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More Calls To Freeze APD

Yet again, there are more calls on the Government this week to freeze its controversial Air Passenger Duty Tax (APD).

This year alone, APD campaigns have been raging by Skyscanner and independent UK parent groups, as well as campaigns about the high cost of holidays during school holidays.

The Confederation of British Industry is also calling on the Government and Chancellor to consider the serious impact APD is having on the aviation industry and the British economy.

Gatwick Airport has been a strong objector to APD. It firmly supported the ‘Fair Tax on Flying’ campaign a few years ago, when staff handed out flyers to passengers urging them to write to their MPs asking for the tax to be reviewed.

The Director-General of the Confederation of British Industry, John Cridland, spoke out this week, saying, "To successfully rebalance our economy we need to give businesses a leg up to invest in new equipment and to sell more of their goods and services around the world."

APD has a serious impact on family holidays, for example, a family of four flying from Gatwick Airport to Florida is charged £268 in Air Passenger Duty tax. For many families, this tips the affordability of a holiday over the edge, and many are choosing to either holiday at home or in Europe.

On 19 March, Chancellor, George Osborne, will hold his 2014 budget, and business figures will call for him to make boosting business investment and trade a priority – including tackling the rising APD costs.

Currently the UK’s APD costs are the highest in the EU and one of the highest in the World.

Willie Walsh, CEO of IAG (British Airways’ Parent Company), has always been an outspoken objector to APD. He says that the APD costs are greatly damaging the UK with airlines refusing to invest in new routes because of the high tax. Instead, they are operating their long haul flights out of European airport hubs, allowing UK passengers to fly short-haul (with less APD charges attached to flights) to these European hubs to transfer to onward long haul destinations. What’s more, he says APD is having a detrimental effect on financially stricken Ireland too, saying, “I speak to airline CEOs around the world and when I ask them about investing in Northern Ireland or starting new routes to Northern Ireland they’re not interested because of the tax issue”.

It will be interesting to see how popular Norwegian Air’s budget Gatwick to New York route will be when it launches in the summer. The airline also plans to operate flights to other American destinations and also to the Far East and Indian in the near future. Gatwick, which wants to break Heathrow’s dominance of the long haul market, welcomes the prestigious new route from its hub.

Norwegian’s boss, Bjørn Kjos, claims politicians have yet to ‘wake up’ to the opportunities that cheap air travel can bring, citing that tourists numbers would add up to millions, and create millions of jobs in Europe, however, the UK’s heavy aviation taxes, namely APD, could damage that.