APD threatens premium economy

UK airlines are reportedly considering dropping their premium economy class due to the impact of the APD (Telegraph, 31-Jan-2011). Under the levy, seats with a couple of inches more space than economy seats are taxed at the same rate as full business-class seats. Thomson Airways, Thomas Cook and Virgin Atlantic have been vocal about the tax. The UK government stated it plans to review APD bands in Mar-2011.

Thomson Airways: "It is not right that families seeking a bit of extra leg-room on their holiday flight to Florida should be asked to pay the same amount of APD as a businessman flying first class on a flat bed to New York,'' Spokesperson. Source: Telegraph, 31-Jan-2011.

Thomas Cook: "It's ridiculous to think that holidaymakers travelling in premium seats on one of our long-haul charter flights will have to pay the same APD as those flying in first class on a scheduled flight, so we've removed this cost from their holidays," Manny Fontenla-Novoa, CEO. Source: Telegraph, 31-Jan-2011.

Virgin Atlantic: "How can it be right that someone sat in our premium economy class pays the same level of tax as someone in our upper class?" Steve Ridgeway, CEO. Source: Telegraph, 31-Jan-2011.