T E N E R I F E ’ S O N LY Issue 677
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W E E K LY N E W S PA P E R
05 November 2010 - 11 November 2010
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New travel taxes won’t affect Tenerife tourists IF you believe this week’s horror stories about the “huge increases” in Air Passenger Duty (APD), which came into effect on Monday, it could put you off flying forever. But fear not! Tenerife and the other Canary Islands have avoided the British Government’s main tax increases by being included in the lowest duty bracket.. That’s because the air mileage to every country has been calculated between London’s airports and the capital cities of the world, and it has been determined in Bands A, B, C and D for tax purposes. Band A, covering shorthaul flights, has a range of 2,000 miles, which would ordinarily relegate Tenerife to the higher Band B rating. But because Santa Cruz, our capital, is several miles nearer to London than the South airport, it takes the Island under the limit and will cost each traveller from the UK just £1 more. True, Band D for long-haul trips takes in Australia, and that means a family of four, visiting relatives Down Under, will pay a punitive £340 in tax, or a ridiculous £680 if they opt for extra leg-room in premium economy. But they are hardly likely to make that journey too often, and most holidaymakers travelling economy class on short-haul flights won’t feel the pinch. The travelling distances are determined in a chart issued by HM Customs and Excise, which puts us alongside Turkey, Albania, Croatia and Cyprus, among many other countries deemed to be within the short-haul range. It is great news for the Tenerife tourism industry, but those flying to, say, Egypt, won’t be as happy
because they will each have to find an extra £15 as it has been bracketed in the Band B category.. Overall, though, the rise in APD has led to travel agents warning holiday-makers to check that advertised travel prices include the new taxes, to avoid any unwelcome surprises. The tax was introduced in 1994 at the rate of £10 on long-haul flights and a fiver for short-haul trips. It was radically restructured and increased in 2007 by the previous government. Labour said it was a necessary “green measure”, and the duty was determined according to whether travellers were flying long-haul or short-haul. On 1st November 2009, these costs were changed to fall into four distance bands: A, B, C and D, with the latter being the most expensive. Then, on Monday, exactly
one year later, the tax was increased further. Overall, those travelling economy class to short-haul destinations in Europe (Band A) will be least affected, their duty on flights rising by £1 to £12. But people flying to medium and long-haul destinations will be hit harder. But measuring the flight distances to a country’s capital city for UK travellers from London has led to anomalies. For example, on journeys to large countries such as the US, you can to fly to the state of Hawaii and pay less tax than if you travel to the Caribbean, which is much closer. Travelzoo UK, an online company which deals with the best last-minute deals, claims that many people in Britain are still not fully aware of the changes to APD, which have been branded a “disgrace” by British
Airways boss Willie Walsh. Phil Salcedo, publisher at Travelzoo UK, said: “The sad fact is that around 30% of the travel deals that we check simply don’t include taxes in the price. “It means that, with this new increase in tax, travellers need to be extra wary and make sure the price they expect to pay doesn’t increase massively when they get to a page of taxes.” He added: “We don’t think this is fair and we won’t feature or recommend deals from any travel company which doesn’t publish taxes and charges up front.” There is more bad news for
travellers in the B Band and upwards because the Government plans to double APD revenue by 2014 to £3.8 billion, which represents the largest stealth-tax rise to hit the travelling public. But because the Government increases in aviation tax have been hidden behind the overall price of an airline ticket, it is harder for increases to be understood by the travelling public. Mark Tanzer, ABTA Chief Executive, said: “For too long, our customers have been taken advantage of with successive governments seeing flying as a convenient cash cow.
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“These latest huge increases in APD will disproportionately affect families on tight budgets when they are under considerable financial pressure. Increasing taxes will make taking holidays and visiting friends and relatives unaffordable for many. “Not only is this tax increase pricing people out of taking holidays, but it is also putting the UK at a clear competitive disadvantage when compared with our European competitors. “ABTA is calling on the Government to call a halt to their planned tax rises that will see this flying tax double in the next five years and adopt a fairer tax system that will encourage real environmental improvements in air travel. “The government will continue to hike air taxes unless there is a public outcry, and ABTA is also calling on holiday-makers paying more for their flights to make their views known to their MP and stop further increases.” Colin Matthews, chief executive of BAA, said: “While we must all play our part in the recovery, we need a sensible tax policy that doesn’t stunt growth and damage our competitiveness, as this does. “Ultimately, increasing APD will hurt consumers and businesses alike as it makes it more expensive to fly from the UK compared with other countries. Thomas Cook believes the move is counter-productive, while Virgin Atlantic says family holidays will be “unaffordable for many.” The future looks bleak for medium and long-term travellers, but anything that boosts the tourism trade in Tenerife will be welcomed over here.