This is no April fool. With the airline industry facing rising fuel costs because of the conflict in the Middle East - airline stocks were hammered on Monday, while airfares soared as the U.S.-Israeli war with Iran sent oil prices surging, sparking fears of a deep travel slump and the potential for the widespread grounding of planes. Oil prices were trading more than 15% higher at levels not seen since 2022 - as some major producers cut supplies and fears of prolonged shipping disruptions gripped the market - and rising airport fees in Spain, the British government is about to hike Air Passenger Duty which will add to increases in airfares. Under the UK Under budget plans, APD will rise from April 2027 in line with inflation. As the duty forms part of the cost of each airline ticket, carriers say the adjustment is likely to result in higher fares on some routes. The higher rate will also cover private jets for which Mallorca is one of Spain’s busiest airports over 5.7 tonnes.
“Extending the scope of the higher rate ensures the tax is applied consistently and that those who can afford to fly privately make a fair contribution alongside commercial air passengers,” the Chancellor Reeves said. The amount of UK APD per passenger depends on aircraft characteristics, seating configuration, class of travel, whether the destination is within or outside of the UK and the geographical distance of the capital city of the destination country/territory from the UK’s capital London.
Destination Bands
Destination countries (or territories) are allocated to either the ‘domestic’ band or band A, B or C. The ‘domestic’ band applies if you fly to destinations in England, Scotland, Wales or Northern Ireland. Band A applies if the distance from London (UK) to the destination country’s capital city is below 2,000 miles. Band A is made up of countries belonging to the European Economic Area (EEA), independent regions (such as Channel Islands and Isle of Man), Switzerland, North African countries (except Egypt), Balkan countries, Turkey, Ukraine, Russian Federation (west of the Urals only) and any other country meeting the distance criteria for band A.
Band B comprises countries where the distance from London (UK) is between 2,000 and 5,500 miles. And Band C where the distance is over 5,500 miles. The new rates will be a reduced rate £8 for domestic flights, with a standard rate £16, and a higher rate £142. Band A will be a reduced rate £15, standard rate £32, higher rate £142. Band B will be a reduced rate £102, standard rate £244, higher rate £1,097. Band C will be a reduced rate £106, standard rate £253, higher rate £1,141.
This means that for economy passengers travelling to Band A destinations, which includes Spain - they will be required to pay £15 instead of the current £13 rate, while those flying business, first, and premium economy will see rates spikes from £28 to £32. Ryanair believes the APD is a burden that increases the price of flights, disproportionately affecting budget airlines and their passengers.
The airline’s CEO, Michael O’Leary, has stated that abolishing or cutting APD would allow Ryanair to offer more services and expand its presence in the UK, particularly in regional airports. Ryanair warns that higher APD rates make the UK a less attractive and less competitive destination for tourism and investment compared to other countries that have lower or no aviation taxes. And last October, the chief executive of Jet2.com and Jet2holidays, Steve Heapy, during the ABTA concention in Magalluf, warned the UK government not to treat the travel and airline sector as a ‘cash cow’.