Chancellor Rishi Sunak has confirmed a 50% cut in air passenger duty (APD) on UK domestic flights together with a new ‘long distance’ rate on flights of more than 5,500 miles.
Sunak hailed the changes as a cut to APD, but it’s likely the new rate on the longest long-haul flights will match the reduction on domestic flights.
In his Budget speech to Parliament today, Sunak said: “People pay more for return flights within the UK than when they fly abroad.
“Flights between airports in the UK will be subject to a new lower rate of APD from April 2023. This will help nine million people and is a boost to regional airports.”
At the same time, he announced: “We will introduce from April 2023 a new ultra long-haul band rate of APD covering flights of more than 5,500 miles.”
The new rate will start at £91 per passenger for an economy flight. Rates on business class and premium economy seats will be double this amount.
However, the rate will be only a few pounds more than the existing long-haul rate of £82 on economy flights which is due to rise to £84 per passenger from next April and the premium rate by £5 to £185.
Sunak told MPs: “Less than 5% of passengers will pay more. Those who fly furthest will pay most.”
Current APD rates are applied in two bands for up to 2,000 miles and over 2,000 miles, with premium class passengers paying double the rate on economy fares.
The changes were set out in a Treasury consultation document in March which argued the new band “would reinforce the ‘polluter pays principle’ by ensuring those who travel furthest internationally and have the greatest impact on the environment incur most APD.
“This would align APD more closely with our environmental objectives . . . as well as maintaining the sector’s contribution to the public finances.”
The industry has long campaigned for the double APD burden on both legs of a domestic return flight to be removed. But ahead of the expected changes, a leading aviation source told Travel Weekly: “This is just an excuse to grab more money.
“‘The polluter pays’ argument is bollocks. If you drive a clean car you pay less tax. If you fly in a cleaner aircraft you don’t. Increasing long-haul APD only makes sense on a Treasury spreadsheet.”
A second source insisted “it’s absolutely not an environmental measure”, saying: “It’s disappointing to have no warning or discussion on this when we had the consultation.
“It’s not even a cut in domestic APD. It’s removing an anomaly, bringing it in line with APD on a flight to Frankfurt or Paris.”
A rate targeted at flights of more than 5,500 miles would include South Africa, eastern South America, Southeast Asia, Japan and Australasia.