UK government sticks to APD increase of 8% on April 1

The UK government has confirmed the Air Passenger Duty (APD) will rise to 8% April 1 as previously announced, despite strong lobbying from airlines, airports and the tourist industry to cancel the tax. It is also keeping plans for a further “inflationary” increase in APD from April 2013. 

“At a time when the government talks about creating jobs and growth, its blinkered insistence on further increases in Air Passenger Duty achieves precisely the opposite,” IAG CEO Willie Walsh, easyJet CEO Carolyn McCall, Ryanair CEO Michael O'Leary and Virgin Atlantic CEO Steve Ridgway said in a joint statement.

The UK APD is one of the highest air travel taxes in the world. It is calculated on a four-band structure and varies from £13 ($20.63) for an economy-class ticket in Europe to £92 for a ticket to a Band D destination (over 6,000 miles). The amounts are doubled for a ticket in premium economy, business or first class.

“In every other leading country, aviation is an expanding industry that underpins and facilitates growth in other parts of the economy. In the UK, rises of up to 360% in APD in the last seven years are squeezing the life out of the economy. The [UK Civil Aviation Authority] CAA has confirmed that UK passenger numbers last year were the same as in 2004,” the CEOs of the country’s four largest airlines added. They argue the “APD must be scrapped.”

Board of Airline Representatives in the UK (BAR UK) chief executive Mike Carrivick described the decision to stick to the APD hike a “reckless brake” on the economy. “A policy of disproportionately high air travel taxation and a failed aviation policy provide two glaring examples of how the government’s aim for economic recovery is being damaged by its own doing,” he said.

The Airport Operators Assn. said it was “dismayed” at the APD decision.

The UK government also confirmed it will proceed with plans to bring executive jets into APD from April 2013, as outlined in December.

On a more positive note, Chancellor George Osborne said the country had to “confront the lack of capacity in the southeast of England.”

Article Source : ATW Daily News