Airline Passenger Duty Tax: An unnecessary tax that is doing more damage than good?

TAM Airbus A330-200 in the former livery

This article is an opinion article and all opinions expressed are my own.

When you watch the news in the UK a week barely goes by without the media attacking bankers. Granted the collapse of the banks in 2008 led to the recession in the US, UK, Europe and world-wide; however, nearly four years later not much has improved. A part of the problem is the banks reluctance to lend but no one questions the impact of airline passenger duty on the economy, cultural understanding, innovation, or families.

What is airline passenger duty (APD)? The UK government adds APD tax to airfares in the name of “global warming,” “climate change,” and “revenue creation.” On an international flight it can add over a £150 to the cost of the ticket, depending on the distance and class of ticket. In some ways the tax discourages travelers from flying due to the “pollution” that air travel creates and it tried to guilt passengers about flying. The guilt is then turned in to “ways” for passengers to correct their “damage to the environment.”   Therefore it can be said the sole purpose of the APD is to discourage airline travel?

Another more damaging impact caused by APD is keeping EU citizens in the EU. By doing this it stops people learning about different cultures and different ways countries address the same issue. For me, on my most recent trip to Japan I saw how the Japanese embraced the use of plastic bags even though Japan’s population is about twice that of the UK with mountains making a lot of the land difficult to use. This would suggest that landfill space is quite limited and the propaganda by environmentalists that plastic bags take up landfill space and pollute the environment lacks creditability. Plus I was able to see how the Japanese subtly encourage recycling without having to resort to media blitz about recycling or having to charge customers for plastic bags.

Some of us may feel by limiting the impact of “pollution” from air travel we are doing something for the “environment.” Reality is air travel brings in tourists who spend money. It also creates jobs in IT, service industries, retail industry, manufacturing, security, travel, construction, accounting and banking. Many developed nations’ economies depend on air travel for trade, jobs, and revenue.  This implies taxing air travel is risk and it can adversely impact an economy.

Currently in the UK over 2.5 million people are unemployed. This raises the question if APD was ened, how many jobs would be created and how much would the economy grow? Also, how much more tax revenue will be collected through economic growth and job creation? Will it be enough to push a struggling UK economy into a more growing economy and be enough to lower inflation?

Unfortunately, I do not have all of the data to do the calculations. However, I am confident in saying removing APD on air fare would increase tax revenue through increased trade, tourism and job creation. In addition I believe, it would lower inflation through increased demand. I further believe removing APD will help to keep  families together, increase trade, and makes create more jobs through increase demand.

By eliminating APD it will help with cultural diversity by making travel cheaper thereby making it easier to experience different cultures and increase understanding how different countries approach the same issue. This may lead more innovation and greater global understanding can reduce the number of wars.  Finally, what is the real reason for APD? Is it to protect the environment or is an isolationist policy that will cause more damage than any good it may do?  It is time to end airline passenger duty to make air travel once again affordable to allow tourism, to create job, keep families to together, and to create a global understanding.

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