Business Weekly - Cambridge, UK

Chancellor Gordon Brown announced the hike in a pre-budget report in December, which doubled the tax payable by passengers flying from UK airports after February 1. Short-haul passengers flying in the lowest class – all of easyJet and Ryanair’s customers – will see the amount paid to the Treasury double to £10, a large percentage increase on the budget airlines’ low fares.

And adding insult to injury for the no-frills carriers, the extra duty is still payable even if passengers bought their tickets before the December 12 announcement. “It is almost unprecedented for the Government to demand additional tax on something that has already been bought and paid for – but that’s exactly what they have done with APD,” said easyJet chief executive Andy Harrison. Harrison called it “the wrong tax for the economy and the wrong tax for the environment.”

It is not only the budget airlines that have been hit by the increased duty; British Airways has said that it would absorb the charge for customers who purchased tickets before the announcement, costing BA around £11m.