Green Aircraft Tax Misses the Mark

The British International Freight Association (BIFA) – – backs informed aviation commentators who have described a possible "plane tax" as an ill conceived proposal that will further damage an industry that is already on its knees. Furthermore, and importantly, it will do nothing to uphold the UK’s competitive edge as a major hub for international carriers serving Europe.

London, United Kingdom, May 22, 2010 --( In fact, the move is likely to have the opposite effect to the intended outcome, predicts Mr Peter Quantrill, BIFA Director-General.

Mr Quantrill says: “The ‘plane tax’ proposal is not new – the previous Government considered it but realised after consultation with trade, including BIFA, that there were a number of show stopping impracticalities to the scheme. Not least of all those relative to taxing airlines whose aircraft use UK airports as a drop/pick up point for through services en-route from origin to final destination.”

The new coalition government is considering replacing Air Passenger Duty (APD) with a ‘per-plane’ tax. The rationale is that with APD empty passenger seats raise no revenue for the Exchequer and provide no incentive to the airlines to fill the seats.

Mr Quantrill says: “Anyone close to the industry will know that airlines can no longer afford to fly with empty seats and constantly review their schedules to minimise this. In fact the EU Emissions Trading Scheme, being implemented in 2012, will have the increased effect of forcing airlines to operate aircraft at maximum capacity.”

Revenues currently derived from APD, and conceivably a replacement plane tax, are not directed towards funding environmental improvements.

Mr. Quantrill added: “For this Government it is clearly a case of looking at any means by which tax revenues can be increased to reduce the deficit. The danger is that the unintended consequences will include inflicting more damage on the UK’s position as the key European hub for airlines, passengers and cargo by charging what, in most cases, will be extra-territorial tax on their operations.”

British International Freight Association
Ian Matheson
+44 (0)1689 860660