Campaigners call on Government to “take action now to make the UK’s aviation industry more cost-competitive”

‘A Fair Tax on Flying’ campaign has submitted evidence to the Treasury ahead of this year’s Budget. In their submission members cite mounting evidence illustrating the damage current levels of APD are doing, and the campaign repeats its calls for a macroeconomic review of the effects of the tax.

The submission states that “the Treasury is looking increasingly isolated on the issue of air passenger departure taxes” adding that:

  • “We believe strongly that increases in three of the four APD bands, and year-on-year rises in the APD take are making the UK economy increasingly uncompetitive.”
  • “Since we last wrote to you ahead of last year’s Autumn Statement the Scottish National Party have called for a 50% reduction in APD should they secure independence, with a view to scrapping the tax in the longer-term. Experience suggests that cross border air tax disparities can have a significant impact on demand for flying.”
  •  “[The Republic of Ireland’s] Air Travel Tax, will be abolished in April 2014.  We are concerned that this may have an impact on the competitiveness of flights departing from the Northern Irish capital, which are subject to APD on short-haul journeys… We would urge you to monitor the situation in Northern Ireland with regards to the damage that the abolition of the Air Travel Tax will have on flights from the country”

The submission cites the growing support for the review and reform of the duty, including the fact that “over 200,000 people and over 100 MPs (who signed EDM 174 in the 2012-13 Parliamentary session) have now called for the Treasury to undertake a macro-economic impact assessment of the economic impacts of APD.”

The 2014 APD increases (coming into force on April 1st) will result in the following APD levels being applied to passengers:

–          Band A (flights between 0-2000 miles) will remain at £13 in economy and £26 in all other classes

–          Band B (flights between 2001-4000 miles) will be increased to £69 in economy and £138 in all other classes

–          Band C (flights between 4001-6000 miles) will be increased to £85 in economy and £170 in all other classes

–          Band D (all flights over 6001 miles) will be increased to £97 in economy and £194 in all other classes

Darren Caplan, CEO of the Airport Operators Association said: “In a fast changing, globalised world, countries across Europe are recognising that air taxes are barriers to long-term growth and connectivity. The UK risks becoming a global outlier on this issue, as countries ranging from the Republic of Ireland to the Netherlands choose to abolish their respective air taxes. With Alex Salmond also promising to reduce APD if the SNP achieves independence, the Chancellor needs to recognise that the UK’s high levels of APD are simply unsustainable and his planned increases will only worsen our competitive position. We respectfully urge the Chancellor to use this Budget to change course.”

Simon Buck, Chief Executive of the British Air Transport Association said: “It’s my hope that the Chancellor will take this opportunity to re-think the Coalition’s approach to taxing air passengers. It’s impossible not to see that the UK is increasingly isolated now on APD. Germany has frozen its equivalent tax, the Republic of Ireland has scrapped its version and the SNP are pledging to reduce the tax under an independent Scotland. The Airports Commission will take over a year to make its full recommendations and construction of any additional capacity will take many years to build. But we can take action now to make the UK’s aviation industry more cost-competitive: by reducing APD.  We urge the Government to re-think its plans and to listen to the UK’s business community for whom this issue remains a serious ongoing concern.”

Mark Tanzer, Chief Executive of ABTA – The Travel Association, said: “With the UK economy showing early signs of economic recovery, now is the time for the Government to look again at this damaging duty. APD reform has the potential to accelerate the UK’s recovery and stimulate economic growth. With a growing numbers of MPs calling for a review, we urge the Chancellor to listen to the growing calls from across the political spectrum for action on this crucial issue.”

Dale Keller, CEO of BAR-UK, said: “A family of four flying to the UK from Australia in economy class from this April will pay £388 in taxes alone. It’s an undoubted disincentive to travel which is putting the UK at a competitive disadvantage. It’s no wonder that people are looking for ways to avoid paying APD by multi-ticketing through European hubs. If we want the UK to remain the hub for passengers vising Britain then we have to take action to reduce APD. The alternative is that savvy passengers will just start to transit through Amsterdam Schiphol or Paris Charles de Gaulle.”