Dominic O'Connell
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British Airways chief executive Willie Walsh has urged the government to “think again” on its plans for a flight tax, saying it will push British passengers to use continental airports for long-haul flights.
The new tax, which will replace air passenger duty, was announced by chancellor Alistair Darling in last year’s pre-Budget report. It is forecast eventually to raise around £3.5 billion a year for the Exchequer.
The new tax will apply per flight, rather than per passenger. This will disadvantage British Airways - its short-haul flights carry fewer passengers than budget airlines like Ryanair and EasyJet, and at present it pays no tax for the one-third of Heathrow passengers that are changing planes. Freight airlines also oppose the plan as the tax will apply to their flights for the first time.
Walsh is understood to have made the company’s opposition plan in recent private meetings with Darling.
Airline industry leaders have made harsh criticisms of the tax, saying it will penalise British aviation, the travelling public, and is not green - the chief reason given for imposing it.
The British Air Transport Association (BATA), the trade body, said the tax rate for a family of four to leave the country would rise from £160 to £250.
Roger Wiltshire, BATA’s secretary general, said the tax would make it cheaper for British holidaymakers taking long-haul flights to travel via a continental hub such as Paris or Frankfurt.
“This is yet another example of the government making controversial decisions on tax policy and failing to think through and appreciate the consequences for the UK public and economy,” he said.
Walsh attacked the tax during a speech last week to the Institute of Directors.
“The proposed duty would give passengers a significant financial incentive to fly long-haul from continental hubs rather than Heathrow. This could only have the effect of weakening Heathrow’s long-haul network, and threatening the frequency of domestic connecting services too,” he said.
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