THE aviation industry decimated by the pandemic says the budget has failed to support their economic recovery.
Charlie Cornish, chief executive officer of Manchester Airport, said:” It is disappointing that the £4 million cap per airport remains in place and that the support provided to other sectors continues to exceed that offered to aviation, given its critical role in driving the UK’s economic recovery.
“With so little financial support available to the UK aviation industry, it is vital that the Government creates a framework for international travel free from restrictions as soon as possible.”
The six month extension to the airport and ground operators support scheme, he said “will will go a small way towards mitigating the devastating impact of the pandemic on our industry.”
A cut of 50 per cent on air passenger duty between airports in the UK from April 2023 and introduction of new long haul air passenger duty (APD) will reduce the cost of flying but, he stressed, more needs to be done.
Mr Cornish said: “The UK has for some time had some of the highest rates of aviation tax in the world, and in the aftermath of these reforms, those travelling on short haul flights will still pay at least £13 and those on long haul flights will still have to pay at least £84.
“These taxes are not only passed directly passed onto passengers, they have also placed us at a competitive disadvantage when seeking to secure new connections to key global destinations as we emerge from the pandemic and seek to create a global Britain.
“It is vital government carries out a full review of all APD bands and considers creative ways to help UK airports win back routes to key global markets, and secure new connections in the future.
“The introduction of the ultra-long haul APD tax band does not assist the industry in terms of aviation decarbonisation and the revenue generated by the levy delivers no environmental benefit.
“The aviation sector already has ambitious plans in place, and is working together with the Government on the Jet Zero Council to achieve net zero by 2050, so that people and businesses can continue to enjoy the benefits of international travel without having any further impact on the environment.”
Karen Dee, chief executive of the Airport Operators Association, said:“We are pleased that the Government has listened and extended for a further six months the Airport and Ground Operations Support Scheme, which will provide some much needed financial relief for airports in England devasted by the ongoing Covid-19 crisis.
“However, this will not benefit business/GA airports or be very much help to our largest airports, as it is capped at a level far below their business rates bills.
“The correction to the long-standing taxation of APD for return leg flights for domestic journeys to a lower rate is very much welcomed and will boost domestic connectivity, particularly for communities with few reasonable alternative transport options and also benefit regional airports.
“But it is disappointing that Government is delaying these benefits by not implementing the measure until 2023.
“Cutting domestic APD on the one hand while increasing it on long-haul travel may make sense on a Treasury spreadsheet but shows a fundamental misunderstanding of how the UK relies on aviation for its prosperity.
“The UK Government’s ambition to create ‘Global Britain’ has seen ministers invest in improving our trading relationships with key markets across the globe, particularly with Australia and New Zealand.
“Increasing the tax on the only way to travel to these countries fundamentally undermines that ambition and effort.
“Not only will UK businesses now be penalised for travelling to seek out opportunities and build new trading relationships, there will also be fewer opportunities to get our goods to market.
“Forty per cent by value of the UK’s non-EU exports travels by air, the majority of which flies in the bellyhold of passenger aircraft. Any increase in APD will affect airline passenger capacity on those routes and therefore also reduce freight capacity.”
Martin Chalk, acting general secretary of the British Airline Pilots Association, said: “Once again British Aviation, and the many people who rely on the industry for a livelihood have been overlooked.
“This budget needed to invest in the recovery of what was once the world’s third largest aviation industry and supported one and a half million UK jobs.
“The Chancellor seemed drunk on promoting prosecco and pubs, rather than on the sober need to support vital innovation and respite for airlines, who must weather a dark winter without a return of public confidence in flying.
“No investment in aviation skills, no investment in operational resilience and no support for our colleagues made redundant by the brutal pandemic.
“At a time when airlines have haemorrhaged money for 18 months, taken on mountains of debt and needed further investment from shareholders just to survive, this Government is again deaf to the reality of this highly competitive market.
“Whilst we welcome the reduction of domestic APD, the creation of a new band for longer haul flying makes no sense. It will now be much harder to capitalise on our recent free trade deals with countries such as Australia and New Zealand and it also unfairly penalises those who need to travel over 5,500km to see family. This flies in the face of the Government’s Global Britain agenda.
“With UK aviation only just being able to see the light at the end of the tunnel, this budget provides no support for our once world leading aviation sector, and no recognition of the contribution we make to UK PLC.”