Passengers could be paying an extra £1 billion a year in increased Air Passenger Duty, Sir Richard Branson’s airline Virgin Atlantic has warned.
The carrier said APD raised £2 billion in 2010 but that this figure could rise to £3 billion a year under new government proposals.
Virgin joins a raft of other airlines and the travel industry to urge a government rethink of APD, which they say is too high and unfair.
Of particular concern is the fact that Caribbean destinations have been included in a higher band of APD charges than the US and Canada, even though flights to, say, the west coast of the US are much longer than those to popular West Indies islands such as Barbados and Antigua.
Another worry is that the Irish Republic is scrapping APD, which could lead to Northern Ireland losing international routes as travellers cross the border to take flights.
The travel industry is concerned about the effect of extra charges from the introduction of the EU’s emission trading scheme (ETS) being lumped on top of possible future rises in APD.
A Virgin Atlantic survey of 35,000 passengers and 1,500 Facebook followers showed 89% of respondents believed APD rates were already too high.
Chief commercial officer Julie Southern warned: “More than half of long-haul fliers say they will consider cutting their number of journeys if there were further APD rises.”
She spoke as she led a band of red-uniformed cabin crew through Westminster to the Treasury hand in its response to the consultation.
A Treasury spokesman said: “The Government launched a consultation on APD at this year’s Budget to achieve a tax system for aviation that is fair, simple, and efficient.
“The Government has made clear that that any restructuring of APD will be achieved on a revenue-neutral basis. We will consider the views and evidence submitted by interested parties and will publish a summary of responses in the autumn.”
Mark Tanzer, chief executive of travel organisation Abta, said: “It is vital that the Government understands the damaging impact that APD is having on the tourism industry in the UK.
“We already pay the highest levels of aviation tax in the world, and if the Government goes ahead with its double-inflationary increase and levies an ETS tax on top of this in 2012, we will see another eye-watering increase in the tax burden on the industry and on holidaymakers.”
A spokesman for BAA, whose six UK airports include Heathrow, said: “Penalising passengers flying from Heathrow would only benefit Paris, Frankfurt, and Amsterdam and would damage jobs and growth across the whole of the UK. The important point is not to get into an argument about differential rates but to recognise that the UK as a whole pays the highest rates of APD in Europe.”
BA chief executive Keith Williams said: “Aviation in the UK is the most undervalued and overtaxed industry in Britain. We want to play our full part in assisting Britain’s economic recovery, but we are held back by levels of tax on flying which are higher than anywhere else in the world.”