Airlines lobby to axe levy on passengers

Marion Dakers
FOUR of Britain’s biggest airlines put aside their differences yesterday to lobby the government to scrap its air passenger duty (APD), which they slammed as uncompetitive.

Ryanair, EasyJet, British Airways and Virgin Atlantic have written to the chancellor arguing the tax on passengers, set to rise by twice the rate of inflation in 2012, puts off tourists from spending money in Britain, cancelling out the revenues from the levy.

“There’s not much these four airlines agree on,” said Ryanair’s chief executive Michael O’Leary. “I think BA’s fares are too high, and Willie [Walsh] thinks our service is too low, but we agree on this.”

Passengers have to pay between £24 and £170 in APD, depending on the length of flight, substantially more than when the tax started in 1994.

EasyJet chief Carolyn McCall claimed that while the charge was introduced as an environmental tax, the Treasury now admits that it is used as a revenue-raising measure.

All four were keen to stress that passengers, rather than the airlines, will feel the benefit of scrapping this duty.

Walsh derided the tax as a “whip round” for the chancellor, but pointed to the Netherlands, which ditched a similar tax after just a year when it found it was taking £300m a year but losing more than £1bn in tourism.

“We believe families should be entitled to taking a break… We believe it’s a right not a privilege people have to take a holiday.”

The Treasury, which hopes to recoup £3bn from APD in 2012, said yesterday that the government had frozen the tax this year, and that it has consulted on reform. THE FORUM: P25

Walsh, the chief exec of British Airways parent IAG, led the quartet in tearing into the tax yesterday, noting how rare it was for all four companies to agree on something. “How often do you see the bitter rivalry – some might say hatred – for each other put aside?”

Ryanair’s chief executive O’Leary has previously spoken out against a tourist tax in Ireland, calling it “disastrous”. He joked yesterday that he might set up a campsite outside parliament until the air passenger duty in the UK is dropped.

EasyJet’s chief was adamant that the airlines are only concerned about the economy, rather than their profits or shirking green taxes: “It’s an easy accusation to make that airlines don’t take their environmental responsibilities seriously, but it’s not the case.”

Ridgway, who has run Virgin Atlantic since 2001, was occasionally drowned out by the more vociferous chiefs at yesterday’s press conference, but noted: “The Prime Minister has said tourism is going to be a key point in the [economic] recovery.”