Sunday, October 30, 2011

Airlines abandoning UK airports because of sky-high aviation tax

Airlines are abandoning UK airports and opting to fly from European rivals because of Britain's sky-high aviation tax, business leaders warned yesterday.

Airports have seen a string of carriers cancel or transfer routes because of Air Passenger Duty (APD).

Aviation industry bosses yesterday declared war on the 'flying poll tax' through an open letter.

Senior representatives from 12 airports and BAA chief executive Colin Matthews criticised the Coalition's plans to increase the duty by nine per cent next month – double the rate of inflation.

The letter says: 'The impact will be...to displace flights to Europe, rather than to generate more tax revenue.'

At the same time, the British Chambers of Commerce has warned that aviation capacity will not be able to cope with the projected 335million passengers expected at UK airports by 2030 and that this will lead to a loss of jobs and slower growth.

The BCC report said that in other European countries, expanded hub airports, such as those at Amsterdam, Paris and Frankfurt, were increasing the potential for investment and economic competitiveness.

The BCC argued that an additional runway at Heathrow, which was falling behind rival airports, would address the capacity issue and ensure the UK had a hub airport that can compete with other countries.

The Fair Tax on Flying Alliance – an alliance of airports and airlines – also recommended scrapping planned increases in the APD tax, saying it had increased massively since 2007.

But Richard Dyer, Friends of the Earth transport campaigner, claimed rises in APD were necessary.

He said: 'Aviation is very undertaxed compared to other sectors.

'Consumers don't pay VAT on airline tickets, and airlines don't pay fuel tax. And aviation is a very polluting industry.

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