The senior UK-based executive of Dubai’s Emirates Airline has hit out at the British government’s tax on air travel, claiming it is anti-competitive and hindering the recovery of the British economy.
Emirates’ UK vice-president Laurie Berryman said Air Passenger Duty (APD) was essentially “a tax on business” and was a major challenge for growth at a time when companies were still feeling the impact of the global downturn.
“If the government is trying to encourage us to come out of the recession with SMEs (small and medium sized enterprises) exporting more... why would you tax them flying off to Indonesia and Vietnam? They are paying a big chunk of tax every time they visit those markets,” Berryman was quoted as saying in an interview with trade publication Buying Business Travel.
Dubai carrier had seen “strong demand” in the UK and last year carried 800,000 passengers on its routes to the main northern British cities.
APD currently costs £52 ($79) for short-haul flights and up to £376 ($575) and while it has an obvious impact on the growth of the travel market, or the UK economy as a whole as Berryman claimed, analysts said it is unlikely to scrapped any time soon
“APD is a hefty hit to ticket prices for customers flying out of the UK. What's worse is that it is unlikely ever to be scrapped since is a pretty cool way for the government to raise near endless revenue as they know that leisure, tourist and business travellers simply have to fly to go overseas and people will end up paying it,” said Saj Ahmad, chief analyst at StrategicAero Research.
“Laurie Berryman is right about APD - while the government can rub its hands at the sight of its coffers expanding via APD revenue, on the flipside, it is punishing those who want to export or create trade links with emerging and resurgent economic regions outside of the EU,” he added.
“There isn't the incentive to do so - all you're doing is paying tax to fly, which is probably more than double the cost of the actual ticket in some cases - how can that be economically sensible in austere times like these that the UK is trying to get out of?”