British Airways Calls for Air Passenger Duty Reform

British Airways has called for a three-pronged approach to reform Air Passenger Duty and make it more consistent with the government’s overriding objective of economic growth.

A family of four flying in economy class from the UK to Florida currently pays £240 in Air Passenger Duty. Travelling to the Caribbean, they pay £300 – or £600 if they are in premium economy.

These rates are more than double what a family from Germany would pay for example. Flying from France, a family would pay just £15 and in 22 EU countries, there is no aviation tax at all.

In its response to the Treasury’s consultation on APD, the airline made the following points:

- The four distance bands of APD should be reduced to two: flights of up to 2,000 miles, and flights of more than 2,000 miles. This would help to address the current disproportionate burden on longhaul flights, and the discrepancies that arise by using capital cities to determine bands. In the last two years, APD on longhaul has risen by between 50 and 112%, while the rise for shorthaul has been 20%.

- Premium economy seats, such as British Airways’ World Traveller Plus, should be taxed at the same rate as economy seats, rather than at the higher rate applying in the Club and First cabins.

- APD should not be increased beyond present levels and should start to be phased out once revenues from the European Union’s Emission Trading Scheme start flowing to the UK Treasury in 2013.

British Airways also welcomed the Chancellor’s decision not to proceed with a per-plane duty, which would have caused even more serious damage to the UK’s connectivity and economic competitiveness. Keith Williams, British Airways’ CEO, said, “Aviation in the UK is the most undervalued and overtaxed industry in Britain. We want to play our full part in assisting Britain’s economic recovery, but we are held back by levels of tax on flying which are higher than anywhere else in the world.”

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