UK airlines call for tax break to help boost demand

LONDON (Reuters) – A group representing UK airlines including British Airways (ICAG.L), easyJet (EZJ.L) and Ryanair (RYA.I) called on the UK government to suspend a tax on flights to boost demand and help the industry recover from the coronavirus pandemic.

Airlines UK said on Monday that the government should waive Air Passenger Duty for a year to save routes and up to 8,000 jobs in an industry which has been battered by the virus, and which is already facing over 30,000 job cuts.

Britain’s airlines, airports and ground handling companies have benefitted from government employment support schemes and loans but there has been no specific support package for the industry.

That’s in contrast to some other European countries which have stepped in to help, such as France which granted Air France 7 billion euros ($7.9 billion) in aid, including state-backed loans, to help it to survive.

Many UK airlines are worried about the coming winter season, traditionally a tougher period for them financially as fewer people travel.

“UK airports are in danger of losing many valuable routes over the coming months unless the government steps in with a support package for our sector – starting with an emergency APD waiver to get us through the winter and into the recovery,” said Airlines UK CEO Tim Alderslade.

Airlines UK said on Monday that APD relief would boost passenger demand by around 12% over the next 12 months.

APD is a tax on passenger flights from UK airports which adds 13 pounds ($16.37) to an economy ticket for a flight between the UK and Europe, but which can add over 170 pounds to some long-haul business class tickets.

Reporting and photo: Reuters

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