Britain's travel industry is issuing a stark warning to the government ahead of this month's Autumn Budget, urging Chancellor Rachel Reeves to abandon plans for significant increases to Air Passenger Duty (APD), widely known as the 'holiday tax'.
Industry Leaders Voice Their Concerns
Senior travel executives have united in their call for the Chancellor to reconsider the planned hikes, which were initially announced in last year's Budget but aren't scheduled to take effect until April 2026. There are growing fears within the sector that Ms Reeves might seek to implement even steeper increases or accelerate the timeline when she delivers her Budget statement on November 26.
Steve Heapy, Chief Executive of Jet2, the UK's largest tour operator, delivered a particularly blunt message. He told The Independent: 'The government must be careful not to kill the goose that lays the golden egg with excessive taxation.' Mr Heapy expressed frustration that 'successive governments have taken the travel industry for granted,' highlighting that his company alone pays over half a billion pounds a year in tax.
The Planned Tax Increases
The proposed APD increases are set to rise at several times the rate of inflation, placing additional financial pressure on holidaymakers. The levy is specifically charged on flights departing from UK airports, meaning it applies to outbound journeys but not inbound flights.
Under the current plan for next year's hikes, the increases break down as follows:
- Flights to short-haul destinations like Spain, Italy, and Greece will see APD increase by 15% to £15 per economy passenger.
- For longer flights to destinations such as the USA, Dubai, and India, the duty will rise 16% to £102.
- Ultra long-haul flights to countries like Australia and Thailand will face a 15% increase to £106.
These rates apply solely to economy passengers, with those travelling in Premium Economy and Business Class facing even higher charges.
Threats to UK Operations and Consumer Demand
The warnings from industry leaders carry significant weight, with several suggesting that further tax increases could force them to reconsider their UK operations. Willie Walsh, the former British Airways boss, labelled the planned hikes a 'disaster for Britain' and joined calls for the Chancellor to spare travellers from being 'fleeced'.
This sentiment was echoed at easyJet's 30th-anniversary celebration at its Luton headquarters. The airline's boss, Kenton Jarvis, stated plainly: 'If APD goes up, we will naturally pass that on. Therefore, we'll see what impact that has on demand. My guess is it'll go down and hit the economy.' He suggested that freezing or cutting APD would be the preferable path forward.
Mr Jarvis also issued a clear warning about the potential for operational shifts, noting that while planes currently operate from easyJet's base in Luton, 'if things change, they can also operate in Basel, or Geneva or operate in Bordeaux, wherever we're seeing good value for the airline.'
Tim Alderslade, CEO of Airlines UK, which represents carriers including Ryanair, Jet2, Virgin Atlantic, and TUI, summarised the industry's collective concern: 'Any further APD increases risk hurting one of our growth success stories, making it much harder to keep flights affordable for families, businesses and international visitors.' Travel bosses are now anxiously awaiting the Chancellor's Autumn Budget, hoping for a reprieve for both the industry and hard-pressed British families.
