Air Passenger Duty remains a “drag” on the UK economy and planned changes to long-haul bands from next year are “half-hearted at best”.
Criticism of the government’s air tax came from Iata director general and chief executive Tony Tyler, who called for a comprehensive review of APD rather than just “tinkering” with the system.
“Last month, the UK government recognised the principle that its onerous APD was hurting the UK’s economic prospects – particularly its ties with emerging economies such as China, India and Brazil,” Tyler said.
“From next April, the highest bands will be eliminated. This followed reductions agreed last year to address the economic damage that APD was doing to Northern Ireland. But despite these adjustments, planned annual inflation-related increases continue.
“This latest effort is half-hearted at best. Instead of immediately addressing the economic damage of this misguided tax, the government will eliminate the highest bands from next year.
“APD is a drag on the UK economy that far outweighs even the billions of pounds that it siphons from the pockets of travelers.
“The government’s tinkering pays little more than lip service to this fact. It’s time for decisive action. Taxing a necessity like connectivity as if it were a social indulgence hurts the economy. A comprehensive review is needed,” said Tyler.
He spoke out as the organisation revealed that demand for global air travel reduced in February over the previous month but still showed an improvement over the start of 2013.
Growth in demand was 5.4% against 8.2% in January with international passenger traffic up by 5.5%.
“Although this represented a slowdown compared to the January traffic increase of 8.2%, cumulative traffic growth for the first two months of 2014 was 6.9%, which compares favorably with the 5.2% overall growth achieved in 2013,” Iata reported.
All regions except Africa experienced positive traffic growth.
“People are flying. Strong demand is consistent with the pick-up in global economic growth, particularly in advanced economies.” said Tyler.