What do British Airways (IAG), EasyJet, RyanAir and Virgin Atlantic all have in common?
It seems they all have a genuine hatred of Air Passenger Duty (APD), and have called for the UK Government and want it scrapped.
APD was originally a “Green” Tax, that strangely by the government of the day – not ring-fenced. Since then, further administrations have tried to greenwash the taxation of APD, with almost all pretence of Greenness gone, and it being a levy now.
The tax was introduced in 1994 adding an extra £5 to £40 a ticket but has shot up in the past few years to £24 to £170. For the 2011 Budget, the APD rise as “deferred”. Well it seems Her Majesty’s Government is going to announce they are going to apply the rise during 2012. APD is levied on almost any journey from the United Kingdom to another destination – even if that destination had to be reached via a 3rd country, with the rate calculated on class (either Economy who paid a “discounted” rate, or Premier Economy/Business/First who pay the “full” rate) and distance from London to the capital of the destination country.
The unholy alliance of BA, EasyJet, Ryanair And Virgin Atlantic have been opposed to the tax from day 1, and state this is making the UK a less attractive destination for tourists and business, as well as UK Holiday makers who have to pay more to fly.
APD is currently set to rise by 10% which will no doubt be another tax to pay sadly. Unless of course you think your way round it.
The majors have all been spilling out the quotes today.
Micheal O’Leary of Ryanair fame states this isn’t going to the airline’s bottom line:
“This has nothing to do with our profits. It is paid by families, paid by passengers going on holidays,” he said.
“If it is scrapped, the money goes straight back into families’ pockets.”
Willie Walsh of IAG (BA/Iberia) weighs in with a challenge to the government to think again.
“This tax is hugely damaging and must be scrapped,”
“We challenge the chancellor to undertake an independent review, which will show that the net effect of this tax is damaging.”
Her Majesty’s Treasury have been trying to be reassuring noises, but a government passing up the opportunity to increase revenue is akin to gate lice trying to be first on a plane. It isn’t going to happen.
A spokesperson said:
“We consulted on a range of reforms to APD, including simplifying the tax and making it fairer by extending APD to private jets.
“We will say more on this in the coming weeks.
“It is also important to remember that the UK is not the only country with an passenger duty, and unlike many other countries the UK does not levy VAT on flights.”
It should be noted that parts of the UK do not have APD, or have reduced APD on certain routes – for example the APD climbdown in Northern Ireland where there was competition from the Irish Republic who charge a travel tax of… €3 to any destination.
The other thing that could really shake things up is the introduction of the European Emissions Trading Scheme, which compared to APD… is going to be a much bigger fight with countries outside the EU not impressed at all…
