The boss of Iata has called on the Government to extend its reduction in long haul Air Passenger Duty from Northern Ireland to the whole of the UK.
Speaking at the release of August world airline statistics, which show a slowing in demand, the director general and CEO Tony Tyler said: “APD is the biggest tax that we face anywhere in the world.
“Reducing APD for Northern Ireland is a clear recognition of the economic damage that it does.
“But why stop with Northern Ireland? The competitiveness of the entire UK transport sector is suffering.
“As a priority, the same reduction must now be made for the whole of the UK, for the benefit of the UK. This would provide a much needed boost to the UK economy, businesses and travellers with more competitive connectivity.”
His call came as the Conservative Party gathered for its annual conference in Manchester and the UK travel industry travelled to Palma for the Abta Travel Convention.
The Iata figures showed passenger demand was up 4.5% over the previous August, this represented a “significant slowing” from the 6% recorded in July.
Iata said the August traffic results are in line with expectations for a decline in profitability heading into 2012.
Airlines are expected to see total industry profits fall from $6.9 billion in 2011 to $4.9 billion.
Historically, the airline industry has delivered collective losses when GDP growth – measured using current exchange rates – falls below 2%, according to Iata. GDP growth has fallen from 3.9% in 2010, to an expected 2.5% this year and 2.4% is projected for 2012.
“Airlines are bracing for tough times ahead,” warned Tyler. “Economic uncertainty owing to the European sovereign debt crisis and the growing likelihood of a protracted period of slow growth in developed economies mean the industry will be even more focused on reducing costs and improving efficiency.
“To ensure that airlines can continue to catalyze economic activity, we need governments to review the often onerous tax burden that they place on aviation,” said Tyler.
European airlines achieved the strongest growth in international passenger traffic in August with a 7.9% increase, just slightly below a capacity expansion of 8.2%.
“Although domestic economies and leisure travel are weak, strong exports have led to increased business travel on international markets. Load factors of 83.9% were at historically high levels,” Iata said.