FILE PHOTO: A British Airways airplane takes off subsequent the National Air Traffic Services tower at Heathrow Airport close to London, Britain October 11, 2016. REUTERS/Stefan Wermuth
LONDON (Reuters) – Britain’s aviation trade hit out on the government on Monday over its choice to extend a tax on long-haul flights, saying it made a mockery of the government’s ambition for a ‘Global Britain’ after it leaves the European Union.
British finance minister Philip Hammond mentioned in his annual funds that Air Passenger Duty (APD) could be frozen for short-haul flights however would rise in step with inflation for long-haul.
The proprietor of British Airways, IAG (ICAG.L), mentioned the tax hindered its efforts to fly to new buying and selling markets.
“It’s ironic that this Brexit budget has undermined Britain’s global competitiveness by upping Air Passenger Duty, the world’s highest aviation tax, again,” IAG mentioned.
“We want to offer more flights to key trading markets, like our European competitors, but APD stifles route development to new emerging markets. If Britain wants to compete on the global stage post Brexit, it should be scrapped now.”
IAG mentioned British Airways passengers paid 682 million kilos in APD final 12 months.
A spokeswoman for Virgin Atlantic mentioned prospects had been already paying a levy that was twice that of some other EU nation, to go away the UK. “APD now accounts for more than a quarter of our lowest fare,” she mentioned.
Hammond mentioned short-haul APD charges for 2020-21 wouldn’t rise, remaining on the similar degree as they have been since 2012. For long-haul they are going to improve by 2 kilos, whereas the charges for these travelling in premium financial system, business and top notch will improve by four kilos.
Tim Alderslade, the pinnacle of trade physique Airlines UK, mentioned the deliberate tax improve despatched the incorrect sign. “APD is nothing but a tax on Global Britain,” he mentioned in an announcement.
Reporting by Kate Holton, Editing by Paul Sandle