This slowdown is partly due to the impact of Air Passenger Duty, which is dampening demand.

“This tax is damaging the economy at a crucial time and is having a negative effect on trade with countries in the Caribbean, Africa, and Asia. We urge the UK government to recognize the impact on the overall economy and reduce Air Passenger Duty.”

Martin Craigs, CEO of the Pacific Asia Travel Association (PATA), said: “The UK is an island trading nation; air services are the vital lifeblood of modern global commerce. The UK Air Passenger Duty is now the world’s highest by a wide margin. It is certainly turning away tourism and trade from the world’s fastest-growing economic region, Asia Pacific.

“Airport Passenger Duty started in1994 at £5 and some worthy intentions to offset aviations carbon footprint. Today at £85 to zone D (Asia/Pacific) it’s a ‘detention tax’ that’s restricting job growth, alienating important trade partners and not being transparently directed to green projects. Airport Passenger Duty maybe easy to collect but it’s also easy to see its macroeconomic damage.”


Travel and tourism to boost UK economy in 2012

The UK will be increasingly reliant on travel and tourism in 2012 as jobs and economic growth in the sector outstrip the wider economy.

According to a report released today by the World Travel&Tourism Council (WTTC), the industry will grow by 1.3 percent in 2012 – over double the rate of growth in the wider economy, predicted to be 0.6 percent by the International Monetary Fund.

This rate of growth means that the travel and tourism industry is expected to directly contribute £35.6 billion and almost 950,000 jobs to the British economy.

When the wider economic impacts of the industry are taken into account, travel and tourism is forecast to contribute over £100 billion to the UK economy and generate 2.3 million jobs – or 1 in 13 of all jobs in the UK.

During 2012, some 30 million people will visit the UK, as the country maintains its position as one of the top 10 most-visited nations.

In 2011, the industry grew by 4.1 percent in the UK – or 5 times the rate of the economy as a whole; according to the Office of National Statistics, the UK economy grew by 0.7 percent in 2011.

David Scowsill, President and CEO of WTTC, said: “At a time of significant economic hardship, the travel and tourism industry is helping to beat the recession by generating jobs and growth at a faster rate than the wider UK economy. 2012 is likely to be bolstered by the cheap pound, the continued trend for domestic holidays, and the extra Bank Holiday weekend for the Golden Jubilee. The London Olympics are unlikely to have any significant effect.”

Figures for the UK for 2012 show a marked difference to the European Union as a whole. A tightening of consumer spending, uncertainty around the future of the Eurozone, and peripheral economies of Greece, Spain, Italy, and Portugal, and the impact of austerity measures kicking-in will result in a contraction of the industry of 0.3 percent.

The WTTC’s annual Economic Impact Report also shows that the global travel and tourism industry is set for a milestone year as the industry’s direct contribution to the global economy is expected to pass $2 trillion in GDP and 100 million jobs.

The report forecasts that the global travel and tourism industry will grow by 2.8 percent in 2012, marginally faster than the global rate of economic growth, predicted to be 2.5 percent.

This rate of growth means that the travel and tourism industry is expected to directly contribute $2 trillion to the global economy and sustain some 100.3 million jobs.

When the wider economic impacts of the industry are taken into account, travel and tourism is forecast to contribute some $6.5 trillion to the global economy and generate 260 million jobs – or 1 in 12 of all jobs on the planet.