Debate rumbles on over Air Passenger Duty
July 3, 2008The controversy surrounding plans to replace Air Passenger Duty (APD) has taken a new twist, with low-cost carrier easyJet throwing its weight behind the government.
Whitehall has called for the current system of basing charges solely on the class being flown in and whether it is a long or short-haul route to be replaced with a more precise measurement.
It has insisted its plans are "proceeding on schedule" - overruling a flurry of opposition from interests as diverse as British Airways, the US government and the Confederation of Business Industry.
Under the present measuring system, passengers pay £10 to £20 APD in Europe - depending on whether they are travelling in economy, business, or first - and £40 to £80 for long-haul services.
However, the government claims this approach is unfair and has called for a new system to be introduced which factors in the precise take-off weight and distance travelled of individual flights.
Though exact details of the new tax will not be outlined until this autumn, Whitehall insiders estimate it will boost fiscal revenue by £500 million in the first year alone - prompting many in the industry to label it an ill-conceived cash-grab that is targeted squarely at passengers.
America's embassy in London complained that "although cast as an environmental measure, [the proposal] appears in reality to constitute nothing more than a device for generating additional revenue from the airline community".
And other groups have been equally critical of the move, warning it will end up backfiring on the British economy.
Several cargo airlines, which are presently exempt from APD, have said the new system will ultimately hit profitability among UK exports - while BA insists the proposals are unworkable unless an exemption is drafted in for transfer passengers.
Alluding to a predicted slump in competitiveness among UK carriers, a BA spokesperson told The Telegraph: "The effect of the proposals would be to reduce Heathrow's long-haul network because they would create a financial incentive for customers to fly via continental hubs rather than Heathrow."
But in a surprise move, no-frills airline easyJet has broken away from the pack and is insisting the government is justified in its stance.
Airline spokesman Toby Nicol commented: "Our message to the government is stand up to the siren voices in the industry. For every person who gets an opt-out, a free ride or a subsidy, someone else is paying and it's not going to be our passengers."
He argued that long-haul carriers, transfer passengers and cargo airlines should all be forced to pay their share, insisting any exemptions would result in the no-frills sector being hit disproportionately hard.
The carrier's unexpected support for the green measure runs in sharp contrast to a recent complaint upheld by the Advertising Standards Authority, which claimed that the no-frills airline had misled its customers about the energy efficiency of its aircraft.
That ruling related to a newspaper ad run by easyJet in which it allegedly implied its aircraft were more environmentally-friendly than those used by full-fare carriers.
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