5-Jan-2011 11:23 AM

UK considers higher passenger tax at south-eastern airports

UK Aviation Minister Theresa Villiers confirmed the Government plans to increase passengers taxes for flights from south-eastern airports through a reform of the Air Passenger Duty (APD) this year (Daily Mail, 31-Dec-2010). The government hopes the move will encourage passengers to use regional airports and reduce traffic at London Heathrow, London Gatwick and London Stansted airports, which they consider “overcrowded”.

  • BAA criticised the plans, stating it would only make the country less competitive with other European hubs;
  • Vancouver Airports, which owns Liverpool Airport, welcomed the revision of the APD, but stated there are other ways to tax passengers, including taking a percentage of fare prices. Network Marketing Director Neil Pakey stated it would be ideal for their to be no APD whatsoever, to ensure the UK remains competitive enough to attract foreign airlines.

UK Government: “It is not inconceivable that our tax reform might look at a higher tax to fly from congested South-East airports. A key part of our approach is to create conditions for regional airports to flourish, and this also has the potential to help relieve overcrowding at south-east airports,” Theresa Villiers, Aviation Minister. Source: Daily Mail, 31-Dec-2010.

BAA: “We already have the highest aviation tax in the world in the UK and if we are looking at increasing taxes on Heathrow - the UK's only hub airport - we will simply make the country less competitive,” Spokesperson. Source: Daily Mail, 31-Dec-2010.

Vancouver Airports: “The present situation isn't working. Especially in certain regions where there is a low propensity to spend, as they are hit harder by a flat-rate tax. The Dutch have scrapped it, as have the Greeks and in Ireland it has been reduced, they wouldn't be doing that if air tax worked. It needs to be looked at strategically. Airlines are internationally competitive now, they can take their business to other European regions, they don't have to fly to the UK. We need to level the playing field,” Neil Pakey, Network Marketing Director. Source: Daily Mail, 31-Dec-2010.

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