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November 2, 2009

7 Ways to Beat Air Passenger Duty Rises

Filed under: Budget airlines, Easyjet, Ryanair — Tags: , , , , , , , , , — ja @ 3:59 pm

    Yesterday, Air Passenger Duty on short haul flights went up by £1, but much larger increases were imposed on long haul and premium service flights. These taxes are set to rise again in November 2010 - and even if a change of government looks likely, there is little to suggest that the Tories will reverse this policy.

    This list was due for a little bit more embellishment, which I’ll try and get round to later in the week, but in the meantime, here are the key suggestions:

    1. Take a Private Jet - you will pay no taxes at all this way.
    2. Let Michael O’Leary pay your taxes - can’t afford a private jet? Look out for Ryanair’s special offers when they pay the taxes for you.
    3. Island hop around Scotland - ‘public service obligation’ flights in the Scottish Highlands & Islands are exempt from duty - and the views are simply stunning.
    4. Take the ferry or Eurostar to Paris or Amsterdam, and fly long haul from there - or even hop over to any European hub on a budget flight, and then continue from there. APD stings you much harder on long haul flights.
    5. Offset the tax by saving on duty free, or not paying other airline hidden charges - ok, so the government sees air passengers as an easy target. Chill out, and enjoy some savings on duty free. The best deals might be at your destination - shop around to see, but even though there aren’t any duty free allowances on short haul flights to EU destinations, these aren’t the ones with the highest taxes. Why not get the best of both worlds and fly via Switzerland or Norway - short haul destinations which also have a duty free allowance. If you don’t have a Visa Electron card by now, then you really can’t whinge about air passenger duty if you are booking flights with a low cost carrier like Easyjet or Ryanair. The taxes aren’t usually avoidable, but the card handling fees always are.
    6. Go all the way by train- this is easier than you might think, and thanks to the new Eurostar links to the continent, you’d be amazed how far you can get in a day from London - and think how much more you see on the way. Don’t fancy a long journey home by train? At least the return flight won’t be taxed so badly, as APD is only levied on the outbound journey - Alistair hasn’t thought out a way of taxing people to come in to the UK yet, but don’t encourage him too much!
    7. Take the ferry to Morocco (from Gibraltar) - ok, so the ferry fare will cost you about as much as the tax you will save, but Gibraltar is a great place to land, and why not add a ferry trip to your African adventure?

    October 5, 2009

    Economic Arguments for Heathrow’s Third Runway in Dragon’s Den

    Filed under: Aviation Economics, British Airways, Regulation, Uncategorized — Tags: , , , , , , , , — ja @ 1:26 pm

    Continued from - Heathrow in Dragon’s Den | Neighbours | Passengers

    According to the Institute of Directors (IOD), delaying further investment in Heathrow is costing UK PLC £1 billion each year in lost opportunity and congestion.  Heathrow employs 72,000 people, making it the largest single-site source of employment inthe UK. Yet a third runway is projected to cost a massive £8 billion. How will this investment be recouped? Clearly, BAA believe that they will get their investment back, and the IOD figure would suggest that UK PLC would see a return in just 8 years - not bad for such a huge piece of infrastructure. But what if the airline industry continues to see weak demand?

    Heathrow’s attraction

    In the current downturn, Heathrow has stayed steady whilst other UK airports have seen demand fall. Heathrow operates at 99% capacity, whereas its main three European rivals (Frankfurt, Amsterdam and Paris Charles De Gaulle) all operate at around 75% capacity. Neither Amsterdam nor Frankfurt has the population to support airports of such size in their own right - these two airports only thrive because of the huge volumes of transfer passengers they attract. Only London and Paris can claim to be true hub cities, where there is substantial latent demand together with the demand for inter-connecting flights, which makes more routes viable.

    But does UK PLC really want all these transfer flights?

    There is a legitimate argument to say that transfer flights are the most wasteful form of air travel, and that it would be better to encourage people to make such connections at airports like Paris, where there is a lower noise footprint. This is, of course, a blatant ‘not in my back yard’ argument, but in terms of economics, is it really worth building an extra runway just to encourage more transfer passengers? The argument behind such transfers is that they enable huge numbers of routes to be profitable, when they would not otherwise be viable. Typically, 25-40% of passengers on long haul flights to and from Heathrow are making transfers - without these passengers, there would be much fewer routes.

    Of course, point to point flying is the most efficient way of getting from A to B, but there are always going to be journeys where the hub and spoke system will be needed - for example from Edinburgh to Entebbe or Oslo to Osaka. Is it really right that these passengers should be forced to be funnelled through Paris, Dubai or Amsterdam, just because Heathrow doesn’t have the capacity?

    Verdict: UK PLC clearly sees the advantages of Heathrow’s third runway and says ‘I’m in’. Score so far: 2-1 in favour.

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