Ryanair has already reduced its weekly flights from Stansted from 40 to just 24, a reduction of 30%. Smaller airlines have done the same in a bid to put pressure on the Chancellor to review the much hated Air Passenger Duty (APD).
Elsewhere in Europe, Belgium, Holland, Greece and Spain have all reduced or even scrapped similar taxes to boost tourism during the credit cruch.
Easyjet, arch rival of Ryanair has not joined the attack calling the tax “certifiably bonkers”.
Virgin Atlantic have expressed their distaste for the tax by printing anti-APD message on its e-tickets. Virgin boss, Sir Richard Branson branded it “one of the most unjust taxes out there” on a website launched railing against APD. He said there was “not a shred of evidence to suggest the £2bn-plus currently raised is going towards environmental or sustainable projects”.
A spokeswoman for British Airways said: “It is not made plausible by the environmental argument. We believe that aviation should be placed within the system of emissions trading, rather than hit with a crude tax such as this.”
Most in the travel industry are expecting the £1 rise in tax in November to go ahead but efforts are being stepped-up to stop the doubling of the tax next November.
A spokeswoman for the Association of British Travel Agents (ABTA) said: “This will have an impact on the tourism trade in this country, especially hitting long-haul flights. However, as Ryanair have pointed out, shorthaul flights will not go unaffected.
“It will also hit those with friends and family abroad, especially those with family in places such as the Caribbean. While we may think the Caribbean is a place for the rich, most travel there is carried out by people visiting family members, so placing it in a very high band will hit them hard. The economies of many countries reliant on tourism will also be hit by this,” she warned.
Gert Zonneveld, an airline analyst at Panmure Gordon, said: “The issues of tax and airport charges are a huge concern to the industry.”
The duty is currently £10 for short-haul flights and £40 for longer journeys, costs which airlines pass on to passengers. Under the government’s plans, the tax will rise to £85 for Australia and £60 to the US by November next year. The revised APD will be based on four bands set at intervals of 2,000 miles from London.