AOA responds to Budget

Commenting on the Chancellor’s Spring Budget 2024, the Chief Executive of the Airport Operators Association (AOA), the trade association for UK airports, Karen Dee said:

“While the Chancellor’s headline measures like the cut to National Insurance will get the most attention, this Budget was a missed opportunity for aviation. There was some positive news, confirming investment in advanced aerospace but bad news on Air Passenger Duty and no reinstatement of tax-free shopping.

“We will continue to work with the Department for Transport and HM Treasury, making the case for the importance of a stable, sustainable and affordable approach to aviation policy.

“This will ensure the sector is able to play its part in creating jobs, opening new markets for goods and services, and help people explore the world”

Tax-free shopping

The Chancellor decided not to reinstate tax-free shopping for international visitors in his Budget today. This has been a key recommendation of the aviation sector and would provide a much-needed boost to the economy.

Commenting on decision not to reinstate tax-free shopping, Karen Dee said:

“This is obviously a missed opportunity for the Chancellor, who could have sent a strong signal that the UK wants people to visit and spend their hard-earned money here.

“Tax-free shopping would benefit the whole country, creating jobs, increasing footfall on local high streets and boosting the economy.

“The UK, however, remains at a competitive disadvantage to our EU neighbours and international travellers will continue to spend their money elsewhere as a result.”

Increase in Air Passenger Duty

The Chancellor also announced that the rate of Air Passenger Duty (APD) for business and premium economy travellers would increase in today’s Budget.

Karen Dee commenting:

“It is disappointing to see the Chancellor increase Air Passenger Duty for business travellers, especially when data show this group is still to recover to 2019 levels.

“It is difficult to see how this squares with the government’s previous commitment not to increase aviation taxes.

“Business travellers are responsible for increasing foreign investment in the UK, for opening new markets for our goods and services, and creating jobs across the country.

“We should be encouraging them to come to the UK, making it easier for them to invest here, not putting yet more barriers in their way.”

Business rates

Most airports will see significant increases in the amount they pay in business rates from 2026 due to a revaluation. Commenting on this, Dee said:

“This is yet another burden put on airports at a time when they are still recovering balance sheets from the pandemic, when travel was shut down, and when they are making investments in massive capital projects like next generation security and decarbonisation.

“We will be working with the Chancellor, and with the next government, to ensure the cost of imposing such burdens on airports does not put the UK’s competitiveness and attractiveness to investors at risk.

“A rethink would ensure airports and aviation were able to invest and attract further investment, improve the UK’s global connectivity, drive the economy and create more jobs.”

Wider investment

“It is good that the Chancellor today confirmed the £200m of public-private investment as part of the enhanced Aerospace Technology Institute settlement. This will help UK aviation achieve it net zero carbon target by 2050 and will create jobs and innovative new technologies.

“The UK can lead the world and take advantage of a huge economic opportunity, creating green jobs, generating clean energy and attracting new investment. As part of the Sustainable Aviation coalition, AOA supports the Road-Map that lays out how, along with airspace modernisation, new, cleaner aircraft and airport vehicles, and green fuels we will deliver cleaner air travel.”