The tax hikes mean that passengers will face increased plane ticket costs from April. Economy short-haul flights will face an 8.3 per cent hike, while a long-haul flight to the US would cost around £65 in APD – which is pretty pricey compared to the £15 duty charge in France.
British Airways bosses said the airline would scrap plans for 800 new cabin crew and pilot jobs and hire just 400 instead, citing the difficulty that increased APD will place on the business in tough economic times.
Airlines across the board have reacted angrily to the APD decision, with a joint statement from BA, Virgin Atlantic, Ryanair and EasyJet complaining: “The Government’s consultation on APD has been a waste of taxpayers’ money.
“We are left with a tax that has already cost 25,000 jobs and is doing damage to the prospects for economic recovery. It sends a message to the world that Britain is a difficult and expensive place to do business.”
Willie Walsh – chief executive of British Airways’ parent company IAG – said in an interview with Sky News this week that the hikes would hurt the UK tourism industry and put off travellers from visiting the country.
Walsh also pointed out that none of the cash raked in would be spent on the environment.
“The first thing to remember is that it is not a green tax,” he said. “The Government has made that clear. This has nothing to do with the environment. Not a penny of this tax goes to environmental issues.”
The tax will be based on distance travelled and is separated into four categories: economy, and flights to the US, Africa and Australia.
Chancellor George Osborne reportedly admitted in a letter to European airport bosses that the tax was “fundamentally a revenue raising duty”. It is thought that the hike will provide the Treasury with £2.5 billion a year.
