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| UK's Olympics 'showcase' will be hit by air tax rise – BA boss | UK's Olympics 'showcase' will be hit by air tax rise – BA boss |
| (about 1 hour later) | |
| The government's plan to showcase Britain during the Olympics risks being undermined by aviation tax hikes, according to one of the event's official sponsors, British Airways. | The government's plan to showcase Britain during the Olympics risks being undermined by aviation tax hikes, according to one of the event's official sponsors, British Airways. |
| BA paid £40m to back the 2012 Olympics but fears that a PR coup for the nation is being offset by a ministerial revenue-grab. In a renewed attack on air passenger duty, Willie Walsh, the chief executive of BA's parent International Airlines Group, said increases in APD are costing British jobs, diverting businesses abroad and deterring tourists. "We're spending billions on hosting the Olympics. It's going to create a great showcase - and then we undermine it by raising APD and keeping people away." | BA paid £40m to back the 2012 Olympics but fears that a PR coup for the nation is being offset by a ministerial revenue-grab. In a renewed attack on air passenger duty, Willie Walsh, the chief executive of BA's parent International Airlines Group, said increases in APD are costing British jobs, diverting businesses abroad and deterring tourists. "We're spending billions on hosting the Olympics. It's going to create a great showcase - and then we undermine it by raising APD and keeping people away." |
| The tax meant the government was "destroying aviation and destroying jobs", he said. APD is set to rise again in April by 8% to £13 per passenger for a short-haul economy flight, and to up to £184 for a long-haul business class flight. | The tax meant the government was "destroying aviation and destroying jobs", he said. APD is set to rise again in April by 8% to £13 per passenger for a short-haul economy flight, and to up to £184 for a long-haul business class flight. |
| Although Walsh said he supported the Olympics, the airline expected to see a short-term negative effect this summer with dampened demand forecast during the games. | Although Walsh said he supported the Olympics, the airline expected to see a short-term negative effect this summer with dampened demand forecast during the games. |
| Walsh reprised his attacks on the government over its broader aviation policy, with a new consultation on British airports expected in the spring - one that specifically excludes Heathrow expansion. | Walsh reprised his attacks on the government over its broader aviation policy, with a new consultation on British airports expected in the spring - one that specifically excludes Heathrow expansion. |
| "If they're going to do a proper consultation they should consult on everything. Ruling things out before they start isn't the way. I would have left everything open and considered all of the options ...[and not] eliminate the potential solutions." | "If they're going to do a proper consultation they should consult on everything. Ruling things out before they start isn't the way. I would have left everything open and considered all of the options ...[and not] eliminate the potential solutions." |
| IAG reported a jump in profits to €503m in 2011 from €84m a year earlier, after passenger revenues increased 11% to €13.6bn, despite rising fuel costs. | IAG reported a jump in profits to €503m in 2011 from €84m a year earlier, after passenger revenues increased 11% to €13.6bn, despite rising fuel costs. |
| Walsh said he expected a further €1bn rise in IAG's fuel costs in 2012, and warned that it would inevitably mean further fare increases. | Walsh said he expected a further €1bn rise in IAG's fuel costs in 2012, and warned that it would inevitably mean further fare increases. |
| While the merger with Iberia early in 2011 had produced, according to Walsh, savings of €70m in "synergies" last year, the Spanish airline was not performing as well as BA due to problems in the eurozone and what he called "outdated practices". | While the merger with Iberia early in 2011 had produced, according to Walsh, savings of €70m in "synergies" last year, the Spanish airline was not performing as well as BA due to problems in the eurozone and what he called "outdated practices". |
| He said: "The labour environment and legislation in Spain is different. We're looking at tackling that." | He said: "The labour environment and legislation in Spain is different. We're looking at tackling that." |
| IAG is launching a low-cost carrier, Iberia Express, in March, a move that has antagonised Spanish unions. But Walsh warned: "It's a battle that once we start we're not going to back down from. We're clear that we're launching this airline, and it will fly." | IAG is launching a low-cost carrier, Iberia Express, in March, a move that has antagonised Spanish unions. But Walsh warned: "It's a battle that once we start we're not going to back down from. We're clear that we're launching this airline, and it will fly." |
| Strong demand on transatlantic routes boosted profits at British Airways owner International Airlines Group, despite another jump in fuel costs. | Strong demand on transatlantic routes boosted profits at British Airways owner International Airlines Group, despite another jump in fuel costs. |
| Walsh said he remained confident that the acquisition of BMI would pass the competition authoritiers and go ahead. "BMI is effectively bankrupt and the only reason it continues to fly today is that we've provided BMI with £60m funding | Walsh said he remained confident that the acquisition of BMI would pass the competition authoritiers and go ahead. "BMI is effectively bankrupt and the only reason it continues to fly today is that we've provided BMI with £60m funding |
| This is a case of BA and IAG rescuing a British company that has effectively gone bust and the only way that the jobs that exists in BMI can be secured. It's for the best for BMI and for UK plc." | This is a case of BA and IAG rescuing a British company that has effectively gone bust and the only way that the jobs that exists in BMI can be secured. It's for the best for BMI and for UK plc." |
| The airline group said higher fuel costs and weaker European markets will mean a reduction in results for the first half of this year, although it expects the pressures to reduce as 2012 progresses. /> | |
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