UK Reforming Air Passenger Duty In 2014

I’ve written in the past about the UK’s heinous Air Passenger Duty (APD), and how best to avoid (or at least minimize) it. It’s basically a tax levied for travel originating in the UK. As long as you have an airline ticket originating in the UK (meaning you’re not connecting from somewhere else in the past 24 hours) you’ll be charged it.

The current system has four pricing tiers, whereby you’re charged the tax based on the distance between London and the capital city of the country you’re flying to:

0-2,000 miles: £13 for economy or £26 for premium
2,000-4,000 miles: £67 for economy or £134 for premium
4,000-6,000 miles: £83 for economy or £166 for premium
6,000+ miles: £94 for economy or £188 for premium

Anyway, it seems like we will soon see some reform to the UK Air Passenger Duty, though I’m not totally sure I follow the logic. Via The Independent:

But George Osborne announced a change to the banding rules so that all long-haul flights will now carry the same tax as a flight to the US.

He also slapped the tax on private jets, which had previously been exempt.

APD has risen by up to 470 per cent since 2007, with a family of four paying between £52 and £376 each time they fly from Britain, depending on how far they travel.

Now, doing something to standardize it makes perfect sense, since there was never any logic to how the UK APD was charged. First of all, why charge based on distance? What’s the difference between a tourist from the US and Australia (other than that the Australian tourist will pay an extra £54 worth of APD)? And I never understood the logic of charging based on the distance to the capital city either. Take the Caribbean vs. Hawaii, for example. The Caribbean is closer to the UK than Hawaii, but has a higher APD.

The article goes on to say:

“A tax system which penalised high growth emerging economies such as China and India was always contrary to the Government’s stated policy on trade and exports, so this is a positive step that recognises the impact of this economically damaging tax.

But ultimately it’s not just China and India that will benefit, but even more so Australia, New Zealand, Singapore, Argentina, etc.

So this is definitely a move in the right direction, though even with the new “standardized” rates this tax is still outrageously expensive.

Comments

  1. maybe it’s a minor improvement, but it’s still a huge pain … esp when redeeming on BA

    pay the miles, all the tax, the fees, the fuel surcharge, AND the APD

    if they want to be fair, tax both into and out of UK.

  2. @ patricia — Don’t give them any ideas! 😉

    Though for what it’s worth unless someone is moving or on a huge Euro trip and flying out of another country, chances are they aren’t flying just one-way, so it does balance out.

  3. I wonder if this tax has effected their tourist numbers much. I personally avoid the UK now, partly because this tax is so out of whack compared to everywhere else.

  4. IIRC, the original reason for having it be distance-based was that it was supposed to be an environmental measure (and longer flights obviously emit more pollutants). Of course, the revenue doesn’t really go toward any high-minded causes any more (and I’m not sure it ever did).

  5. Impressed with the quick coverage of this, Lucky after it only being announced today! It’s an incredibly annoying tax and makes me (as a UK resident) resort to taking a short flight to DUB or AMS and flying from there instead to avoid it – a total pain though in having to do this and I’m sure this slight improvement has mainly been due to them slowly getting the message about the impact on tourism. They should drastically reduce it further though.

  6. @lucky Though for what it’s worth unless someone is moving or on a huge Euro trip and flying out of another country, chances are they aren’t flying just one-way, so it does balance out.

    I try and do open jaw as much as possible. If flying a 3rd country carrier (Air Canada, Lufthansa), you can often still get the roundtrip rates if you open jaw (for example LAX-YYZ-LHR and CDG-YYZ-LAX on return) and hop over to Paris on Eurail to save over $100 on APD.

  7. I’ve paid $1000+ in fees one-way just *transiting* Heathrow and don’t seem to have the luck you guys do. And for some reason I have enormous difficulty arranging any flight to Europe (or much of the world) from the U.S. East Coast without being routed through LHR. I wouldn’t mind never seeing the UK again at this point.

  8. @ Kyle McKenna — Sounds like you’re paying fuel surcharges by booking travel on British Airways, which is a bit different than the APD (though equally frustrating, if you ask me)!

  9. If your connection is under 24h you won’t be charged APD. You should be able to get a breakdown of the taxes/fees to check.

  10. I think APD has its biggest impact on people flying in premium economy, because, if I understand correctly, the APD charge is the same for premium economy and higher. So it’s not a big deal for first class, but is for premium economy.

    That said, on a paid fare in BA’s CW, the difference in the cost of flying from say PHX-LHR vs. PHX-ZRH is much greater than the APD. In my experience, this ranges anywhere from $500 to 3000 more on a typical day to fly just to LHR, than to continue on to somewhere in Europe. Obviously there are other factors here (flying to a hub vs. competing with LH/LX). Also, for most of the past few years, a typical LHR-US route in CW is about $1000 less per person than the reverse US-LHR route.

    APD is a relatively small fee compared to other carrier surcharges (fka fuel), and the higher fares that Americans pay to fly to the UK in business class. It is a much bigger cost on award tickets, where you’ll pay anywhere from $600-1200/person in fees + miles.

  11. On a revenue ticket looks like the airline eats the costs. Comparing flights to neighbouring countries are about the same. More of an impact on award tickets

Leave a Reply

Your email address will not be published. Required fields are marked *