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06 September 2010 |

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APD upsets BA

ADP - a boost to non-UK hubs

Eugene Gold Eugene Gold
Friday 9 July 2010

The Con-Lib coalition are committed to reducing public spending and increasing tax income but are wary of hikes in headline income tax. Enter the Air Passenger Duty as a likely candidate for milking. Treasury forecasts show that the £1.9bn raised last year will become £3.8bn in 2014-15.

BA’s Willie Walsh said: "APD on long-haul routes will have tripled in four years. We are in severe danger of pricing large numbers of people out of flying."

The airline industry lost a collective £31bn over the last decade and is now being faced with punitive tax burdens including a $10bn tax contribution towards the United Nation's Copenhagen accord on climate control.

For BA, the more immediate worry is Government's plans to switch the current APD regime from a passenger to a per-plane tax. For BA, this is not just about the tax burden. They see a risk of traffic being diverted through hubs outside the UK, giving minimum reduction in carbon emissions and maximum damage to BA’s long-haul business model.

Ben Holmes
Ben Holmes, Leicester
12 July 2010, 11:45AM
Willie Walsh is right on this, APD could result in pricing large numbers of people out of flying. It would also increase carbon emissions by diverting traffic through hubs outside the UK.
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