25 April 2008

Planned new UK air tax could penalise long haul carriers

A planned new air tax could raise the cost of family holidays outside Europe by Ã&#pound;90, it has been claimed.

Aviation industry body the British Air Transport Association calculates that British families will have to pay Ã&#pound;250 just to leave the country in 2011, up from Ã&#pound;160 now.

The warning came at the end of a consultation period on government proposals to introduce a new aviation duty to be levied on every departing aircraft to replace Air Passenger Duty.

The new tax is expected by the Treasury to raise more than Ã&#pound;3.5 billion in 2011-12 against Ã&#pound;971 million from APD in 2006-07, according to BATA.

The associationÃ¢â¬â¢s secretary general Roger Wiltshire claimed that the proposals would subsidise foreign carriers and airports because it would make it cheaper for travellers to connect to a hub on the Continent to then fly long-haul rather than taking a flight direct from the UK.

"Passengers who choose to make their long-hail journey via an airport in another EU state would benefit from a windfall reduction of 75%. These passengers currently pay Ã&#pound;40 APD whereas in the future they would only pay short haul aviation duty of around Ã&#pound;10.

"This large incentive will not only create significant competitive disadvantage for airlines providing long-haul services from UK airports such as Heathrow, it will also encourage more indirect journeys, with the increased emissions that result."

He claimed that the plan would deliver "questionable environmental benefits"as it is not linked to the emissions of a particular aircraft.

"So it provides no incentive to invest in more environmentally friendly aircraft, yet will threaten the UKÃ¢â¬â¢s air links, economy and families,"added Wiltshire.

He went on to say: "We accept the principle that aviation should meet its environmental and social costs. Indeed, as the government has alraedy accepted, the industry meets its climate change costs in full following the doubling of APD last year.

"We feel strongly that the proposed new duty fails to meet its environmental objectives and the amount the Treasury is planning to rake in is excessive and unjustified.

"The proposal also creates new and significant market distortions.

"Furthermore, it is logical that aviation duty should be abolished when the European wide system of emissions limits and trading includes air travel, which is expected in 2012, to ensure passengers do not pay twice."

by:Phil Davies