Thursday, 5 November 2009

Government must reform air duty and financial protection urges senior travel trade figure

The Government should charge air passenger duty on a per plane basis - and sort out the absurd geographical anomalies which mean travellers to the Caribbean pay more than those flying to Los Angeles.

That was just part of a shopping list presented to MPs and Peers at the House of Commons yesterday by Peter Long, chief executive of TUI Travel - which owns Thomson and other tour operating brands.

Long, travel industry elder statesman, also called for the scrapping of next year's planned, further rise in APD and argued that the higher rate should not be applied to premium economy passengers - such as those flying in BA's World Traveller Plus cabin.

Turning to financial protection for consumers he urged Ministers to extend the ATOL (air travel organiser's licence)financial safety net to all passengers buying through interest or High Street retailers - or clicking through to accommodation sites after booking flights.

None of this is without self interest. Package tour charters generally fly fuller than scheduled services. And your operators don't see why they - or their passengers - should have to fork out to support the financial protection system when others get away without contributing.

But he makes perfect sense. Charging APD per plane encourages efficient burning of fuel. There can be no argument that the banding system, based on the distance of a capital city from the UK, badly needs revising (there was some hope this week that the case of the Caribbean islands, which consequently fall into the same band as whole of the US and Canada - including their West Coast cities - might be resolved by the Government. I will not repeat my earlier tirade against the imposition of the higher APD rate on premium economy passengers, which remains grossly unfair.

So far as the ATOL system is concerned there it looks likely the issue of gaps in the protection net may be addressed in a consultation paper due soon from the Department for Transport. Other voices, besides Long's, will then be added to the chorus of support for reform.

The Government got its fingers burnt after last year's Excel collapse when it insisted travellers who were not covered by an ATOL should be repatriated along with those who were, leaving the Civil Aviation Authority - not with 100% success - to bill them for the special fares they agreed to pay at the time.

At a time when every penny counts, the threat that the Treasury might have to stump up after future collapses might just be enough to prod Ministers into action at last. Let's hope so.

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