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Air duty may reduce Ryanair JLA services
BUDGET airline Ryanair is considering whether to cut routes from Liverpool John Lennon Airport (JLA) in the wake of this week’s pre- Budget statement.
The airline yesterday said it could be forced to scale back its services from Liverpool following changes to Air Passenger Duty announced by chancellor Alistair Darling on Monday.
At a specially-called press conference at JLA, airline chief operating officer Michael Cawley lashed out at the tax hikes, saying fewer passengers would book flights in the UK as ticket costs rise.
Ryanair hopes to grow its total passenger numbers by another 10m in 2009, but Mr Cawley said that growth was likely to be in countries with more favourable tax regimes.
Mr Cawley warned routes from Liverpool could be cut and aircraft currently stationed there shifted from the Speke aerodrome.
Airlines currently pay Air Passenger Duty at £10 per passenger in economy class flying to European destinations. That rises to £40 for longer journeys.
Monday’s pre-Budget report introduced three new bands. The starting level will be £11 on tickets to destinations within 2,000 miles of London, £45 for flights of up to 6,000 miles and £55 above that.
Airlines had hoped for a reduction of the tax to ease the economic burdens.
Mr Cawley said yesterday: “This a grievous mistake. It’s going to have a huge ramifications for airports, principally in regional Britain, but also in London.
“This certainly affects the number of routes we will have and the number of aircraft we have here.
“£11 or £12 next year is a significant issue. APD of euro13 is about 13% of our average fare and they’re adding another 10% to that now and another 10% the following year.
“Passenger travel will decline. When you put up fares demand goes down. It’s a very crude and non- discriminatory tax.”
He said it was too early to say how drastic cuts at JLA might be but the airline will have made up its mind in “five or six weeks”.
He added: “If the Government puts their hand in our pocket for another pound, there are cheaper airports elsewhere from where you can fly. We will support governments that won’t penalise aviation.”
Mr Cawley said he suspected “not a penny” from APD, billed as a green tax, was being invested in environmental projects.
Industry watchers have warned Liverpool JLA could see a repeat of the situation when VLM – who operated a five-times daily service to London City Airport – pulled out of Merseyside.
The airline left shortly after the Government doubled APD from £5 to £10. The improved rail link to Euston station was also blamed.
Mr Crawley is due to meet with directors of owners Peel Airports in the coming weeks to discuss next summer’s schedule.
Robin Tudor, spokesperson for JLA, said the airport “shared Ryanair’s frustrations”.
Mr Tudor said: “We are very strongly against some of these changes. Increasing [APD] yet again could well have an impact on the demand for air transport.
“At a time when the Government is encouraging the consumer to spend, why is the airline industry being targeted for increases to the consumer?
“We’re frustrated and will continue to lobby the Government over the issue of taxation.”
Source
BUDGET airline Ryanair is considering whether to cut routes from Liverpool John Lennon Airport (JLA) in the wake of this week’s pre- Budget statement.
The airline yesterday said it could be forced to scale back its services from Liverpool following changes to Air Passenger Duty announced by chancellor Alistair Darling on Monday.
At a specially-called press conference at JLA, airline chief operating officer Michael Cawley lashed out at the tax hikes, saying fewer passengers would book flights in the UK as ticket costs rise.
Ryanair hopes to grow its total passenger numbers by another 10m in 2009, but Mr Cawley said that growth was likely to be in countries with more favourable tax regimes.
Mr Cawley warned routes from Liverpool could be cut and aircraft currently stationed there shifted from the Speke aerodrome.
Airlines currently pay Air Passenger Duty at £10 per passenger in economy class flying to European destinations. That rises to £40 for longer journeys.
Monday’s pre-Budget report introduced three new bands. The starting level will be £11 on tickets to destinations within 2,000 miles of London, £45 for flights of up to 6,000 miles and £55 above that.
Airlines had hoped for a reduction of the tax to ease the economic burdens.
Mr Cawley said yesterday: “This a grievous mistake. It’s going to have a huge ramifications for airports, principally in regional Britain, but also in London.
“This certainly affects the number of routes we will have and the number of aircraft we have here.
“£11 or £12 next year is a significant issue. APD of euro13 is about 13% of our average fare and they’re adding another 10% to that now and another 10% the following year.
“Passenger travel will decline. When you put up fares demand goes down. It’s a very crude and non- discriminatory tax.”
He said it was too early to say how drastic cuts at JLA might be but the airline will have made up its mind in “five or six weeks”.
He added: “If the Government puts their hand in our pocket for another pound, there are cheaper airports elsewhere from where you can fly. We will support governments that won’t penalise aviation.”
Mr Cawley said he suspected “not a penny” from APD, billed as a green tax, was being invested in environmental projects.
Industry watchers have warned Liverpool JLA could see a repeat of the situation when VLM – who operated a five-times daily service to London City Airport – pulled out of Merseyside.
The airline left shortly after the Government doubled APD from £5 to £10. The improved rail link to Euston station was also blamed.
Mr Crawley is due to meet with directors of owners Peel Airports in the coming weeks to discuss next summer’s schedule.
Robin Tudor, spokesperson for JLA, said the airport “shared Ryanair’s frustrations”.
Mr Tudor said: “We are very strongly against some of these changes. Increasing [APD] yet again could well have an impact on the demand for air transport.
“At a time when the Government is encouraging the consumer to spend, why is the airline industry being targeted for increases to the consumer?
“We’re frustrated and will continue to lobby the Government over the issue of taxation.”
Source
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