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

In the UK Budget delivered last night, Chancellor George Osborne announced that tax on long-haul flights to New Zealand would be cut, effective from the 1st of April 2015. This will result in a £26 (NZ$50 at today’s exchange rate) saving 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. 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 significant disincentive for UK visitors to travel to New Zealand

Passengers travelling to long-haul destinations like New Zealand and Australia have been paying nearly 10 times more APD than those making short-haul trips to 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 travelers.”

Lesley Immink, Chief Executive of the Tourism Export Council has also 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 adds that making travel easier is an important stage of the Tourism 2025 growth framework, which will be released next Monday (the 24th of March).

“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.”

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