Response to Government support for a UK SAF revenue certainty mechanism

Commenting on the announcement today by Government that it will introduce a revenue certainty scheme to support UK SAF production, Tim Alderslade, CEO of Airlines UK, the industry body representing UK-registered carriers, said:

“Aviation connectivity is critical to the success of the UK and SAF is an important technology in our net zero arsenal. It is a proven way of driving aviation emissions down – particularly for long-haul – and will make the biggest contribution to aviation decarbonisation to 2050. Industry has long been calling for a policy that directly incentivises investment in the initial UK SAF plants.

 “We need the right mechanism though – with Government acting as the underwriter – and UK airlines look forward to engaging in the consultation and agreeing the details of a scheme as quickly as possible, to ensure we meet the Government commitment of having 5 plants under construction by 2025. 

“Ultimately, the end goal must be more and cheaper SAF, to avoid spiralling price increases for passengers and to ensure we meet the SAF mandate, without relying wholly on imports or suppliers simply buying out of their obligations. This means Government also introducing incentives to close the price gap between SAF and fossil jet fuel – as they have done in the US and EU – and ensuring airlines have access to enough HEFA-based SAF – the only commercially available SAF today – until enough second generation fuel can be produced by domestic plants here in the UK.”

New report reveals £24bn contribution of UK based airlines to the UK economy including over 1 million jobs and vital connectivity

• New report has revealed that each UK-based aircraft directly supports 400 jobs and £27m UK Gross Added Value (GVA) – compared to 100 jobs and £7m GVA where overseas airlines operate UK routes
• Every two additional departing flights added by a based aircraft creates another job in the wider UK economy
• UK airlines transport around 20 million overseas visitors per year to the UK who spend £14 billion – taking total UK jobs supported by UK airlines to over 1 million
• Benefit is expected to grow by generating £111 billion for the UK economy and £41 billion in GVA by 2050

As the UK enjoys its busiest summer travel period since the pandemic, a new report has revealed the vital importance of UK-based airlines to UK jobs and growth. The new report by Steer, commissioned by Airlines UK, examining the strategic and economic contribution of UK-based airlines to the UK economy, has shown that having airlines basing themselves in the UK matters significantly for job creation, UK connectivity and future economic growth potential.

Read the full report here.

The start of the UK school holidays saw the busiest travel weekend since before the pandemic with over 2 million Brits heading overseas, while UK Border Force expects over 34 million air arrivals coming through the UK over the coming months. Most of these travellers are carried onboard airlines with bases at UK airports. This new research has shown that UK-based aircraft generate four times the jobs and economic value for the UK, compared to an aircraft serving the UK based at an airport overseas.

Moreover, as UK-based aircraft predominantly serve the routes from the UK’s regions and cities outside the South-East – where an overseas carrier is unlikely to step in – UK-based airlines provide UK travellers, businesses and exporters with essential connectivity and choice helping keep costs for consumers and businesses lower.

Key findings from the report also show:

• UK airlines who are members of Airlines UK have over 900 UK-based aircraft located and maintained in facilities across the country, employing local people directly as well as supporting jobs within supply chains

• UK-based aircraft provide the significant majority of the UK’s unique international connectivity (73%) and serve 85% of international routes and all domestic routes

• Airlines with a UK operating certificate carry nearly 800,000 tonnes of air cargo annually – contributing to the 40% of the UK’s non-EU trade by value carried onboard aircraft

• By 2050, the economic benefits of UK airlines are expected to grow and, by 2050, generate £111 billion of output and £41 billion of GVA

As well as the significant economic benefits to the UK of a growing airline sector, the report also highlights the need for a competitive aviation environment in an increasingly global market, especially where countries are supporting their domestic aviation industries to meet the costs of vital decarbonisation. If the share of passengers carried by airlines based in the UK fell 10% by 2050, the UK would lose tens of thousands of jobs and around £5bn in GVA that would otherwise be benefitting local communities.

Tim Alderslade, CEO of Airlines UK, said: “As we hit peak summer travel, this report showcases the huge value that based airlines bring to the whole of the UK, not just for leisure travel but also for UK businesses and companies trading overseas. This highlights the importance of keeping the UK a competitive place to base and grow an airline and, critically, the vital role of effective partnerships between Government and our sector on our path to net zero”.  

Aviation Minister, Baroness Vere, said: “As this report recognises, the UK is a global leader in aviation connectivity and innovation, supporting jobs and businesses across the country.

“The Government is committed to working in partnership with UK airlines and the wider industry to seize the opportunities that aviation decarbonisation can bring, through the Jet Zero Council and funding commitments such as £180 million to support the development of the UK SAF industry.”

Johan Lundgren, CEO, easyJet, commented: “The significant value of airlines like easyJet, with 178 aircraft based in the UK, is absolutely clear. Not only do we enable UK trade around the globe and bring visitors into the UK, but also ensure hard-working families can connect with friends and family, do business and enjoy well deserved holidays across Europe.

“The UK is easyJet’s largest market with more than half of our passengers flying to and from UK airports and over 10,000 people employed across the country. We continue to invest in the UK with a new three aircraft base in Birmingham opening next year and the benefits of this couldn’t be clearer with the creation of around 100 direct and many more indirect jobs and this also demonstrates our confidence in the resilient strength of demand for travel and connectivity in the UK.

“Decarbonising aviation is a major undertaking for which the whole sector is coming together and government and policy support is vital to help us to ensure a sustainable future so these benefits continue to be realised for the UK economy and society.”

Sean Doyle, Chairman and CEO, British Airways, said: “As we experience our busiest summer travel period since 2019, the report shows the value that UK airlines bring to the economy and how much our island nation needs the connectivity that airlines offer. With more than 250 aircraft based in the UK, British Airways makes a uniquely important contribution to the jobs and prosperity that aviation delivers.

“While we must all work together to ensure the aviation industry remains competitive, we must do so with sustainability at the heart of this. We must continue to work closely with industry and Government to effectively decarbonise our industry. This includes making the UK a competitive place to develop sustainable aviation fuels (SAF) and getting the right policy support in place to produce more SAF right here in the UK, to ensure a more sustainable future for aviation.”

Shai Weiss, CEO, Virgin Atlantic, said: “UK airlines, including Virgin Atlantic, enable essential connectivity and trade that creates vital jobs and economic growth.”

“It’s crucial that UK Government acts on its behalf and sees UK aviation as a strategic asset, with policy that supports a thriving and globally competitive aviation sector, including an affordable hub airport at London Heathrow. UK leadership in decarbonisation can only be achieved through radical collaboration between industry and Government to create the right conditions for accessible Sustainable Aviation Fuel at scale, one of the best levers available to achieve net zero 2050 ambitions and unlock green growth.”

UK airlines respond to Government Net Zero Plan

Commenting on the publication of the Government’s Net Zero Plan, Tim Alderslade, CEO of Airlines UK, the industry body representing UK-registered carriers, said:  

“The SAF mandate consultation is extremely positive and will help to incentivise a market in SAF production. Likewise, we welcome the second round of the Advanced Fuels Fund which will assist with much of the planning and construction work for the initial SAF plants here in the UK.

“That said, we have long been clear that whilst a mandate creates demand for SAF it does not provide revenue certainty for producers in what is still a nascent industry. Airlines will pick up SAF as required by Government – either at home or through imports – but existing policy will not provide certainty to investors who want to build here in the UK and produce SAF locally.

“Without a clear commitment to a revenue certainty mechanism, without the need for public subsidy, in the coming days we risk this investment – and the tens of thousands of jobs and huge export potential from a homegrown SAF industry – going to the US, who announced their own support for SAF production months ago. We look forward to working with HM Treasury and the Department for Transport at pace to agree ways of ensuring this opportunity isn’t lost.”

UK airlines respond to appointment of new Transport Secretary

Commenting on the appointment of Anne-Marie Trevelyan MP as the new Secretary of State for Transport, Tim Alderslade, CEO of Airlines UK, the industry body representing UK-registered carriers, said:

“UK airlines congratulate Liz Truss on becoming Prime Minister and Anne-Marie Trevelyan on her appointment as Secretary of State for Transport. The UK is a proud aviation nation, whose network of domestic and international air links – the third largest globally – is vital to our shared prosperity, connecting people, businesses and goods and facilitating the economic activity that will be the catalyst for long-term growth. Aviation is truly a sector where the UK can lead the world.

“The potential for our sector is vast. Through innovation and the mutual endeavour of our engineers and manufacturing base, we are meeting the challenge of decarbonising air travel, partnering with Government to create thousands of highly skilled jobs across the UK, greater energy security and valuable export potential for our companies. There is more still to do – from completing airspace modernisation to developing a thriving UK SAF industry – but the foundation is there for the UK to be a jet zero pioneer.

“Delivering on this agenda will allow UK aviation and its base carriers to continue doing what they do best. Providing more choice and competition for families and consumers whilst enabling the connectivity that will link the UK and its businesses to all parts of the world. We look forward to furthering this work.”

UK airlines respond to Jet Zero Strategy launch

Commenting on the publication of the Government’s Jet Zero Strategy, Tim Alderslade, CEO of Airlines UK, the industry body representing UK-registered carriers, said:

“UK airlines welcome the Jet Zero Strategy, which must act as a launchpad for the vital action needed this decade and beyond to deliver net zero aviation by 2050. Flying is not the enemy – carbon is – and this strategy demonstrates that a sustainable future for aviation is possible through the development of new, zero emission technologies like hydrogen, upscaling and commercialising the use of sustainable aviation fuels – made here in the UK – developing carbon markets and greenhouse gas removal technologies, and completing airspace modernisation – allowing us to enjoy all the good things aviation can offer whilst driving down its environmental impact.

“More progress is required to get us to that point, though, in particular on SAF. The commitment to seeing the initial handful of SAF plants under construction by 2025 is hugely welcome, and we know the proposed mandate will drive demand from airlines in what is a proven technology. The challenge now is to commercialise this nascent industry, and we look forward to working with Government this year to see if further interventions are required to stimulate investment in UK SAF, in particular by ensuring a level of price stability that can attract new entrants into the market.”

Airlines respond to CAA Heathrow Airport announcement – “a positive announcement that brings down the cost of using the airport for consumers”

Commenting on the announcement today from the Civil Aviation Authority on Heathrow Airport passenger charges, Tim Alderslade, CEO of Airlines UK, the industry body representing UK-registered carriers, said:

“This is a positive announcement that brings down the cost of using the airport for consumers, taking into account the robust recovery we’ve seen for air travel since the pandemic. Charges are, though, still too high at Heathrow – the most expensive airport in the world – and so the CAA can and should go further to bring it into line with other European hubs. This is fundamental to the competitiveness of all of UK aviation as we emerge out of the worse crisis in its history.”

UK Airlines Response to Aviation Strategy Publication

Tim Alderslade, CEO of Airlines UK, said:

“There can be no ‘Global Britain’ without the air connectivity that UK airlines deliver. We welcome the publication of this strategy and look forward to working with Ministers to ensure UK aviation and its based carriers receive the support they need to recover and prosper. This means recognising the critical role of UK-registered airlines in connecting us to the world, and that the domestic and international routes they provide are strategic assets for the UK, delivering tens of thousands of jobs across the country, export opportunities and supporting inward investment and tourism.

“We look forward to a laser-like focus from government on the levers it can pull to make the UK a truly competitive, global aviation hub and a recognition that sustainable air travel – committed to net zero emissions – can be a force for good for mobility, livelihoods, society as a whole and the economy for years to come.”

Response to first net zero transatlantic flight announcement

In response to the Transport Secretary’s announcement of plans for the first net zero transatlantic flight, Tim Alderslade, CEO of Airlines UK said:

“UK airlines strongly support the development of a UK Sustainable Aviation Fuel industry, which will play a vital role in helping our sector deliver net zero emissions by 2050, as we are committed to doing. This announcement will provide additional momentum to achieving this and, alongside the recent £180m in Treasury support for the development of new UK SAF plants, demonstrates the commitment of Government to making SAF a key part of the decarbonisation of aviation. We now need to turbocharge production in order to build the initial 3 SAF plants by 2025 and UK airlines have shown real commitment to making this happen with our partnerships with Phillips 66, Velocys and LanzaTech.

“We look forward to working with Ministers through the Jet Zero Council to continue to explore mechanisms to attract the required private investment – in addition to a planned mandate – so we can help deliver the Government’s 10% SAF uptake goal by 2030.”

Airlines UK response to the Transport Select Committee report on aviation and the pandemic

Tim Alderslade, CEO of Airlines UK, said:

“We always said there was huge pent-up demand for travel and that’s been demonstrated by the surge in bookings we’ve seen since the Covid restrictions were removed. This summer should be a bumper one and for many routes we’re seeing demand above where we were in 2019. But we can’t lose sight of the fact the sector has been through its worst ever crisis and it will take several years to deal with the debt airlines had to take on to make it through the pandemic with no passengers.

“The Government is about to publish an Aviation Strategy and we need it to focus ruthlessly on the areas where they can really make a difference, including setting the policy framework that will allow the sector to introduce and invest in sustainable aviation fuels at scale, and modernising the UK’s airspace as quickly as possible to further progress our net zero commitments. On so many of the Government’s big set-piece policy ambitions – Global Britain, energy independence, investment in skills and the green jobs of the future – aviation can play its part, and begin the process of putting the past two years behind us.”

Airlines respond to removal of remaining Covid travel restrictions – “The UK travel sector is back”

Commenting on the announcement today on the removal of remaining Covid travel restrictions, Tim Alderslade, CEO of Airlines UK, the industry body representing UK-registered carriers, said:  

“Today’s announcement sends a clear message to the world – the UK travel sector is back. With travellers returning to the UK no longer burdened by unnecessary forms and testing requirements, we can now look forward to the return to pre-Covid normality throughout the travel experience. We’re grateful for the timing of the announcement as we prepare to welcome back passengers this Easter and Summer, for which we know there is huge pent-up demand, and for the UK’s leadership in being the first major aviation market to remove all remaining restrictions. The time to return to the skies – to enjoy all that makes aviation and international travel great, for families and businesses – is now.”