Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Airlines' £10bn Government Fuel Subsidy  
User currently offlineCostastic From , joined Dec 1969, posts, RR:
Posted (6 years 6 months 2 weeks 11 hours ago) and read 2009 times:

The Government has been urged to abolish a £10bn-a-year "hidden subsidy" to the airline industry to bring it into line with hard-pressed motorists struggling with higher petrol prices.

http://www.independent.co.uk/news/uk...overnment-fuel-subsidy-842770.html

6 replies: All unread, jump to last
 
User currently offlineWAH64D From United Kingdom, joined Jan 2005, 966 posts, RR: 14
Reply 1, posted (6 years 6 months 2 weeks 11 hours ago) and read 1968 times:

I've got a better idea, drop the 58p per litre rate of fuel duty for car/truck drivers. Thats a much better way to restore parity.

The other option would effectively put the UK out of international tourism and would be seen as anti-competetive by the EU unless every other country in the world with a direct airline service to the UK adopted the same measure.

How can the government possibly charge duty and VAT on fuel where the majority of that product is used outwith the UK's borders?

This will never see the light of day. If it did, the UK air transport industry would cease to exist overnight. You'd be as well turning up at Heathrow with a "will the last person out turn off the lights sign".



I AM the No-spotalotacus.
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3682 posts, RR: 3
Reply 2, posted (6 years 6 months 2 weeks 10 hours ago) and read 1863 times:

Anyone who believes that it would be possible to increase the UK revenue by £10billion by imposing the same rate od tax on aviation fuel as vehicle fuel is living in cloud cuckoo land.

Neither FR or U2 would purchase a single drop of fuel in the UK if this came to pass they would simply rotate their fleet to ensure that all UK flights operated using fuel tanked in from abroad.
Other airlines would adopt the same measures for shorthaul, and develop procedures to minimalise fuel iptake in the UK for longhaul. The result would be higher fuel burn due to tanking a lot more of the stuff around. The exact opposite of what the Government is meant to be encouraging. Just shows the level of brain power available in the Lib Dem party


User currently offlineBurkhard From Germany, joined Nov 2006, 4409 posts, RR: 2
Reply 3, posted (6 years 6 months 2 weeks 10 hours ago) and read 1828 times:

It is indeed strange that railways running national services have to pay such taxes ( at least in Germany ), while airlines don't. And having a good national rail system, nobody can argue that internal flights in Germany must be subsidized.

There was an initiative by several European governments some years ago for a fair taxing of airlines, but this was blocked by some others who claimed a disadvantage of it. The current challenge on airlines does not indicate now to be a good time to discuss this - but it will come.


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7737 posts, RR: 17
Reply 4, posted (6 years 6 months 2 weeks 8 hours ago) and read 1755 times:

In the UK fuel for use in agriculture and in boats - even, I believe, for boats that can only be used for leisure purposes - is duty free. A red dye is put into such fuel so that Customs & Excise can detect illegal use in motor vehicles.

As for the possibility of introducing a £10 billion a year tax on aviation fuel, it is clearly a non-starter.

One of the current complaints of the British road haulage industry is that diesel fuel duty in the UK is much higher than in continental Europe. This, they say, gives trucks coming to the UK from continental Europe an unfair cost advantage as they fill up before crossing the Channel and therefore have lower operating costs while they are in the country. Therefore British truckers not operating regularly into Europe cannot compete cost wise against their continental brothers.

However a similar situation would not arise in the aviation industry as nearly all British commercial aircraft flying on domestic routes also fly regularly on international routes.

So British airlines could and would fill up their short haul aircraft with fuel while out of the UK (as the cost in fuel burn carrying the extra fuel would be lower than paying the proposed UK duty) and their European competitors would also carry enough fuel for the return flight. They could only do this on their long haul flights with an intermediate short haul stop. So perhaps we would see all flights by both British and foreign airlines putting down at DUB or SNN to refuel for TATL flights originating in the UK and at AMS or FRA for similar flights to the Far East and Australasia. Those airlines operating domestic flights would clearly reschedule their aircraft allocation so that, for example, an aircraft would operate CDG-LHR-GLA-LHR-CDG and fuel up at CDG for all four legs of the routing.

So the net effect of such a clever move by the Liberal Democrat party would be to increase the carbon footprint of all flights from UK airports either through higher fuel burn due to increased gross weight on half of all short haul flights to and from the UK and an increased carbon footprint due to higher fuel burn due to introduction of additional refuelling stops on half of all long haul flights for no gain in tax revenue! It would also provide welcome business for suppliers of aviation fuel in other European countries and hit the UK industry hard with appropriate loss of jobs at LHRv and other UK airports amongst the aviation fuel suppliers. In turn this would reduce the government's take of income tax, national insurance and company tax and increase the government's social security payments.

Of course without changes to their route structures there would be some losers like Loganair who fly few international services.

The biggest worry about all of this is that these ridiculous and totally unworkable policies that would have the likely effect of decreasing the total UK government tax take and increasing government expenditure for the negative benefit of increased carbon emissions are actually being put forward by people who will present themselves to the British electorate at the time of the next British general election as a possible future UK government. Who knows they may even get elected!


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17823 posts, RR: 46
Reply 5, posted (6 years 6 months 2 weeks 7 hours ago) and read 1730 times:

How much in taxes does the UK government get from airlines? Their departure tax alone has to be more than 10B pounds annually?


E pur si muove -Galileo
User currently offlineVV701 From United Kingdom, joined Aug 2005, 7737 posts, RR: 17
Reply 6, posted (6 years 6 months 1 week 6 days 10 hours ago) and read 1523 times:



Quoting MaverickM11 (Reply 5):
How much in taxes does the UK government get from airlines? Their departure tax alone has to be more than 10B pounds annually?

According to accountants Cannon Moorcroft at

http://www.cannonmoorcroft.co.uk/con...axcentre_taxcard/airpassenger.html

the figure for the government take on Air Passenger Duty (APD) is forecast at £2.1 billion.

Interestingly this site reveals that there is a minor change in APD scheduled for later this year that I was unaware of. Currently APD is charged depending on class of travel with the charge for a premium class passenger being twice that for a non-premium class passenger. So APD is £10 or £20 for short haul and £40 or £80 for long haul flights. But the law currently states that all passengers on single class flights will be treated as non-premium class passengers. From later this year the duty pertaining to passengers on a single-class premium class flight like those formerly operated by Eos, MaxJet and Silverjet will be liable for duty for premium class passengers at double the current rate as will the BA 318 LCY-JFK service when it starts next summer.

Looking back to the figures, the CAA reports that there were 240,722,000 what it calls "terminal passengers" in the UK in 2007. (I think that this phrase is used to distinguish "terminal" passengers from transit passengers.) If we assume that half of these were arriving passengers and the other half were departing passengers then there were 120,361,000 departing passengers liable for APD.

Of these passengers:

24,175,000 were domestic passengers liable to pay £10 APD.

68,945,000 were passengers travelling to other parts of Europe or North Africa, with nearlly all liable to pay either £10 or £20 APD

The remaining 27,241,000 - all long haul passengers - would have been liable to pay £40 or £80 APD.

These numbers show that the total take from APD in 2007 would have been fractionally over £2 billion if there had been no premium class passengers. So I think that the estimate of £2.1 billion is conservative. If we assume 10 per cent of all passengers on international short haul and on all long haul flights were premium class passengers - and I have no idea what the real figure is - then the total APD take would have been around £2.9 billion.


Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
On Airlines, Aircraft And Fuel posted Tue Sep 27 2005 21:24:47 by NADC10Fan
Airlines Bidding On Government Travel posted Thu May 22 2008 11:38:59 by Panova98
Airlines Adding Fuel To Nrsa And Award Tickets? posted Wed May 14 2008 08:12:33 by BillReid
What Fuel Efficient Cars Mean For Airlines posted Sat May 3 2008 14:39:18 by MileHighFlyer
Airlines Cutting Routes Due To Fuel Prices? posted Tue Dec 11 2007 20:34:43 by Jlbmedia
Why Fuel Supplements With Hedged Airlines? posted Sun Nov 11 2007 09:28:07 by Beaucaire
European Airlines' Fuel Surcharges posted Wed Oct 17 2007 09:58:51 by Pe@rson
USA Government/airlines' Cuban Contingency posted Wed Jun 27 2007 16:48:26 by ConcordeBoy
Government Owned Airlines posted Sun Feb 18 2007 19:07:04 by Sampa737
Fuel Prices Effect On Airlines? posted Sat May 20 2006 23:02:44 by DYK
Why Fuel Supplements With Hedged Airlines? posted Sun Nov 11 2007 09:28:07 by Beaucaire
European Airlines' Fuel Surcharges posted Wed Oct 17 2007 09:58:51 by Pe@rson
USA Government/airlines' Cuban Contingency posted Wed Jun 27 2007 16:48:26 by ConcordeBoy
Government Owned Airlines posted Sun Feb 18 2007 19:07:04 by Sampa737
European Airlines' Fuel Surcharges posted Wed Oct 17 2007 09:58:51 by Pe@rson
USA Government/airlines' Cuban Contingency posted Wed Jun 27 2007 16:48:26 by ConcordeBoy
Airlines Adding Fuel To Nrsa And Award Tickets? posted Wed May 14 2008 08:12:33 by BillReid
Government Owned Airlines posted Sun Feb 18 2007 19:07:04 by Sampa737
What Fuel Efficient Cars Mean For Airlines posted Sat May 3 2008 14:39:18 by MileHighFlyer
Airlines Cutting Routes Due To Fuel Prices? posted Tue Dec 11 2007 20:34:43 by Jlbmedia
Why Fuel Supplements With Hedged Airlines? posted Sun Nov 11 2007 09:28:07 by Beaucaire
European Airlines' Fuel Surcharges posted Wed Oct 17 2007 09:58:51 by Pe@rson
USA Government/airlines' Cuban Contingency posted Wed Jun 27 2007 16:48:26 by ConcordeBoy
Government Owned Airlines posted Sun Feb 18 2007 19:07:04 by Sampa737
Freighter Airlines And High Fuel Prices posted Sat Jul 29 2006 19:15:42 by WN230
Airlines Cutting Routes Due To Fuel Prices? posted Tue Dec 11 2007 20:34:43 by Jlbmedia
On Airlines, Aircraft And Fuel posted Tue Sep 27 2005 21:24:47 by NADC10Fan
Why Fuel Supplements With Hedged Airlines? posted Sun Nov 11 2007 09:28:07 by Beaucaire
Airlines Bidding On Government Travel posted Thu May 22 2008 11:38:59 by Panova98
European Airlines' Fuel Surcharges posted Wed Oct 17 2007 09:58:51 by Pe@rson
Airlines Adding Fuel To Nrsa And Award Tickets? posted Wed May 14 2008 08:12:33 by BillReid
USA Government/airlines' Cuban Contingency posted Wed Jun 27 2007 16:48:26 by ConcordeBoy
What Fuel Efficient Cars Mean For Airlines posted Sat May 3 2008 14:39:18 by MileHighFlyer
Government Owned Airlines posted Sun Feb 18 2007 19:07:04 by Sampa737
Airlines Cutting Routes Due To Fuel Prices? posted Tue Dec 11 2007 20:34:43 by Jlbmedia
Why Fuel Supplements With Hedged Airlines? posted Sun Nov 11 2007 09:28:07 by Beaucaire
European Airlines' Fuel Surcharges posted Wed Oct 17 2007 09:58:51 by Pe@rson
USA Government/airlines' Cuban Contingency posted Wed Jun 27 2007 16:48:26 by ConcordeBoy
Government Owned Airlines posted Sun Feb 18 2007 19:07:04 by Sampa737