XL and other failures make immediate action imperative
London, 22 September 2008: Cheapflights.co.uk, the UK’s leading price comparison site online for flight deals, today called on Chancellor Alistair Darling immediately to axe Air Passenger Duty.
The collapse of XL, the UK’s third largest tour operator, has added urgency to the need to get rid of this tax that was originally imposed at a modest level in 1994 and at the beginning of a sustained economic boom when the average price of crude oil was $15.66 per barrel. The Department for Transport concluded in the December 2003 White Paper, The Future of Air Transport, that any action taken to tackle the environmental impacts of aviation must take into account the effects on competitiveness of UK aviation and the impact on consumers. Clearly this is doubly relevant at this time.
Cheapflights gives four reasons to “axe the tax” now:
1) Britain is the only country in the G7 that imposes this levy on airline passengers. It therefore puts our domestic airline industry at a competitive disadvantage. Additionally, it makes it more expensive for British travellers to see the world than for those of other countries.
It also makes the cost of business travel from the UK more costly – again, putting our companies at a disadvantage to overseas competitors.
2) The increased APD is regressive and prevents many hard-working families from travelling not only to the sunshine but also to places where holidays are cheaper than the UK (Note 1 Prof. Tim Jackson & UK vs Turkey table, Note 2 socio economic groups)
3) APD has been positioned as environmentally positive. This is a con: the money raised does not get invested in environmental clean-up. APD actually has the opposite effect by undermining airlines’ profitability and therefore their ability to invest in more fuel efficient aircraft. “Taxes do not reduce emissions. Only better operations and technology can do that.” (Note 3 – source Bisignani).
4) APD was doubled last year by Gordon Brown, at a time when Britain was booming; now, in an economic downturn, hard-pressed consumers will be deterred from travelling. So the knock-on effect on the British travel industry is immense.