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UK Government confirms plans to increase the Air Passenger Duty again in Nov-2010

25-Mar-2010 10:25 AM

UK Government confirmed plans to increase the Air Passenger Duty again in Nov-2010, as part of its 2010 budget report (telegraph.co.uk, 24-Mar-2010). Industry responses were generally negative:

  • IATA criticised the move, questioning where the funds raised from the tax will go;
  • Airport Operators Association stated (24-Mar-2010) the increase will result in taxes on some routes being more than double what they were in 2008, despite passenger numbers falling almost 10% in 2009. AOA estimated the tax has already cost the UK economy approximately GBP758 million this year; [more]
  • Board of Airline Representatives in the UK (BAR UK) also expressed (24-Mar-2010) disappointment that the government has missed an opportunity to change its plans on the APD. [more]
  • European Tour Operators Association warned London could lose its place as a main gateway to Europe as a result of the tax;
  • Ryanair stated the tax has forced it to cancel plans for new services to/from the UK.

IATA: “How many trees will the Chancellor be planting with GBP2.5 billion? Padding the UK budget at the expense of holidaymakers is not sound environmental policy,” Giovanni Bisignani, Director General. Source: telegraph.co.uk, 24-Mar-2010.

Airport Operators Association: "Today’s Budget represents a failure by the Chancellor to stop this November’s damaging increase in Air Passenger Duty. The UK already has the highest levels of aviation tax in Europe. By increasing the cost of flying from Britain we are penalising our passengers and businesses, who are still suffering the effects of the recession, and a slow recovery. The APD rise will make this recovery harder. It will cost the UK economy GBP748 million this year alone, and risk 18,000 jobs. The APD rises will hit passengers twice. They will hurt ordinary hard-working people by not only making it harder for them to get away on holiday, but by slowing economic recovery and threatening jobs. Today the Chancellor could have chosen to avoid that." Ed Anderson, Chairman. Source: Airport Operators Association, 24-Mar-2010

BAR UK: “By proceeding with the tax hikes in November, the Chancellor has missed his golden opportunity to rectify the wrongs of APD.The exorbitant levels of APD will continue to make travel too expensive for so many, not least those who fly to visit friends and relatives, or children, who will continue to be taxed at the adult rate. Bargain-savvy travellers have already identified that flights may be cheaper by using airports outside of the UK. Ultimately, more emissions would be created and the Treasury would be responsible for reducing its own APD revenues. What an ‘own goal’ that would achieve,” Mike Carrivick, CEO. Source: BAR UK, 24-Mar-2010.

Ryanair: “Gordon Brown's tourist tax will see Britain lose over 10 million passengers, 10,000 airport jobs and more than GBP2.5 billion in tourism spending. While the UK keeps taxing tourists, Ryanair will switch its growth to EU countries where governments are welcoming tourists, not taxing them,” Michael O'Leary, CEO. Source: telegraph.co.uk, 24-Mar-2010.