IATA labels APD an "enormous mistake"

Transport association attacks passenger tax rise

The International Air Transport Association (IATAThe International Air Transport Association: IATA represents and serves the airline industry, with a membership made up of around 230 airlines. The association seeks to raise awareness of how aviation benefits the economy, fight for airline's interests and ensure industry regulations are sensible. IATA helps its members directly by offering advice on reducing costs while improving efficiency and on improving safety standards. It also provides professional support in the form of publications, training and consulting. ) has attacked the increase in the UK Air Passenger Duty (APDAir Passenger Duty (UK only): An excise duty charged on the carriage of passengers flying on an aircraft with an authorised take off weight of more than ten tonnes or more than twenty seats. Due when the aircraft first takes off on the passenger’s flight and is payable by the aircraft operator.), labelling it "an enormous mistake."

Giovanni Bisignani, IATA's director general and ceo, said the tax reforms announced on Monday would disadvantage UK carriers compared to their rivals.

He said: "The highest travel taxes in the world reduce the UK's competitiveness for businesses that depend on global connectivity.

"Increases in economy fares are a step backwards to the days when world travel was only accessible to the wealthy."

According to Mr Bisignani, adding to the cost of travel would put the UK's 200,000 aviation jobs at risk.

"The only one smiling is the Chancellor as the Treasury counts its billions," he said.

Mr Bisignani called the proposal "another cash grab by the Treasury, thinly disguised as an environmental measure."

"The UK Government already admits that the current £2bn take from APD more than covers the cost of aviation's climate change impact," he said.

The plan was announced to the House of Commons by Alistair Darling in his pre-budget "recession package".

Despite abandoning a "per plane" Aviation DutyA per plane "green" tax, PROPOSED by Alistair Darling (Oct 08), designed to ensure airline operators fill their seats., the announcement met with criticism from across the industry.

Andy Harrison, ceo of easyJet, said: "All Parties agreed that APD needed to be changed to a tax on planes not people, but now the Government has succeeded in bodging-up the reform of an already bodged tax."

BA said: "There can be no environmental justification for this, and extra taxation is a further blow to the industry at a time when it is reeling from the combined effects of rising costs and falling demand."

The Board of Airline Representatives in the UK (BARBoard of Airline Representatives in the UK: The industry association for scheduled airlines undertaking business in the UK (www.bar-uk.org).) and Virgin Atlantic also spoke out against the plan.

Giovanni Bisignani

Mr Darling's four band scheme would see increases in duty from 2009 to 2010.

Under Band A, for flights in the EU, APD will rise to £11 from November 1, 2009 and to £12 in November 2010.

Under Band B, for flights 4,000 plus miles including some transatlantic trips, the levy will increase to £45 next year and £60 the following.

Band C flights, including those to the Caribbean, will incur a £50 charge in 2009 and to £75 in 2010.

The tax on the longest flights, under Band D, to Asia and Australia, will stand at £60 next year and £85 the year after.

These figures are for economy seats each way. The cost to premium passengers will be much higher.

For example on Band D flights, business class travellers paying £80 will instead pay £110 next November and £170 in 2010.

www.iata.org  www.hm-treasury.gov.uk  www.easyjet.com  www.bar-uk.org  www.virgin-atlantic.com  www.ba.com