Abolishing Air Passenger Duty (APD) would boost the UK economy and create almost 60,000 new jobs, a new report has suggested.
The study by PriceWaterhouseCoopers (PwC) looking at the economic impact of the tax found that GDP could increase 0.46% in the first year of it being scrapped, amounting to GBP16 billion in the first three years and 60,000 jobs.
If APD were scrapped airlines would be able to put more money into their networks; inbound tourism would see a boost and business travel would pick up in the medium term.
The figures were calculated using the same model used by the IMF, World Bank and UK Treasury to measure the impact of taxes.
“Abolishing APD has the potential to reduce the cost of flying, making it cheaper for businesses to maintain relationships with overseas customers. In this sense APD could be regarded as a tax on exports,” the report added.
In a jointly released statement, bosses from British Airways, easyJet, Ryanair and Virgin Atlantic said the report had shown the “critical role that aviation plays as an engine in economic growth”.
“It proves that APD is one of the three most destructive taxes; alongside Corporation Tax and Fuel Duty. The Chancellor has taken action on those two taxes in the Autumn Statement and we would encourage him to use the forthcoming Budget to remove APD to stimulate economic growth and create jobs,” the statement said.
All four would “be able to move quickly to add new flights” if the tax was abolished.