Industry unites to fight possible APD hike

3 Mar 2011 by BusinessTraveller

A campaign for the reform of Air Passenger Duty has been launched ahead of the Budget, backed by 25 of the industry’s biggest names.

The Fair Tax on Flying campaign, coordinated by Abta, has the support of airlines including British Airways and easyJet plus airports, tour operators and organisations including the Board of Airline Representatives in the UK. It will use the internet to put pressure on the government via an online petition on Facebook.

The group is concerned at the level of APD and also about anomalies in it which they say is affecting the UK’s competitiveness. A chief concern is APD’s effect on long-haul flights. The campaign claims some passengers, particularly premium passengers, are avoiding higher rate APD by transferring at European hubs instead of flying direct.

In a letter to the Chancellor, the campaign says any increase in APD will “incentivise the strengthening of alternative hubs to the UK both in and outside Europe and reduce the number of connections and destinations served by UK airports.”

The group also argues that APD must be adjusted to take account of the income that the EU’s Emissions Trading Scheme will bring from 2012. It also wants the premium economy APD banding changed, as it is currently designated the same as first class seating.

Fair Tax on Flying also argues that the tax take from APD is far in excess of that needed to offset the environmental effects of flying, which the Department for Transport estimated at between £2.18 and £3.30 for short-haul flights and £18.05 and £20.04 for long-haul. APD’s current range is between £12 and £170.

The chancellor will outline plans for APD in the Budget on March 23.

British Airways chief executive Keith Williams said: “We recognise the exceptional difficulty of the country’s fiscal position and we are content to pay our fair share.  But the UK airline industry is already the most heavily taxed in the world and any further tax burden will be counterproductive to the country’s economic recovery.”

Report by Gary Noakes

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