The tax that passengers must pay when flying from most UK airports increases each year with the forecast Retail Price Index (RPI) and is adjusted in line with inflation. However, in the Autumn budget, the chancellor said that APD had “not kept up with inflation in recent years” and announced additional rate increases effective from 1 April 2026.
This rise in APD, especially for long-haul and private flights, is intended to discourage excessive air travel, which is a significant contributor to carbon emissions. By making flying more expensive, the government hopes to encourage travellers to consider alternative modes of transport or reduce the frequency of their flights.
Did You Know: Air Passenger Duty (APD) is a relatively new tax, having been introduced in 1994 by the then Chancellor Kenneth Clarke. It is a very efficient tax for HMRC because it is collected and paid over by airlines, so the cost of collection is very low.
Industry Reaction
The increased rates will impact travellers as they are likely to be passed on by the airline industry, resulting in increased ticket prices, particularly for domestic and long-haul flights. The government said its understanding is that “airlines and aircraft operators ordinarily pass the cost of APD through to the consumer in prices” but added this is a “commercial decision for the airline or operator”.
However, the increases have not been received positively by the airline industry, with the government urged to reconsider its approach and prioritise policies that support the aviation industry, sustain growth, protect jobs and promote regional economic development.
It is fair to say that the increase may lead to a slight decline in demand for certain routes, especially among price-sensitive travellers. Airlines will need to balance fare increases with maintaining competitiveness.
Private Jet Usage
The substantial increase in APD for private jets (up to 50%) reflects a targeted approach to reduce the environmental impact of high-emission travel. Private jets have a disproportionately high carbon footprint per passenger compared to commercial flights, so this change aims to ensure that affluent travellers contribute more to offset their environmental impact.
How much these amounts will really deter the ultra-rich is debatable.
Environmental Considerations
The government is framing these changes within a broader strategy to promote sustainable travel. While the immediate effects may be limited, the hope is that over time, higher costs will lead to a cultural shift towards more environmentally friendly travel options.
Official assessments suggest that the overall impact of the APD changes on emissions is expected to be negligible in the short term. This is partly because the increases are aligned with inflation and may not significantly alter travel behaviour for many passengers.
Overall, while the changes aim to maintain revenue in real terms and ensure a fair contribution from airlines, they could lead to higher travel costs for consumers, potentially affecting travel patterns and choices in the coming years.
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