Aviation: Airline bosses join forces to condemn passenger duty hike
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Wednesday 30 November 2011
Air passenger duty (APD) will see a steep rise next year, a move jointly condemned by the country's main airlines.
The Treasury said the APD rate, which is linked to inflation, would go up from April 2012 after this year's rise was deferred in the March budget.
It means next year's increase could be double the rate of inflation, according to the accountancy firm PricewaterhouseCoopers. The tax will also be extended to private jets from April 2013.
Chief executives at the UK's biggest airlines joined forces to voice their criticism of the decision.
"In the cause of the UK economy recovery, air passenger duty is an own goal and the Chancellor has just scored another one," said a joint statement by Steve Ridgway at Virgin Atlantic; easyJet's Carolyn McCall; Willie Walsh at the British Airways owner IAG; and Michael O'Leary from Ryanair.
"By increasing this tax, he is further deterring inbound tourism and foreign investment and choking off yet more job opportunities for young people."
George Osborne's pledge that with the exception of another runway at Heathrow, the Government would look at "all options" to maintain the UK's status as an aviation hub received a warmer reception.
The Chancellor's comments raised hopes that the Government might throw its weight behind proposals for a Thames Estuary airport.
John Cridland, director-general of the CBI, welcomed Mr Osborne's announcement on aviation capacity.
"We have ambitions to build the UK's export capability and without a world- class hub airport in the South-east to service the needs of travellers to all emerging market destinations this cannot happen," Mr Cridland said.
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