The UK’s airline industry has hailed Government backing for expansion and sustainability while warning that rising costs risk undermining the nation’s global competitiveness.
Speaking at the Airlines UK Annual Dinner 2026, Chair, Baroness Liz Sugg welcomed strong ministerial support for growth, airspace modernisation, airport expansion and the development of sustainable aviation fuels (SAF), but cautioned against policies that could place an “unsustainable cost base” on carriers.
The event, sponsored by Boeing, brought together representatives from across the aviation sector, including passenger and cargo airlines, airports, manufacturers, handlers, Government, NATS and the Civil Aviation Authority.
Addressing guests, Baroness Sugg highlighted aviation’s central role in the UK economy. Each aircraft based in the UK supports around 400 jobs, while every two additional flights generate another job. Airlines carry approximately 40% of the value of the UK’s non-EU exports, underlining the sector’s strategic importance to trade and growth.
Public satisfaction with aviation also remains strong. The latest survey from the Civil Aviation Authority shows customer confidence has rebounded significantly since the pandemic, with passenger experience rated ahead of other modes of transport.
Government Support Welcomed
The industry expressed appreciation for the Government’s commitment to strengthening aviation’s foundations, particularly in progressing long-delayed airspace modernisation and supporting airport expansion. Backing for the commercialisation of SAF was also described as critical to delivering decarbonisation while enabling growth.
However, speakers warned that economic and geopolitical uncertainty, combined with environmental pressures, mean aviation cannot rely on historic strengths alone.
Concerns were raised over the competitiveness of the UK aviation market compared with international rivals. Airlines UK analysis indicates that costs in the UK are rising faster than in competitor nations, potentially eroding long-standing advantages.
Air Passenger Duty (APD) is set to increase by 13–15% for most travellers from April and remains among the highest aviation taxes globally. Meanwhile, the cost of an Electronic Travel Authorisation (ETA) for inbound visitors is due to rise to £20, double its level a year ago, which airlines argue could deter international visitors.
The forthcoming implementation of the EU Entry/Exit Scheme was also highlighted as an area requiring close coordination between industry and Government to avoid disruption and protect the passenger experience.
Airport Charges and Expansion
Airport expansion was strongly supported in principle, but with a clear caveat: it must remain affordable.
Heathrow’s charges were described as already the highest among global hub airports, with warnings that costs could increase further without regulatory reform and improved governance. The industry stressed that so-called “private investment” in airports ultimately translates into higher charges for airlines and passengers.
Cargo operators were also said to be facing capacity constraints and operational restrictions, potentially limiting growth in a sector vital to UK trade.
Sustainable Aviation Fuel Pressures
On the journey to net zero, airlines reiterated their commitment to making the UK SAF mandate a success. The 2% SAF supply target for last year appears to have been met — a milestone welcomed by the sector.
However, as SAF blending requirements increase and more advanced fuels are mandated, airlines warned that supply must expand rapidly and at competitive prices. While the mandate legally sits with fuel suppliers, carriers fear they could ultimately bear the cost of non-compliance through higher fuel bills.
Buy-out penalties — reportedly close to £6,000 per tonne — could be passed through to airlines if suppliers fail to meet their obligations, a scenario described as both a market and policy failure.
Further concern was expressed over the ability of airlines to account for SAF use under the UK Emissions Trading Scheme (ETS), with ministers urged to resolve the issue swiftly ahead of looming deadlines.
A Call for Competitive Growth
Despite the challenges, the tone of the evening remained optimistic. Aviation was described as a “gold-standard national asset” underpinning the UK’s status as a world-leading aviation nation.
Industry leaders emphasised that with the right partnership between Government and the private sector — balancing competitiveness with sustainability — UK aviation can continue to drive economic growth, create jobs and deliver net zero ambitions.
As the dinner concluded, the message was clear: the sector stands ready to play its full part in keeping Britain connected, competitive and open to the world — but calls on policymakers to ensure the UK remains an attractive place to operate, invest and travel.