Air Passenger Duty remains unchanged – what impact will this have on investment in sustainable aviation fuel?
The UK’s new Minister for Aviation, Maritime, and Security has outlined the country’s stance on several key issues impacting the industry, including Air Passenger Duty (APD) and sustainable aviation fuel (SAF).
UK’s new Aviation minister
Speaking at the Airlines 2022 conference in London on November 21st, Baroness Vere left calls to reduce APD and ruled out a further review, stating, “we just looked at Air Passenger Duty so that we won’t be looking at it again.”
Recent UK APD ranges from £6.50 ($7.70) on a domestic, economy class ticket to £191 ($227) on a long-haul, business, or 1st-class ticket. An even higher rate now applies to the majority of private jet flights.
UK Government
Baroness Vere also took the chance to outline the UK Government’s commitment to sustainable aviation fuel (SAF), confirming that by 2025, there would be 5 new SAF plants under construction in the UK.
However, others at the conference did not believe that this was going far enough. CEO of Virgin Atlantic, Shai Weiss, criticized the pace of sustainable aviation fuel (SAF) innovation in the UK, saying,
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Sustainable aviation fuel
“The UK Government has targeted 5 plants by 2025, but at the end of December 2022, there is not a single plant that has reached final investment decision. I fear that in 2025 we will be seeing most of our capacity for sustainable aviation fuel (SAF) arriving from abroad.”
Weiss went on to say that sustainable aviation fuel (SAF) investors were “still awaiting final details, or more probably, as is common in the UK, another consultation.”
When it arrives to investment in sustainable aviation fuel (SAF), the figures speak for themselves – the UK Government has so far pledged just £165 million ($195 million) to support sustainable aviation fuel (SAF) effects, compared to the $4.3 billion that has been promised in the US.
With no changes to APD on the horizon, where will the money needed for vital further SAF developments come from? Baroness Vere raised the question at the Airlines 2022 conference, stating,
“I think there will have to be some grown-up conversations about whether the industry pays, do the traveling public pay, or does the taxpayer revenue.”
During her time at the conference, Baroness Vere also touched upon the challenges passengers faced this summer and her desire to improve passengers’ protection as a result. Widespread disruption was seen throughout the UK, in particular for passengers with reduced mobility (PRMs), with employee shortages blamed for much of the problems.
Countries across Europe and North America faced similar problems, with many airlines now running large-scale recruitment campaigns to confirm they have enough employees to cope with the expected further boost in travel demand next summer 2023. For example, German flag carrier Lufthansa is seeking 20,000 new employees.
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