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Top airlines unite over passenger duty costs

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Bosses of four of the biggest airlines around the UK have asked the government to scrap the tax that passengers must pay on flights.

APD (Air Passenger Duty) tax was first introduced 17 years ago to UK airports and has since been increased three times in the past four years with airport passengers declining by 7.4 million in 2010 because of the constant rise.

With other European airports that don’t have passenger duty costs, seeing a rise of 66 million passengers shows how passenger duty costs can have an effect on where passengers travel to.

Chief executives of British Airways, Virgin Atlantic, Ryanair and Easyjet have spoke about the costs of air passenger duty being incredibly damaging to the economy.

Despite their ongoing feuds and rivalry between the companies they have come together to claim that the tax is draining the economy generating 2.2bn for the treasury. 

The argument is that it puts tourists off visiting the UK because of added costs, it is destroying job creation and it also discourages companies investing in Britain.

If the tax was scrapped for the reasons stated it will do the opposite by getting more tourists to the UK, get people investing in Britain and turn the economy around.

A report commissioned by the airlines found that tax cost the UK £2.6bn a year and claimed it caused a £29m drop in the flights taken by passengers between 2007 and 2010.

Willie Walsh, chief executive of British Airways parent company, IAG said: “This is the chancellor having a whip-round to take tax from tourists that want to fly in here, from the business person that wants to fly here to generate jobs, every family that wants to take a well-earned break – it is them that are paying, not the airlines.

"This is a tax that's collected by us on behalf of the chancellor, if it is scrapped it will go straight back into the pockets of the traveller."

Passengers only paid £5 to £40 APD when it was first introduced to UK airports, now passengers can pay from £24 to £170 depending on what class they sit in and where they are travelling to resulting in a pricey ticket for passengers.

The Government have acknowledged the call for the ban on Air Passenger Duty and has said it will be discussed over the next few weeks to determinate if it will be a thing of the past.

© Copyright Autonet Insurance

By Ian Donaldson (Autonet Insurance)