Aviation chiefs have lined up to criticise todays rise in passenger taxes, claiming the industry will be damaged by making Britain a less competitive place from which to fly.
The rise in Air Passenger Duty (APD) is part of the governments bid to increase revenue from green taxes and is estimated to generate £3.8bn for the Treasury by 2015/16.
From today, short-haul flight prices increase by nine per cent, putting an extra £12 on economy flights and £24 on premium flights, and long-haul prices go up 55 per cent (£85 economy, £170 premium).
The government hopes that the third increase in APD in three years will persuade travellers to take more environmentally friendly forms of transport over shorter journeys, and the new prices will make options such as the Eurostar more competitive with flying when its routes are extended in 2013.
The move was welcomed by environmental groups such as WWF-UK, which called the rise "necessary" and "realistic".
But it has been branded a "disgrace" by BA chief Willie Walsh, who was equally unimpressed with the possibility of replacing APD with a per-plane duty.
BA and other airlines feel that they are already being squeezed by the poor economic climate, a perceived increase in the risk of terrorism and the volcanic ash cloud causing disruption earlier in the year.
The prevailing view is that the tax could dramatically reduce the amount of passengers travelling to the UK or push air traffic to Frankfurt or Amsterdam, and many in the industry believe that only a global deal will effectively reduce the industrys carbon emissions.
Earlier this week Malaysia's low-cost, long-haul airline AirAsia abandoned Manchester airport for Orly, south of Paris, prompting Michael OLeary, chief executive of RyanAir, to hint that his company was one of many more airlines that could follow AirAsias example
In a statement accompanying the companys results, OLeary said: "We continue to switch capacity away from countries like Ireland and the UK where they have a passenger tax. But were growing very rapidly in those countries like Spain and Italy where they scrapped the taxes and have been rewarded with traffic and tourism growth."
source: APEC-VC Korea
