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UK Air Passenger Duty cut a boost for NZ tourism

UK Air Passenger Duty cut a boost for NZ tourism

The tourism industry is welcoming the decision by the UK government to cut Air Passenger Duty (APD) on long-haul flights.

In the UK Budget last night, Chancellor George Osborne announced that tax on long-haul flights to New Zealand would be cut with effect from 1 April 2015, resulting in a £26 (NZ$50) cut per passenger or for a family of four, £104 (NZ$201).

New Zealand tourism bodies have long been advocating for a reduction in the APD on the basis that it is a barrier to long-haul travel and is nothing more than a blunt taxation instrument to help reduce debt.

In a joint submission made to the UK Treasury in 2011, the Tourism Industry Association New Zealand (TIA), the Tourism Export Council (TEC), the New Zealand Airports Association and the Travel Agents Association of New Zealand (TAANZ) argued that the APD, combined with other air travel taxes, was a strong disincentive for UK visitors to travel here.

Passengers travelling to long-haul destinations like New Zealand and Australia have been paying nearly 10 times more APD than short-haul European destinations, says TIA Chief Executive Martin Snedden.

The UK is currently New Zealand’s fourth largest visitor market in terms of arrivals (191,632) and third largest in terms of spend ($608 million). In 2008, just before the APD was increased significantly and as the Global Financial Crisis was beginning to impact, the UK was our second largest market by arrivals (285,094) and spend ($1.32 billion).

NZ Airports Chief Executive Kevin Ward says the APD has been an impediment to tourism, travel, and economic development.

“We have argued for a flat per person levy irrespective of destination or class of travel undertaken. While the Chancellor’s announcement does not go that far, it does help ease the impact for long haul travellers.”

Lesley Immink, Chief Executive of the Tourism Export Council representing inbound tour operators, has welcomed today’s announcement.

“The UK has been a tough market for us over the last five years, not helped by the high level of the APD. When taken with the strength of our dollar, it has made this market challenging.”

Mr Snedden says making travel easier is an important action in the Tourism 2025 growth framework which will be released on Monday.

“Taxes like the UK APD and the Australian Passenger Movement Charge are a handbrake on growing sustainable air connectivity, a key theme of the 2025 framework.”

• The reduction in APD will take effect from 1 April 2015 with the per person cost on long haul travel to New Zealand reducing from £97 (NZ$188) to £71 (NZ$137), or for a family of four from £388 (NZ$752) to £284 (NZ$550).

Click here to read the joint 2011 submission.


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