BAA concerned increased APD may make Heathrow less competitive

BAA CEO Colin Matthew stated London Heathrow International Airport may become less competitive against other European hubs and demand for long-haul leisure services may be negatively effected due to rising UK travel taxes (Bloomberg, 27-Oct-2010). Passengers travelling on long-haul services of more than 6000 miles will pay up to GBP170 in Air Passenger Duty (APD) from 01-Nov-2010, a 55% increase from the current rate of GBP110. This compares to a maximum EUR40 levied in France and as much as EUR45 in Germany from 01-Jan-2010.

BAA: "Our APD is in place already and it is high. The assumption that you can just tax and tax and tax is mistaken and it's unhelpful," Colin Matthew, CEO. Source: Bloomberg, 27-Oct-2010.

BAA: "Although the UK economy is in a tough state, many parts of the globe are growing very fast so business travel to those places is buoyant. Heathrow is exposed to global business activity and that's one reason why it's been so strong but with UK spending cuts there will be less money in people's pockets so no one is predicting an easy time in 2011," Colin Matthew, CEO. Source: Reuters, 27-Oct-2010.