Crunch time for government’s consultation on APD

16 Jun 2011 by BusinessTraveller
With the UK government’s consultation on the reform of Air Passenger Duty due to close tomorrow (June 17), airlines and airports are making their voices heard. BA has released a statement outlining what it calls a “three-pronged approach” to reforming APD, in order to “make it more consistent with the Government’s overriding objective of economic growth”. The airline is calling for the current four APD bands to be reduced to two – flights of up to 2,000 miles and those over 2,000 miles – to help “address the current disproportionate burden on longhaul flights, and the discrepancies that arise by using capital cities to determine bands”. BA also wants premium economy seats to be taxed at the same rate as economy, rather than at the higher rate applying to Club World and First cabins. Finally the carrier says that APD rates should not be increased beyond present levels, and should start to be phased out “once revenues from the European Union’s Emission Trading Scheme start flowing to the UK Treasury in 2013”. Meanwhile Virgin Atlantic has proposed similar reforms, including the re-banding of premium economy charges, and “a change in the anomaly that means passengers flying to the Caribbean pay more APD than those flying 5,000 miles further to Hawaii”. The carrier is also opposed to the possible “South east” levy, which could result in passengers travelling from airports in the South East of England paying an extra fee to subsidise a discount for those flying from regional airports. Unsuprisingly Gatwick airport is also against this proposal, branding calls by regional airports to increase taxes on passengers flying from London airports as “utter nonsense”. In a statement the airport said: “Re-branding the tax as a charge on congestion is disingenuous. Any suggestion that Gatwick is congested is wide of the mark. Last year, Gatwick handled around 32 million passengers but can see a clear path to grow to 40 million by the end of this decade. “The argument that a differential tax system would help boost inbound tourism to the regions also falls foul of logic. The vast majority of international passengers – leisure and business – visiting the UK simply want to visit London. “To ask them to fly into a remote regional airport and then take a train is simply ludicrous. They may just decide not to come to the UK at all.” Passengers travelling on flights falling within band D (those over 6,000 miles) currently pay an APD rate of £85 in economy, and £170 in premium economy, business and first class.
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