British Airways CEO addresses London's Aviation Club

British Airways CEO, Willie Walsh, has called for an end to the air passenger duty (APD) after the aviation industry's inclusion in the EU Emissions Trading Scheme in 2012 (Telegraph, 09-Jul-2010). In his address to the Aviation Club in London. Mr Walsh demonstrated that a family of four travelling from the UK to India has seen increases in APD from GBP160 to GBP300 in a year.

British Airways: "APD on long-haul routes will have tripled or even quadrupled in four years. We are in severe danger of pricing large numbers of people out of flying … We cannot go on layering ever more punitive tax burdens on this industry," Willie Walsh, CEO. Source: Telegraph, 09-Jul-2010.

Mr Walsh also criticised the British Government's plans to "explore changes" to the current APD system, switching from a passenger tax to a per-plane duty. Recent figures demonstrate that the British Government has plans to raise GBP3.8 billion through aviation taxes in 2014/15, double what the government raised in 2009.

British Airways: "We know the Treasury is well aware of the flaws in the per-plane concept, having considered and rejected it two years ago … Such a tax would not reduce carbon emissions. It would increase them by diverting traffic through hubs outside the UK, while damaging the UK's connectivity with vital emerging markets." Willie Walsh, CEO. Source: Telegraph, 09-Jul-2010.

Mr Walsh also stated that the new government's decision to reject the construction of a third runway at London Heathrow would severely damage the airport's hub status, warning that Heathrow would cede traffic to nearby European and Gulf hubs. With BA's tie-up with Iberia approaching, Mr Walsh advised his audience that it was "inevitable" that the majority of the airline's growth will come from its partner's Madrid Barajas hub, where 20% of its capacity is "unused".

British Airways: "Growth's not going to stop because runways are full. In the absence of that [a new runway], we will be focusing a lot of our growth in Madrid, which is a loss to the UK and that disappoints me." Willie Walsh, CEO. Source: Telegraph, 09-Jul-2010.

Separately, Mr Walsh stated that he had made a "fair and reasonable" offer to BA's striking cabin crew, including a 5.9% base pay rise over two years from Feb-2011.