Air Travel Duty: Passenger tax hike raises revenues and hackles

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Air tickets are expected to go up after the Chancellor took the first tentative steps towards a "polluter pays" policy by doubling air passenger duty (APD).

From 1 February, the tax that passengers pay every time they leave a British airport is to increase from £5 to £10 for economy-class passengers taking domestic and European short-haul flights. On long-haul flights, the duty they pay is to rise from £20 to £40.

Passengers travelling in business class and first class seats, who already pay twice as much APD as those sitting in economy class, will have to pay £40 for short-haul flights and £80 for long-haul flights.

Simon Bullock of Friends of the Earth said the Chancellor's statement was "pretty poor" as far as the environment was concerned, but welcomed the increase in APD as a sign that the Government was seeking to manage the demand for air travel.

However, he said the increase was insufficient and simply took the duty back to its level in 2000.

Jason Torrance, campaigns director at Transport 2000, welcomed the announcement but argued there was a long way to go before the industry paid for the pollution it caused. He urged the Government to spend the £1bn raised by the increased duty on investment in sustainable transport such as buses, trams and trains.

The aviation industry condemned the increase on the grounds that it gave no incentive to use cleaner engines. British Airways described the increases as "highly regrettable".

In a statement BA said: "Air Passenger Duty is an extremely blunt instrument that provides the Treasury with extra funds for general public expenditure without any benefit to the environment whatsoever.

"Further taxing hard-working families and British businesses is not the way to address climate change. Unlike other transport sectors, UK aviation pays for all its own infrastructure and security. This hike ... is revenue-raising ... with aviation being treated as a cash-cow."

Paul Charles, director of communications at Sir Richard Branson's Virgin Atlantic, pointed out that since APD was introduced, the number of passengers had increased sharply.

"Virgin Atlantic believes that higher taxes are not the answer to tackling global warming, as travellers will always want to fly to see friends and relatives or meet business contacts." He added that higher duty did not act as an incentive to find cleaner engines. "There needs to be a greater focus on cutting emissions at source, through a combination of measures such as towing aircraft towards runways instead of taxiing on engines, greater efficiencies within European air traffic control systems, and the creation of a European emissions trading scheme."

Andy Harrison, chief executive of budget airline easyJet, said APD was "the wrong tax for the economy and the wrong tax for the environment".

Mike Rutter, the chief commercial officer of the low-fare airline Flybe, described APD as "the poll tax of the skies" because it would hit ordinary travellers hardest of all.