Britain may push more flyers to regional airports with a new two-tier passenger tax system

Source: The Daily Telegraph

Travellers flying from London’s biggest airports could be asked to pay more under new plans to reform Air Passenger Duty (APD). It is claimed the Treasury considering a proposal from the owners of Liverpool John Lennon Airport to introduce a two-tier rate of APD, with lower charges for those flying from outside the capital. Chloe Smith, the economic secretary to the Treasury, was reported by the Sunday Express to have told representatives from Peel Holdings – which owns three other airports in the north of England: City Airport Manchester, Doncaster Sheffield and Durham Tees Valley – that the suggestion is being examined by the Government. It is hoped that such a move would encourage airlines and travellers to take more flights from Britain’s regional airports, many of which have witnessed a sharp fall in passenger numbers during recent years. It has been claimed that APD has had a disproportionate impact on the country’s regional hubs. Around 190,000 passengers flew from Durham Tees Valley last year, for example, down from 912,000 in 2006, and 820,000 flew from Doncaster Sheffield in 2011, down from 947,000 five years previously. While a reduction in the level of tax paid by those flying from regional airports would be welcomed by many, airlines, tour operators, and some businesses would probably object to the proposal if it meant an increase in APD on flights from Heathrow and Gatwick. The Taxpayers’ Alliance, a pressure group which supports lower taxes for UK residents, last week described APD as a “burden” on ordinary British families, while many believe the tax is hindering the country’s economic recovery. Meanwhile, the Fair Tax on Flying campaign group, consisting of more than 30 airlines and tour operators, stepped up its protest by launching a new website that allows Britons to register their opposition by emailed their local MP. So far nearly 10,000 people have used the website. APD is paid by all travellers departing from a UK airport. Following the most recent rise in the tax, an eight per cent hike made in April, a family of four travelling to Europe must pay £52 in APD, while those flying farther afield are hit even harder. The cost of APD for a family of four flying to the United States or Egypt, for example, is £260; for those travelling to the Caribbean or South Africa, it is £324; and a family visiting Argentina or Australia must pay £368. Those figures are doubled for those flying in premium-economy, business- or first-class cabins. In 2005 APD was just £5 per person on European flights, and £20 per person on all other services, meaning it has risen by as much as 360 per cent in seven years. Further rises are planned for next year.