Rise in British airline taxes will hurt region – Minister

By Admin Wednesday December 11 2013 in Caribbean
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ST. GEORGE’S: The Government of Grenada says it is disappointed that Britain has not agreed to a reduction in the controversial Air Passenger Duty (APD) that Caribbean countries say puts them at a disadvantage and hurts its tourism industry.


Tourism, Civil Aviation and Culture Minister Alexandra Otway-Noel said she was disappointed that British Chancellor of the Exchequer, George Osborne, in his “Autumn Statement” to Parliament last week, did not announce a reduction in the taxes at a time when tourist arrivals from the United Kingdom were on the decline.


In his address, Osborne said that the increase in the tax, which goes into effect from April 1, 2014, would increase the cost of medium and long-haul flights from Great Britain.


According to estimates, this means that a family of four traveling economy to the United States will pay £276, (one British pound=US$1.63 cents) up from £268, while the APD would move from £332 to £340 if they were travelling to the Caribbean. Moreover, those opting for premium economy, business, or first-class cabins, will be required to pay double the sum.


Noting that this is the sixth time there has been an increase in the APD, Otway-Noel said she was also disappointed that the decision to follow through with the tax increases was carried out in spite of the lobbying done by Caribbean tourism officials for the British to halt the APD augmentation.


Otway-Noel was part of a delegation that met with the Treasury Ministry in Britain while on her recent trip to the World Travel Market. Several Ministers and Caribbean tourism officials have lobbied with the British government over the tax that has been on the rise for several years.


She said that the increases would continue to have serious implications on the tourism sector.


“Persons in the Diaspora will continue to find it difficult to travel to the Caribbean to visit their family and friends,” Otway-Noel said. “This tax is keeping families apart. We understand that the British government has a right to tax its citizens but all the Caribbean region is asking for is a level playing field, so that we can compete. The APD tax was originally implemented as an environmental levy and the banding structure is based on that. All we ask is that the tax be standardized.”


The proposed rise of the APD will impact negatively on the Caribbean tourism industry. Tourism is the top income earner and employer in the region and traditionally the United Kingdom has been one of the strongest markets.


Otway-Noel said she anticipates the increase will further negatively impact the Caribbean’s current economic situation.

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