Air travel costs likely to rise, budget appears to show

Hotel News - 24/06/2010

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Families are likely to suffer even higher costs, thanks to the latest budget. The Air Passenger Duty (APD) is already going up dramatically in November. The higher APD will lead to higher costs for families flying on holiday - a typical family vacation in the USA will be hit by an increase in APC to £300, from around £200. The latest budget seems to say that the government plans to double the money it gets from air travel by 2015, raising concerns that future tax rises are coming to the air-travel industry.

Starting in November, a family of four that flies to Florida will have to shell out 33% more in APD. Industry organizations checking the full text of the budget have found what they think are worrying signs that the government plans yet further tax increases. The Treasury generated £1.9 billion from taxes on air-travel last year. The 2010 budget says that amount should increase to as much as £3.8 billion in 2014-2015. Air-industry lobbyists Flying Matters are worried that the text in the budget points to further tax rises that consumers will end up paying.

The Air Transport Users Council thinks that asking people to share the cost of dealing with pollution is fair but asking passengers to stump up another 33 per cent is asking too much. British Airways thinks the threatened per-plane tax will do more harm than good. The airline says a per-plane tax will not help the environment at all but it will, however, weaken UK economic competitiveness and probably result in travellers having a slimmer choice of direct long-haul destinations from Heathrow.

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