Recession and APD forces airlines to cancel routes

A sharp decline in passenger numbers has resulted in airlines abandoning up to 200 routes in the past year, according to new figures.

The Official Airline Guide (OAG), the aviation data company, reported that 192 of the routes that were being used to and from Britain in June 2008 were no longer being operated last month, as airlines cut their services to survive during the economic downturn.

This week, Virgin has said that its Heathrow-to-Chicago service will not operate this winter and British Airways has announced the curtailment of six short-haul routes and the dropping of its services from Gatwick to Malta in October. Ryanair is to stop its services from Nottingham to Inverness this month, while Loganair is cancelling its Blackpool-to-Belfast route from July 12.

"Forward bookings are down on last year and there is less demand," said Paul Charles, director of communications for Virgin Atlantic. "People are still travelling, but they are not paying enough for their seats, and you can't make money in this climate."

Further route cuts are expected before the rise in Air Passenger Duty (APD) in November. Jet Republic, the private aviation company, predicts that between March 2008 and October 2009 up to 1,000 weekly direct flights will be cut at Britain's 10 biggest airports.

The Government said this week that by 2030 the additional APD will be deterring some 1.5 million fliers, mostly short-haul, from using British airports.

Many aviation analysts predict the number of people put off flying as a result of APD will be even higher.

"These figures show how millions of ordinary families will be priced out of flying by these taxes," said Brian Wilson, chairman of the pressure group Flying Matters. "There is no justification for such a regressive measure. Returning air travel to the preserve of a wealthy elite is not going to go down well with the electorate."

Mr Wilson said the Government had underestimated the impact that the APD increases will have on long-haul travel, whereby a family of four will have to pay up to £600 in tax.

This week, Holland dropped all its flight taxes in an attempt to keep people flying, while France reduced VAT on restaurant and café bills from 19.6 per cent to 5.5 per cent, in order to increase visitor spending, which has suffered in the recession.

The Caribbean Tourism Organisation is urging people to write to their MP to prevent the rise in the air tax. The Caribbean has been penalised harshly, with APD to the region to rise from £40 to £75 per person by November next year.

Families with holiday homes in Europe, bought on the back of new low-cost flights, have been warned that their properties could fall in value as airlines cut non-profitable routes or reduce frequencies.

News Source: http://www.telegraph.co.uk/