Airlines may scrap premium economy over APD rate
31.01.11
A number of airlines are preparing to scrap their ‘premium economy’ cabins unless the Treasury agrees to overhaul Air Passenger Duty (APD), the Telegraph reports. Under the current APD arrangements, the same tax is charged on a seat with a couple of inches more space than regular economy as for a full business-class ticket with a flat bed seat, better food, wine and in-flight entertainment. This adds £120 to the cost of a flight to the US.
The Government has announced that it is ready to review APD bands and will publish proposals for reform in March. A spokesman for Thomson Airways told the newspaper: ‘It is not right that families seeking a bit of extra leg-room on their holiday flight to Florida should be asked to pay the same amount of APD as a businessman flying first class on a flat bed to New York.'
Thomas Cook has already announced that it is scrapping the product on its outbound flights from Britain to destinations such as Jamaica, Cancun and Goa. Manny Fontenla-Novoa, the company's chief executive, said: ‘It's ridiculous to think that holidaymakers travelling in premium seats on one of our long-haul charter flights will have to pay the same APD as those flying in first class on a scheduled flight, so we've removed this cost from their holidays.'
Other airlines could follow suit, according to Simon Buck, chief executive of the British Air Transport Association. He told the newspaper: ‘Many airlines are now reviewing their fleet plans and the loss of this service would be very much against the consumer interest. We look to the Treasury to correct this anomaly in its review of APD in March.’
Virgin Atlantic, which will retain its premium economy seating, also regards the current arrangements as an anomaly. Steve Ridgway, the airline's chief executive, said: ‘How can it be right that someone sat in our premium economy class pays the same level of tax as someone in our upper class?’Add to: del.icio.us | Digg it | Newsvine | NowPublic | Reddit
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