Airlines Slam UK Government over Passenger Duty Changes

 - October 27, 2021, 11:13 AM

The airline industry reacted angrily to changes to the UK’s airline passenger duty (APD), which lawmakers announced as part of the country’s new budget in Parliament on Wednesday. Chancellor of the Exchequer Rishi Sunak reduced duty on domestic flights within the UK while introducing increasing APD of long-haul flights of over 5,500 nautical miles from London. The changes do not take effect until April 2023.

The domestic rate of APD will be cut in half for economy-class passengers, falling from £13 ($17) to £6.50. The ultra-long-haul duty—which will mainly impact flights to Asia, Australasia, southern Africa, and Latin America—will now have an economy-class rate of £91 (up from £82). Business and first-class passengers will pay significantly more.

IATA condemned the increases as undermining the UK airline industry as it struggles to recover from the Covid pandemic.

“Masquerading this cash grab as a green tax the week before the COP26 [climate change conference] is the height of political hypocrisy that people are fed up with,” said IATA director general Willie Walsh. “Just two weeks ago, the global airline sector committed to achieving net-zero carbon emissions by 2050. The aim is to both keep flying affordable and make it sustainable. A tax hike does not help. We know that none of the billions of pounds collected will be directed to green investments.”

Sunak said that in the new budget, funding for the Aerospace Technology Institute’s support for new aviation technology will continue. However, he declined to provide details about future funding levels, a day after UK Aviation Minister Robert Courts confirmed that the government’s so-called Jet Zero strategy will not be finalized until 2022. “Our members will be looking for early clarity on an ATI funding level that matches industry ambitions here in the UK to deliver net-zero aviation,” said industry group ASD in a written statement.

Walsh, a former British Airways chief executive, was less diplomatic. “Placing an even larger APD financial barrier between the UK and the world makes a mockery of the ‘global Britain’ ambition by dealing yet another blow to the UK’s competitiveness. The reduction in domestic APD tells us that the government understands the economic destruction that APD causes. It should apply this wisdom to international connectivity and aim to boost UK competitiveness by eliminating APD completely. Frankly, it is astounding that the UK chancellor thinks now is the time to raise the cost of flying.”

Environmentalists were also dismayed by cuts to Britain’s domestic APD rates. They argue that travelers should be discouraged from taking short flights when alternatives such as rail are available for them.