Air Passenger Duty will see a significant rise next April, as laid out in the 2011 Budget.
While no reference to APD was made in chancellor George Osborne’s speech to the House of Commons today, the plan to increase the tax was confirmed in the full Autumn Statement online.
Final figures for APD rates for 2012-13 are due to be announced in December, but the chancellor has indicated that the rise will be twice the rate of inflation.
As APD was frozen for the current financial year 2011-12, the increase in the Retail Price Index (RPI) for this year (5%) will be added to the tax alongside the RPI for next year (an additional 5%).
The government will also extend the duty to flights on business jets, a move also previously announced, and cut the rate of APD for passengers travelling on long-haul flights from Northern Ireland.
The lack of change in the government’s stance on APD comes amid a growing backlash against the tax by airlines.
British Airways, Easyjet, Ryanair and Virgin Atlantic launched an unprecedented alliance earlier this month, calling on the chancellor to axe the tax.
The airlines’ CEOs have continued in their opposition against APD by releasing a joint statement calling on the chancellor to commission an independent study into the impact of the tax on the UK economy.
According to Easyjet’s Carolyn McCall, IAG’s Willie Walsh, Ryanair’s Michael O'Leary and Virgin’s Steve Ridgway such a study would confirm that APD's negative impact on UK GDP significantly outweighs its revenue benefit for the Treasury
“In the cause of UK economic recovery, Air Passenger Duty (APD) is an own goal - and the Chancellor has just scored another one,” they said.
“By increasing this tax by double the rate of inflation, he is further deterring inbound tourism and foreign investment, and choking off yet more job opportunities for young people.”
According to the four CEOs, APD “has no international parallel” and has already cost the UK economy 25,000 jobs.
“That is what the Government should focus on,” they said.