APD undermines UK’s ability to compete, says easyJet

APD undermines UK's ability to compete, says easyJetBy Lee Hayhurst
Rising APD is making it less likely easyJet’s will be able to grow its UK flying network as it prepares to bring 135 new aircraft into its fleet.Britain’s biggest carrier renewed calls for the Chancellor George Osborne to scrap the tax at its annual Parliamentary reception in the House of Commons last night.Newly appointed UK market director Sophie Dekkers (pictured) pointed out that even in a record year for profitability for the budget carrier last year the amount made per passenger was £7, up from just £2 in previous years.

APD on short-haul flights is due to rise to £13 in April and there is the prospect that Osborne could signal further increases in the air tax in this month’s budget.

“My role as UK director is to grow easyJet in the UK. We have a new fleet coming in and I will be campaigning to try to secure as many of those aircraft as we can.

“Look at the numbers on commercial performance and other markets perform significantly stronger. APD has a real impact on my ability to challenge internationally and secure aircraft for the UK.

“If we want growth in the UK it would make a big difference to have a complete rethink about how it [APD] is structured and working.”

Addressing guests at the reception, Dekkers quoted the results of a PricewaterhouseCoopers report commissioned by the Fair Tax on Flying campaign.

It concluded abolishing the tax could generate a net gain for the Treasury of £16 billion over three years and create 160,000 jobs.

She said a World Economic Report highlighted how the UK due to having some of the world’s highest air taxes was 139th out of 140 in terms of a key competitiveness indicator.

“It’s hard to find another comparable table on a key measure of international competitiveness which shows Britain in this position,” Dekkers said.

Industry campaigners accept the Treasury is highly unlikely to change its policy on APD that brings in revenues of £3 billion a year and is the second easiest to collect.

However, they believe the high profile Fair Tax on Flying campaign, which has gained support from airlines which are mortal enemies, as well as organisations like Abta, has prevented larger increases.

Dekkers believes the message is getting through to MPs. “I think we are gradually getting there. I think there is a nervousness from the government about how much they are going to lose.

“The PwC report gave us an independent review that abolishing the tax would create additional taxes and cover the losses from other tax revenues.”

Robert Goodwill MP, Parliamentary under secretary for transport, said the government wanted to encourage aviation to grow and that it was investing in infrastructure to aid this.

He said under the current growth forecast the numbers of flyers will double by 2050, meaning Gatwick will be at full capacity by 2020 and Luton by 2030.

“We need to make sure the UK has the connections to prosper. Difficult decisions have been put off for too long.

“We want to see the aviation sector in Britain, with companies like easyJet, opening new routes and creating new jobs and wealth. That’s why we are committed to improving infrastructure over the next couple of years.”

Sourced from Travel Weekly


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