Challenged to answer the view that opposing APD was a waste of time because a government during a downturn was never likely to forgo the revenue of one of the most easy to collect taxes, Abta chief executive Mark Tanzer said: “This is a long-term siege rather than a knock out blow.”
The association’s head of public affairs Luke Pollard (pictured) added: “It’s an easy tax to collect but at the same time it’s something that has a material effect on the bottom line on everybody’s business in here and it’s dampening growth.
“We need to keep going on at this, we need to be united. If we divide our voice, as it’s sometimes tempting to do, governments will simply go through us and keep hiking up the tax.”
Tanzer said the failure to persuade government on APD as well as on Heathrow expansion contradicted assumptions of the strength of airline lobbying often blamed for a lack of progress in getting carriers into Atol financial protection.
Sourced from Travel Weekly
By Amanda Greenwood
Private jet charter firm PrivateFly has criticised the Government for treating its services like airlines when it comes to paying Air Passenger Duty (APD).
Adam Twidell, CEO of PrivateFly has predicted most non-UK companies will not pay the tax as private charter flight companies work very differently to a typical airline.
By assessing figures from data provider WINGX-Advance, PrivateFly has estimated the industry will lose GBP4.6 million in revenues as a result of the tax increase.
This is only half of what could be collected if non-UK companies were to cough up, with those based in the UK left to potentially pick up the costs.
HMRC has already placed a projected cost of GBP2-3 million on the private jet sector for APD which Twidell believes will cover money it expects not to collect from non-UK companies.
“The collection process for APD on business aviation was not properly discussed with the industry, with HMRC applying the same logic for airlines to the highly fragmented private jet sector. However, the makeup of the private jet industry is very different to that of the airlines: while there are around 130 airlines operating UK departures, in 2012 over 3,000 private jet companies flew into the UK, with 75% having less than three aircraft in their fleet. Routes are not scheduled and the aircraft behave like taxis,” explained Twidell.
“With the onus being on the aircraft operator to register and pay APD independently, the system is bureaucratic and difficult to understand for small private jet companies who only fly to and from the UK occasionally. The result will be many aircraft operators ignoring the tax. And with private aircraft able to use more than 300 airports in the UK, the task of tracking down non-payers will be almost impossible for HMRC.
“Many will escape their scrutiny, creating a commercial disadvantage for UK operators who must factor in the costs of paying and administering the tax,” he added.
Sourced by Travel Daily UK
The First Minister Carwyn Jones says he’s been given assurances that the Wales bill announced in the Queen’s speech could be expanded to include the devolution of ‘minor taxes’ such as Air Passenger Duty and Stamp Duty which would allow the Welsh Government to borrow money for large-scale projects.
But he’s given a cool response to planned changes to the way the Assembly is elected which is the initial purpose of the Draft Bill. A spokesperson said:
The First Minister welcomes the indication he has been given today that the Draft Wales Bill could be a potential vehicle for implementing the recommendations from Silk Part One. With regards to electoral arrangements, we believe these should be dealt with in Wales by Assembly Members
Sourced from ITV.com
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.
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.
“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.
A couple from Spain would have to pay £26 to fly home from Scotland.
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.
Sourced from BBC Scotland News
By Ian Taylor
A senior travel industry figure has said he can understand why the Treasury has refused to accept the industry case for cutting Air Passenger Duty (APD).
Guild of Travel Management Companies (GTMC) chief executive Paul Wait, until recently head of sales at Virgin Atlantic, said: “I can understand why the Treasury has listened with folded arms.”
Addressing the GTMC conference in Barcelona, Wait said: “I don’t think any government is going to take a different view.
“We can increase our lobbying effort, but I’m not sure it will make a difference whatever the government.”
Wait noted former transport secretary Lord Adonis had told the recent Institute of Travel and Meetings (ITM) conference that no government would lower APD.
Referring to the recent PwC report on the impact of APD, commissioned by airlines including British Airways and Virgin Atlantic, Wait said: “The report said if APD was abolished it could provide a boost, it could create 60,000 jobs, it could pay for itself.
“If someone knocks on your door and says give me £20,000 and it could turn into £60,000, would you give it?”
Wait told Travel Weekly: “We fully support Abta and the Fair Tax on Flying campaign. We do have to keep lobbying. We can’t just give up.”
But he said: “There is no point going to the Treasury saying ‘ we want you to do less’.
“We want to be able to say to the Treasury: if you drop APD, companies will reinvest the money in business trips.
“If we say to chief financial officers now, ‘what will you do with the money if APD is cut – invest in business travel or put it on the bottom line’, what will they say?
“We need to get to a stage where we can promise cutting APD will deliver investment.”
BA UK head of sales and marketing Richard Tams said “Paul may be right” but added: “Remember the hundreds of smaller companies with no chief financial officers. Getting APD back could mean more business travel by them.”
Sourced from Travel Weekly
Control of air passenger duty is an essential economic lever that would give the Scottish Parliament the power to boost growth by helping tourism and increasing business connectivity, First Minister Alex Salmond said today.
The First Minister said the existing APD regime, which sees the tax imposed uniformly across all of the UK’s airports, had led to the “ludicrous” situation where terminals in London were at capacity, while airports elsewhere were fighting for direct routes.
Speaking ahead of a keynote speech to the SCDI annual forum in Edinburgh, Mr Salmond cited research from PWC that showed air passenger duty in the United Kingdom was now the highest tax of its type anywhere in the world, a situation he said was hurting the Scottish economy.
The First Minister also pointed to York Aviation research on behalf of Scotland’s major airports that demonstrated the current APD level would cost the Scottish economy around £200 million a year in lost tourist revenue by 2016 as he said devolution of this tax would enable Scotland to encourage the establishment of more direct international air routes.
The First Minister said this would not only boost the Scottish economy, as well as reducing the cost of flights for passengers, but also help reduce environmental damage by enabling more people to fly direct to Scotland and not have to stop at a transport hub.
The First Minister said:
“There is now an overwhelming consensus that the current air passenger duty regime in the United Kingdom is hurting our economy by discouraging the establishment of direct air routes into Scotland’s airports.
“In February, PriceWaterhouseCoopers published a study that demonstrated UK air passenger duty is the highest tax of its type in the world by some margin.
“The level of air passenger duty is so uncompetitive, that it hurts the economy as a whole – not just the aviation sector. And its reduction would boost the economy as a whole. PWC suggested its abolition would boost exports by 5 per cent in total over the next three years, increase the UK’s GDP by £5 billion a year, and create approximately 60,000 jobs.
“That’s why PWC also found that reducing or abolishing air passenger duty could pay for itself. Increased receipts from other taxes, such as VAT from tourism revenues, would compensate for the reduction in APD.
“In simple economic terms, it makes no sense to retain air passenger duty at its current level across the UK. It makes even less sense in Scotland.”
Gordon Dewar, Chief Executive of Edinburgh Airport, said:
“This tax has now hit its tipping point where the damage that it is doing to Scotland far outweighs the benefits. It cannot stand and must be reviewed as a matter of urgency.
“The impact of this tax goes far beyond the boundaries of the airport, not just in Scotland, but across the world. Airlines are telling us that they are seeing it have an impact on passenger flows which is ultimately having an impact on their decision making on where to put planes.
“The evidence lays bare the argument that this tax is assisting with the deficit. Rather, APD is hindering our ability to tackle the economic challenges Scotland faces.”
Airlink Group chairman John McGlynn said:
“I would welcome a serious look being taken urgently on Air Passenger Duty, it is clear that this is now damaging the ability to attract new flights to the UK and in particular to Scotland.
“The recent concessions to Northern Ireland will have a direct impact on Scotland. If there was ever a tax that would be ideally suited to the Scottish Parliament this would be a prime example.
“Scotland needs new direct air routes and the devolution of APD to the Scottish Parliament would provide an essential lever to assist in delivering new routes that would have a transformational impact on the Scottish economy.”
Professor Lesley Sawers, Chief Executive of SCDI, said:
“Improving Scotland’s global connectivity is vital for economic growth. SCDI has called for the devolution of Air Passenger Duty for many years on the basis that this would be used to attract new international air routes to Scotland and provide a boost to Scotland’s exports, inward investment and tourism industry.
Sourced from Scottish Tourism Alliance.
By Luke James,
Publicly owned Cardiff airport has been dealt a blow after MPs blocked a bid to devolve airport taxes to Wales, Plaid Cymru MP Jonathan Edwards said today.
Wales First Minister Carwyn Jones called for powers over a raft of minor taxes, including Air Passenger Duty, to be devolved from Westminster as part of a new devolution settlement set out by the cross-party Silk Commission.
Mr Jones’s Welsh Labour government has since won praise for sealing the bold £52 million buyout of Cardiff airport.
But all Labour MPs, except Dennis Skinner, abstained on Thursday’s vote over the devolution of air passenger duty, allowing Tory and Lib Dem MPs to shoot down the transfer of powers.
And Mr Edwards told the Star it could damage Welsh government’s attempts to attract new business to Cardiff Airport.
He said: “If you’ve got an asset and you’re continuously bleating in the Welsh Assembly that you’re going to use that as an economic driver, the key aspect of making the most of that asset is control over the taxes levied for use of the airport.
“Airport duty has already been devolved to Northern Ireland and it was one of a number of small taxes recommended for devolution by the Silk commission.
“It’s astonishing that the Labour Party in London would rather these powers be in the hands of a Tory-led government than in the hands of a Labour Welsh government.”
Left Labour MP Dennis Skinner said he opposed devolution but wanted to scrap Air Passenger Duty and added “on all occasions possible, I vote against the Tories.”
Sourced by Morning Star Online
Plaid Cymru MP Jonathan Edwards will table an amendment to the UK Government’s Finance Bill in a bid to speed up transfer of control of Air Passenger Tax to the Welsh Government.
Devolving the airport duty is one of the recommendations of the recent Silk Commission Report. Mr Edwards is urging Labour MPs to support his amendment.
The UK Government-sponsored Silk Commission in its first report recommended the full devolution of minor taxes such as Airport Duty, Aggregates tax, business rates, landfill tax and Stamp Duty, in addition to a tax-sharing arrangement for income tax.
There are three important reasons why the Welsh Government should be empowered with fiscal powers as advocated by the Silk Commission.
Sourced from ITV Wales
This was followed by lots of noise from APD campaigners, telling tales of petitions, letters to their MPs etc – which got me thinking. Why has the Treasury disregarded them?
On the grounds that the government is in the business of making the right decisions for the economy, then either we haven’t got the message over, or we haven’t made the case.
Much has been made of the study by PwC, on behalf of the airlines, which outlines the case for abolishing APD.
However, as quoted in the Daily Telegraph: ‘a Treasury spokesman said: We do not recognise the figures in this report or agree with the assumptions behind it.’
This strikes me that we have not done a good job of getting the argument in front of the right people.
Is Abta using the correct lobbying tactics? Maybe they are; I am not in a position to judge, but if so it’s clearly not working.
Unless – which brings me to the second, and much more fundamental, point – we do not have a good economic case to present?
If I was working in the Treasury, and George Osborne asked me to look at the issue, I would probably mention:
- The PwC report was produced for the airlines and therefore has a vested interest in their businesses. Clearly abolishing APD would increase UK airlines’ traffic, but would it help the UK economy overall in these difficult times?
- The report says that abolishing APD would just about pay for itself in tax revenue, although there are potential substantial other long-term benefits, which would mean the UK economy would be £16 billion better off by 2015.
- However, there has been no recognition anywhere that any reduction in outbound holidaymakers means an increase in domestic holidays, thereby keeping the holidaymakers’ funds within the UK economy rather than spending them overseas. This oversight undermines the findings.
- We are getting mixed messages from the airlines who say that increasing airport capacity is vital, but also saying APD is impacting their future growth. I cannot reconcile these two views.
- The study suggests that abolishing APD will mean an increase in foreign holidaymakers, but again we are getting mixed messages. Visit Britain makes the point that easing Visa restrictions, making them easier and cheaper, is the main way to stimulate overseas holidaymakers. Perhaps, George, we should address this before APD.
- In terms of business traffic the study goes into some length about how the businessman will travel through European hubs, and give more business to European airlines. Quite frankly, if businessmen want to do business in the UK, they will fly here to do it. How they get here is a commercial decision and should not impact our thinking.
- For our own UK businessmen travelling overseas, there is no real case made that APD impacts their travelling to any large extent.
- George, APD is easy to operate and cheap to collect. It brings us in three quarters of a billion pounds per annum, which we need in these difficult times. And abolishing it will not gain us any votes.
I know this is a bit basic, but while there may well be a case for abolishing APD, it is self evident that we have not made it clearly enough, or action would have been taken. Am I wrong?
Sourced from Travel Weekly