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Published on Thursday, May 13, 2010

Industry welcomes plans for per-plane air tax - UPDATED



ABTA has welcomed the news that the new coalition Government has agreed to adopt a per-plane tax.

But it is calling on the Government to rethink its policy to scrap permission for a third runway at Heathrow and new runways at Stansted and Gatwick (see separate story).

ABTA chief executive Mark Tanzer said: “We have always stated that the travel industry should be taxed fairly and that a system more closely aligned to the efficiency of aircraft and distance travelled is the fairest way to achieve this, and we welcome the Government’s move to adopt a per plane tax.

"However, the amount of this taxation must not be set at a punitive level and when the European Union’s Emissions Trading Scheme comes into force in 2012 it should be scrapped.

"Before the Government makes final decisions about individual airports it needs to consider the overall capacity needs of the UK. Banning any airport expansion will severely damage UK PLC without significant environmental benefits as air traffic will simply migrate to our competitors on the continent."

ABTA said it will be looking to meet with key staff as soon as possible.

The move towards a per-plane tax was also welcomed by EasyJet chief executive Andy Harrison.

"The two Government parties have made a firm coalition agreement to reform the daft APD, which taxes full planes but not empty ones. It’s now time to act and make APD a fairer and greener tax without increasing the tax burden on the flying public.”

UKinbound chief executive Mary Rance said: “We look forward to this Government actioning its pledges to review and amend APD and hope that their solution can remove this barrier to UK entry."
Gareth Williams, CEO of flight comparison website Skyscanner said: “APD taxation has been a bone of contention within the travel industry for some time now.
“It was introduced as a duty charged on the carriage of passengers travelling from UK airports under four bandings based on the distance between London and the capital city of the destination.
Extortionate increases were due this November which would see the highest distance tax bracket increase from £55.00 per flight in November 2009 to £170.00 in November 2010.
The government classified APD as a green levy to discourage long haul flights by putting a financial burden on passengers. As this tax was never specifically ring fenced for investment in environmental or carbon offsetting initiatives many felt it was simply a revenue generating device for a government suffering from a significant budget deficit.
“The abolishment of APD in favour of a ‘per plane levy’ means airlines would be charged per plane in order to incentivise them to fly with full aircrafts or invest in more fuel efficient fleets.
Airlines are already struggling to deal with record fuel prices and, while initially this policy may appear to remove financial burden directly from passengers, ultimately the airlines will still need to manage this cost so it will inadvertently be passed on to consumers.”
Caribbean Tourism Organisation secretary general Hugh Riley welcomed the new coalition government’s decision to scrap APD in favour of a per plane tax.
He told TravelMole: “The Caribbean Tourism Organisation is extremely happy that the matter of the Air Passenger Duty has been given priority so early in the tenure of the new British government, and that the government is keeping its pre-election promise to reform the tax.
“This speaks volumes to us about the importance that the UK government has attached to this issue.
“It also speaks volumes about the strength of unity of the Caribbean. We made our voices heard and we did what we felt was necessary to bring attention to the matter.

“We eagerly await the details of the new system.”
Meanwhile, Cheapflights has called on the Government to place more focus on aviation and to ensure flight prices do not rise at the predicted 5% by the end of 2010.

It is also calling for further research into volcanic ash and for improving consumer confidence in the aviation industry following a spate of shutdowns and the BA strike.

*By Bev Fearis and Phil Davies

* What do you want the new Government to do to secure the future of the travel industry. Send us your ‘wishlist’ by clicking on Add a comment below. 


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  • Why build a NEW airport

    Unlike Paul I am not in favour of a brand new airport. An estuary aiport would require completely new infrastructure leading to far greater additional environmental impact than extra runway capacity at existing airports, which, in LHR's case would lead to reeduced time queuing in the air and on the ground and relatively less impact for the benefits gained. Surely the way forward is to encourage more efficient use of existing resources, improved public transport access to existing airports and more environmentally friendly propulsion systems (quieter, more efficient and less dependent on non renewable and polluting energy sources) A new airport is not radical and not environmentally friendly IMHO....

    By Ian Wiseman, Thursday, May 13, 2010

  • Disagree that Industry supports per plane tax

    The headline that a per-plane tax is supported by industry is misleading, and has not taken into account airlines' views. As far as our c90 members are concerned, the overall consensus is definitely against for several reasons. We were among those who scrutinised Labour's proposals for a per plane tax and nobody could see how it would work without penalising the greenest of aircraft. Aviation is already discriminted against other modes through APD, and ETS will be implemented to cover the environmental aspects of flying, so why ABTA should wish to see its clients double-charged is puzzling indeed.

    By Mike Carrivick, Thursday, May 13, 2010

  • New London Airport

    I think the decision to scrap the Heathrow expansion is the correct one to make. The local infrastructure struggles already, so would seriously strain with an enlarged airport. I once lived under the flight path and dread to think how much noisier and disruptive a third runway would prove to be for residents. However, I'd now like to see some serious investigation done on Boris Johnson's estuary airport. The benefits of this scheme seem obvious, in that capacity is increased with little extra land expenditure, because of straight-in landing options it has the potential to be a more enviro-friendly option but mostly because it would show the world that the UK is innovative, forward thinking and capable of making big decisions. The message would be a strong one at a time when confidence is at a low ebb.

    By Paul Bondsfield, Thursday, May 13, 2010

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