The travel industry has given a mixed response to the budget delivered by chancellor Rishi Sunak earlier, with praise for business rates relief, but concerns over changes to Air Passenger Duty.
A consultation will examine options including creating a new lower domestic rate or exempting return flights in an effort to boost connectivity in areas “left off” the transport map.
ABTA is again calling on the British government for meaningful reform of air passenger duty to maintain global competitiveness. At the same time, the travel organisation hopes changes can support the net zero carbon emissions target set for 2050.
The British government is to consider reforming air passenger duty on domestic flights as part of a plan to save Flybe from collapse. It is thought the move could save Flybe up to £100 million over three years.
British chancellor Philip Hammond has confirmed air passenger duty will rise in line with inflation for long-haul flights during the annual budget - a decision greeted with a mixture of disbelief and anger among aviation stakeholders.
International Airlines Group has warned the government air passenger duty undermines Britain’s position as a global trading nation post-Brexit and reduces the chance of its new long-haul, low-cost airline brand Level flying from UK regions.
UK hospitality operators have offered a mixed response to the decision to freeze air passenger duty on short-haul and economy class flights. The move was revealed earlier by Phillip Hammond, chancellor of the exchequer, in the autumn budget.
The Scottish government has confirmed plans to halve Air Passenger Duty by the end of the current Scottish Parliament in 2021. Willie Walsh, IAG chief executive, welcomed the move. He said: “This is a major step towards the complete abolition of this stealth tax that hinders economic growth, tourism and jobs.”
UK chancellor of the exchequer George Osborne has issued a discussion paper on possible changes to Air Passenger Duty as part of his latest budget. Although not committing the government to any changes in the unpopular levy, the paper will consider options such as devolving air passenger duty within the English regions.
Families flying from the UK will benefit from the abolition of Air Passenger Duty for children under the age of 12 from today. For some families this will cut the cost of going on holiday by hundreds of pounds. For example, abolishing APD for under 12s will mean parents with two young children could save as much as £142 on long-haul trips to destinations like the USA and Australia.
Air Passenger Duty has been partially reformed in the UK as the new tax year begins. From April 1st, the two more expensive bands of APD are being abolished. Band ‘C’ affects people travelling over 4,000 miles, and band ‘D’ affects journeys over 6,000 miles.
One of Britain’s fastest-growing taxes is 20 years old this week. Relentless rises in Air Passenger Duty mean that a family of four flying to a destination outside Europe will soon pay £284 in tax, compared with just £40 when the levy was introduced on November 1st, 1994. That seven-fold increase in APD has taken place while inflation has not even doubled over the same period.