This new independent analysis of the economic impact of Air Passenger Duty (APD) shows its abolition could boost economic growth, create up to 61,000 jobs, and pay for itself through higher revenues from other taxes. UK airlines have welcomed the findings which suggest that the tax currently suppresses demand for flights by 10%.
In 2013, PwC were commissioned by four major airlines – British Airways, easyJet, Ryanair and Virgin Atlantic – to conduct an independent assessment of the abolition of APD. In May 2015, PwC were asked to update this study following publication of new supporting evidence and subsequent public policy changes. Both reports use an economic model to simulate how changes in Air Passenger Duty would affect the rest of the economy. This “dynamic” approach to modelling tax impacts is used by the IMF and the World Bank.