22 September 2008

Chancellor urged to ditch APD

A call for the government to abolish Air Passenger Duty has come from online price comparison site Cheapflights.

As the Labour Party conference took place in Manchester, the company demanded that Chancellor Alistair Darling immediately axe APD.

Cheapflights' chief executive Chris Cuddy said: "With the UK economy teetering on recession, the government needs to act and to act now.

Ã¢â¬ÅâœThe aviation industry has been hit far harder than most sectors of the economy by rising oil prices and infrastructure fees.

Ã¢â¬ÅâœIt will be a sad day indeed when flying once again becomes the preserve of the rich and only the affluent can afford to go abroad.

Ã¢â¬ÅâœAPD creates a double whammy for ordinary working people who are not only prevented from flying to the sunshine but are forced to holiday domestically and thus endure the UK's high prices.

Ã¢â¬ÅâœThe government knows full well that APD has nothing whatever to do with the environment. One of their ministers even admitted it.

"Ministers have been fast to act on Stamp Duty. They must act equally quickly on APD to give the UK airline industry and UK travellers, especially those at the bottom end of the economic scale, the respite they deserve."

The company described as a Ã¢â¬ÅâœconÃ¢â¬~ claims that APD is environmentally positive.

Ã¢â¬ÅâœThe money raised does not get invested in environmental clean-up. APD actually has the opposite effect by undermining airlines' profitability and therefore their ability to invest in more fuel efficient aircraft,Ã¢â¬~ according to Cheapflights.

The company used this and other examples as to why APD should be abolished.

It argued that the UK is the only nation in the G7 that imposes this levy on airline passengers, putting the domestic airline industry at a competitive disadvantage. Additionally, it makes it more expensive for British travellers to see the world than for those of other countries.

APD also makes the cost of business travel from the UK more costly - placing companies at a disadvantage against overseas competitors.

Last yearÃ¢â¬â¢s doubling of APD came at a time when Britain was booming but in an economic downturn, hard-pressed consumers will be deterred from travelling. The knock-on effect on the British travel industry is Ã¢â¬ÅâœimmenseÃ¢â¬~ with 520,000 people are employed directly and indirectly in the British aviation industry.

The increased APD is Ã¢â¬ÅâœregressiveÃ¢â¬~ and prevents many hard-working families from travelling not only to the sun but also to places where holidays are cheaper than the UK, the company added.

APD was also described as Ã¢â¬ÅâœdamagingÃ¢â¬~ to the economies of the developing world, many of which depend on overseas visitors. The lack of such visitors causes direct real economic hardship on some of the world's poorest people.

by Phil Davies