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Flybe boss urges the Government to cut flight taxes in half

Published 04/07/2016

Chief executive Saad Hammad said Air Passenger Duty (APD) should be slashed by 50%
Chief executive Saad Hammad said Air Passenger Duty (APD) should be slashed by 50%

The boss of Flybe has called on the Government to cut flight taxes in half as Britain deals with the "serious and lasting damage" caused by Brexit.

Chief executive Saad Hammad said Air Passenger Duty (APD) should be slashed by 50% and funded by a tax hike at the UK's major international airports.

In a letter to Chancellor George Osborne, Mr Hammad said the turmoil in the financial markets and the threat of an economic slowdown meant the cost of the levy was now a "critical issue".

He said the APD was stymieing growth and had a "stranglehold" on regional economies.

He added: "HM Treasury has previously argued that it cannot abolish APD given the scale of its contribution to the public finances.

"In the absence of outright abolition, Flybe firmly believes that APD could be amended in a fiscally neutral manner to deliver an economic benefit to the UK regions, a stated aim of the Government.

"This could be achieved by lowering the levy at regional airports by 50% in line with what is being planned in Scotland, funding it through an increase at the large, slot-constrained airports in London such as Heathrow and Gatwick."

Mr Hammad said the move would boost regional airports and local economies, while removing "market distortions" and "unfairness" to English passengers caused by the APD cuts in Scotland and Wales.

He added: "A decrease in APD at regional airports would help address the disproportionate impact on the UK regions of the current APD regime whereby a typical domestic passenger can be charged up to 19 times the tax per mile of a passenger on a long-haul flight."

He said the tax cut would also "provide an economic incentive" for using spare runway capacity at regional airports while the UK waits for a decision on a new runway at Heathrow.

A spokesman for the Treasury, said: "The Government is committed to making sure APD is a fair tax for airlines and passengers - that's why we've made it cheaper to fly through freezing APD for most passengers since 2012, exempting children and reducing the number of bands, meaning it's now lower for many more long-haul destinations.

"Airlines already pay no tax on the fuel used in international flights, no VAT on international flights and unlike in many other countries, no VAT on domestic flights."

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