Flybe calls on Government to ease APD stranglehold on regional economic growth
In light of current financial turmoil, leading regional airline says Government can no longer ignore damaging impact of Air Passenger Duty
4th July 2016
Saad Hammad, CEO of Flybe, Europe’s largest regional airline, has today sent the following to UK Chancellor George Osborne in an urgent call to reform Air Passenger Duty:
Call for Air Passenger Duty Reform
I am writing to respectfully draw your attention to a critical issue which can no longer await resolution now that the country has voted to leave the EU and we are beginning to see turmoil in our financial markets and our economy under threat of serious and lasting damage. This is the issue of Air Passenger Duty (APD) and the need to address the very real stranglehold it is having in curbing the growth of regional economies.
HM Treasury has yet to comment on the outcome of the discussion paper regarding the options for supporting English regional airports against the impacts of APD devolution. Now is surely the time to address this issue, particularly with the Scottish Government pressing ahead with plans for a 50% reduction in Air Passenger Duty.
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.
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. This iniquity is doubled when a return international passenger suffers this charge just once, but a domestic traveller is taxed twice as APD is a UK departure tax. The corresponding increase on passengers using Heathrow and Gatwick would be akin to a congestion charge, a concept already well established in our economy as best shown by the London road congestion charge.
The benefits of APD reform as proposed by Flybe are manifold. First, it would provide a more level playing field between regional and international travellers and assist the development of regional airports and economies, particularly in light of the uncertainty after the referendum vote to leave the EU. It would also remove potential market distortions and risks of unfairness on passengers in England from APD devolution and reduction in Scotland and Wales. Finally, it would provide an economic incentive for the immediate use of spare runway capacity available today at regional airports neighbouring London such as Birmingham Airport, given new runway capacity at either Heathrow or Gatwick could take more than a decade to come on stream if it is ever approved.
Flybe is not only Europe’s largest regional airline. We operate more UK domestic flights than any other airline, delivering unrivalled regional connectivity to and from 37 UK airports. This accounts for 53% of all internal flights within mainland Britain. Over half our passengers are travelling on business, driving trade and economic growth.
We therefore urge you to act as a matter of urgency to address the APD issue once and for all and, by so doing, deliver a benefit to all regional passengers and especially to those whose very business success plays a critical role in the continued success of the British economy.
Issued by the Flybe press office:T: 0845 675 0681 E: [email protected]
Notes to Editors:
Flybe, Europe's largest regional airline – 218 routes serving 10 countries from 75 departure points, 40 UK/35 European airports* (all routes on sale May’16 – Apr‘17); operates more UK domestic flights than any other airline (UK CAA May’15 – Apr’16); one of only two UK-based carriers in top 20 global airlines punctuality league table by OAG (Jan ’16) and named top UK airline for punctuality in report issued by UK consumer watchdog Which? (Dec 2014); named ‘Best Short-Haul Airline’ at the 2016 Business Travel Awards (Jan ‘16); is the largest scheduled airline by air traffic movements at Belfast City, Birmingham, Cardiff, Exeter, Isle of Man, Jersey, Manchester, Newquay and Southampton airports (UK CAA Apr ’16); operates fleet of 76 aircraft – 51 Bombardier Q400, 9 Embraer 195, 11 E175 & 5 ATR 72s; codeshares with BA, Air France, Etihad, Finnair, Aer Lingus, Cathay Pacific, Emirates, Virgin Atlantic and Air India; has three franchise partners, Loganair, Stobart Air and Blue Islands making it only UK airline brand with 70% coverage of reporting airports (UK CAA Apr’15); has own globally recognised Training Academy in Exeter with flight deck and cabin crew simulator facilities, 26 classrooms and 150-seat conference facility.
*Flown under the Flybe brand (30 routes/11 airports exclusively served by Flybe’s franchise partner, Loganair: and 3 routes and 3 airports exclusively operated by franchise partner, Stobart Air)