Thursday, May 19, 2011

EasyJet Claims APD Changes Could Hurt the Economy and Environment

Jacking up the Air Passenger Duty (APD) would have a 'destructive' effect on the economy, the environment and jobs, a report commissioned by budget airline EasyJet said yesterday.

The airline that is renowned most for doling out cheap tickets on flights posted the report yesterday on its official website.

The report claims that changes in the Air Passenger Duty will reduce the numbers of UK travellers by three million a year, increase in CO2 emissions by 360,000 tonnes a year and trim down the tourist spending in the country by £475 million a year.

The Government proposals, published in the month of March, would raise APD from £12 to up to £16 per person for flights up to 2,000 miles and reduce the rates and number of tax bands on long-haul flights.

As per the report by Frontier Economics, even though the duty change would cut down the total number of flights, the level of CO² emissions will go up as more and more people will be encouraged to book long-haul flight tickets.

The report also states that the changes would shrink down the UK gross domestic product by more than £2.5 billion a year. This could lead up to the loss of up to 77,000 jobs and could impact regional airports.

EasyJet, one of the most popular carriers in the UK, is in the favour of a per-plane tax as against the move to charge per-plane tax. The airline fears that the increase in the APD would discourage some British travellers from planning their holidays, particularly the short, weekend breaks. EasyJet considers that vacationers who look for tickets on cheap flights will perhaps be disheartened with the increase.

EasyJet’s CEO, Carolyn McCall called on the Government to think again on the policy of aviation taxation, “This independent report shows that the Government’s proposals on APD would be bad for the environment and the economy. APD has already risen by 140% since 2007 on short haul flights. This report provides convincing evidence that the Government should not impose further increases in APD on short haul flights and should rethink its policy on aviation taxation,” she stated.

Virgin Atlantic Joins the Chorus

Virgin Atlantic was seen to be sharing the concern raised by the independent report published by EasyJet. A Virgin Atlantic’s spokesperson said, “We share concerns about the impact of further increases on APD on family holidays, British business, and tourism alike.

“However, if the Government is determined that increases are necessary, then these should be apportioned fairly. Historically the percentage increase in this tax has been much higher for long haul flights than it has for short haul flights where alternative forms of travel often exist. This is illogical for a tax that is claimed to be an environmental one,” VA’s spokesperson observed.

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