Chancellor announces changes to Air Passenger Duty

The British Government is to change the way it charges Air Passenger Duty (APD).

Chancellor of the Exchequer, Alistair Darling announced in his Pre Budget Report that from 1 November 2009 APD would be charged under four distance bands, up from the current two.

Currently, APD is levied on on the carriage of passengers flying from UK airports in two bands, the first for 'specified European destinations' and the second 'for all other destinations'.

From 1 November 2009, APD will be structured around four distance bands, set at intervals of 2,000 miles from London. This reform will ensure that those flying farther, and therefore contributing more to emissions from aviation, will pay more.

There had been concerns from a number of carriers in the UK that the government would introduce a per-plane tax. Regional airlines feared that such a tax might place their smaller turboprops into the same band as a narrowbody jet airliner operating from London to Moscow for example.

The government said: "Reforming APD avoids the disruption and costs associated with the transition to a new tax, while continuing to send environmental signals to passengers and the industry alike, and ensuring that the sector contributes fairly to public services."

"It also takes account of the need in the present economic circumstances, to mitigate the potential impact on the air-freight sector, the impact on employment in this sector, and the wider business community which relies on air-freight services; as well as mitigating the potential regional employment and connectivity impacts."

Andy Harrison, easyJet CEO, said he was dismayed by the changes.

He said: "All Parties agreed that APD needed to be changed to a tax on planes not people, but now the Government has succeeded in bodging-up the reform of an already bodged tax. He has made a bad situation worse by increasing the burden of APD on hard working families.

"The Chancellor said that he wouldn't allow the economic crisis to "push aside the importance of protecting the environment" but his green credentials have been brushed aside in a dash for cash and the emissions from cargo planes, private jets and transfer passengers continue to be tax free. So, Roman Abramovich, FedEx and Heathrow's transfer passengers will continue to be exempt, but hard-working families going on their summer holiday on environmentally-efficient low-fare airlines will now pay even more!!"

APD Rates by Band from November 2009

Band A (0-2000)         £11
Band B (2001-4000)    £45
Band C (4001- 6000)   £50
Band D (over 6000)     £55

By Tony Osborne - LARAnews.net Editorial Team