The Treasury has confirmed the increased rates for Air Passenger Duty (APD) from next April, retaining the existing four bands for another year, and also confirmed passengers already booked to fly will have to pay the additional tax.
The new rates were released overnight. Passengers who have already booked tickets for travel from April 1 will have to pay the extra – with airlines expected to collect the money.
APD on economy short-haul flights – meaning to Europe, Tunisia and Morocco – will rise to £13 from the current £12.
Tax on economy departures to the US, Egypt, Dubai and other destinations in band B will increase from £60 to £65.
APD on economy flights to the Caribbean, Mexico, East Asia, Thailand and other countries in band C will go up from £75 to £81.
And tax on departures to Singapore, Australia, New Zealand, Argentina, Chile and other destinations in band D will rise from £85 to £92.
APD on premium economy and business class fares will be double these rates, unless the government changes the current banding rules when it responds to an industry consultation next Tuesday (December 6).
It appears the government has postponed any other changes to APD until April 2013.
The industry reacted with fury to news yesterday that a double-inflation increase would apply next year.
Virgin Atlantic chief commercial officer Julie Southern said: “It’s completely unacceptable that millions of passengers now face an additional tax bill on tickets they have already paid for.
“We have been warning the government for months of the impact this will have and urged them to avoid this unnecessary situation. Hundreds of thousands of passengers have already booked travel with us after April 1, meaning millions across the industry are likely to be impacted.
“People would never be expected to pay extra duty for the petrol already in their cars or wine in their fridge. Why does the Treasury think it acceptable to retrospectively charge airline passengers?”