New UK Aviation Competitiveness Index

February 27th, 2026

Airlines UK, Airlines for America and AirportsUK jointly commissioned a new study to assess the impacts of present and future cost base pressures on the aviation sector and demonstrate these impacts through a hypothetical illustration of how they would affect the cost of travel if they were passed on in full to the consumer.

This included a new cross-country Aviation Competitiveness Index, which places the UK sixth out of eight countries assessed. You can find the key results summary here.

While the UK has real strengths – in skills, connectivity, and border efficiency – these are increasingly offset by a growing cost base including high aviation taxes, punitive business rates and a stricter near-term SAF Mandate, alongside a regulatory environment that constrains growth, including night-flight limits at major airports impacting both cargo and passenger flights.

Whilst not a prediction, modelling suggests that due to its more rapidly rising cost base the UK is on course to lose cost competitiveness. Externally imposed discretionary costs, such as SAF and passenger taxes – as opposed to mandatory costs like staff, navigation charges or conventional jet fuel – account for a rising proportion of ticket costs and the greatest share of projected cost growth affecting UK based airlines by 2031. This is reflected in the cost breakdown of future tickets, with examples modelled here for UK flights to Turkey and the United States.

For the wider economy, the consequences of the impact of higher costs on demand include billions less in tourist spending, exports, and investment (by 2031):

Over £4.3bn less spent by foreign leisure travellers and £500m less spending from business travellers
£3.5bn decrease in exports and £1.4bn decrease in FDI

This outcome is not inevitable, however avoiding it requires policy makers to recognise the impact of aviation’s rising cost base, and the need for steps to tackle it.