The cost of flying to destinations such as Singapore, Australia and Thailand is set to increase following an overhaul of air passenger duty (APD), announced today by the Chancellor, Rishi Sunak.
The plan was unveiled as part of the 2021 Autumn Budget and will see the introduction of a new ‘ultra-long-haul’ band for trips to countries with capitals over 5,500 miles from the UK. The new rate will come into effect from April 2023.
Meanwhile, rates for domestic flights between airports in England, Scotland, Wales and Northern Ireland will be cut by 50% from April 2023. The standard rate for short-haul journeys, however, has remained constant since April 2020.
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What is air passenger duty, and why is it rising for longer trips?
Airlines pay air passenger duty for each passenger on flights departing from the UK. There are three rates, charged to the airline according to the class you’re flying. APD costs are usually passed onto passengers, meaning a rise in APD will likely lead to a rise in the cost of flying.
There are currently two bands for APD: one short-haul rate for trips under 2,000 miles, and a long-haul rate for longer trips. Sunak’s update means that from April 2023 there will be three bands, including the new ultra-long-haul rate charged at £91 for economy passengers.
Sunak expressed hopes that the cuts to domestic flight air passenger duty will bring people together across the UK and ‘help with the cost of living, with nine million passengers seeing their duty cut by half’. He added that the move should boost airports such as Aberdeen, Belfast, Inverness and Southampton.
According to the red Budget book, also published today, the introduction of an ultra-long-haul band aims to ‘further align with UK environmental objectives’. In his speech, however, Sunak did not address concerns that a lower rate of duty on flights within the UK could encourage people to fly more frequently within the UK, as opposed to taking the train, (a less carbon-heavy alternative).
- Find out more: Autumn Budget 2021 key points
What are the new rates for economy passengers?
From April 2023, the new air passenger duty economy rates will be:
- £6.50 for journeys within the UK (ie domestic)
- £13 for journeys under 2,000 miles (ie short-haul)
- £87 for journeys over 2,000 miles (ie long-haul)
- £91 for journeys over 5,500 miles (ie ultra-long-haul).
The distance is calculated according to the distance from the UK to your destination country’s capital city.
What does the increase mean for holidays in 2021 and 2022?
If you’re planning to fly to a destination under 2,000 miles away, this news will not affect those plans.
But if you’re planning to fly to a destination that falls into the long-haul or ‘ultra-long-haul band’ (ie over 5,500 miles away) from April 2023, fares may be higher when you come to book. With that in mind, it’s worth planning ahead and budgeting for those possible changes.
What else was announced for holidaymakers?
Sunak announced an extension of financial support to airports for another six months, plus greater investment in the UK’s transport infrastructure.
Tax relief cuts for culture will also be extended to 2024, which could have a knock-on effect of maintaining or reducing the costs of sightseeing at the UK’s galleries, museums, and other cultural institutes.