Posted on: 08 September 2016 by Mark Howells
Airlines for Europe (A4E) has called upon the UK government to drop its Air Passenger Duty (APD) tax on air travellers, emphasising in particular the value the move would bring as the country prepares to leave the European Union.
CEOs from three of A4E’s members – Carolyn McCall of easyJet, Willie Walsh of IAG and Bjorn Kjos of Norwegian – joined the association’s managing director Thomas Reynaert for a press conference during the Aviation Festival in London, to make the plea.
The UK’s APD is the highest tax paid by passengers simply for using air travel. The rates range from £13 per departing passenger for short-haul economy class to £146 per departing passenger for long-haul in a premium cabin.
“More than £31 billion has been paid by passengers in the 21 years since the tax was introduced,” explained Walsh. “That means it has risen by 824% over the period from 1994 to 2015. For many years it was dressed up as an environmental tax, but nothing ever went directly to green projects. It is a significant disincentive for travellers.”
McCall noted that removing APD would boost the UK GDP by 1.7% and create 61,000 new jobs, according to a PwC study. “If we are to be a competitive destination – for both leisure and business – this tax must be scrapped,” she declared.
The easyJet CEO also highlighted that after the Republic of Ireland scrapped its version of APD the number of people travelling from Northern Ireland to fly from Dublin rose significantly.
Kjos backed up the call by noting the effect such taxes have. “Norway introduced an APD and it took one week to have an effect. Rygge Airport was closed and 1,000 jobs were lost overnight,” he reported. “EU tourist numbers [to Norway] continue to decline and various routes to EU cities have been cancelled, so there is less customer choice.”
Walsh confirmed that both he and McCall have had discussions with new UK government, including with Transport Secretary Chris Grayling. “I think he was surprised by the strength of my conviction on this, but I think he understood. He is passionate about UK succeeding,” said Walsh. “And he is passionate about travel,” added McCall.
On the point often raised to counter dropping APD – that aviation does not pay tax on its fuel – Walsh remarked, “Aviation pays for its infrastructure, particularly in UK, which no other transport mode does. Others have their infrastructure paid for by governments,” he responded. “Also, aviation is still very efficient in terms of emissions per passenger-km and I’m optimistic that we’ll get a result at ICAO for a global market-based mechanism for emissions.”
Bernie Baldwin, editor, Low-Fare & Regional Airlines/laranews.net