British Airways blames Reeves’s air travel tax for raising price of loyalty flights

British Airways (BA) has blamed Rachel Reeves’s tax increases for a sharp rise in fares available to members of its popular Avios loyalty scheme.

The carrier said the cost of flights, which can be paid for with Avios frequent flyer points and a cash sum, known as “Reward Flights”, will rise from Dec 15.

It said the move was because of increases in departure taxes to be introduced by the Chancellor from April 2026, as well as higher inflation.

A BA spokesman said: “Our Reward Flight saver flights continue to offer our members incredible value, but a combination of factors has left us with no choice but to increase our prices.

“We’ve given members as much notice as we could to help them plan ahead.”

An increase in air passenger duty (APD) announced by Ms Reeves in her first Budget is set to hit the airline industry from April 1, adding £2 to the cost of a short-haul economy flight and £4 to a similar trip in the front of the plane.

The levy for long-haul flights will typically increase by £12 in economy and £28 in business. It follows a similar rise in APD in April 2025.

It means the number of Avios points needed for a free flight will increase, as well as the cash top-up required.

For example, the cost of a one-way, off-peak business-class flight from Heathrow to Geneva will increase from 15,000 Avios points plus a £12.50 fee to 16,500 points and a £15 fee.

With points generally regarded as worth about a penny apiece, that equates to an increment of about £17.50.

A business fare to New York will cost 176,000 points plus £399 under the new terms, up from 160,000 points and £375, BA said – equivalent to an increase of about £184.

Fares for flights already booked will not be affected.

The airline said changing market conditions were a further factor in the decision to lift the price of Reward Flights, which are available to the 13 million members of the British Airways Club.

The volume of corporate bookings with BA this year is running at just 63pc of the level seen before Covid, parent company International Airlines Group revealed last month.

Luis Gallego, the IAG chief executive, has blamed the trend partly on the number of Britons still working from home.

BA guarantees that at least eight Reward seats will be available in economy class on flights to and from Heathrow and Gatwick, plus two in premium economy and four in business.

Frequent flyer programmes play an increasingly important role in generating revenue for airlines.

IAG Loyalty contributed 8pc of group revenue in the first six months of 2025, together with an operating profit of £191m.