Calls to slash air passenger duty to keep Britain competitive as it leaves the European Union were not acceded to by the chancellor today.
Instead, Philip Hammond announced in his Autumn Budget that short-haul APD rates for 2019-2020 will remain frozen, as they have been since 2012. The long-haul rate for economy passengers will also be frozen at the 2018-19 rates, but Hammond said that will be paid for by a raise on premium class tickets and private jets.
The rates for premium economy, business and first class will rise by £16, and for those travelling by private jet by £47.
APD is levied against each passenger on every flight departing from the UK.
Regional airline Flybe today said it was "disappointed" with the news, calling APD "a highly damaging tax which penalises domestic travellers".
Tim Alderslade, chief executive of Airlines UK, the industry association representing UK carriers, said: "The change announced today on APD is simply a sleight of hand move by the Treasury. The total tax take from APD is not being cut – currently at £3.3bn, it will hit £4bn a year in 2022/23 and remains the highest in the world, and is far more than those levied by our competitors, especially in Europe."
Jason Geall, vice president, Northern Europe, American Express Global Business Travel, said: "On one hand the government talks about forging new trade relationships with non-EU marketplaces, while on the other it increases the cost for businesses to travel and trade."
What was initially introduced as an environmental tax has become a stealth tax on trade. This is a massively shortsighted decision made by a chancellor who purports to be pro-business.
Many across the aviation industry have added their voices to calls for APD to be slashed, with Heathrow saying in September scrapping APD on domestic flights would level the playing field with Europe as Britain gears up to leave the EU.
Research from Frontier Economics found that UK passengers were paying an extra £225m in aviation tax on domestic flights when compared to many of their European counterparts.
The airport said that abolishing taxes on a return domestic flight from Heathrow, which are currently £26, would save UK passengers £24m annually.
Heathrow said the move would also boost demand, which would in turn make new domestic connections commercially viable for airlines.