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Air Passenger Duty To Rise by 8 Per Cent From April 2012 Affecting the Caribbean holidays industry

The British chancellor, George Osborne, announced yesterday that APD would be increased by eight per cent in a double inflation rise. The rise will apply from April, 2012 and will significantly affect the price of flights for Caribbean holidays.

Air Passenger Duty To Rise by 8 Per Cent From April 2012 Affecting the Caribbean holidays industry

Despite receiving an open letter from aviation, tourism and trade unions, calling for a freeze on the APD increase, the British chancellor has decided to go ahead with the eight per cent double inflation rise on the tax.

The rise in APD will affect the price of flights coming in and going out of the UK and travellers planning Caribbean holidays will see a hike in the price of flights to the region as airlines are forced to add the hike to their fares.

The APD rise will come into effect from 1st April, 2012 and is disappointing news for tourism and aviation leaders who fought to scrap the duty completely.

"The government has repeatedly said it looks to travel and tourism as one of its key drivers of growth but instead of listening to concerns that APD is stunting this growth, not only in travel but in the wider economy too, it has chosen to significantly increase the tax burden,” stated Mark Tanzer, the Chief Executive of the Association of British Travel Agents.

 Caribbean Beaches
Image by: *michael sweet*, on Flickr

APD was introduced in 1994 and is charged according to how far away the capital of a country is from the United Kingdom. Despite Florida and Hawaii being located further from the UK, the country’s capital New York is closer than many Caribbean capital cities, so passengers taking holidays to the Caribbean are charged more.

Last year, the British chancellor, George Osborne, announced a freeze in APD for 12 months but it seems that passengers travelling in and out of Britain are now paying for that freeze with the highest flight taxes in the world.

Osborne also confirmed in his Budget speech yesterday that the APD would rise again with the rate of inflation in April, 2013.

 Caribbean Beaches
Image by: *michael sweet*, on Flickr

The worst hit travellers will be those planning long haul trips such as holidays in the Caribbean, the United States, the Middle East, South Africa, South America and Australia.

The cost of APD for a family of four flying to the United States or Egypt has risen from £240 to £260, and the same family taking flights to the Caribbean or South Africa, will now pay £324, compared to the previous £300.

In the open letter which was delivered to the British Chancellor prior to the Budget announcement, tourism, aviation and trade unions urged the government to scrap the duty, saying that by removing it, an additional 91,000 British jobs could be created and £4.2 billion would be added to the economy in just 12 months.

 Caribbean Waterfalls
Image by: worldtraveller5, on Flickr

The news is also a blow for the Caribbean tourism industry which is only just beginning to recover from the global recession. The region’s economy heavily relies on travellers going on holidays in the Caribbean and the increased APD could see families heading to destinations that are closer to the UK or to the United States.

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