UK"s New Aviation Minister Says No APD Reform, More To Be Done On SAF

Air Passenger Duty remains unchanged – what impact will this have on investment in sustainable aviation fuel?


Photo: London Heathrow Airport

The UK’s new Minister for Aviation, Maritime and Security has outlined the country’s stance on a number of key issues affecting the industry, including Air Passenger Duty (APD) and sustainable aviation fuel (SAF).

Speaking at the Airlines 2022 conference in London on November 21st, Baroness Vere rejected calls to reduce APD and ruled out a further review, saying, “we just looked at Air Passenger Duty, so we won’t be looking at it again.”

Read more: Aviation headwinds are business as usual

Current UK APD ranges from £6.50 (USD 7.70) on a domestic, economy class ticket up to £191 (USD 227) on a long-haul, business, or first class ticket. An even higher rate now applies to the majority of private jet flights.

Yesterday I spoke about the big issues facing the aviation sector at the @airlines_UK annual conference From our #JetZero decarbonisation strategy to the #GenerationAviation skills campaign, I will work with the sector as Aviation Minister to help it achieve its goals. pic.twitter.com/yipcpl9Wgj — Charlotte Vere (@CharlotteV) November 22, 2022Greater investment in SAF is needed

Baroness Vere also took the opportunity to outline the UK Government’s commitment to sustainable aviation fuel (SAF), confirming that by 2025, there would be five 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 SAF innovation in the UK, stating,

“The UK has targeted five plants by 2025, but at the end of 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 SAF coming from abroad.”

Weiss went on to say that SAF investors were “still awaiting final details, or more likely, as is common in the UK, another consultation.”

When it comes to investment in SAF, the figures speak for themselves – the UK Government has so far pledged just £165 million (USD 195 million) to support SAF developments, compared to the USD 4.3 billion that has been promised in the US.

Find out the latest on sustainability in the aviation industry here.

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, saying,

“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 pay.”

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Improvements in consumer protection

During her time at the conference, Baroness Vere also touched upon the challenges passengers faced this summer and her desire to improve consumer protection as a result. Widespread disruption was seen throughout the UK, in particular for passengers with reduced mobility (PRMs), with staff shortages blamed for much of the problems.

Countries across Europe and North America faced similar issues, with many airlines now running large-scale recruitment campaigns to ensure they have enough staff to cope with the expected further increase in travel demand next summer. German flag carrier Lufthansa, for example, is currently seeking 20,000 new employees.