LONDON (Reuters) – Britain wants to cut air passenger duty on domestic flights to boost internal links and will launch a consultation this spring, giving a glimmer of hope to the stricken airline industry.
The boss of UK-based easyJet welcomed the news but said action was needed fast. Airlines, airports and holiday companies are desperate for a summer recovery in travel after a year of minimal revenues.
But a consultation on internal air passenger duty (APD) could last months.
“A reduced domestic rate would be a positive step in supporting the UK’s air connections,” easyJet Chief Executive Johan Lundgren said. “The government should act quickly to take this opportunity.”
The new consultation will consider options such as the introduction of a return leg exemption, creating a new lower domestic level and increasing the number of international distance bands, the transport ministry said in a statement.
In 2019, APD raised an estimated 3.7 billion pounds for the government. Airlines have long opposed the tax, which they say is the highest European aviation tax by a long way and they want a suspension across the board, not just an internal cut.
In a connectivity review of the union, the government promised to improve rail, road, sea and air links to boost parts of the country that feel left behind.
APD is charged per passenger flying from a British airport to both domestic and international destinations in bands that take account of distance and class of travel.
Transport minister Grant Shapps said earlier on Wednesday that cutting APD on domestic flights would not adversely affect Britain’s climate change goals because there would be increasing use of sustainable fuels.
Greenpeace said it was nonsensical.
The government is due to publish more information on April 12 about whether people will be able to travel abroad this summer. It has said holidays will not be allowed before May 17.
Shapps also said that he was “hopeful” that travel could be given the go-ahead.
(Reporting by Costas Pitas and Sarah Young; Editing by Peter Graff and Steve Orlofsky)