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A gloomy picture

Old 22nd Nov 2011, 22:48
  #21 (permalink)  


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However, if APD is forcing companies out of business, then at some point the costs of redundancy and unemployment benefit more than outweighs any income. The loss of tax revenue from companies the size of TCX would wipe out any fiscal advantage from APD in one fell swoop.

The Dutch immediately saw the damage that an APD did, and dumped it very quickly, if I remember rightly Schiphol saw a drop of 30% in pax numbers within 9 months of the introduction of a departure tax.

Did the government not announce recently that APD would increase in April? And if APD is supposed to be a "green" tax, then with the introduction of ETS then surely APD should die...?
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Old 22nd Nov 2011, 23:01
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However, if APD is forcing companies out of business, then at some point the costs of redundancy and unemployment benefit more than outweighs any income.
Good point, but at what point? I'm guessing that a large proportion of those costs are borne by the private sector. The government, like any government, will have about as much foresight as a snail crossing the M25 in the rush hour, and won't be thinking long term!
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Old 22nd Nov 2011, 23:09
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ncleflights - if one were to draw 2 straight lines, one from Newcastle to Lancaster, and another going east-west about 10 miles south of Edinburgh / Glasgow, we find a large area of land with a relatively low population density. Yes, the residents of Berwick or Carlisle might switch from choosing NCL / MAN to instead using EDI / GLA respectively, but I am not yet convinced many of those living in Newcastle, Lancashire or Scotland's central belt would realistically consider crossing the border and making a long land journey to an airport for a flight, either now or in the future.

Do you happen to know if there is any publicly available data showing how many people currently make these big land journeys to reach a different airport ?
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Old 23rd Nov 2011, 00:58
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davidjohnson6 - yes the population is small if we use the area given in your example and I would have agreed with you until recently. However if the Scottish Government abolish APD as they have indicated they want to I think quite a few folks would travel to save the fee, particularly if its a long haul flight and a family of 4. In this example your going to save a fortune.

Whilst I am unsure as to whether any data exists as to whether folks travel long distances we do have a recent example to draw upon. Continental lobied hard to have the NI assembly reduce APD in NI as they were loosing long haul passengers from Belfast to Dublin which of course did not have APD. I think we can draw on this example as evidence that given the chance to save a few hundred quid folks will drive a couple of hours up the road rather than 15 minutes to the local airport. Ive done it a few times myself driving to Manchester rather than flying from Newcastle to see my brother in the US as on average I can save £600 (family of 4). If APD is abolished in Scotland I would simply drive to Glasgow and save even more, its a no brainer and I live 5 minutes from Newcastle Airport terminal entrance.
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Old 23rd Nov 2011, 01:04
  #25 (permalink)  


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Evidence exists in the Dutch example.

Frankfurt and Brussels gained as Schiphol lost.
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Old 23rd Nov 2011, 01:59
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All the airlines could always just turn around and whack a massive surcharge on all governmental travel, be it as a charter or individual seats. It will be ok as long as they say its for green taxes.
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Old 23rd Nov 2011, 05:03
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NS
I donít think you understand what I was trying to emphasise. The current situation is not caused by the withdrawal of subsidies, but by interference. Your views are narrow and the better we get to a free market, the better. My assumptions are based on the worldwide industry where carriers are not allowed to fail, protected air service agreements and sovereign guarantees allowing unhealthy carriers to expanding their fleets where their balance sheets are a sea of red. Where we do agree however, is that APD is another stealth tax, where the process will undoubtedly end up in the same pot as speeding finesÖ
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Old 23rd Nov 2011, 06:44
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Well, I'm no spring chicken but I can honestly say I can't recall a more anti-aviation government than this one. At least, not since the Wilson administration of the late 1960's introduced the £25 per pax limit on the amount of currency that could be taken abroad (per year if my memory is right), which played a big part in the demise of British Eagle.

If the Dutch government (historically one of the world's greenest) can see the folly of what was a much lower rate of Dutch APD, and abolish it, then HMG should take note. I suspect the lingering influence of Zac Goldsmith here.
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Old 23rd Nov 2011, 09:05
  #29 (permalink)  
 
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sanook:
I donít think you understand what I was trying to emphasise. The current situation is not caused by the withdrawal of subsidies, but by interference
Oh don't worry I fully understand what you were trying to say. I just don't agree with it. The logic of the free market which you champion, if it continues to be applied, will centralise air travel on a few large airports which have the economies of scale and the large and dependable passenger flows to generate the car parking and shopping mall revenues which replace the subsidies of old. Public authorities in all European - and many other - countries could see long ago that local airports were a public resource which generated benefits for the wider economy and society, which is why virtually all airports were publicly-owned in the not too distant past. The demise of the public authority and the notion of public assets as accepted ideas in the last 30 years, and the inexorable drive to move resources from public to private hands, means airports can only be privately-owned now. They are therefore faced with that age-old question "how on earth do you make money out of aviation?" The answer is the same as it always was: "by making someone else bear at least some of your costs".
NS
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Old 23rd Nov 2011, 10:09
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NorthSouth - I dont think its as simplistic as your making out, as has already been mentioned I dont think this would cause problems for Newcastle but also Leeds and Manchester to a lesser extent. If your a family you are going to save a fortune flying long haul from Edinburgh or Glasgow. The savings will far outweigh the extra cost of parking fuel etc.
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Old 23rd Nov 2011, 17:08
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Evidence exists in the Dutch example.
Frankfurt and Brussels gained as Schiphol lost
Yes, evidence that a small country with only one significant international airport and with land borders with two other countries with international airports in easy travel distance can lose out from a differential tax regime. But the only equivalent cases in the UK would be the likes of the Belfast-Dublin and Newcastle-Edinburgh or maybe Carlisle-Glasgow examples explored above. Abolishing APD would make no difference to, e.g., people flying internationally from Bristol, because . And if it was possible for Salmond to abolish APD in Scotland, what would it achieve? Increased transatlantic traffic from Edinburgh at the expense of same from Newcastle? Why's that progress? And how many Newcastle people would make the journey given the increased travel and probably car parking costs?
NS
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Old 23rd Nov 2011, 17:54
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What's the position in Germany? They have a high APD tax (2nd highest in Europe?). Is there going to be any change with their's?
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Old 23rd Nov 2011, 18:36
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BBC News - Airlines call for Air Passenger Duty to be scrapped

Good to see the airlines ramping up the pressure on our silly government, its a shame that the whinging of a few hundred environmentalists will probably get more attention.
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Old 23rd Nov 2011, 20:55
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The case for Bristol & Birmingham could come under the Welsh Government considering to reduce/abolish APD.

However they seem to be slower at working at this compared to the Scottish & Northern Ireland Governments.
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Old 23rd Nov 2011, 21:24
  #35 (permalink)  
 
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mathers - I could see a case for APD being reduced or even scrapped at Anglesey and Swansea, but would struggle to see why there should be any kind of reduction at Cardiff.

I would be surprised if any long-haul carrier opened at Cardiff, given that Continental have left Bristol for the time being, and the Govt is unlikely to want to subsidise those flying from Cardiff to the Mediterranean beaches or UK domestic

Is there however a mechanism for the Govt to subsidise a specific route or two for a limited period of time (2 years maybe ?) as exists in the USA, with the offer open to any airline choosing to fly the route ? Perhaps the Welsh Govt might want to encourage the development of a Cardiff-Frankfurt or Cardiff-Dusseldorf route ? Would be much easier to argue in favour of it helping to boost the Welsh economy...
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Old 23rd Nov 2011, 21:36
  #36 (permalink)  
 
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mathers_wales_uk - Agree with you 100% however I think the Welsh assembly are not considering removing APD at the moment. Its been mentioned but no firm plans unlike the Scottish Government who have made a firm commitment to get rid of it.

The whole situation is a mess as politicians in various parts of the country recognise that APD is actually damaging the economy. The Scottish Office has recognised this for years in the Highlands and Islands. And indeed the UK Government itself has actually acknowledged that this harmful tax restricts air travel by lowering APD for the Continental airline service from Belfast International to Newark.

I dont think we have ever had a government as anti aviation as the current one whilst the decline in regional airports can be partly be blamed on the general economic climate it must be also be blamed on the current administration. The airline industry unlike every other form of transport is not subsidised whereas rail and bus travel is heavily subsidised by the UK taxpayer. The aviation industry does not ask for billions of pounds each year in subsidy to buy new planes or build new airports. It pays for this itself. Imagine the huge public outcry if we added £12 Rail Passenger duty to a single rail ticket. Need I say more.
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Old 23rd Nov 2011, 23:25
  #37 (permalink)  
 
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NS open your eyes. You fail to understand the difference between government investment and subsidies. Investment in infrastructure is what is needed. We need a third runway at Heathrow; we need a second runway at Gatwick. We need a new airport in the Thames for the future otherwise UK plc will remain stagnant. Aviation has made significant advances in reductions of emissions with new technology. We need a policy that will put the UK back where it belongs. Subsidies are irrelevant .In your case, let the market decide whether there is demand for the existence of a regional airport. Fiscal policy has got us into this mess and we are paying the price.
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