Iata boss cites APD as worst example of excessive taxation

Iata boss cites APD as worst example of excessive taxationTaxation of European aviation is now around $40 billion a year, twice that of the Asia-Pacific region, according to Iata chief Tony Tyler.

In a speech to the European Regional Airlines Association general assembly in Barcleona, he described the UK’s Air Passenger Duty as “the most egregious example of excessive taxation”.

The Iata director general and chief executive warned that taxes in Germany, Austria and elsewhere continue to hold back air connectivity.

But new tax proposals keep emerging, with Portugal and Sweden suggesting new levies on passengers in the last two months alone.

“Despite this situation, I do see a glimmer of light at the end of the tunnel. Parts of Europe are slowly waking up to the economic consequences of disproportionate aviation taxation.” Tyler said.

The Irish government’s decision to scrap its passenger charge was “significant”.

Tyler said: “Aside from the benefit to the Irish economy itself, it also keeps the pressure on Northern Ireland to keep its low rates of APD.

“The Scottish government is likely to get further tax powers following the recent close independence referendum, and freedom to set a lower APD rate is one of their requests.

“Even the minor improvement that was announced to the APD banding earlier this year, dismal tinkering as it was, shows that the arguments are moving in our direction.

“So despite it sometimes feeling like we are banging our heads against a brick wall, I believe we are making some progress on this issue.”

But he urged the aviation industry “to keep arguing for a new mind-set from European leaders” to focus them on building a strong airline sector.

“If governments and industry work hand in hand to promote connectivity then the ability of aviation to act as an economic engine will be enhanced,” said Tyler.

“How can this be achieved? If you look across the world at the places where aviation is an undoubted success story, certain basic points are common. Governments encourage the development of world-class infrastructure and a regulatory and fiscal framework that facilitates, rather than frustrates, air connectivity.

“In Europe, by contrast, almost the opposite case holds. Infrastructure development moves at a snail’s pace: Eurocontrol estimates that there will be a shortfall of 12% – around 2 million flights – in airport capacity by 2030.

“Next year we will see a crucial decision on the future of runway capacity in the South of England.

“Germany has several airport issues, including the continuing problems in Berlin and the decision to prevent expansion at Munich.

“There are 93 slot-constrained airports in Europe, which speaks to the severity of the looming capacity crunch. And let’s remember that every flight which cannot happen because of limited capacity is full of lost economic opportunities.

“Finding a political and social consensus for the expansion of aviation is absolutely essential for our industry and the economic development of the world.”

Sourced from Travel Weekly

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