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UK airports demand Government action on APD and sustainable aviation fuels in 8 July Budget

With an emergency Budget due on 8 July the Airport Operators Association (AOA), the trade association representing over 50 UK airports, has called on the Government to reduce Air Passenger Duty (APD), conduct a far-reaching review into its impacts, and ensure any reduction in APD in Scotland and potentially Wales is matched by a cut  in all parts of the UK. The AOA is also calling for the Government to provide economic support for the development and roll-out of sustainable aviation fuels.

In a formal submission to the Treasury, the AOA has made a number of requests to the Government. These include:

• Reduce APD so that it is in line with the UK’s nearest European competitors
• Establish a thorough and far-reaching review to consider all aspects of the APD regime and its impact on aviation, tourism and business
• Ensure that any future reduction in APD in Scotland and potentially Wales is matched, immediately, by a cut in all parts of the UK, so that no area is disadvantaged in any way
• Provide economic support for the scaling-up and rollout of sustainable fuel production for the aviation sector, ensuring that aviation is entitled to the incentives already available for road transport fuel producers

On APD, Darren Caplan, Chief Executive of the AOA, said: “Whilst we are grateful to the Treasury for taking action in recent Budgets to reduce the longest haul APD rates and abolish the tax altogether for children, we are still uncompetitive compared to our nearest European rivals who either do not levy air taxes at all, or who do so at much lower levels than in the UK. This is continuing to damage the UK from a tourism perspective and sends out the wrong message to the rest of the world with respect to the UK being open for business.

“The overall rate of APD has been increasing for a number of years now, and is expected to net the Government a staggering £3.7bn by the end of the decade, compared to less than £1bn in 2007. It cannot be said that aviation is not paying its fair share to contribute to the Treasury coffers.

“The ongoing situation with regards to the Scotland Bill and the future devolution of the tax north of the border offers a genuine opportunity to see a substantial reduction in the tax in all parts of the country. With the Prime Minister making it clear before and during the recent general election campaign that he will not allow cities in other parts of the UK to lose out as a result of Scotland potentially reducing APD by 50%, as the SNP has promised to do, the Government needs to set out proposals that will make this a reality. We believe that the only way to do this, without creating any distortions, is to match whatever happens in Scotland, and if this means halving APD across the UK then so be it.”

On sustainable aviation fuels, Darren Caplan, Chief Executive of the AOA, said “On the issue of sustainable aviation fuels, we believe that providing economic support for the scaling-up and rollout of sustainable fuel production for aviation would offer tangible advantages for both the Treasury and the UK as a whole. It could cut the carbon intensity of aviation fuels, reduce reliance on oil imports and boost the UK economy, potentially creating 4,400 jobs and adding £265 million to GDP by 2030. In order to make this technology a reality, however, the sector requires policy support from Government to help these innovative projects get to commercial scale and to build trust in emerging technologies. It is only fair that sustainable fuel producers for aviation should be entitled to the incentives already available for road transport fuel producers.”