Rachel Reeves’s Heathrow Expansion Plan May Raise Ticket Prices by £40

Rachel Reeves’s Heathrow Expansion Plan May Raise Ticket Prices by £40.

Treasury analysis indicates that ticket prices are anticipated to rise universally, with no intentions for frequent flyers to bear a greater share of the expenses.

Rachel Reeves's initiative to expand Heathrow Airport may result in an increase of £40 in airline ticket prices, as indicated by the Treasury's own analysis.

Make Sure You Check Skyscanner For The Cheapest Flights!

The Chancellor's strategy to reduce carbon emissions associated with a larger Heathrow includes the implementation of sustainable aviation fuels. However, experts have expressed concerns that these fuels are costly and may not be produced at the necessary scale to support aviation growth.

A cost-benefit analysis from the Treasury, reviewed by the Guardian, reveals that the use of sustainable fuels could raise the price of a single economy airline ticket by £37.80 by the year 2040. There are currently no measures in place to ensure that frequent flyers or passengers in first or business class bear a larger share of the costs, leading to an anticipated increase in ticket prices for all travelers.

The Chancellor formulated these climate strategies in response to critiques from Energy Secretary Ed Miliband, who reportedly cautioned cabinet members that expanding airports could jeopardize the UK's compliance with its legally mandated carbon budget, which is essential for achieving the 2050 net zero emissions goal. A senior source noted that Reeves has been particularly enthusiastic about the Heathrow expansion since the summer, exerting pressure on Miliband and former Transport Secretary Louise Haigh.

Several cabinet ministers have expressed their support for the chancellor's proposal to incorporate plans for the use of sustainable fuels. However, there are concerns among others that this approach may prioritize immediate economic growth at the expense of addressing the climate crisis, which poses a significant risk to economies due to the increasing frequency of natural disasters that can devastate infrastructure, homes, and food supplies.

During a press conference at the World Economic Forum in Davos on Wednesday, Reeves articulated her belief that economic growth during this parliamentary term takes precedence over achieving net zero emissions. When asked to prioritize between the two objectives, she stated, “If [growth is] the number one mission, it’s obviously the most important thing.”

There exists a degree of skepticism within Whitehall and beyond regarding the extent to which airport expansion would contribute to economic growth. The Department for Transport, led by Haigh, commissioned a study to assess the economic impact of a third runway at Heathrow.

The findings suggested that any potential increase in economic growth would not be realized immediately, as the airport is not expected to accommodate additional flights until 2040. Furthermore, the most significant increase in passenger numbers is anticipated to stem from transit passengers, who do not incur air passenger duty.

RELATED: Where to Get the Cheapest Flights: Your Ultimate Guide to Budget Travel.

Reeves is reported to have informed cabinet members that increasing the required usage of sustainable fuels by airlines will compensate for any emissions produced. However, Alethea Warrington, the aviation director at the climate charity Possible, stated: “For the government to try to claim that so-called ‘sustainable aviation fuels’ can undo the climate harm caused by new runways is a fantasy. The supply of genuinely sustainable fuels for aviation will be extremely small, and nowhere close to sufficient to supply even aviation’s current demand, let alone new runways. Any higher costs should fall on frequent flyers and those who can afford to fly in first class, rather than on the majority of people, who already fly rarely, if at all.”

The analysis conducted by the Treasury indicates that 75% of the expenses associated with the utilization of more sustainable aviation fuel (SAF) will ultimately be transferred to consumers. The officials responsible for drafting the document acknowledged this reality, noting that the current prices of plane tickets are insufficiently high: “Ticket prices do not reflect the full social cost of flying and are not sufficiently incentivising the uptake of decarbonisation solutions such as SAF.”

Currently, aircraft rely on kerosene, a fuel that significantly contributes to pollution. The adoption of biofuels derived from feedstocks, cooking oils, or crops has the potential to decrease emissions by as much as 80%. However, this approach necessitates extensive land use and diverts agricultural resources from food production to fuel generation.

Recent findings from the Royal Society indicate that the United Kingdom would need to allocate at least half of its agricultural land or more than twice its current renewable electricity output to produce sufficient aviation fuel to achieve its net-zero flying goals. Last year, Air New Zealand abandoned its 2030 decarbonization objective, citing challenges in obtaining sustainable jet fuel.

Alex Chapman, a senior economist at the New Economics Foundation, said: “We need emission reductions across the economy now and aviation cannot be given a get-out-of-jail-free card on the basis of unsustainable fuels and shaky arguments of growth. Instead of unsustainable aviation fuels, the government should look to managing the demand for flying through ideas such as a frequent flyer levy.”

A majority of cabinet ministers who had previously opposed the expansion of airports are now believed to be willing to endorse the growth of the four London airports. Among those who have voted against expansion in the past are seven cabinet ministers, including Prime Minister Keir Starmer, as well as Environment Secretary Steve Reed and Darren Jones, the Chief Secretary to the Treasury.

Rachel Reeves’s push for Heathrow expansion and reliance on sustainable aviation fuels (SAF) faces significant skepticism. The projected £40 increase in ticket prices highlights the financial burden on consumers, with no provisions for frequent flyers or premium travelers to bear a larger share. Critics argue SAF’s limited scalability and environmental trade-offs, such as land use for fuel crops, undermine its feasibility.

RELATED: Rachel Reeves Net Worth: How She Built A $2 Million Fortune In 2025.

While the Chancellor emphasizes economic growth, experts question whether the benefits outweigh the environmental costs and potential harm to climate goals. Without clear strategies to manage demand or distribute costs equitably, the proposal risks prioritizing short-term gains over sustainability.