Earlier today, the United Kingdom’s Chancellor, Philip Hammond, revealed the annual budget, set by Her Majesty’s Treasury to outline the expenditure of the public sector. While many of the changes are expected to impact numerous industries, there were several changes in particular that will likely impact the number of passengers and expected revenue for the air travel industry.
First, the Air Passenger Duty (APD) – a fee charged for passengers flying from a United Kingdom or Isle of Man airport on most commercial aircraft – will stay the same for short-haul flights; the same value charged since 2012. However, the long-haul duty charge will increase in line with retail price index (RPI) inflation, going up by £2 ($2.56) for economy passengers and £4 ($5.12) for premium economy, business class and first class passengers.
However, the APD regime in Northern Ireland will remain unaffected to try and promote tourism to the area. This caveat is in response to concerns that were raised stating that APD and value-added tax (VAT) rates impacted tourism in Northern Ireland.
Additionally, the government will introduce changes to the U.K. border experience from 2019 to enhance the experience for incoming travelers. Passengers travelling into U.K. ports who are citizens of the United States, Canada, New Zealand, Australia and Japan will be able to use the e-passport gates beginning in the summer with aims to significantly improve the flow of passengers through busy airports.
John Holland-Kaye, the CEO of Britain’s busiest airport, London Heathrow, responded to this part of the budget in a statement by saying “We welcome the Government’s announcement that passengers from more countries will be able to use the ‘eGates’ at Heathrow. eGates offer a world-class immigration process whilst keeping Britain’s border secure.”
However, Holland-Kaye believes that these citizens should be able to use the gates earlier, stating that “The Government should make this happen before the end of March 2019 to demonstrate that Britain is open for business, as we leave the EU.”
The change to Passport eGates at U.K. border points could also be as a result of increased pressure on the government from airlines such as British Airways and Virgin Atlantic after immigration wait times at Heathrow were criticized. Virgin Atlantic saw a 20 percent increase in U.S. passengers in 2018, meaning that more of its passengers were likely affected by the previous immigration slowdowns.
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