British airlines have accused the government of concealing an increase in flight taxes despite claims that the air passenger duty (APD) levy will be frozen for a year.
The British Air Transport Association (Bata), whose members include British Airways and Virgin Atlantic, said they were not expecting an APD increase in the first place and were stunned by the budget announcement that a rise would be delayed for 12 months. "What increase do they mean? We never knew that there was due to be a rise. It is spin to claim that it has been deferred," said Simon Buck, chief executive of Bata.
In the short term, APD will remain fixed at a level that the airlines complain is already too high. The tax is split into four bands: £12 for an economy-class short-haul flight; £60 for an economy-class trip to a medium-haul destination such as Egypt; £75 for long-haul trips, say to China, in economy; and £85 for ultra-long-haul destinations such as Australia for passengers in the back of the plane. Treasury forecasts indicated strong annual rises in APD are on their way. APD will rise from £2.2bn last year to £3.1bn in 2013 and £3.6bn by 2016.
Unless growth is generated by new passengers, which is considered unlikely given that UK passenger numbers have fallen for three successive years, the extra income will have to be driven by increases in the levy. Those rises were not revealed in the chancellor’s speech, but they will now be introduced next April following the freeze announced in the budget.