Regional Air Passenger Taxation

By | Category: Travel rumblings

Heathrow Terminal 3

This daft idea was put up fourteen regional airports in the UK to the APD consultation process. They have jointly signed a submission saying that replacing APD with a tax on the busiest airports would stimulate the regions. In effect they want the tax to be placed on passengers using Gatwick, Stansted and Heathrow, those being the three busiest.
What’s behind their thinking?
They claim that the regions have been particularly badly hit by the economic downturn. They have also fewer business flyers than exist in the south east of England and that their proposal would make better use of airport capacity.
Since the fourth largest airport in the country is Manchester – and they are a signatory to this idea- the proposal would not apply to them. Therefore it is solely directed at the 25% of the population of the UK that live in London and the south east. Why should the people in this area pay a tax that the rest of the UK doesn’t? And if you follow this logic shouldn’t Manchester Airport users pay a tax so that Blackpool airport can compete more equally? And shouldn’t Bristol be taxed so that Exeter can compete? Plymouth airport is closing so maybe Exeter should be taxed this allowing Plymouth to stay open.
Airports have their own mechanism for determining prices. There are development taxes at Blackpool, Newcastle, Newquay and Norwich to name but four. There are plastic bag charges, drop-off charges and cleverly designed schemes to fleece passengers of their money. All of this contributes to their own problems as well as the economic downturn. So why should tax systems be used to help out poorly run or greedy airports by making them appear more efficient and competitive?
Let’s suppose there were such a regional tax and set at £12 per person. Do they really think that someone from the south east will drive to their nearest airport that doesn’t have the tax? It would cost more than that in fuel or train fares. And in case these airports haven’t realised it, the reason passengers go to Heathrow, Stansted or Gatwick is because the flights that they want are there. Until regional airports can offer a range of destinations that compete with the bigger airports, the bigger ones will win passengers. If APD was removed from the regions, and assuming a reasonable range of destinations, will this cause more people to fly from those airports? There will be some increase on short-haul flights. On long haul there will hardly be any difference at all. People from Leeds, for example, will still go to Manchester because it offers more destinations so there will still be rivalry from nearby places.
Separately, Glasgow Prestwick says the tax should be devolved to the Scottish government. They say if it were and APD was removed an extra 750,000 would fly through their airport each year. They base this on their 2008 economic report which, coincidentally, was the best year for passenger numbers that Prestwick has ever had. Passenger numbers have dropped by about 760,000 since then. Now it has just 1.6 million passengers a year so it seems unbelievably optimistic that removing a £12 tax will generate a 47% increase in passenger numbers. And it will still fall slightly below their peak numbers of 3 years ago. And if Scotland operates a different tax, the problems that Northern Ireland is having with the Republic will be replicated.
No, the whole idea is cock-eyed, discriminatory and badly thought out. The sooner the idea is dumped the better. The sooner the airport owners who signed this document concentrate on attracting more airlines to deliver the services their prospective passengers want, the better for all concerned.

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