New UK electronic travel authorisation could cost £5bn in annual losses

Posted by Admin September 16, 2024 Travel

Proposed by the former Conservative administration and now adopted by the new Labour government, the Electronic Travel Authorisation (ETA) is an online document that, from 2025, must be applied for, approved and paid for, by nearly all foreign visitors prior to travel to the UK.

While Migration and Citizenship Minister, Seema Malhotra, has said the scheme is part of the rollout of digitisation that will provide “a smooth experience” for travellers to the UK, the inclusion of airside passengers that are merely transiting a UK hub before travelling on elsewhere is a source of major concern.

90,000 passengers switched to other hubs in 2024

The negative impact of the ETA on UK hubs has already caused complaints. Even though the scheme currently only applies to six Gulf nations (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), Heathrow Airport officials were already denouncing its effect back in April 2024, blaming it for the loss of 90,000 would-be passengers from those countries who, it said, had chosen to use other airports in the few months since the scheme began. Heathrow competitors such as Amsterdam, Frankfurt, Istanbul, Paris CDG, Dubai and Singapore do not require a special visa waiver or fee to be paid and passengers transiting only need to register their final destination.

Now, the Independent has confirmed that “initial figures for Gulf nationals suggest one in six prospective transit passengers has switched from Heathrow to a different hub because of the ETA demand.”

“Serious financial damage” ahead

Extrapolating these figures out to model what might happen when the scheme is widened to apply to US and EU citizens as well as others, the Independent’s analysis shows that ETAs “will cause serious financial damage for Heathrow airport and its retailers, as well as UK airlines.”

In detail, the outlet says if other flyers follow the pattern seen with the Gulf nations, Heathrow could lose a colossal four million passengers, with British Airways and Virgin Atlantic worst affected by falling profitability as transit passengers choose other airlines.

The Star Alliance carriers (Lufthansa, United, Air Canada and Singapore Airlines) will also suffer, the analysis showed, as well as a number of airport shops and hospitality businesses which will lose out on footfall and spending from passengers killing time with retail therapy, food and drink as they wait for connecting flights.

Losses could be up to £5bn annually

While The Independent notes the challenges in accurately forecasting such losses, its estimate for the loss to the UK economy is “in the range from £2.5bn to £5bn annually, counting lost revenue to airlines and spending in airport shops.”

Apparently keen to maintain positive communications on the subject, an airport spokesperson told the newspaper the hub wants to “work in partnership with Home Office ministers over the next few months to address this issue” and insisted “We don’t disagree with the long-term roll-out of the scheme, but including airside transit passengers will make the UK less competitive and harm economic growth.”