Autumn Statement: Disappointing Chancellor failed to seize opportunity to cut APD

Responding to the Autumn Statement, AOA Chief Executive Darren Caplan said:

“It is disappointing that the Chancellor has failed to seize the opportunity to cut Air Passenger Duty today and demonstrate that the UK is open for business by doing so. The UK’s APD is one of the highest air taxes in the world and with our nearest neighbours either charging nothing or less than half of what the UK levies, it harms our global competitiveness.

“The AOA will continue to make the case that APD is unfair on families and is a tax on the UK’s global competitiveness and connectivity. The vast majority of tourism and business travellers, and those visiting friends and family, travel to and from the UK by air, with 40% imports and exports by value carried with them in the belly hold of planes. APD therefore holds the UK back from realising its full economic potential.

“Halving APD would have sent out a signal internationally and encouraged airlines to schedule more routes to the UK and fly more frequently on existing routes, boosting the UK’s connectivity. We urge the Government to cut APD as a matter of urgency and by doing so open up new trading opportunities, including with emerging markets.

“We note that the Government has published a summary of responses to its consultation on how to support regional airports in England from the potential effects of APD devolution but has not announced its preferred course of action. The AOA is clear that a cut in APD anywhere in the UK should be matched, immediately, by a cut everywhere, so that no parts of the country are disadvantaged in any way. We call on the Treasury to publish a plan that sets out how and when this can be delivered.”

Notes to Editors:

  1. The UK is ranked 137th out of 138 when it comes to air ticket taxes and charges, according to the 2015 World Economic Forum’s Travel and Tourism Competitiveness Report.
  2. Six other EU countries levy aviation taxes, but all at substantially lower rates: the next highest aviation tax is in Germany, where they charges less than half the level of UK APD. Countries like the Netherlands and Ireland recently abolishing theirs.
  3. After the Republic of Ireland abolished its APD, Dublin Airport achieved the highest rate of passenger growth of any major airport in Europe, with a 15.4% increase in 2015. The number of Northern Ireland residents flying from Dublin increased by 52% the first year after Ireland scrapped the tax, according to Dublin Airport.
  4. The British Chambers of Commerce calls APD ‘a trade tax on global traders’. The CBI, Institue of Directors and many other leading business groups have also highlighted its damage.
  5. 40% of the UK’s trade by value uses aviation, predominantly in the belly hold of passenger aircraft. In terms of destinations, the majority of air freight goes to the US and Asia.
  6. With nearly 75% of inbound tourists travelling by air, according to VisitBritain, UK aviation supports nearly half a million jobs in the tourism sector and adding another £19bn to UK GDP, according to a report by Oxford Economics published in 2014.