British Airways has announced the return of short-haul flights from Gatwick Airport after resolving a row with a pilots’ union.
The UK’s largest international airline will resume trips to 35 destinations from March 2022, including Ibiza, Milan, Faro, Malaga and Tenerife.
Operations will start with three Airbus SE aircraft, with plans to ramp up to 18 planes by the end of May.
The airline had to overcome union opposition to its plan to resume short-haul operations at the airport, which have been suspended since early 2020.
In September, members of the British Airline Pilots’ Association rejected proposals for BA to run short-haul flights from Gatwick, London’s second-largest airport.
After negotiations, pilots voted in favour of a new subsidiary in October after IAG SA-owned BA said it would scrap European operations at Gatwick if it could not cut expenses.
BA contended that a new unit that could better compete with low-cost rivals such as easyJet and Wizz Air was the only way forward at the airport south of London after years of losing money.
The airline said it has already started a “significant recruitment campaign” to hire staff for the new subsidiary — BA Euroflyer.
Announcing the decision on Tuesday, BA said the flights would be operated by the new subsidiary. While planes will continue to carry British Airways branding, the new airline will exist as an “entirely separate entity”, it said.
“Today is a landmark moment for British Airways,” chief executive Sean Doyle said.
“The creation of a new British Airways short-haul organisation means Gatwick customers will benefit from access to a premium service from the UK’s flag airline at competitive prices.
“We are looking forward to bringing a short-haul network back to Gatwick, with a fantastic flying team in place, to serve our customers from London’s second hub airport, which we feel sure will be a success.”
The vast majority of British Airways’ short-haul flights from the West Sussex airport have been suspended since March 2020 because of the Covid-19 pandemic.
The company previously said the flights were loss-making even before the virus crisis, and they would only restart if there was “a competitive and sustainable operating cost base”.
The announcement comes after airline bosses and travel companies hit out at the UK government’s tightened travel restrictions.
When the Omicron Covid-19 variant was detected in the UK last month, the Conservative government imposed strict rules for travellers entering from 11 African countries, requiring them to spend 10 days in hotel quarantine.
PCR tests have once again become mandatory for all travellers arriving in the UK, after they were swapped for less expensive lateral flow tests in October.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
