Virgin Atlantic to hold government talks over APD

Virgin Atlantic to hold government talks over APD

Virgin Atlantic chief executive Craig Kreeger (pictured) is to press the government to review Air Passenger Duty.

The carrier was “set up” to hold “conversations with many of the new ministers” about the tax which airlines argue harms the UK economy and the aviation industry.

Asked during the airline’s inaugural flight to Detroit whether he had started to engage with the new Conservative administration, Kreeger told the Telegraph: “When I get back to the UK, I have a number of meetings set up to have some conversations.”

He is lobbying ahead of the summer Budget next month, which chancellor George Osborne could use as an opportunity to signal further changes to the tax.

The tax costs each short-haul traveller a minimum of £13 and up to £142 for long-distance flights. A report released last week by PwC suggested that abolishing the duty would boost the UK economy by 1.7% in five years’ time.

“Knowing the role that tourism and the business travel plays in the UK, that just seems crazy to me,” Kreeger said.

The Scottish National Party has already pledged to halve the duty. Airlines fear that English travellers seeking cheaper flights would drive north of the border, hitting demand further south.

“With what’s going on in Scotland, it certainly calls out desperately the need for a thorough review of this tax,” said Kreeger.

“I’d certainly like a commitment for a thorough review, recognising that there now could be very different issues associated with changing this tax in different parts of the [UK],” he added.

Virgin Atlantic, which returned to profitability last year, is hoping to post record profits by 2018.

The airline could start flying to Latin America before then, and may start new routes to China to build on the service it already flies to Shanghai, Kreeger said.


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