Calls to reverse air passenger duty as tickets prices soar

Oct 31 2009 by Adam Jupp, The Journal

Air tickets will soar in price from today as the Government introduces the first phase of its aviation tax hikes. Adam Jupp reports.

THE cost of air tickets will rise from today when the first of two increases in Air Passenger Duty (APD) airport departure tax takes effect.

It is feared the rises – which are passed on to passengers through ticket prices – will lead to key routes being pulled from the region’s two airports, as well as acting as a barrier to new services being secured in the future.

Business leaders say that would have a devastating impact on the North East economy, with reduced passenger numbers at Newcastle International and Durham Tees Valley and some firms forced to relocate because of the lost connectivity.

The rises come as aviation bosses on Tyneside say they have managed to cling on to a vital long-haul route.

Newcastle International Airport has revealed it has secured its existing service to Toronto for another year after a detailed set of negotiations with operator Canadian Affair.

But despite the good news, the airport has re-issued its warning that other key routes could be pulled from the region’s two airports as a result of the rises in APD, which are passed on to customer ticket prices.

Newcastle International head of planning and corporate affairs Graeme Mason said: “This prestigious service linking Newcastle with Toronto is important for our region, which is why we are continuing to support and work closely with our partners at Canadian Affair.

“This route brings a large number of Canadians into the region, visitors we and the region would lose without this service.

“We once again call upon the Government to respond to the damage that higher Air Passenger Duty (APD) levels will have upon the UK economy if services like this one were to cease.”

APD is levied on how far the capital of the destination country is from London and there are four bands, all of which are set to rise in November, having previously doubled in 2007.

From tomorrow, APD on an economy short-haul flight to Europe or North Africa will rise from £10 to £11 and in November next year to £12.

Duty on flights to the USA, Russia and the Gulf will increase from £40 to £45 and then to £60 in 12 months, a Caribbean flight will see its APD increase from £40 to £50 and then £75. And economy flights to Australia will increase from £40 today to £55 and then £85. That means by next year, a family of four – or even a team of business colleagues – flying from Newcastle to Australia using Emirates will pay £340 in APD, more than double what they currently do. The UK is the only country in Europe to have such a tax. Both Newcastle and Durham Tees Valley airports have reported a fall in passenger numbers because of the recession and fear the increases to APD will have a similar effect when they come in, potentially compounding the problem.

Businesses, universities and tourism bosses have told how vital good air links are to them and what the impact on their organisations would be if key services were pulled.