Airlines should have stood up to government over APD sooner, says Walsh

Airlines should have stood up to government over APD sooner, says Walsh

Airlines should have spoken out against APD when the government first moved to introduce it, Willie Walsh said at the AOA conference.

But Walsh believes there was still an opportunity to scrap APD in the UK, a tax he believes is a “disincentive to invest in the UK, a disincentive to do business in the UK” and is “discouraging tourism”.

Walsh says the industry “made the mistake of standing back” while Gordon Brown doubled APD in 2006 for environmental reasons, but claimed that “not a single penny” of the money raised from APD goes towards environmental purposes.

He said: “We should continue to argue against APD. I know people say I shout on about things and nobody is listening but I’m going to continue shouting on about them. It doesn’t bother me if people don’t listen because ultimately I think they will listen.

“If we keep hammering home this issue, then maybe people will listen in the treasury and maybe they will accept that there is an issue that needs to be addressed here. At some point you have to hope that common sense prevails. On APD, I genuinely believe the UK economy would improve and would see increased growth if APD was removed.

“I think more and more people are coming on-side with us and more and more people are agreeing with us, and we need to mobilise people to ensure this issue does get addressed because it is impacting significantly on our competitiveness. It is a significant drag on UK competitiveness.”

Walsh told delegates that business people he meets in places such as China, India and Brazil are always talking about the issues of APD and visas.

He said the country shouldn’t be encouraging China to invest or do business with the UK, and encourage the Chinese to visit and then say “by the way, we’re going to put you through hell to get here”.

He said that it was encouraging that changes were being discussed but claimed the UK still required a “system that is fit for purpose”.

Speaking on the recent announcement over visas, Walsh added: “I don’t believe it is enough to turn the dial but at least they’re listening and responding to the campaigning we are doing, but we have to keep the pressure on.”

In the Q&A section of his talk, Walsh wouldn’t be drawn on what recommendations he is expecting from the Davies Report on airport capacity solutions; however he did pass comment on the recent news that Alitalia had been saved from bankruptcy.

He said the competition commission should be looking at Alitalia’s fresh funding from shareholders, of which €75million is thought to have come from the Italian postal service.

He said: “We are going to look at it very carefully, but I believe it is blatantly state-aid.”

Walsh said “if it walks like a duck then it is state aid”, and said the funding was an effort to find an “Italian solution to an Italian problem”.

“Europe has got to stand up and implement the rules that exist. State aid is damaging to this industry, it has led to a fragmented and unprofitable industry in Europe.

“I have a lot of sympathy for Michael O’Leary when you look at the time, money and effort the commission put into trying to prevent Ryanair from taking over Aer Lingus.

“You look at the size of that market – tiny – but they spent a fortune on that and yet they turn a blind eye on what is happening in Italy. You tell me which is more impactful to competition in Europe – Ryanair taking over Aer Lingus or a failing, effectively bankrupt airline, being bailed out so it can continue to compete.

“Without question the commission should be looking more at the state aid issues.”


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