2012: Tax, runway capacity and carbon emissions

The Government eventually announced an independent commission to study and report on aviation hub capacity and UK connectivity. As an island, trading nation, international air links are vital for the UK economy if we are to compete effectively for new overseas business and boost tourism. It is essential for the UK’s future competitiveness that new runway capacity is permitted wherever it is needed, to provide for existing and future demands. We hope that will be the conclusion of the Davies Commission when it reports in the summer of 2015 and that any such recommendations are implemented by the next Government, of whichever political party, without further delay.

The other major concern for both the industry and wider public – the tax on flying known as Air Passenger Duty (APD) levied on departing passengers from UK airports – resulted in a concerted campaign, under the auspices of ‘A Fair Tax on Flying’. This generated 200,000 emails from constituents to MPs and prompted 100,000 overseas residents to contact the Treasury to ask for a freeze in rates and a review of the impact of the tax on the wider economy. Unfortunately, the 2013 rates announced by the Chancellor in the March budget remain in place after the Autumn Statement and there was no mention of an independent study. The campaign will continue with a new focus on the March 20th Budget and renewed effort to persuade the Government to freeze rates, pending a full economic impact study.

In Europe, the Commission made a dramatic announcement towards the end of the year with the proposal to ‘stop the clock’ on elements of aviation’s involvement in the EU Emissions Trading Scheme (ETS), in order to allow time for a wider international agreement by the International Civil Aviation Organization (ICAO). UK airlines have always argued for a global approach to tackling the impact of aircraft emissions on climate change. We would therefore welcome any progress on this made through ICAO. However, any part suspension of the EU ETS must not result in different rules applying to different airlines dependent on the routes they operate. There is a potential for competitive distortion between airlines with this action which could be damaging.