15th February 2016
GOVERNMENT FIGURES CONFIRM EXCESSIVE TAX BURDEN ON DOMESTIC TRAVELLERS FROM AIR PASSENGER DUTY
<Leading regional airline speaks out in support of UK domestic travellers being taxed up to 38 times per mile more than those flying long haul>
The call by Flybe, Europe’s largest regional airline, for Air Passenger Duty (APD) to be scrapped entirely, or dramatically reformed to be fairer to domestic travellers, has been renewed following the latest figures released recently by HMRC which show UK passengers are paying more than £3.1 billion a year in Air Passenger Duty (APD). This amount has increased almost tenfold since 1995, when it raised a mere £331m.
The UK’s APD is the highest aviation tax in Europe and one of the highest in the world, continuing to penalise disproportionately those whose air travel is within the UK. It disadvantages domestic regional travellers on a per mile basis in comparison to those travelling short-haul to Europe and in particular against those travelling long-haul. And because APD is a UK departure tax, the domestic traveller ends up paying twice on return trips, when the international traveller pays it only once. In many examples, as in the one illustrated below, this can result in the domestic traveller paying a tax premium per mile of 38 times!
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 or 12p per mile. If that person were to travel from Manchester to Auckland (approx. 11,311 miles) they would pay £71 or 0.6p per mile. This means that the domestic passenger is paying 19 times more in APD per mile than the long haul traveller. The iniquity is, of course, compounded on a comparison of return trips.
Flybe believes that APD needs to be reformed if not abolished. Indeed, at a time when the Scottish Government is considering a significant cut in APD and HM Treasury is looking at options for devolving APD to local authorities in England, it is high time that this iniquity be addressed.
Because devolution of APD in Scotland and Wales is likely to create market distortions and issues of fairness for passengers living in England, Flybe calls on HM Treasury to vary APD rates within England by increasing APD at large slot-constrained airports – defined as those that carry more than 25 million passengers per annum – and decreasing it at regional airports. That would not only provide a more level playing field for regional customers, but may also incentivise the use of regional airports where there is no shortage of runway capacity.
Saad Hammad, Flybe’s Chief Executive Officer, says: “Since APD was introduced it has been an ever growing cash cow for HM Treasury, proving a clear impediment to regional economic growth and development throughout the UK.
“HM Treasury has overlooked a fundamentally important issue: namely 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. It is illogical given the Government’s desire to see balanced economic growth between the South-East and other regions of the UK.
“We need the Government to be responsive to the needs of those who live outside the perimeter of the M25 where 80% of UK GDP is generated and abolish or significantly reform APD.”