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June 17th 2011

FLYBE CALLS FOR TREASURY TO AXE SCANDALOUS ‘DOUBLE DIP’ TAX

Europe’s largest regional airline questions why 18 million UK domestic passengers are being sold out to placate 1-million Caribbean holidaymakers

Flybe, Europe's largest and most successful regional airline and the UK’s Number One Domestic airline, has responded robustly to the Treasury’s consultation on the future of Air Passenger Duty (APD) by calling for a radical overhaul of the tax.

In its response, which was delivered to the Treasury today, Flybe has highlighted what has become known as the taxman’s ‘double dip’ where UK domestic passengers pay APD twice while those flying to Europe pay just once because APD only applies to flights departing from a UK airport.  Currently, a family of four travelling from Glasgow to Belfast City (a flight of just 104 miles) pays £96 in tax for a return journey while that same family would only pay £48 tax to fly to a European destination such as Dalaman in Eastern Turkey (2,043 miles), paying no tax for their return travel.

On a second issue, Flybe has questioned why the Treasury has proposed a banding structure seemingly designed to placate just 1-million long-haul holidaymakers who can afford to fly to the Caribbean whilst at the same time, propose absolutely no change for the 18-million strong domestic passenger base.

Commenting on those issues, Flybe’s Head of PR and Public Affairs Niall Duffy said:
“The Treasury needs to seriously re-examine its priorities when it considers the future shape of APD. It is frankly scandalous that lifeline air routes around the UK which stimulate regional economies and enable families to keep in touch, attract the same levels of taxation as ‘fly-away’ tourism to Turkey, Greece, Morocco and the Western Sahara. No-one begrudges hard-working families the chance to relax on holiday, but why on earth should Flybe customers flying between Northern Ireland, Scotland, Wales and the English regions pay twice as much tax as those flying to and from the UK to Europe and North Africa?”

Highlighting the lack of any proposed amendments to APD banding for domestic aviation, Mr. Duffy added: “Flybe supports a six-band charging structure*, where lifeline domestic routes aren’t treated in the same way as European flights. Instead, the consultation document seems to favour a two-band solution designed to placate a lobby, namely the Caribbean tourist market, in a move that hugely overstates that market’s importance to the UK. Just look at the numbers - 1.2 million passengers flew to the Caribbean from the UK in 2010 while 18 million UK domestic passengers travelled over the same period. The government need to answer why passengers flying to Barbados, Bermuda and Cuba are having their APD cut at the expense of UK domestic passengers.”

Flybe’s consultation response, which was informed largely by an independent analysis of the effect of APD on the UK regions, also:

  • Supported government plans to widen the scope of the tax to include private jets and has been calling for this level playing field for some time
  • Called for the Treasury to include freight flights under APD
  • Supported the differentiation of APD by region to help rebalance growth; Flybe suggested a 20% reduction in APD for airports outside London
  • Supported devolution of APD to Northern Ireland, Scotland and Wales but would recommend checks and balances being in place to safeguard regional services ahead of tax breaks for ‘vanity routes’ to long-haul destinations
  • Called for a commensurate reduction in APD after the introduction of the EU Emissions Trading Scheme in 2012 given that it will produce an extra financial burden for aviation.