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A senior British Airways official has warned Caribbean countries that the region’s tourism sector could be negatively affected from the start of 2012 when airlines will have to account for their emissions of carbon dioxide whenever they fly into the European Union (EU).
British Airways Chief Executive Officer Keith Williams addressing the Caribbean Tourism Organisation (CTO) inaugural “State of the Industry Conference” said the controversial United Kingdom imposed Airport Passenger Duty (APD) could further impact the tourism market.
"We continue to protest against the rises in APD and I hope the government’s recent consultation will lead to a more equitable banding system that does not penalise the Caribbean," he said.
He added that the British government is expected in the next few weeks to announce a further increase in the duty.
The APD is an excise duty paid by airline passengers travelling from UK airports. The tax is levied according to groups of countries and by the class of travel used.
Caribbean governments have lobbied against various anomalies in the APD noting that the flights to the Caribbean attract a higher tax than flights to destinations that are much further away, such as the United States.
Earlier this year, the region welcomed the decision by London to postpone until April next year, an increase in the APD.
Chairman of the Barbados-based CTO Richard “Ricky” Skerrit, who is also the Tourism Minister of St. Kitts and Nevis, said that British travelers to the region would not now have to pay any additional tax increase for a year.
Before November last year, each economy class traveller to the Caribbean paid £50 (US$77) in APD, but that tax was increased to £75 (US $115) - the second in as many years. The levy for premium economy, business and first class passengers rose from £100 (US$154) to £150 (US$291).
Williams said that the inclusion of the airline industry in the Emissions Trading Scheme (ETS) will have negative repercussions.
“There is no denying that it will have an impact on tourism and it will not be the one you are looking for, the ETS mix together with the Air Passenger Duty will only increase the cost of travel to this region,” he said.
Williams said he remains hopeful that the next reform of the APD will not put additional pressures on the Caribbean.
“Right now it cost a family of four, 300 pounds sterling (US$473) more to travel from London to a Caribbean destination and we are bracing ourselves because things are not expected to get better but worst with regards to the cost,” he added.
Williams said under the ETS, airlines flying to Europe will be required to purchase permits to allow them to emit additional tons of carbon dioxide above a predetermined cap. According to the proposals, sanctions for non-compliance will include fines and flight suspensions.
Williams said that while economic indicators point to a decline in spending, British Airways remains financially sustainable.
“Looking at British Airways, the good news from the BA perspective is despite the economic downturn, there has been a significant demand for premium travel which allows us to refute the claims there is no market today from our first class product and indeed that we’ve invested in and we continue to invest in our premium products,” Williams said.
“The Caribbean is an important destination for us and we have a long heritage of serving the region. However, we can’t deny the reality that demand is not as high as it has been, It is no coincidence that our reduction in the number of services to the Caribbean is accompanied by a rise in services to Florida – another destination for UK sun-seekers, and a destination that is taxed at a rate 20 per cent less than the Caribbean,” he said.