Summary
Countries in the Premium Flyers Solidarity Coalition are considering levies on premium air travel to raise international climate finance. A recurring objection is that such levies would suppress premium demand, hurting airline profitability and making revenues unstable. Until now, direct evidence on how premium travellers respond to higher prices has been scarce.
A new briefing by the International Council on Clean Transportation (ICCT) tests this objection against observed market data. The 2026 jet fuel price shock offered a rare natural experiment: jet fuel prices rose 87% year on year, driving up the cost of flying across all carriers and regions. The ICCT combined OAG fare and booking data, private jet activity data, and a decade of HMRC data on the UK Air Passenger Duty, an existing premium levy.
Key findings
1. The fuel shock raised the cost of premium flying more than the proposed levy would.
Premium fares rose by about 8.7% year on year between March and July 2026. On medium- and long-haul routes, the average increase per one-way premium ticket (about US$243 and US$360) far exceeded the Task Force’s sample levy rates for those distance bands (US$175 and US$250).
2. Premium demand kept growing while economy demand fell.
Business Class bookings rose by about 5% across nearly every route corridor and world region, while Economy Class bookings fell by about 3%.
3. Private aviation proved equally resilient.
Global private jet activity rose by about 4% as jet fuel prices roughly doubled, while published charter rates held flat.
4. An existing premium levy has not held back premium travel.
Under the UK Air Passenger Duty, the premium share of long-haul passengers rose from 20.0% to 22.4% over the past decade, while the premium rate rose by about 72%. After the April 2025 rate increase, premium passengers still grew by 3.4%, private jet passengers by 17.5%, and total receipts by about 12%, to £4.6 billion.
Overall conclusion
The evidence supports the case for a premium air travel levy:
- A levy at the rates under discussion is unlikely to materially suppress premium demand, which proved resilient to a far larger cost increase.
- The levy would fall on a concentrated, high-income segment: the top twelve origin markets account for around three-quarters of premium bookings.
- Premium demand remained stable despite price volatility, supporting a predictable revenue stream for climate and development.
The briefing was written by Sola Zheng and Daniel Sitompul of the International Council on Clean Transportation (ICCT). Commissioned the Global Solidarity Levies Task Force
