British Airways is demanding that Air Passenger Duty bands be reduced from four to two as part of a three-pronged reform of the tax.
The four distance bands of APD should be reduced to flights of up to 2,000 miles, and flights of more than 2,000 miles, the carrier said.
“This would help to address the current disproportionate burden on long-haul flights and the discrepancies that arise by using capital cities to determine bands,” BA said in a submission to HM Treasury as an APD review ends this week.
Reducing the distance bands to two would remove the anomaly of APD for Caribbean countries (currently Band C) being higher than APD for those destinations on the west coast of North America (Band B).
It would also ease the burden of APD on the current Band C routes to India, China and Brazil, BA said. In the last two years, APD on long-haul has risen by between 50 and 112%, while the rise for short-haul has been 20%.
BA says premium economy seats, such as World Traveller Plus, should be taxed at the same rate as economy seats, rather than at the higher rate applying in the business and first class cabins.
Additionally the airline says APD should not be increased beyond present levels. It should start to be phased out once revenues from the European Union’s Emission Trading Scheme start flowing to the UK Treasury in 2013.
However, BA welcomed the Government’s decision not to proceed with a per-plane duty, which would have caused “serious damage” to the UK’s connectivity and economic competitiveness.
BA chief executive Keith Williams said: “Aviation in the UK is the most undervalued and overtaxed industry in Britain.
“We want to play our full part in assisting Britain’s economic recovery, but we are held back by levels of tax on flying which are higher than anywhere else in the world.”
A family of four flying in economy class from the UK to Florida currently pays £240 in APD. Travelling to the Caribbean, they pay £300 – or £600 if they are in premium economy.
The rates are more than double what a family from Germany would pay. Flying from France, a family would pay just £15 and in 22 EU countries, there is no aviation tax at all.