Bosses at Manchester Airport have this week announced that they are confident in the growth in the number of long haul routes they are able to offer, despite concerns that a high Air Passenger Duty tax would convince airlines to look elsewhere when choosing international hubs.
Companies must pay Air Passenger Duty if they operate a fixed wing aircraft from any UK airport, providing the plane weighs over 5.7 tonnes and is equipped to carry passengers. This means that the majority of commercial aircraft operating in the UK today qualify to pay this tax.
The tax is calculated by banding. For travel in the lowest available class on a journey under 2,000 miles, the airline must pay £13. On a first class trip covering 6000 miles or more, the airline would be expected to cough up £142. This is on top of the corporation tax applied to company profits. Airlines are however exempt from paying VAT and fuel duty.
Airport boss Ken O’ Toole admits: “The truth is, the UK has one of the highest aviation tax regimes in Europe, and it does make us uncompetitive.”
Despite the chancellors promise to cut the higher rates of APD, compared to the rest of Europe, the UK’s airports are at a competitive disadvantage. In Ireland, the flat €10 Air Travel Tax applies to journeys of any length over 300km. This was introduced in 2009 and is celebrated for saving the lucrative Dublin – New York transatlantic route.
Using new found powers gained through devolution, the Scottish Government has entered discussion over halving and then, eventually, scrapping the APD entirely. Critics have suggested that families could save up to 40% on airline tickets by flying from airports in Scotland, a move which could hurt tourism in England. In future, devolved powers inherited by local councils, such as Manchester, could mean that the local authority takes control of taxation, and hub airports could scrap the APD in much the same way.
With up to 100 flights to the US a week, Manchester airport still holds a confident long haul offering and following a groundbreaking deal with China to provide a frequent Manchester – Shanghai route there is hope that Manchester can play an important part in influencing UK aviation legislation.
By Jack Nightingale