High levels of Air Passenger Duty should be cut to boost demand for air travel alongside a decision on UK airport capacity.
Industry coalition A Fair Tax on Flying repeated its call for an APD review in its submission to the Airports Commission, chaired by Sir Howard Davies.
The submission cites the recent PricewaterhouseCoopers report on the economic impact of APD which quantifies the effect that cutting or abolishing APD would have.
The Fair Tax on Flying submission argues:
- APD is “hampering aviation growth and restricting the ability of the sector to energise and mobilise the wider UK economy”;
- The usefulness of using APD as a tool to constrain demand for air travel “is negated by the detrimental effect that APD has to development, jobs and growth across the UK”;
- Rises in APD are making the UK economy increasing uncompetitive, creating a barrier for business, preventing growth and the creation of new jobs;
- The benefits of reform or abolition of APD are substantial and sustainable.
It also highlights the forced closures and postponements of air routes brought about as a result of increases in the tax.
The letter to Sir Howard says: “Air Asia X stated that in March 2012 they were ceasing their Kuala Lumpur-Gatwick route specifically due to rising APD.
“Peel Airports said that following APD’s doubling in 2007 and its subsequent rises, Liverpool John Lennon lost six domestic, five European and two long-haul (North America) services; and Robin Hood Doncaster Sheffield lost one domestic service, six European and three long-haul services.”
The submission ends by explaining the success that has been achieved in Northern Ireland by the reduction of APD on long-haul flights from Belfast.
British Air Transport Association chief executive on Simon Buck said: “It is important that Sir Howard and his colleagues are fully aware of the facts of APD before reaching any conclusion on airport capacity.
“A Fair Tax on Flying’s submission sets out these facts and clearly shows the tax for what it is: a barrier to the further development and growth of the UK economy and the creation of jobs.”
Darren Caplan, chief executive of the Airport Operators Association said: “If the UK government is serious about lessening constraints on UK airports in the short to medium term, the first thing it should do is reduce this country’s eye-wateringly high level of APD. This would boost demand for air travel and improve our connectivity with developed and emerging markets.
“There is a whole plethora of evidence in the public domain about the damage current levels of APD are doing to our economic competitiveness, and our ability to link with potential trading partners.
“We now call upon the Commission to follow in the footsteps of the Transport Select Committee, the Aviation All-Party Parliamentary Group, PwC and more than 300,000 people who last year wrote to their local MP or the Chancellor about this issue and urge the government to take action to either reduce APD or commission an independent study to look into its impact on the whole of the UK economy.”