A week out from Wednesday's Budget, Jet2.com and Jet2holidays chief executive Steve Heapy pleaded with Rachel Reeves not to target average income holidaymakers.

“I would ask the government not to continue using the airline and holiday industry as a bottomless pit of money – because any additional taxes would inevitably be passed on to customers,” he said, speaking as Jet2 revealed its half-year results.

Update: Key takeaways from the Budget

He warned tax increases risked making flying "something for the rich and privileged”. “The people that would be unable to afford a holiday will be the lowest-earning members of society," he added.

Abta said travel had been “democratised” in the past decades, with the association calling on the government not to “send this progress into reverse”.

The industry fears the government’s need to balance the books may mean outbound travel is seen as an easy target. One concern is Air Passenger Duty, with APD earning the Treasury £4.2 billion in 2024/25 – an increase of £350 million on the previous year, due mainly to more people flying.

Amy Leversidge, general secretary of pilots’ union Balpa, said increases were “hitting families going on holiday the hardest”. “Quite simply, air passengers are already paying enough," she said.

“The government has cleared the way for millions of pounds of private investment in airport expansion at Heathrow and Gatwick. To discourage people from flying by raising the cost of a ticket is counter-intuitive and risks undermining the government’s own plans for growth.”

'Joined up thinking'

EasyJet chief executive Kenton Jarvis, speaking as easyJet posted its annual results on Tuesday (25 November), also said there were mixed messages coming from the government. “They understand we are an island economy and aviation is an important economic enabler,” he said.

“I’d like to see some joined up thinking and they freeze or reduce APD. It does not feel joined up if you are pressuring airports to build new runways, there will need to be demand.”

The Scottish Passenger Agents’ Association (SPAA) also warned any increase in domestic APD would threaten air links between Scotland and the rest of the UK.

Vice-president Alan Glenn said: “Scotland cannot afford to lose connectivity with the rest of the UK. Affordable and frequent air links are essential for business travel, tourism and family life. Keeping domestic APD low is crucial to maintaining those lifeline connections."

The SPAA also urged UK and Scottish governments to review the impact of business rates and taxation on high street travel agencies, small travel firms and business travel specialists.

One issue travel struggles with at government level is the perception it is not a sustainable industry and is a net exporter of wealth, but Julia Lo-Bue Said, Advantage Travel Partnership chief executive, said: “Travel-related spending, including both inbound and outbound, business and leisure travel, contributes around £84 billion to the UK economy every year.

“Importantly, the UK outbound travel sector exports people, not economic growth, keeping wealth circulating within our domestic economy.”

Advantage criticised changes to National Insurance in the April Budget, and Lo-Bue Said added its SME members “are feeling the pinch, continually facing the challenge of rising costs, which is impacting their ability to invest and thrive”.

State of limbo?

One bright spot for the industry next Wednesday should be confirmation of business rate reform which was signalled in the spring Budget. Reeves has already said high street businesses will pay less tax while warehouses used by online businesses will pay more.

Business advisory firm BDO said: “The pace of reform to business rates has been slow but changes this year will see businesses that use large/high value premises pay higher rates, with smaller high street premises retaining some business rates discounts.”

The timing of the Autumn Statement comes just before the build-up to peaks, and the industry hopes pent-up demand will be unleashed if the Autumn Statement does not restrict consumer spending power.

Many consumers are putting plans on hold until they hear what is afoot, with Heapy saying Jet2 was continuing to see a “later booking trend” and had adjusted the mix of flight-only and packages because of this.

Agents are also in a state of limbo, with one, Tivoli Travel’s Jo Richards, telling TTG she had “put our fifth shop on hold” because of the uncertainty and that people were “holding onto their money”.