What impact will the UK Budget have on aviation?
November 27, 2025
The UK aviation sector is evaluating the implications of this week’s Budget, which confirmed future increases to Air Passenger Duty (APD) and did not introduce new financial measures related to pilot training.
The announcements by Chancellor Rachel Reeves have prompted a mixed response across aviation industry groups.
UK Budget raises Air Passenger Duty
Under the Budget plans, APD will rise from April 2027 in line with inflation. As the duty forms part of the cost of each airline ticket, carriers say the adjustment is likely to result in higher fares on some routes.
The higher rate will also cover private jets over 5.7 tonnes.
“Extending the scope of the higher rate ensures the tax is applied consistently and that those who can afford to fly privately make a fair contribution alongside commercial air passengers,” Reeves said.
APD is already due to rise from £13 to £15 on short-haul economy fares from April. Long-haul and premium cabins will see higher increases.
Aviation industry responds to increased charges
Clive Wratten, chief executive at Business Travel Association, was quoted by Travel Weekly as saying: “This Budget confirms a series of new costs for those who travel for work – costs that risk undermining growth at the very moment the UK economy needs it most.
“The uprating of standard Air Passenger Duty is frankly huge: £4.195 billion was collected in 2024-5, and adding another 3.6% to that will add further pressure to everyday business travellers.
“APD is not simply a passenger charge; it is a tax on global connectivity.”
The magazine also quoted Dan Owens, chief executive at Belfast International Airport, who said: “For a Chancellor and government that talks about growth, today’s Budget will likely damage the UK’s tourism and aviation sector with its increase in Air Passenger Duty.
“As an island off an island, Northern Ireland needs air travel, as we do not have the option of rail connectivity that the rest of the UK has.
“This is an additional tax on air travel that the Irish Republic does not have, and therefore it makes Northern Ireland less attractive to airlines considering introducing new routes. This is a harmful tax that suffocates economic growth.”
UK Budget contains no support for pilot training
Pilot organisations have highlighted the continued challenge of training affordability, which was not addressed in the Budget.
The cost of qualifying as a commercial pilot can exceed £100,000, and industry bodies have long raised concerns that financial barriers may limit the pipeline of new entrants.
While the sector has called for a review of training finance options, no new support schemes were announced in this Budget.
The British Airline Pilots’ Association (BALPA) has voiced strong criticism of Chancellor Rachel Reeves’ Budget, describing it as “bad news for the aviation industry”.
BALPA’s Director for Strategy and Reform, Alice Sorby, said: “Firstly, the Chancellor has ignored calls from BALPA – the voice of airline pilots – and the industry and announced plans to increase Air Passenger Duty in line with RPI from April 2027. Bad news for passengers, especially families going on holiday, who now face increased ticket prices.
“But it’s even more bad news for young people considering a career as a pilot. Rachel Reeves has missed an opportunity to deliver any measures that will make their eye-watering training costs more affordable. This simply isn’t good enough.
“Most people don’t have the means to cover £100,000 for training without a guaranteed job at the end. Too many who have the skills and ambition are giving up on their dreams of flying, and the UK is losing out as a result.
“If the Government wants to drive economic growth through expanding Heathrow, it needs to ensure we have the right skills to fill the new jobs the airport will create. The new runway will deliver 276,000 new flights to the UK every year. We want to see UK-trained pilots in the cockpits of those flights, and Rachel Reeves needs to make pilot training more affordable to achieve this.”
Assessing the impact on aviation as a whole
Business-travel and tourism representatives have also assessed the APD changes in the context of broader travel patterns.
While the tax rise could place additional pressure on business-travel budgets, economic conditions and corporate priorities will likely remain the dominant factors influencing demand.
For passengers, the overall impact will depend on how airlines price their services and how travellers respond to cost changes across both short-haul and long-haul markets.
Construction and engineering bodies reacted positively to the Budget and the focus on building new pieces of critical infrastructure, such as airports.
The chancellor used the Budget to reconfirm that the government is making “rapid progress” in enabling the delivery of an operational third runway at Heathrow by 2035.
In October, the Department for Transport launched a review of the Airports National Policy Statement (ANPS) and this week identified the scheme promoted by Heathrow Airport as the scheme to take forward to inform the ongoing review of the ANPS.
The government will consult on any amendments to the ANPS by July 2026. Reeves said the Heathrow expansion will be entirely privately financed, with no cost to the taxpayer.
She also mentioned the recent approval Gatwick has won for its second, northern runway.
Featured image: CMAC
