UK Government explores lower rates of Air Passenger Duty for English regional airports

Amongst the many announcements by the Chancellor George Osborne in today’s summer budget, the Government has announced a consulation whereby regional airports in England may be able to offer differing rates of Air Passenger Duty.

This follows the earlier devolution of Air Passenger Duty to national governments in Scotland, Wales and Northern Ireland and concerns that regional airports may be at a competitive disadvantage.

This may be achieved through either devolving the power to set rates of Air Passenger Duty to local authorities or for differing rates of duty to be set by Central Government. An alternative option proposed is to provide aid to regional airports.

Whilst any reduction in Air Passenger Duty would be welcomed by the aviation industry we suspect that many airlines will argue that the measure is insufficient and that duty must be reduced further to enable the UK and, specifically London Heathrow, to compete against other aviation hubs in Europe and the Middle East.

Furthermore, whilst many regional English airports such as Manchester and Birmingham have been growing their international links, particularly to the Middle East, this is unlikely to result in a significant rebalancing of aviation capacity between London and the English regions.

That said, the measure may attract more long-haul airlines to English regional airports, particulary to operate “pop-up” routes during the peak summer season, such as Virgin Atlantic’s summer seasonal flights between Belfast and Orlando.

The full consultation can be viewed online. Any interested parties are required to respond by Tuesday 8 September 2015.

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