The doctrinaire, dare I suggest dishonest, approach of the UK government to adding taxes to air travel to ’save the environment’ comes with some bizarre consequences.
Chancellor of the Exchequer, Alistair Darling, has announced a set of Air Passenger Duty charges which rise according to the distance a jet flies from London which would add £85, or about $212, to the outbound stage of a flight to Australia via Bangkok, Singapore or Hong Kong, but cost £20, or about $50, less for flights via Bahrain or Dubai.
So, while £85 might seem a triviality to anyone numbed by the experience of shouting a few lagers in London, or in a moment of insanity, taking a taxi to Heathrow, it involves a prodigious transfer of commercial advantage from the likes of Qantas, Singapore Airlines, Cathay Pacific and Thai International to Emirates or Etihad because the former group hub or connect their Australian traffic feeds in SE Asia or Southern China, and the latter do so in the Middle East, much closer to the UK.
Let’s assume that there are around 400 Australia bound passengers on each of these A380s that these airlines apart from Cathay Pacific will all have leaving Heathrow each day by 2011. Three of them will be flown by Emirates, but Etihad will also have frequent flights in smaller jets on the kangaroo routes.
Confining ourselves to a single Emirates A380, it will be getting a commercial advantage over the other carriers worth $20,000 per flight (400 x $50). Or $7.3 million per year (365 x $20,000) per A380 load. Or $21.9 million a year if it has as currently intended, launched triple daily A380 connections from London through Dubai to Sydney, Melbourne and Brisbane by then.
What Emirates will do with the advantage who knows. It could add to its ability to undercut its competitors, or it could add to its profits. But it is a silly, obnoxious tax on travel that goes straight into HMG’s general revenue and means zip in terms of environmental savings, especially compared to the 20% or more reduction in greenhouse gases per passenger in terms of liberated fossilized carbon achieved through the choice of an A380 because of its fuel efficiency compared to other jets.
Earlier this year Qantas risk manager, Rob Kella, told a green flight symposium that the distortions caused by EU proposals for a similar distance based ETS calculation on international flights could see the sudden congregation of hundreds of jets at hitherto obscure airports near its borders prior to completing flights to Europe just to negate its unfairness.
Kella then pointed out that this would actually increased greenhouse gas emissions because the extra stop, and the additional ground taxying and climb and descent, would all add to fuel burn.
Reducing air transport greenhouse gas emissions requires more intelligence than the UK government has so far invested in dealing with these issues.
3 Comments
Ben, When I was a kid in England Harold Wilson’s Labour Government imposed a limit of GBP50 on anyone going overseas. That made going overseas for self funded travellers such as tourists impossible because they had nothing to spend when they got there. Such a law would nowadays be very difficult to police due to credit cards and so on. I am suspicious that this is a protectionist measure designed to keep the British at home while robbing a few rich foreigners of their cash. I have been a regular traveller to Europe so now I will a) Think twice about going; b) no longer use Heathrow as a hub even though it has the best connections; c) investigate cheaper ways of getting there such as via Amsterdam and the ferry/Paris and the train/Any airline that hubs closer to England than Singapore. Geoff
I would have thought that any charge claiming to aid the environment should work in exactly the opposite way. Short-haul flights should attract the highest surcharge and tail off with distance. Europe has an excellent high-speed rail network, which on the best stretches competes very favourably with the airlines. It is the people who take a plane for a trip that takes less than 4-5 hours by train who should be hit the hardest.
Of course that hits the whole European jet-setting business/political class directly. Lets face it, nobody is going to cancel an already $2k-3k flight for an extra 200 dollars. Double the cost London-Paris and see what happens.
Chris,
I think that has especial relevance in Europe and some parts of the US. Only the ‘poor’ people fly from London to Paris in most instances because the itinerary they undertake from door-to-door or office-to-office is faster by several hours using Eurostar. The high speed 1 link from London that opened just over a year ago produces a journey from St Pancras to Paris Nord which is less than one hour longer than the check-in and security shambles at Heathrow even before take off, not to mention the long trip into town from Charles de Gaulle airport, even if you are familiar with the optimum RER/Metro routing for your meeting or whatever.
It might not work as intended here because of our low population density. But I use the atrocious bad country/city rail links into Sydney a lot because there is now acceptable network for computers or smart phones all the way. It might take 2.5 hours instead of 1.5 hours driving, but I can use the time and save money and slash my consumption of fossilized carbon emitting gasoline.
However I’d be cautious about shorter haul charging that would encourage some who must travel between Sydney and Melbourne for instance to forsake the misery of a full 180 seat jet for the fuel wastefulness of driving a car occupied by only one person. If we tried to model that pricing initiative here fuel consumption overall would rise, and so would road fatalities.