BAA response to rise in APD

07 December 2006

In his pre-Budget Report, the Chancellor has today announced a doubling in 
Air Passenger Duty (APD).  In response, Stephen Nelson, BAA Chief Executive 
Officer, said,

"Today's announcement of a doubling of APD means that air passengers will 
pay £2 billion a year in green tax, which will cover the full costs of 
aviation's environmental impacts – a principle we accept. Going forward, 
aviation's inclusion in the European-wide carbon trading scheme is the best 
long-term solution for the environment and the economy and therefore blunt 
taxation should only be an interim measure."

Notes to editors:

History of APD
Air Passenger Duty (APD) was introduced by the Conservative Government in 
November 1994, and is a duty of excise which is levied on the carriage, 
from a UK airport, of chargeable passengers on chargeable aircraft. The tax 
does not apply to flights from airports in the Scottish Highlands and 
Islands.

The initial rate in 1994 was £5 for short-haul flights and £10 for long 
haul. In 1997, the duty was doubled.

In 2001, APD was restructured into four catergories. Standard rates for APD 
cover seats which can be reasonably classed as premium and, until today, 
the rate was £10 for specified European destinations and £40 for all other 
destinations.

Reduced rates apply to economy seats and, until today, were set at £5 for 
specified European destinations, £20 for all other destinations.

In the last financial year, APD raised £905 million.

BAA’s position
BAA believes that getting aviation into the next phase of the EU Emissions 
Trading Scheme (ETS) is the best long-term solution for the environment and 
the UK economy. The European Commission is due to publish draft legislation 
on how this can be achieved before Christmas.

Following today’s announcement, aviation’s net contribution of around £2 
billion to the UK Exchequer will cover the environmental impacts of the 
sector. However, BAA is of the view that the best solution for the 
environment and the economy would be for carbon trading to replace APD once 
aviation joins the EU ETS.    

Media Enquiries:
Lydia Pretzlik, Maitland
Tel: (removed)

Mark Mann, BAA
Tel: (removed)


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