Virgin Atlantic, BA attack APD

Virgin Atlantic, BA attack APD

Bitter rivals Virgin Atlantic and British Airways have at last found a common cause, with both launching attacks on increases in Air Passenger Duty.

The duty – which is collected from all passengers departing from British airports – is set to rise on Monday, as the coalition government seeks to offset a ballooning budget deficit.

Ahead of the changes, however, Virgin founder Richard Branson has stated APD may well make summer holidays “unaffordable for many”.

Joining the attack, Virgin Atlantic’s chief commercial officer, Julie Southern, said: “Holidays are an essential part of our lives and are valued even more in these difficult economic times.

“With passengers now being asked to pay up to ten times more tax since APD’s introduction, the annual family holiday will become unaffordable.”

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Air Passenger Duty

APD – initially introduced under the former Labour government – rates are set to increase on Monday.

Those taking trips to the Caribbean – a key market for Virgin Atlantic – will be particularly hard hit, with each economy passenger paying £75 in APD - a 50 per cent hike on the previous rate.

For APD purposes, the Caribbean has been put in Band C - which means that passengers will be paying more to fly, for example, to Barbados which is only an eight-hour trip, than to Los Angeles which is a near 12-hour flight.

This is because the whole of the USA has been put in Band B where APD rates are slightly lower.

British Airways

Virgin Atlantic has also found an unlikely ally in British Airways.

Announcing a return to profitability today, BA chief executive Willie Walsh took aim at the proposed changes.

“Excessive taxation puts aviation’s social and economic benefits at risk,” he said.

“Aviation supports more than 500,000 jobs in the UK and provides the transport links that are vital to the success of UK businesses in a globalised economy.”

The UK government argues the tax increase will better reflect the cost of carbon emissions by the airline industry.

However, BA claimed “We already meet our carbon costs twice over even before these increases.”