The Airport operator BAA has called on the UK government to reduce air passenger duty (APD) to aid economic recovery, following the announcement of a 70% cut in the tax for passengers flying from Ireland.
Nigel Milton, Heathrow’s policy director, says the UK travel industry is suffering under “punitive” taxes that could cause long-term damage to the British economy.
"The Irish recognise that the aviation industry is fundamental to their recovery and this is very much something ministers in the UK need to take note of,” he added.
“We must stop treating air travel as if it's a luxury we can do without and appreciate the very real contribution it makes to the economy.”
According to BAA, around 250,000 jobs in the UK are reliant on aviation, with 40,000 of those being created by Heathrow’s new Terminal 2.
“Strong links are vital for all businesses,” added Milton. "David Cameron is doing great work in building business ties with China and India but the UK currently has the highest aviation taxes in the world.
“The government needs to ensure we are not making ourselves uncompetitive with punitive tax measures that will damage us in the long-term."
As ABTN reported last week, the Irish government will reduce its air passenger tax from €10 to €3 in a bid to support tourism, as part of the debt-hit country's recent budget review.
The reduced rate will apply on a temporary basis, from March 2011 until the end of the year.
Brian Lenihan, the Irish government’s minister for finance, said the tax will be reviewed next year and increased unless the airlines give “an appropriate response”.