AEF argues why government should NOT cut APD; it is needed as part of a greener recovery for the sector
The airlines take every opportunity to lobby to have APD (Air Passenger Duty) reduced, in an attempt to get more people to fly. “Airlines UK” representing BA, easyJet and Ryanair etc have again called on the UK government to suspend the tax. In fact, APD is only £13 for a return flight anywhere in Europe, so not enough to deter passengers. The AEF (Aviation Environment Federation) argues the case against any cuts in APD. They say there is no need to cut the tax, as air fares are likely to be low anyway, while airlines struggle to recover from the Covid hit; oil prices are also low. Air travel is substantially under-taxed, and there can be no justification for reducing its cost further, increasing demand and thus CO2 emissions. Air travel demand should not be encouraged, while there are no meaningful policies to tackle the sector’s environmental impacts – noise and air pollution, as well as CO2. Airlines have benefited substantially from public funds, through furloughing staff; they should not be allowed to pay even less tax, while all sectors must make a fair contribution towards rebuilding public finances. And foreign holidays should not be incentivised at a time when the UK’s domestic tourism and hospitality sectors need to rebuild. Read the whole briefing.
The briefing by AEF (The Aviation Environment Federation) on why APD should NOT be cut
AEF briefing on the importance of maintaining Air Passenger Duty as part of a green recovery for the aviation sector
2nd July 2020
Cutting APD in order to stimulate demand with lower fares is unnecessary given that fares are likely to be low anyway due to available airline capacity and low oil prices. APD should be retained or increased during the recovery from the pandemic for the following reasons.
• The Government should not be implementing measures designed to stimulate aviation demand in the absence of meaningful policies to tackle the sector’s environmental impacts, including noise and climate change. While the industry has set itself a target of net zero emissions there is currently no policy mechanism for holding it to account to deliver this.
• Many airlines have benefited from Government loans and made extensive use of the staff furlough scheme during the pandemic. In recovering, they should make a fair contribution towards rebuilding public finances, and on the spending necessary to support a green recovery.
• Travel abroad should not be incentivised at a time when the UK’s domestic tourism and hospitality sectors need to rebuild.
• Aviation is already very lightly taxed – too lightly, NGOs have argued.
• Flying is a discretionary activity undertaken largely by those in the top half of the income spectrum. The 15% of the UK population who fly frequently are responsible for 70% of all flights, with the 1% most frequent flyers accounting for close to a fifth of all flights by English residents. To put the sector on a trajectory compatible with net zero, there is a strong case for increasing taxation rather than providing high income passengers with tax breaks.
The 3-page briefing concludes:
In ‘Building back better for aviation’ AEF and other environmental groups set out how the government could use the opportunity represented by the slowdown in air travel to reset the UK’s aviation strategy and, as the Prime Minister has put it, “build back better” by initiating a green recovery.
Such a recovery would set aviation on a fairer and more sustainable course, while providing any support necessary for workers to shift to green jobs. Now is the right moment to put in place key measures to help ensure that in future the industry acts responsibly in terms of both emissions and taxation.
The joint briefing noted that flights from UK airports are overwhelmingly discretionary leisure travel by UK households in the top half of the income spectrum. The 15% of the UK population who fly frequently are responsible for 70% of all flights, with the 1% most frequent flyers accounting for close to a fifth of all flights by English residents.
It argued that “Higher taxes, equitably levied, on flights from the UK would help both to reduce demand and to put the sector on a trajectory compatible with net zero. There are numerous taxes which could be combined to achieve this including: a frequent flier or air miles levy, which would be the most equitable instrument; VAT on plane tickets; introducing excise duty on aviation kerosene; raising Air Passenger Duty.”
See the full briefing at
UK airlines call for tax break to help boost demand
20th July 2020 (Reuters)
LONDON (Reuters) – A group representing UK airlines including British Airways, easyJet and Ryanair called on the UK government to suspend a tax on flights to boost demand and help the industry recover from the coronavirus pandemic.
Airlines UK said on Monday that the government should waive Air Passenger Duty for a year to save routes and up to 8,000 jobs in an industry which has been battered by the virus, and which is already facing over 30,000 job cuts.
Britain’s airlines, airports and ground handling companies have benefitted from government employment support schemes and loans but there has been no specific support package for the industry.
That’s in contrast to some other European countries which have stepped in to help, such as France which granted Air France 7 billion euros ($7.9 billion) in aid, including state-backed loans, to help it to survive.
Many UK airlines are worried about the coming winter season, traditionally a tougher period for them financially as fewer people travel.
“UK airports are in danger of losing many valuable routes over the coming months unless the government steps in with a support package for our sector – starting with an emergency APD waiver to get us through the winter and into the recovery,” said Airlines UK CEO Tim Alderslade.
Airlines UK said on Monday that APD relief would boost passenger demand by around 12% over the next 12 months.
APD is a tax on passenger flights from UK airports which adds 13 pounds ($16.37) to an economy ticket for a flight between the UK and Europe, but which can add over 170 pounds to some long-haul business class tickets.