British Destinations

Air Passenger Duty, airport expansions and airline update

Posted on June 20, 2019 Updated on June 20, 2019

1. Formed in March 2019 a new Westminster All Party Parliamentary Group for Air Passenger Duty Reform has launching an inquiry on, The impact of air passenger duty on the UK post Brexit. The group’s creation follows on (coincidentally or not?) from the HM Treasury report on the impact of VAT and APD on tourism in Northern Ireland published in 29 October 2018, which roundly dismissed the case for a reduction in Northern Ireland and by inference across the UK.

The case for reducing APD in the UK has not, in my view, been strengthened by the Scottish Government’s recent decision not to pursue a 50% reduction moving to 100% in APD in Scotland, nor by the fact that they are doing so largely on environmental grounds (7 May 19). The potential impetuous of differential rates and their potential impact, especially on airports in Northern England has just gone away, while the environmental imperative has been given greater credibility; regardless of whether or not you believe ADP is principally an environmental tax design to reduce impacts and/or make the polluter pay, or simply a revenue stream for HMG (or any of the many shades in between the two).

I don’t propose to respond, for or against a reduction in APD to the APPG’s call for evidence, unless there is a strong and as yet unexpected ground swell to do so from within the destination-based membership.  I am not planning to respond in the certain knowledge that the Tourism Alliance will be submitting comments as they have done before, strongly supporting the case for a reduction in APD. These will be based largely around arguments about international competitiveness and the need to retain and grow the UK share of inbound international tourism.  Even if British Destination’s membership as a whole were to take an opposing view, which I doubt, it would be highly unlikely to have sufficient weight to block or mitigate the majority view held among the Tourism Alliance’s largely private sector trade association members.

The call for evidence can be found in the dropdown from the “Consultations” main menu tab or go direct to the page at: https://britishdestinations.net/consultation-responses/open-consultations/appg-for-air-passenger-duty-reform-apd-reform-inquiry-closing-19-july/

2. Heathrow expansion master plan has been revealed and is now undergoing a 12-week period of statutory review. The plans envisage the third runway being completed by 2026 and the remaining supporting infrastructure, including new terminals and access complete by 2050. Plans apparently include: the eventual creation of parking for a staggering 53k vehicles, an additional 260k flight and 50m additional passengers a year by 2050 (Gatwick carried c 46.5k last year):

https://www.bbc.co.uk/news/business-48668001

Again, unless there a case made to me from the membership, I don’t currently intend to respond.  Some individual members directly impacted by increased traffic from Heathrow, or who have local airports that may be effected by the Heathrow expansion may of course think that this represents a further opportunity for them to influence, either the Heathrow expansion plans themselves or the wider issue of increasing UK airport capacity and/or the final selection of Heathrow as the Westminster Government’s preferred option for expansion in South East England.

3. There has been a lot media coverage in recent months regarding difficulties among UK and EU airline operators, especial in the budget sector. 2018 was not a particularly good year for the sector and prospects for 2019 are still very mixed. Published in February the following article remains a useful overview of the underlying issues:

https://www.bbc.co.uk/news/business-47278322