Regional airline Flybe has called for APD to be scrapped entirely or “dramatically reduced” in an open letter to chancellor George Osborne.
The letter follows a submission that Flybe has recently made to HM Treasury on options for supporting English regional airports from the impacts of APD devolution in Scotland, Wales and Northern Ireland.
Flybe CEO Saad Hammad said HM Treasury overlooked a “fundamentally important issue” when deciding to review the tax last year, especially in the way in which APD “disadvantages regional travellers on a per mile basis in comparison to those travelling short-haul to Europe and in particular against those travelling long-haul”.
The basic domestic rate for APD is £13; so someone travelling on a one way trip from Manchester to the Isle of Man (approx. 109 miles) pays £13. If that person were to travel from Manchester to Auckland (approx. 11,311 miles) they would pay £71. This represents a tax premium per mile of 19 times for the UK domestic business traveller over the long haul traveller, Flybe said.
Hammad added: “There is absolutely no logic in such an unfair discriminatory tax regime. If the Government is serious about fostering economic development in UK regions, it should continue to support aviation rather than just spending billions subsidising rail projects such as HS2 and HS3 which will not be delivered for decades.
“The availability of affordable, high-quality air service connectivity is fundamental to the economic prosperity of the whole of the UK”
Last week, the Scottish government confirmed plans to scrap APD after certain powers were devolved after the independence vote.