It is not often that you see the CEOs of rival airlines joining forces. But Ryanair’s Michael O’Leary and IAG’s Willie Walsh have united to call on the UK government to scrap Air Passenger Duty.
The tax, which applies to every passenger flying out of a UK airport, was introduced in 1994 as a “green tax” and has continued to rise over the years.
The bosses of Ryanair, British Airways – owned by IAG, easyJet and Virgin Atlantic have launched a campaign against APD – “Axe the Tax”.
Airlines say that the UK has the highest aviation taxes in the world and that its negative impact on the UK economy is outweighing any benefit from the revenue raised.
In a letter to Chancellor George Osborne, the airlines said passenger numbers at UK airports had fallen consecutively for the last three years to a level lower than 2004.
The chief executives challenged the Chancellor to commission an independent report on the true economic effects of aviation tax in Britain.
The campaign comes ahead of the Chancellor’s Autumn Statement on November 29, when it is feared that George Osbourne will announce a rise in APD from April 2012, after putting a freeze on the tax in this year’s Budget.
The cost of Air Passenger Duty
APD is currently split into four price bands, and increases based on the flight distance from London and class of travel.
Currently, passengers pay £12 per ticket in APD on short-haul flights in economy class.
The tax increases to £60 per ticket to the US or Hawaii, £75 to the Caribbean and £85 for a return flight to countries including Singapore or Australia, in economy.
It means a family of four flying in economy class to Florida pay £240 in APD.
Virgin Atlantic and British Airways have also shown concern about APD’s effects on premium economy passengers, who currently pay the same tax as those travelling in First Class.
In the premium cabins, passengers flying from the UK to Australia pay £170 per ticket compared to £85 in economy class.