It’s no early April Fools’ joke. The Treasury has confirmed that, from 1 April, tax on flying out of the UK will rise by well above the rate of inflation. Will this make you less likely to fly abroad in 2012?
So what does this all mean? A person flying in economy from London to Malaga will be charged £13 in Air Passenger Duty (APD) – up from £12, while APD to the Caribbean will rise from £75 to £81, and a family of four flying to Sydney will pay a wallet-denting total of £368 in APD, up from £340.
Why the price rise?
Airlines and other tourism organisations have waged a long, concerted campaign to persuade the government not to increase APD, claiming that it will put more of the public off flying. They also called for a change in the tax’s banding structure during a government consultation, but it was all in vain.
British Airways has now blamed the rise in APD for its decision to reduce its number of new recruits in 2012 from 800 down to 400.
But BA won’t be taking the hit for the increase – we will. The airline is already passing on the higher charge directly to passengers who are booking flights for April and after, as are other airlines. Carriers will only lose out if the higher overall fares are the final straw to convince consumers that they can’t afford that planned 2012 holiday overseas.
How much difference will these changes make?
APD is certainly a big expense on long-haul flights, but I think that people who are already prepared to pay £340 in tax for a flight to Australia won’t scrap their plans for an extra £28. I’m not sure that the extra £1 per person on short-haul flights will really put people off either.
And earlier this year, I wrote about Which? Travel research showing that despite the APD amounts, we Brits get a relatively good deal on flight prices leaving from the UK compared with those from other European cities.
It will be interesting to see what the airlines do about people who booked their post-April 1st flights before the new tax rates were confirmed in the Chancellor’s Autumn Statement last week. Will they demand that passengers cough up the extra £1, £5, £6 or £7 per person at the airport or earlier, or will they just absorb the cost themselves?
BA and Virgin Atlantic say they are currently deciding what to do, but even though airline terms and conditions usually have a clause allowing them to chase added taxes, it would seem very tight of the airline not to absorb it themselves.
Do you think these tax rises are over the top? Will the higher tax mean you will be less likely to fly overseas next year?