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19 May 2012 |

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APD change likely to damage British Airways

Changes favour low-cost carriers

Jasper Kelly Jasper Kelly
Sunday 16 May 2010

The planned changes to APD (Airline Passenger Duty) will damage BA just at a time when it could really do without another drain on its profitability (or increase in its losses). 

Under the old scheme, APD was paid by the passengers. Under the new scheme, it is paid per aircraft. Fly full, like Ryanair and Easyjet, and the airline benefits from the tax charge. Fly with empty seats, like BA, and the airline suffers a double blow.

Of course, this is exactly the environmental aim of this green tax. Fuller aircraft means fewer aircraft and so, less pollution. But is this an ecological over-simplification of the complex relationship between airlines, service standards and customers?

For all its faults, BA provides and remains an alternative to the low-cost carriers. Despite the success of the low-cost model, passengers still chose to travel with BA and other 'conventional' service-lead carriers.

Let us hope that some more detailed thought will be given to these proposals before they are hurried though on the wave of new government optimism.

Angela Mason
Angela Mason
27 May 2010, 06:33PM

This is just what BA needs after a pretty bad year. I think the new government ought to think about the consequences of tax changes.

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Philip Jones
Philip Jones, London
30 June 2010, 01:43PM

I think per plane tax is a worthy alternative to air passenger duty as tax on emissions gives a direct incentive to aircraft manufacturers and airlines to reduce emissions and fuel consumption.

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