Hundreds of jobs could be under threat at Manchester Airport unless the government reforms its controversial aviation tax, owners Manchester Airports Group have warned.
It is rumoured chancellor George Osborne is gearing-up to hike Air Passenger Duty (APD) - is passed-on to travellers through ticket prices - for the fourth time in three years in Wednesday's budget.
MAG says regional airports are hit more by the levy than those in the south east and has commissioned a independent study into the issue.
The findings, seen by the MEN, reveal concerns leaving APD in its current form – or increasing it further – could lead to airlines pulling out of Manchester or choosing to locate elsewhere.
The report, which has been presented to the Treasury and the Department for Transport, calls on Downing Street to abandon its 'one-size-fits-all' approach to aviation taxes and introduce regional variations instead.
It states: “MAG is concerned that aviation taxes are now at a level that will severely hamper the ability of regional airports to support economic growth, specifically in terms of providing direct international links.
“This is because the tax on air fares to long haul destinations – up to £170 in business class and £85 in standard – is acting as a major disincentive to airlines considering new routes from regional airports.
“Several airlines have told MAG unofficially that the level of aviation tax in the UK is a problem for them. It makes it more difficult for airlines to sell tickets in the UK, with the extra tax built in, than in countries where no (or far less) tax is applicable.
“For example, Air Asia X have recently confirmed that they would have started a new route from Kuala Lumpur to Manchester but decided in favour of Paris Orly, purely because of the impact of APD.”
In November, APD on a business class short-haul flight to Europe rose from £22 to £24.
Duty on flights to the USA, Russia and the Gulf increased from £90 to £120, while a Caribbean flight saw its APD increase from £100 to £150.
Business flights to Australia increased from £110 to £170 , which is in stark contrast to the £10 it was when first launched in 1994.
The report, carried out by York Aviation, states MAG, which operates Manchester, East Midlands, Humberside and Bournemouth airports, estimates around 600 on-site jobs will be lost in 2011/12 as a result of the most recent hikes, the bulk of which will be at Manchester.
It adds a further 1,500 roles are likely to be shed as a result, while Manchester alone will have 650,000 fewer annual passengers by 2015/16.
APD generates around £2bn for the Treasury every year and is touted as a green tax designed to mitigate the impact of aviation on the environment.
But critics dismiss that, saying the money it creates is not spent on environmentally-friendly initiatives.
Previous chancellor Alastair Darling admitted the levy was a revenue raiser, as opposed to a green tax.
There are also allegations that the banding system is flawed. For example, a 7,200-mile flight to Hawaii attracts less duty than a flight to Jamaica – 4,600 miles away – because it is calculated based on the distance to a country's capital city and Washington is closer to London than Kingston.
A similar tax to APD previously existed in Holland but the Dutch government scrapped it after noticing a trend of passengers crossing borders to take cheaper flights from airports in other countries.
Tweet
Comments
Login or Register to comment
cant this poxy brained government remember how how thatcher did the same putting millions out of work by doing stupid things like this and again under a con lib gov its happening again if they want to save money why the heck are we using it bombing gadafi if there was no oil in his country they wouldnt give a toss just like they didnt in zuimbabwe so come on uk gov get ur act together before we lose all the jobs and investment here again as we did under u in the past and stop taxing the uk people to the hilt
Derek, firstly this increase in air duty is a Labour measure that Alistair Darling came up with so it has nothing to do with teh Lib Dem/Conservatives. Besides it has also been announced that he coalition are going to scrap it.
This article here mentions nothing of the plan to scrap it and say that it's 'the government controversial aviation tax'. It is the previous govenments tax.
Ed Balls said on the radio last week and at the time of Labour introducing this tax that it is a 'green tax' designed to make people change their habits i.e. not flying so the Labour policy is working if indeed it did go ahead and people fly less (alos resulting in job losses in the aviaition industry).
''Alistair Darling told members of the House of Commons in today’s budget that revenue raised by plane duty will by 10% in 2011/12, it’s second full year''.
See, Labour.
"A similar tax to APD previously existed in Holland but the Dutch government scrapped it after noticing a trend of passengers crossing borders to take cheaper flights from airports in other countries."
Someone should tattoo that on the inner eyelids of every idiot who thinks 'more tax' is automatically some form of solution to anything.
The coalition are every bit as eager to display their green credentials as Labour were, despite no one north of Islington really giving a damn and the fact it'll do precisely nothing to help the environment.
it beggers belief that yet again, our goverment is considering taxing more people through stelth taxation, the only thing most UK residents have in life these days, is the hope of getting away from this country and the doom, gloom and missery of day to day life here, for a couple of weeks, now that has been spolied by goverments past and present who will not do what needs to be done, taxing the people that can afford to be taxed and closing loop holes so large compaines cannot right off big tax bills,
How about the managers of MAP taking a cut in their million pound salaries?
The airport are fine ones to complain, when they rake money in from the sale of goods, it must be one of the most expensiveplaces on the planet to buy abottle of water.