Travel associations criticise Budget’s APD plan

By Andy Hoskins, published 13/03/20

Following a Budget announcement dominated by measures to tackle the economic impact of coronavirus, several industry bodies have criticised the government’s decision to proceed with planned rises in Air Passenger Duty.

BAR UK, the Board of Airline Representatives, highlighted the lack of support or measures for the aviation sector despite airlines being uniquely impacted by the coronavirus crisis.

The organisation’s Chief Executive, Dale Keller, said: “The entire aviation industry will be deeply frustrated that the Chancellor has shown zero support to a vital sector which the country relies upon to deliver connectivity and enable economic prosperity.

“Despite announcing an APD review in January in time for this Budget, the Chancellor has instead pushed a response back to Spring whilst discreetly publishing a further £2 increase to £82 on economy long-haul flights from April 2021.

Keller added that airlines had requested a temporary six-month waiver of APD as a supporting measure while they deal with an “unprecedented situation”.

“The lack of action and support for aviation in this Budget demonstrates a Government and Chancellor with little regard for sustaining the UK’s domestic and international air connectivity at the very time it is needed most,” adds Keller.

The Business Travel Association (BTA) welcomed the fiscal measures detailed in this week’s Budget, but said it “missed some opportunities to stimulate the economy which business travel can drive”.

It believes the £30billion fiscal stimulus and interest rate cut are “absolutely necessary” but bemoaned the fact planned rises in Air Passenger Duty (APD) will go ahead.

“The BTA welcomes the plan to consult on aviation tax, but the time for action to reduce the burden of APD is now,” says the statement from the BTA. “Business travel oils the wheels of the UK economy, building and growing trade links that are vital.”

It continues: “When the Coronavirus situation passes its peak, the need to travel will be greater than ever and, at that point, we will need no brakes on business travel and the economic prosperity it can deliver.”

It did however praise the government’s plan to increase research and development spending.

“Cleaner, greener technology will lower the impact of key elements of business travel, and increased regional funding can drive the development of research clusters around the UK’s major cities and, in turn, create new business travel demand at regional airports.”

ABTA Chief Executive Mark Tanzer took a similar stance: “We are disappointed by the inflationary increase in APD announced, which puts the UK at an even greater competitive disadvantage compared with other countries where similar departure taxes are much lower.”

He adds: “While we welcome the government’s commitment to review APD in relation to domestic connectivity, we strongly urge the Government to do this as part of a wider reform process, acting as the catalyst for constructive discussions between industry and government about a more comprehensive overhaul of the structure of APD.”

Meanwhile, American Express Global Business Travel’s Jason Geall said the TMC would have liked more immediate action on reforming APD, “but hopes that the government’s consultation, to be published this spring, will produce policies that enable business to travel, trade and thrive”.

Geall adds: “We are pleased to see the government committing to infrastructure investment in road and rail networks – and we hope this reflects a long-term strategy. We see this as essential to improving reliability and connectivity for businesses operating in the UK, and to supporting them in achieving their sustainability goals.”