Plane lobby crash

The news that the lobbying group for aviation, Flying Matters, which lobbied for the idea of ‘freedom to fly’ is to close down at the end of the month suggests it is not only the rail industry that has problems with projecting a unified front to the outside world. Apparently Freedom to Fly’s demise has been caused by a dispute between EasyJet and Virgin over the putative plane tax, but also, I suspect, reflects wider differences over how, and indeed whether, to lobby for aviation at a time of growing concern over climate change.

Its chairman was Brian Wilson, once a radical Scottish MP, but later a minister in the Blair government who seemed to have sold his soul to the New Labour neoliberal agenda. Interestingly, when I shared a platform with him at a conference last year, I asked him the basic question ‘why should there be a freedom to fly?’ I suggested that all sorts of things may seem desirable to people, but there was no more a right to flying than, say, owning Rolex watches.

I was astonished that such an experienced politician had never really thought of the question, let alone the answer. He blustered something about how people had come to expect foreign holidays and therefore nothing should be done to try to limit this ‘freedom’. It seemed a remarkably inept answer. Surely, I argued, its about the market and about the real cost of undertaking such activity. If, as is widely accepted, flying causes far more damage to the environment than is reflected in the fare price, then imposing taxes which reduce that gap was a perfectly sensible policy.

All he could do was bluster again that people had come to expect their two weeks on the Costa del wherever. I should have responded  that the Victorian middle classes expected to pay very little for child chimney sweeps to risk their lives cleaning out their flues but I did not think of it at the time.

A wider question is actually where now for the aviation industry. BAA plc announced today that there had been a small increase in passenger numbers overall, notably at Heathrow, and higher rises at their Scottish airports, but significantly both Stansted and Southampton were sharply down due to reduction in low cost airline flights. The Coalition government, though, has no plans at all to expand capacity in the south east, and the idea that high speed rail will replace deamnd for flying is fanciful. Therefore there has to be a more rational use of existing resources to accommodate any growth. But with Gatwick already sold and BAA being forced to dispose of Stansted, their new competing owners are unlikely to co-ordinate airport use to make a more rational allocation of runway space. Successive governments’ emphasis on competition rather than tighter regulation and co-ordination could prove to be a disastrous error.

I have no sympathy for the environmentally-damaging airline industry which is undertaxed and does itself no favours when the likes of Michael O’Leary revel in making life difficult for its customers, but aviation is certainly in need of some type of strategy to deal with the succession of blows it has suffered. Unfortunately, it is not the railways that offer any type of example.

  • It is being claimed, e.g. at http://www.aef.org.uk/downloads//AirportWatch_bulletin_8thApril2011.pdf , that Gatwick is operating at only 75% capacity and Stansted at little more than 50%. If that is true, why are people even thinking about new runways anywhere? Doesn’t that vindicate the coalition’s determination that there should be no more runway capacity? With the 3 airports now to be in different and competing ownership, in an ideal world market forces should ensure that the flights are rebalanced between them, i.e. Heathrow being already full can afford to charge the airlines more so that less-profitable (shorter-haul?) flights would shift to one of the other two. This would probably work better if runway slots were auctioned off to the highest bidder. It’s a question of supply and demand.

    Of course I agree with you that short-haul flights especially (domestic and near European) should be much more heavily taxed to reflect their toll on the environment. If that makes them insufficiently profitable to run, then tough: people can go by train.

    I never did think much of Brian Wilson, by the way. He proved wildly wrong on devolution.

  • Anonymous

    There used to be an old adage among motorists that everyone had a good story about a towing expedition that went hilariously wrong – now that modern cars are so reliable, that seems to have been replaced by “who has had the worst ever experience on Ryanair”, yet perversely people seem to keep going back for more because they treat low cost flying and multiple foreign holidays a year as a right, rather than a privilege. How sad – the biggest fallacy that continues to be peddled by Michael O’Leary and his ilk is that they have somehow empowered poor people to fly – pure twaddle – all it has done is allowed those on reasonably good incomes to take more holidays, more often.

    It’s small wonder that in this country that we have local businesses that rely on the tourist pound – pubs, restaurants, stately homes to name but four – going out of business because of our love affair with sun and Costas. The beach brigade argue that holidaying in Britain is expensive – but that is only because hotels etc have to put their prices up to make a return on the business that they ARE doing. And when you factor in all the ancillary costs associated with jetting off abroad – currency exchange, dipping into the duty free, parking your car at the airport, not to mention all the extras that tour operators sell you – what did it REALLY cost compared to the headline price you saw in the travel agents’ window on that cold January afternoon??

    I think that the taxation regime on aviation should be turned around 180 degrees – the tax burden and surcharges should be reduced on long haul (because there is no alternative to flying), and increased for short haul and domestic flights that are not connecting with a long haul sector. It wouldn’t happen though – firstly the airline industry lobby is powerful enough to argue that formerly deserted regional airports which were transformed into large hubs and focus cities by low cost airlines would be hit hard and jobs would be lost etc etc.

  • Windsorian

    I see that BAA have abandoned their existing proposals for Airtrack and have set up a Heathrow working party to comprhensively review all rail related projects ie both existing and proposed –

    http://www.heathrowairport.com/portal/page/Heathrow%5EGeneral%5EOur%20business%20and%20community%5EMedia%20centre%5EPress%20releases%5EResults/50dcc9048144f210VgnVCM10000036821c0a____/a22889d8759a0010VgnVCM200000357e120a____/

    Hopefully BAA will keep their proposed HEx T5-Staines extension, as this would give Staines a link to T5, CTA, OOC and Paddington; an OOC stop for HEx would give people living south of Heathrow a link to HS2, HS1/HS2 and Crossrail.

  • Paul Holt

    I like the idea of the tax burden and surcharges being reduced on long haul aviation, because there is no alternative to flying for those journeys. Similarly, petrol tax can be reduced outside London because, for many journeys, there is no alternative to the private car. I suspect that also won’t happen!

  • Anonymous

    I do like the idea of overhauling the fuel duty system, rather than having a flat rate that is applied everywhere. There should be a regional loading depending on the availability of public transport alternatives – i.e. increasing it around cities, reducing it in remote areas.

    For example in the outer fringes of the Highlands and on the Western Isles for example the headline price for diesel is now well over 150p per litre at small independents. Yet these isolated communities are generally low income and the problem is compounded by non-existent public transport. The workability of such a scheme is another matter, would it cause any unintended side effects i.e. city dwellers travelling out the the sticks to bag a cheap tankful!

  • Andrew

    Short-haul aviation is definitely undertaxed. There’s scope for putting the APD Band A charge to at least £20. The APD structure does need alteration; Band A should be up to 2,500 miles, a second band from 2,501 – 5,000 miles and flights of over 5,000 miles regarded as long-haul.

    It is UK tourism and hotels and guest houses in particular that need a tax break. The aviation industry has it lucky and doesn’t even pay 5% on fuel, it pays nada!

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