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Old 23rd Jun 2017, 08:45
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Scottish APD reduction

I am surprised that no one has posted on here about the Scottish Parliament's vote in favour of reducing and then abolishing APD from April 2018. Given the growth in traffic at Scotland's main airports and Mrs Krankie's rhetoric re how Westminster Govt should be raising taxes to end austerity, this seems vaguely absurd. Maybe someone more computer literate than me could post the link - I saw it on the Buying Business Travel website.
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Old 23rd Jun 2017, 17:58
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The vote was passed to introduce a Scottish rate of APD. The new rates will be decided in a later vote. I beleive it will go one of two ways, a 50% reduction for everyone initially with a view to getting rid, or a freeze on short haul APD rates and a scrapping of long haul rates altogether. The rates are due to be decided later on this year or early next year with a view to the changes coming in to force next autumn.

Why is it absurd? The idea is to boost direct air links to Scotland by removing this ridiculous tax. Yes, we are seeing growth, but surely anything to further boost that would be good? I know some English airports were up in arms about this (NCL being the most vocal), claiming it was unfair. They could have focused their attention on getting their own APD rates changed or scrapped, but decide instead to focus their anger on Scotland which has historically always been more expensive to fly from. At the very least this will bring some competition.
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Old 23rd Jun 2017, 18:42
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At the very least this will bring some competition
We'll have to agree to differ on this one - having a beneficial tax rate is clearly an unfair advantage. Also, NCL are looking for a level playing field and haven't focussed their anger on Scotland - the focus is on central government.

Airport makes fresh Government plea on APD

Following the recent general election, Newcastle International Airport is now once again urging the government to announce specific measures to support English regional airports from the impacts of Air Passenger Duty (APD) devolution to Scotland
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Old 23rd Jun 2017, 19:03
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It by no means certain that any reduction will be approved. The SNP is a minority government, dependent on Green party support, and they are obviously opposed to any reduction, never mind deciding what public service will be cut back to fund it.

Nearly ten years ago, the Scottish parliament committed the country to a halving of Transport-related CO2 emissions. So far it has done virtually nothing to deliver on this, and transport emissions have continued to rise. But to actively encourage their growth?
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Old 23rd Jun 2017, 19:21
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It will pass. The SNP, Tories and Labour all supported it. The bill to introduce the APD rate passed by a considerable majority (108 for, 11 against, SNP only have 63 MSPs) with the Tories pretty much fully behind any kind of change. There just needs to be some agreement on how to go forward but a change will be approved, for sure. The greens don't support everything the SNP want, barely anything in fact, they are only aligned on independence, they disagree on many things.

http://www.bbc.co.uk/news/uk-scotlan...itics-40332210

As for the English airports, BHX, MAN, NCL were all actively pushing for a block on the APD devolution. Instead of focusing their energy on central government to start with.

Newcastle Airport chief lobbies party leaders over crucial Air Passenger Duty - The Journal

English airports cry foul over Scottish air tax competition (From HeraldScotland)

I think it's a bit rich for the combined effort, especially when BHX and MAN already do extremely well for long haul services with the current APD rate and Scottish reductions will pose no threat to them whatsoever. NCL is the only airport which really has a case, but that itself is no reason to prevent Scotland from attracting more business.
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Old 23rd Jun 2017, 20:23
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Doesn't this issue stem from EU competition law?

Anything where an individual taxation authority singles out an individual company (e.g. an airport) for preferential treatment falls foul of being defined as illegal state aid.

It is said that this prevents Westminster from varying APD between locations in England, but doesn't require the Scottish parliament to follow the same rates.

I can see how it could be viewed as "unfair" but you know, frankly that's life.

This is surely just one more illustration of why the Scots wanted a Parliament in the first place.
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Old 23rd Jun 2017, 20:42
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This is surely just one more illustration of why the Scots wanted a Parliament in the first place.
There's an answer to that, but we are moving into Jet Blast territory
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Old 23rd Jun 2017, 21:14
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I once posted on the NCL thread a rough outline of what I thought personally would be an acceptable nationwide rate of APD... I managed to dig it out. Some things have changed (this is from August 2016) but I think it still stands.


"I think the government need to screw their head on to be honest. Brexit was enough of a disappointment, enough said on that. But I think UA might have tried an extended season in 2017, if the pound hadn't dropped the way it did.

I am forever grateful for Emirates at NCL, couldn't imagine the airport without them, they've done a lot of good for us, even if they were branded as a white elephant for pretty much the first 5 years - proved people wrong.

Newcastle is now one of the slowest growing airports in the UK... I don't think we've really been in that position much, I remember many articles from before the recession that said we were the fastest growing. We've been completely overshadowed by long haul and low cost growth at Manchester and Edinburgh... Both of which have benefitted from the lack of a 3rd runway at Heathrow (I almost hope they don't get it). Other similarly sized airports to us are growing, albeit as I mentioned before mainly low cost.

The regional route development fund was, in my opinion ridiculous. That money that was wasted on oddball and marginal routes (most of which never materialised, or went up against existing operators) could have been much better spent on propping up routes like NCL-EWR, BFS-EWR, MAN-PEK, MAN-HKG... Among many others, EDI is after a China route, Fund it! Until it pays for itself, if it doesn't can it!

I just think if they were gonna give money for something, give it for something worthwhile

In my personal opinion, there should be fairer, differentiated bands of APD...
- Central London/Major airports in affluent areas: LCY, LHR and maybe LGW should pay full APD (£13/26 - £76/146)
- Outer london and +20 million ppa airports like LTN, STN, MAN should pay 75% current APD (£9.75/£19.50 - £57/£109.50)
- +10 million ppa airports should have APD devolved 50%: EDI and after this year BHX (£6.50/13 - £38/73)
- +5 million devolved to 25% current rate: GLA, BRS, hopefully soon NCL, LPL, BFS etc. (£3.25/£6.50 - £19/36.50)
- Airports of less than 5 million ppa should have APD fully devolved OR pay a standard flat rate of say... £5 per passenger in all classes of travel over all distances, perhaps 50% delivered back to the airport as a development fee
- Another potential band for consideration could be full devolution for airports with less than 1mppa, and/or full devolution on all non London domestic flights

This presents a lot of potential pros and cons. People who use LHR and LCY are always going to use LHR and LCY, fact... It's a high tax area anyway, why not pay full APD. The regions are much more marginal. Airports like MAN, STN, EDI, LTN, BHX have already paid their worth, so why shouldn't they pay tax? People at EDI and MAN might not be happy at NCL and LBA paying different tax bands, but while it may be a disadvantage (very small one) they already have a lot to offer AND already have a comprehensive network! Very very different to devolved APD to EDI, as they have more to offer to begin with, so would have a double advantage if they devolved their own APD.

The government would still get a good sum of tax from throughout the UK and being honest, the domestic passengers that BA could stand to lose to CDG, AMS, DXB etc. might stand in their favour. Funnel more through DUB and MAD, free LHR slots and it'll all balance out.

You'll probably all think I'm crazy, and the government would laugh me off... But that's what I'd do if I was prime minister

To complicate things more, I'd say airlines should be able to bid for devolution on long haul routes, such as EDI, GLA, MAN, BHX - China, MAN-HKG, NCL-DXB, anything else that may be struggling or need propping up. It could lead to routes like ISB-LBA being restarted... Or dare I say it NCL-NYC?

It's all good for the UK economy, and takes pressure off London airports, while UK passengers still line the government's pockets with the highest APD going (albeit at a lower rate than it used to be)

As I said... Call me crazy but I believe the regions should be given an advantage, not London. That can and do look after themselves"



Obviously I am biased, but finally things are looking up for NCL (although still a little rocky with the incumbent carriers not having grown for a good few years and the recent news of Aer Lingus ((stupidly, might i add!!!)) slashing the current 16 weekly NCL-DUB for a rather pathetic x7 weekly, mid afternoon service) but if EDI and GLA were to have their APD devolved, it would have a severe effect on Newcastle's services, we do very well for a small airport in a poor part of the country, but a lot of people are very price sensitive, and it's not an exaggeration to say they'd drive 2 hours up the A1 to save a tenner!

... maybe it's a good thing that half of the journey from Newcastle to Edinburgh is single carriageway on a God awful excuse for a major road between two capitals, might put some people off.
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Old 23rd Jun 2017, 21:25
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BHX

edi_local

BHX long-haul doing well - losing a 428 seat 77W and 176 seat 757 in the last few months is not doing well. Okay not many airports of BHX's size can boast about double daily A380's this winter and APD was not directly cited as an issue for these losses but certainly westbound it might have helped AA reconsider at least for summer although some would say with the AA product nothing would have helped!

Pete
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Old 23rd Jun 2017, 22:26
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Originally Posted by EK77WNCL
I once posted on the NCL thread a rough outline of what I thought personally would be an acceptable nationwide rate of APD... I managed to dig it out. Some things have changed (this is from August 2016) but I think it still stands.


"I think the government need to screw their head on to be honest. Brexit was enough of a disappointment, enough said on that. But I think UA might have tried an extended season in 2017, if the pound hadn't dropped the way it did.

I am forever grateful for Emirates at NCL, couldn't imagine the airport without them, they've done a lot of good for us, even if they were branded as a white elephant for pretty much the first 5 years - proved people wrong.

Newcastle is now one of the slowest growing airports in the UK... I don't think we've really been in that position much, I remember many articles from before the recession that said we were the fastest growing. We've been completely overshadowed by long haul and low cost growth at Manchester and Edinburgh... Both of which have benefitted from the lack of a 3rd runway at Heathrow (I almost hope they don't get it). Other similarly sized airports to us are growing, albeit as I mentioned before mainly low cost.

The regional route development fund was, in my opinion ridiculous. That money that was wasted on oddball and marginal routes (most of which never materialised, or went up against existing operators) could have been much better spent on propping up routes like NCL-EWR, BFS-EWR, MAN-PEK, MAN-HKG... Among many others, EDI is after a China route, Fund it! Until it pays for itself, if it doesn't can it!

I just think if they were gonna give money for something, give it for something worthwhile

In my personal opinion, there should be fairer, differentiated bands of APD...
- Central London/Major airports in affluent areas: LCY, LHR and maybe LGW should pay full APD (£13/26 - £76/146)
- Outer london and +20 million ppa airports like LTN, STN, MAN should pay 75% current APD (£9.75/£19.50 - £57/£109.50)
- +10 million ppa airports should have APD devolved 50%: EDI and after this year BHX (£6.50/13 - £38/73)
- +5 million devolved to 25% current rate: GLA, BRS, hopefully soon NCL, LPL, BFS etc. (£3.25/£6.50 - £19/36.50)
- Airports of less than 5 million ppa should have APD fully devolved OR pay a standard flat rate of say... £5 per passenger in all classes of travel over all distances, perhaps 50% delivered back to the airport as a development fee
- Another potential band for consideration could be full devolution for airports with less than 1mppa, and/or full devolution on all non London domestic flights

This presents a lot of potential pros and cons. People who use LHR and LCY are always going to use LHR and LCY, fact... It's a high tax area anyway, why not pay full APD. The regions are much more marginal. Airports like MAN, STN, EDI, LTN, BHX have already paid their worth, so why shouldn't they pay tax? People at EDI and MAN might not be happy at NCL and LBA paying different tax bands, but while it may be a disadvantage (very small one) they already have a lot to offer AND already have a comprehensive network! Very very different to devolved APD to EDI, as they have more to offer to begin with, so would have a double advantage if they devolved their own APD.

The government would still get a good sum of tax from throughout the UK and being honest, the domestic passengers that BA could stand to lose to CDG, AMS, DXB etc. might stand in their favour. Funnel more through DUB and MAD, free LHR slots and it'll all balance out.

You'll probably all think I'm crazy, and the government would laugh me off... But that's what I'd do if I was prime minister

To complicate things more, I'd say airlines should be able to bid for devolution on long haul routes, such as EDI, GLA, MAN, BHX - China, MAN-HKG, NCL-DXB, anything else that may be struggling or need propping up. It could lead to routes like ISB-LBA being restarted... Or dare I say it NCL-NYC?

It's all good for the UK economy, and takes pressure off London airports, while UK passengers still line the government's pockets with the highest APD going (albeit at a lower rate than it used to be)

As I said... Call me crazy but I believe the regions should be given an advantage, not London. That can and do look after themselves"



Obviously I am biased, but finally things are looking up for NCL (although still a little rocky with the incumbent carriers not having grown for a good few years and the recent news of Aer Lingus ((stupidly, might i add!!!)) slashing the current 16 weekly NCL-DUB for a rather pathetic x7 weekly, mid afternoon service) but if EDI and GLA were to have their APD devolved, it would have a severe effect on Newcastle's services, we do very well for a small airport in a poor part of the country, but a lot of people are very price sensitive, and it's not an exaggeration to say they'd drive 2 hours up the A1 to save a tenner!

... maybe it's a good thing that half of the journey from Newcastle to Edinburgh is single carriageway on a God awful excuse for a major road between two capitals, might put some people off.

Very sophisticated, but far too complicated.

APD has far more problems than solutions.

It can't be fixed.

As a tax it's really weird. It has no direct relationship to any of price, cost or value. These are all well established bases for taxation, and APD exhibits none of them.

It's just a fixed government charge for something government has no real involvement in.

Just get rid of it, and try again.
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Old 23rd Jun 2017, 23:39
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Unfortunately it is illegal under international treaties to tax the fuel, and there's no VAT on transport fares. APD may be a very crude tax, but it is the only way yet devised of raising revenue from an activity which is a significant emitter of CO2. To not tax it, would in effect be to subsidise it.
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Old 24th Jun 2017, 05:54
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Newcastle are at least great supporters of Heathrow rw3 so if the did lose Emirates they would still be connected to long haul.
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Old 24th Jun 2017, 05:56
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Not to tax it, in effect would be to subsidise it.
(There, corrected the English for you!)

So the Netherlands and Ireland are 'subsidising it'?

(Just how much APD is collected from all those freight aprons?)
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Old 24th Jun 2017, 07:27
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Not to tax it would, in effect, be to subsidise it.

Even better English. Note to self: don't post after midnight.

I think most people agree that it would be much fairer to have an international tax on hydrocarbon fuels, whether by aircraft or ships. The LCCs would prefer this because they operate modern, fuel-efficient, full a/c.
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Old 24th Jun 2017, 09:49
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Going back to the top of this thread, the reason that I think a reduction of Scottish APD would be "absurd" is because 1/ pax growth at at least EDI and GLA currently very strong and doesn't need extra stimulation and 2/ the SNP make much noise about how Westminster should "end austerity", increase taxes and spending so why cut a tax Holyrood controls? Also, given the SNP's left leaning politics it is proposing cutting a tax that only affects the better off. The poorest in society only see a plane when one flies overhead.
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Old 24th Jun 2017, 10:12
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I always thought that simple tax paid by the airline or operators based on a per-seat charge would be easier to administrate, and allow the airline to pass the charge on in full, in part, or not at all, or allocate different proportions of it to different areas of the cabin, in effect charging this at the front who have paid more for their seat more in money terms but less in percentage terms based upon the amount the passenger had actually paid for the seat. e.g. A passenger paying £300 for their seat, of which £ 30 was allocated as APD (or whatever it would be called) would pay substantially less in percentage terms than another passenger, travelling in cattle-class for whom £30 is a huge percentage of their £100 ticket. It need not be referred to as a "tax" merely another one of the seemingly never ending list of ancillary charges that appear on tickets already.

The principal would be however that the carrier paid the tax, not the passenger.

And, the charge should be paid by all commercial and business flights, using multi engine aircraft with in excess of 9 seats, or in the case of cargo, say a payload capacity of 1000 kg / 6 cubic metres.

In doing this carriers would be be forced to look at their loads and remove excess capacity, where it exists, to reduce costs / maximise profitability and have the alleged desired result of operating the tax as an environmental tax, rather than another way of generating more money for government koffers.
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