The tax would be welcomed by passengers and airlines, but would drive travelers away from neighboring airports causing friction between regions.
The cross-party Silk Commission has recommended devolving a range of taxation powers to the assembly, including APD, which is currently paid by all travellers flying from British airports.
A statement from Cardiff International Airport praised the recommendation. “We welcome today’s report from the Silk Commission, in particular the recommendation to devolve responsibility for long-haul APD to Wales,” it said. “The ability to control long-haul APD rates is just one tool in the armoury we have to improve air passenger services to and from Wales and increase passenger traffic. We will share today’s excellent news with the airlines we are in dialogue with to increase long-haul services to Wales.”
Following the most recent rise in APD, an eight per cent increase in April, a family of four travelling to Europe must pay £52 in tax, but those flying farther afield are hit even harder. A family of four flying to New York, for example, are liable for £260 in APD, one visiting the Caribbean must pay £324, while those heading to Australia are hit with a £368 tax bill. Those figures are doubled for anyone flying in premium economy, business-class or first-class cabins, and further rises are planned for next year.
APD has been criticised for pricing ordinary British families out of flying, discouraging foreign holidaymakers (who pay the tax on their return) from visiting, and damaging the economies of countries – such as those in the Caribbean – that are heavily reliant on tourism. Airlines have also been put off launching new routes, particularly from Britain’s regional airports, because of the tax.
Just 1.2 million passengers passed through Cardiff airport last year, compared with more than two million in 2006, when APD was just £5 per person on flights to Europe, and £20 per person on flights farther afield.
Last year APD on all long-haul flights from Belfast was reduced from £60 to £12 in a bid to save Northern Ireland’s only remaining long-haul route. Continental Airlines has threatened to scrap its service from Belfast to Newark, as Britons were opting to cross the border and take advantage of cheaper flights to the US from Dublin.
Neighbouring airports were quick to object to the Commission’s recommendations, citing the example of Northern Ireland. A statement from Bristol Airport suggested that cutting APD on flights from Cardiff would jeopardise jobs, connectivity and growth in the South West. It said: “Even when restricted to direct long haul flights, a price advantage in Wales would put vital services from nearby English airports to European hubs at risk and severely undermine the business case for long-haul services from Bristol to the USA and Middle East.”