Flying from the UK is about to get more expensive because of Air Passenger Duty increase
Flights from the United Kingdom are about to get more expensive.
As part of his budget announcement on Wednesday, Chancellor of the Exchequer Rishi Sunak revealed that the U.K. will increase Air Passenger Duty (APD) tax on long-haul flights.
Sign up to receive the daily TPG newsletter for more travel and industry news!
While the move has been opposed by the already-struggling travel and aviation industries, the cost of APD isn't going up by much. Sunak said that rates for long-haul economy flights from the U.K. will increase by £2 (about $3), totaling £84 (about $117) per passenger.
Meanwhile, premium passengers will have to pay more per flight. Premium economy, business- and first-class travelers will see the APD tax on their tickets increase by £5 (about $7), totaling £185 (about $258) per passenger leaving the U.K.
Sunak's increase on APD will hit private jet flyers the hardest, as long-haul flights taken on non-commercial aircraft will increase £13 (about $18) for a total of £554 (about $773) per passenger.
The increased APD tax across all cabins will kick in as of Apil 2022. It's worth noting that this increase only applies to long-haul journeys. Sunak made clear in his budget that the government will keep APD taxes for short-haul flights frozen at previous levels for the next two tax years — £13 (about $18) for economy and £26 (about $36) for all other cabins.
The April 2022 changes won't come before the APD will increase this year. In fact, as of April 2021, economy APD is rising from £80 to £82 (about $112 to $114) and premium cabin travel from £176 to £180 (about $245 to $251) per passenger.
Related: All flights from Heathrow Airport are now nearly $12 more expensive
First introduced in 1994, APD is a tax charged to each passenger at least 16 years old who is departing from a U.K. airport. Airlines charge the tax as part of the ticket price and then pay it to the government, though the exact amount of the fee varies depending on flight length and class of service.
The Treasury expects that APD will raise £600 million (about $837 million) in the 2020-2021 tax year, a massive drop compared to the nearly £3.7 billion (about $5.2 billion) it raised prior to the coronavirus pandemic-related downturn in travel.
Opponents of the move targeted Sunak's decision, saying that the move to increase taxes on long-haul flights will further damage the already-struggling aviation industries.
"The chancellor talks about protecting jobs and livelihoods, fixing the public finances and laying the foundations for the future economy, and yet he continues to ignore the UK's aviation sector," Heathrow CEO John Holland-Kaye said. "He clearly doesn't understand that all three depend on a strong aviation sector delivering the trade, tourism and investment that power vast parts of the British economy."
In September 2019, prior to the pandemic, a group of MPs and airline executives urged the government to reduce APD in order for airlines to flourish after Brexit.
Related: Airline executives urge government to cut Air Passenger Duty fees
The U.K.'s APD tax is considered one of the highest of its kind in Europe. In fact, it's one of the biggest pain points when attempting to redeem points and miles for travel from the U.K. More specifically, flights from the U.K. to long-haul destinations often see the taxes and fees on award tickets totaling higher than the cash price of a ticket.
For that reason, some travelers take to positioning to other countries in Europe that charge fewer air travel-related taxes. For example, you can add a non-U.K. city like Paris to start your redemption, meaning the APD tax will not be payable.
TPG featured card
at Bilt's secure site
Terms & restrictions apply. See rates & fees.
| 1X | Choose to earn up to 1X points on rent and mortgage payments with no transaction fee |
| 2X | Earn 2X points + the option to earn 4% back in Bilt Cash on everyday purchases |
Pros
- Choice to earn up to 1 Bilt Point per dollar spent on rent and mortgage payments
- Elevated everyday earnings with both Bilt Points and the option to earn Bilt Cash
- $400 Bilt Travel Portal hotel credit per year (up to $200 biannually)
- $200 Bilt Cash annually
- Priority Pass membership
- No foreign transaction fees
Cons
- Moderate annual fee
- Designed primarily for members seeking a premium, all-in-one card
- Earn points on housing with no transaction fee
- Choose to earn 4% back in Bilt Cash on everyday spend. Use Bilt Cash to unlock point earnings on rent and mortgage payments with no transaction fee, up to 1X.
- 2X points on everyday spend
- $400 Bilt Travel Hotel credit. Applied twice a year, as $200 statement credits, for qualifying Bilt Travel Portal hotel bookings.
- $200 Bilt Cash (awarded annually). At the end of each calendar year, any Bilt Cash balance over $100 will expire.
- Welcome bonus (subject to approval): 50,000 Bilt Points + Gold Status after spending $4,000 on everyday purchases in the first 90 days + $300 of Bilt Cash.
- Priority Pass ($469/year value). See Guide to Benefits.
- Bilt Point redemptions include airlines, hotels, future rent and mortgage payments, Lyft rides, statement credits, student loan balances, a down payment on a home, and more.