APD should be reformed to support sustainable aviation fuels

Part of the almost £4 billion a year raised by Air Passenger Duty should be used to support the development of alternative aviation fuels.

The call came today from Heathrow as it revealed that passenger numbers rose by 1.8% in the first half of the year to reach a record 38.8 million.

The London hub called for reform of APD as part of the government’s goal of achieving net zero carbon by 2050.

“We are calling on the UN’s aviation body Icao to set targets for the use of biofuels in aviation, as recommended by the Energy Transition Commission,” Heathrow said.

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“We also call on the government to invest some of the nearly £4 billion annual revenue raised from Air Passenger Duty to scale-up production of sustainable fuels.

“APD is the highest of its kind in the world, and the revenue raised is not used to help manage the environmental effects of aviation.

“Given the scale of the challenge and society’s desire to address climate change, it is right that the money air passengers are already paying should be spent alongside contributions from industry to scale-up alternative sustainable fuels and develop new clean technologies sooner.

“We will continue to use our position as one of the world’s top aviation hubs to drive this important change by the wider industry.”

There is “further scope” for the government to help the aviation industry move faster by working with other governments to prioritise sustainable fuels for aviation, Heathrow claimed.

“This will send a strong signal to producers to increase investment in biofuel and synthetic fuel production and start to reduce the cost of production; and invest some of the annual £4 billion it already raises from air passengers in the form of Air Passenger Duty in the production of sustainable fuels.”

The issue was highlighted as Heathrow reported a 61% rise in adjusted pre-tax profits to £153 million in the six months to June 30 over the same period last year on revenue up by 4% to £1.46 billion.

Regarding Brexit, the airport said: “Extensive operational contingencies are in place which will help to minimise any potential impact on passengers.

“In addition, Heathrow has sufficient resources to cope with an unlikely no-deal Brexit and still meet its obligations, including progressing our expansion plans.”

Long-haul routes continued to be the key driver of growth in the first half of 2019, with numbers up by 3.3% on last year.

North American traffic was the fastest growing market through increased load factors, flight frequency and aircraft size to a number of destinations such as New York (JFK), Boston and Miami, and new routes to Las Vegas and Dallas.

Traffic to Africa also grew strongly driven by increased frequency to Johannesburg and new routes to Marrakesh, Seychelles and Durban.

Short haul traffic remained in line with last year, with UK carryings declining 1.2% and European traffic up by 0.3%.

Heathrow CEO John Holland-Kaye said: “2019 is shaping up to be a strong year for Heathrow – our colleagues are delivering an excellent service to passengers, we’re investing millions to improve the airport and secure new skilled jobs for the future and we’ve set out our plans to expand Britain’s hub airport sustainably and affordably.

“We support the goal of net zero carbon emissions by 2050, and are working to ensure that global aviation plays its part.”

MoreUK Air Passenger Duty ‘won’t be reduced’

France unveils tax on flying

Operator sets out green alternative to Air Passenger Duty


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