The Treasury confirmed yesterday that the levy on passengers would jump by eight per cent in April, despite a massive lobbying effort by the airlines, who argue that the charge is hitting tourism.
The hike comes at a time when airlines are already frustrated by the coalition’s lack of ideas for keeping up with international growth in air travel, with a third runway at Heathrow scuppered and a plan for a new hub in the Thames Estuary still in its infancy.
British Airways said the most recent blow had made its plans to create 800 new jobs next year impossible, and that it would cut this number in half, and shelve up to three Boeing 747s.
The government launched a consultation in June about its plans for an APD rise at double the rate of inflation, but said the 500 responses it received had not changed its mind.
It made clear that the tax is a revenue raising exercise rather than an environmental levy. Yet it has cut the fee for flights from Northern Ireland – even though the Treasury expects the resulting increase in demand to be “negligible”.
BA, EasyJet, Virgin Atlantic and Ryanair said in a joint statement the consultation “has been a sham and a waste of taxpayers’ money. We are left with a tax that has already cost 25,000 jobs, is doing increasing damage to the prospects for economic recovery.”
The UK is set to lose a total of £1.1bn from tourism spending by 2017 thanks to the rising cost of APD discouraging holidaymakers from visiting, according to research by the Tourism Alliance.
But the tax has done little to put off Air China from the UK – the firm yesterday unveiled a new Gatwick to Beijing service, starting in May.