Air Passenger Duty

Special pleading for yet more handouts from the public purse.

Manston and a clutch of other regional airports are asking the Government to change the way that APD (Air Passenger Duty) is levied. The suggestion is that APD levels should "be set at a lower level for uncongested regional airports with significant available capacity to help alleviate congestion and improve the passenger experience at the main London airports." Charles Buchanan, CEO of Manston airport, says:

"The government should provide economic incentives to encourage airlines to move out of the congested London airports, and importantly to make better use of those where capacity is available. If passengers and airlines want to fly out of airports which are congested then they should pay a premium for doing so, just as motorists pay a premium to drive in central London."

Let's get something straight - the London airports that Mr Buchanan dismisses as "congested" are, in fact, successful. There's a difference. They have large populations in their catchment areas (unlike Manston), and they offer a wide range of popular destinations at competitive prices (unlike Manston).

To compensate for their shortcomings, the regional airports want the Government to penalise passengers for choosing the successful London airports. If you want to fly to somewhere that isn't one of Manston's (two) available destinations, you are to be charged a premium for daring to use a London airport. Absurd!

Just as a quick reminder as to what APD is actually for, here's a summary from AEF:

APD, which is levied on all flights departing from UK airports, was first introduced in 1994 to help account for the fact that no tax is levied on aircraft fuel. Yet APD falls a long way short of fully offsetting this benefit. While the total tax take from APD in 2011-12 is forecast to be around £3 billion, in October 2009 the Treasury estimated that if airlines paid fuel duty at the same rate as motorists, and if VAT was applied to air tickets, the Government would raise an additional £10 billion per year – an effective subsidy which, given increases in VAT and in fuel costs, is probably now closer to £12 billion.

These airports have the cheek to demand yet more special treatment, when the aviation industry is already being feather-bedded by the Treasury (i.e. every tax payer in the country, fliers and non-fliers alike) to the tune of £10bn or more.

Coming hot on the heels of Manston's bid to get £600k of public money as a sweetener to pay an airline to use the airport, this is just shameless greed. It is also another clear sign that Manston's management and owners are in denial about a blindingly obvious fact: the airport is not commercially viable.