UK airline industry push for ‘extremely low’ prices on domestic flights

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A controversial new air passenger tax cut, due next month, was passed after the airline industry told the Government it would usher in a new era of “extremely low” prices for domestic flights in the UK, with one airline seeing a surge in passenger numbers up 31% forecast, industry documents reveal.

The new Air Passenger Duty (APD) reduction for domestic flights was approved by Rishi Sunak when he was Chancellor and halved the price to £6.50 from April 1. The rail industry has warned that the move could increase CO2 emissions by 27,000 tonnes a year and result in 220,000 fewer rail journeys a year.

Industry submissions received by openDemocracy under freedom of information laws show how airlines have campaigned for tariff reductions to boost air travel in the UK despite efforts to cut carbon emissions.

In its contribution to the March 2021 consultation, Ryanair said it would be able to offer more domestic flights at low prices, noting that domestic flights in Spain could be booked for as little as €5 (£4.42). The low-cost airline has unveiled a number of new domestic routes in the UK, including London Stansted to Cornwall, since announcing the tariff reduction.

The airline also rejected a frequent flyer tax that would have progressively increased fees for each flight taken. She argued that it “would probably only penalize passengers who have an ongoing practical need to fly frequently”.

EasyJet said in its filing, “Our analysis shows that a 50% reduction in domestic APD would result in an overall 31% increase in domestic traffic to 10.6 million passengers.” BA’s owner, International Airlines Group, said Treasury said that “positive results could include new routes, increased frequency and larger aircraft on existing routes, and lower fares.”

International flights will face an increase in tariffs from April. Customs duty on most long-haul economy flights from 2,000 to 5,500 miles will increase from £84 to £87. Economy flights over 5,500 miles are subject to a £91 customs fee.

Sunak, who regularly uses private flights across the country, announced the cut in APD for domestic flights in the October 2021 autumn budget. Ministers rejected a recommendation by the Climate Committee, the government’s climate advisors, for a frequent flyer tax.

The airline industry says cutting tariffs on domestic flights will boost non-rail routes and help support the region’s economy, but environmental campaigners have criticized the move.

Related: The expansion of Bristol Airport would hamper Britain’s climate targets, the court said

Silviya Barrett, director of policy and research at the Campaign for Better Transport, said: “Not only will it encourage more polluting travel, but it will also reduce the revenue that could and should be invested in sustainable alternatives.”

Airlines UK, the trade body for registered airlines, said: “The UK’s domestic air links play a crucial role in connecting nations and regions. It does not mean jeopardizing the sector’s commitment to net-zero carbon emissions by 2050.” EasyJet said in a statement: “We welcome this first step in ODA reform. EasyJet only operates domestic flights where there is no direct train journey of less than three hours.”

A Government spokesman said: “We are absolutely committed to leveling the UK and meeting our net zero commitments which is why from April we are halving tariffs on UK domestic flights excluding private jets and introducing new higher rates for ultra- long-haul flights.

“We discussed a frequent flyer levy in 2021. We concluded that ODA should remain the most important tax in the aviation sector.”

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