Airlines criticize UK government plan to increase air passenger duty
First this from the U.S. Air Transport Association:
The new duty on a one-way Economy class flight from the United States to the UK will now cost $90 – up from $60.
“The decision to revise and further increase the UK duty is a revenue raiser for the government under the guise of environmental protection,” said ATA President and CEO James C. May. “The funds collected do not go to environmental projects, and yet the taxes take money from airlines that they could otherwise invest in more fuel-efficient and greenhouse gas-efficient technologies. This is an illegal action, which we expect to be settled in the courts.”
The ATA says the extraterritorial move by Britain is in violation of the Convention on International Civil Aviation and claims its member airlines, representing 90 percent of U.S. passenger and cargo traffic, have saved 2.5 billion metric tons of carbon dioxide since 1978 – equal to taking 18.7 million cars off the road each year.
Because the tax is levied only on long distance flights that transit to and from Britain, it risks damaging the tourism industry in the UK as well as hurting primarily UK airlines. RyanAir is not happy:
Ryanair has hit out against increases in Air Passenger Duty (APD), claiming that the rise will “devastate UK tourism”.
The airline today said that the increase in APD for short-haul traffic from £10 to £11 in 2009 and to £12 in 2010 has been criticised as “regressive, damaging to the UK tourism industry and devastating for regional airports”.
Ryanair blasted the tax which had been billed as an environmental tax since it was introduced, claiming that “not one penny” of the tax has so far been put towards environmental issues. Ryanair added that the tax “fails to reward airlines, such as Ryanair, which invest in brand new aircraft and operate younger, cleaner, more environmentally friendly aircraft”.
Even IATA is criticizing the plan:
“The chancellor wisely abandoned plans to introduce aviation duty, the proposed per plane tax, on the grounds that this is no time for introducing greater instability in the airline industry — a catalyst for economic growth. Unfortunately, the wisdom stopped there. Adding millions of pounds to the cost of travel from the U.K. will not help the chancellor set the U.K. economy back on a growth path. We have the right diagnosis but the wrong prescription,” said Giovanni Bisignani, IATA’s director general and CEO. “This is another cash grab by the treasury, thinly disguised as an environmental measure. The U.K. government already admits that the current GBP 2 billion take from APD more than covers the cost of aviation’s climate change impact. Airlines take their environmental responsibility seriously. In this year alone, IATA-led efficiency measures have saved over 14 million tons of CO2. How much CO2 will the increased APD save? The blunt instrument of taxation does nothing to improve environmental performance.”
And the TimesOnline says the brunt of the tax will be borne by business travelers:
Once again, as we saw last week, it is business travellers who are expected to cough up for what is touted as a way of reducing the environmental impact of flying but in reality is no such thing. No matter that aviation is about to be included in the European Union’s Emissions Trading Scheme. In fact, aviation lobbying body BAR UK argues that the Department of Transport’s own statistics show that aviation’s contribution “already exceeds its environmental costs by over £100 million per annum”.
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