Chancellor Rishi Sunak unveiled his autumn budget earlier this week and introduced new air passenger duty (APD) rates.
APD will be going down for domestic flights and up for long-haul, and a brand new tax band has been created for ultra-long-haul.
Here’s the lowdown…
The new rates mean APD will be going down for domestic flights and up for long-haul, and a brand new tax band has been created for ultra-long-haul
Ok, so air passenger duty is changing — what is that?
Air passenger duty is the tax levied at airlines for each passenger carried on flights from UK airports. Airlines usually pass on this charge to customers. So it is an ‘invisible’ tax in terms of advertised air fares.
So is it safe to assume that it’s going up?
Not for all flights. For domestic journeys, the tax has been halved to £6.50 per flight. Given that this charge is in both directions, the cost of a return journey in the UK is due to drop by £13 — assuming airlines pass on the savings.
When is it going to come into effect?
From April 2023, so a while yet.
What about flights abroad?
This depends on how far you travel. For flights of less than 2,000 miles the rate will stay the same. This will cover all EU countries as well as the likes of Turkey, Tunisia and Morocco. A full list can be found at ‘Rates for Air Passenger Duty’ at gov.uk.
It’s estimated an easyJet flight from London to Glasgow will fall from £26 to £19.50 from April 2023
Is it rising for longer journeys?
Yes. The APD for journeys of more than 2,000 miles, but less than 5,500 miles, is increasing from £82 to £87.
What about flights of more than 5,500 miles?
The amount is to increase from £82 to £91.
Is this for all classes of flights?
No. The amounts mentioned above are for economy fares. Business-class APD on domestic flights is to halve from £26 per journey to £13.
Meanwhile, business-class APD on flights of 2,000-5,500 miles will increase from £180 to £191, and on flights of more than 5,500 miles from £180 to £200.
What counts as business-class?
Any seat that has a pitch (leg room) of more than 40 inches.
Do you have to pay APD on the return leg?
No. APD is only for flights out of the UK. For flights in, passengers are subject to taxes levied by foreign countries.
The new APD rates mean an ultra-long-haul flight from London to Bangkok with Thai Airways would go up from £401 to £410
What is likely to be the airlines’ reaction?
They are likely to pass on changes. But most have expressed frustration about the increase to long-haul charges, which they say are already among the highest in the world. Luis Gallego, boss of IAG, which owns British Airways, said the changes ‘penalise Global Britain’.
However, the industry trade body Airlines UK is pleased about the fall in the domestic APD, which it believes will help people get about more easily.
Does the green lobby have anything to say?
Yes. It’s not happy. With COP26 UN Climate Change Conference starting tomorrow, environmentalists think the announcement sends the wrong message. The Friends of the Earth said: ‘[It] flies in the face of the climate emergency. The Chancellor should be making it cheaper for people to travel by train, not carbon-guzzling planes.’
Could anything else affect fares?
Plenty. Airports are requesting permission from the Civil Aviation Authority to increase passenger fees to recoup losses caused by the pandemic. These are due to rise from £19.60 to £30 on January 1 at Heathrow. Then there are worries about increasing oil prices.
Is cash raised by APD spent on green causes?
No. It’s just another way for the Chancellor to raise taxes.