Rival airline chiefs unite to fight tax

Four airline chiefs have urged the government to axe air passenger duty, saying its negative impact on the UK economy outweighs any benefit from the revenue raised.

In a letter to Chancellor George Osborne, they said total passenger numbers at UK airports had fallen consecutively for the past three years to a level lower than 2004.

In 2010, there were 7.4 million fewer passengers in the UK, while numbers using European airports grew by 66.3 million.

They also highlighted the case of the Netherlands, where an air tax scheme was abandoned after a year because of its harmful effects on the economy.

The letter was signed by Willie Walsh, chief executive of British Airways’ parent company IAG, easyJet chief Carolyn McCall, Ryanair boss Michael O’Leary, and Virgin Atlantic chief executive Steve Ridgway.

Their comments were echoed by the head of Flybe, Jim French, who warned that regional routes in particular could be hard hit by an increase in the tax.

They challenged Mr Osborne to commission an independent report on the impact of the tax.

They said the tax doubled in 2007 and rose again in each of the past two years, giving the UK the highest air taxes in the world.

The letter said: “For hard-working families, APD is a tax too far for the privilege of taking a well-earned holiday. It is also a tax on tourism and on business.

“Aviation doesn’t just drive exports – it is a major exporter in its own right with our airlines earning nearly £11 billion of foreign revenues every year.”

Tourism is worth £115bn to the UK economy.

Mr French said: “I cannot stress enough that the success of regional aviation is crucial to regional development. In supporting commerce, industry and social mobility – not to mention much-needed employment.”

Holyrood’s enterprise minister, Fergus Ewing, said he is working with Scottish Conservatives to persuade the UK Treasury to address regional variations in the tax.

One Conservative MSP source said that the scheme posed a “threat to Scottish tourism”.

Mr Ewing added: “We are very concerned about the impact of APD. I’m delighted to make common cause, working shoulder to shoulder with the Scottish Conservatives to persuade the Chancellor to provide a better tax environment to attract tourists and visitors.”