Minister suggests aircraft tax may be abandoned

A senior government minister has made comments that indicate the Treasury may not move forward with plans to replace Air Passenger Duty with an aircraft tax.

Jim Fitzpatrick, parliament’s under-secretary for transport spoke at a conference last week and said: “Difficulties surround the decision. There are strong arguments that we should not proceed with the transition.”

The Treasury is currently working on a draft aircraft tax scheme to replace APD from November of next year. The final details are scheduled to be released in October, giving tour operators sufficient time to price the tax in their offerings and brochures. Provisional details are anticipated to be available by the end of July.

The Treasury is behind schedule, however, and has thus far taken no decisions. Industry sources suggest that it is already too late for a plan to be completed in time for an October announcement.

Fitzpatrick admitted that the government is under significant pressure from the major carriers. He noted: “There are very strong arguments from non-charter airlines that the proposals will penalise them.”

His remarks were delivered at the Sustainable Future for Aviation Conference held recently in London. British Airways has been one of the airlines lobbying hard against retreating from the APD.

At the same conference, Willie Walsh, chief executive of BA criticised David Cameron, Tory party leader, for ¬questioning the need for Heathrow expansion.

Walsh remarked: “David Cameron appears to agree with those who believe Heathrow transfer ¬passengers contribute little to the economy, but without transfer passengers Heathrow would become a regional airport.”

www.britishairways.com