UK Air industry unites to fight tax rises
Friday March 04 2011 | 07:22 AM

Airlines, airports, tour and travel companies have banded together in a rare consensus to ask the chancellor not to raise contentious air passenger taxes in this month’s Budget.

British Airways and Virgin Atlantic, as well as Heathrow and Gatwick airports, were among 25 companies to suspend their traditional rivalries to fight air passenger duty charges that have risen three times in three years and given the UK by far the highest flight taxes in Europe.

“We recognise the exceptional difficulty of the country’s fiscal position and we are content to pay our fair share. But the UK airline industry is already the most heavily taxed in the world and any further tax burden will be counter-productive to the country’s economic recovery,” said Keith Williams, BA chief executive.

Mark Tanzer, head of the Abta travel association, said air passenger duty had become a “punitive stealth tax” that had put the UK at a competitive disadvantage to its European neighbours, some of which have ditched similar charges after industry lobbying.

The new coalition, which is launching a social media campaign on Facebook on Thursday, said it was unfair that a family of four flying economy class from the UK to Florida paid £240 in APD, or £340 if they went to Australia. An Irish family paid £11 in tax to fly to the same destinations and a French family £15.

The last round of APD increases in November, which originated with the previous Labour government, meant people flying to distant countries faced a charge of up to £170 a ticket, depending on class of seat and distance flown, a big jump from the £5 imposed when the tax was introduced in 1994.

But there was little sign that the new coalition government was likely to substantially roll back APD, which is expected to raise £2.2bn ($3.6bn) of revenue this year and £3.6bn by 2015-16.

The government said last year it would look at changing from a per-passenger to a per-aircraft tax, a move fiercely opposed by those not caught by the existing tax, such as air freight operators, but welcomed by low-cost airlines such as EasyJet with younger, fuel-efficient fleets.

EasyJet has not joined the new campaign. A spokesman for the airline said it shared the concerns of others in the industry about the level of taxation “but our very strong view is we should be moving away from a passenger-based tax to a per-plane tax”.

The Treasury said: “Revenue from this tax provides important support to the UK’s public finances and deficit reduction plan,” adding “any major changes will be subject to consultation with key stakeholders and relevant parties”.