Scrap APD? Low level complaining turns into veritable campaign by Big 4 airlines
Air Passenger Duty (APD), has been a grumbling appendix on the digestive system of the Goverrnment for a while. It seems no-one particularly minded it when it was a piddling £5, and up to a maximum of £40, but now that the range of charge goes from £24 to £170, even the airlines have decided to show their disgruntledness. Four airlines from the UK and Irish Republic, Easyjet, Ryanair, Virgin Atlantic and British Airways, are now calling for the UK government to scrap Air Passenger Duty completely.
The tax, which applies to virtually every ticket on a flight originating in the UK, has risen sharply since it was introduced in 1994 and the airlines are claiming it penalises British holidaymakers and makes the UK a less attractive destination. Clearly they are wrong on this last point- APD is not levied on flights into the UK, only on flights out, so it is actually making Britain a far more attractive place to come, but never leave.
The airlines further argue that, as the tax was first introduced to combat greenhouse gas emissions, it should be abolished with the introduction of the EU's Emissions Trading Scheme next year.
Unfortunately the Treasury disagree. A Treasury spokesman said that the government had frozen APD this year (although an increase of about 10% is anticipated next year) and that, unlike many other countries, the UK did not levy VAT on flights. So we should be thankful we are only paying APD. Something Bitterwallet mentioned some time ago. We are so ahead of the game. It is also worth noting that APD is expected to generate £2bn of income this year, so the Government will be loathe to simply give up that much money.
Ryanair chief Michael O'Leary, our favourite airline chief, told the BBC that removing APD would not increase the airlines' profits.
"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." Oh, how we laughed.
Mr O'Leary also said that 30 million fewer overseas visitors had come to the UK in the past five years owing purely to APD. No statistics were produced to support these figures, but 100% of statistics are true, we can only assume Mr O’Leary is 100% truthful 100% of the time, so it must be right.
Willie Walsh, chief executive of International Airlines Group, which owns of British Airways, called on Chancellor George Osborne to set up an independent review of APD.
"This tax is hugely damaging and must be scrapped," he said."We challenge the chancellor to undertake an independent review, which will show that the net effect of this tax is damaging."
In response, a Treasury spokesman 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.”
While a complete scrapping has, perhaps, a snowball’s proverbial chance in the hot place, there may be some room for manoeuvre. Earlier this month the rate of APD was reduced for direct long-haul flights from Northern Ireland, because of competition from services in the Irish Republic, which has an Air Travel Tax of just 3€ to any destination.
Or they could just start charging VAT at 20%. Be careful what you wish for...