Air fares will soar again if fuel costs stay high, British Airways’ chief executive Sean Doyle has warned, as he urged a rethink of aviation taxes that he says are stunting UK growth.
Speaking at the International Air Transport Association annual meeting in Rio, Doyle said there was “no getting away from” the fact that “if fuel goes up, fares have to go up”. Jet fuel prices have surged since the Iran war began in February, adding further pressure on an industry already saddled with some of the highest aviation taxes in the world.
“BA's Sean Doyle warns UK's high aviation taxes and rising fuel costs are deterring tourists and stunting economic growth.”
Doyle said the UK was falling behind rivals such as Japan, France and Germany in attracting inbound tourists. The government has set a target of 50 million international visitors a year by 2030, up from about 40 million now. “Unless we address the affordability issue we’re not going to get there,” he warned. “If you look at France and Spain, they’ve absolutely shot past us.”
Air passenger duty was raised by 15% in April – now £8 per passenger on domestic flights, £15 for European departures and up to £253 for premium economy seats on long-haul routes. For a family of five, Doyle said, the cost is a “huge penalty compared to what you pay in Europe”.
But the problem is not just the cost of flying in and out of the UK, he argued. Rail ticketing is also a barrier. “The other thing is the lack of options to travel around the UK, because of things like rail networks which are fragmented, the lack of [rail] passes – the lack of a kind of curation of tourists is a big issue.” As a result, tourism is concentrated in places like London and Edinburgh, while the rest of the economy misses out.
Doyle also warned that the government’s backing for a third runway at Heathrow could backfire if the airport develops its own scheme at the cost of airlines paying higher charges. “What’s the biggest challenge in the country at the minute? It’s growth. And what should policy be doing? It should be unblocking growth. If you want to promote tourism and aviation … the last thing you do to encourage that expansion is put the cost of it up,” he said.