Archive for the 'Aviation Economics' Category

Want people to take less domestic flights? Leave it to the market

Wednesday, April 11th, 2007

Looking back over the last few weeks, it really has been silly season from various so-called environmental organisations, who have each taken their turn at launching evermore ludicrous potshots at the aviation industry. One of the most bizarre episodes involved Greenpeace campaigners turning up to protest at British Airways reinstating their flights from London Gatwick to Newquay. It is not that I’ve got anything against environmental organisations protesting about short-haul flights - they have some valid points to make - it is just that they really do seem to pick on the most ridiculous targets.
Of all the major airlines operating flights from UK airports, why target BA? Surely these groups would want target the airlines which are growing fastest, and which they see as the biggest threat - Easyjet and Ryanair? They’ve levelled plenty of criticism about the growth of no-frills flights before, but I can’t help wondering that the real reason for targeting BA is that they are a soft touch. The dumbest of all anti-aviation groups, the aptly named (no, I don’t do irony) Planestupid, did try to have a go at Easyjet, but turned up at the Easy-brand headquarters in Camden, instead of the Easyjet head offices, which are situated in a bright orange hangar at Luton airport!   Perhaps Planestupid are one of the few organisations out there who practice what they preach, because anyone who has ever taken flights from Luton knows that Easyjet’s head office is impossible to miss! Of course, they wouldn’t dare mess with Ryanair – not only are the Irish airline notoriously litigious, but their tough talking (and highly intelligent) chief executive, Michael O’Leary, would tear them to shreds. 
So why even bother to add more fuel to the fire, and keep commenting on this topic? Simply because, in broad terms, I do actually agree with the principle – short-haul flights should be replaced by quality, high-speed train services. However, as always, the do-gooders have got plenty of sticks with which to beat us, but they are pretty lousy at coming up with carrots. So, looking over some recent UK domestic air route changes, I’ll do a bit of their homework for them. Below are just a few examples of routes which have been cancelled, or significantly cut back, in the face of improved competition from high-speed train services or more suitable airline rivals:
The end of BA Connect - whether British Airways continue to operate flights to Newquay or not, the least that groups like Greenpeace and Friends of the Earth could have done is given them a huge pat on the back for finally bringing the axe down on their heavily unprofitable, and equally wasteful, BA Connect regional airline. Despite half-hearted attempts to rebrand this business and launch it as a low fares operation, BA Connect was always going to be a costly company to run, and one which relied on heavily inefficient aircraft. Our understanding is that there were several BA Connect routes which regularly operated with single figure passenger loads. Those routes which are still viable, will continue to be operated by Flybe, leading to some inevitable rationalisation in the market, especially on numerous city pairs where the airline duo competed head-to-head with each other. This means that there are now huge efficiency improvements on flights between Scotland and major regional hubs such as Birmingham and Manchester.
Axing of British Airways Gatwick to Newcastle flights; reduction in frequency on British Airways Gatwick to Glasgow flights - in both of these cases, British Airways might be giving way to no frills competition in the form of Jet2 and Easyjet respectively, but it is generally accepted that no-frills airlines offer greater efficiencies than their traditional counterparts, in terms of both financial costs and fuel burn per passenger. Additionally, Eastern Airways were unable to make their flights from London City to Newcastle work. Although we always felt that this particular route looked ambitious, we would expect that the vast majority of sensible business travellers between London and the Northeast will continue to opt to take the train.
Manchester to Edinburgh (Jet2) - although this route continues to be operated by Flybe (who have inherited the route from BA Connect) and BMI Regional, we suspect that this flight is simply too short to be viable for no-frills operation.
Liverpool to Edinburgh and Glasgow (Flybe); Belfast City - Flybe’s attempt to muscle in to Liverpool has to be one of the most spectacular failures in low-cost airline base set-ups. Although there was no other competition on flights from Liverpool to Scotland at the time (Ryanair have subsequently launched cheap flights from Liverpool to Inverness and Aberdeen), there just does not appear to have been enough demand to make flights from Liverpool to the Scottish central belt work. It might look surprising that these routes were a failure, considering that Manchester can still support competition to both cities between Flybe and BMI regional, but this is significantly helped by transfer traffic, which is not relevant to Liverpool. Flybe’s failure on the Liverpool to Belfast City route was a little bit more surprising to us, but it seems that they just couldn’t compete against Easyjet’s well established flights to Belfast International.
Liverpool to London City (VLM) — reduced frequency. This service initially operated five times a day when the route started, but now VLM operate just three daily flights between Liverpool and London City. During the time that these flights of operated, the West Coast mainline has undergone significant upgrades. However, VLM have recently increased their frequency on their London City to Manchester flights, bucking the general trend towards rail. This suggests to us that rail travel has a significant advantage over flights into other London airports - especially Stansted and Manchester, but that for the time being at least, VLM can capitalise on being able to get people in and out of the Docklands financial district very quickly. As the West Coast mainline undergoes further improvements, and as domestic flights continue to be squeezed by having to pay two sets of air passenger duty, we wouldn’t be surprised to see VLM’s Liverpool flights getting dropped within the next 12 months.
Birmingham to Newquay (BmiBaby) – there isn’t much difference in the drivetime between Newquay and either Birmingham or London, but BmiBaby’s route to the Cornish surfing Mecca just did not seem to work from Birmingham. There might well have been the operational reasons behind this decision, but it was interesting to see that BmiBaby’s Manchester to Newquay flights (Manchester is another two hours up the road) have survived. We think this might be an interesting case in point about the viability of shorter domestic hops - even if the road journey takes a bit longer, people still prefer the convenience of driving in their own car. This is less of an issue for more business dominated routes, where speed, and the ability to work during the journey, offer advantages which outweigh the convenience of the car.

We hope that the above examples show that market forces can and will have a significant effect on people’s choice of transport mode, regardless of any input from the environmental lobby. As each case has shown, the reasons for success or failure of any particular flight route can be extremely varied, and even these are subject to a liberal dose of our own speculation. However, what they highlight is that the aviation industry, in the UK at least, is extremely Darwinian in its weeding out of the poor performers. Perhaps this stems down to the ultimate paradox of air travel - because flying is an inherently resource intensive method of transport, companies have to be extremely efficient in their usage of fuel, and other assets like aircraft, in order to compete and survive. Adding additional environmental costs on to short-haul flights might tip the balance against inefficient routes even further, although this might also endanger some economically vital regional routes. 
There has been scant debate so far about where additional taxes on flights should be allocated, but any fiscally responsible government should take some very deep breaths before handing this cash straight over to the railway industry. When the national flag carrying airline (British Airways) withdrew from its base operations from every UK city apart from London, there was no big outcry - the move was accepted as a rational and necessary cost-cutting effort. Now what would happen if the same efficiency measures were proposed on the rail network? Mention of Dr Beeching (the notorious BR chairman who closed huge swathes of the UK railway network in the 1960s) will send shivers down the spine of any avid train proponent, but if we are going to be serious about making long-distance train travel an economically and environmentally viable alternative to flying, isn’t it time the rail industry borrowed a few efficiency measures from the no-frills airlines?

We must stub out this victimisation of aviation

Tuesday, April 10th, 2007

Last week, I got an early leak of a press release from the IPPR (Institute of Public Policy Research), suggesting that flights should now carry environmental health warnings in a similar manner to cigarettes.

The IPPR has singled out aviation, and called for measures including:

• Large, and clearly visible warnings, with statements such as “flying causes climate change”.
• Estimates of average emissions for each flight taken.
• A comparative emissions chart between flying and making the same journey by rail or coach.

The first measure is barely worthy of comment, such is its crass stupidity. The second measure looks reasonable enough - airlines such as Flybe have called for an environmental labelling scheme which would make it mandatory for all airlines to provide this information, in much the same way as household appliances have energy star ratings, and car manufacturers must declare their carbon dioxide emissions and fuel consumption.

The third measure might help consumers to make informed decisions, although we would of course argue that any such comparison must also include the subsidies handed out to the alternative rail journey, so passengers can weigh up the economic and the environmental externalities of the journey.

We continue to be disappointed, although not surprised, that none of these environmental organisations or supposedly intelligent think tanks are calling for similar emissions data to be made available for rail journeys. Whilst we fully accept that rail journeys are generally less polluting than flights, the margins are nothing like as great as claimed, once average occupancy levels and power consumption methods are taken into account.

Recent suggestions that we are a nation addicted on so-called binge flying are easy political soundbites, but has anyone checked growth rates on all other modes of transport, particularly on the roads and railways?

I challenge the Institute for Public Policy Research to run a survey of airline passengers checking in for flights at Stansted, or any other London airport of their choice. I guarantee that every single one of them will say that they enjoy the freedoms which flying brings them. I would also wager that the vast majority would be perfectly happy to accept the principle that the airline industry should pay a fair price for any environmental damage it causes.

Of course, the environmentalists will then argue that if people want to continue travelling, they should do so by less environmentally damaging means, such as by high-speed train. When the rail network is up to scratch, and when we have enough renewable energy to make inter-city train travel’s astonishingly low occupancy rates an irrelevancy, then we would unequivocally support this argument. However, passengers really don’t need the eco-puritans to tell them this - as the figures for modal splits between air and rail between London and Manchester (formerly 40% by rail and 60% by air, now the other way round) since the West Coast mainline upgrade, attest. 

More worrying still is the continued insistence amongst ill informed organisations like the IPPR that aviation taxes should be “raised to cover the environmental damage caused by flying”. At present, widely published figures are available for the cost of carbon dioxide offset for flights, and if the IPPR had bothered to check the references they quote, they would see that these typically range from just 39p (air passenger duty is £10) for a London to Amsterdam flight, up to £23 for a long-haul flight from London to Auckland in New Zealand (air passenger duty £40).

In most cases, the carbon dioxide cost is significantly lower than the air passenger duty, which even the government themselves have acknowledged is an incredibly blunt way to tackle the emissions caused by aviation. If there are additional costs which need to be factored in, such as noise disturbance, then let’s have a full debate over the respective figures. We would also find it far more constructive if the green brigade came up with some sensible proposals for how they would like any extra taxes to be spent, instead of just calling for them to be increased further.

The IPPR then goes on to call for the UK government to work with other EU member states to better integrate the “fragmented” European rail network. Last time we checked, we found that the European network is pretty well integrated - trains such as the Thalys run smoothly between France, Belgium, the Netherlands and Germany, using a combination of dedicated high speed and standard rail thoroughfares. If any rail network needs integration, then we need to look much closer to home. At least we will finally see a major step forward when the new St Pancras International Eurostar station opens in November.

Further follow up:

Flight routes and property investment

Tuesday, March 27th, 2007

I’ve often wondered about how much emphasis is placed on flight routes when people are investing in property. OK, the answer is pretty obvious - a very great deal! If you are searching for a second home in the south of France, then you can be fairly sure that there will always be plenty of flights to Nice from the major UK airports.

What if you live in Norwich though, and found a really good investment deal, but don’t relish the constant drive down to Stansted to catch Easyjet’s flights to Nice? With Flybe having recently added Nice flights from Southampton and Exeter, is there a chance that they’d also start a route there from Norwich? Maybe, but I wouldn’t advise making an investment decision on it. However, you do still have plenty of other options.
Ryanair have recently announced flights to Maribor in Slovenia - this looks like an area which is set to see plenty of growth, but would you want to risk buying property there, only to find out that the route gets axed? Maybe, at least there are other alternatives via Ljubljana, or perhaps even Graz, just across the border in Austria. But at the moment, this part of the world is still not so easy to get to from outside London. A good investment is always a better one when it is easy to reach from the whole of the UK, not just one region.

I don’t know if we’d be in a position to offer this advice to individuals or companies on a commercial basis, but I certainly love the guesswork.

Some factors worth looking at would include:

  1. Is the local airport expanding, or applying for permission to do so. 
  2. Is there local community support for expansion. 
  3. Have airlines made comments about intentions to grow there. 
  4. Does the local government have plans to encourage tourism – or discourage flying. 
  5. Is there an opportunity for traffic to flow in both directions (very relevant for the new EU entrants). 
  6. How stable are existing routes – be careful about anywhere with just one 3x weekly Ryanair route from Stansted. 

It is certainly worth being cautious about the intensely speculative nature of air routes – they are so much more vulnerable to change than road or rail developments, which rely far more on fixed infrastructure.

Some safety questions I’d like answered

Sunday, March 25th, 2007

One nice thing about a blog is that I don’t have to do all the research myself. If we publish a news article, we do at least need to make reasonable efforts to check that what is being said is correct.

So, these are some questions I’ve never got round to answering, but I’d love to see some comments:

  1. How many years are spent listening to in flight safety announcements - and how many lives have actually been saved due to people taking note of what is being said?
  2. How many lifetimes have been spent manufacturing life jackets for usage onboard aircraft? How many times has an aircraft landed on water, with fuselage intact (i.e. there are survivors), and how many lives have actually been saved by these jackets?
  3. How much fuel is burnt each year carrying all of these life jackets over deserts and mountain ranges?
  4. Have the new security measures introduced last year really prevented any further terrorist atrocities? And how many years do we Brits now spend queueing at airports, because lazy airport managers can use terrorism as an excuse for not bothering to recruit enough staff?
  5. How many fatalities are there on the roads each year, due to accidents involving people who are fearful or either flying, or taking the train?
  6. How many people will die from obesity related illnesses, because their parents ferried them 500yards to school, because they were concernd about a bogeyman hiding in the bushes?
  7. How many villagers are there who have hurtled in their 4×4’s through country lanes, just so they can’t be late to that public meeting about their local airport expansion, where they will hear endless tirades about planes falling out of the sky, and spraying their washing with unburnt kerosine?

Technorati Profile

When did science come into it?

Sunday, March 25th, 2007

Just having a scout round a few other posts on these new Newquay flights, and I came across an article in the Ecologist, with the headline:

BA ‘fly in the face of science’ with Newquay flights

Just exactly what science are they flying in the face of? If we are talking about the hotly debated issue of climate change, then they should remember that BA are at the forefront of carbon trading initiatives, and that they have never tried to pretend that the problem doesn’t exist - even though there are still plenty of scientists out there who would say it doesn’t, or that if it does, that we’re really not the culprits.

If they are saying that we should reduce our dependency on domestic flights, then fine - but did they ever check to see where this plane was going before they launched their tirade? No, they did not. The answer is Glasgow - another domestic destination, and one which IS served by DIRECT, ELECTRIC powered trains.

The article then goes on to state the so-called science:

“Greenpeace campaigner, Emily Armistead, said that BA’s decision to open the route – especially in the light of a new high-speed rail link which will open later this year – flew in the face of science:
‘Planes are ten times more damaging to the climate than trains, so if we don’t do something about the growth in aviation Britain will find it very hard to meet its global warming targets,’ she said.”

 Newquay airport have meanwhile issued their own rebuttal, claiming that:

“Eight coach HST (High Speed Train) with 472 seats emits 12,170 g/km of CO2; at 30% occupancy (i.e. 140 seats), a standard occupancy rate used for UK rail travel, equates to 0.04 tonnes per passenger; for 105 pax (equivalent to 75% occupancy on a Boeing 737-400) the equivalent figure is 0.05 tonnes.”

We have no reason to dispute the 30% occupancy claim about the trains - and perhaps if Greenpeace activists spent more time on them, they’d realise that this is quite realistic! Over-crowding grabs the headlines (remember how the Cumbria incident was initially reported as being a ‘packed’ train to add more impact to the headline?). The reality is that outside peak times, trains are just very good at moving around huge volumes of air. The further away from London the train gets, the more passengers get off - and since when will the tin-pot branch line to Newquay be a high speed route? It might be scenic, as is the route along much of the way, but please stop pretending it is quick!

So far, this route seems pretty unpopular, if the numbers on the inaugral flight are anything to go by. One thing is certain though - if the route is a flop, it will get dropped like a hot potato. Train companies just can’t, and won’t do this.

So, the claim that “planes are ten times more damaging to the environment than trains” is utter garbage - nonsensical, unethical, and totally unscientific. But do Greenpeace provide further justification of their figures? No, they are far too busy going on their headline-seeking rants, knowing full well that they will get the media support they want, and that their figures will rarely be scutinised.

Does it matter then if flights are still more environmentally damaging, but “only” by a factor of between, say, 50% and 200%, and not the 1000% that Greenpeace are claiming?

Yes it does - because there is a huge difference in logic between the two. If trains really are super-clean, as could be said for the Swiss system, where virtually all of the network is electrified, and where far more electricity is generated from HEP, then the environmental case for using them is compelling. If the difference is only by a small factor, then surely any efforts to reduce transport’s emmissions should be targetted at ALL modes of movement, not just flights? And how come, all of a sudeen, environmentalists have started saying that flying is worse than “driving and going by train”. It isn’t! It all depends on the journey being undertaken, the directness of the route, the fuel or power source, and perhaps most importantly of all, the levels of occupancy.

So if you are really concerned about science, there is only one place for the kind of nonsense spouted by Greenpeace - the recycling bin.

 

 

Flights to Newquay - should BA bother?

Sunday, March 25th, 2007

As usual, it looks like the green lobby missed a trick with their pointless protest against BA’s new flights from Gatwick to Newquay, which started this week.

They chose to target the CO2 emmissions of the industry as a whole, and to say that these flights should not be needed, because the route is a very short one, and people should travel by train instead for domestic journeys.

Newquay airport countered by saying that the train service to Newquay was actually pretty lousy (let’s face it, it is), and that a fair comparison needs to take into account that trains usually only operate at 30% occupancy.

Their figures suggested that the CO2 emmissions per passenger for the flights would be no greater than the train journey, because these flights should be around 75% full.

So when Greenpeace turned up to give their usual tirade, it looks like there were almost as many protesters as passengers, since only 34 people turned up for the Gatwick to Newquay leg. There were also just 18 passengers on the return flight.

Considering all the free publicity that Greenpeace and chums have given BA about this new route, I would have expected more people to have wanted to use it. Of course, it is early days yet, but as we already commented last week, this route now has three airlines competiting against each other. I would still expect more passengers to travel with Air Southwest, who offer a much higher frequency of service on this route.

Maybe this route will pick up over the summer, maybe it will not, but I wouldn’t be too surprised to see it quietly dropped at the end of the season.

Then, Greenpeace can have their little organic beer party and dance a merry jig about the nanogram of C02 which will have been saved, but the simple reality is that this route will thrive or fall on pure commercial logic. As it happens, commercial logic will also be environmental logic, as is so often the case.

Stung by Flybe, trod on a hornets’ nest

Saturday, March 24th, 2007

We ran an article on Flightmapping last week about dropping adverts for Flybe, because they has asked for all affiliate marketing activity to be suspended. The reason for this was quite clearly stated - they were approaching the financial year end, and the budget had reached its limit.

Then they told us that it was all a mis-understanding, they just wanted affiliates (sites like ourselves) to cool things down a bit, and actually we could carry on advertising them, but could we just tone down any suggestion about them being short of cash?

We made a few small changes to the story, but they then wanted us to go further, explaining exactly how we’d made this mis-understanding, and adding some general comment about what a nice airline they were.

Unfortunately, we just can’t do that, and our commercial arrangements with them are suspended by mutual disagreement, with immediate effect.

For further details about this (from the perspective of the affiliate industry), please see my personal blog post on the subject. 

 

 

We must stop this obsession with domestic flights

Friday, March 23rd, 2007

It seems that the Conservative party have blindly jumped on the directionless and disingenuous bandwagon which seeks to penalise people who take domestic flights within the UK. Last week, the Independent carried a front-page article about British Airways’ new flights to Newquay, claiming that the airline was being irresponsible by starting a new domestic route — even if this service was merely a reallocation of a previous Glasgow rotation!Of course, the industry needs to cover its environmental costs, but in the rush to go carbon crazy, we seem to be shooting ourselves in the foot when it comes to protecting our own domestic market. As coverage of the British travel trade fair in Birmingham has pointed out, 80% of the UK tourism market is fed by domestic visitors, yet anyone who chooses to fly to internal destinations is now being penalised by two sets of air passenger duty, instead of just one. How can we persuade a family of four from Belfast to take a short break in London, which is already one of the most expensive cities in Europe, when they will have to fork out £80 in air passenger duty? Instead, this family could drive down to Dublin airport, and take a short break to Spain, and pay no air passenger duty at all on the outbound journey, and a mere €5.78 each on the return — despite the fact that the flight to Spain will be almost 3 times as far.At least bed tax proposals seem to have been dropped for now, but if we are going to be serious about asking more people to take their holidays in the UK, then this will inevitably mean we will have to build more accommodation facilities along the South Coast. This will no doubt bring the travel industry back into conflict with an untold number of nimby groups, crewed by the very people who are trying to stop us from flying to more distant destinations.

Whilst any policy measures to encourage the development of more high-speed rail routes should be broadly encouraged, the West Coast Mainline upgrade has already shown us just how massively over budget these projects can run — so much so that the (allegedly unpaid) carbon cost of a flight from Birmingham to Edinburgh is significantly less than the subsidy handed out to the railways for the short train journey from Birmingham New Street to the airport!

Any transport infrastructure needs to balance its social and environmental impacts with its financial costs, but it would be disastrous to give the rail industry blank cheques in the name of combating global warming, especially as domestic flights make up such a tiny proportion of aviation’s contribution to the problem.

 

 

What’s wrong with increasing taxes on flights?

Thursday, February 15th, 2007

I will start the Flightmapping.com blog on the hotly debated topic of the recent doubling in Air Passenger Duty (APD). 

Nothing wrong with “polluter pays” principle

Before I launch into my tirade against Gordon Brown, and his hugely ill judged tax raid, I should start by saying that I have absolutely no objection whatsoever to the “polluter pays” principle, or to the broad notion that the aviation industry needs to do more to clean up its act. Furthermore, I might derive most of my income from the sale of flight tickets, but I don’t think that my involvement in this industry should give me any reason to bury my head in the sand on what is clearly a very important topic. And, just for the record, I do think more should be done to encourage a modal shift from short-haul flights to high speed trains, and often travel by train up to Scotland, when I could perfectly easily fly.

So, why do I feel so strongly about the recent increase in APD, when all that Gordon Brown has done is restore this tax back to the levels that it was at when Labour came into power in 1997? Considering how many other stealth taxes have been introduced, wasn’t it always an anomaly that flights were one of the few things which had effectively been de-stealthed?

Bad application

Gordon Brown’s first major folly was to announce a rise in APD, and then to apply the extra charge immediately to all flights from February 1, including those which had already been booked. There is no plausible explanation for the necessity to apply the APD rise with such haste.  It worryingly smacks of extreme government desperation for extra cash, and it has also created a totally unnecessary sense of ill feeling amongst both airlines and passengers, who are having to stump up extra money for flights they reasonably believed had already been paid for. To borrow an analogy from Easyjet’s managing director Andrew Harrison, this state sponsored thievery is no different to the manager of the local off-licence calling round to your house, and demanding £1 for every bottle of beer or wine you have bought from them, but have not drunk yet.

Bad timing

Environmentalists have often been heavily critical of airlines for not wanting to address the environmental impacts of their emissions, and for a long time, these criticisms were entirely valid.  However, over the last few months, many of the UK’s major airlines have started to respond to public opinion, and to work together on a number of different schemes to offset their carbon emissions. Some tour operators had also been looking at voluntary carbon offset payments to add to their booking processes, whereas the no-frills airlines had tended to concentrate on extolling the virtues of their ultramodern, highly efficient fleets.

Whilst it might be perfectly true to say that airlines have been dragging their feet on these issues, discussions between them and the Department for Environment, Food and Rural Affairs (DEFRA) were clearly very well advanced at the time that the APD increases were announced, but Brown’s short sighted idiocy has totally scuppered these delicate negotiations. The airlines have now called off the talks with DEFRA, and we are left with the worst possible scenario – passengers being rinsed of huge amounts of cash, little of which will go on green causes, alongside bitter airlines who feel they are paying more than enough for any environmental damage they cause.  

Bad reasoning

The typical carbon cost of a one way European flight is in the region of £1 (if we go by DEFRA’s own figures). With APD now set at £10 on European flights (giving a 1000% markup to the government), it should be perfectly clear that the recent tax increases have been brought in for the sake of swelling government coffers, with the environment being used as a convenient smokescreen.

By all means, it is perfectly reasonable that a largely discretionary commodity like airline tickets should make a fair contribution to the general Exchequer, but airline passengers should not be deceived in any way shape or form into thinking that this is done for environmental reasons.

Some anti-aviation campaigners have often wondered why flight tickets are not subject to VAT.  Whilst much of the reasoning for this goes down to the international nature of most air travel, there have been some moves within Germany to levy VAT on domestic flights. Whilst this sounds like a perfectly plausible suggestion, environmentalists conveniently forget that domestic flights are already disproportionately taxed, and APD is applied on the return journey as well as the outbound flight. Airlines will also readily point out that comparisons between the cost of aviation fuel, which bears no duty, and the petrol or diesel used in cars, are not entirely fair, considering that no other form of public transport pays fuel duty either.

Bad for the environment

The basic environmental theory behind increasing APD is that by making flights more expensive, people will be less inclined to travel by air, and that the “rapacious” demand for cheap flights can then be curtailed. Whilst this argument might be true in a broad sense, any seasoned commentator on this issue will easily point out how tax increases alone are an extremely blunt instrument. Airlines like Easyjet have also repeatedly called for the hypothecation of these taxes, i.e. that revenue raised from air passenger duty should be used towards environmental improvements. Whilst there will never be a perfect taxation system (notwithstanding the fact that emissions trading also has its flaws), there are a number of very legitimate concerns about the current application of APD, namely:

  • Discrimination against the UK tourism industry, and the shortest flights. UK domestic flights now attract a duty of £10 each way - which works out at a whopping £80 for a family of four to travel from Belfast to London for the weekend. This means that, in addition to the existing perceptions about it being expensive to stay in the UK, there is an even greater financial incentive to take flights to more distant destinations within Europe.
  • There is no accounting for more efficient aircraft. Unlike road duty, APD is applied at a fixed rate, whether passengers are travelling on a full Flybe Q400 from Birmingham to Edinburgh, or a half empty and ageing KLM Fokker 70 from Glasgow to Athens via Amsterdam. The latter might produce up to ten times the emissions, yet the former is taxed at the same rate - and as if that wasn’t enough, taxed again on the return journey!
  • Damage to emerging markets. The definition of long-haul is based on continental boundaries, rather than flight duration. This particularly penalises emerging economies like Morocco and Egypt, which are only marginally further away from the UK than Spain or Greece respectively. 
  • Unfair scapegoating of airlines. Whilst it might be true that air travel generally causes more emissions per mile travelled than other modes of transport, these differences are often over-exaggerated, especially considering the relatively high rates of occupancy on most no-frills airlines, compared to intercity trains, which often run half-empty outside of peak hours.

Bad precedent

If our bookings for January are anything to go by, then these latest APD changes have done little to dampen the public’s enthusiasm for cheap flights. No doubt environmentalists and politicians would argue this justifies even more tax rises, rather than trying to think through a more coherent long-term green policy. Considering that both global warming and air travel are inherently international issues, then we really do think this is one area that countries need to work together on.

With the newly re-branded Conservatives trotting out the “go green, vote blue” mantra, we have every reason to suspect that flights will be an easy target for both Tony Blair’s immediate successor, and for whichever government holds the reins of power after the next general election.  The environment is clearly going to be more of a winner than it ever has been, but no politician should pretend that all environmentally conscious voters have windmills on their roofs and cycle to work.

Countless surveys have shown that most people will accept paying more for commodities like flights, if that means that the extra revenue raised will be spent on environment projects, but politicians should also not forget just how much the no-frills airlines have truly democratised the skies, and brought about many travel opportunities which have never previously existed.