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IAG chief warns failing to reduce air passenger duty is 'suicidal'

Published 22/11/2016

International Airlines Group chief executive Willie Walsh said increasing APD will not encourage new trade and exports
International Airlines Group chief executive Willie Walsh said increasing APD will not encourage new trade and exports

It would be "suicidal" if the UK does not reduce a ir passenger duty (APD) , the boss of British Airways' parent company has said.

IAG chief executive Willie Walsh claimed he will be "very surprised" if such an announcement is not made by Chancellor Philip Hammond in his Autumn Statement on Wednesday.

From April 1 the rate of APD for departing long-haul flights is set to rise from £73 to £75 for passengers in economy, and from £146 to £150 for those in premium seats.

Mr Walsh said that the UK will have to become "much more competitive" if it is to increase trade with countries outside of the European Union following Brexit.

He told delegates at the Airport Operators Association's annual conference in west London: " If these are the markets where we want to enhance our reputation, enhance our competitiveness, that we want to encourage more trade with, and we're increasing APD, it's madness. It's absolute utter madness.

"It was madness before the decision to leave the EU.

"It's suicidal actually because t he UK will not be able to enhance it's competitive position globally if it's the highest taxed aviation market in the world.

"It will not encourage new trade, new exports, new relationships with countries if we continue to fleece them with this horrendous tax."

Mr Walsh claimed it " doesn't require an intelligent being to work out that this is ridiculous", adding: "It has to go."

Asked whether he believed a reduction in APD would feature in the Autumn Statement, Mr Walsh replied: " I would be very surprised if it doesn't and I would be very disappointed.

"It sends a worrying signal to people about what a post-Brexit UK is going to look like.

"Unless we start tackling these issues the outlook for the UK is going to be one of significant decline rather than one of significant growth."

The Scottish Government has pledged to use powers devolved to Holyrood to halve APD for flights from Scottish airports by 50% from April 2018 and eventually remove the tax altogether.

According to Airlines for Europe (A4E), a lobby group representing carriers such as easyJet and Ryanair, pa ssengers have paid £31 billion in APD since it was introduced in 1994 and the UK has the highest aviation tax in the world.

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