BALPA wants APD funds to be used to help aspiring pilots, rather than more socially useful purposes

The  British Airline Pilots’ Association wants the Government to divert funds raised via Air Passenger Duty to help pilots to train. Currently pilot training is expensive and lengthy, so BALPA says it is only for the wealthy.  They say it can cost £100,000 to train, and pilots have to take out loans or turn to their families for help.  (As with many other career choices).  In reality, as BALPA and the Telegraph conveniently forget, Air Passenger Duty exists on air travel because it pays no VAT and no fuel duty. The Treasury therefore charges APD to go some way to make up for the unfair tax advantages that air travel has, (for various anomalous and historic reasons).  Experienced pilots are high earners. The government has never charged APD as an environmental tax, and it has never been willing to hypothecate it to the aviation industry, for its own purposes. Giving money from APD, which is needed for general government expenditure, would be akin to using tax from the sale of champagne to help fund the training of wine tasters. And where would the government make up the tax short-fall from?
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BALPA says: “Use Air Passenger Duty to help pilots with £100,000 debt”

British Airline Pilots’ Association calls on Government to divert funds raised via Air Passenger Duty to ensure a career in the cockpit isn’t just for the wealthy

Taxes raised via the hated [hated by the Telegraph, which has campaigned against it for years, and misses no opportunity to whinge about it] Air Passenger Duty should be used to help aspiring pilots with the £100,000 cost of training and to ensure flying isn’t just a career for a wealthy few, a union has urged.

Pilots are racking up debts of £100,000 and are often forced to turn to their families, bank loans and credit cards to meet the cost of training, according to the British Airline Pilots’ Association (Balpa).

The union is pressing the Government to use a portion of funds raised via APD – a tax which is met by passengers through ticket prices and will raise £3.9bn for the Treasury in 2015/16 – to make sure that Britons who aren’t from wealthy backgrounds are not excluded from becoming pilots.

Balpa says other industries, such as construction and shipping, already operate similar schemes. In a speech to the Royal Aeronautical Society on Wednesday, Balpa’s chairman, Captain Mark Searle, pointed to the maritime “tonnage tax” and the Construction Industry Training Board as potential blueprints.

“It is a myth that there is currently a shortage of pilots in the UK but it is certainly becoming harder for people without serious financial backing to take up a career in the cockpit,” he said.

A recent survey of cadet pilots showed that more than half were going cap in hand to their parents for financial support while a third had taken out bank loans, were relying on credit cards or re-mortgaging their homes to pursue their chosen career.

Balpa has found that one in six newly qualified pilots are trying to make do on £500 a month or less in their first jobs, as they have to juggle repayments on loans.

The harsh reality of pilot training is at odds with the stereotypical image of pilots’ glamorous, jet set lifestyles.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/10893292/Use-Air-Passenger-Duty-to-help-pilots-with-100000-debt.html

 


 

More detail on APD at 

Air Passenger Duty is a general tax on air travel. It has never been intended as an environmental tax, but merely to make  up for the under-taxation of the aviation sector.

The industry has been asking for years for the money raised by the tax to be given to them, to help them with making flying less environmentally harmful. The government has never agreed to hypothecate the tax – ie. not to apportion it to some particular use. The tax goes into general taxation, as do most other taxes.

There is no logic in giving APD money to pilots.  Any more than giving taxes raised by sales of wine and spirits to those who want to set up vineyards, or train to be wine tasters.


New rates of APD after 1st April 2015 compared with during 2014:

Lower (standard) rate Higher rate
2014 From 1.4.2015  2014 From 1.4.2015
Band A.  0 – 2000 miles £13 £13 £26 £26
Band B.  2000 – 4000 miles £69 £71 £138 £142
Band C.  4000 – 6000 miles £85 £71 £170 £142
Band D.  Over 6000 miles £97 £71 £194 £142

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Air Passenger Duty – 10 Key Points  

(APD – 10 Key Points Briefing from SSE)

1. APD was introduced in 1994 by Ken Clarke, the then Chancellor of the Exchequer, not as an environmental tax but because he considered the aviation industry to be lightly taxed compared to other sectors, largely arising from its exemption from fuel duty and VAT.

2. It was initially set at £5.00 for short haul economy travel, which accounts for more than three quarters of all air travel. In 1997 Ken Clarke doubled APD to £10.00 for short haul economy flights.

3. Gordon Brown halved the short haul economy rate of APD in 2001, put it back up again to
£10.00 in 2007 and Alistair Darling raised it to £11.00 in 2009. George Osborne increased it to £12.00 in 2010. There was no increase in 2011 but it was raised to £13.00 in April 2012. Thus, for the vast majority of passengers APD has increased by just £3.00 (30%) over the past 8 years. (£10 in 2007.   £13 in 2015

4. APD is payable only on departure from a UK airport and so the basic Band A rate of £13.00 is for a round trip to an overseas (anywhere in Europe) destination. APD is however payable on both legs of a domestic round trip within the UK.

5. APD raised £2.6 billion for public finances in 2011/12 and this is planned to increase to £3.9 billion by 2015/16. APD would, however, need to rise to four times its current level to offset the value of the industry’s exemption from fuel duty and VAT. If airlines paid the same level of fuel duty and VAT as road users, the cost to the aviation industry would be around £10.5 billion a year.

6. Not only do airlines pay no VAT on fuel, they are exempt from VAT on everything they buy
relating to the provision of air transport services. Mostly, VAT is not charged in the first place; aircraft and aviation fuel, for example, are zero rated. However, where VAT is charged, the airlines claim this back and in 2010/11, HMRC paid UK airlines a VAT rebate of £583 million (net).

7. In 2010/11, one of  the latest years for which a detailed HMRC breakdown is available, 77% of passengers paid APD at the short haul economy rate (Band A).

8. Whilst it is true that “passengers can end up paying £194.00 tax on some flights”, as we are repeatedly told by the industry, this is the very top rate of APD and applies only to first class and business class passengers on long haul flights to countries whose capital city is more than 6,000 miles from London. Less than 0.4% of all air passengers fell into this category in 2010/11.  From 2015 the top rate goes down to £142, as the top two bands for APD are amalgamated.

9. Regarding the alleged negative impacts on the UK economy of the recent hikes in APD, it is worth noting that overseas leisure trips by UK residents reduced from 60.1 million in 2008 to 49.2 million in 2011 – a fall of 10.9 million (21.5%) whilst the number of foreign tourists coming to the UK fell by less than 300,000 (1.6%) over the same period, from 23.8 million to 23.5 million. The effect of this was to reduce the UK’s tourism trade deficit by £6.8 billion and to boost spending in the domestic UK tourism industry by £5.1 billion over the same period (2011 vs 2008).

10. Finally, those in the aviation industry who are pressing the Government for APD to be reduced should explain how they would propose to make up the revenue shortfall to the Exchequer. Should we sack some more policemen, teachers or nurses? Should we cut pensions or welfare benefits?

Or should we raise VAT and/or extend its scope?

(the aviation industry has not questioned the accuracy of any of these figures).

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Airline pilot:

Salary and conditions

  • Salaries vary according to the airline that you are employed with, the type of aircraft you are flying and your experience. The starting salary for a newly qualified first officer working for a small operation may be around £21,000. Starting salaries for those in larger companies are higher at around £22,000 – £24,000.
  • Salaries for more experienced pilots could range from £36,000 to £48,000 in a first officer role.
  • The starting salary for a captain with a medium-sized airline may range from £57,000 to £78,000, while those with the major operators could earn from £97,000 to more than £140,000.
  • A pilot’s salary is often incremental, rising with each year of service with the company.
  • Benefits usually include a pension scheme, various allowances and discounted travel.
  • …… and it continues …..
  • http://www.prospects.ac.uk/airline_pilot_salary.htm
  • .
  • .
  • .and
  • So how much do commercial pilots earn?

    This greatly depends on the airline and the type of aircraft flown. Salaries tend to increase with each year of service with a company, says BALPA so even if you are initially paid a low wage, the situation may well improve after several years of employment.

    Salaries vary according to the airline a pilot is employed with, the type of aircraft being flow and experience gained. The starting salary for a newly qualified first officer working for a small operation may be around £22,000 (or US $35,000).

    Starting salaries for those in larger companies are higher at around £24,000 pa to £28,000 pa (US$38,000 to US$45,000) .

    Salaries for more experienced commercial pilots could range from £28,000 (UD$45,000) to £44,000 (US$70,000) in a first officer role. The starting salary for a captain with a medium-sized airline may range from £54,000 (US$87,000) to £75,000 (US$120,000), while those with the major operators could earn from £97,000 (US$156,000) to over £140,000 (US$225,000).

    British Airways is one of the best airlines to fly for in terms of average salaries. Our calculations suggest that a long-haul pilot with lots of experience could well reach the £130,000 mark. Even some low cost airlines like Ryanair can pay their senior captains up to £100,000.

    Flight Duty Pay is additional pay that can affect monthly take-home, although not all airlines around the world use this system. It varies from company to company but essentially Flight Duty Pay is an element of pay based on a pilot being at work, in addition to basic salary. Often this is taxed at a different rate to the main salary. Flight Duty Pay can be a flat rate per sector or an hourly rate, and can be based on duty time or flight time.

    It’s worth remembering that a pilot’s salary is often incremental, rising with each year of service within the company. And benefits and rewards should be taken into account too. These usually include a pension scheme, various allowances, health cover and discounted travel.

  • ……..
  • http://blog.aviationjobsearch.com/blog/2012/09/commercial-pilot-jobs-salary-guide/