UK to halve domestic APD in 2023, add ultra-longhaul rate

The United Kingdom plans to amend its much criticised Air Passenger Duty tax starting in April 2023 by cutting rates on domestic flights while adding a new highest tariff for ultra-longhaul flights.

“Flights between airports in England, Scotland, Wales and Northern Ireland will, from April 2023, be subject to a new lower rate of Air Passenger Duty. This will help cut the cost of living, with 9 million passengers seeing their duty cut by half. It will bring people together across the UK. And because they tend to have a greater proportion of domestic passengers, it is a boost to regional airports like Aberdeen Dyce, Belfast Int’l, Inverness, and Southampton,” Chancellor Rishi Sunak said during the autumn review of the 2021 budget in the British parliament.

After the adjustment, all passengers departing from British airports on domestic flights will pay GBP6.50 pounds (USD9) if travelling in economy class and GBP13 (USD18) if in premium class. Currently, the lower rate stands at GBP13 (USD18) and the higher at GBP26 (USD36). They will remain at this level for all international short-haul destinations in the so-called Band A countries, comprising all European countries, Morocco, Algeria, Libya, Turkey, and the western part of Russia up to the Ural mountains.

Sunak underlined that the UK had a return-leg exemption for domestic APD until 2001 but has since included domestic services in the Band A rate.

The ch-aviation capacities module shows that based on current schedules, the airlines that would stand to benefit the most from the exemption are British Airways, easyJet, and Loganair, which proffer 166,806, 104,325, and 34,686 weekly scheduled seats within the UK.

In contrast to the APD relief for domestic flights, Sunak said the government would also add a new rate for ultra-longhaul flights to destinations more than 5,500 miles (8,850 kilometres) away including Japan, Australia, South-East Asia, and South Africa.

The rate for economy class passengers will be GBP91 (USD126) and GBP200 (USD276) for all premium classes. He did not clarify whether the rate would be determined based on route length or, as it is now, on a country-level based on the distance between London and the destination country’s capital. The distinction would have important implications for flights to Brazil and China: while both Brasilia and Beijing Capital are within the 5,500-mile radius, gateways such as Rio de Janeiro Int’l, Sao Paulo Guarulhos, Shanghai Pudong, or Hong Kong Int’l lie further away from London.

Currently, the Band B APD rate, which covers all flights beyond Band A destinations, is set at GBP82 (USD113) and GBP180 (USD249) in economy and premium classes, respectively.