Consultation is set to take place on cutting the UK’s air passenger duty scheme as part of a broad government rethink on the country’s transport network.
Air passenger duty is a distance-based scheme which is pitched as a mechanism for addressing environmental concerns, but has long been controversial with airlines.
The spring consultation – which follows the initial stage of a review in to UK transport connectivity – will include options to change the way the duty is calculated for domestic flights, such as introducing an exemption for return services or establishing a lower rate.
Prime minister Boris Johnson says he wants to cut passenger duty on domestic flights to “support connectivity across the country”.
But this will require consideration of the potential impact on decarbonisation measures.
The government says it will look at the case to increase the number of distance bands for international flights, while also continuing its efforts to decarbonise domestic air travel to meet emissions targets.
Its Union Connectivity Review, in an interim report on 10 March, lists initial findings on key transport concerns including the need for better air links from England to Northern Ireland and northern Scotland – although not exclusively with London Heathrow – and an “appropriate” rate of air passenger duty for journeys not realistic by rail.
“Air corridors to Northern Ireland were raised by all stakeholders,” the interim report states. “The issue of air passenger duty and its imposition on both legs of domestic flights was widely raised as an economic barrier, particularly in Scotland and Northern Ireland.”
Domestic UK connectivity was disrupted last year by the collapse of regional carrier Flybe, which had an extensive internal network. Deferral of air passenger duty payment was among the options put forward for government discussion during the efforts to save the airline.
“While some [Flybe] routes were quickly adopted by rival airlines, a significant number of unprofitable routes that the airline operated have not yet been filled,” says the interim report.
The UK’s Airport Operators Association says the review into domestic duty is “welcome” but needs to be part of a wider aviation recovery package.
Chief executive Karen Dee says the country’s domestic sector has “suffered a double hit” as a result of Flybe’s loss and the onset of the pandemic.
She says the review amounts to a “recognition of the detrimental impact” of air passenger duty, and underlines the finding that many of Flybe’s routes were not profitable.
“Air passenger duty is one of the key levers that the government has to boost connectivity recovery but [its] reform must be part of a holistic approach,” adds Dee.
“This could include measures such as a regional connectivity start-up fund, public service obligation routes, or waiving of airport charges for key routes as is happening in [Ireland].”
Consultation on aviation tax reform, a measure unveiled during the 2020 budget, will also be published in spring this year, the government states.
