The UK press have reported that IAG has warned that it could opt to keep new low-cost airline LEVEL out of the UK over air passenger duty (APD).
They note that IAG launched the low-cost, long-haul carrier last year with flights from Barcelona to the US, and in November announced plans to set up a new base from Paris, flying to the Caribbean and North America from July.
IAG’s chief executive Willie Walsh has spoken of expansion plans for the airline, and was initially weighing up Paris and Rome for the choice of its second base, though previously said he would consider the UK for the future.
Recently though, Walsh said he had written to MPs, saying air passenger duty – which is levied against each passenger on every flight departing from the UK – undermines Britain’s position as a global trading nation post-Brexit, and reduces the chance of him bringing LEVEL to the UK.
He said: “In Spain and France, LEVEL can offer lower fares than it can in the UK – and that goes for other long-haul low-cost airlines too. MPs need to know that APD undermines our ability to introduce new low-cost flights that would benefit their constituents,” Walsh added. “If APD was axed, IAG could open new routes and operate LEVEL from regional airports.” Walsh has told MPs that abolishing APD would make it more likely that LEVEL could operate from Birmingham, Cardiff, Edinburgh and Manchester, saying it is not financially viable with LEVEL’s fares starting at around £88 one-way, when long-haul economy APD is £78.
A spokesperson for the Treasury said: “We have frozen Air Passenger Duty for most flights, keeping the cost of travel down for 95 per cent of the population.”