To cut aviation emissions, Britain jacks up air passenger duty

The government of the United Kingdom has decided to raise the tax for flying out of British airports by at least 10% and, in some cases, the tax will double by 2010 with a view to reducing emissions from aviation.

From November 1, 2009, air passenger duty (APD) will be based on the distance from London to the capital city of the country where the flight lands, Britain’s Finance Minister Alistair Darling announced in parliament.

“I have decided to reform air passenger duty into a four-band system ensuring those that travel further and have a larger environmental impact meet that cost,” Alistair Darling added. “This will be effective in reducing emissions from aviation.”

The APD will be based on four bands set at intervals of 2000 miles from London. And, from December 2010, when the APD will be raised a second time, a non-standard-class passenger flying more than 6,000 miles will pay 170 pounds ($254) – up from the current 80 pounds.

From November 1, 2009, the lowest APD – which will be paid by passengers on budget airlines – will be 11 pounds ($16.40) for a flight, up to 2,000 miles, up from 10 pounds now. The charge will be raised to 12 pound in November 2010.

The present system has two bands – the first band is made up of the European Economic Area, the European Common Aviation Area, the countries applying to join the European Union, and Switzerland; the a second band covers all other destinations.

When the government expands the existing scheme into a four-band system, at intervals of 2,000 miles from London, those airlines which have a larger environmental impact will meet the cost.

Alistair Darling’s announcement puts an end to talk that the APD might be reformed so that airlines would be required to pay per plane rather than per passenger. This idea had cross-party support in the British parliament.

“As much as I am in favour of a bipartisan approach,” Darling explained, “it seems that, in this case, a right conclusion has not to been reached. The per-plane proposal could harm the aviation industry at a time when it is facing huge problems.”

Darling also reminded members of the British parliament that aviation would be included in the European Union’s emissions trading scheme from 2012, under the Climate Change Bill.

In a statement, British Airways, the flag carrier of the United Kingdom, reacted thus: “While British Airways is pleased that the government has decided not to proceed with its aviation duty proposals, the company is disappointed that aviation has again been targeted for increased taxation. There is no environmental justification for doubling the APD by the year 2010 on flights of more than 4,000 miles. Extra taxation is a further blow to the industry at a time when it is reeling from the combined effects of rising costs and falling demand.”

The website timesonline.co.uk quoted an aviation analyst with Numis Securities as remarking: “Low-cost carriers such as Britain-based easyJet and Ryanair, based in Dublin, Ireland – both good at filling planes which are newer and thus more fuel-efficient than the industry average – might have preferred a move to a ‘per plane’ system for APD.”

An official of the of the global environment and conservation group Greenpeace said he was disappointed the at the British government’s proposals. He added: “Plans to tax flights instead of people would have encouraged the industry to fill their planes instead of flying half-empty airliners around the world. Once again, the aviation industry has been given a free pass at a time when its contribution to climate change is rising.”

A spokesman of the Society of British Aerospace Companies, national trade association of the Britain’s aerospace industry and its member companies, commented that that the government’s move to raise the air passenger duty “would not necessarily encourage airlines to use the most environmentally friendly aircraft” and that “Alistair Darling appears to have replaced one bad idea with another.”