Air Passenger Duty is today described as a ‘tax on fun’ in a Budget day plea for an overhaul of the system by the boss of Thomas Cook.
The group’s chief executive, Peter Fankhauser, has urged Chancellor George Osborne to introduce a further simplification of the banding and a halt to any further inflationary increases to APD as an immediate step towards a review and overall reform of the air tax.
“The status quo is forcing UK passengers to fly to Amsterdam or Paris or other European countries in order to catch long-haul flights where they can get cheaper tickets – and that can only be bad for Britain,” he said.
“Even within the UK, we’d call on the chancellor to ensure a level playing field if future reductions in APD take place in Scotland. For instance, if the Scottish Parliament decided to reduce or abolish APD, this could put UK airports at a disadvantage as customers may travel to Scotland to take long haul flights.
“In last year’s Budget, the UK Chancellor said he wanted to reform APD to ‘end the crazy system where you pay less tax travelling to Hawaii than you do travelling to China or India’.
“We applauded measures to abolish APD for under-12s travelling in economy from May this year and for under-16s next year.
“For families, this exemption for children resulted in a saving of between £13 for short-haul and £71 for the longest flights for families departing from the UK.
“And we supported a simplification of the banding system which has brought the cost of taxes to fly to the Caribbean in line with the US.”
But Fankhauser added that “more can and should be done”.
Writing in the Telegraph, he said: “The recent changes demonstrate the UK government clearly recognises the negative impact of APD so now would be a good time to carry out a full review of the system.
“Reducing APD would promote growth and support job creation.
“Inevitably, at a time of austerity, there will be question marks over any tax cuts. But a recent study by PwC, the global accountants, concluded that scrapping APD would pay for itself by increasing economic prosperity and creating 60,000 jobs.”
He pointed out that APD has risen exponentially since being introduced 21 years ago to the point that UK holidaymakers are now subjected to the highest air taxes in the world.
The World Economic Forum ranked the UK 138th out of 139 countries in terms of the competitiveness of its air taxes and charges in 2013.
“Only passengers in Africa’s Chad were hit harder that year. That cannot be sustainable,” said Fankhauser.
“As an immediate step, a further simplification of the banding and a halt to any further inflationary increases to APD would be welcomed
“We call on the Chancellor to give Britons a holiday. APD is a barrier to free movement and having fun.”
Meanwhile, Saga Travel called on airlines and other travel operators to slash fuel surcharges following a slump in oil prices to a six year low.
A spokesman said: “Whilst the cost of fuel has been dropping like a stone, airline fuel surcharges have remained as buoyant as a hot air balloon.
“We believe that people need fair treatment in the air as well on the garage forecourt and Saga is calling for airlines and other travel operators to slash fuel surcharges and give a much needed boost to the travelling public.”