As per the title, I rushed home from work this afternoon in anticipation to see what Darling had up his sleeve for the aviation industry in his Pre-Budget Report.
Interestingly he said he is proposing to drop the intended ‘per plane’ tax idea that he stole from the Conservatives at the last Budget announcement 8 months ago, as he thinks it would be ‘bad for the industry’, and yet he is now going to pursue the opportunity to introduce a four-tier tax system for Air Passenger Duty so that people who fly further end up paying more in order to reduce emissions?
Is it me, or is that not just a fancy way of saying he wants to increase APD yet again?:mad:
And what has the money that has been collected since the doubling of APD came into effect on Feb 1st 2007 been spent on so far as I have not noticed any specific changes to the industry in terms of ‘greener flying’ or emissions reductions?
Will certainly be interesting to see what the individual airlines have to say about the new situation…
Anyone else have an opinion, please feel free to share it below!
By: cloud_9 - 25th November 2008 at 15:20
And in another TravelMole.com article:
Government scraps Aircraft Duty plan
The government is to scrap plans for an aircraft duty to replace Air Passenger Duty.
Instead a new four-band APD will be introduced on November 1, 2009 so those flying the furthest, and making the most envionmental impact, will pay the most.
The announcement was made by Chancellor Alistair Darling in his pre-Budget Report.
He said the proposed Aircraft Duty was not the right conclusion as it would harm the aviation industry.
The reformed APD will be introduced in a year’s time set around four distance bands, each set at intervals of 2,000 miles from London.“This reform will ensure that those flying farther and therefore contributing more to emissions from aviation will pay more,” the pre-Budget report says.
by Phil Davies
It really does seem as though the Government do want to the travelling public to take the hardest hit. Mind you, with the level of national borrowing set to increase to an eye-watering £118bn next year, a stealth tax on the aviation industry masked as a ‘green’ tax seems like the easiest way to claw back the huge amount of debt that this country is in!
GRRRRR….MAKES MY BLOOD BOIL!!!:mad:
By: cloud_9 - 25th November 2008 at 15:04
Well there’s been a mixed response to Darling’s decision, but mostly on the negative side, as this article from TravelMole.com explains:
Industry reaction to APD change
Thomson and First Choice said they were “surprised and utterly disappointed” that the Chancellor has shied away from introducing Aviation Duty as announced in the 2007 Pre-Budget Report.
Customer director Tim Williamson said: “Yet again, the Government has chosen to target the aviation industry and more importantly, holidaymakers.
“APD was introduced as an environmental tax, yet we have seen the Government take no obvious steps to pledge the monies collected to invest in environmental solutions or ameliorate the impact from the emissions of UK aircraft.
“Nor does it offer any incentive for airlines to operate in an environmentally responsible manner, which should surely be criteria for anything that claims to be an environmental tax.
“We have spent a lot of time explaining to Government, that there should be a differentiation between Premium seats on charter flights and First Class on a scheduled flight, yet both have to pay double the rate of tax.
“A family who wants to spend its hard earned cash to pay for extra legroom on a holiday flight and a businessman, whose company has paid for a first class flight with a ‘flat-bed’, are both penalised to the same degree.
“Who will feel the pain of the double taxes? I doubt the businessman will. We will continue to lobby the Government till they realise quite how absurd this is.”
“We fully expect APD to be removed once all carriers enter the EU Emissions Trading Scheme in 2012.”
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ABTA said it was disappointed that the Government has chosen to continue with Air Passenger Duty “which is acknowledged not be environmentally efficient, and actually penalises those airlines which operate full aircraft”.
“As it now has four different distance bands, it means that passengers flying to Australia from 2009 will have to pay nearly 38% more than today, and 112% more in 2010/11,” ABTA said.
The association warned that the increase will put off travellers to destinations such as the Caribbean and Kenya, whose economies are extremely dependent upon tourism, particularly from the UK.
ABTA head of development Andy Cooper said: “The travel sector has not yet felt the full effect of the recession, but travel lags behind the rest of the economy by about six months and we are facing an extremely challenging 2009.
“The money being raised from APD will not be hypothecated to go to environmental causes, but will just end up in general government coffers, despite being grouped under the heading on how the government will deliver on environmental goals.”
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TTA and Worldchoice managing director Simon Hargreaves said: “The Government says it wants to help business. I find that hard to believe!
“The positive impact of the measures announced will be absolutely minimal on travel companies, while the damage from increased taxation comes at a time when we are all facing challenges from fluctuating fuel prices, plunging currency values and a hugely risk-averse atmosphere in the financial markets.
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Easyjet chief executive Andy Harrison said: “I am dismayed that the Chancellor has failed to carry through his commitment to reform a bad tax.
“All parties agreed that APD needed to be changed to a tax on planes not people, but now the government has succeeded in bodging-up the reform of an already bodged tax.
“He has made a bad situation worse by increasing the burden of APD on hard working families.
“The Chancellor said that he wouldn’t allow the economic crisis to ‘push aside the importance of protecting the environment’ but his green credentials have been brushed aside in a dash for cash and the emissions from cargo planes, private jets and transfer passengers continue to be tax free.
“So, Roman Abramovich, FedEx and Heathrow’s transfer passengers will continue to be exempt, but hard-working families going on their summer holiday on environmentally-efficient low-fare airlines will now pay even more.”
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Cheapflights welcomed the decision to drop the proposed Aircraft Duty but regretted retaining a modified APD.
“The Chancellor has made no provision to reduce the tax burden for consumers, especially lower income travellers,” the price comparison site said.
“Air travel is the only viable mode of transport for both leisure and business travellers for mid to long haul destinations.
“The increase in APD, especially on long haul, stated by the Chancellor as being for environmental reasons, actually harms the environment by delaying the introduction of fuel efficient and cleaner emissions aircraft.
“Furthermore, the option for travellers to fly from Paris or Brussels to long haul destinations looks increasingly attractive for both economy and for business class passengers with APD at £110 and £170 respectively.”
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The Board of Airline Representatives in the UK (BAR UK) had a mixed response to the Chancellor’s decision.
It said the decision to abandon plans to introduce Aviation Duty and retain the principle of the existing APD was ” a victory for common sense”.
But it said the decision to completely revise APD will see large-scale increases for all passengers flying 2000 miles or more.
Passengers flying in economy class beyond the EEA countries will see APD rise from the current £40 to a maximum of £85 by 2010/11, and those flying in all other cabin classes will see an increase from £80 to a maximum of £170 over the corresponding period.
BAR UK chief executive Mike Carrivick said: “The revised distance bands will cause anxieties to many airlines and also create some market distortions.
“Now is not the time to impose additional financial burden on the airline industry and the travelling public.”
By Phil Davies and Bev Fearis
Passengers flying in economy class beyond the EEA countries will see APD rise from the current £40 to a maximum of £85 by 2010/11, and those flying in all other cabin classes will see an increase from £80 to a maximum of £170 over the corresponding period.
So, if I understand this right basically it means that APD is likely to double (again!) but it depends on how far you travel?
With a move like this I think we can expect to see even more airlines go under, especially as global growth in demand for air travel is expected to be around 1% this year which is a direct consequence of the economic crisis, an increase in APD is going to make things even worse than now!!!
I suppose one possible answer to this would be to buy two separate return tickets and fly via a European city with hub connections, for example if you needed to fly to JFK, you could buy one LHR-CDG-LHR ticket and a CDG-JFK-CDG ticket and as then you will only have to pay the APD charge for the LHR-CDG sector which will be a lot less than if you chose to fly to JFK direct from London, but obviously from a businesspersons perspective this is not a good thing to have to do as that takes more time and will cost more as well!
By: Skymonster - 25th November 2008 at 10:29
Few people travel long haul for the sake of it, and yet Darling is going to charge them even more. I think its high-time that, if anyone is taxed more, its all the oiks off for cheap weekend junkets that they don’t need to take – that they only take because the flights are cheap.
Andy
By: Bmused55 - 24th November 2008 at 21:48
How about they start taxing the freakin thousands of passenger boats and ships that leave and arrive on our shores each year.. they’re pumping 4 times as much crap into the atmosphere than Aviation does and have so far been left alone.
By: Jet 22 - 24th November 2008 at 18:54
ANother way of robbing 350 passangers who go to LAX, SFO etc you get my point.
About time we just had 3 taxes on plane flying- Short to Medium Haul, USA and that way, Asia/Far East and that way. Simple.
EDIT: I dont see BA doing anything to there 57, 18-8 Year old planes to make them greener. And it has been proven that flying is more efficent than car, yet he wants to sting people who fly on planes. pure:diablo:
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November 24, 2008 at 6:42 pm