The travel industry has rallied together to urge the government to halve Air Passenger Duty (APD) in the autumn budget.
Airlines, airports and trade associations such as Heathrow, Gatwick, Virgin Atlantic, ABTA, IATA, the Airport Operators Association and UKinbound put their names to a letter to the government pleading for APD to be cut by at least 50 per cent.
Research by the ‘A Fair Tax on Flying’ campaign found that passengers flying from the UK pay the highest tax in the EU, currently standing at £75 for economy tickets and £150 for other classes. The rate is set to increase again from April 1, 2018 to £78 and £156. The research showed this is double what German passengers pay.
Heathrow boss John Holland-Kaye said in September that cutting APD on domestic flights would “supercharge British competitiveness” in a post-Brexit environment and make it more viable for UK businesses to travel within the country for face-to-face meetings, which research shows is vital to striking deals.
UKinbound CEO Deirdre Wells OBE commented: “A reduction in APD would be a clear message to the tourism industry and businesses across the UK that the government is committed to its vision of a Brexit-ready Britain. Effectively a tax on trade, we need to signal to Europe and the rest of the world that the UK continues to be open for business.”
However, change is unlikely, according to Rajeev Shaunak, head of travel & tourism at MHA MacIntyre Hudson. “The industry has been demanding a cut in APD for several years. However, this may be a difficult argument to win. APD generates approximately £3 billion for the UK treasury and any reduction would impact other politically sensitive areas such as health, education and social services. There’s also a danger that if the tax is cut, airlines – already under pressure from increasing oil prices – will simply raise fares. This will leave passengers, and the industry, no better off.”