Air-passenger duty is pointless!

Green flying taxes are causing a huge stir, as they are criticised on environmental and economic grounds.

Air-passenger duty is one of the few extra costs that you can normally now expect airlines to quote openly and up front, instead of infuriatingly tacking it on later. However, it is still a controversial charge, and a big one at that.

Governments past and present have ridden on the back of the huge international success of carriers easyJet and Ryanair. While the airlines have driven prices down and boosted tourism to and from the UK, politicians have raised the environmental tax on flights so high that they are the steepest in the world, according to British Airways chief Willie Walsh.

The tax is charged per seat and across four bands, roughly based on distance from London. Although it is the airline that is charged the tax, most carriers pass the cost on to customers.

Two economy passengers making a return trip to Europe or northern Africa will be asked to pay £48 in the air-passenger duty tax (APD). To the US and the Middle East and back costs £120, to and from Brazil or China costs £150 and if you go all the way to Australia it's £340 in this tax alone. Premium economy, first class and business class taxes cost twice as much to all destinations.

That can be quite kick in the teeth, especially when you add on the other extra costs that airlines charge after teasing you with flights costing a few pounds. For a return flight you might pay an extra £10-£15 for using your credit card, £60-£100 for two hold bags, £5 compulsory check-in fees, and admin fees on top.

Serious doubts about effectiveness of the tax

The APD tax was introduced in 1994 at just £5 to £10 in order to combat climate change. There are few who believe it has been successful in doing so, as flights and emissions continue to rise over the long term. This leads to the common gripe that the tax is more for the Treasury coffers than to reduce any man-made effect on global warming.

To tackle emissions, airlines are now going to have to join the European carbon-trading scheme, whereby heavy greenhouse-gas emitters must buy “carbon credits” from those who use less.

Even so, the UK Government intends to continue running the air-passenger duty tax even after airlines join the carbon-trading scheme. It is also possible that it will increase the tax further from April 2012, adding £8 per return economy flight and £30 for long-haul economy. Meanwhile, Holland has already scrapped its APD and the Irish ruling coalition has promised the same, with other European countries scrapping the tax as the carbon-trading scheme takes effect.

If customers aren't maddened enough, some airlines will retrospectively pass on any increase in APD tax next year if you book your flight before the tax rise but fly afterwards. It's likely to effect at least 6.5 million travellers next year, according to Virgin Atlantic.

How the APD tax effects tourism

The Government took nearly £2 billion last year and charges almost ten times the European average, and 30 times higher than some European countries, according to the Telegraph campaign to abolish the tax. If increases go through, it could mean customers paying another £1 billion on top.

The Telegraph also published a letter denigrating the tax, signed by the heads of the British Air Transport Association, the Airport Operators Association, UK Inbound and the Association of British Travel Agents.

The heads of British Airways, easyJet, Ryanair and Virgin Atlantic have put aside their differences to write a letter to the Government telling them to scrap the tax, claiming it has a larger negative effect on the economy and jobs than the benefits it brings in taxes.

British Airways chief executive Willie Walsh gave the most damning figures in a press conference, saying that as APD tax has risen in the past few years, passenger numbers have fallen by millions, while in the rest of Europe they have risen by tens of millions.

Despite the questionable tax, and all the other add-on charges we experience, I think that we should still remember that, overall, flying is still incredibly cheap, and that we live in amazing times. Overseas holidays used to be for the very rich only.

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