Call to scrap APD ‘not a threat’, but ‘airlines can move assets’

Call to scrap APD ‘not a threat’, but ‘airlines can move assets’

The bosses of Europe’s biggest airlines, members of the Airlines for Europe (A4E) group, demanded the UK scrap Air Passenger Duty (APD) yesterday and hailed a retreat on air tax by Italy after carriers withdrew capacity for one million passengers.

However, IAG chief executive Willie Walsh and easyJet chief Carolyn McCall denied A4E was threatening governments which increase air taxes.

A4E members include easyJet, Ryanair, British Airways and Iberia parent IAG, Lufthansa, Air France-KLM and Norwegian Air Shuttle.

Speaking at the Aviation Festival in London yesterday, Walsh said the UK government had “fleeced customers of £31 billion in APD since 1994”.

He argued: “You can’t spend hundreds of millions on a tourism action plan to attract people to the country when you charge up to £146 for tourists to come here. It’s a disincentive to visitors.

“This is a central issue the new Prime Minister will have to address.”

McCall agreed, saying: “There is ample evidence to show APD is counterproductive. It is hugely anti-competitive for Britain.

A4E managing director Thomas Reynaert referred to an Italian’s government plan to add €2.50 on passenger tax from September until it was postponed last month.

Reynaert said: “Some of our members had the flexibility to move flights away from Italy. There were roughly one million passengers less.”

He suggested there could be similar action in response to future increases, saying: “Some of us have the flexibility to more very quickly and no doubt we will do that.”

However, Walsh insisted: “A4E is campaigning on the issue of tax. Decisions on capacity are for individual airlines. There is no coordination of activity. Airlines are influenced by and do respond to these decisions.”

Walsh added: “I met [transport secretary] Chris Grayling and made it very clear that APD is a huge factor in where we decide to operate. It does influence our decisions on network development.”

McCall said: “It’s economics. Anything that suppresses demand will affect the economics of routes. Airlines can move assets. It’s not a threat, it’s an economic reality.”


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