British Airways’ owner IAG has told MPs that UK holidaymakers are missing out on cheap long-haul flights because of air passenger duty.
In an open letter, chief executive Willie Walsh said IAG was looking to expand the operations of its budget airline LEVEL and abolishing APD would make it more likely it could operate from Birmingham, Cardiff, Edinburgh and Manchester.
"British consumers are losing out because of APD. In Spain and France, LEVEL can offer lower fares than it can in the UK – and that goes for other long-haul low cost airlines too," said Walsh.
LEVEL launched flights from Barcelona to the US and Latin America last year and will fly from Paris to the Caribbean and North America in July. However, Walsh said it’s not financially viable to launch flights from UK regional airports when LEVEL’s fares start around £88 one-way and long-haul economy APD is £78.
"MPs need to know that APD undermines our ability to introduce new low cost flights that would benefit their constituents. If APD was axed, IAG could open new routes and operate LEVEL from regional airports," said Walsh.
He described it as ‘foolhardy’ for a trading nation reliant on developing international connections post Brexit to tax aviation so harshly, pointing out that premium economy and business class passengers pay £156, rising to £172 next year.
"By hiking APD in the last Budget, it’s clear the Chancellor doesn’t understand that Britain is losing out to countries that don’t have draconian aviation taxes," he added.
