Leading the charge against the APD increase are major carriers such as Virgin Atlantic, British Airways through its parent company IAG, Ryanair and EasyJet.
It has been confirmed that the UK authorities intend to increase the APD, starting from April this year. However that is not expected to be the final upward movement on the tax, because already industry officials are crying foul over the plan to institute even further increases to grow revenue by 46 percent by the year 2016, admitted the UK’s Chancellor of the Exchequer, George Osborne.
On March 12, the airlines’ CEOs, Carolyn McCall, Willie Walsh, Michael O’Leary and Steve Ridgway, said: “These endless cumulative increases in APD are pricing families out of flying – both from and to the UK. That means fewer visitors to the UK, which destroys jobs in our tourism, aviation and hospitality industries – and chokes off opportunities for young people at a time of exceptional youth unemployment.
The new hikes, said the airline representatives, would mean a family of four paying tax of 440 pounds sterling to fly economy-class to the Caribbean, and 500 pounds to Australia. In 2005, a family of four travelling to any long-haul destination would have paid just 80 pounds.
On the other hand a family of four in Scotland, or Northern Ireland, flying to see friends or relatives in England, three times a year, would have an APD bill of 420 pounds sterling. In 2005, it would have been 120 pounds sterling.
Aviation figures have confirmed this week that UK passenger numbers in 2011 were at the same level as in 2004. Seven years of rising taxes have brought seven years of no growth.
“Aviation wants to, and should be, playing a leading role in economic recovery – as it does in so many other countries. But the UK imposes the highest aviation taxes in the world, and keeps on increasing them without any analysis whatever of their overall economic impact. We are exporting economic growth, and jobs, to competitor countries. How much longer must this madness go on?
The airlines have called on the government to suspend the planned rises pending an independent study of the economic effects of such a tax rise.
The airlines are confident such a study would show that APD’s damage to economic activity outweighs the revenue obtained. It is irresponsible of the Treasury, if it is serious about pursuing economic growth, to keep piling on APD increases without conducting a study of this kind, argued airline officials. The planned increases will reduce passenger numbers and hinder economic recovery, stated airline executives.