Four of the UK's leading airlines have slammed planned increases in airline passenger duty (APD) , claiming that the planned increase will reduce passenger numbers and hinder economic recovery.
EasyJet, British Airways’ parent IAG, Ryanair and Virgin Atlantic claim that the Treasury measure, to be announced next week by UK chancellor of the exchequer George Osborne, would be counter-productive.
The Treasury plans to increase APD from April 1 with further increases intended to grow revenue by 46 per cent by 2016.
The airlines claim that these increases would mean a family of four paying tax of 440 pounds sterling to fly economy-class to the Caribbean, and 500 pounds to Australia. In 2005, a family of four travelling to any long-haul destination would have paid just 80 pounds.
A family of four in Scotland or Northern Ireland flying to see friends or relatives in England three times a year would have an APD bill of 420 pounds sterling. In 2005, it would have been 120 pounds sterling.
In a statement on March 12, the airlines’ CEOs, Carolyn McCall, Willie Walsh, Michael O’Leary and Steve Ridgway, said: "These endless cumulative increases in APD are pricing families out of flying – both from and to the UK. That means fewer visitors to the UK, which destroys jobs in our tourism, aviation and hospitality industries - and chokes off opportunities for young people at a time of exceptional youth unemployment.
"CAA figures have confirmed this week that UK passenger numbers in 2011 were at the same level as in 2004. Seven years of rising taxes have brought seven years of no growth.
"Aviation wants to, and should be, playing a leading role in economic recovery – as it does in so many other countries. But the UK imposes the highest aviation taxes in the world, and keeps on increasing them without any analysis whatever of their overall economic impact. We are exporting economic growth, and jobs, to competitor countries. How much longer must this madness go on?
The airlines called on Osborne to suspend the planned rises pending an independent study of the economic effects of such a tax rise.
"We are confident such a study would show that APD’s damage to economic activity outweighs the revenue obtained. It is irresponsible of the Treasury, if it is serious about pursuing economic growth, to keep piling on APD increases without conducting a study of this kind."