Tuesday, 9 June 2009

Could APD rise prompt leg room increases?

Swingeing planned increases in air passenger duty (APD)* raise an interesting question. Might it prove viable for an airline to offer a single class with extended legroom on long haul flights - on the grounds that standard class attracts the lowest duty?

You may recall that the Government had decided to iron out an earlier, similar anomaly which enabled passengers on business class only carriers to pay the lower charge. This move was quickly rendered unnecessary by the demise of the relevant airlines.

But there would be no need to market extra leg room as a carrot for business travellers. Airlines could just sell it as a superior economy. I don't see anything in the plan which relates duty to seat pitch.

Would this business model work? I don't know. But there should be demand, particularly from passengers currently booking seats in premium economy cabins, who would surely be happier to fork out more for extra leg room than pay the extra APD.

*APD will rise in bands from next November - and again from November 2010 - depending on the length of the flight. For economy passengers flying to New York (around 3500 miles), for example is rises from £40 now to £50, then £75 the following year. In premium economy, business or first class cabins it will go up from £80 to £110 and £150. Travellers on the longest flights - eg to Australia or New Zealand - will see the charge increase to £55, then £85 in economy and to £110, then £170 in other classes.

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