Industry has work to do on APD

The industry campaign against Air Passenger Duty (APD) has cranked up impressively following an ABTA-hosted meeting to coordinate activity at the end of May.

The idea is to whip up public antagonism and pressure MPs, particularly in marginal constituencies and where a high proportion of voters have connections to the Caribbean. It could make a difference in the run up to an election.

There is a growing online petition which ABTA has missed little opportunity to publicise – with news releases such as that declaring “Stop the government taxing families out of the skies”. Industry PR group FlyingMatters has maintained a barrage of its own, commissioning a poll in marginal seats which suggests overwhelming distaste for this “stealth tax”

Long-haul destinations have every reason to be aggrieved – APD rates will double from November 2010, adding £50 to a Caribbean fare. For an island dependent on UK visitors the impact could be devastating.

Charter carriers with premium economy seats, on which the APD will be double, are likewise miffed. But the campaign brings together almost everyone in the industry bar Ryanair, and its message is clear – the duty on long-haul flights will be penal and the government’s claim that it will benefit the environment is hokum.

Will it work? My guess is the Treasury will look again at the APD bands and put the Caribbean on the same rate as the US – removing the most serious anomaly. If the Caribbean then considers the job done, that could drive a wedge in the coalition.

Focusing on the election would work best if Gordon Brown’s opponents also oppose the increases. There is scant evidence of that. But crucially, what government is going to scrap a tax on discretionary spending when whoever wins the election will face rising unemployment and a revenue black hole?

Market analyst Mintel suggests consumer reluctance to reduce flying so long as they can afford it plays into the Treasury’s hands, while FlyingMatters’ poll that rated the rises “unfair” also found a majority of respondents unaware of APD at all. The industry has its work cut out.


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