Taxing flying

A UK low cost airline, Easyjet has commissioned a report by Frontier Economics to reveal the impact of the government’s proposed Air Passenger Duty on air travel. The government has offered a number of options for calculating air passenger duty but Frontier Economics’ research indicates that all of the options that would be “bad for the UK”. Of course an airline commissions a report that it expects will support, not hinder, its lobbying for a particular type of duty on flying.

The government is somewhat restricted on the taxes that it may levy on flying by international agreement. Taxing flying is nevertheless desirable not merely for the revenue it raises but because in reality we should discourage flying, particularly inefficient flying. Easyjet has been lobbying for the APD to be on a per plane basis; this would be logical, as well as favouring low cost airlines.

It is logical because the number of passengers in a plane makes very little difference to the emissions that the plane discharges. Most of these emissions are discharged at high levels but take off and landing also discharges more emissions than simple flying, so there is a case for taxing short haul more than long haul.

Easyjet would be advantaged by a per plane tax, because it operates without a first and business class and crams as many passengers as possible into each plane and appears somewhat ruthless when it comes to cancelling poorly filled flights.

A tax per flight would favour it, and there is a logic to this, which cannot be implemented without substantial revisions to international aviation treaties.

Frontier Economics predict that the new APD proposed would lead to an overall decline in air traffic of about 1.5%. To me, this would be a positive of APD, not a negative for the climate of our planet. They claim that 76,000 UK jobs in tourism will be lost, but frankly I believe that when planning any holiday to or from the UK the impact of another £3 on a short haul flight will not make or break a holiday decision. The APD is already part of any holiday budget; it is only any extra tax that will create an extra expense and far greater impacts are suffered by holidaymakers in exchange rate variations.

It is also claimed that fewer more expensive flights will lead to an increase in aviation emissions. I have tried to find the reasoning for this claim in their report, but without success.

A summary is available at http://www.frontier-economics.com/_library/publications/frontier%20report%20-%20the%20impacts%20of%20proposed%20changes%20in%20air%20passenger%20duty.pdf

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