Higher Air Passenger Duty may damage UK economy

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As Air Passenger Duty (APD) goes up, research by Oxford Economics has shown that removing the UK aviation tax could raise £4.2 billion for the economy.

Fri, 27 Apr 2012

As Air Passenger Duty (APD) goes up, research by Oxford Economics has shown that removing the UK aviation tax could raise £4.2 billion for the economy.

APD was introduced in November 1994 as an incentive for the aviation industry to reduce carbon emissions. Since then the Government has admitted, as APD is not tied to the individual environmental effects of each company or plane, it is simply a source of revenue.

From April 1st 2012 increases in APD will lead to an average ticket increase of 8%, in moves that will affect long-haul flights most. The British Air Transport Association calls this a “tax on tourism”. The UK has the highest aviation tax anywhere in the world and the costs will affect those travelling from UK airports or international travelers stopping over en-route to other destinations.

The survey requested by the World Travel & Tourism Council found that if APD was abolished, up to £4.2 billion could be added to the British economy in the next 12 months and 91,000 new jobs could be created. This compares to £2.8 billion in extra tax that APD will annually raise.

Simon Buck CEO of British Air Transport Association urged the Government to review the situation, “Britain will lose revenue from overseas, will lose inward business investment from foreign businesses and lose British jobs.”

Simon Calder suggested to Evening Standard readers that the only solution is to avoid UK airports and consider travelling to a different European airport in order to save on APD when flying internationally.