Tui chief executive Peter Long has slammed the government’s decision to scrap plans for a per plane tax as a replacement for the current Air Passenger Duty.
Government sources over the weekend confirmed that the plans set out in the coalition agreement had been shelved. “We tried and tried [to find a way of implementing the policy] and it just wasn’t workable,” said a Downing Street source.
The government has previously refused to comment on speculation that it has dropped proposals to scrap APD because the Treasury has failed to find a way around international aviation regulations that make a tax on aviation fuel illegal.
In a statement, Long said: “APD in its current form is not focused on environmental benefit. A per plane tax would be the simplest way of reforming this tax and achieving a tax system that properly rewards and incentivises environmentally responsible behaviour. We expected the government to stand by its commitments to reform the aviation taxation system in this way.
He added: “We are surprised by the comments that a per plane tax may breach the Chicago Convention. The method of calculation we had proposed to government would be one that mirrored the European Union Emissions Trading Scheme (EU ETS). If EU ETS is compliant with the Chicago Convention, then we believe that a Per Plane Duty would be equally compliant.”
Long called for changes to the current banding system, which charges more on flights to the Caribbean than to Hawaii or the west coast of America..
“Should APD be retained, then government must, as a minimum, make changes to the current banding system and to the tax rates for premium economy seating.
“Customers choosing premium economy seating and, who are seeking a bit of extra legroom on their holiday flight are at present asked to pay the same amount out of their own pocket as a businessman flying first or business class on expenses.
“We remain committed to working with the government to ensure a more just tax system for British families.”