BA sets out APD reform wishlist
British Airways has responded to governmental consultation on APD by calling for two distance bands instead of four, equal tax on economy and premium economy seats, and a phasing out of the levy altogether by 2013.
In a three-pronged approach, BA says the distance bands for taxing should be simply below 2000 miles and above 2000 miles which would “help to address the current disproportionate burden on long-haul flights, and the discrepancies that arise by using capital cities to determine bands”.
The airline says that in the last two years, APD on long haul has risen by between 50% and 112%, while the rise for short haul has been 20%.
It also thinks it is much more reasonable to tax premium economy seats at the lower rate charged to economy seats rather than classifying it with club and upper class seats.
Moreover, BA claims that it would be fairer for the government to start phasing out the levy once revenues from the European Union’s Emission Trading Scheme start flowing to the UK Treasury in 2013.
The airline highlighted the uneven playing field the UK experiences against Europe. In the UK, a family of four flying in economy class from the UK to Florida currently pays £240 in APD. Travelling to the Caribbean, they pay £300, or £600 if they are in premium economy.
In contrast, a German family would pay less than half this in taxes while a French family would pay just £15 and in 22 EU countries, there is no aviation tax at all.
But BA did applaud the government decision to scrap the per-plane levy “which would have caused serious damage to the UK’s connectivity and economic competitiveness”.
British Airways chief executive officer Keith Williams said: “Aviation in the UK is the most undervalued and overtaxed industry in Britain. We want to play our full part in assisting Britain’s economic recovery, but we are held back by levels of tax on flying which are higher than anywhere else in the world.”
The Treasury’s consultation on the reform of APD closes today.
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