AIR PASSENGER DUTY (APD) & AVIATION TAXES
APD was introduced in 1994 and has seen several increases since, the last being a doubling of APD rates effective 1 February 2007. Current rates are:
Reduced Rates (economy seats)
£10 for European destinations*
£40 for all other destinations
Standard Rates (premium seats)
£20 for European destinations*
£80 for all other destinations
*EU Member States, Albania, Croatia, Bosnia-Herzegovina, Iceland, Kosovo, Macedonia, Montenegro & Serbia, Norway, Switzerland and Turkey.
Effective 1 November 2008, the business class-only airlines will pay the standard APD rate rather than the reduced rate they pay now. On 9 October 2007 the Chancellor announced, as part of his pre Budget Review, a consultation to move to a per plane tax/flight levy to replace APD, to take effect 1 November 2009. The Treasury/HMRC launched this consultation on 31 January 2008 suggesting that the basis of aviation duty is a combination of maximum take-off weight of the aircraft and a distance factor.
The 2003 Aviation White Paper contained the Government’s views on how aviation should meet its environmental costs with preference given to a scheme of global emissions trading. The EU Emissions Trading Scheme (ETS) is expected to apply to all carriers flying intra, into and out of the EU by 2012 (from the beginning of the new trading block); aviation will be part of a wider ETS.
ABTA’s Position
ABTA accepts that aviation should pay its proper environmental cost and believes that that cost is already reflected in the current APD level. ABTA has always supported the airline lobby that emissions trading is the most appropriate solution and should eventually replace APD. ABTA is part of the Flying Matters coalition and Responsible Air Travel Alliance, both arguing against further taxation of air transport. ABTA believes the general public must not be disenfranchised by using economic instruments as a means of raising costs of aviation.
ABTA supported the Federation of Tour Operators' (FTO) request for Judicial Review into the doubling of APD, as the position tour operators found themselves in, under the Package Travel Regulations, of not being able to surcharge was untenable.
ABTA has responded to the Treasury/HMRC consultation. We’ve continued to press for the abolition of any flight levy when aviation joins the ETS. We've expressed concern about the timing given the tour operators’ need to publish brochures well in advance and not knowing how aviation duty will be translated into a cost per passenger with the likelihood of it varying from airline to airline. The proposed duty provides no incentive to airlines to invest in more efficient aircraft which must be addressed. Lastly, we have expressed concern about passengers required to take a domestic flight to connect with an international flight frequently having to pay duty on both segments.
Last updated: 14 May 2008
