Chancellor George Osborne’s decision to only scrap air passenger duty for children under the age of 12 represents a missed opportunity to help regenerate UK regions and help the travel industry, according to Flybe CEO Saad Hammad.
Osborne made the decision on APD in his Autumn Statement earlier today, which he said will save a family of four £26 on a flight to Europe, and £142 on one to the US.
However, the Flybe boss said despite continuing to engage with the government to emphasise the unfairness of APD, the needs of passengers are still being ignored.
“It’s time for the Chancellor to seriously listen to the UK regions and deliver reform quickly, to ensure the government does not inflict further damage to the UK’s aspirations for economic growth,” said Hammad.
“The Smith Commission’s recommendations to devolve APD to the Scottish government shows progress, and we believe its implementation would demonstrate the benefits of cutting or abolishing the tax to other nations or regions within the UK, which in turn would deliver a balanced economic recovery,” he added.
The cut made by Osborne follows an announcement in the March Budget that there would be a reduction of APD to some long-haul flights - A business class Band D flight (includes Australasia, Malaysia and Indonesia) attracts an APD levy of £194, this will drop to the Band B rate of £138 (plus any RPI-based rise) in April 2015.
Air passenger duty is charged on all passenger flights from UK airports. The rate of tax varies according to where the passenger is going, and the class of travel.
The announcement was welcomed by Virgin Atlantic CEO Craig Kreeger but he said it was just another step to reform the “damaging tax”.
“There is a growing body of evidence demonstrating the huge benefits, both to the travelling public and the UK economy, of reducing or abolishing APD across the whole of the UK.”
The exemption of tax for under 12s will be extended to under 16s from 2016.
Osborne also pledged to make airlines list all taxes and charges on tickets.