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Government to look at cutting air passenger duty

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11/03/2021
The government has confirmed plans to reform the way that aviation is taxed, including a cut to air passenger duty (APD).

As part of its plans to boost transport connectivity across the UK, the Department for Transport is consulting on a reduction in APD for domestic flights.

The consultation will include other options too, such as introducing a return-leg exemption from the duty.

Boris Johnson, the Prime Minister, said: “I want to cut passenger duty on domestic flights so we can support connectivity across the country.”

What is air passenger duty?

APD is a tax paid by flight operators, so it’s not a direct tax on you and me. Instead operators have to fork out a charge for each passenger on their flight, with rates varying based on their final destination.

There are two bands for operators to consider. Band A is for short-haul destinations ‒ defined as those where the capital city is less than 2,000 miles from London ‒ while Band B is for long-haul destinations.

From 1 April 2021, the standard rates for Band A and B will sit at £26 and £180 respectively.

Why a cut matters to you

Critics of APD have long argued that it makes certain routes unviable ‒ particularly domestic flights ‒ with the levy blamed for contributing to the collapse of Flybe last year.

The idea is that cutting APD will improve flight links across the UK, providing travellers with more options if they want to fly, and possibly at lower prices than was previously the case.

Karen Dee, chief executive of the Airport Operators Association, said that with the aviation industry facing a lengthy recovery following the pandemic, some routes are at risk of not returning quickly, or even at all, without reform of APD.

She added: “APD is one of the key levers that the Government has to boost connectivity recovery but APD reform must be part of an holistic approach. This could include measures such as a regional connectivity start-up fund, Public Service Obligation routes, or waiving of airport charges for key routes as is happening in the Republic of Ireland.”

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