Scots want APD devolved to Scotland before 2014 Games and London flight guarantees

In 2014 the 2014 the Commonwealth Games and the Ryder Cup will be held in Scotland. This, together with the recent decision by Flybe to sell all their landing slots at Gatwick, has prompted more calls to the Treasury,by the Scottish government to, get devolution of APD (Air Passenger Duty).  Scotland wants to both deal with their own air travel tax, and also get guarantees of London airport slots for Scottish flights.  Heathrow and Gatwick prefer larger planes to more profitable long haul destinations, and smaller planes from domestic airports are less lucrative for them. The Scottish government are claiming that the extra cost of £13 per flight within the UK (£26 for a return flight) is deterring tourists coming from London. As air travel pays no fuel duty and no VAT, removing or reducing APD would make the sector even more under-taxed than it is at present. The Flybe Gatwick slots will be taken over by EasyJet, which is likely to use them for more profitable destinations abroad, as that would make more money for shareholders than UK flights.

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Air Passenger Duty:  Air travel is not over-taxed.  In reality it is very lightly taxed. Air travel from and within the UK pays Air Passenger Duty, because there is no VAT on any element of the aviation industry and they are zero rated, and because they pay no fuel duty.  If there was no APD the industry would be even more under-taxed. Details


 

Brown wants airport tax answers

27 May 2013  (Herald Scotland)

TRANSPORT Minister Keith Brown has demanded an urgent update on the devolution of Air Passenger Duty (APD) to Scotland and the protection of Scotland’s access to London airports.

His call to the Treasury, which handles the tax, came as the head of the national tourism agency warned over the impact of the duty on visitors to the country.

The move comes in the wake of last week’s announcement that Flybe had sold all its take-off and landing slots at Gatwick airport to easyJet for £20m, prompting concerns about the Inverness-Gatwick service. High levels of APD and landing charges at London airports were cited by Flybe as factors in their decision.

Mr Brown said: “Whilst we have sought and received welcome assurances from easyJet on its continuing commitment to Inverness, there can be no guarantees at this stage that overall capacity and service provision will not be diminished.

“Myself and other Scottish ministers have raised the issues of APD and access to London with Danny Alexander and his colleagues in the Treasury repeatedly, warning of the danger both presented to the Scottish economy.

“Perhaps now that Mr Alexander’s own constituency in the Highlands is set to suffer the consequences, these warnings might be taken more seriously.” He said the punitive levels of APD are cited repeatedly by airlines and airports as obstacles to securing new routes and maintaining the existing ones.

VisitScotland chairman Mike Cantlay said: “Times are tough for tourism businesses and visitors are increasingly looking for best value. We need the UK Government to look at how we can make our tourism industry more competitive.

“There are major concerns that the UK and Scotland may price itself out of the market for overseas visitors.”

http://www.heraldscotland.com/news/transport/brown-wants-airport-tax-answers.21190531

 

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Call to devolve air duty before 2014 Games

6.5.2013 (BBC)

Aircraft on tarmac
Air Passenger Duty charges in the UK range from £13 to £188
[£13 is the standard rate for any journey within Europe or any distance under 2,000 miles. The cost is only £188 for a first class passenger flying to Australia or equivalent distance. Details of APD ]

The Scottish government, airports and tourism leaders have called on the UK government to devolve Air Passenger Duty (APD) before the 2014 Commonwealth Games and the Ryder Cup.

They said high APD charges could put off tourists from flying to attend the Glasgow and Perthshire events.

Last year, a report from Scotland’s three largest airports said APD could lead to a cut in passengers.

It said the Scottish economy could lose £210m a year in tourism spend by 2016.

A UK Treasury spokesman said: “Whether to devolve air passenger duty to Scotland remains under review.”

The level of APD depends on the country to which an airline passenger is flying.

When flying from any British airport there are four bands based on the distance between London and the capital city of the destination country, ranging from £13 to £184.

There is concern that the duty is applied uniformly across the UK, with no consideration given to the differences between a large hub airport like Heathrow, and smaller regional airports such as Dundee.

The majority of MSPs believe the Scottish Parliament should have control over the aviation tax.

New regime

Transport Minister Keith Brown said: “Scotland will welcome the world in 2014 courtesy of the Commonwealth Games and Ryder Cup, and yet we are in the absurd situation of increasing costs for people who intend to visit Scotland.

“The ‘World Economic Forum, Travel & Tourism Competitiveness Report 2013’ shows that the UK has amongst the highest aviation taxes and charges in the world, ranked 139th out of 140.  [That is because aviation is generally not taxed, due to outdated agreements dating back to the 1920s when air travel was a novel industry].

“I would urge the UK government to deliver devolution of APD as soon as possible so that we can develop a regime that makes Scotland more competitive.”

A Transport Scotland study found that a family of four on a return flight in economy class from the US would have to pay £268 in air passenger duty. [ie. They are paying £67 each].

A couple from Spain would have to pay £26 to fly home from Scotland. [ie. only £13 each].

Mike Cantlay, chairman of VisitScotland, said: “As we look ahead to the spectacular opportunity to reposition Scottish tourism when Scotland welcomes the world in 2014, I know that the industry is extremely anxious about how accessible and competitive Scotland will be in terms of access by air.”

Gordon Dewar, chief executive of Edinburgh Airport, said airlines were questioning the viability of basing planes in Scotland because of APD.

http://www.bbc.co.uk/news/uk-scotland-scotland-business-22419713

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Comparing rail with air ticket price – even paying APD travel by air is still cheaper

[Even for domestic flights within the UK, on which APD is charged for both parts of a return journey – as both take off from UK airports – the cost of air travel is generally cheaper than the equivalent rail journey.

For instance, taking a  random trip – London to Aberdeen, for one person, travelling on 5th June and returning on 6th June, the cost by rail is about £147 at the cheapest  link  and around £100 by air  link .]

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Concerns over Flybe’s Gatwick slots sell-off to Easyjet

23.5.2013 (BBC)

Business leaders and politicians have raised concerns over the future of Inverness’s links with London Gatwick.

A three-times-a-day service operated by Flybe is in doubt following the airline’s decision to sell all of its take-off and landing slots at Gatwick.

Easyjet, which also operates a Gatwick-Inverness service, is set to take over the slots next March in a £20m deal.

There are worries that the frequency and timings of the Inverness connections will be affected.

Transport Minister Keith Brown said he had been in contact with Easyjet.

He said: “The prospect of cuts to Inverness Gatwick services is deeply worrying and I have requested an urgent meeting with Easyjet, with a view to ensuring capacity on this service is maintained.

“While I welcome the confirmation that the current level of service will continue until March 2014, it is essential for the economic development of the Highlands region that the service is maintained beyond summer 2014.

“I have already had discussions with Easyjet this morning and will be keeping in regular touch to press the case.”

The Inverness and Scottish chambers of commerce, the Scottish Council for Development and Industry, Highland Council and politicians are among those raising concerns.

The sale is part of a cost-cutting programme for the airline. About 600 workers have been made redundant and pilots have agreed a 5% pay cut.

Flybe serves a number of destinations directly from its Gatwick hub, including Belfast, the Isle of Man, Guernsey, Jersey, Newcastle and Inverness.

The airline said the deal was subject to shareholders’ approval and that it would continue to operate all the slots until March 2014.

Stewart Nicol, of Inverness Chamber of Commerce, said the availability of connections at the moment meant Highland firms could do a day’s business in London.

Drew Hendry, leader of Highland Council, said he hoped Easyjet would recognise the importance of the Flybe service to the region’s economy.

Fraser Grieve, the Highlands and Islands manager for the Scottish Council for Development and Industry (SCDI), expressed concern about the deal and called for urgent steps to safeguard the flights.

He said: “Flybe’s decision highlights the vulnerability that regional routes into London face as a result of a lack of capacity at Heathrow and Gatwick Airports and the financial value of these slots.

“The air connections to and from Inverness are vital economic links and the move to Easyjet will likely result in both a loss of service and a lack of competition on the route.”

He added: “The UK’s leading international gateways must be able to accommodate the economic needs of the whole of the UK.

“Oil and gas services and food and drink in the north are two of the UK’s leading exports and they must be able to reach overseas markets. Tourists and investors must also be able to get to the north of Scotland.”

SNP MSPs have accused Lib Dem MP Danny Alexander of “hypocrisy” in a political row over the future of Gatwick-Inverness links.

Mr Alexander, who is MP for Inverness, Nairn, Badenoch and Strathspey and chief secretary to the Treasury, said “astronomical increases” in landing charges at Gatwick had hit Flybe hard.

Mr Alexander said: “Last year’s Civil Aviation Authority investigation changed nothing, but we need to press Gatwick to think again in the light of the damaging economy impact.

“There is clearly an opportunity for Easyjet to strengthen its Inverness to Gatwick services, but keeping early morning and late evening services will be critical for business, as will the ability easily to connect onto international flights.”

He added: “I welcome Easyjet’s positive commitment to building on its Inverness connections, as well Flybe’s commitment to maintaining its other services.”

‘Working tirelessly’

However, the SNP said the cost of the UK government-levied Air Passenger Duty (APD) was to blame and had hampered Flybe’s ability to make its links profitable.

Fergus Ewing, SNP MSP for Inverness and Nairn, said: “The loss of these services would be a hammer blow for the Highlands.

“The Inverness Flybe service is the one used by Danny Alexander to get to Westminster – and now it is being withdrawn, in part because APD is too high.

“That is because of the taxation policies of Danny Alexander’s own government – and he is guilty of the most appalling hypocrisy on this issue.”

Liz Cameron, chief executive of Scottish Chambers of Commerce, said that both Scottish and UK governments had failed to protect the Gatwick-Inverness link.

She said: “Government action is required north and south of the border to help to sustain and grow Scotland’s aviation market.

“Our airports are working tirelessly to serve the needs of Scotland but they are being hamstrung by a lack of support from government.

“Our politicians at Westminster and Holyrood need to recognise the critical role that our air links play in our economy and deliver the right environment and support for both the airports and airlines.”

Easyjet said it was looking into the possibility of maintaining some of Flybe’s Highland links with London.

A spokeswoman said Easyjet was already committed to serving Inverness and carried twice as many passengers as Flybe to London each year.

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Continue reading the main story

image of Douglas FraserAnalysis   Douglas Fraser, Business and economy editor, Scotland

With a hiatus over Britain’s aviation policy, the future of London’s airport is often seen as an issue for Londoners.

And while it’s a noisy row for those under the flight paths, the economic impact of the bottlenecks in London matters at least as much to those who fly in as those who fly out.

It matters most to those regional airports with passengers dependent on connecting to global flights.

While the competition authorities have stepped in to ensure competition on Heathrow’s links with both Edinburgh and Aberdeen, the break up of BAA’s control of Heathrow, Gatwick and Stansted is leading to less regulation.

Meanwhile, the high cost of landing/takeoff slots drives airlines to seek high returns on their investments, which tend to come from larger aircraft flying longer distances.

That hits connections to the rest of Britain. And while rail services into London have improved for much of England, travellers from Scotland still need to be able to connect by air.

At least as important, Scottish tourism – which is a big employer, particularly in the Highlands – needs competitive and well-timed air links through Heathrow and Gatwick, without which many inbound travellers may not be bothered heading north.

It’s an even bigger problem for Newquay in Cornwall, with slow train links and no other airline currently providing a service into Gatwick.

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Earlier:

Flybe to end all domestic flights from Gatwick by March 2014 after selling its 25 slot pairs to easyJet

May 23, 2013        Flybe is to stop all of its Gatwick flights after agreeing to sell all its 25 pairs of slots to EasyJet for £20 million, as it needs the money. That only leaves Flybe with a few London slots, at Luton. Flybe will leave Gatwick the end of March 2014. That means the end of its flights from Gatwick to Belfast City, Guernsey, Inverness, the Isle of Man, Jersey, Newcastle and Newquay. EasyJet is under no obligation to replace domestic flights, and will just use the slots for the most profitable holiday routes. There are concerns in Inverness about losing their Gatwick link. Flybe launched an expensive complaint to the CAA in 2010, complaining about the level of its charges. However the CAA ruled in September that Gatwick was within its rights to raise its landing fees for smaller aircraft, as it prefers to use slots for larger planes carrying more passengers. Flybe has been hit because on domestic flights, APD of £13 is charged on both legs of a journey. Flybe’s Chairman, Jim French said that even if Gatwick did not want its passengers, other airports would, and Flybe would work to ensure that the “UK’s regional passengers don’t get left in the cold.”     Click here to view full story…

 

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Scottish airports and York Aviation lobbying, yet again, for a cut in APD

1.11.2012Scottish airports are, yet again, hoping to get a drop in Air Passenger  Duty, to try and keep flights under-taxed. Edinburgh, Glasgow and 
Aberdeen airports are calling on the UK government  to abolish APD or at least frozen and then reduced.  A new report by York Aviation (they produced one in February 2011 for BAA Scotland) says Scotland will lose 2 million passengers and £210 million a year in lost tourist spending because of APD. Strangely, this figure is massively higher than it was only a year and three quarters ago.  In February 2011 York Aviation only said that  ” …over the next three years, Scottish airports will lose around 1.2 million passengers, with the largest numeric losses on domestic services.” So a very sharp increase.  Dodgy assumptions and calculations? York Aviation and the airports, as they always do, only consider tourist income of visitors coming to Scotland, and completely ignore the money lost by Scots flying out to spend their holiday money abroad. And of course, completely ignores the tax breaks that air travel receives from paying no VAT and no fuel duty.    http://www.airportwatch.org.uk/?p=3491 

Tax on air passengers ‘costs Scotland £210m’

Aberdeen, Glasgow and Edinburgh airports want the air passenger duty tax abolished.

http://www.scotsman.com/news/transport/tax-on-air-passengers-costs-scotland-210m-1-2609000

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Scottish government says it will seek powers if re-elected to cut APD to help boost flights

22.2.2011  (GreenAir online)

Scotland’s First Minister, Alex Salmond, has said his Scottish National Party
will seek powers to reduce UK Air Passenger Duty (APD) on Scottish air travellers
if re-elected to office in parliamentary elections in May. Salmond believes lowering
the duty would reduce airline fares and help encourage tourism and inward investment
to Scotland.
The call coincides with the release of a report commissioned by BAA-owned Aberdeen, Edinburgh and Glasgow airports that estimates last November’s hike in APD could lose Scotland’s airports more than one million passengers over the next three years and cost the Scottish economy £77 million ($124m) in lost tourism spend. 
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