Airport Passenger Duty

[Navpi]

Interesting article in the December Airport Magazine with reference to Airport Passenger Duty and how it is effecting UK regional airports.

Spun a bit too heavily toward Manchester but I guess it is the only place which could provide major levels of capacity immediately without new runways , or additional terminals.

Must confess I didn't realise that if you fly in and out same day from one international destination to another international destination, no APD is payable to the UK treasury.

It is therefore somewhat bizarre that we are in effect talking about the need for at least 1 maybe 2 new runways at LHR but a significant proportion of the passengers who use it i.e. tfr pax are the ones most likely to benefit, but seemingly are not contributing in any way shape or form to its cost !

[Cyrano]

It is therefore somewhat bizarre that we are in effect talking about the need for at least 1 maybe 2 new runways at LHR but a significant proportion of the passengers who use it i.e. tfr pax are the ones most likely to benefit, but seemingly are not contributing in any way shape or form to its cost !

I think you have it a bit backwards. Airports will be collecting revenue from all passengers including transfer passengers (whether it's landing fees and PLS charges, or profits from airport retail). It's APD on the other hand which doesn't contribute in any way shape or form to the cost of the infrastructure - it's just a general tax.

[DaveReidUK]

Must confess I didn't realise that if you fly in and out same day from one international destination to another international destination, no APD is payable to the UK treasury

Night-stopping international transfer pax are also exempt, provided that they continue their journey within 24 hours.

Incidentally, I'm surprised that Airport Magazine hasn't managed to get the name of the tax correct - it's Air Passenger Duty.

[Tableview]

-the following transfers are exempted:

* transfer interval of 24 hours when the following flight is international
* transfer interval of less than 6 hours when the following flight is domestic and arrival is before 17h00.

If following flight is domestic and arrival is at 17h00 or later, transfer interval is extended to 10h00 on following day.

*note: Open dated departures are considered as non- connecting and the apd is chargeable. Only when specific departure times are booked can a con- nection exemption be considered.

- when departure is scheduled on small aircraft less than 10 tons maximum take off weight -

the channel islands alderney (aci), guernsey (gci) and jersey (jer) are not part of the uk for apd purposes and do not apply air passenger duty on departures from those airports.

[CelticRambler]

- when departure is scheduled on small aircraft less than 10 tons maximum take off weight -

To be revised downwards from next April (6t)

The OPs point remains valid, however. Heathrow's third runway is frequently justified by citing the "hub" argument, i.e. potential for international travellers to connect in London instead of Paris/Amsterdam/Frankfurt, but these passengers are exempt from APD so their benefit to the country is limited to whatever profit the airport can make from their presence.

Similarly, the supposed original purpose of APD was to encourage travellers to use alternative forms of transport, or compensate for the alleged environmental damage caused by those that refused to opt for an overland journey. Yet transfer passengers whose short and commercially insignificant stay in the UK is accompanied by the same take-off emissions as anyone else are exempt from APD while the small businessman in Kent or Devon who needs to travel to Scotland is penalised twice should he choose to prefer working to commuting.

[DaveReidUK]

Heathrow's third runway is frequently justified by citing the "hub" argument, i.e. potential for international travellers to connect in London instead of Paris/Amsterdam/Frankfurt

That's a very narrow definition of a hub's USP. Non-connecting passengers, both international and domestic, also benefit from the synergies that a hub offers whenever they fly on a route that needs transfer traffic to be viable.

[Navpi]

That's a very narrow definition of a hub's USP. Non-connecting passengers, both international and domestic, also benefit from the synergies that a hub offers whenever they fly on a route that needs transfer traffic to be viable.

But surely if we are led to believe London is suffering because of lack of slots and interconnectivity would it not be better to sacrifice some of these flights for say 2 direct point to point Chinese or Brazilian flights ?

Do we really need flights to New York every 30minutes ?

We all know that APD has sod all to do with emissions and more to do with "tax collect". BUT there is something radically with a system that is supposed to reduce emissions which has no impact on those passengers who supposedly make a contribution to that pollution but do not a jot of business in the UK ?

[Fairdealfrank]

Quote: "Similarly, the supposed original purpose of APD was to encourage travellers to use alternative forms of transport, or compensate for the alleged environmental damage caused by those that refused to opt for an overland journey. Yet transfer passengers whose short and commercially insignificant stay in the UK is accompanied by the same take-off emissions as anyone else are exempt from APD while the small businessman in Kent or Devon who needs to travel to Scotland is penalised twice should he choose to prefer working to commuting"

No, it was one of Ken Clark's 22 "stealth" taxes (along with VAT on insurance and fuel bills for example). The "stealth" taxes principle has been continued by Gordon Brown, Alister Darling and George Osborne.

It was introduced when we were in recession and came out of the ERM and before the so-called Clark/Brown "boom".

It had/has nothing to do with alternative forms of transport (for the most part, there aren't any), or the environment or anything else. For many years it was relatively modest, but since the recent recession, Brown, Darling and Osborne have been raising it out of all proportion.

[DaveReidUK]

Do we really need flights to New York every 30minutes ?

No, of course not - LHR to JFK/EWR certainly doesn't fit my description of "a route that needs transfer traffic to be viable".

[Skipness One Echo]

But surely if we are led to believe London is suffering because of lack of slots and interconnectivity would it not be better to sacrifice some of these flights for say 2 direct point to point Chinese or Brazilian flights ?

Airlines are (well should be!) a commercial business, that means they fly to where the money is. This is why they fly to NYC so often, they need to realise as much value from their assets (aircraft). They could fly them to Brazil but unless that makes more than the NYC rotation, commercially it's a bad decision. What many on here advocate is increasing capacity so NYC capacity and profits are maintained and growth into new markets can be funded. Bear in mind these new markets will be loss making for some time.

One bad year can kill any business.

[The SSK]

Wherever there is a similar tax - France, Germany, Netherlands for a while, transfer traffic is always exempted, otherwise it would totally distort comeptition between the home-based hub carrier and its competitors.

[Navpi]

Not being rude SSk but not sure what you mean ?

APD has pretty much been scrapped in most EEC countries , where it does exist the rates are so low that it makes little difference to total price.

This is why I guess Manchester is so animated !

Its not London BUT its not a regional airport either.

I understand it is heamorraging traffic to hubs like AMS FRA CDG simply because it is so much cheaper to fly via those airports thus avoiding the UK long haul element of APD by flying direct.

If that is true its not only increasing the number of uneccessary flights but the tax take is lower.....

Barmy beyond belief !

[The SSK]

APD type taxes are levied in France, Germany, Austria - at much lower rates than APD admittedly. Germany goes up to €53 max. Netherlands had one but withdrew it because it was costing the economy a lot more than it was bringing in. Belgium planned one but saw what was happening in the Netherlands and scrapped the plan.

I understand it is heamorraging traffic to hubs like AMS FRA CDG simply because it is so much cheaper to fly via those airports thus avoiding the UK long haul element of APD by flying direct

Wrong. If you fly long haul from UK via one of these hubs you still pay long haul APD - unless you purchase two separate tickets (almost certainly more expensive and no protection in the case of missed connections.

[Fairdealfrank]

Quote: "APD type taxes are levied in France, Germany, Austria - at much lower rates than APD admittedly. Germany goes up to €53 max. Netherlands had one but withdrew it because it was costing the economy a lot more than it was bringing in. Belgium planned one but saw what was happening in the Netherlands and scrapped the plan."

Denmark also scrapped it and Ireland changed their's to Eu 3.00 (£2.50ish)

Quote: "Wrong. If you fly long haul from UK via one of these hubs you still pay long haul APD - unless you purchase two separate tickets (almost certainly more expensive and no protection in the case of missed connections."

Correct me if this wrong, but AFAIK, it can be done one ticket, by booking a multi-sector journey, with a 24 hour stopover at the European hub on the outward journey, e.g on KL: LHR-AMS on monday; AMS-NRT on tuesday.

[Navpi]

Thanks for Clarification SSK

and yes

Correct me if this wrong, but AFAIK, it can be done one ticket, by booking a multi-sector journey, with a 24 hour stopover at the European hub on the outward journey, e.g on KL: LHR-AMS on monday; AMS-NRT on tuesday.

That was my take re outbound !

Plus the price differentials between using what can be descibed as "dumped capacity" is lower than premium service direct...its completly skewed when there are multiple examples of fares like;

£700 Manchester - Newark
£300 Manchester CDG - Newark

[Tableview]

by booking a multi-sector journey, with a 24 hour stopover at the European hub on the outward journey, e.g on KL: LHR-AMS on monday; AMS-NRT on tuesday.

Some fare types don't allow a stopover, or charge for one, and then there is the extra money that one would possibly spend during the stopover, which would wipe out any saving on APD. There is only a benefit if you want to stop over in, e.g. AMS - as I invariably do.

[Fairdealfrank]

Quote: "Some fare types don't allow a stopover, or charge for one, and then there is the extra money that one would possibly spend during the stopover, which would wipe out any saving on APD. There is only a benefit if you want to stop over in, e.g. AMS - as I invariably do."

Fair point.

As for AMS stopovers, it would be a shame not to!

Guess it's a case of pay your money take your choice: the money goes to Chancellor, or the money goes towards a pleasant time in Amsterdam.

[John MacCalman]

I understand that Belfast (BFS) will be exempt from UK Air Passenger Duty in 2013 on International flights. Till the end of this year pax only paid the domestic rate for these flights. This is all to do with competition from Dublin (DUB) where the UK APD did not apply. Airlines (well mainly United) had threatened to pull out unless something was done so the Northern Ireland Government has abolished APD on these flights.
The UK Government should take the same view to make UK airports in a stronger position Vs Europe and abolish APD now.

[Navpi]

The Welsh have said they will abolish APD "if" they buy Cardiff !

AND if the Scots gain independence it will also be scrubbed at Glasgow and Edinburgh !

[GAZMO]

Zero APD from NI only applies to long haul flights which I believe is more than five hours duration NOT all International flights

[John MacCalman]

I happily stand corrected :) but wish it could be abolished on all flights from all UK airports.

[MerchantVenturer]

The Welsh have said they will abolish APD "if" they buy Cardiff


It's not as straightforward as that.

The Silk Commission that last month published its initial recommendations into devolution of a range of taxes to the Wales Assembly Government (WG), including apd, believes that in the first instance long haul apd should be devolved to the WG, followed by all apd in due course.

It will be a matter for the Westminster Government to decide whether to follow some, all or none of the Silk Commission's recommendations.

Following its consultation into apd in 2011, with devolution then one of the issues, the Westminster Government decided that it would maintain the status quo so far as Scotland, Wales and England were concerned though the matter would remain under consideration in future. In other words it was in the too-hard-to-do basket at that time and I see nothing to suggest that this has changed.

English airports, especially those in close proximity to Wales and Scotland, had expressed serious concern which was a point mentioned by Justine Greening, the then Treasury Minister, in a letter to my MP at that time.

The Davis Commission will report its findings into UK airport capacity in 2015 and it's difficult to believe that apd will not feature in some way, if indirectly. In addition the House of Commons Select Committee on Transport is conducting an enquiry into aviation strategy with apd one of its remits and is not expected to report until shortly before the Davis Commission.

All this give the Westminster Government every excuse to put off any final decision on apd devolution until after the next general election.

Wales's First Minister might want to be given charge of the Principality's apd but there are a lot of obstacles to be negotiated before that could occur, whoever owns CWL.