International Airlines Group CEO Willie Walsh has said that low-cost subsidiary Level could launch flights from regional UK airports – but only if the government abolished Air Passenger Duty.

Walsh said that IAG is looking to expand Level, which launched long-haul flights from Barcelona last year, and will add services from Paris to the Caribbean and North American in July.

But he warned in a letter to MPs that operating Level flights from the UK is not financially viable, with long-haul economy APD rates currently standing at £78, only £10 less than Level’s lead-in one-way fares of around £88.

Walsh said that “If APD was axed, IAG could open new routes and operate Level from regional airports”, with possible airports including Birmingham, Cardiff, Edinburgh and Manchester.

The letter also said that APD “undermines Britain’s position as a global trading nation post-Brexit”, adding that “it’s foolhardy for a trading nation reliant on developing international connections post Brexit to tax aviation so harshly”.

In the last Budget the Chancellor announced a freezing of all short-haul APD rates, as well as long-haul economy APD charges, but passengers travelling in premium cabins will see rates increase in April 2018 and again in April 2019.