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Industry APD bill rose £42m in January

Economic secretary to the Treasury Justine Greening will address the Abta Travel Matters conference in London today as latest government figures show revenue from Air Passenger Duty (APD) rose by 27% in January on a year ago.

Monthly income to the Treasury from APD hit £196 million in January, up by £42 million on January 2010 following a sharp rise in rates last November.

The increase came despite a fall in passenger numbers year on year in the three APD band rates – B, C and D – applied to medium and long-haul air fares. Only the number of passengers on short-haul flights in band A was up at the start of this year over January 2010.

Treasury income from APD this January was 2.5 times as much as in the same month in 2007.

Greening is responsible for the reform and administration of APD in the coalition government.

The Treasury launched a six-month consultation on APD reform on the day of the Budget last month. However, the proposals for changing APD banding allow for just two options – neither allowing an overall reduction in revenue or much reduction in the higher rates of APD.

Abta will meet fellow members of the Fair Tax on Flying coalition later this week to plan the next phase of the industry’s campaign to reform APD and reduce its impact on travel.

A Conservative MP, Greening led opposition in Parliament to plans for a third runway at Heathrow, describing the previous government’s expansion proposals as “reckless” and arguing: “The economic benefits [of a third runway] have been vastly overstated.”

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