Where Forward for APD?
Last Friday saw the end of the consultation period for APD, Air Passenger Duty. Airlines, airports, industry boffins have all put in their two pennyworth so is there any consensus?
You might remember that prior to last year’s election the Conservatives were talking of making the tax based on a per plane basis rather than the current per person basis. For those who can remember back to the nineties, you might also remember that it was a carbon based tax.
These days no one really disguises the fact that this is just another tax. A new, EU carbon emissions tax is due to be introduced next year so perhaps it is no wonder that the government and nearly all politicians of whatever persuasion don’t call APD that for it seems we may have both a tax and the emissions tax.
British Airways, in its submission, called for the four APD bands to be reduced to two and distance bands and that it should be based on whether you fly economy or first and business class. They also ask for it to be phased out by 2013 when revenue from the carbon tax would start to fuel the tax coffers.
Virgin Atlantic highlighted the iniquity between flying long-haul and shorter distances. But then Virgin only flies long-haul. It also suggests the current proposals would deter people from long-haul trips. It also follows BA in suggesting that economy and premium economy passengers should be carged the same tax, as, incidentally, do most other submissions.
ABTA noted the problem that would exist in Northern Ireland. On a trip to the US for a family of four, Britons would pay £240 whilst a family flying from the Republic of Ireland would pay just €12. So why wouldn’t those in Northern Ireland not just fly from Dublin and save themselves hundreds of pounds? The travel industry in the province could be severely hit. Sammy Wilson, the Northern Irish finance minister also submitted a view that the special situation in Northern Ireland should be addressed in the final outcome. ABTA also says that scrapping the tax could boost earnings by £1 billion (but the tax this year will bring in twice that!) and create 25,000 jobs.
easyJet has already said that family holidays will be hit and that it could cause the loss of 77,000 jobs.
The Scottish Passenger Agents Association wants the tax lifted for domestic flights, and like others, wants 12 months’ notice of the changes when they are decided upon.
Finally the Association of ATOL Companies (those who are bonded) wants to link the distance bands as well so that one band is short and medium-haul and the other is long. They also pointed out that demand would be hit meaning fewer flights taken.
So now, we await the governments’ proposals