The International Air Transport Association (IATA) welcomed the UK Chancellor of the Exchequer’s decision not to increase the Air Passenger Duty (APD), announced in his Budget Statement today.

“This is good news for Britain, its businesses, visitors and its holiday-makers. I congratulate the Chancellor on his wise decision at this critical time of rising oil prices. He has begun to address the falling competitiveness of the UK aviation sector—at least by not making the APD situation worse. But much more needs to be done. Air passenger taxes in this island nation, which relies on air transport for connectivity, are still the highest in the world,” said Giovanni Bisignani, IATA’s Director General and CEO.

IATA continues to urge the UK to commit to abandoning completely its APD—long touted as an environmental tax—if plans continue for aviation to join the EU Emissions Trading Scheme (ETS) in 2012.  IATA strongly believes the EU ETS is an inefficient environmental mechanism that contravenes international agreements in the Chicago Convention. As a regional scheme, the EU ETS undermines efforts by the International Civil Aviation Organization to develop a global framework for economic measures to manage international aviation’s climate change impact.

“We oppose misguided efforts on the EU ETS. But if it comes into place the UK APD must go—completely. Even without the planned increase, the UK collects more than GBP 2 billion pounds annually in the name of the environment through APD. That is enough to offset the entire annual carbon footprint of the UK aviation sector four times over. Aviation supports 1.5 million jobs and GBP 82 billion in economic activity in the UK. Moreover aviation has a global commitment to cap its net emissions from 2020 and cut them in half by 2050. If the Chancellor’s goal is to restart the economy, punitive taxation of this environmentally responsible employer and economic catalyst must stop,” said Bisignani.

IATA also welcomed the Chancellor’s decision not to convert the “per passenger” APD to a “per plane” tax, which would have eroded UK competitiveness.