Long-haul flights will be more expensive as UK announces aviation tax increase
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The airline industry is up in arms after learning that the U.K. government’s new budget raises the Air Passenger Duty Tax on “ultra-long-haul routes,” according to the Independent.
While not a complete surprise, the decision sparked frustration because it comes at a crucial moment for the travel sector, which is slowly starting to rebound from the coronavirus pandemic.
Increasing the price of a plane ticket now is seen as counterproductive, when the industry is trying to encourage people, especially business travellers, to return to the skies.
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Aviation trade group the Board of Airlines Representatives told the Independent that the decision is a “Halloween horror for long-haul travellers” and added that hiking the ADP tax undermines the airlines’ commitment to net-zero emissions.
The tax affects routes longer than 5,500 miles. That means flights to key British markets such as Asia (including Hong Kong, Bangkok, Singapore and Tokyo) and South America will get even more costly.
A big concern for airlines is that the U.K. already has some of the most onerous aviation taxes in the world. It’s why flyers looking to redeem points and miles for long-haul travel from the U.K. often wind up paying more in taxes and fees on award tickets than the cash price of a ticket.
The ADP will increase to £91 for each economy-class ticket for flights over 5,500 miles in distance, reportedly starting in April of 2022. That’s a larger increase than expected. The tax, which airlines add to the ticket price and then pay to the government, typically accounts for billions in annual revenue. The significant reduction in travel for the past 18 months caused ADP collection to drop to £600 million in the 2020 to 2021 tax year, down from nearly £3.7 billion prior to COVID-19.
While business travel to important destinations may be affected by the higher prices, there is one notable silver lining: Regional travel within the U.K. will cost a bit less. The current £13 each-way ADP fee is being halved to £6.50.
Even this bit of good news raised eyebrows, however, because the reduction in ADP for local air travel won’t kick in until April of 2023. As Jonathan Hinkles, chief executive of regional carrier Loganair said, “This measure could and should be implemented by April 2022 at the very latest, if the full benefit for the U.K. economy through restoring connectivity after the pandemic is to be realised.”
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