Industry Disappointed by ‘Missed Opportunity’ for UK APD Tax

Many industry campaigners have responded to the British Government’s decision to maintain the Air Passenger Duty (APD) tax it levies on passengers departing from UK airports. Industry representatives had urged the Chancellor of the Exchequer, Philip Hammond, to scrap or reduce the levy which they say has a damaging effect on airline ticket sales. However, in his November 22 budget the chancellor announced that from April 2019, the APD charge will be frozen for those travelling in economy, but increased for premium passengers travelling on long haul flights or in executive jets.
Originally introduced in 1994, APD applies to all (except transit) passengers who are flying from a UK airport. Originally designed to be a tax that helps to mitigate the environmental effects of flying the rules regarding the level of the fee and the age limit on those required to pay it have changed on several occasions. However, the UK charge is still significantly higher than that levied by any other European government.
Commenting on the Chancellor’s announcements on Air Passenger Duty, Chief Executive of the UK’s Airport Operator’s Association (AOA), Karen Dee said:
“We welcome the Chancellor’s recognition that Air Passenger Duty (APD) is a burden on families and businesses and has taken the decision to freeze it. However, UK APD remains double the next highest rate in the EU so it is disappointing that the Chancellor has not gone further to address the competitive disadvantage this creates for the UK.
“Aviation is crucial to connecting the UK to the existing and emerging markets that will be vital to our post-Brexit future. APD is a “tax on trade” that holds back growth in the UK’s international connectivity and hits people and businesses travelling to enhance our global trading relationships as well as the tourism industry that contributes so much to all UK regions.
“The AOA also believes that any cut in APD anywhere in the UK should be matched by a cut everywhere else. For that reason, the UK Government should commit to match APD to the Scottish Government’s planned Air Departure Tax, regardless of the delayed introduction announced today and should ensure that the planned review of APD in Northern Ireland looks at APD across the whole of the UK.”
Glyn Jones, Chief Executive Officer of Stobart Aviation, owners of London Southend Airport said: “It’s disappointing that the chancellor has missed the opportunity of reforming short-haul air passenger duty (APD). Smaller airports need help to compete on a level playing field particularly with Brexit around the corner.
“A partial freeze on the tax is woefully short of what we need. It should be removed from smaller airports which would encourage airlines to base more flights outside the larger airports.
“Smaller airports need a reasonable return on the significant capital that is invariably invested. It’s not difficult to see what the result of increasing costs and falling demand due to Brexit could have on these businesses.
“An APD reduction would help address the capacity crisis, particularly in the south east, which so often exacerbates the delays passengers face.”