The boss of Manchester Airports Group has called on the government to take action to reform Air Passenger Duty and unlock the potential of UK regional airports.
Ken O’Toole used the platform of the UK Northern Powerhouse conference in Manchester to reveal a new video showing how the airport will look in 10 years following a £1 billion investment.
But he said there are things government can do to fully unlock the potential of the Northern economy.
The UK has the highest levels of APD in Europe – more than double the rate seen in Germany – which is passed on to passengers through ticket prices.
The tax is deterring airlines from setting up as many long haul services as they are at European airports.
Mr O’Toole used his speech to propose a revamp of APD.
“Short of abolishing APD, there’s an opportunity to offer airlines starting new long haul services an exemption from APD for a period of time something we’ve referred to as an ‘APD holiday’,” he said.
“This would at no direct cost to the Exchequer provide a huge boost to the competitiveness of UK airports seeking to grow long haul services, and as a result, strengthen global connections right across the country.
“In the long run, the Exchequer would benefit not only from more air services paying APD, but also from the more productive economy that it would help create.”
O’Toole said long haul services were key to long term growth in the UK but airports in the south-east are currently full.
That means government should not just focus on where a new runway should be built in the south-east but on how spare capacity at airports like Manchester could be made use of.
Manchester airport handles 23 million passengers a year but has the capacity for 55 million.
O’Toole said: “It follows that the government should be doing far more than it is to drive the development of air services, and particularly, new long haul services across the country.
“One of the key ways it can do this is ensuring UK aviation taxation policy does not make UK airports uncompetitive against our European and world peers, peers that we compete with daily for the limited aircraft that airlines have to deploy.
“We have worked hard to develop a worldwide route network to be proud of and I have already name-checked the places we now connect to.
“But for all these successes, we are playing catch-up. Growth in long haul seats at our European peers has been two-and-half times the rate seen at Manchester airport over the past decade.”
He added: “Just imagine the Chinese firm hunting for a location for its new European HQ, which will create 500 high value jobs. One great European city has a direct flight and one doesn’t – where will it pick?
“That is the impact of an anti-competitive tax that encourages connectivity in nation but hinders it in another.”
Talking about the need for high speed rail connections, OToole, said: Unless access between the major northern towns and cities and assets like Manchester Airport is also improved, the North will not fully benefit from our growth.
“To draw a comparison, Gatwick Airport sits 30 miles from London and it takes 30 minutes to get there by train.
“Currently, Manchester is the only city you can get to within 30 minutes of Manchester airport, which is ludicrous given how close it is to many of the great cities of the North.
“But with that sort of journey time to Leeds, Liverpool and Sheffield, there would be three times as many people able to access Manchester airport from their front door within two hours as currently do.
“When we reach our goal of being a 45 million passengers a year airport, the economic benefit we will bring to the UK will be nearly £1bn greater than today and we will support 20,000 more jobs.
“Why wouldn’t you want to unlock that benefit as soon as possible?”
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