Airlines call for Air Passenger Duty to be scrapped

 

Michael O'Leary of Ryanair and Willie Walsh of the International Airlines Group unite in opposing the tax

Four airlines from the UK and Irish Republic are calling for the UK government to scrap Air Passenger Duty.

The tax, which is applied to almost every ticket on a flight originating in the UK, has risen sharply since it was introduced in 1994.

When APD was introduced, passengers whose journey originated in the UK paid between £5 and £40 per ticket. They now have to pay from £24 to £170.

It is opposed by Easyjet, Ryanair, Virgin Atlantic and British Airways.

The airlines say it penalises British holidaymakers and makes the UK a less attractive destination.

The amount of APD that passengers have to pay depends upon whether their flight is short or long-haul, with business and first class travellers having to pay more than those with an economy ticket.

A Treasury spokesman said that the government had frozen APD this year, and that, unlike many other countries, the UK did not levy VAT on flights.

Environmental campaigners opposed the airlines' move, saying APD helped combat global warming.

"Air Passenger Duty plays an important part in tackling aviation's significant impact on climate change," said Richard Dyer of Friends of the Earth. "Ministers must stand up to this unfair lobbying."

Revenue raising

BBC transport correspondent Richard Lister said: "The chancellor put this year's increases on hold, but a further rise of around 10% is expected next year.

Start Quote

We consulted on a range of reforms to APD, including simplifying the tax and making it fairer by extending APD to private jets”

End Quote Treasury spokesman

"The airlines say that as the tax was first introduced to combat greenhouse gas emissions it should be abolished with the introduction of the EU's Emissions Trading Scheme next year.

"The government is considering making changes to Air Passenger Duty, but has made clear that it regards the tax as an important way of raising revenue, and expects it to generate more than £2bn this year."

Ryanair chief Michael O'Leary told the BBC that removing APD would not increase the airlines' profits.

"This has nothing to do with our profits. It is paid by families, paid by passengers going on holidays," he said.

"If it is scrapped, the money goes straight back into families' pockets."

Mr O'Leary also said that as a result of APD, 30 million fewer overseas visitors had come to the UK in the past five years.

He added that with UK passengers having to pay the new Emissions Trading Scheme tax from January, they will be "taxed on the double".

Willie Walsh, chief executive of International Airlines Group, the owner of British Airways, called on Chancellor George Osborne to set up an independent review of APD.

"This tax is hugely damaging and must be scrapped," he said.

"We challenge the chancellor to undertake an independent review, which will show that the net effect of this tax is damaging."

Consultation process

A Treasury spokesman said: "We consulted on a range of reforms to APD, including simplifying the tax and making it fairer by extending APD to private jets.

"We will say more on this in the coming weeks.

"It is also important to remember that the UK is not the only country with an passenger duty, and unlike many other countries the UK does not levy VAT on flights."

At the start of this month APD was reduced for direct long-haul flights from Northern Ireland, in response to competition from services in the Irish Republic, which has an Air Travel Tax of just three euros to any destination.

 

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  • rate this
    +29

    Comment number 32.

    I have a better idea. Let's scrap all taxes and the NHS, the state education system, the armed forces, the police, waste disposal, the prisons, etc. Not a good idea? People like me who can afford to fly can also afford to pay their share in taxation whatever the special pleading of those poor souls who run the airlines.

  • rate this
    +38

    Comment number 31.

    An industry that pays no VAT, but can claim it back, pays no fuel duty, and doesn't pay any compensation for pollution, including noise, and expects to go tax free? Anything that could get this pair together must be suspect. APD is far less than VAT or fuel duty would be - it should go up.

  • rate this
    -11

    Comment number 30.

    I have just spent £106 for two single flights to Paris in january. I want to use some Avios miles for two business class BA flights to Berlin for August and the taxes are £330 for two! stupid, over pricing the independant traveller and the average uk family out of the idea of flying now.

  • rate this
    -1

    Comment number 29.

    I would rather get charged VAT on a flight than this APD. At least I can claim back VAT on my travel expenses. APD is a black hole tax where there is no way to recoup the costs of me doing business. Unfair and very expensive.

  • rate this
    +3

    Comment number 28.

    Politicians should pay a stupid comment and idea tax. The exchequer would make a fortune. Most of them are like Baldric, with his "I have a cunning plan"

  • rate this
    -1

    Comment number 27.

    So, APD was introduced to reduce CO2? I take it then that the Govt. can produce independently verifiable figures to show exactly how much less CO2 has been produced as a result of this tax? No, didn't think so. This whole eco-greeny thing is just an excuse to raise taxes. Sadly, I thought that "tax solves everything" was a Labour mantra, but it seems it's this Govt's too!

  • rate this
    +25

    Comment number 26.

    Foreign holidays are a luxury and add nothing to the UK economy. This tax encourages holidays to be taken in the UK and this adds to national employment. APD therefore is an excellent and progressive tax. It is hard to understand how it "damages" the UK economy as the airlines claim.

  • rate this
    +11

    Comment number 25.

    If we're all for simplification of taxes, let's get rid of this tax, and instead apply VAT at 20%, and fuel duty & tax as per a normal vehicle. The government will still get some of their 'revenue', whilst getting rid of one more tax. Simplify, simplify, simplify. Easy!

  • rate this
    0

    Comment number 24.

    We don’t really want a vibrant economy with less folk unemployed do we ? Far better to pander to the greenwash agenda in the false belief its good for votes. Despite the fact no one votes Green, enter “carbon taxes”, emission trading, etc. & ignore the real damage to our economy, jobs, prosperity. China – take note of what to avoid.

  • rate this
    +1

    Comment number 23.

    Taxing something that already bears a high percentage of tax is nothing new to UK governments; just look at petrol, where we pay VAT in the duty which makes up a significant amount of the cost in the first place.
    I predict the airlines & public will be fobbed off with platitudes & assurances that the government "shares our concerns".

  • rate this
    +3

    Comment number 22.

    Every Year i spend a week in The Highlands, Scotland on holiday. Every year the flights have gone up and up to a point where it is more economical to drive the 550 mile journey.

    2 years ago 3 plane tickets was about £400, this year they wanted £900

    Unless this changes then every year we will drive.

  • rate this
    +4

    Comment number 21.

    Except that they will be from next year Simon and this tax is not a tax on the airline, it is a tax on the passenger. It has absolutely no bearing on what the airline charge per ticket or what they pay in tax, it is a government tax on the end user, us, and something that is crippling British business and tourism.

  • rate this
    +5

    Comment number 20.

    Comment 1. hits the nail on the head. This tax encourages people to stay at home and spend their holiday money in the UK.

  • rate this
    +3

    Comment number 19.

    APD or not, isn't it about time all these excess charges were clearly shown in the advertised price. Passengers should pay the advertised price and should then receive the package they actually paid for.
    At present add-ons are frequently applied at will. Package holiday alterations are even worse with their last minute itinery changes when it's too late to cancel or change provider.

  • rate this
    -13

    Comment number 18.

    And stuff the environment huh? As long as us decadent Westerners can afford chea flights to the sun who cares about the massive damage done to the environment by flying around the world.......it's no wonder we're in such a mess.....anything that discourages us from willfully trashing the planet on which we all rely for life is a good thing.......

  • rate this
    +4

    Comment number 17.

    I have never understood why airlines do not pay tax on their fuel. As someone who doesn't fly I would be happy for airlines to be taxed to the hilt, especially if it would help reduce the tax burden on me as a rural motorist A car is essential here in rural Northumberland, and I would argue that whilst a break on the continent is nice, it is hardly essential.

  • rate this
    +5

    Comment number 16.

    I think that this is a little misleading - tax forms a large proportion of what you pay for any product or service, but airline tickets are unusual in how clearly delineated this is. The airlines clearly like to promote this as a tax on passengers, rather than on their own business. And yet, were it abolished, I'm sure ticket prices won't fall that much, at least in the longer term.

  • rate this
    0

    Comment number 15.

    This tax effects everyone that visits this country too, so a great way to boost tourism then!
    Successive Governments seem great at stifling the economy at every turn.
    How about a few ideas to boost the economy - come on you lot on here, you have plenty to say. Lets hear it.

  • rate this
    +3

    Comment number 14.

    Careful how you word this article BBC. Some of the budget airlines I've been on I know will think you mean scrap their duty to air passengers.

  • rate this
    +2

    Comment number 13.

    The treasury spokesman is incorrect as. No country charges VAT on international flights.

    APT is avoidable as long haul passengers can save money by flying to Amsterdam or Paris first and then connecting to their destination. For economy flights to Australia the saving would be around £500 per passenger. For first and business class the savings would be much higher!

 

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