UK report says APD is main threat to small airports
Air Passenger Duty (APD) is the biggest threat to small airports in the UK, according to a report published by the UK House of Commons’ Transport Committee.
The committee carried out an inquiry into around 40 small airports in the UK, including a number of business aviation airports.
The committee concluded: “We found that Air Passenger Duty is the principal threat to the smaller airports sector.
“APD cannot be amended to support people, businesses and regional economies because of the operation of European competition law, while proposals to devolve it to the regions would serve only to spread a patchwork of market distortions across the UK.”
Corporate aircraft were originally excluded from APD because their contribution was too low, but in March 2011, the tax was applied to private jet passengers from the UK on business jets with a take-off weight of 5.7 tonnes or more.
Charges range from £26-188 for small and medium business jets to £52-376 for long-range jets, based on the distance flown by the aircraft.
“Any additional taxation to an industry that is already highly taxed is going to have a disproportionate effect in attracting new business to the UK in a negative way,” says Robert Walters, business development director at London Biggin Hill Airport.
“Businesses in general and entrepreneurs in particular are not attracted by the perception that they are being penalised for their success. As such they will make decisions based on what they think is good valued consideration for the product or service they are buying.”
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The tax was met with initial scepticism from business aviation airports, as well as the British Business & General Aviation Association, which saw it as unnecessary addition to the existing European Emissions Trading System and an administrative burden for aircraft operators.
In December 2014, Chancellor George Osborne announced in his Autumn Statement that the UK government would scrap APD for children under the age of 12 by May 2015, with plans to extend the exemption for under-16s in the following year.
In its latest report, the Transport Committee said: “We welcome the acknowledgement of the negative impact of APD on the aviation sector in the autumn statement 2014. However, exempting children from APD was a marginal change which did nothing for business travellers and little for smaller airports.”