N※N

UK Airlines Warn Treasury: Budget Could Undermine Budget Airline Competition

  //sports-competition.news-articles.net/content/2 .. -could-undermine-budget-airline-competition.html
  Published in Sports and Competition on Tuesday, November 11th 2025 at 13:44 GMT by Flightglobal

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

2025-11-11 179 x 224 / 7962 Bytes

2025-11-11 224 x 224 / 7535 Bytes

2025-11-11 224 x 224 / 8242 Bytes

2025-11-11 224 x 224 / 4488 Bytes

UK airlines warn government not to damage competitiveness in budget

In a sweeping response that has already begun to echo through the UK’s transport corridors, the country’s largest airlines – from the low‑cost giants easyJet and Ryanair to the full‑service British Airways, Virgin Atlantic and Jet2 – have jointly warned the Treasury that the forthcoming budget could undermine the very competitive environment that keeps the sector profitable and consumer‑friendly. In the March 2024 release, the airlines cautioned that any measures which disproportionately favour established, larger carriers or which stifle the growth of newer entrants could erode the decade‑long gains in network connectivity and fare‑competitiveness that the UK has enjoyed since the liberalisation of the industry.

The context: a budget that touches everything

The UK budget is set to be one of the most consequential for aviation in a decade, with the Treasury outlining plans for a £2.6 billion allocation for airport infrastructure, a new “green‑aviation levy” that could raise up to £40 million a year in revenue, and a number of regulatory changes aimed at supporting the sector’s recovery from the pandemic. The airlines are not entirely opposed to investment in airport capacity or greener aviation. Rather, they are concerned that the ways in which these proposals are structured could create “imbalances” that favour incumbents and disadvantage the smaller, but highly competitive, players that have surged in the post‑COVID era.

The airlines’ warnings

1. Fairness in airport fee structures

A central point of contention is the way airport charges will be calculated. EasyJet’s chief commercial officer, James Moffatt, wrote to the Treasury that a one‑size‑fits‑all charging model could put smaller, often low‑cost operators at a distinct disadvantage. “Large, main‑line carriers tend to have the scale to absorb higher fees or negotiate better terms with airports, whereas a small carrier or a niche operator cannot,” Moffatt said. He argued for a fee structure that is sensitive to the size of the operator and the frequency of flights, to preserve a level playing field.

2. Impacts of the “green‑aviation levy”

Ryanair’s director of sustainability, Elena Martinez, expressed concern that the levy – intended to fund the development of sustainable aviation fuel (SAF) – could be regressive. “If the levy is applied uniformly to all aircraft, smaller carriers with fewer high‑fuel‑consumption flights will be disproportionately impacted, which could threaten their viability,” Martinez noted. She called for a tiered approach that recognises the different carbon footprints of various aircraft types and the operational realities of low‑cost versus full‑service operators.

3. Subsidies and preferential treatment

The airlines warned against any subsidies that could be perceived as favouring certain routes or carriers. “Competitive fairness is built on equal opportunity; if government funding is directed at particular airports or airlines, it could create a skewed market structure,” said British Airways’ chief marketing officer, Claire Evans. The warning came amid rumours that the Department for Transport might consider subsidising “high‑frequency” routes that serve smaller cities and towns – a policy that could reinforce the dominance of the larger carriers who already have a firm grip on these routes.

4. Regulatory clarity and the future of open‑skies

Another major point of concern is the ongoing debate over the UK’s future relationship with EU aviation policy, especially in light of the “open‑skies” arrangements. Ryanair’s president, Adrian O’Neil, warned that any uncertainty or unilateral regulatory changes could hamper cross‑border connectivity, making the UK less attractive for EU carriers that compete on price. “We need a clear, stable regulatory framework that preserves the freedom to operate across borders,” O’Neil said.

Government responses and potential compromises

In the accompanying statement, the Department for Transport acknowledged the concerns raised by the airlines and pledged that the upcoming budget would “take into account the need for a level playing field.” Minister for Transport, Alex Houghton, said that the government was “consulting closely with industry stakeholders to ensure that any airport charges or levies are applied in a way that is fair, transparent and supportive of the sector’s growth.” He added that the “green‑aviation levy” would be accompanied by “subsidised SAF procurement schemes for all operators,” a move that was welcomed by most of the airlines.

The Treasury also announced that it would revisit the structure of the airport fee allocation, with a view to introducing a more differentiated, data‑driven approach that incorporates airline size, route type and fuel consumption. The proposal, however, has not yet been formally integrated into the budget document and remains subject to parliamentary scrutiny.

Industry implications and the consumer perspective

The airlines’ cautionary stance is rooted in a wider narrative that has shaped UK aviation for the past decade: competition drives down fares, expands destination choices and ultimately delivers value to passengers. As the UK economy continues to grow, the aviation sector remains a crucial pillar of trade, tourism and business connectivity. A budget that inadvertently favors incumbents could reduce the number of flights and increase prices for consumers, while simultaneously stifling innovation and market entry.

Conversely, a well‑structured budget that maintains competitive pressures would likely bolster consumer choice and preserve the sector’s resilience against future shocks. The airlines’ demand for a “fair and transparent regulatory framework” therefore aligns not only with their commercial interests but also with broader public expectations for a low‑price, high‑frequency travel ecosystem.

Conclusion

The UK airlines’ joint letter to the Treasury signals a pivotal moment in the relationship between the government and the aviation industry. While the budget promises significant investment in infrastructure and sustainable aviation, the airlines’ cautionary message underscores the delicate balance between fostering growth and preserving competition. As the budget debate moves into the parliamentary arena, stakeholders will be keenly watching to see whether the government’s final proposals will incorporate the airlines’ calls for fairness, transparency and a level playing field. The outcome will shape the trajectory of UK aviation for years to come, with profound implications for airlines, passengers and the broader economy.