Government Consultation On Air Passenger Duty 'A Sham And A Waste Of Money', Say Airline Chiefs

Air Passenger Duty

First Posted: 6/12/2011 14:27 Updated: 6/12/2011 14:27   PA

Government consultation on the air passenger duty (APD) airport departure tax was "a sham and a waste of taxpayers' money", airline chiefs have said.

In last week's autumn statement Chancellor George Osborne confirmed an 8% rise in APD from next April.

The Treasury has released its response following consultation on APD, which is vehemently opposed by airlines.

Despite pleas to reduce, scrap or amend APD, the Treasury said the system would carry on as it is.

In a statement, the bosses of easyJet, Ryanair, Virgin Atlantic and British Airways parent company IAG, said: "The Government's consultation on APD has been a sham and a waste of taxpayers' money.

"We are left with a tax that has already cost 25,000 jobs, is doing increasing damage to the prospects for economic recovery, and sends a message to the world that Britain is a difficult and expensive place to do business."

They went on: "We are united in calling for the Government to commission an independent study of APD's overall economic value and impact. We have no doubt this would confirm that APD's negative effect on UK GDP (gross domestic product) significantly outweighs its revenue benefit for the Treasury. We call for this tax on passengers to be axed."

Under the new rates from April 2012, passengers in economy class flying no further than 2,000 miles from the UK will see their APD rise from £12 to £13.

In the next band up - covering flights from 2,001 to 4,000 miles - economy passenger APD will rise from £60 to £65, while those flying economy on trips between 4,001 and 6,000 miles will see their tax rise from £75 to £81.

APD for economy passengers on flights of more than 6,000 miles (such as trips to Australia) will find their APD rising from £85 to £92 in April 2012. APD for passengers in business class and first class will range from £26 on the shortest trips to as much as £184 on the longest ones from April.

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Government consultation on the air passenger duty (APD) airport departure tax was "a sham and a waste of taxpayers' money", airline chiefs have said. In last week's autumn statement Chancellor G...
Government consultation on the air passenger duty (APD) airport departure tax was "a sham and a waste of taxpayers' money", airline chiefs have said. In last week's autumn statement Chancellor G...
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06:20 PM on 12/06/2011
APD is a tax that collects income from an under-taxed industry for general taxation purposes. Airlines pay no excise duty or VAT on their fuel and APD is not a “green” tax, rather a proxy for the lack of fuel taxes on this industrial sector. We strongly support the Government’s view that APD is not a “green” tax.

Secondly, the demand impact of APD is very low, as both business and leisure air ticket prices are relatively unaffected by APD at these rates per band, despite industry claims otherwise. The Government’s own estimates of demand reductions show this to be minimal in terms of lower CO2 emissions. These are currently around 33.4 MtCO2 with DfT/HMT estimating APD causes between .6 and 1.2 tonnes of CO2 less than otherwise would be the case, although we think the actual impact is pretty negligible. We feel very strongly that passengers are not impacted by APD at all when viewed as a fraction of their total trip costs – they simply “pay and fly”. There is NO evidence otherwise – industry anecdotes and bleating don’t count!

The airline industry's anti-APD campaign has rightly been dismissed and we support the Chancellor's decision 100%.

Jeff Gazzard
Aviation Environment Federation
LONDON