UK government to consult on cutting domestic air passenger duty

While the aviation industry welcomed the news, Wizz Air UK’s managing director exclusively told Key.Aero that aviation tax reforms could create some “proper competition for the railways”

Boris Johnson has said he wants to cut air passenger duty (APD) for domestic flights in a bid to boost connectivity across the UK. 

The government has launched a consultation for the plans following the publication of the interim report of Sir Peter Hendy’s Union Connectivity Review.  

In June, Hendy was tasked by the prime minister with exploring ways in which transport can better connect all parts of the country. 

The consultation will include options to change the APD treatment for domestic flights, such as reintroducing a return leg exemption or the creation of a new lower domestic rate. 

In addition to looking at the case for increasing the number of international distance bands, the government says it will continue to decarbonise domestic aviation as part of its ambition to reach net zero, including through mandating the use of sustainable aviation fuels.  

Commenting on the review, Boris Johnson said: “It gives us the tools we need to deliver on our ambitions for a UK-wide transport network that encompasses sea, rail, and road – and I also want to cut passenger duty on domestic flights so we can support connectivity across the country.” 

Speaking to Key.Aero, Owain Jones, managing director of Wizz Air UK, cautiously welcomed the news: “It’s something that’s been called for, for a long time now… but let’s see what the review concludes. 

“It could potentially be good news and will create some proper competition for the railways.” 

Loganair chief executive Jonathan Hinkles said: “We’re pleased to see that the Union Connectivity Review, chaired by Sir Peter Hendy, has recommended that the UK Government should halve the level of APD applicable to domestic flights.

“We believe that the change will make a big difference to the economic viability of many UK regional air routes and will help to stem the decline in connectivity which has taken place even before Covid-19."      

Brian Strutton, BALPA general secretary, commented: “We welcome the government’s announcement of a consultation on reform of domestic APD. It is important that domestic connectivity is reinvigorated post-COVID as this is something which can really help power our economic recovery. This is especially important given the collapse of Flybe and its extensive UK route network last year.  

 “The double taxation of domestic flights is an anomaly which is a real barrier to new routes being established and new connections being made between the regions and nations of the UK.” 

Tim Alderslade, chief executive of Airlines UK, the industry association representing UK-registered carriers, added: “This is really positive news that will help support regional connectivity, level up the UK, and provide a welcome measure of relief to domestic carriers facing an existential threat from the impacts of Covid.  

“It will help to sustain current domestic connections – including into Heathrow, our national hub, as well as all the regions of the UK – which is essential to achieving economic growth and supporting the Government’s Global Britain agenda. We look forward to working further with the Hendy Review and Ministers and would urge as much speed as possible in the consultation process.” 

The consultation is set to begin in the spring, but no specific dates have been set for its conclusion.