Air Passenger Duty is hampering International Airlines Group’s fledgling low cost long-haul arm LEVEL from starting flights from UK regional airports.
Abolishing the air tax would make it more likely that LEVEL could operate from Birmingham, Cardiff, Edinburgh and Manchester airports.
But it is not financially viable when LEVEL’s fares start at around £88 one way and long-haul economy APD is £78.
IAG warned MPs that APD undermines Britain’s position as a global trading nation post-Brexit and reduces the chance LEVEL flying from UK regions.
The British Airways owner is looking to expand LEVEL, which started flights from Barcelona to the US and Latin America last year and will fly from Paris to the Caribbean and North America in July.
IAG chief executive Willie Walsh told MPs in a letter: “British consumers are losing out because of APD. In Spain and France, LEVEL can offer lower fares than it can in the UK – and that goes for other long-haul low cost airlines too.
“MPs need to know that APD undermines our ability to introduce new low cost flights that would benefit their constituents.
“If APD was axed, IAG could open new routes and operate LEVEL from regional airports.”
It is foolhardy for a trading nation reliant on developing international connections post-Brexit to tax aviation so harshly, IAG argued.
In addition to £78 for economy passengers, passengers pay £156 in premium economy and business class. The premium rate will rise another 10% to £172 next year.
Walsh added: “By hiking APD in the last Budget, it’s clear the Chancellor doesn’t understand that Britain is losing out to countries that don’t have draconian aviation taxes.”
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