A total of 66 new routes from the UK could be added by airlines if Air Passenger Duty was abolished, a new study claims.
These include 20 domestic connections, 31 European short-haul connections and 15 long-haul routes outside of London.
The research, carried out by Frontier Economics and commissioned by Airlines UK, also found that of a sample of eight loss-making routes dropped by airlines in recent years could all have been viable if the air tax had been abolished.
The report concludes that by increasing the price of fares, APD dampens demand and impacts negatively on connectivity at UK airports.
It highlights that:
· APD was found to constitute as much as 50% of the price of an off-peak short-haul ticket – from UK to Poland – and 44% the price of an off-peak long-haul ticket – from UK to Israel.
· By raising around £3.4 billion per year, APD represents around the same cost as the total aeronautical revenue – the money raised through charges paid by airlines – generated by all airports in the UK.
· Through analysis of 2017 schedules data at the 20 largest airports in the UK by movements, a total of 66 new direct connections could “potentially” be viable if APD were abolished, such as:
o Domestic connections – examples include Liverpool to Southampton; Bristol to Leeds Bradford; and Edinburgh to Guernsey
o Short-haul connections – examples include Belfast to Madrid; Southampton to Barcelona; and Aberdeen to Munich
o Long-haul connections – examples include Bristol to Dubai; Edinburgh to Delhi; and Birmingham to Tel Aviv
Airlines UK chief executive Tim Alderslade said: “As we prepare to leave the European Union the government should be doing everything in its power to create the right conditions for economic success.
“Levying the world’s highest rate of tax on air travel is incompatible with this goal.
“APD is putting the brake on the UK’s economic growth with dozens of potential services, including long-haul connections outside of London, unviable under current conditions. The removal of APD will leave airlines in a position to respond with more routes, greater frequency and better connectivity for the whole of the UK.
“The message from this report is clear – get rid of this damaging tax once and for all and carriers will be in a position to respond in kind with more routes, greater frequency and better connectivity for the whole of the UK.”
EasyJet chief executive Johan Lundgren said: “Removing Air Passenger Duty would allow airlines to provide more routes and lower fares for passengers in the UK, offering even more choice and important economic connections.
“This is a clear opportunity for the government to help business all across the UK to do more business abroad.”
His counterpart at Virgin Atlantic, Craig Kreeger, said: “With Brexit on the horizon the UK should be working harder than ever to demonstrate it is open for business, not levying the highest rate of tax on air travel in the world.
“We need the government to send a clear signal that it is serious about helping us to connect to international markets and that it sees our world-class aviation sector as a key component of the nation’s future economic success.”