AIRLINES AND SPAA IN TUNE ON PUNITIVE APD TAX

SPAA President Kevin Thom has expressed the Association's strong support for the guiding principles of the Axe The Tax campaign, launched this week by British Airways parent IAG, Virgin Atlantic, Easyjet and Ryanair. Commenting following extensive media coverage of statements by Willie Walsh and Michael O'Leary, the President said, "We strongly endorse the Axe The Tax protaganists' views that APD is punitive and damaging, and that it needs to be scrapped, as a matter of urgency. Whilst we don't believe that adjustments to the taxation levels - for example, VS's suggestion that short-haul APD should be increased to 'subsidise' a reduction in long-haul APD, we do also strongly endorse the regional overview so well expounded by Flybe's Jim French. Undoubtedly, domestic APD needs to be scrapped, with immediate effect - and it seems clear that on APD, the UK travel sector - including major airlines - is united."

Flybe Chairman and Chief Executive, Jim French, reiterated his previous-raised concerns by backing the views voiced by of other airlines highlighting the troubling impact of APD and the very real damage it is doing to the UK economy and to hard-pressed families.

He said, “Domestic air travel has been hammered hard over the past four years. In 2007, APD was £5, a sum in line with that now being charged by several other European countries. Today, UK APD is £12 one way. The result? Four million less domestic air passengers travelling, equating to a 21% decrease in passenger numbers passing through the country’s regional airports.*

I cannot stress enough that the success of regional aviation is crucial to regional development. In supporting commerce, industry and social mobility – not to mention much-needed employment.

The Scottish Office has recognised this for years in the Highlands and Islands. And indeed the UK Government itself has actually acknowledged that this harmful tax restricts air travel by lowering APD for the Continental airline service from Belfast International to Newark!

It is absolutely scandalous that the domestic passenger is being hit hardest in what Flybe has coined the ‘double-dip’ with UK, with domestic flyers being penalised by having to pay APD twice. This is because APD only applies to outbound flights from the UK so those flying abroad pay just once.

How can this Government be serious about developing regional economies when they are taxing the industry out of existence? On the one hand they claim to be promoting regional airports by restricting the development of runways in the South East whilst at the same time penalising the industry through taxation the next.

Unlike every other form of transport, excepting bicycles, air travel is not subsidised; rail and bus travel is heavily subsidised. The aviation industry does not ask for billions of pounds of subsidy to buy new planes or build new airports. It pays for this itself. Air travel costs the UK tax payer nothing.

Once again the Government is failing to appreciate the importance of regional transport links rather making ill-judged decisions to concentrate on a privileged rail system radiating out from London. What about the communities and business in those areas of the country where air travel is the only viable form of transport to go between A and B?

At a time when the country can ill afford to compromise economic growth, it is quite simply nonsensical for the Government to ignore the facts and not to publicly acknowledge that APD is severely impacting the viability of much-needed regional development.”

*Domestic Air travel CAA 2007 v 2011 (to Sep ’11)

MTB 18/11/11