LONDON (Reuters) - Britain’s aviation industry on Wednesday criticised changes to a tax on air passengers which will freeze the duty for a majority of customers, saying they did not go far enough to keep Britain competitive as Brexit approaches.
Chancellor Philip Hammond said in his annual budget that the 2019-20 level of Air Passenger Duty (APD) would be frozen for short haul and economy passengers, while those flying premium class would pay more.
But the industry wants to see the tax cut, and British Airways owner IAG (ICAG.L) said the plan contradicted Hammond’s pledge for low taxes.
“At a time when the country is looking to the government for confidence and encouragement we get a dull and uninspiring budget from a dull and uninspiring Chancellor,” IAG said in a statement.
“If this tax continues, the UK will struggle to compete on the global stage, post Brexit.”
The government said the move “will keep costs down for the vast majority of passengers,” though Britain has high duties compared with other European countries.
It has become a particular issue in Northern Ireland, where tourists can cross the border into Ireland to take advantage of cheaper airfares. The Democratic Unionist Party (DUP) made the tax a key issue in talks to prop up Prime Minister Theresa May’s government earlier this year.
“The change announced today on APD is simply a sleight of hand move by the Treasury,” said Tim Alderslade, chief executive of industry association Airlines UK, adding the duty should be cut to help regional airports establish links with emerging markets.
“Post-Brexit this will be more important than ever and that’s why today is a massive missed opportunity.”
Reporting by Alistair Smout; Editing by Mark Potter