Air Passenger Duty: Osborne changes 'crazy and unjust' airport tax

Passengers on an airplane

UK passengers will be relieved to hear news of Osborne's overhaul of the much-hated Air Passenger Duty (APD) airport departure tax.

Announcing changes, Chancellor George Osborne admitted that the current system was "crazy and unjust" in that Britons travelling on, say, eight-hour flights to Barbados pay more APD than those on 11-hour flights to California. Source: PA.

Those on ultra long-haul flights to destinations such as Australia and south east Asia pay even more in APD.

Passengers on long-haul flights will benefit from the new changes.

Mr Osborne said that he was scrapping the two highest of the four APD tax bands so that those on long-haul flights pay only as much as they do now travelling to the USA.

UK airlines, travel companies and Caribbean tourist boards have long bemoaned the APD system and there was a cautious welcome today to the changes.

A Virgin Atlantic spokeswoman said: "A two-band APD rate is a very welcome simplification to remove some of the biggest distortions of the current system, which the Chancellor himself admitted is crazy and unjust.

"The Government has rightly recognised the damage APD is having on exporters and the travelling public alike."

She went on: "A tax system which penalised high growth emerging economies such as China and India was always contrary to the Government's stated policy on trade and exports, so this is a positive step that recognises the impact of this economically damaging tax.

"There is a growing body of evidence demonstrating the huge economic benefits to the UK of reducing or abolishing APD and we hope that the Government will continue to go further in the long run."

A British Airways spokeswoman said: "This is window dressing a tax that even George Osborne says is 'crazy'.

"It still punishes families and costs UK jobs. The only long-term solution is to scrap APD in its entirety and allow the aviation and tourism industries to flourish, to the benefit of the wider UK economy. APD remains the highest aviation tax levied in the world."

Dale Keller, chief executive of the Board of Airline Representatives in the UK, which speaks for 75 UK carriers, said: "The Government has finally acknowledged what the industry and business knew all along - that the highest rates of aviation tax in the world were a brake on driving the UK's economic growth with emerging markets."

He went on: "Of course we would like the Chancellor to go further still on reducing APD but this is a step in the right direction and we will continue its engagement with the Government to deliver the fair and proportionate aviation tax that the UK deserves."

In the meantime, air passengers will have to put up with the present four-band APD system, as the changes will not take effect until April 1 2015.

Travellers will also have to contend with an RPI-inflation rise in the existing system from April 1 this year and another RPI-inflation rise on the new, two-band system from April 1 next year.

Mr Osborne also announced that the Government was extending the scope of the existing regional air connectivity fund to include start-up aid for new routes from regional airports.

Darren Caplan, chief executive of the Airport Operators Association, said: "It is clear the Government has recognised that APD represents a growing barrier to growth and investment, putting the UK at a competitive disadvantage compared to our nearest international rivals.

"This reform of APD - together with the measures announced to assist the start-up of new routes from airports around the country - is a very welcome step from the Treasury."

Mark Tanzer, chief executive of travel organisation Abta, said he strongly welcomed the APD changes as "a first step in the reform of this damaging tax".

He said moving all long-haul flights into band B of APD at current levels would save passengers more than £200 million annually, and should boost travel and tourism as well as promote greater UK connectivity.

He added that Abta would continue to call for a reduction in overall rates of APD.

He said that, at current levels, a family of four will save £112 on flights to Sydney and £64 on flights to Cancun in Mexico.

UK's best (and worst) airports
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Air Passenger Duty: Osborne changes 'crazy and unjust' airport tax

The worst airport in the UK is Aberdeen Airport according to British travellers. The airport, which handles more than three million passengers per year, was given the thumbs down for its facilities including its baggage carousel area, which passengers said is in need of updating.

Luton Airport is in at number 14 and is the least favourite London airport for UK travellers. It's the fifth busiest UK airport and serves as a base for airlines such as easyJet, Monarch and Thomson Airways. One passenger wrote on airline review website Skytrax: "As a frequent flyer all I can say is how embarrassing this airport is as a gateway to our country."

London City Airport is small compared to the capital's four other international airports and is mainly used by business travellers. Passengers said the airport has "expensive parking," although it does offer free WiFi for all. The airport is busiest during the winter months when most airlines fly to top ski destinations.

London Stansted Airport is not the most favoured UK airport by British travellers and was blasted for its "extremely long queues at check-in". The airport located in Essex is the largest base for budget carrier Ryanair, with over 100 destinations served by the airline. In 2012, it was named the fourth busiest airline in the UK after Heathrow, Gatwick and Manchester.

Formerly known as Aldergrove Airport, Belfast International Airport lies near the village of Aldergrove in Northern Ireland. It's the busiest airport in Northern Ireland and is the second busiest on the island of Ireland, after Dublin Airport. Malaga, Faro and Alicante are the most popular international routes to and from Belfast International Airport, while Liverpool, Gatwick and Stansted are the busiest domestic routes.

Bristol Airport in North Somerset handles over 5.9 million passengers a year, with Amsterdam, Dublin and Edinburgh the most popular flight routes. It has one of the shortest international airport runways in the country at just 2,011 metres in length, which means large planes are rarely, preventing most long-distance flights.

Located in North West Leicestershire, East Midlands Airport serves the counties of Derbyshire, Nottinghamshire, Leicestershire, Staffordshire and South Yorkshire. The airport has established itself as a hub for low-cost carriers, like, Ryanair and Monarch.

Edinburgh Airport is Scotland's busiest airport and its upgraded terminal building features new car parking facilities and a larger arrivals hall. There are plans for expansion at the airport, with passenger numbers expected to reach a whopping 26 million per year by 2030.

In at number seven is Glasgow Airport, which is located six miles west of the city centre and is Scotland's second busiest airport and the eighth busiest in Britain. The airlines with the biggest presence are British Airways and Loganair, and the busiest routes are the Netherlands, the UAE, Spain and Ireland.

Named after a famous Beatle, Liverpool John Lennon Airport picked up the sixth spot, connecting travellers to UK and European destinations. Around 4.5 million passengers pass through the airport each year. While there is no train station at Liverpool John Lennon Airport, there are shuttle buses from Liverpool South Parkway and Liverpool Hunts Cross.

Britain's busiest airport Heathrow was named the fifth best overall, but was voted the easiest airport to get to and from. Although it is served by Heathrow Express, which is one of the most expensive train journeys in the world, it is also served by several low-cost options, such as London Underground, Heathrow Connect and coach services. Travellers said Heathrow has a "great variety of shops and restaurants," such as Gordon Ramsay Plane Food, The Tin Goose and The Five Tuns.

Birmingham Airport was voted the fourth best British airport. Passengers said it is "compact and customer friendly". Birmingham Airport was also named the fourth easiest airport to get to in the UK, after Gatwick, Manchester and Heathrow Airports.

Newcastle Airport was voted by passengers as the easiest airport to travel through. Passengers of the airport commented on its simple layout and good choice of food and drink options, saying it is "easy to navigate and clean".

Britain's second busiest airport, London Gatwick Airport, handles more than 34 million passengers every year and came in second place, with passengers praising its friendly staff and large check-in areas.

Manchester Airport is Britain's best airport, according to UK travellers! The third busiest airport in the UK welcomes more than nine million passengers each year and hit the top spot for the best customer service, facilities and shopping, as well as the best bars and restaurants. Passengers commended it for being well organised, passenger-friendly and for its accessibility.

A new survey has revealed British travellers' favourite UK airports. The poll by Skyscanner asked 1,600 British flyers to rate the UK's airport on customer service, facilities, shopping, bars and restaurants, and ease of travelling through. Skyscanner's Victoria Bailie said the winning airport is one of Britain's busiest but "it still manages to keep passengers happy". Click through the gallery to find out which airport scooped the top spot...


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