New UK Report Encourages More Flexible Regulations On Domestic Routes

The UK government should amend air transport regulations to allow subsidized routes between UK regions, rather than—as is the case currently—a subsidized route having to touch London, according to a new report.   

The recommendation was one of a number of suggested changes presented in the final report of the Union Connectivity Review, which seeks to chart a way forward for transport services linking England, Scotland, Wales and Northern Ireland. The report was organized by the UK Department for Transport.  

The Union of Connectivity Review also suggested halving the much-criticized UK Air Passenger Duty to prevent domestic passengers from being hit twice by the tax on both legs of an internal UK journey. And the report urges the government to intervene in the assignment of slots at London airports to ensure more are allocated to domestic services.  

“Domestic aviation is particularly important for Northern Ireland and the more northern regions of Scotland and is also key for connecting to international travel,” the report stated. “Domestic aviation has suffered from some significant challenges in recent years with the collapse of Flybe and Stobart Air creating real difficulties for people seeking to travel domestically in the UK.”   

The report continued: “This has been compounded by the COVID-19 pandemic, which has drastically reduced short-term demand for domestic flights, reducing the frequency of services and the number of routes and putting more airlines at risk of severe financial difficulties.”  

Of the UK’s top 10 passenger routes in 2019, six were from London airports to Scottish airports (routes that take a minimum of five hours to travel by rail), while three linked London with Northern Ireland. Only one–London to Manchester (MAN)–is a route entirely within England.   

The report “recognizes the need to support domestic routes for which there is not a suitable rail or road alternative, whilst balancing this with strategies to decarbonize the aviation sector and support the UK government’s climate ambitions.”  

Several routes in the UK that would not otherwise be commercially viable are subsidized under Public Service Obligation (PSO) routes, but current regulations mean that these are limited to services that touch one of the London airports. The Scottish and Welsh governments also have their own PSO routes to provide lifeline services for remote communities, typically on island groups.

Existing PSO routes are also limited to those exclusively operated by one airline, “which limits their extent, consumer choice and competition,” the Union of Connectivity report said.   

The report recommended: “Where journeys are too long to be reasonably taken by road or rail, the UK government should revise existing subsidy rules for domestic aviation to allow support for routes between different regions of the UK, rather than just to and from London, and to allow multiple airlines to serve a single route.”  

On APD, the UK government is already reviewing the tax rates. The report urged the administration to reduce the tax on routes that cannot reasonably be served by surface transport.

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