Airport passengers are being cheated out of £2.5billion by retailers

After last week’s duty free revelation, a study undertaken by Kabbee, the award-winning licensed minicab price comparison and booking app, has today revealed that airport retailers fail to pass on an average of £2.5billion of VAT savings* to passengers travelling outside of the EU, each year.

Helping hundreds of thousands of air travel passengers get the best minicab fares to and from London’s airports all year round, Kabbee asked 1,000 of its frequent flyers what they thought of the tax pocketing behaviour of airport-based retailers.

Each year, approximately 116.5million people fly to countries outside the EU from London airports** and only 37 percent of Londoners knew why they had to show their boarding pass when buying from Duty Free, leaving 63 percent in the dark.

Joining hundreds of Brits who have already said they will refuse to show their boarding passes, including MP Chris Bryant and Dragon’s Den Duncan Bannatyne, well over half of those asked (59 percent) now refuse to conform.

The study has also revealed what consumers want to see happen – a massive 72 percent of respondents are calling for airport retailers to introduce a two-tiered price structure for EU and non-EU travellers. A surprisingly large 28 percent of consumers said they were less bothered about the tax arrangements.

Kabbee is encouraging consumers to urge retailers to ‘pass on’ the 20 percent saving, making travel that little bit more cost-effective, just as Kabbee does via its competitive airport journey fares. Each year, around 30 percent of all bookings via the app are to and from London’s airports. 

The licensed minicab firm has launched a petition to help consumers call for change. See the petition here.

MP David Gauke, the Financial Secretary to the Treasury showed his concern for consumers at airports last week, saying he wants retailers to pass on the savings to shoppers. He said “The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops.

“While many retailers do pass this saving on to customers, it is disappointing that some are choosing not to. We urge all airside retailers to use this relief for the benefit of their customers.”

Justin Peters, Kabbee Founder and CEO comments on the findings: “We know consumers are looking for more options to help make additional savings when taking a holiday, and the 20 percent discount they are losing out on, points us to one obvious way they can do this.

“We see hundreds of thousands of passengers booking journeys to and from the airport via Kabbee, so we offer competitive fixed fares that include parking spaces, in addition to a meet and greet programme, whereby the driver will personally assist the passenger and meet them at a designated location within the arrivals area. We hope our petition will help to make a real difference.”

-Notes to Editor-

Methodology

  • The study was conducted by Kabbee between 17/08/15 to 21/08/15 to 1,000 Kabbee users who have used the service to travel to / from a London airport in the last 12 months.
  • *Annual number of passengers flying to countries outside the EU from London airports (116.5 million) multiplied by average VAT paid in an airport (£21.31) equals £2.5billion of VAT held back.
  • The average VAT paid in an airport (£21.31) is calculated from the average spend per passenger in an airport (£127.84) by Londoners surveyed.
  • **116.5 million people fly to countries outside the EU from London airports each year, calculated by multiplying annual number of passengers flying from London airports (143 million) by percentage of Londoners surveyed that said they had flown outside the EU (81.4%).
  • The annual number of passengers who fly from London airports per year (143 million) is based on figures from each of the five airports (Heathrow, Gatwick, Stanstead, Luton and London City).

-Ends-

For more information please contact the Kabbee press office at Sense Communications at Kabbee@sensecommunications.co.uk or call 0203 551 3954.

About Kabbee:

  • Kabbee lets users instantly compare quotes from more than 60 leading London fleets – based on price, time, location and type of car – and then book and pay by cash, card or pre-paid account. This saves passengers time and money and increases fleet efficiency.
  • Kabbee was launched in June 2011 and has had more than 500,000 app downloads to date.
  • *Kabbee has recently launched its ‘Kabbee Treats’ Loyalty Programme, which rewards its users with goodies from Kabbee and some great brands such as LateRooms.com, Naked Wines, Pact Coffee, Hubbub, Housekeep, LOVESPACE, Bloom & Wild and La Gourmandina. The app’s top users are entitled to a selection of rewards, based on how many miles they have earned via Kabbee over a three month period. Kabbee’s users earn one mile for every £1 they spend, and earn more miles for referring friends to Kabbee, booking an executive cab or travelling to/from the airport.
  • Kabbee incentivises its users to earn credit with its Free Cabs programme. By simply sharing their referral code the user gets £10 free credit for any friend who makes their first new account booking and their friend will automatically get £10 free credit too! Please refer to full T&Cs.
  • Kabbee won the UK Mobile App & Design Awards for ‘Best Startup App’ in June 2014.
  • Kabbee was recently named as a ‘Future 50 Brand’ by Real Business, for being one of Britain’s most exciting and disruptive new businesses.
  • Kabbee won Bronze for ‘Best Travel & Tourism App’, as voted for by The Appys Awards 2014
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