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New $250 Tax Threatens London Air Gateway

Will Amsterdam Displace London as European Entry Point

By Dan Schlossberg
ConsumerAffairs.com

February 3, 2007

• Be a Traveler, Not a Target • Money Solutions for the Traveler • Travel News

London's loss could be Amsterdam's gain.

A new tax that doubles that air passenger duty on long-haul flights may convince Americans bound for Europe to choose the cheaper Amsterdam as their port of entry.

The tax, first imposed in December, adds more than $250 in taxes and fees to the cost of a ticket from the U.S. to the U.K. On a typical ticket, that's more than twice the tax-plus-fees surcharge added to a ticket between the United States and the Netherlands.

To compound the felony -- at least in the eyes of passengers -- the British government has also hiked taxes (as of Feb. 1) on domestic flights and those within Europe. Revenues raised by the fees are ticketed for public transportation and environmental programs.

Although the tax hikes became official on Dec. 6, they were made retroactive. That means passengers who paid in full before that date are receiving additional bills to cover the new fees.

Although British Airways agreed to cover those bills -- at a cost of $20 million -- other airlines are insisting that passengers pay up, sometimes in advance.

Virgin Atlantic is collecting the tax at the airport, while Ryanair insists upon advance payment. And all carriers not named British Airways are refusing to board passengers who won't pay the retroactive tax.

Both Britons and those who use British airports are miffed about the new tax but furious about the retroactive application. And both government and airline officials are concerned that Americans who once saw London as a low-cost base for European travel will switch their focus to Amsterdam.

EasyJet, a discount carrier often used by visiting Americans seeking to see several cities in Europe, serves both Amsterdam and London. Ryanair, another discounter, does not fly to Amsterdam but serves a myriad of other cities. An outspoken opponent of the tax, it ran a three-day sale of "free" travel, charging passengers nothing but the taxes, fees, and charges, that ended Jan. 25.

Ryanair's website even features a "Wanted" poster of U.K. Chancellor Gordon Brown, who imposed the fees, that depicts him as a gun-toting cowboy on a horse. The poster refers to him as "a heinous outlaw" and calls the tax "highway robbery of the worst kind."

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