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Airlines in a Tizzy over Tax Hike
Friday 8th of December 2006  |  News Source: Travel Mole
Too good to last, was it? Last week's news that some more travel companies were jumping on the Carbon Offset bandwagon has been trumped by Gordon Brown's Budget Statement. In contast, one airline (read on) is doing a little something more...
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Airlines in a Tizzy over Tax Hike

Britain's Chancellor, Gordon Brown, disappointed many in the Green Movements by his pre-budget report last week, which really wasn't a good example of using fiscal policy to score any useful points for the environment.

Among the damp squibs was an increase in 'Air Passenger Duty' (APD), a tax that airlines pass straight on to passengers. Tax on short-haul flights leaving the UK will rise by £5 to £10 per economy class passenger; on long-haul flights, it will rise to £40 for economy class and will double to £80 in business class. That is hardly going to be doing any great damage, even to the bargain bucket low cost airlines: most travellers now know to expect surprises in the tax box when they click though a fare, and an extra £5-10 really isn't going to put any serious percentage off. As for long-haul, the damage is minimal in percentage terms, and business class aren't paying so they don't care.

The airlines, predictably, queued for the microphone to complain. It also severely put the knickers of holiday giant First Choice into a twist. A previous Bello report (further down the list) praised them (albeit faintly) for making an opt-out (ie. compulsory unless you complain) donation of £1 to per holiday a carbon offset scheme. Now the APD has gone up, they're pulling the scheme. An extra £1, apparently, would put their customers off. Beggars belief, but it's their ball, and if they want to march off with the £21 million they claimed their scheme was apparently going to raise, they're darn well going to and you won't stop them. Just be thankful they weren't crying too.

Says a lot for their green credentials, doesn't it? The tax is supposed to come through in February (rather than with the full Budget in March), there may yet be interesting (or cynical) developments.

In an entirely unrelated development (but I wasn't going to make another story of it), Virgin Atlantic have announced plans to improve their practice at British airports, in a move which could save 120,000 tonnes in carbon emissions a year if they did it with their whole fleet. How it works is this: currently an aircraft taxis to the runway under its own power. If it were towed by a vehicle (what about an electric vehicle, eh?) a small proportion but a considerable amount of fuel is saved. It's not dramatic but it could be a significant move, especially if other airlines adopt it - obviously the Airport Authorities and Air Traffic Control have to be on board, which they are with the Virgin trial. OK maybe we'd rather the plane didn't fly at all, but at the moment any genuine saving of hyper-polluting jetfuel sounds like a good move to us.

Don't you think we should all cross the Atlantic by balloon, Mr Branson?

 

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Comment by: steve
Posted on Sun 7th January 2007
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First Choice calm down a little

First Choice have now reviewed their position (see story below) and will not abandon their scheme entirely; but will only match donations relating to holidays departing after November 2007 rather than the summer peak. Should the Government not charge the tax retrospectively on tickets already sold for flights after the beginning of the scheme in the Spring, First Choice says it will match £1 for £1 on all bookings as originally planned. Seems like a lot of fuss over a very few ££ per customer, and First Choice keeping their hand firmly in their (and your) pocket.

Comment by: steve
Posted on Mon 18th December 2006
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and more of them...

The Times has reported that British Airways, Virgin Atlantic and easyJet have rejected negotiations towards an industry-wide carbon offsetting scheme being created by the Department for Environment, Food and Rural Affairs (DEFRA) – aiming to create a benchmark standard for companies wishing to offer customers a carbon offset.

"Everyone felt the Defra plan was a step too far, especially in a week when the Chancellor had increased passenger taxes," an industry source said in the report.

Airlines are concerned that the government is trying to develop a scheme which would treat all companies the same. This could hit airlines harder than some other industries – no surprise there, surely? Does that obviate the need to do anything about it?