Air passengers set for triple hit with aviation duty hike

Sep 23 2009 by Adam Jupp, The Journal

AIR passengers will be hit with a triple whammy if the Government presses ahead with plans to hike aviation taxes.

That was the warning last night issued by airline and airport bosses, who are bracing themselves for rises to Air Passenger Duty (APD).

The tax is set to go up in November and again in 2010, meaning it will be four times higher than it was three years ago.

Business leaders fear that will lead to airlines abandoning key routes from the region’s two airports, which would have a knock-on effect on the wider economy.

That is why The Journal this week launched our ‘A Tax Too Far’ campaign, which urges Downing Street to re-think its plans.

APD has been billed a green tax but representatives from the aviation industry say the Government’s current tax take from the duty already covers the £2bn environmental cost it generates.

That is before the UK enters the EU’s Emissions Trading Scheme in 2012, at which point it is estimated £3.6bn will be generated through the combined revenue-raising schemes, comfortably off-setting the effect on the planet.

The cost of both these mechanisms will be passed onto passengers through increased ticket prices and it is feared this will lead to passenger number plummeting and routes being pulled.

And the UK is the only country in Europe where such a tax applies, meaning British airports are not competing on a level playing field to those on the continent. It is the regions, like the North East, where this disadvantage is felt the most.

All this comes at a time when airlines themselves are pledging to halve their carbon emissions by 2050.

Siân Foster, head of Business Sustainability at Virgin Atlantic Airways, told The Journal it has set its own target of increasing fuel efficiency by 30% by 2002, against a 2007 baseline.

And by that date, it expects the reduction in emissions achieved to have outstripped the increase in carbon footprint that would by expected based on the firm’s predicted growth levels.