UK APD Rises Again

(Photo: Tony Dixon)

THE UK’S controversial Air Passenger Duty (APD) has come under renewed criticism after the announcement of a 10% increase from April 1. 
Several of the UK’s largest carriers, including British Airways, easyJet, Ryanair and Virgin Atlantic, wrote to the British Government’s Chancellor, George Osborne, in late March highlighting the anti-competitive nature of the aviation tax.  Figures released in February by the Office for National Statistics reveal that government collected an extra £500 million during 2011, a 25% increase over the previous year.  The group added that since its introduction in 2007, APD has continued to rise while the number of visitors travelling to the UK by air has fallen by 15% over the same period. 
Virgin Atlantic CEO Steve Ridgway remarked in his letter to the Chancellor: “It is shocking that UK APD is already the world’s highest air passenger tax.  Given the importance you [the Chancellor] rightly place on international trade and inbound tourism in driving growth, increasing the cost of international business visiting the UK is the last thing that should happen at this time.” 
Ryanair CEO Michael O’Leary commented: “UK regional airport traffic and jobs are collapsing due to APD and with another increase due, the disproportionate effect it is having on regional UK traffic, tourism and jobs over London is set to continue.”  He added that the “insane policy of taxing tourists instead of welcoming them is deeply damaging to regional airport traffic, tourism and jobs,” and called for plans to scrap the tax. 
The 10% increase to APD is double the current rate of inflation and, for the second time in five years, it is being applied retrospectively, which means passengers who booked flights before April 1 will be asked to pay the higher rate.