Willie Walsh, chief executive of International Airline Group, has called for the British government to look at the full negative effect Air Passenger Duty is having on the economy.
For the good of the economy, Walsh argued chancellor of the exchequer George Osborne needed to look past the fixation with deficit reduction.
Addressing an industry audience at The Travel Convention, in Palma Mallorca, the outspoken critic of the levy said the government “must get weaned off the revenue raised by the flying Poll Tax”.
“The tax should be withdrawn,” added Walsh, stating “APD is having a hugely negative impact on the economy”.
Walsh urged the government to follow the example of the Dutch who scrapped their version of APD as they saw less than expected revenue streams as people chose to fly from other countries and overall, the tax cost the Dutch economy four times the revenue raised.
In the UK, the negative impact of APD can clearly be seen, argued Walsh, with a reduction in passenger numbers in the UK of 7.4 million in 2010 against growth of four per cent in the rest of Europe.
Walsh also stated that not having a coherent Government tourism policy until 2013 is unacceptable and the government’s decision to refuse permission for a third runway at Heathrow makes no environmental sense in the light of China and other developing nations´ decision to build new airports.
Instead the rest of the world would continue to benefit economically from aviation as the UK lost out.
IAG is composed of British Airways and Iberia.
BA chairman Keith Williams recently blamed APD for the airline’s decision to reduce the number of flights it offered to the Caribbean.
Air Passenger Duty
The government intends to raise APD by twice the level of inflation in April 2012 having postponed an increase in April 2011.
In addition the European Union intends to introduce an Emission Trading Scheme for aviation in 2012, revenue from which will go directly to the treasury.
ABTA wants the Government to cancel its plans for an increase in APD and offset revenue raised from ETS against APD revenue which currently raises £2.2 billion a year.
The government has previously stated that it intends to increase APD revenue by £1.4 billion by 2015.