Passenger numbers are expected to be hit in 2013-14 if Chancellor George Osborne sticks to his plans for a further rise in Air Passenger Duty.
A survey of 26 UK airports reveals widespread concern about the impact of widely anticipated increases in the tax.
Osborne is expected to confirm a 2.5% increase in APD from April 2013 in his Autumn Statement tomorrow. It follows a double inflation rise in April this year.
The UK airports study by the Airport Operators Association found that:
* 1 in 4 airports say passenger numbers would fall my more than 5% as a direct consequence of the 2013-14 planned APD rise. A further 1 in 4 airlines said passengers numbers would fall by between 2%-5%.
* 73% of airports say they are “very worried” by the government’s plans to increase APD.
* Every airport surveyed backed calls for a freeze in APD until the Treasury has undertaken a full review of the impact of APD on the UK economy.
• 83% of airports say that “current levels of APD are having an impact on whether airlines choose to fly from our airport”.
AEA chief executive Darren Caplan said: “It is clear that UK airports are already under pressure from the eye-watering levels of air passenger taxes their customers have to pay, the highest in the world by far.
“The Chancellor should immediately stop any planned APD increases and get the Treasury to conduct an economic impact-assessment, to establish the scale of the damage that this tax is having not just on airports but on the whole of the UK economy.”
The survey also found widespread evidence of lost routes and the damaging commercial impact that the UK’s APD – the highest air passenger tax anywhere in the world – is already having.
Stansted managing director Nick Barton said: “The UK is now only one of six European countries still imposing this tax and we charge twice the amount of the next most expensive country, Germany.
“Instead of increasing APD, government needs to understand the damage this is doing to UK Plc, freeze the rate immediately and conduct an economic impact assessment.”
Glasgow airport managing director Amanda McMillan said: “Due to the size of the market in Scotland, we will always find it difficult to attain and sustain new routes and this situation is compounded even further by APD which simply serves to artificially depress demand and dissuade airlines from basing aircraft here.
“Unless APD is reformed, people travelling to and from Scotland – who must fly due to the lack of feasible alternatives – will continue to face some of the highest levels of taxation in Europe, which is clearly a disincentive to travel.”
Bristol airport chief executive Robert Sinclair said: “Further increases to Air Passenger Duty risk pricing us out of the market for tourists and inward investment at a time when the government is looking to the regions to help rebalance the economy.”