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Air tax to increase despite pleas from beleaguered travel industry

APD already adds as much as £176 to the cost of an airfare - getty
APD already adds as much as £176 to the cost of an airfare - getty

The Government is pressing ahead with plans to increase Air Passenger Duty (APD) despite pleas from the beleaguered travel industry to temporarily scrap the tax.

APD already adds as much as £176 to the cost of an airfare and airlines and tour operators had called for it to be suspended for a year to help them survive the Covid crisis.

Instead, the Government has confirmed that the tax will rise in April 2021 to a maximum of £180 per person. This is the highest rate, which applies to longer flights (where the distance from London to the destination country’s capital city is over 2,000 miles) for premium economy, business-class and first-class passengers. The reduced rate – which applies to economy-class airfares – will rise from £80 to £82 for longer flights. The short-haul rate will remain £26 per person (or £13 for passengers in economy class).

Abta, the travel association, Airlines UK, which represents carriers including British Airways, EasyJet and Ryanair, as well as the Airport Operators Association, have all urged the Government to suspend APD in recent weeks to provide a timely boost for an industry left on the brink by global travel restrictions.

Last week Mark Tanzer, chief executive of Abta, said: “We believe the Chancellor should consider an APD cut ahead of next summer to incentivise people to book their holidays in 2021.”

How APD has soared
How APD has soared

Airlines UK chief executive Tim Alderslade added: “The Government should bring forward a targeted package of support measures [including] a 12-month APD waiver to ensure our industry can play a vital role in the economic recovery.”

Already this year 19 Atol-bonded tour operators have ceased trading, including Shearings and STA Travel, and more failures over the winter seem certain.

APD compared | How other indirect taxes have risen
APD compared | How other indirect taxes have risen

Nick Trend, Telegraph Travel’s consumer editor, commented: “We already impose world beating taxes on travellers – our APD is among the most expensive anywhere. To raise rates again, when airlines are fighting for survival and desperately need people to start flying again, is a serious blow both to the industry and to consumers.”