Virgin Atlantic CEO says UK budget is 'tax on growth' with air duties set to rise

LONDON –  Virgin Atlantic CEO Shai Weiss on Monday said the U.K. Labour government's landmark October budget presented a "tax on growth" due to higher rates placed on the aviation industry.

Weiss said during the Airlines 2024 conference in London that both Labour and the previous Conservative administration had "not done enough to recognize aviation as a strategic asset" for the U.K.

"All we've seen is an increase on Air Passenger Duty," Weiss said. Air Passenger Duty (APD) is levied on airlines and aircraft operators on a per-passenger basis, with rates differing by distance traveled and the cabin class traveled in, and is generally – though not always – passed on to customers in ticket costs.

"I would call [the Budget] a tax on growth," Weiss said Monday, adding that while it was necessary to cover Britain's budget deficit, it was also important to recognize the contribution of aviation to the wider U.K. economy.

Under Labour policy, APD will increase on short-haul economy class tickets to £15 ($18.90) from £13 from April 2026, with the rate on other cabin classes rising to £32 from £28. For journeys between 2,001 and 5,500 miles, APD will rise to £102 from £90 in economy and to £244 from £216 in other classes.

Regarding the APD hike, the U.K. Treasury says rates would increase by the rate of inflation measured in the Retail Price Index, with a further increase to account for inflation not incorporated into previous budgets. According to Treasury forecasts, the higher rate of APD – which also includes a 50% rate in the amount paid on private jet passengers – will see revenue generation jump from approximately £100 million to £500 million annually.

Aviation taxes are a increasingly popular revenue-raiser for governments which