New UK airline tax hits Australia hard

[Greg McDonald]

From NEWS.COM.AU:

AUSTRALIAN Tourism is taking a pounding by the new UK "climate" tax, with many airlines slashing the number of flights Down Under.

Despite industry opposition, Prime Minister Gordon Brown introduced a 112 per cent rise in a passenger duty, slugging a family of four wanting to fly to Australia with up to $700 in fees and charges.

The airline industry has hit back with new figures showing airlines operators have cancelled more routes and flights out of London than any other city in Europe, including a dozen flights Down Under.

Low-cost airline Ryanair chief executive Michael O'Leary, says the tax will result in 10 million passengers not flying in the next 12 months as a direct consequence of the tax. Already almost 80 routes out of London have been cancelled with more expected.


A spokesman for the Treasury claimed that the tax, which increases the greater distance you travel making Australia the most expensive, was fair.

"Air Passenger Duty is an important contributor to the public finances, while helping the Government to achieve its environmental goals,'' he said.

The tax is based on an internal government study in June which concluded those flying further pay more since they were ``contributing more to the emissions from aviation''.

Opposition aviation spokesman Greg Hands said Australian tourism and business would suffer.

"We are concerned with these enormous increases in passenger duty to Australasia. We think a much more just way of treating aviation taxation is a per plane tax. That would be more closely linked to an aircraft's environmental impact,'' he said.

Qantas and BA protested the move but have been forced to slash the number of their code-shared flights to Australia.

The UK'S Environmental Audit Committee highlighted the fact airfreight would go untaxed, contrary to the ``polluter pays'' principle.

[Brenden S]

$700 is just way too much.

[Kelvin R]

It would be cheaper to have a stopover in FRA on the outbound leg as then only the LHR-FRA tax applies which is at a discounted rate.

[Benny Zheng]

I'm so glad i just got back from the UK.

[Steve Jones]

Just thinking: does it make a difference if you're booked, say, QF2 LHR-SYD versus, say QF10 LHR-SIN connecting to QF6 SIN-SYD?

Both are one stop options London-Sydney on Qantas... If the tax is greater because the ticket shows the flight going to Sydney (ignoring for a moment the technical stop) vs Singapore, maybe Qantas should re-number the flights similar to what they have done domestically (where almost all multi-stop flight numbers have disappeared). But then you lose the perceived benefit of one flight, one plane etc...

If the tax is different in such cases (and I think it is), and if the $$ are that significant, it will put QF, BA and VS at a significant disadvantage compared with the host of other airlines who operate on the Kangaroo route with a stop via a hub in Asia or the Middle East.

Of course, as someone else has said, an even better option is to go LHR-FRA/AMS/CDG/FCO etc and then go from there, though it would mean an extra stop on the trip home, which usually entails extra airport taxes anyway. Would be interesting to make the comparison.

[Adam P.]

The airline industry has hit back with new figures showing airlines operators have cancelled more routes and flights out of London than any other city in Europe, including a dozen flights Down Under.

(my bolding)

This is the point surely? As I understand it* it's flights to Heathrow that cop a bigger tax. So people are avoiding Heathrow. If LHR is where the congestion is,avoiding it creates less congestion, therefore less unnecessary holding (which creates a lot of the emissions they are worried about).

There are other ways to get to the UK than via LHR. If this tax spreads the load over more entry points it ultimately reduces congestion - not a bad thing.

*If this understanding is incorrect, everything that follows is wrong. In that case, pretend I was never here .

[Matt D]

It is the UK initially but from 2012 significnatly increased taxes will apply to all flights to/from the European Union, based on distance.

The UK tax is part of the governments commitments to reducing airline based CO2 emissions to 2005 levels by 2050. It is purely based on distance traveled and is not airport specific.

It is largely arising from the Climate Change Act 2008 which strongly influences all government departments on how to meet strict European CO2 emmissions obligations.

Other options being explored in the UK are:
.. limited runway growth at all UK airports
.. restricting landing and departure slots

To meet the targets it is estimated that passenger growth will have to be drastically reduced - limited to 60% between now and 2050, compared with an increase of 130% in the last twenty years, allowing the UK a maximum of around 370 million air travellers by 2050, from 230 million currently.

On a domestic/European front it will require significant behavioural change - shifting from short haul intra-European flights to high speed rail - high speed rail that in some places is yet to exist.

[Peter Agatsiotis]

What a joke! Any flight heading east out of London is only in UK air space for about 10 to 15 mins so on a flight to SYD (say 23 hrs) this represents 1.1% of the total flight time. Sure at take-off etc it will be near max TOW so will burn a fair bit on the take-off and climb.

When you see the low season fares offered (best I've seen is around $1300 return) $700 is a big hike, even for a family of 4 ($175 each).

[Gareth Forwood]

I think in theory the idea of a "climate tax" has merit, but 10% of the common economy fare is admittedly quite high.

On Virgin Blue you can voluntarily pay a surcharge to offset emissions. Does anyone know what % of the fare that represents? It would be interesting to compare...

In response to Peter's comments, I imagine the reason the tax applies to the full journey, rather than just the part in British airspace, is because the money raised would have almost zero impact if it did just apply to those regions. I think, however, there's a long way to go before this is globally effective.

I think we all need to realise that climate change isn't just going to go away on its own, and that there will be significant financial costs involved in the future, but again 10% is very high.

[NickN]

So I assume they are happy to sacrifice travel growth and the continued prosperity of their nation/union for extra revenue, most of which will probably be used on non-environmental expenditure?

That is a whopping huge addition to the average airfare, one which airlines will wear the brunt of, and ultimately will result in less jobs being available for their own people as the growth will be stifled.

Better off making a small tax, one which will be used exclusivly for climate/environmental expenditure and that won't turn travelers and airlines away.