Plan to alter air tax sparks industry rage

Marion Dakers
BUDGET airline EasyJet will today launch a campaign warning the government against changing the air passenger duty as proposed in the Budget, claiming such a move would reduce British GDP by £2.6bn.

EasyJet today releases a report, written by Frontier Economics, which will claim that moving the levy would also reduce tourist spending by £475m a year and cut passengers by 3m.

The report also pours scorn on the environmental credentials of hiking taxes on airlines, by claiming a rise plus a change in the taxation bands for short-haul flights would increase CO2 emissions by 360,000 tonnes a year.

Airlines currently pay between £11 and £170 per passenger for any flight taking off from the UK.

Chancellor George Osborne said in March the government would leave the air passenger duty in its current form, citing problems with international law that prevented a unilateral change to air taxation.

But he added in the Budget that “intensive work with our international parters” would look at moving to a per-plane rather than per-passenger tax, which would charge half-empty planes the same rates, and alter the distance benchmarks used in calculating the tax.

The government also froze a planned inflation-linked rise in the current tax, at a public cost of £145m.

Several airlines have spoken out against previous plans to alter the duty, with BA head Willie Walsh labeling one hike “a disgrace”.

But easyJet chief Carolyn McCall (pictured) will focus on the extra cost to holidaymakers.