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Three quarters of adults in England and Wales think that Air Passenger Duty (APD) should be equal across all UK regions - A Fair Tax On Flying
Three quarters of adults in England and Wales think that Air Passenger Duty (APD) should be equal across all UK regions

5976264120_7476b52226_zAdults in England and Wales are backing the alliance of airports, airlines, travel companies, and leading businesses, who are calling on the Government to reduce Air Passenger Duty (APD) by at least 50% – on all short-haul and long-haul flights – to enable the UK to compete on the global stage.

The campaign ‘A Fair Tax on Flying for the Whole Country’ which launches today, is being led by ‘A Fair Tax on Flying’ – a coalition of travel and tourism partners seeking to lower levels of APD – with a view to abolishing this tax altogether. The UK’s air travel tax is amongst the highest in the world – five times the global average and double that of Germany which is the next highest in Europe. Our immediate neighbours – Ireland and the Netherlands – have abolished their tax altogether.

Campaigners warn that this is having a negative impact on the country: making the UK a less attractive destination to trade with, invest in, and visit.

A new poll by independent polling company ComRes reveals that three quarters (75%) of adults in England and Wales think that the amount of APD in the UK should be same, regardless of which airport you fly from. Six in 10 (63%) say that all countries in the world should charge the same level of APD. A majority (60%) also said that the cost of flying is very important in determining how often they travel abroad. Additionally, only around three in ten (27%) English and Welsh adults trust the Government to set reasonable tax rates for APD.

The power to control APD is in the process of being devolved to the Scottish Government, who have made a commitment to cut APD by 50%. To ensure that the whole of the UK can benefit from a lower air tax, ‘A Fair Tax on Flying for the Whole Country’ is calling for the UK Government cut APD for everyone.

Darren Caplan, Chief Executive of the Airport Operators Association (AOA), spokesperson of the ‘A Fair Tax on Flying for the Whole Country’ campaign, said:

“APD is among the highest taxes of its kind anywhere in the world, and at its current level, it is clearly unfair on families and businesses across the UK. APD puts the country at a relative disadvantage.

“Families and businesses should pay the same amount of APD whether they’re from Inverness, Ipswich, or Innsbruck – it’s only fair. The message from the wider public is loud and clear – they simply want a level playing field.

“We believe that reducing APD by at least 50% across the country will make a substantial difference to families, by making flights more affordable. Someone who works hard has every right to enjoy holidays with their family – without being charged a premium for departing from the UK.”

Nick Longman, Managing Director of TUI UK and Ireland, said:

“We take more than 5.5 million customers away every year on holidays which offer exceptional value for money. We believe this is an unfair tax and we have welcomed previous changes to APD rates, but we think more still needs to be done. This is to ensure UK customers are not at a disadvantage and so the UK aviation industry can remain competitive with other markets. We want to make it as affordable as possible for our customers to travel wherever they want to in the world and we remain fully supportive of the fair tax on flying campaign.”

Case studies:

1. Continental Airlines operated a direct daily service between Bristol and New York between 2005 and 2010, carrying over 400,000 passengers during this period.  Significant increases in Air Passenger Duty played a part in the airline’s decision to withdraw the route after five years of operation, with a significant rise – from £45 to £60 on an economy fare (£90 to £120 on business class tickets) – set to take effect from November 2010, when the service was withdrawn.  Business visits from the US to the South West region subsequently fell by 17.5 per cent in the following year, compared to a 6 per cent increase across the UK as a whole.  Recent analysis suggests that at least one long-haul scheduled service would be viable now from Bristol if APD were to be removed.

2. The stark impact of APD was highlighted in a 2012 report commissioned by Aberdeen, Edinburgh and Glasgow airports which analysed the impact of APD on Scotland. The York Aviation2 report warned that in addition to costing Scotland two million passengers per annum, by 2016, APD will cost the Scottish economy up to £210 million in lost tourism spend per annum.

3. According to Liverpool John Lennon Airport, APD remains a barrier to airline growth in the UK. Whilst past changes to APD with the abolition of the two highest bands have been welcomed, they have had no effect at all on traffic at regional airports such as Liverpool. Here the vast majority of passenger traffic is served by low-cost operators, for whom changes are required at the lowest bands of APD.

Airlines have made it very clear that APD continues to be a factor in them developing more intra-European services as opposed to flights serving the UK market. APD needs to be reduced for regional airports or removed altogether in order to stimulate the market, particularly for Airports such as Liverpool, where low cost airlines are dominant and where APD makes up a higher proportion of the air fare compared to long haul and premium fares. A typical twice weekly service to a destination in Europe from Liverpool will cost around £200,000 per year in APD. A cost that is simply not incurred for flights between most European airports.

In addition, the double charging of APD on domestic sectors continues to act as a deterrent to new domestic services linking the regions of the UK and has previously been cited as a factor in decisions to curtail services. At Liverpool for example, VLM’s decision to quit flying from LJLA to London City Airport in 2007, was a direct consequence of a doubling of APD. Over half the cost of a one way domestic fare can be the APD, favouring other modes of transport that do not suffer the same taxation.

ENDS

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