Responding to the UK Budget, Carolyn McCall of easyJet, Willie Walsh of IAG, Michael O’Leary of Ryanair, and Steve Ridgway of Virgin Atlantic, jointly said: “At a time when the Government talks about creating jobs and growth, its blinkered insistence on further increases in Air Passenger Duty achieves precisely the opposite.
“Youth unemployment is at record levels. Inbound tourism is a major employer of young people, but international visitors are being turned off the UK because of the exorbitant level of APD – which is by far the highest air travel tax in the world.
“In every other leading country, aviation is an expanding industry that underpins and facilitates growth in other parts of the economy. In the UK, rises of up to 360 per cent in APD in the last seven years are squeezing the life out of the economy. The CAA has confirmed that UK passenger numbers last year were the same as in 2004.
“Yet again, the Treasury is pressing ahead with further rises without any analysis of their effect on the wider economy. In the absence of such a study, we must assume that the Treasury knows it cannot justify this job-destroying tax in overall economic terms. APD must be scrapped.”
The HM Treasury document ‘Budget 2012’ includes the following:
2.158 Aviation tax: rates – Air Passenger Duty (APD) rates will rise from April 2012, as set out at Autumn Statement 2011. APD rates for 2013-14 will rise by the RPI from 1 April 2013, as set out in Overview of tax legislation and rates.
2.159 Aviation tax: business jets – The Government will proceed with the extension of APD to flights taken aboard business jets, effective from 1 April 2013. Details were set out in the Government’s response to the APD consultation on 6 December 2011. (Finance Bill 2012) (c)
2.160 Aviation tax: Northern Ireland – From 1 November 2011, the APD rates for direct long haul flights departing from Northern Ireland were cut to the short-haul rate (£13 per passenger in economy and £26 per passenger in business and first class, from 1 April 2012). The power to set APD rates for direct long haul flights departing from Northern Ireland will be devolved to the Northern Ireland Assembly. (Finance Bill 2012)