Airlines blast Treasury's refusal to reform air passenger duty

Airline bosses denounced the government's consultation on air passenger duty today (APD) as a "sham" after the Treasury stood firm against travel industry demands to reform the tax. The Treasury confirmed that the tax, due to rise by 8% in 2012, would continue to be collected as before, with no concessions to airline representations to create new bands that would lower the duty imposed on premium economy customers and those flying to destinations such as the US or the Caribbean. A family of four would now pay £260 in APD to visit Florida, or £520 in "standard rate", which applies to premium economy seats in the same way as first or business-class travel. However, the government has decided that any attempt to define premium economy would increase the complexity of the tax and lead to greater administrative burdens for both the travel industry and the revenue. The duty is deeply unpopular with airlines, whose bosses again united to speak out today, having taken the unusual step of publicly appearing on the same platform last month to urge the chancellor to freeze the duty . The chief executives of easyJet, Ryanair, Virgin Atlantic and IAG claimed the tax revenue was "significantly outweighed" by its "negative effect" on the economy. In a statement today issued by Carolyn McCall, Michael O'Leary, Steve Ridgway and Willie Walsh said: "The government's consultation on APD has been a sham and a waste of taxpayers' money. "We are left with a tax that has already cost 25,000 jobs, is doing increasing damage to the prospects for economic recovery – and sends a message to the world that Britain is a difficult and expensive place to do business." British Airways said the APD rise would mean it would create only half the 800 jobs planned for next year, and stop it bringing an extra Boeing 747 into service in 2012. The rise in APD, deferred in this spring's budget, in effect means a two-year inflation rise starting in April 2012. A consultation launched after the budget saw representations from airlines and industry bodies to freeze what they have depicted as a "stealth tax" on holidays. Mark Tanzer, chief executive of the UK travel trade association Abta, said: "To completely ignore all recommendations after a lengthy consultation is extremely disappointing. The government has missed an opportunity to make this tax fairer." However, a Treasury spokesman said that the impending rise was made clear in the 2011 budget. He added: "The duty is paid by flight operators based on passengers carried, and it is up to airlines to factor the price of APD into ticket prices. Any additional charges levied are at the discretion of airlines." Most short-haul flights will see a rise of £1 in APD to £13. As George Osborne announced in his autumn statement, the duty will also apply to private business jets from 2013.