Business Travel Show Europe Kick Off, 23 February,
Global Travel Risk Summit Europe, April 2023,
3rd Annual Sustainable Business Travel Summit
MPs from across the political spectrum have joined forces to form an All Party Parliamentary Group (APPG) on Air Passenger Duty (APD) Reform to encourage the government to cut the UK’s flight tax rate.
The MPs claim cutting APD would allow the UK “to compete on a level playing field with our European counterparts, boosting tourism, trade, jobs and growth”.
APD is a per passenger tax levied on all flights departing from airports in the UK. The British rate is currently the highest in the world and more than double that paid in Germany, according to the APPG, with long-haul flights subject to a £78 additional cost for economy tickets and £156 for business class.
Chancellor Philip Hammond has faced pressure from airlines and government officials to reduce the rate of APD, but he has increased the tax on some long-haul flights twice over the last two years. Short-haul rates have been frozen since 2012.
International Airlines Group (IAG) CEO Willie Walsh has said in the past that the rate of APD is preventing its low-cost carrier Level from establishing a base in the UK, while a study by Frontier Economics found the nation is missing out on 66 new domestic and international connections because the tax makes them financially unviable.
Following Hammond’s decision to increase APD, long-haul tickets in premium economy and above will see a hike of £16 from 1 April.
Chair of the new group, Henry Smith MP, who represents the constituency in which Gatwick airport sits, commented: “I am grateful to have been elected chair of the APPG for Air Passenger Duty Reform. As the UK leaves the European Union and looks to forge a new identity for ourselves in the world as a global nation, it is critical we have a tax system that reflects that ambition. A significant reduction in the UK’s APD rate would signal to the world that the UK is open for business.”
A spokesperson for the A Fair Tax on Flying campaign added: “This marks an important step in the campaign to reduce APD. A cut in APD is long overdue and many MPs across Parliament recognise that reducing APD would significantly boost the connectivity of UK airports and dramatically improve the competitiveness of UK airline routes relative to European alternatives, while at the same time tackling this additional tax burden on holidaymakers and business travellers.”