Families who have already booked flights for their summer holiday next year should receive a tax refund from their airline which could amount to a windfall worth hundreds of pounds following changes announced in the autumn statement.
Air passenger duty will no longer apply for children under 12 on flights that depart from the UK from 1 May onwards. The tax costs £13 for short-haul flights, covering all of Europe plus Turkey and north Africa. It rises up to £97 for longer journeys.
The exemption for children under 12 will initially only apply to economy seats but from March 2016 it will be scrapped for all children under 16 in all seats. This could amount to significant savings. A family with three children travelling to the US would see their flight prices cut by £213, for example.
While the move has been broadly welcomed by the airline industry, the swiftness of the changes has caused something close to panic. Airlines will now not only need to reprice flights from May next year but will also need to refund passengers who have already booked, and in some cases airlines do not know the ages of their passengers.
A spokeswoman for easyJet said dealing with the tax changes was complex.
“We are proactively refunding passengers where we know the ages of their children,” she said. “However, for domestic flights within the UK we may not have that information and are asking passengers to complete a refund form from our website.”
So far, British Airways, Virgin, Monarch, BMI and Ryanair have all confirmed they will be issuing refunds.
Ryanair said it will also refund children’s tax for the six weeks from 27 March 2015 and will not charge the £17 administration fee it normally levies for such refunds.
TUI and Thomson said they would be issuing refunds. This is more straightforward for families who have booked a package holiday as they are likely only to have paid a deposit.
It is not just passengers who have booked already who may need to claim. The airlines will continue to take bookings for 1 May onwards at the old prices until they have updated their booking systems. This could mean thousands more people will need to make claims.
Once the airlines have updated their ticketing systems, a short-haul economy flight for departure after 1 May 2015 that is priced for adults at £100 should be on sale to under-12s for £87. This could be a particular challenge for budget airlines such as easyJet that charge a flat rate for all passengers over the age of two.
In a further move that could improve the position for air passengers, the chancellor said the government will push to amend pricing regulations to make tax charges on air fares transparent.
“The government believes that these tax changes should be clear and visible to consumers,” he said. “The government will therefore consult on an amendment to pricing regulations which would require airlines to separate out air passenger duty from their other fees and charges.”
