Airline CEOs slam Treasury on air tax rise

2nd Apr 2012 07:49

Leaders of the UK's biggest airlines have called on the Chancellor to review the impact of Air Passenger Duty (APD) after it was hiked yesterday.For short-haul flights, the tax has gone up from £12 to £13, while for long-haul flights between 4,000 and 6,000 miles it has risen from £75 to £81.APD on flights above 6,000 miles has increased from £85 to £92.CEO's from easyJet, IAG - the parent company of British Airways, Ryanair and Virgin Atlantic jointly warned of "an increase in APD of double the rate of inflation which will hit millions of hard working families in the UK as they book or fly away on their well-earned break".The airlines said increases would mean a family of four paying tax of £440 to fly economy-class to the Caribbean, and £500 to Australia. This compared to 2005, when a family of four travelling to any long-haul destination would have paid just £80, they said."APD rises again on April fool's Day but the public should not be fooled again by this tax and the damage it does to them, to jobs and to the wider economy," said Carolyn McCall, Willie Walsh, Michael O'Leary and Steve Ridgway in the joint statement."We urge George Osborne to make APD the first tax to be examined under the Treasury's new review of the wider impacts of taxation on the economy and to halt the proposed rise in APD to £500 for a family of four until this review is complete."Business lobby group, the CBI, also said the APD rise should be lower.The government said it had frozen APD last year and that most passengers would see little difference in the price of their ticket."Most passengers pay only a pound more on their flights as a result of the rise," said Economic Secretary to the Treasury Chloe Smith."We have made aviation tax fairer by bringing private business jets in for the first time," she said. "I think that does represent a fair deal for passengers and I think it does also represent a fair deal for businesses, who are today enjoying a historically low rate of corporation tax."As of 1 April, corporation tax in the UK fell by 1% to 24%.