The travel trade has criticised the government’s decision to increase Air Passenger Duty from 2010.

Chancellor of the Exchequer Alistair Darling announced rises in yesterday’s pre-Budget report that will add £15 in tax to a flight to Australia from next November and £45 from November 2010.

He also announced the creation of a new four-band APD system, instead of the current two bands, from November 2009:

  • Bands A and B will cover Europe
  • Band B will extend 4,000 miles to destinations such as Egypt, Bahrain, the Gambia and the US
  • Band C will take in the Caribbean
  • Band D will cover Australia and New Zealand

The standard rate of APD will rise by £1 to £11 but band B will rise £5 to £45, band C will be £50 and band D £55 from November 2009, with further rises in November 2010.

Advantage Travel Centres, a consortium of more than 700 travel agents, said the news was a blow for the outbound tourism market, particularly families.

Chief executive John McEwan said: “Once again it is innocent holidaymakers who are hit in the pocket. The increases in APD, especially for long-haul flights, are staggering and will certainly discourage many people from travelling.”

He added that the new rates will also hit businesses at a time when many agencies were already feeling the effects of the economic downturn and when the government is trying to promote British industry abroad.

“The £170 tax on a longhaul business class ticket come November 2010 is absolutely bonkers, especially as everybody knows the taxes raised are  not ring-fenced for environmental projects,” he said.

Similarly, ABTA said it was disappointed with the government’s decision to continue with APD, which it said penalised airlines operating full aircraft. It fears the increases will put passengers off destinations such as the Caribbean and Kenya, adding that the rises mean passengers flying to Australia from 2009 will pay nearly 38% more than today and 112% more in 2010/2011.

ABTA’s head of development Andy Cooper said: “The travel sector has not yet felt the full effect of the recession but travel lags behind the rest of the economy by about six months and we are facing an extremely challenging 2009.

“The money being raised by APD will … just end up in government coffers despite being grouped under the heading on how the government will deliver on environmental goals.”

ABTA added it was concerned the government had not stated its intentions once aviation joins the emissions trading scheme in 2012.

More detail on the APD increase