The Air Passenger Duty is a tax that has long been controversial. Despite how travellers feel about it, it appears that the tax is here to stay … at least for people who are over the age of 12. According to George Osborne, the chancellor, APD will be scrapped for all kids under the age of 12. This will start for all flights on May 1, and he hopes to extend this move to teens under the age of 16.
This announcement was made during the Autumn Statement and gives new life to the struggling airline industry; Flybe, British Airways and EasyJet all saw their shares jump. The hope is that this will encourage people to start flying again. Getting rid of APD for kids under 12 will cut travel costs by £71 a child on long-haul flights.
EasyJet, the second largest budget carrier in Europe, welcomed the news with open arms. The company saw its shares jump 2 percent to 1,660 pence after the news was announced. Even the International Consolidated Airlines Group said its shares jumped 2 percent to 469.60 pence.
Carolyn McCall, the CEO of easyJet, said that the airline supports any kind of move that makes travel more affordable and easier for travellers. EasyJet hopes that this new move is just the start of things to come for the airline industry. The UK currently has the highest air passenger taxes in the world, so any reduction to this is welcome.
Dropping the APD for kids under 12 only saves families £13 per child when traveling to destinations within the UK. However, it is the nearly £71 pounds it saves them when traveling to other places in Europe that is so welcome.
Saad Hammad, the CEO of Flybe Group, said that this is a very welcome move indeed. That being said, Hammad still feels like the government is just tinkering at the edge of what really needs to be done. It seems like officials are doing just enough to keep people happy while still avoiding any kind of meaningful reform. The fact that Flybe shares jumped 6.3 percent is proof that the people of Britain have been waiting for such a reform.
Osborne also announced that the government is still going to access the amendment of other regulations that require airlines to separate APD from other charges and fees. Right now, airlines should not be raising their fees due to APD because this tax was already frozen in another budget earlier this year.