News

APD increases “a further blow to the industry”

25 Nov 2008 by Mark Caswell

Airlines have criticised the Chancellor of the Exchequor’s decision to double Air Passenger Duty on long-haul flights by 2010.

Under plans unveiled by Alistair Darling yesterday, APD rates will be split into four bands depending on the distance travelled (see below for the full breakdown of rate changes). For business class passengers travelling on long-haul flights to destinations in Asia and Australia (band D), this will mean an increase from the current rate of £80, to £110 in November next year, and £170 in 2010, a hike of over 110 per cent in two years.

Long-haul economy passengers will be equally as hard hit, with the rate of band D flights increasing from £40 today, to £60 next November, and £85 in November 2010.

The increases come as Darling announced he was scrapping the proposed Aviation Duty, which would have introduced a “per-plane” tax, designed to ensure airlines filled their planes.

A spokesperson for Virgin Atlantic Airways said that while it was pleased that Aviation Duty has been scrapped, the new rates would badly affect business in the UK.

“Such an increase is unjustified, as the aviation industry already contributes £2bn a year via APD, which far exceeds the environmental costs of the industry. The increase will have an adverse impact on UK jobs and the UK economy. The industry has made, and is making, significant progress in improving its environmental record and we’re disappointed that the Chancellor has penalised us further.”

BA also criticized the move, saying that it was disappointed that aviation had been targeted for increased taxation.

“Government figures show that UK airlines are already fully meeting their environmental costs”, a spokesperson said. “There can be no environmental justification for this, and extra taxation is a further blow to the industry at a time when it is reeling from the combined effects of rising costs and falling demand.”

Easyjet’s Andy Harrison said that the government’s green credentials had been “brushed aside in a dash for cash [while] the emissions from cargo planes, private jets and transfer passengers continue to be tax free.”

The full breakdown of the changes in APD rates is as follows:

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