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07 February 2012 | Sign In
Plans to replace Air Passenger Duty with a per-plane tax
Another heavy blow to the UK’s airline industry?
There will be some serious work to be done if the new coalition government wants to make its plans to scrap Air Passenger Duty and introduce a per-plane tax a success.
The agreement made on May 11 stated:
”The parties agree that a switch should be made to a per-plane, rather than per-passenger duty; a proportion of any increased revenues over time will be used to help fund increases in the personal allowance.”
When Labour previously proposed a similar idea, it fell flat on its face. Mike Carrivick, Chief Executive of the Board of Airline Representatives in the UK (BAR UK), said that from a consumer point of view a per-plane tax could be a "dog's breakfast" because of the complications which would arise from having to split the tax between passengers. Because of airlines not being able to talk amongst themselves to agree a common rate, there would be different rates on the same route, depending on which airline you fly.
Easyjet have said the new duty would be fairer and greener because it would discourage airlines from flying half-full aircraft.
In the previous proposal there was to be a maximum take-off weight times a distance factor, which would have had the undesirable effect of making the heaviest plane, which is also the cleanest, the Airbus a380, most expensive of all to run. You could have ended up with the relatively clean Airbus 320s in the same weight band as the McDonnell Douglas md80s, which would have had no positive effect on the environment whatsoever.
British Airways said the best way to address aviation’s impact on the environment is by the inclusion of airlines within the EU emissions trading scheme which will happen from 2012.
Mike Carrivick of BAR UK had previously said the new proposals were “not welcomed” and would effectively be a double tax.
Is this really a duty that could have a positive effect on the environment or just another heavy blow to the UK’s airline industry?
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Kate Garbutt, london 15 May 2010, 04:36PM | |
Great article. Interesting point. I think airlines would be forced to finally take green issues into consideration and stop running these non-environmentally friendly planes with the introduction of this tax. However, whether the airline industry could take this kind of a blow is a very good question! I think it boils down to one simple fact for the average bod....air fare is going to rise significantly.So what do people value more, the currency in their pockets, or the well being of the planet? | |
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Thelma Wilson, Kidderminster 21 May 2010, 09:29AM | |
I agree with Kate Garbutt, this is a good article. I had not understood the point before and I can now see what was intended to be a good idea will distort the market and may be counter-productive for the environment. | |
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This does show how difficult it can be for politicians to come up with a workable tax regime. I had originally thought that the idea was to put the tax on aviation fuel, which seemed sensible to me. I presume that the more fuel you use, the more 'damage' that you do to the environment (assuming that there actually is any causal link). The fuel tax seemed to cover most of the angles as fuel usage must relate to number of passengers, distance flown and efficiency of the aircraft. I would be intrigued to know why this idea was dropped. | |
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Justin Gills, London 22 June 2010, 04:27PM | |
I can't see any reason why UK departing passengers needing long haul flights will not just fly on the cheap tax bracket to mainland Europe and then catch a connecting flight to their destination. Meaning for these passengers no extra per plane tax and also extra revenue for non-British airlines. | |
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Colin, Essex 1 July 2010, 02:23PM | |
Airlines are already struggling to deal with record fuel prices, the aftermath of the volcanic ash etc, while initially this policy may appear to remove financial burden directly from passengers, ultimately the airlines will still need to manage this cost, so it will inadvertently be passed on to consumers | |
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David Lane, Sevenoaks 1 July 2010, 02:31PM | |
Holidaymakers could also suffer from a lack of competition if airlines which fail to regularly fill planes start axing flights in a bid to avoid paying the per plane duty on unprofitable routes. | |
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