BA to cut back recruitment after APD rise
07.12.11
British Airways will recruit fewer new staff next year as a result of the Government's 8% rise in Air Passenger Duty (APD). BA said next April's tax rise will mean that it will hire about 400 new staff, rather than the 800 originally planned. Willie Walsh, CEO of BA parent International Airlines Group (IAG), said the harm to the economy the increase in APD will cause exceeds the revenue that will be raised. A Treasury spokesman said the aviation sector had to ‘play its part’ in restoring the public finances.
BA said it had planned to take on 800 staff in 2012, but this would now be cut in half, and that the airline would also review plans to bring in an extra Boeing 747 to Heathrow. Mr Walsh added: ‘I believe that this tax is actually doing more harm than good. I believe the impact on the economy is significantly greater than the tax revenue the chancellor is looking at, and that's why we've called for an independent review of APD to fully assess what the negative impact on the economy is.’
Under the new rates announced yesterday economy-class passengers flying no further than 2,000 miles will see their APD rise from £12 to £13 per passenger. Longer flights up to 4,000 miles will see an increase from £60 to £65, flights between 4,000 and 6,000 miles will rise from £75 to £81 and the tax on economy flights above 6,000 miles - such as trips to Australia - will rise from £85 to £92. The tax for premium class passengers will be double the economy rate.
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