Long-haul air passengers are subsidising their short-haul counterparts to the tune of hundreds of millions of pounds annually due to the design of the Air Passenger Duty (APD) system.
That is according to Virgin Atlantic, which today released data suggesting the figure could be as high as £222 million annually.
Virgin based its findings on the percentage rise in the rate of APD in the last four years.
Over the period, APD rates have risen by 20 per cent on short-haul travel, while rates on long-haul travel have increased by at least 50 per cent.
”Had the tax gone up at the same rate, short-haul flights would collectively be contributing at least £222 million more a year – but instead the difference has been made up by travellers flying further afield,” Virgin Atlantic argued in a statement.
Air Passenger Duty
Passengers currently pay £12 in APD for a short-haul economy class flight.
However, rates go as high as £170 for a passenger travelling long-haul in business class or in first-class to some destinations in Asia and Australasia.
Now, to redress what it believes is an imbalance in the system, Virgin is proposing a new £20 rate of APD for short-haul journeys.
The airline claims the move could bring in nearly £650 million to the Treasury.
Chief commercial officer Julie Southern said: “Air Passenger Duty has rocketed in recent years and with a family of four potentially facing a £260 tax bill to fly to Orlando, steps need to be taken to bring this back under control.”
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