Key issues Airport capacity, APD, Atol and VAT
Davies set out, in his own words, “to provide evidence that will make it very difficult for a future government to duck this”. The concern for carriers, airports and business is that the next government will nonetheless fail to press ahead. Willie Walsh, chief executive of BA parent IAG, saw no reason to change his view that no runway will be built, arguing: “Nothing has changed politically.” The economic case points to Heathrow. The business case – and business lobby – point to Heathrow. The London Underground and Heathrow Express already connect to Heathrow. The terminals (with capacity for additional passengers) are already built or under construction at Heathrow. Only the politics really points to Gatwick. The main parties will hedge their pre-
election bets. The Tories were reported to be preparing a manifesto that would not repeat a 2010 pledge to oppose a third runway but fudge the issue. If Cameron wins, expect a new Heathrow
runway. If Labour wins, a lot could depend on promises made in the run-up to the election in an effort to prise Tory MPs out of seats around Heathrow. If the Liberals
UK PASSENGER TRAFFIC TO FRANCE, GERMANY, NETHERLANDS UK PASSENGER TRAFFIC TO... FRANCE, GERMANY, NETHERLANDS
12 15
0 3 6 9
France Germany Netherlands
UAE, QATAR, SAUDI ARABIA*
2003 2004 2005 2006 2007 2008 Source: CAA Passenger numbers outbound & inbound 2009 2010 2011 2012
*Saudi Arabia accounted for less than 500,000 passengers, 2013 2013
0 1 2 3 4 5 6 7 8
feature in a coalition, a third Heathrow runway looks unlikely. If Ukip joins the Tories in government, the coalition would be business-friendly on most issues but obsessed by Europe and could fracture. All of which leads back to the London
Mayor. Johnson has staked a claim to succeed Cameron as Conservative Party leader if the prime inister loses the election. He will stand at the election in a safe Tory seat for precisely this reason and has pledged to fight Heathrow’s expansion.
BELOW: The charts show a remarkable rise in traffic to the Gulf states and the airport hubs of Dubai, Abu Dhabi and Doha. But it would be hard to argue from the French, German and Dutch figures that Paris Charles de Gaulle, Frankfurt or Schipol have grown much at Heathrow’s expense.
UAE, Qatar, Saudi Arabia*
Air Passenger Duty The government finally responded to industry demands by announcing a switch to a single APD band for medium and long- haul flights in the March Budget. So the dreadful treatment of the Caribbean, taxed at a higher rate than Hawaii, will end from April 2015.
Destinations from India to New Zealand
and the Caribbean to Chile will see APD applied to UK flights at the same rate as the US following a clear retreat by Chancellor George Osborne, who vetoed a move to simplify the four-band system in 2011. But rates are still scheduled to rise in line with the Retail Prices Index (RPI). So APD on an economy fare to the Caribbean will merely fall from £83 in March 2015 to £71 in April. A further change was set in train by the
fallout from the Scottish Independence Referendum when the major parties agreed in late November to devolve tax-raising, including APD, to the Scottish Parliament. Industry frustration would turn to fury if Westminster retained the tax while Scotland abolished it. Days earlier, the industry coalition A Fair Tax on Flying launched a campaign to demand the government scrap APD on flights for children. The problem for the sector is that
the government not only intends to maintain ‘austerity’ through to 2018 but also remains shy of its budget-
36 | Travel Weekly Insight Annual Report 2014
Visitors (m)
10.2m 9.6m
7.8m
7.9m 7.9m
8.3m 8.4m 7.7m 7m 6.9m 7.5m 7.8m 8.2m
Visitors (m) 3.1m
3.8m 4.3m 4.8m 5.4m 5.7m 6.2m 6.5m
6.9m 7.1m
7.9m 9.7m 10.3m 10.9m
10.9m 11m
11.6m
11.5m 11.8m
11.6m 11.7m
11.2m
10.7m 10.7m
11.2m 10.3m
10.2m 10.4m
11.6m 11.9m 12.2m
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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