Airlines Urge Suspension Of Fees And Taxes At London's Heathrow

by Robert Lee, Tax-News.com, London

31 March 2003

The Board of Airline Representatives, the lobby group consisting of 90 international carriers, has urged the BAA (British Airports Authority) to hold off implementing a 9% rise in landing fees at London Heathrow as the industry tries to cope with an alarming drop in demand.

The board has also asked the government to suspend ticket tax until three months after the end of the war in Iraq to help boost passenger numbers, echoing similar calls by carriers in the United Sates. It argues that the effects of terrorism, war and general uncertainty have affected the industry worldwide, not just in the perceived trouble spots. Airlines are operating in an "intensified negative business environment" according to a statement from the board.

The UK government currently levies a £5 charge per ticket on short-haul European flights, and £20 per ticket on worldwide flights. The Treasury nets £800 million per year from the tax. Particularly vocal on the issue of increased fees and taxes are the countries presently on the fringe of the EU, especially in Eastern Europe, who complain that fees and charges are effectively quadrupled for their national airlines flying into the British hub.

European transport ministers recently met in Brussels to discuss the crisis facing the airline industry and the possibility of extending emergency help in the form of an aid package. However, from a British standpoint, government sources revealed that ministers are not keen on propping up the airlines, and see the crisis as an opportunity for them to restructure, according to a report in The Guardian.

The European carriers meanwhile, continue to worry that discussions in the US over a possible multi-billion dollar aid package for American carriers could well put them at a competitive disadvantage.

The 43p per passenger increase in landing fees will come into effect on April 1.

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