Airport Bosses Urge Government to Ease Business Rates Ahead of the Budget

LONDON — UK airport leaders are urging the government to address rising business rates and Air Passenger Duty (APD) ahead of the Budget on 28 October. They warn that higher costs and uncertainty over future tax rules could discourage investment in UK airports.

The issue dominated the AirportsUK Annual Conference in London on 14 October, where industry leaders called for a more predictable tax and regulatory framework. AirportsUK’s conference statement sets out the industry’s concerns.

Why Are UK Airports Concerned About Business Rates?

Business rates are a tax on commercial property, including airport facilities. For airports, the bill is linked to how profitable the airport is. After passenger numbers recovered strongly following the pandemic, the 2026 revaluation pushed many airports’ bills sharply higher.

Some regional airports face large increases. Manchester Airport’s bill was forecast to rise by around £4.2 million to £18.1 million in 2026, according to analysis by tax firm Ryan.

The government introduced relief to phase in the increases and is reviewing how airport rates are calculated. Airport leaders say the uncertainty over future valuations makes long-term investment harder to plan.

Baroness Ruby McGregor-Smith, chair of AirportsUK, said business rates were holding back investment in UK airports. She called on the government to match its commitment to economic growth with a tax and regulatory framework that encourages and rewards investment, and described aviation as one of the UK’s “genuine success stories”.

What Have Airport Leaders Said?

• Vincent Hodder, chief executive of Leeds Bradford Airport, highlighted the UK’s “huge cost issues”.

• Andrew Macmillan, chief strategy officer at Manchester Airports Group, suggested the Treasury sees aviation as a sector it can raise revenue from.

• Lucy Chadwick, partner at Global Infrastructure Partners, which owns Gatwick and Edinburgh airports, said rates had doubled even with relief in place, and that unpredictable taxes make long-term investment decisions harder.

• Parminder Kohli, chief executive of the Office for Investment, said stability is key to investor confidence.

Transport Secretary Heidi Alexander of the Department for Transport told delegates the government was listening on business rates, but said she couldn’t say more so close to the Budget.

What Are the Current Air Passenger Duty Rates?

APD is a tax on passengers flying from UK airports, and it’s included in your ticket price. The amount depends on how far you fly and your class of travel. The reduced rate applies to economy, and the standard rate to premium economy, business and first class.

Rates from 1 April 2026 to 31 March 2027:

Rates from 1 April 2027:

The 2027 rates are already set. The Budget on 28 October could add further changes. See HMRC’s APD rates guidance for full details, including exemptions.

Could Rising Airport Costs Affect Flight Prices?

• Fares could come under pressure. Airports may recover higher costs through charges to airlines, which can feed into ticket prices. How much reaches passengers depends on airlines and the market.

• APD adds up for families. A family of four flying economy to a Band B destination such as Dubai pays £408 in APD on the outbound flight alone. Children under 16 flying in economy are exempt.

• Compare the full price. When booking 2027 travel, check the total fare, baggage allowance and other charges rather than the headline price.

• Watch the Budget. The 28 October Budget could bring clarity on business rates and aviation taxes. Announcements will be published by HM Treasury.

What Happens Next?

Airport leaders are looking to the Budget for clarity on business rates and the wider tax framework. They argue that predictable rules would make it easier to invest in airport infrastructure and keep UK aviation competitive.

For travellers, no fare increases have been confirmed as a result of the conference. We’ll cover any Budget changes that affect your flights.

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