On January 20, 2025, a new proposal from the British government sparked a strong reaction within the airline industry. Indeed, the United Kingdom Home Office has announced its intention toincrease the price of electronic travel authorizations (ETA) by 60%a system already in place for non-European travelers, but which will now be extended to European citizens. Currently set at 10 pounds (around 12 euros), this price would increase to 16 pounds (around 19 euros). This increase, which could come into force in the coming months, does not leave airlines indifferent.
The International Air Transport Association (IATA), which represents the world’s major airlines, strongly opposed the proposal. According to Willie Walsh, its chief executive, this increase would not only be unwelcome, but counterproductive to the UK’s competitiveness as a tourist destination. The 6 pound increase represents an additional cost for travelers before they even arrive on British soil, a barrier for future tourists.
Potentially serious economic consequences
IATA highlights a paradox in this measure: the British government, which is committed to increase tourist arrivals by 30% by 2030 to reach 50 million visitors per year, could compromise its own economic ambitions by increasing the bill for foreign travelers. The United Kingdom, which already receives substantial revenues from tourist flows, could be penalized by this decision.
Gatwick Airport, along with many other major UK hubs, are among the main arrival hubs for international travelers. According to IATA estimates, aviation and tourism in the UK supports around 1.6 million jobs and contributes almost $160 billion to gross domestic product (GDP). The increase in ETA fees could have negative repercussions on these sectors, leading to a reduction in the number of touristswhich could affect the profitability of many players in the tourism market.
-Increased competition
Beyond the immediate impact on the UK’s competitiveness, IATA highlights another major problem: increasing competition from other European destinations. The European Union’s Electronic Travel Authorization System (ETIAS), which is expected to come into force in the coming months, offers a cheaper and more advantageous alternative. Priced at 7 euros, around a third of the UK’s planned rate, the ETIAS will also offer a one-year validity, while the UK ETA would only be valid for a shorter period. This difference in cost and duration could encourage many travelers to choose the EU over the UK.
Strong impact of the tax on air passengers
This measure on the ETA comes in a context where the United Kingdom already applies a tax on air passengers (Air Passenger Duty, or ADP), one of the highest in the world. The Ministry of Finance announced a further increase in this taxscheduled for April 2025, which only increases the overall cost for travelers even more. The combination of these two increases (the ETA and the ADP) could make the British destination less attractive for tourists, in particular those from price-sensitive markets, such as those from Europe.
The call for a review of tax policies
Airlines, increasingly worried, are calling on the British government to rethink its tax policies on tourism and air transport. For them, making the UK more competitive is paramount, especially at a time when travelers have a range of options. By setting the bar too high in terms of costs, the country risks being overtaken by other destinations which rely on attractive prices to attract visitors.
