British holidaymakers are facing a significant increase in the cost of air travel following a major business rate hike announced in the recent Budget. The move is expected to hit passengers directly, with airlines likely to pass on the substantial new costs to consumers.
Which Airports Are Facing The Biggest Increases?
According to analysis from tax advisory firm Ryan LLC, Heathrow Airport, already paying the highest business rates in the country, will see its rate bill skyrocket from £117 million to £240 million within just three years. This represents a staggering 353% increase in its rateable value by 2026 compared to its 2023 valuation.
The financial pressure is not limited to the UK's busiest hub. London Gatwick Airport is also set for a dramatic rise, with its rate bill more than doubling and reaching an £80 million charge by the 2028-29 financial year. Meanwhile, Manchester Airports Group, which owns East Midlands Airport and Stansted, will be charged £75 million.
How Will This Impact Travellers?
Karen Dee, Chief Executive of AirportsUK, has issued a stark warning about the consequences for the travelling public. She described the Budget move as 'a short-sighted move that passengers will feel in their pockets', predicting that both hard-working families and business flyers will experience price rises and more limited choices.
Dee also highlighted the potential damage to long-term investment, suggesting the increases could force companies to 'review billions of pounds of transformational investments' and potentially put jobs at risk. She explained that the success of the travel industry's post-pandemic recovery is ironically being penalised, with the resulting costs being transferred to airlines and, ultimately, to passengers through higher fares.
A Wider Problem For UK Aviation
This development comes at a challenging time for UK air travel. The International Air Transport Association (IATA) has reported that the UK has become one of Europe's most expensive countries for air travel. This is due to a combination of factors, including the nation's growth outlook, high operational costs for airlines, and some of the highest ticket taxes on the continent.
The country's popularity is also suffering, with airlines like easyJet, Ryanair, and British Airways recently reporting a reduction in international tourists visiting the UK. The new business rate hikes are expected to further exacerbate this trend, negatively impacting local economies that rely on airport connectivity, supply chains, and tourism.
