How will Air Passenger Duty increases impact your travel business?

7 July 2025

How will Air Passenger Duty increases impact your travel business?

If you work in travel, you will already know things are getting more expensive.

Flight costs, insurance, staffing, it is all going one way, and this includes aviation taxes.

From April 2025, the Government increased Air Passenger Duty (APD) again. Another rise is coming in 2026.

If your business involves flights, especially long-haul or premium, this matters.

Here’s what’s changed, what it means for your bottom line, and how to deal with it.

What has actually changed with Air Passenger Duty?

For premium long-haul flights, the duty per person jumped by over 10 per cent. For private jets, the increase was 50 per cent.

And that’s not the end of it. From April 2026:

  • Premium long-haul flights will carry a £253 APD per person
  • Private jet flights will be taxed over £1,100 per person on ultra-long-haul routes

These are real numbers with real consequences.

Who’s paying for Air Passenger Duty?

In theory? The passenger. In practice? You might be.

Some customers will absorb the extra cost. Others won’t, or can’t. That leaves travel businesses stuck in the middle, trying to protect margins without losing clients.

Luxury operators, tour providers, flight consolidators, anyone who sells flights as part of a package needs to decide: do you pass the cost on, or take the hit?

The risks if you do not plan ahead

A few scenarios we’re already seeing:

  • Margins eroded because future APD rises weren’t priced in
  • Complaints from clients who spot a price increase they weren’t warned about
  • Cashflow tight spots because bookings are taken now, but higher APD is owed later

What you can do now

Here’s how to reduce the stress and protect your profit:

Review your pricing now, not next spring

If your packages include flights after April 2026, make sure those prices reflect the upcoming APD rise. If not, you’re leaving money on the table.

Be upfront with customers about Air Passenger Duty

Explain where the increases are coming from. It’s easier to justify a higher cost when the customer knows it’s a Government tax, not your markup.

Reassess your product mix

Are long-haul or premium-heavy trips still viable at scale? Can you shift to shorter-haul or alternative routes with lower tax exposure?

Forecast your cash flow properly

Just because Air Passenger Duty is collected at booking does not mean it won’t create a cash pinch. Talk to us now, and not when it’s due.

Consider all-inclusive pricing

For luxury or bespoke trips, bundling Air Passenger Duty into a clear, fixed package price might help reduce price shock and avoid awkward conversations later.

If you would like to run through your current pricing or cashflow set-up, we are happy to help. Contact us today for professional advice.

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