A Decision by the British government to increase a tax on all flights leaving the United Kingdom has airlines and tourism and travel organizations in that country worried about the effect the increase will have on air travel into the U.K.
On February 1, the Air Passenger Duty, one of those “taxes, charges, and fees” added to airfares, doubled. The tax on long-haul flights in economy class increased from £20 to £40 (about $78.58 U.S.), while the duty on long-haul flights in business class increased from £40 to £80 ($141.14).
The tax is being imposed retroactively so that it applies to tickets already purchased for travel after February 1.
Chancellor of the Exchequer Gordon Brown, front-runner to replace Prime Minister Tony Blair later this year, announced the tax increase in December as a green measure, arguing that it can help to reduce demand for airline flights and, therefore, the effect aviation has on climate change.
But the Board of Airline Representatives in the U.K., an organization representing airlines doing business in the U.K., has harshly criticized the increases since their announcement. Its chief executive, Michael Carrivick, called the tax a blunt instrument that fails to differentiate between airlines that are sensitive to environmental concerns and those that are not. He also argued that the minimal effect on the environment would be far outweighed by the damage to the airlines and the U.K. economy.
As for the impact on the U.K. as a destination, Peter Haigh, a principal consultant with Hamilton Haigh Associates in London and president of Meeting Professionals International's U.K. chapter, said it depends if other European countries follow Britain's lead. “If not, then I think it might have an adverse short-term effect,” he said, adding that he is just as concerned about the impact the monetary exchange rate is having on groups looking to come to the U.K.