COMMENT: APD - Air France please read

Air France/KLM please read this piece.  You may be in for a boom in long distance travel from the UK.

Readers will know that from 1 November, as things stand, Air Passenger Duty (APD) for travellers flying out of a British airport will rise substantially. 

The tax is effectively two tiered, is based on the seat pitch, and calculated capital to capital in four bands; up to 2,000 miles (Nicosia is 1,850 and Tel Aviv 2,227), 4,000 miles (Washington is 3,665, Hawaii APD is the same but is at least twice as far), and 6,000 miles taking in the Commonwealth countries of Australia and New Zealand.

The new fees for economy are £12, £60, £75 and £85.  With a 40” seat pitch and upwards (effectively Business Class) it is £24, £120, £150, £170.  Taking a family of four to see your relations in Perth will cost you £340 before you start.  Using perhaps Air Miles and treating your brood to an upgrade takes your donation to government to £680.  The Treasury is clearly pro Europe and the fees will only be £48 if you decide on a weekend in France or Spain. 

Expensive APD for long distance destinations can easily be avoided.  Go via Amsterdam or Paris (or Brussels, Helsinki, Madrid or Zurich – but not Germany).  Book a single sector to any of these places and you only pay £12 or £24.  The long haul flight reservation would be done separately (but probably at the same time).  As noted the saving is substantial.

Yes, technically your luggage would be off-loaded at the change airport but many business people travel only with roller bags even as far as Oz and since the tagging of cases is a very easy airport exercise the first carrier would have no problems in attaching the right three letter bar code at check-in.  No doubt the lawyers on both sides would look at this one.

Interestingly HM Revenue and Customs have not updated its notice 550 APD (December 2009), as yet it only detailing the current tax.  Officially we don’t know what the new rules are.  Upgrades are covered in this 12,000-word 57-page document.  Assuming you have not been told in advance of a cabin change (and they are always on a “space available” basis) you should not pay the extra duty.

Paris Charles de Gaulle is a very easy changeover and Amsterdam much the same.  Even now many airlines offer long haul connecting flights far cheaper than those available direct via British Airways, bmi and Virgin Atlantic.  This Government axed Heathrow’s third runway (with its single opposition group) in favour of a railway dream which will be fought all 400 miles to Edinburgh.  It does not seem to have an airline policy (and an invisible Minister). They will also get the blame for the increase in APD.  Heathrow is the international aviation hub of the world.  But for how long?  Drop the increase and blame the previous incumbents.

Schiphol used to promote itself as “London’s third airport”.  If AF/KLM gets its act together Charles de Gaulle could be chasing that role.

Malcolm Ginsberg
Editor in Chief

And if that isn’t enough, you can read ON TOUR which also has something to say about APD.

http://customs.hmrc.gov.uk www.whitakersalmanack.com/pdfs/LondonAirDistances.pdf

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Air Southwest sold by Sutton Harbour Group

EASTERN AIRLINES is to become the new owner of Air Southwest (ASW), the Plymouth-based regional carrier.  As forecast in last week’s AERBT, Eastern Airways, headquartered at Humberside Airport, will complete a take-over deal in October.  Air Southwest will continue to fly under its existing brand.  Current owner Sutton Harbour Group announced in May that it intended to sell Air Southwest so that it could concentrate resources on its core business of property regeneration and development.  It will retain its lease on Plymouth City Airport, and says it will continue to work with the airport’s freeholder, Plymouth City Council, on this strategically important asset for the city.  The two airlines are very compatible in terms of route structures and having completely different fleets (ASW 50-seat Dash 8 versus Eastern’s core 29-seat British Aerospace Jetstream 41). www.airsouthwest.com www.easternairways.com

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Brighton to Portsmouth loses its loos

SOUTHERN RAILWAY is to introduce re-furbished trains on the popular local Brighton to Portsmouth service without a toilet facility.  The firm said trains would run in areas with short journeys where most people travel for less than half an hour.  A journey from Portsmouth to Brighton can take up to an hour and a half.  Independent rail passenger watchdog Passenger Focus said the decision was a blow for passengers who were elderly, had medical conditions and travelled with children.  Railways Union chief Bob Crow called the move "unacceptable" and said it runs the risk of turning carriages into "stinking cattle trucks" creating appalling conditions for passengers and staff.  A Southern Railway spokeswoman said the new trains would have a "refreshed interior" including new seats and flooring, a passenger information system and flexible spaces for wheelchairs and cycles. www.southernrailway.com

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CAA airport stats

LONDON CITY AIRPORT'S on-time performance continues to exceed the punctuality levels achieved by other UK airports.  Statistics published by the Civil Aviation Authority (CAA) marked London City Airport's arriving and departing scheduled services at 88% on time, 10% above the average for UK airports.  With its very simple runway arrangement ‘planes are airborne normally within 6/7 minutes of leaving the apron, with passengers often landside in less than ten minutes of the touchdown.  While punctuality declined at all other UK airports monitored by the CAA during the second quarter of 2010, at London City Airport punctuality improved. www.londoncityairport.com

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Flybe profits

BASED AT EXETER AIRPORT, Flybe, which aspires to a Stock Exchange listing and is 15% owned by British Airways, has reported pre-tax profits of £7.5m (US$11.7m) in the year to March – significantly up on the same figure last year.  But, stripping out exceptional, the underlying income fell from £12.8m to £6.8m on the back of passenger numbers that were largely unchanged.  The airline says that the Icelandic volcanic ash cloud cost £12 m in lost revenue.  Flybe has a franchise arrangement with Loganair who operate mainly Scottish regional services.  It also recently signed a code-sharing agreement with Air France allowing it to move into continental Europe.  The airline is in discussions with Finnair regarding future operations out of Helsinki.  Flybe flew 7.2m passengers in the financial year, slightly down on the 7.3m for the previous period. www.flybe.com

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London Fashion Week

SKYSCANNER, the flight price comparison website, has taken advantage of London Fashion Week to ask users which airline they thought has the most stylish cabin staff uniforms.  For many years carriers have insisted that their front line troops, the flight attendants, have looked very smart, competing against each other in terms of style.  Elder readers may recall the chic uniforms of Pan Am and British Caledonian.  Welsh designer Julien MacDonald took his needle and thread to BA’s uniform in 2004 in an effort to stop cabin crew looking like “someone’s old granny”.  A respectable 15% of Skyscanner users think that BA, which sponsors Fashion Week, should take the top title in the style poll.  Air France commissioned Christian Lacroix to design a whole wardrobe of items for cabin crew in 2005.  Lacroix designs for a top grade list of celebrities, and Skyscanner users are suitably impressed, with 17% voting Air France’s uniforms as the most stylish.  The airline that Skyscanner users actually deemed to be the most stylish is Qatar Airways.  The airline’s retro-look crimson uniform took a massive 33% of all votes. www.skyscanner.net

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San Salvador from Europe

IBERIA next Saturday (2 October) will start flying between San Salvador and Madrid, becoming the first European airline to link the two cities directly.  The four new weekly flights (on Mondays, Tuesdays, Thursdays and Saturdays) will also allow travellers to connect to other Central American cities with codeshare partner TACA, and to other European cities from Madrid with Iberia.  The carrier will use Airbus A340/300 aircraft, with capacity for 254 passengers, including 36 Business Plus flat-bed seats.  Iberia currently flies from Europe to Costa Rica, Guatemala and Panama.  The new flights will help consolidate the carrier's presence in Central America, and increase its market share, currently 42% (or 52% for Business Class travellers) of all European flights to the region. www.iberia.com

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ON TOUR: Routes Worldwide 2010

A Retrospective on the 16th Worldwide Routes Conference from Vancouver.  Chris Cain reports.

The 16th annual Routes Worldwide global ‘speed-dating’ road-show took place in Vancouver last week, one of North America’s most attractive and liveable cities.  What follows are some reflections on a very successful and enjoyable event for those able to be here.  And there are signs that the conference could mark the turning point for the aviation industry as green shoots begin to appear following a long cold commercial winter caused by a combination of the worldwide economic downturn, a series of external shocks (oil prices rises, volcanic ash and on-going security concerns) and the unjustified pariah status accorded to aviation in the global political debate about climate change. 

With 250 airlines, 450 airports and 125 tourism authorities and governments attending, Vancouver was the largest Routes conference yet and quite an act for future hosts Berlin (2011), Abu Dhabi (2012) and Las Vegas, which was announced as the 2013 venue during the event.

The Conference venue, the new C$1bn Vancouver Convention Centre, set new standards for space and ambiance, being quiet, efficient and comfortably able to accommodate the large and ever more imaginative exhibitor stands (first prize going to the Scottish Government’s striking modern “igloo” dressed proudly in national colours and several fine whiskies on offer to boot), four co-located conferences and the meeting halls and rooms which provide the venues for the crucial face to face meetings between airlines and airports which remain the core of the event for most delegates.  It also offered a spectacular setting for those wishing to take a break from the hurly burley of the conference, providing a superb viewing platform as it does for Vancouver’s lifeblood, the Fraser River, a hive of activity encompassing an eclectic mix of ‘float’ planes, passenger ferries, cruise liners, cargo ships and leisure craft against a spectacular mountain backdrop.

But even more notable than this was the genuine warmth of the welcome offered to the 2,500 delegates by the host City, the Government of British Columbia and the lead sponsors the Vancouver Airport Authority (YVR).  And the way this was effortlessly combined with efficient management of a wider event programme – including the gala dinner (complete with ticker tape and flashing glasses), city tours and visits to the Boeing factory at Everett across the US border.

The programme of co-located aviation conferences was also substantially enhanced, offering insights into the air cargo sector, the symbiotic relationship between air transport, tourism, airports and economic development.

The GASS Summit was also an opportunity for industry leaders to meet and discuss the latest challenges facing the sector and share their thoughts on the strategic direction of travel required if the emerging green shoots are to grow into a sustained and robust recovery.

So what were the key highlights?  Well firstly what was striking is the truly global nature of the event, reflected in the increasing presence of African, Asian, Indian and South American delegations and national and regional governments.  Numerically the host continent and Western Europe continues to have the biggest presence, but in terms of ambition and importance there is no doubt that the rest of the world has understood the importance of good air transport links and is aggressively setting its stall out to catch up with the market leaders.

There was the usual well orchestrated programme of route announcements of deals struck before the Conference began and noted in AERBT above.

Winners of the principal World Routes Airport Marketing Awards for 2010 were:

Europe: Brussels Airport
Americas: Edmonton International Airport
Asia: Auckland Airport
Africa: Nairobi Jomo Kenyatta International Airport

The Orbis Social Responsibility award went for British Airways charity work in partnership with Comic Relief.

But it was also notable that many airport delegates were commenting upon the heightened interest of airlines in considering new markets, which a year ago they would have regarded with much greater caution.  The proof of this greater optimism is real and tangible, and will come in a number of new routes which emerge later in the year and in 2012 often started from meetings held in Vancouver.

There were also clear signs of continued alliance building, including between legacy and low cost carriers, and that some influential low cost carriers (Jet Blue, Norwegian, Ryanair and West Jet to name but four), perhaps responding to the operational efficiencies prospectively offered by new aircraft models, are beginning to look seriously at the hitherto difficult problem of developing a viable long haul low cost business model.  These new ideas seem unlikely to take exactly the same form as pioneering initiatives by Asian, Indian and Australasian carriers, but it will be interesting to discover whether a model which is sustainable and can stimulate growth in larger and more mature market sectors such as those across the Atlantic, and how incumbent network carriers in Europe, North America and latterly the Middle East will choose to respond.

But finally, and most notably, given the apparent indifference shown by some leading European Governments to the travails that the industry has faced over the last two years, with many airlines still struggling financially, and their rapacious appetite to find new ways to tax air travel, was the announcement by Gordon Campbell, Premier of the Government of British Colombia, that it is eliminating the jet fuel tax for international flights on 1 April 2012, saving airlines an estimated US$20m in 2012/13.  This was matched by a five-year incentive programme covering landing and terminal fees to encourage airlines to a new capacity by its principal airport authority.

Following the lead provided by the Dutch and Belgian Governments in reducing Air Passenger Duty earlier in the year, it is to be hoped that the British Columbia initiative sends out a signal to the less enlightened amongst their counterparts that aviation is crucial for doing business, increasing tourism revenues and improving connectivity in an ever more globalised and competitive world.  Hopefully by the time of the next conference in Berlin, the industry will have got this message across and is facing a more benign economic and fiscal environment in which it can restore profitability and facilitate growth.

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