As the autumn Budget approaches at the end of this month, travel bosses are warning the government not to increase Air Passenger Duty – also known as the ‘holiday tax’.
Under Rachel Reeves’ plans, the levy on air fares is set to increase several times the rate of inflation.
The hikes in Air Passenger Duty (APD) were announced by Reeves in her Budget last year, but don’t come into effect until April 2026.
However, travel bosses fear she may come back for more in her Budget this month (November 26) by increasing the rate of the hike.
They would like her to at least abolish last year’s increase to keep the price of a holiday down for hard-pressed families.
It comes as the boss of the UK’s biggest tour operator, Jet2, has urged the Chancellor not to increase taxes on travellers.
Jet2 chief executive Steve Heapy told The Independent: ‘The government must be careful not to kill the goose that lays the golden egg with excessive taxation.’
The levy is charged on flights taking off from a UK airport, meaning it is paid on outbound journeys but not inbound.
Air Passenger Duty is charged on flights taking off from a UK airport, meaning it is paid on outbound journeys but not inbound. Luton Airport is pictured
The boss of the UK’s biggest tour operator, Jet2, has urged the Chancellor not to increase taxes on travellers
Under next year’s hikes, APD on travel to short-haul destinations like Spain, Italy and Greece will increase by 15 per cent to £15 per flier.
On longer flights to hotspots like the USA, Dubai and India, it will increase 16 per cent to £102, and by 15 per cent to £106 for ultra long-haul destinations such as Australia and Thailand.
These rates are just for economy passengers, with the rates for Premium Economy and Business Class tickets being even higher.
The Jet2 boss added: ‘I think successive governments have taken the travel industry for granted. We pay over half a billion pounds a year in tax.’
It comes as a former British Airways boss warned plans to hike taxes on holidaymakers would be a ‘disaster for Britain’.
Willie Walsh led calls for the Chancellor to spare travellers from being ‘fleeced’ in the Budget by ditching her plans to hike the ‘holiday tax’.
Walsh, who led BA for more than a decade from 2005, was joined by other airline bosses who warned they could pull UK operations and move them to where taxes are lower if the hike goes ahead.
Speaking at easyJet headquarters in Luton yesterday, where the airline celebrated its 30th birthday, its boss Kenton Jarvis added: ‘If APD goes up, we will naturally pass that on.
Under Rachel Reeves ‘ plans, the levy on air fares is set to increase several times the rate of inflation
‘Therefore, we’ll see what impact that has on demand. My guess is it’ll go down and hit the economy. So I would suggest freezing or cutting would be the way forward with APD.’
He also warned easyJet could pull operations from the UK if taxes go up too much because planes can be flown in and out of easyJet’s base in Luton.
‘But 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, boss of Airlines UK, which also represents Ryanair, Jet2, Virgin Atlantic and TUI, said: ‘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.’
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Government warned not to ‘kill the goose that lays the golden egg’ by increasing travel tax
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