Today Irish low cost carrier Ryanair has announced it will be reducing its winter flights by 16%. While most airlines make their announcements and move on, Ryanair’s CEO Michael O’Leary is making public statement that the United Kingdom’s Air Passenger Duty (APD) is ‘damaging’ the airline industry and creating capacity reductions in the United Kingdom.
This may be only the second time I have agreed with any statement by Michael O’Leary, the UK Air Passenger Duty significantly increases airfares to far beyond many advertised fares for flights departing the United Kingdom…and starting in November 2010 the Air Passenger Duty fees will increase significantly.
I covered the discrepancy in advertised airfares and the airfares passengers actually pay here – The Airfare Discrepancy: What You See Is Not What You Get…Its Not Just Low Cost Carriers
So, since we all know that airfares come with taxes and fees, how significant could the UK Air Passenger Duty be to impact an airline’s ability to fill seats? Well first we need to know what the Air Passenger Duty is. The Air Passenger Duty is a tax that is charged to passengers flying from an airport within the United Kingdom on an aircraft that has more than twenty seats or an authorized weight of more than ten tons. The actual tax levied is based on distance, with longer flights having an increased tax.
The distance of a flights and its relative Air Passenger Duty fee is not based on the actual distance of the flight, but on the distance from London to the Capital City of the nation a passenger is flying to. Under this current system a flight flying from Belfast (BFS) to Newark (EWR) with a flight distance of 3,354 miles is levied the same tax as a flight flying from Manchester (MAN) to Las Vegas, a flight distance of 5,087 miles … because both flights are based on the 3,684 miles distance between London and Washington, DC.
Flights flying from the United Kingdom to countries with the Single European Sky program, face a lower Air Passenger Duty, where as flights to nations not covered under Single European Sky face a higher fee.
These are the Air Passenger Duty fees passengers pay for flights within the Single European Sky as of November 2010:
0000-to-2000 miles – £12
2001-to-4000 miles – £60
4001-to-6000 miles – £75 (no flights apply for this fee)
Over 6000 miles – £85 (no flights apply for this fee)
These are the Air Passenger Duty fees passengers pay for flights outside of the Single European Sky as of November 2010:
0000-to-2000 miles – £24
2001-to-4000 miles – £120
4001-to-6000 miles – £150
Over 6000 miles – £170
For those of you in the U.S., at today’s current exchange rate, many flights from the UK to the United State would face an Air Passenger Duty of US$226 for their seat … of course that puts a dent in some of the current US$600 round trip fares … not including taxes and fees.
With the airline industry in a fragile state, and United Kingdom based airlines largely fighting for survival, including the major carriers, the Air Passenger Duty should be rethought. Not that I ever want to side with Ryanair, but a 16% reduction in flights from the United Kingdom not only decreases passenger taxes, but it decreased airport revenue, reduced employee hours which in turn reduces their income and overall has a negative impact on the economy as a whole…for all airlines and airports in the United Kingdom, not just Ryanair.
Planning to fly to United Kingdom? You may find it cheaper to fly into Ireland or France, and then travel from one of these destinations back into the United Kingdom,