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U.K. plans to raise air travel tax once again

Over the past few years, the British government has repeatedly increased its Air Passenger Duty (APD)—a head tax on all airline travelers departing the country—to the point where it is the highest of any major nation. And in 2013, the government plans to raise it again, raising an outcry from the airline and travel industries on both sides of the Atlantic.

According to budget plans released by the U.K. government last week, the APD will rise by about 2.5 percent in April 2013. Not all types of travel are affected; the tax on short-haul economy class flyers will remain at 13 pounds ($21), for instance. And the increase for others will be modest, increasing by just 2 pounds ($3.20) on longer flights of more than 2,000 miles.

But travelers on private jets, who were previously exempt, will now have to ante up a tax of $83 to $603 per person, depending on the length of their flight.

The relatively small increase on most travelers didn’t make the plan go down any easier for opponents, since the existing APD is already extremely high.

“Increasing this already oppressive tax depresses the demand for air travel to and from the U.K. and unfairly penalizes airline customers,” said Nicholas Calio, CEO of Washington D.C.-based Airlines for America (A4A), the U.S. industry’s trade group.

A4A said the U.K.’s Air Passenger Duty “is the largest single tax passengers face anywhere in the world.” With the planned increase, A4A said, the APD adds $107 one-way to the price of economy tickets from London to the U.S., and $215 to premium seats.

“This is a tax the Treasury has already hiked with a 300 percent rise since 2007,” said a spokesman for the Association of British Travel Agents. He noted that the latest increase comes at a time when “European governments are recognizing the damage that air passenger taxes are having on their own economies, and are abandoning or freezing their own taxes.”

In a survey of U.K. airports by the Airport Operators Association, every respondent supported a freeze on the APD until the government can study the economic impact, and 83 percent said that even at current levels, the nation’s APD is having an impact on whether carriers will fly out of their airports.

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