The UK airline industry has hit out at plans in the government’s autumn budget to increase taxes on long-haul flights from 2020.
Chancellor of the Exchequer Phillip Hammond said on 29 October that air passenger duty (APD) charges would be frozen for short-haul flights but would rise in line with inflation for long-haul journeys from April 2020.
APD is imposed on all passengers flying from an airport in the UK or the Isle of Man on a fixed-wing aircraft that weighs over 5.7 tonnes and is fuelled by kerosene; it is primarily a revenue-raising tax but the government has previously argued that it has some environmental benefits.
According to the autumn budget, the APD rates for long-haul economy will increase by £2, and the rates for those travelling in premium economy, business and first class will increase by £4 per journey from 2020. Those travelling long-haul by private jets will see the rate increase by £13.
Flag carrier British Airways’ owner IAG said the tax was “outdated” and “stifles route development to new emerging markets”, before calling for it to be “scrapped” if Britain wants to “compete on the global stage post-Brexit”.
A spokesperson for IAG told ALN that Hammond’s announcement “has undermined Britain’s global competitiveness”, noting that British Airways passengers had already paid £682 million in APD during 2017.
“The Government has missed a crucial opportunity to lower the cost of long-haul air travel for UK businesses and holidaymakers by cutting Air Passenger Duty,” a spokesperson for UK-based airline Virgin Atlantic told ALN.
“Our customers are already paying the highest rate of long haul APD in the world – twice that of any other EU nation – simply to depart the UK,” they added, noting that APD accounted for more than a quarter of the airline’s lowest fares.
Tim Alderslade, CEO of trade body Airlines UK, meanwhile described Hammond’s announcement as sending “entirely the wrong signal” as Britain prepares to leave the European Union.
“APD is nothing but a tax on Global Britain,” he said, adding that “rates are already the highest in the world, with the burden on passengers travelling from and within the UK having risen over 1000% since its introduction, and set to hit an eye watering £4bn by 2022/3”.
The UK was “the only country in Europe to see a loss of direct connectivity last year”, he said in a statement, adding that an increase in ADP will “make it even harder for UK airlines to grow our international connectivity, establish new trade links and encourage more tourists to visit the UK”.
“With Brexit just around the corner, it is a missed opportunity to have truly transformed the UK’s international competitiveness, Alderslade said.
The chancellor also announced that access to ePassport gates at the border at UK airports will be extended to visitors from the United States, Canada, Australia, New Zealand and Japan, in a move that was welcomed by Airlines UK as a “step in the right direction”.
In a statement, Alderslade noted that “as passenger numbers continue to rise, UK Border Force must be adequately resourced and adopt new approaches in order to prevent a repeat of last summer, where lengthy border queues were experienced at a number of UK airports”.
Widening access to ePassport gates – which are currently only open to nationals of the European Economic Area (EEA) – will enable “millions more travellers to be processed more quickly”, he said, calling on the government to implement the required technical changes as quickly as possible.