Treasury confirmation of a near 10% rise in Air Passenger Duty (APD) next April drew a furious industry response.
Abta described the increase as “eye watering” and argued: “It flies in the face of basic economics.”
Airline bosses Carolyn McCall of easyJet, Willie Walsh of British Airways’ parent IAG, Michael O’Leary of Ryanair and Steve Ridgway of Virgin Atlantic issued a statement saying: “APD has no international parallel and has already cost 25,000 jobs.”
The Airport Operators Association (AOA) denounced the increase as “a damaging tax grab” and the Board of Airline Representatives in the UK (BAR UK) called it “devastating for the travel industry”.
The Chancellor’s Autumn Statement confirmed a double-inflation rise in APD in 2012, “as set out at the 2011 Budget”. This gave notice the deferred 2011 increase “will be implemented alongside the April 2012 RPI [Retail Price Index] increase”.
The current RPI inflation rate is 5%, suggesting next year’s rise will be near 10%. Details will be announced next Tuesday when the Treasury will also respond to the consultation on APD earlier this year and announce any changes to the tax bands.
The four airline chief executives, who set up an ‘Axe the Tax’ campaign in November, called for “an independent study of APD’s economic value”.
“We have no doubt this would confirm APD’s negative impact outweighs its revenue benefit for the Treasury,” they said. “This tax must be abolished.”
AOA chief executive Darren Caplan said: “The tax take from APD will soar. The Treasury should listen to the ‘Fair Tax on Flying’ alliance and re-think its plans.” A Fair Tax on Flying is backed by airlines, tour operators, destinations and associations including Abta.