AOA’s response to Chancellor’s failure to cut APD

The Airport Operators Association, which represents more than 50 UK airports, has responded to the Chancellor’s Budget Statement, which failed to cut Air Passenger Duty (APD).

The association’s Chief Executive, Karen Dee said: “Airports provide the necessary infrastructure for the UK’s international connectivity, with aviation the transport mode of choice for most people travelling to and from the UK and for 40% of the UK’s trade. Boosting that international connectivity through unlocking new destinations will be crucial to achieve the Chancellor’s aim of building the foundations of a stronger, fairer, more global Britain.

“That is why it is a missed opportunity for the Chancellor not to have cut Air Passenger Duty today and instead announcing another rise in line with RPI in 2018/19, on top of the RPI rise from April 2017. The UK’s APD is already one of the highest air taxes in the world. With most of our nearest neighbours either charging nothing or less than half of what the UK levies, APD is a tax on the UK’s global competitiveness and connectivity.

“Halving APD, as the AOA had called for alongside A Fair Tax on Flying campaign partners, would have brought the UK into line with the next highest APD equivalent in the EU, in Germany. It would have encouraged airlines to schedule new routes between the UK and new destinations, including in emerging markets, by making those flights more economically viable. It would also have made boosting capacity on existing routes more attractive.

“Cutting APD will boost the UK’s international connectivity and we urge the Chancellor to take action at the first available opportunity. We also continue to urge the Chancellor to make clear that any cut in any part of the UK would immediately be matched across the rest of the UK.”

AOA responds to Autumn Statement

The Airport Operators Association (AOA) – the trade association representing UK airports – has issued a statement highlighting its disappointment at the failure of the Chancellor to cut Airport Passenger Duty (APD) in his Autumn Statement.

AOA Chief Executive Darren Caplan said: “It is disappointing that the Chancellor has failed to seize the opportunity to cut Air Passenger Duty today and demonstrate that the UK is open for business by doing so. The UK’s APD is one of the highest air taxes in the world and with our nearest neighbours either charging nothing or less than half of what the UK levies, it harms our global competitiveness.

“The AOA will continue to make the case that APD is unfair on families and is a tax on the UK’s global competitiveness and connectivity. The vast majority of tourism and business travellers, and those visiting friends and family, travel to and from the UK by air, with 40% imports and exports by value carried with them in the belly hold of planes. APD therefore holds the UK back from realising its full economic potential.

“Halving APD would have sent out a signal internationally and encouraged airlines to schedule more routes to the UK and fly more frequently on existing routes, boosting the UK’s connectivity. We urge the Government to cut APD as a matter of urgency and by doing so open up new trading opportunities, including with emerging markets.

“We note that the Government has published a summary of responses to its consultation on how to support regional airports in England from the potential effects of APD devolution but has not announced its preferred course of action. The AOA is clear that a cut in APD anywhere in the UK should be matched, immediately, by a cut everywhere, so that no parts of the country are disadvantaged in any way. We call on the Treasury to publish a plan that sets out how and when this can be delivered.”

The UK is one of only six EU countries that imposes aviation taxes.

Ryanair calls on UK Government to scrap APD

Ryanair has called on the UK Government to scrap Air Passenger Duty (APD) for all air passengers.

The airline claims that the VAT received from additional tourist spending would far outweigh any revenue lost by axing the tax.

Since the Irish Government axed its own APD in April 2014, Ryanair has launched 21 new routes to/from Dublin, Knock and Shannon airports, which, the airline claims, will this year increase passenger numbers travelling through the Irish airports by 1.7m.

Protestors Increase Anti APD Campaign

The Government stands firm on its decision to keep the profit making Air Passenger Duty (APD) tax.

However, anti-APD campaigners continue to barrage MPs about the damaging effects it is having on the UK’s economy and aviation industry.

APD, infamously referred to as the ‘air congestion tax’, is here to stay, so it seems, as the UK struggles to copy with finding extra air space.

Leading anti-APD campaigners, A Fair Tax on Flying, now look to put additional pressure on the Government following the expansion of Lilian Greenwood’s role as Labour front bencher, which sees her brief now include aviation. The Fair Tax On Flying group says the move gives substantial time to step up the pressure on the Opposition between now and the General Election in 2015.

The British APD is around 30 times higher than similar taxes charged across the world. As a result, the UK Government brings in £2.3 billion a year in revenue generated from APD. And by 2015 this is set to rise to a staggering £3.8 billion.

Aviation, travel and business heads, both in the UK and internationally, believe the UK will ultimately lose out on vital business due to the tax, along with losing major aviation business to competitor European hubs. Business that cannot afford to be lost, especially as the aviation and travel industry is one of the largest contributors to the UK economy, contributing around £20.6 billion a year!

The gradual rise in APD has certainly had an effect on the amount of long haul traffic out of the UK – in the last two years long haul travel has witnessed a dramatic decline as the expensive APD add-on to holiday prices puts long haul destinations off the map for many.

As a result of the affect APD is having on long haul travel, more than 50 tourist board wrote to the Government saying that further rises in APD would have “serious consequences” for them – in particular Caribbean countries, such as the Bahamas and the Dominican Republic, where this year numbers have declined rapidly.

So much so, Barbados is launching a ‘free spending money’ campaign in a bid to draw UK holiday makers back to the country as they see their tourism industry decline, potentially have devastating effects to their economy.

A rapid rise in short haul destinations, with more affordable APD charges apply, has been seen, with Spanish destinations topping the popularity stakes from nearly all UK airports this year.

The Government is set on increasing APD each year. If you would like to voice your concerns over APD then you can lobby your local MP. Alternatively join the Fair Tax On Flying campaign.