THE cost of air tickets will rise from today when the first of two increases in Air Passenger Duty (APD) airport departure tax takes effect.
It is feared the rises – which are passed on to passengers through ticket prices – will lead to key routes being pulled from the region’s two airports, as well as acting as a barrier to new services being secured in the future.
Business leaders say that would have a devastating impact on the North East economy, with reduced passenger numbers at Newcastle International and Durham Tees Valley and some firms forced to relocate because of the lost connectivity.
The rises come as aviation bosses on Tyneside say they have managed to cling on to a vital long-haul route.
Newcastle International Airport has revealed it has secured its existing service to Toronto for another year after a detailed set of negotiations with operator Canadian Affair.
But despite the good news, the airport has re-issued its warning that other key routes could be pulled from the region’s two airports as a result of the rises in APD, which are passed on to customer ticket prices.
Newcastle International head of planning and corporate affairs Graeme Mason said: “This prestigious service linking Newcastle with Toronto is important for our region, which is why we are continuing to support and work closely with our partners at Canadian Affair.
“This route brings a large number of Canadians into the region, visitors we and the region would lose without this service.
“We once again call upon the Government to respond to the damage that higher Air Passenger Duty (APD) levels will have upon the UK economy if services like this one were to cease.”
APD is levied on how far the capital of the destination country is from London and there are four bands, all of which are set to rise in November, having previously doubled in 2007.
From tomorrow, APD on an economy short-haul flight to Europe or North Africa will rise from £10 to £11 and in November next year to £12.
Duty on flights to the USA, Russia and the Gulf will increase from £40 to £45 and then to £60 in 12 months, a Caribbean flight will see its APD increase from £40 to £50 and then £75. And economy flights to Australia will increase from £40 today to £55 and then £85. That means by next year, a family of four – or even a team of business colleagues – flying from Newcastle to Australia using Emirates will pay £340 in APD, more than double what they currently do. The UK is the only country in Europe to have such a tax. Both Newcastle and Durham Tees Valley airports have reported a fall in passenger numbers because of the recession and fear the increases to APD will have a similar effect when they come in, potentially compounding the problem.
Businesses, universities and tourism bosses have told how vital good air links are to them and what the impact on their organisations would be if key services were pulled.
A poll by London-based travel industry exhibition World Travel Market (WTM) showed 52% of 1,030 people surveyed – all of whom holidayed this summer – said they would reduce their overseas holidays due to the APD increase.
And 13% said they would stop overseas holidays altogether.
Younger holidaymakers were the ones most likely to cut back on foreign breaks due to the increase.
In a separate WTM poll of 459 senior travel industry professionals, almost two-thirds said they would also reduce their holidaying due to the APD rise.
WTM chairman Fiona Jeffery said: “The increases in APD could be a real concern to both the UK outbound and inbound travel industries. APD was doubled in 2007 and will more than double again by November 2010, so it’s easy to understand why holidaymakers could be put off travelling abroad by this and next year’s increases.”
Another survey, by low-fare airline easyJet, showed 80% reckoned all flights, including cargo and private jets, should be taxed, while 69% said APD ought to be designed to tackle climate change.
Also, 65% agreed that APD should also cover foreign transfer passengers.
EasyJet chief executive Andy Harrison said: “APD is a daft tax that the Government promised to reform. It broke its promise and increased the tax burden on the average family.
“People don’t understand why their tax is going up again while pampered fat cats on private jets, cargo planes and foreign transfer passengers still don’t pay any tax at all. How can the Government justify a tax break for 20 million foreign transfer passengers while charging a British family of four £44 to go to Europe?”
Page 3: 'Huge tax hikes are bad news for holidaymakers'
'Huge tax hikes are bad news for holidaymakers'
BUSINESS leaders, airlines and travel firms have hit out at rises to Air Passenger Duty.
British Airways customer services director Silla Maizey said: "These huge tax hikes are very bad news for holidaymakers - and completely unjustified.
"The Government says the tax is environmental, but its figures show aviation already meets its environmental costs without any increase in APD."
Mark Tanzer, chief executive of the Association of British Travel Agents (Abta), said: "We’ll continue our efforts to make the Government see sense on next year’s rises, which will be even higher than Sunday’s.
"It may well be by then that we have a different political party in power and it will also be even clearer just how damaging these increases are both to the UK economy and those nations worldwide that depend heavily on tourism."
He said he was urging all Abta members "to raise customers’ awareness of this socially-useless tax which even the Government has stopped pretending is solely a ’green’ tax but in fact a significant money raiser for the Treasury."
Steve Ridgway, chief executive of Virgin Atlantic Airways, said: "These proposed increases will not only hurt the aviation industry but also harm the British economy and those of many developing countries, like the Caribbean, which heavily rely on the tourism trade. It will also tax many hard-working British holidaymakers out of flying altogether.
"We are therefore calling on the Conservatives to see sense on this issue and commit to scrapping the planned increase for 2010 if they are successful at the next election. Everyone knows the airline industry, along with the wider UK business community, will be severely damaged by these unjust future increases in APD.
"The Government seems to claim this is an environmental tax despite a total lack of evidence to support this claim. Aviation is already paying its own way for carbon emissions generated and any further increases in APD are simply lining Government pockets."
A CBI spokesman said: "Aviation will be an important driver for the economic recovery through making international markets more accessible to UK businesses."
Page 4: New service
AN airport reeling from the loss of a route to the capital has been given a boost.
Airline bmi pulled its Durham Tees Valley to London Heathrow service in February, blaming inflation-busting charges at the airport and rising Air Passenger Duty (APD).
Airport bosses said the rises in APD encouraged fliers to hop over to the continent to connect with services to more far-flung destinations, rather than use domestic hubs.
Now Eastern Airways has launched a new Southampton service, with two flights each weekday in both directions.
Airline chiefs say that provides commuters with the option on travelling on to London, which is 75 miles away, by train or by motorway.
Chris Holliday, Eastern Airways’ chief operating officer, said: "Our new service not only serves Hampshire and the south coast region, but also provides an alternative option for Tees Valley business travellers visiting the M3 corridor and south west London.
"Our schedule allows commuters to maximise their day in the south before returning that evening."
Richard Whitehouse, Durham Tees Valley Airport’s aviation development manager, said: "We’ve already received a very positive response to the announcement of the new service.
"The South East is obviously one of the most important markets for companies from our region and it means that they can now get full value in term of time and money, arriving in time to do a full day’s work and also avoiding an overnight stay."