Firm behind report calling for a 50% cut in APD – York Aviation – linked to airlines. Hence bias.

The Herald Scotland reports that a report claiming a reduction in Air Passenger Duty (APD) could boost the Scottish economy by £1 billion was based on research by a firm that has worked for major aviation companies. This is York Aviation – which has done numerous reports for the industry over the years, each biased in favour of aviation, with very partial and incomplete analysis. The study is at  Edinburgh Airport The impact of reducing APD on Scotland’s airports March 2015   The new report was done for Edinburgh airport, presenting findings useful to their client.  Ryanair is another of  York Aviation’s clients, which again stands to benefit if the report is taken seriously.  Green MSP Alison Johnstone said she was not surprised that an “aviation-friendly consultancy” was involved in a “PR exercise” for big business. The new York Aviation report makes claims, such as how cutting APD by 50% would create 4,000 jobs and boost the economy by £1bn within five years. However, as with all York Aviation reports, it makes no mention whatsoever of downsides – or of money taken out of Scotland by cheaper holiday flights by Scottish people. Links to many other York Aviation reports are given here. A spokeswoman for York Aviation said: “We do relatively little work for airlines.”
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Firm behind air tax cut call linked to airlines

A report claiming a reduction in Air Passenger Duty (APD) could boost the Scottish economy by £1bn was based on research by a firm that has worked for major aviation companies.
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[The study is at  
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Edinburgh Airport’s dossier was put together by York Aviation, which counts anti-APD airline Ryanair amongst its clients.

Green MSP Alison Johnstone said she was not surprised that an “aviation-friendly consultancy” was involved in a “PR exercise” for big business.

APD is an excise duty levied on passengers when they fly from UK airports, with its cost dependant on the class of travel and the destination.

It generated around £234 million from flights in Scotland in 2012/13 – around 8% per cent of the UK total.

Supporters of the tax argue that APD helps cuts carbon dioxide emissions, but critics say it is a burden for families.

Airlines dislike the charge as it makes flying more expensive.

Edinburgh Airport, which handles around 10 million passengers a year, last week published a report calling for APD to be cut by 50%

It said halving the tax would create 4,000 jobs and boost the economy by £1bn within five years.

Without this action, the report warned that Scotland could lose out on around 1million passengers and cost the economy up to £68million in lost tourism every year.

APD is due to be devolved to the Scottish Parliament and the SNP is committed the cutting the tax.

However, the “independent” consultancy that compiled the report has links to the multi-billion airline industry.

York Aviation, a “specialist firm of air transport consultants”, has worked for Easyjet, Cityjet and the European Airline Association.

It also provides “ongoing advice” to Ryanair, whose chief executive Michael O’Leary is a staunch supporter of scrapping APD.

He said last year: “APD should be repealed up here in Scotland. It is a major disincentive to airlines, and it is one of the reasons why we struggle to develop the business at Prestwick. It turns off a lot of visitors to Scotland.

“Services that have been lost in recent years would come back at three, four, five times if APD was scrapped.”

Johnstone said:

“Highly profitable airlines don’t pay a penny of tax on fuel and they are failing to pay for the pollution they create. It doesn’t surprise me that an aviation-friendly consultancy is involved in a PR exercise trying to making life easier for these big businesses.

“Let’s focus instead on boosting domestic tourism, and designing a tax system that shifts responsibility onto highly profitable firms so they pay for their pollution. Let’s also focus on what really matters to the tourism sector in Scotland – issues around skills, broadband and reliable public transport within Scotland.”

Dr Richard Dixon, the Director of Friends of the Earth Scotland, said:

“The air travel industry has form for using its own pet consultants to produce wild figures for how wonderful a decrease in APD would be or how terrible an increase would be. A few years ago they told us it would be a disaster when APD was increased but the number of people flying continued to grow even through the recession. Their latest claims are just as unbelievable. ”

A spokesman for Edinburgh Airport said: “We chose York Aviation to undertake this report as they are one of the leading research firms in this area, and because they work with other airlines and airports. The economists there understand the aviation market intimately and how Air Passenger Duty works to frustrate its growth, making flights to and from Scotland more expensive and reducing the number of direct connections available to Scots travellers.”

A spokeswoman for York Aviation said: “We do relatively little work for airlines.”

Link to story

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The study is at  

and on the subject of tourism it states:
“Tourism Impact – activity in the wider economy generated by the additional expenditure in Scotland by new visitors coming to the country as a result of the reduction in APD. The additional expenditure injection is based on average spend per visit statistics from VisitScotland. This expenditure has then converted to a GVA and employment impact using relevant multipliers from the published Scottish input output tables;”
[There is absolutely no mention of the effect of outbound tourists, leaving Scotland to take their holidays, and their holiday spending money, abroad.  The number of out bound tourists is higher than the number of inbound tourists.  York Aviation never acknowledges this at all.  AirportWatch note]

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This is not the first case of an airport or airline getting an allegedly “independent” report done by a company with which it has links. This time PWC and easyJet:

Airlines have another go at trying to get rid of APD – PWC report

Date added: February 4, 2013

EasyJet has produced two press releases, making out that a new study done for the airline industry shows that the UK economy would benefit if Air Passenger Duty was cut. EasyJet, BA, Virgin and Ryanair commissioned PwC to investigate the possible effect of abolishing APD. Using elaborate contortions of facts and logic, and glossing over the point that the main beneficiaries of abolishing the tax would be themselves (not UK plc) they ignore the inconvenient facts that the majority of air travel takes Brits abroad, to spend their money elsewhere. Only a minority – around 20% at most – of air passengers from the UK are on business. The study also ignores the fact that air travel pays no VAT and no fuel duty – making it a very special case, and very under-taxed in comparison to other sectors. Much of the “logic” behind the calculations by PwC of the suggested economic benefits of removing APD involve indirect effects, such as boosting tax take in a variety of sectors, increasing investment, and presumed spin off effects of this over time. All very dubious. No industry likes to pay tax, but there is no reason why air travel – largely discretionary spending by the better off – should escape a fair level of tax. These APD claims by the 4 airlines really are stunning nonsense.

Click here to view full story…

Not so independent auditor

And, to add another interesting twist, the – in theory – “independent” auditors for easyJet is …. guess who?  …. PriceWaterhouseCoopers.

Independent auditors’ report (512KB)

which is most irregular …… probably worthy of investigation, as the “independent” auditor should not be involved in writing reports for its client.


 

Earlier studies by York Aviation for the aviation industry (with bias):

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

Scottish 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/2012/11/york-aviation-lobby-apd/

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York Aviation report says ending Heathrow runway alternation and other short term measures would financially benefit UK

It is rather quiet on the aviation news front at the moment, so time for some publicity for the airports trying to get their runway plans accepted.  Backers of Heathrow expansion (London First and the City of London Corporation and Let Britain Fly) have quoted from a report that they hope strengthens their case for a runway to be built as soon as possible. The report is by a firm called York Aviation – which has done a great many reports in the past, with dubious economics that exaggerates one case, while ignoring inconvenient facts that detract from their argument.  The York Aviation report says there would be £206 million of economic benefit to the British economy if runway alternation was ended at Heathrow, so both runways were  used in mixed mode. This would be deeply unpopular with tens of thousands (even hundreds of thousands perhaps as some 725,000 are overflown) and is why Heathrow airport itself is wary of advocating this. York Aviation also says reducing delays at Heathrow by an average of 2 minutes would result in further savings of £125m. [Really?? for 2 minutes for each person?] But – they say – these benefits are limited compared to the huge benefits of a new runway …. so better get on with it……

http://www.airportwatch.org.uk/2014/02/19866/

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Only a 4-runway hub airport will do, says new study for Boris (done by York Aviation)

4.7.2013
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As their response to the Airports Commission discussion paper on airport operational models the Mayor of London, Boris Johnson, has had a report commissioned from York Aviation – a company that has produced many reports for the aviation industry over recent  years. This report, (not yet publicly available) not surprisingly bearing in mind Boris’s continuing support for a huge new hub airport for London, comes out saying London needs a new huge, 4 runway hub airport. The findings of the report were made public by City Hall  two weeks before the Mayor submits his proposals to the Airports Commission. Boris is against Heathrow expansion, so unsurprisingly, the York Aviation report says Heathrow is not the right site for a 4 runway hub, as it lacks the space to configure the facilities and its expansion would be a blight on local residents (ignoring the blight that would be caused for others elsewhere?).  York Aviation comes up with all the usual stuff about need for flights to emerging markets, need for the UK to retain its hub supremacy, and so on.  Nothing new.http://www.airportwatch.org.uk/?p=3847
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This was reported in a press release by Boris as:”The detailed route-by-route analysis, compiled by well-respected aviation advisors, York Aviation,* confirms that a four runway hub airport is the best option for connectivity, providing a much wider range and greater frequency of flights than if the same number of runways were spread across the south east.”.

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Criticisms by economists CE Delft of the exaggeration of benefits of the aviation industry by York Aviation:

* York Aviation have been criticised recently by economists, CE Delft,  (page 19 of The Economics of Airport Expansion, March 2013), who said: ..“Overestimation of positive effects
On the other hand, there is a tendency in the aviation industry to overestimate
the positive impacts of aviation. Many studies are based on the ACI-Europe
study kit which has been developed by York Aviation and is widely used by
airports and organisations like the Air Transport Action Group (York Aviation,
2004; ATAG, 2005).” .Also criticism of similar studies showing alleged airport expansion benefits on page 37.York Aviation has repeatedly produced reports in favour of aviation expansion, which have been criticised as being very biased and unbalanced, excluding any inconvenient statistics and exaggerating others.  See below

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Some earlier mentions of York Aviation and their pro-aviation expansion reports:
Nov 1, 2012  Scottish airports are, yet again, hoping to get a drop in Air Passenger Duty, to try and keep flights under-taxed. Edinburgh, Glasgow and 
www.airportwatch.org.uk/?p=3491
A new report has been written by York Aviation, for the London Chamber of Commerce, on the alleged financial contribution it makes to London. It says the 
www.airportwatch.org.uk/?p=2307
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  
www.airportwatch.org.uk/?page_id=8489
Britain should follow Europe by “expanding” rail travel, not aviation: “We should  [The only evidence for this figure is a report by York Aviation in Feb 2011 at 
www.airportwatch.org.uk/?p=1745
File Format: Microsoft Word
We note that several of the studies quoted were carried out by Oxford Economics or by York Aviation. Both are consultancy firms strongly biased towards the 
www.airportwatch.org.uk/…/Connectivity-Response-from-GACC-March- 2013.doc
Feb 20, 2008  Friends of the Earth and Birmingham Airport Anti-Noise Group (BANG) say the study by consultants York Aviation fails to take properly into 
www.airportwatch.org.uk/?p=1274
Mar 14, 2013  York Aviation – a leading firm specialising in the assessment of the economic impacts of aviation and aviation demand planning. [As with 
www.airportwatch.org.uk/?p=2706
ASA and York Aviation reports are worth a look at ASA letter-26th June 2012. Economic Consulting Associates found “Taken together, these observations lead  
www.airportwatch.org.uk/?p=2443
Mar 11, 2009  Research by York Aviation, a consultancy close to the aviation  Sewill argues that the York Aviation research takes no account of the number
www.airportwatch.org.uk/?p=2957
Another of York Aviation’s reports:


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Birmingham International airport runway study (by York Aviation) flawed, say opponents

20.2.2008  
(Birmingham Post)A cost-benefit analysis claiming that harm to the environment caused by Birmingham International Airport’s runway extension will be outweighed by economic benefits to the West Midlands has been condemned as seriously flawed.Friends of the Earth and Birmingham Airport Anti-Noise Group (BANG) say the study by consultants York Aviation fails to take properly into account issues relating to climate change.
there was also a study done for Manston airport, by York Aviation, claiming it was perfectly geographically placed to take surplus air freight from  Heathrow,
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There was a York Aviation report (2011) claiming that London City Airport brought in £500 million to the local economy and was at the heart of East London regeneration

 


 

See also

Study by York Aviation for Edinburgh airport suggests a 50% + cut in APD in Scotland could “boost Scottish economy by £200m per year”

Another study by York Aviation (who have done numerous studies giving huge figures of the amount of benefit created by the aviation industry ….) says that cutting APD by 50% in Scotland could boost Scotland’s economy by £1bn by 2020 and create almost 4,000 new jobs. The study was commissioned by Edinburgh Airport.  Powers over APD are to be devolved to Holyrood following recommendations by the Smith Commission. However, a specific date has yet to be set as the move requires UK legislation to be passed.  York Aviation believe a 50% cut in APD would “create £200m per annum in GVA (gross value added) by 2020″.  They also believe Scottish airports could get 700,000 more passengers coming through Scotland’s airports in the first year, if APD in Scotland was cut by at least 50%. These would be passengers either coming from England, or not using English airports. The number might rise to about 900,000 passengers, after five years. York Aviation never considers the loss to the economy of the money taken out of the country by people going on holidays abroad – which would rise if APD was cut. They only ever consider inbound tourism and business flights.  If Scotland lost the tax revenue from APD it would need to make up the shortfall from elsewhere.

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Air tax cut ‘could boost Scots economy by £1bn’

9 March 2015 (BBC)

Slashing the tax paid by air travellers could boost Scotland’s economy by £1bn by 2020 and create almost 4,000 new jobs, a report has suggested.

The figures emerged from research carried out on behalf of Edinburgh Airport.

The report looked at the impact of cutting air passenger duty (APD) by 50%.

Powers over APD are to be devolved to Holyrood following recommendations by the Smith Commission.

However, a specific date has yet to be set as the move requires UK legislation to be passed.

The new research, conducted by consultants York Aviation, suggested a 50% reduction in APD “might support around 3,800 additional jobs and £200m per annum in GVA (gross value added) by 2020″.

It also found that Scottish airports could lose out on nearly one million passengers a year if APD is not cut by at least 50%.

Such a cut, it argued, would result in 700,000 more passengers coming through Scotland’s airports in the first year, rising to about 900,000 after five years.

Edinburgh Airport chief executive Gordon Dewar said: “We’ve long argued that APD is a tax on Scotland’s ability to compete with European airports of our size and our economy is footing the bill in lost jobs and lost opportunities.

“Our report shows that the economic benefit of a reduction will outweigh any lost tax revenues.

“It’s therefore reasonable for passengers, airlines and the tourism industry to have some certainty on when this regressive tax will be reduced, and to know whether it will eventually be scrapped.”

The Scottish government welcomed the report, which it said showed “the clear benefits” of devolving power over APD to Holyrood.

A spokeswoman said: “This is something we have long called for and a move that has widespread support within the aviation and tourism industry. This analysis from Edinburgh Airport only strengthens that argument.

“Devolving APD to Scotland as soon as possible will help to unlock the country’s full economic potential, bringing more international flights to and from Scotland as well as cutting costs for passengers.

“In terms of the timetable, only once the necessary legislation has been passed by the UK Parliament will the Scottish government be able to legislate for a replacement Scottish tax.

“We have confirmed that we intend to reduce APD by 50% within the term of the next parliament with a view to eventual abolition of the tax when public finances allow.

“No specific timetable has been given by the UK government for passing the legislation, but we continue to argue for this to happen as soon as possible.”

‘Financial accountability’

A UK government spokesman said: “This is a good example of the choices the further devolution of powers is giving the Scottish Parliament.

“The ability to change the levels of air passenger duty will lie entirely with the Scottish government while also being responsible for the loss or gain of revenue that results.

“That means financial accountability in decision-making in this area in Scotland.

“The UK government, like Edinburgh Airport, look forward to seeing their detailed plans in due course.”

Environmental group WWF Scotland said the report completely failed to acknowledge that aviation was the fastest growing sector of carbon pollution.

Director Lang Banks said: “Despite all their special pleading, the aviation industry still enjoys significant exemption from taxes, including VAT and fuel duty.

“Even the Scottish government admits that halving APD would increase carbon emissions by as much as 60,000 tonnes a year.

“The reality is that, if we want to meet our climate targets, any growth in emissions from the aviation sector will have to be offset by deeper cuts elsewhere in Scotland’s economy.”

http://www.bbc.co.uk/news/uk-scotland-scotland-business-31789066

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