May 28, 2024

Study shows need for APD waiver

By Bev Fearis, published 22/07/20

UK airlines are calling for an emergency 12-month Air Passenger Duty waiver in the next Budget, claiming the move would save nearly half of the air routes from the UK that would otherwise be lost due to the impact of Covid-19.

The call comes after a study, commissioned by lobbying group Airlines UK and carried out by York Aviation, showed that without Government intervention UK airports will lose around 600 routes initially due to the pandemic.

The research concluded that as the market recovers this figure would improve but would still be down by around 130 routes by July 2021, with around 80% of the lost routes being in the UK regions.

Airlines argue that with an emergency 12-month APD waiver in place, the picture would brighten, with 35 routes immediately returning. This number would grow steadily, with an APD waiver supporting an additional 56 routes by July next year.

This means that by July 2021 a waiver would have saved around 45% of routes that would otherwise be lost and passenger demand would be improved around 12%, or around 21 million passengers against a baseline of 170 million passengers.

In addition, around 8,000 jobs would be saved enabling the sector to support an additional £7 billion in GVA (gross value added), which is around 3.3 times greater than the expected revenue from APD over the next 12 months.

Tim Alderslade, CEO of Airlines UK, said: “UK airports are in danger of losing many valuable routes over the coming months unless the Government steps in with a support package for our sector – starting with an emergency APD waiver to get us through the winter and into the recovery.

“Some of these routes may never come back but APD relief will – by next July – save almost half that would otherwise be lost. The UK came into this crisis as the third-best connected country in the world – it would be a tragedy if through Government inaction and neglect we needlessly forfeited this position to our closest rivals.”

Graham Brady, MP for Altrincham and Sale West and Chairman of the 1922 Committee, added: “We are in grave danger of causing real and lasting damage to UK aviation if measures are not taken to protect routes out of our airports and support the sector through what we know will be an extremely challenging winter. Almost alone within Europe we have been slow to appreciate the importance of aviation – not only as an industry that supports a million jobs – but as an enabler of the outward facing trading nation we wish to be.”

In response to Airlines UK call for an emergency APD waiver, The Advantage Travel Partnership’s CEO Julia Lo Bue-Said commented:

“We are in full support of an emergency 12-month air passenger duty waiver as proposed this week by Airlines UK. Our industry has undergone unprecedented challenges and in order to recover we must take unprecedented action to save it. Right now APD is putting unnecessary pressure on a fractured industry. If the Government can discount VAT for hospitality, it must be equipped to waive APD for a year to support the travel industry and enable us to get back on our feet. This will help secure air routes and importantly thousands of jobs. All too often we have seen the Government overlook this industry and now is the time to act and provide tangible sector support.”