No change was made to air passenger duty in today’s Autumn Statement, delivered by the Chancellor, Philip Hammond, despite pressure from industry leaders.
Air passenger duty
The only reference to APD made in the published statement was regarding the ‘Discussion paper on options for supporting English regional airports from the impacts of air passenger duty devolution’.
The government has published a summary of responses to the consultation on how to support regional airports in England from the potential effects of APD devolution.
“Given the strong interaction with EU law, the government does not intend to take specific measures now, but intends to review this area again after the UK has exited from the European Union,” the statement read.
Airport Operators Association (AOA) chief executive, Darren Caplan, said: “The AOA is clear that a cut in APD anywhere in the UK should be matched, immediately, by a cut everywhere, so that no parts of the country are disadvantaged in any way.
“We call on the Treasury to publish a plan that sets out how and when this can be delivered.”
Tim Alderslade, chief executive of Airlines UK, added: “It is also extremely disappointing that the government has failed to set out conclusively how they intend to respond to the Scottish government reducing the tax by 50% in April 2018.
“It is still the policy of the government to ensure that airports in England and elsewhere do not lose out by way of competitive distortion and yet by refusing to take a decision on any of the options currently under consideration until we leave the EU – whenever that may be – ministers are prolonging the uncertainty that has built up over the past couple of years.
“The airline community was united in believing that none of the options were satisfactory – principally for the reason that all three would result in undue distortion of the market within England, with negative impacts for regional economies and consumers, and the summary of responses to the Treasury discussion paper published today makes clear that none of the options attracted support within industry.
“The fact that they have not been ruled out is a complete mystery, and begs the question of how the UK government will respond once the APD cut north of the border takes place.”
Speaking more generally, Caplan said the AOA will continue to make the case that APD is unfair on families and is a tax on the UK’s global competitiveness and connectivity.
“Halving APD would have sent out a signal internationally and encouraged airlines to schedule more routes to the UK and fly more frequently on existing routes, boosting the UK’s connectivity,” he said.
“We urge the government to cut APD as a matter of urgency and by doing so open up new trading opportunities, including with emerging markets.”
Alderslade added: “It is increasingly untenable – at a time when we are looking to strike deals and open ourselves up to new markets and opportunities – for ministers to continue to levy such excessively high levels of taxation on air travel.
“With new capacity at Heathrow not likely to be operational for another 10 years at least, it was important for the government to signal that improving connections from airports across the country and making the UK more competitive internationally is a top priority – and they failed in that task.”
Hannah Maundrell, editor in chief at money.co.uk, added: “It is a bit of disappointment that APD wasn’t scrapped, especially with a hike hitting long-haul flights next year.
“This tax is being added to the government’s list of ones to look at as we untangle ourselves from the EU. You can bet it won’t be first in the queue so we’ll need to keep on forking out for Air Passenger Duty every flight we take.
“The Autumn Statement didn’t even try to give a boost to the travel industry, and holiday companies could suffer as travel to Europe gets more expensive thanks to the fall in the value of sterling.”
Taxation and pay