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CBI rejects anti-congestion airport tax

Jan. 12, 2013 at 12:58 PM   |   Comments

LONDON, Jan. 12 (UPI) -- A British bushiness group said it rejected the concept of raising a passenger tax at specific airports to persuade travelers to take alternative routes.

The Daily Telegraph reported Saturday the British Treasury asked HM Revenue and Customs to explore raising the Air Passenger Duty at Heathrow and Gatwick airports near London, as Heathrow is operating at full capacity and Gatwick is projected to hit that mark in six years.

"We're already losing business to other European destinations so we can't kick this into the long-grass," said a representative for the business group, the Confederation of British Industry.

"We need new connections with fast growing markets like China, India and South America -- with space for airlines to put on new flights," the representative said.

Heathrow operators said they oppose the plan that the Treasury said was only an idea being studied as a "research project to inform policy making in general."

The study found raising the Air Passenger Duty selectively -- bumping it up 50 percent for Heathrow and Gatwick airports -- would increase the cost of a flight from New York to London by about $50.

The study also found the number of passengers at Heathrow would drop by 23.1 million per year to 18.9 million. The number would fall at Gatwick from 35 million per year to 12.8 million by 2014.

The numbers would then likely climb, the study found, as other airports would operate at full capacity over time. At Heathrow, for example, passenger traffic would climb back to 23.3 million by 2022, the study found.

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