Jun 2010 Financial News

UK airline tax threatens tourist industry ... again

Jun 24, 2010

An emergency budget presentation in the United Kingdom (UK) on Tuesday, suggesting the government will go ahead with planned increases in the air passenger duty (APD) this November, has sent shock waves throughout the Caribbean's tourist industry.

While in Opposition, the UK's ruling party had suggested in its manifesto that the aviation tax would have been applied to each airline, and not per passenger as was done under the Labour government. However, it appears that now faced with a hole in their budget the new government has made an about-turn.

Under the APD, a family of four flying to the Caribbean (from November onwards) will pay £300 in duty, an increase of 87 per cent. For passengers travelling in Premium Economy - an important market segment for the Caribbean - and Business Class, the corresponding increases will be 25 per cent and 94 per cent, respectively.

The news comes at a time when the Caribbean is doing very poorly in the European markets, with reports from the Caribbean Tourism Organisation showing that arrivals declined 4.3 per cent in the first quarter of 2010.

"Their silence on the matter suggests the current system and the band that the Caribbean is in will remain," argues Jamaica's Tourism Minister Edmund Bartlett. He added that the region was expecting the UK Government's position on APD would be very clear. The Caribbean is currently in a higher band than Hawaii, a US state.

"The Caribbean will be in a most disadvantageous position, and the cost to us would increase significantly," said Bartlett, speaking to The Gleaner from Toronto, Canada, yesterday.

WESTERN BUREAU:


Source:
Jamaica Gleaner
Thursday June 24, 2010

http://jamaica-gleaner.com/gleaner/20100624/news/news3.html