Airlines pay much less for fuel than anyone else does, that is an indirect subsidy.
Care to put a figure on "much less"?
Aviation fuel in the UK is bought on the open commercial market, lots of negotiations involved, then hedging etc, so hard to pin down what any airline pays on any given day.
Now having said it's normally at this point "but VAT" gets mentioned.
Fair point, there's no VAT on aviation fuel so just for fun, how much difference do you think VAT on fuel would make on, say, the aforementioned London-Glasgow flight?
A slightly informed, back of envelope calculation follows, please bear with me...
London-Glasgow on something like a A320/B737 might burn 3 tonnes of jet fuel, that's very rough figure, but it will do for the purposes of the sums.
It's hard to work out the cost of fuel to any specific company (commercial agreements etc) but it could credibly be around 900 US dollars a tonne ATM, so the LON-GLA flight burns 2700 USD worth of fuel...
ATM no VAT so that's a 2700 USD fuel bill for the sector.
Now put VAT on at a, say, 25% hypothetical rate; fuel bill becomes roughly (rounding up ) 3400.USD....
i.e. the fuel bill has gone up by all of 700 USD.
Spread across a typical short haul load of 180 passengers that's an increase per ticket on that flight of just less than...4 ( yes four) USD....
So put VAT on fuel and you up the cost of a London Glasgow by less than five pounds...that'll really cause people to flock to the railways.
TBH no idea why rail fares in the UK can be as astronomic compared with air fares but I suspect it'll be that old favourite, market forces/ what the market will support..