Posts Tagged ‘APD’

Airlines ask government to scrap passenger tax

Friday, December 30th, 2011

On 1 January, the emissions trading scheme will begin across Europe as a way of offsetting the amount of carbon dioxide being produced by airlines. The scheme will apply to all airlines land or taking off from airports in the EU. Carriers will have a cap put on the amount of CO2 they are allowed to produce and will have to pay for credits.

In the UK a number of airline bosses have formed an alliance to demand the abolition of the controversial Air Passenger Duty. They are arguing that the tax was originally intended to offset emissions and now that ETS is being introduced it no longer has to serve that purpose.

In a statement IAG boss Willie Walsh, Carolyn McCall from easyJet, Ryanair’s Michael O’Leary and Steve Ridgway of Virgin Atlantic explain that there is no proof that the government has ever used APD to pay for the environment. Currently the Exchequer receives £2.5 billion every year from APD and is hoping to ramp this up to £3.6 billion by the middle of the decade.

The group points out that according to figures compiled by the government, airlines in the UK were already contributing enough money to cover carbon emissions in 2008. APD since then has soared. By 2020 it is estimated that airlines in Britain will be paying around 400 million euros under ETS.

The scheme applies to all airlines visiting airports in Europe and has come under fire from foreign governments who feel the charges do not conform to international legislation.

Airlines ask government to scrap APD

Friday, November 18th, 2011

A group of airlines in the UK and Ireland have come together to ask the government to abolish Air Passenger Duty. The tax was first added to tickets in 1994 as a way of offsetting the carbon emitted by jet engines. What was between £5 and £40 added to the price of a ticket is now between £24 and £170 depending on the destination and the class which is being flown.

Ryanair, easyJet, British Airways and Virgin Atlantic are all saying that the charge is extremely damaging and needs to be scrapped. They say that holidaymakers in the UK are being unfairly penalised, and that the country has become far less attractive to overseas visitors.

The Treasury, which stands to make around £2 billion from APD this year, has defended the tax. A spokesperson said that UK travellers were not required to pay VAT for their flights, unlike people in a number of other European countries.

Conservation groups have also defended APD, saying that it is necessary for combating the damage done by aircraft engines. Although the Chancellor made the decision not to raise the price of APD this year, many expect that it will be hiked next year by around 10 per cent.

Willie Walsh, boss of International Airlines Group and former head of British Airways, said he had contacted George Osborne to ask him to rethink APD. The Treasury said that it had already examined a number of ways of simplifying the tax and that announcements would be made in the coming weeks.

APD increase to be included on pre booked flights

Wednesday, November 9th, 2011

Britain is facing an announcement that, for the fourth time in just five years, Air Passenger Duty will be increased. Many in the airline industry are concerned that the hike will hit those who have already booked their seats on future flights. If the announcement in the Chancellor’s Autumn Statement is as predicted, the new level of APD will be introduced on 1 April 2011.

This increase will be added onto all flights after that date, meaning that those who have thought about their travel plans well ahead of time will still be required to pay the controversial tax.

Virgin Atlantic has said that it already has thousands of advanced bookings, and if the other airlines are taken into account this amounts to some 6.5 million seats already bought for after 1 April next year. APD will have to be tacked onto the price of every one of these tickets.

If the government manages to put its proposals through, Virgin said that the £2 billion raised because of the tax in 2010 would increase to £3 billion. It is expected that an average of 10 per cent will be added to the price of airline tickets after the Chancellor makes his announcement. However, some prices could go up by a third.

Hoteliers, tour companies and restaurateurs are predicting that APD will cause bookings next year to fall by around five per cent. The November 2010 APD increase saw some flights shoot up in price by well over 50 per cent.

Travel boss calls for airport expansion

Wednesday, April 6th, 2011

Chairman of the Association of British Travel Agents, John McEwan, has said that even though the government needed to be congratulated on postponing any increase in the level of Air Passenger Duty until next year, more had to be done to make sure that the tax was a fair tax.

Speaking to delegates at a travel conference in London, the Abta chief also demanded better financial protection for those booking a holiday.

He pointed out that only around half of those booking a holiday in the UK were fully financially protected against something going wrong. He appealed to the travel industry as a whole to make sure that everyone was insured, no matter how they book their foreign holiday.

Mr McEwan also attacked the government for its decision not to agree to the expansion of airports in the south-east including Heathrow, Luton and Gatwick. He said that by not increasing capacity, the UK risked becoming uncompetitive. One of the reasons the coalition has denied plans to expand is the potential impact on the environment through CO2 emissions and noise pollution.

Keith Williams, chief executive of British Airways, also addressed the delegates and said that the airline industry needed to work harder at tackling the problem of climate change. He added that the country’s flag-carrier continued to look at ways to make itself greener. He too attacked the level of APD saying that even though an increase had been deferred to 2012, airlines in the UK were still being more heavily taxed than their global competitors.

Airlines attack Air Passenger Duty

Monday, November 1st, 2010

Airlines have been hitting out at Air Passenger Duty (APD). British Airways said that on some long-haul flights APD could mean a fare increase of up to 55 per cent. The UK government has called APD an environmental tax. BA claims it is already paying twice over for the amount of carbon it emits, even before the new charges come in to play. In a press release, BA pointed out that taxing the airline industry excessively could damage both the economic and social advantages of air travel.

The airline added that Aviation was responsible for allowing UK businesses to perform on a global stage as well as providing employment for around 500,000 people across the UK.

Rivals Virgin Atlantic has also criticised APD saying it could result in fewer families being able to afford to fly. EasyJet pointed out that a £12 rise on the ticket price of a European flight would mean that since 2007, the tax will have gone up by 140 per cent. The budget carrier also attacked the government’s argument that APD was an environmental tax by pointing out that there is no correlation between emissions and price.

Transfer passengers will be exempt from paying the duty as will those who can afford to fly on a private jet, according to the carrier; meaning the overall cost will have to be absorbed by ordinary passengers.

During the election, both coalition parties said they would be changing the duty into a per-flight tax. This would better reflect the affects of the airline industry on the environment.

Luton airport takes another hit

Friday, September 4th, 2009

In another blow to Luton, easyJet has announced that it’s cutting flights to the beleaguered airport by at least 20%. Earlier this week SkyEurope, another airline serving Luton, declared bankruptcy and stopped all operations there as well.

The easyJet move carries with it the prospect of enormous job cuts for the local area. They currently employ over 500 pilots and crew at the Luton location. Besides that, an estimated 4.7 million passengers move in and out of the airport each year on easyJet flights.

Officilas at easyJet specifically cited the Luton Borough Council’s stubbornness on fees as one of the reason for cutting flights. The Council is responsible for setting fees at the airport and easyJet was seeking a more competitive cost base. The Council has raised fees at the airport by more than 25% in the past 3 years.

At the same time, easyJet and other low-cost airlines have been struggling in the face of the recession and have been seeking cost cutting measures on all levels. With the current fee structure, combined with the effects of the government’s increased APD, the airline can no longer operate profitably at the Luton venue.

In addition to cutting service at Luton, easyJet is going to completely pull out of East Midlands airport which it considers to be a stagnant market. The move out of there will effect 120 jobs.