Chancellor Jeremy Hunt’s announcement of a one-time increase in Air Passenger Duty (APD) on non-economy flights in the latest Budget has sparked widespread condemnation from leaders in aviation, corporate travel, and tourism.
The Chancellor’s announcement lacked specific details, but Treasury documents have confirmed that APD rates will indeed rise this April as previously anticipated, with the one-off increase in premium and business-class rates set to take effect from April 2025.
Clive Wratten, CEO of the Business Travel Association (BTA), labeled the move as “disastrous,” arguing that it would impede the economic prosperity of British businesses and their employees. Wratten highlighted the misconception that business travel is solely for the wealthy, emphasizing its importance for small and medium enterprises (SMEs) in fostering international collaboration opportunities.
Tim Alderslade, CEO of Airlines UK, echoed similar sentiments, criticizing the increase in APD for contradicting the Prime Minister’s commitment to not discouraging flying through taxation. Alderslade emphasized that such stealth tax rises would further diminish the UK’s competitiveness on the global stage, with aviation taxes and airport charges already among the highest worldwide.
Mark Tanzer, CEO of Abta, expressed concern over the potential negative impact of the APD increase on the travel and tourism sector’s growth prospects. He stressed the importance of a conducive policy framework for sustaining the sector’s expansion, warning against additional or new taxes that could hinder its recovery, especially when the UK already shoulders one of the heaviest air travel tax burdens globally.
Jacqueline Dobson, president of the Scottish Passenger Agents’ Association (SPAA), labeled the decision to raise APD as “short-sighted,” emphasizing its detrimental effects on the ongoing recovery of the travel industry and the broader economy, particularly in Scotland. Dobson urged collaboration between the UK and Scottish governments and the industry to devise fairer and more sustainable aviation tax solutions.
Meanwhile, a Virgin Atlantic spokesperson criticized the government for penalizing families and business travelers with the APD increase, underscoring its adverse impact on the competitiveness of the UK economy.
Joss Croft, CEO of UKinbound association, welcomed certain aspects of the Budget, such as the cut in national insurance, but lamented the absence of measures to restore VAT-free shopping for international visitors, which he deemed a missed opportunity for stimulating growth and generating additional export revenue.
Karen Dee, CEO of the Airport Operators Association (AOA), described the APD rise as “bad news” and criticized the Budget for overlooking opportunities to support the aviation sector’s recovery. Dee called for incentives to encourage business travelers to visit the UK and for the reinstatement of tax-free shopping for international visitors to boost the economy.
Ben Edgar-Spier, head of regulation and policy at Sykes Holiday Cottages, slammed the Chancellor’s decision to end tax relief on holiday lets, arguing that it unfairly targets holiday let owners and risks harming businesses supporting tourism.
Martin Ferguson, vice president of public affairs at American Express Global Business Travel, suggested redirecting APD revenue towards encouraging Sustainable Aviation Fuel production in the UK, describing the APD increase as disappointing and short-sighted.
The collective outcry from industry leaders underscores the concerns surrounding the detrimental effects of the APD increase on the aviation, corporate travel, and tourism sectors, urging the government to reconsider its decision and prioritize policies supportive of industry recovery and growth.