Air passenger duty is a tax paid by airlines which is typically passed onto their customers within ticket costs. It is banded on the distance from London to countries’ capital cities, with a reduced rate for economy class passengers.

At Budget 2014, the Government announced a significant reform to air passenger duty to bring the cost of long-haul travel down to a uniform duty rate. From 1 April 2015 any country over 2,000 miles from London will fall into the same B rate banding as the USA. The abolition of duty bands C and D underlines the Government’s commitment to export-led growth, and will help businesses to strengthen links with key growth markets like Brazil, India and China, through lower air ticket costs.

This reform offers a fiscally responsible approach that will be beneficial to economic growth, but ensures that the Government continues to prioritise restoring the public finances to a sustainable footing.

The vast majority of passengers, around 80 per cent, fly to band A destinations within the UK and Europe. The economy flight duty rate for these journeys is set to remain at ÂŁ13. By the end of March 2016 it will have stood unchanged at this level for four years.

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