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Travel Management

Passenger duty meets its critics

As the UK tries to levy further taxes on air travel, critics have come out in force

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The Air Passenger Duty has risen steadily since its introduction and now accounts for a sizeable piece of every airfare charge. Complaints have risen right along with the duty over the years. The fee currently stands at somewhere between £24 and £170 per ticket, with many passengers complaining that the fee is excessive and that it falls most heavily on those who can least afford it, such as families travelling for their summer holiday.

A common enemy
Competing airlines, traditionally at odds with each other, are actually joining forces to battle the tax. EasyJet, British Airways, Ryanair and Virgin Atlantic CEOs issued a joint statement saying, “These endless cumulative increases in APD are pricing families out of flying, both from and to the UK. That means fewer visitors to the UK, which destroys jobs in our tourism, aviation and hospitality industries and chokes off opportunities for young people at a time of exceptional youth unemployment.” The APD is projected to bring in £2.5bn to government coffers during the 2011-2012 budget period.

Between 2007 and 2010, passenger flights from the UK fell by 29 million. Some point to the recession, some to the APD, but most agree it is probably a combination of the two factors. It’s easy to see that the APD had some kind of effect, as passenger flights from the continent actually grew by 66 million in the last year alone. UK air passengers currently pay, on average, almost nine times the duty of their continental counterparts.

Positive effects?
Environmentalists point out that the APD helps combat global warming. The tax was created and introduced as one method to combat greenhouse gas emissions, and in fact the imposition of the tax will be broadened to cover private jets as early as 2013. No one disputes the fact that airline emissions, particularly because they occur so high in the atmosphere, have a damaging effect on the ozone layer. But with the EU’s Emissions Trading Scheme coming into effect, some argue that the time has come to re-evaluate or even scrap the APD.

Government’s view
A spokesperson for the Treasury department has said that the APD rise is only £1, a tiny increase which was publicised well in advance. Also, VAT is not levied on domestic flights within the UK, and the airlines benefit from the fact that aviation fuel escapes tax. The Treasury has also cut corporate taxes for the airline industry, benefiting all the corporations that are complaining about the tax. While not specifically mentioned, the APD raised £2.2bn, a fact that may be more of an impediment to removing the tax than even the most cogent argument from the airlines and passengers.

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