Number of people flying to visit friends and relatives at all-time high

New analysis by the British Air Transport Association of official travel statistics has revealed that more people are taking to the skies to visit friends and relatives (known as ‘VFR’ travel) than ever before.

Last year, there were 19.03 million VFR visits to and from the UK by air –  an increase of almost 230,000 from the pre-recession high in 2008, and a 23% increase since 2010.

• 58% of the total visits last year (11.06 million) were made by UK residents to friends and family living abroad. Two thirds of those visits (7.26 million) were made to European destinations and one third (3.81 million) were to the rest of the world.

• 42% of the total (7.97 million) were made by overseas residents to the UK in 2014. 68% of those visits (5.44 million) were made by people living in Europe, while 32% (2.53 million) were from the rest of the world.

VFR visits both to and from the UK have increased since 2010, but visits by UK residents overseas have increased at a significantly faster rate – 26% (from 8.8 million to 11.06 million) compared with 19% (from 6.72 million to 7.97 million) for overseas residents to the UK.

Flying is easily the most popular mode of transport for people visiting friends and relatives. 83% of all such visits are made by air. Just 10% are made by sea and 7% by rail through the Channel Tunnel. Even for journeys to and from Europe, flying accounts for 77% of visits, compared with 14% by sea and 9% by rail.

On top of the obvious social benefits of families and friends who live far apart being able to spend time together, there are also economic benefits from VFR travel. £4.07 billion was spent in the UK by overseas residents who were visiting their friends and relatives last year.

VFR travel is not concentrated at any one airport, reflecting the fact that people all across the country fly domestic, short-haul and long-haul to get to their loved ones. According to the latest CAA passenger survey data, Luton airport had the highest proportion of VFR journeys at 48% in 2013.

Nathan Stower, Chief Executive of the British Air Transport Association said:

“While recent debate has focused on the economic benefits and environmental challenges of aviation growth, the social benefits of aviation should not be ignored. Air travel allows people who live in different parts of the country and different corners of the world to meet up with their family and friends. Communication technology may have improved and expanded in use significantly in recent years, but it’s clear that nothing can replace being with your nearest and dearest.”

ENDS

21 August 2015

easyJet CEO Carolyn McCall to deliver the inaugural British Air Transport Association annual lecture

The British Air Transport Association (BATA) is pleased to announce a new annual lecture, which in its inaugural year will be delivered by Carolyn McCall OBE, Chief Executive Officer of easyJet. The event in October will offer BATA members and senior industry stakeholders the opportunity to hear from and question one of the aviation world’s leading CEOs.

Sponsored by Airbus and SITA, BATA expects its annual lecture to become a permanent fixture and highlight of the aviation calendar, sitting alongside an expanded programme of events run by the UK trade body.

CEO of easyJet since 2010, Carolyn McCall has led the company through a series of important milestones, including the airline carrying over 60 million passengers per annum and its listing on the FTSE 100. Having been responsible for introducing a number of airline innovations and generating record annual profits, Carolyn is the perfect person to help launch this prestigious new aviation lecture.

BATA Chief Executive, Nathan Stower, said:

“We are thrilled to have Carolyn McCall deliver our first annual lecture, an event that we believe will become a fixture in the UK aviation calendar. Carolyn’s experience leading one of the world’s most successful airlines promises a fascinating talk. Thanks to the support of Airbus and SITA, the event represents the next stage in BATA’s development”.

The invitation-only lecture and reception is taking place on 14 October 2015 at a prestigious central London location.

ENDS

24 July 2015

Summer Budget and APD – BATA Response

Responding to today’s Summer Budget, Nathan Stower, Chief Executive of the British Air Transport Association (BATA), said:

“By failing to properly address the damaging impact of APD in the Budget, the Government has missed a big opportunity to boost trade, tourism and competitiveness. This is disappointing when detailed independent economic analysis suggests that its abolition could increase economic growth, create up to 61,000 jobs, and pay for itself through higher revenues from other taxes.

“With the Scottish Government committed to halving APD following devolution of the tax, followed by full abolition, the status quo is going to become economically and politically unsustainable. Indeed, the Treasury has also today published a ‘discussion paper’ looking at possible responses in England to devolution of APD. The scope is too narrow and the three options for discussion are fundamentally flawed. The Treasury must also consider a significant reduction and abolition of APD across the UK if this review of options is to be credible.“

ENDS

8 July 2015

BATA response to Airports Commission final report

Responding to the publication of the final report by the Airports Commission, Nathan Stower, Chief Executive of the British Air Transport Association (BATA), said:

“Today’s final report is the result of nearly three years of hard work and detailed independent analysis by Sir Howard Davies and his team. We will study the recommendations and evidence in favour of Heathrow expansion in detail. We urge everyone to do the same with an open mind.

“The Government will now consider the report’s findings before reaching its own conclusion and this does not need to be rushed. Additional capacity is urgently needed, but not at any price and there can be no blank cheques. Our priority is to ensure that the final scheme is cost effective, offers value for money for airport customers, and does not rely on today’s passengers paying now for infrastructure that wouldn’t be ready until the mid-2020s. Airlines will work with Government to ensure that their decision meets the needs of passengers and cargo customers.”

ENDS

1 July 2015

Jane Middleton is new BATA Chairman

The trade body for UK airlines, the British Air Transport Association (BATA), has appointed a new Chairman. Jane Middleton will take up her role on 1^st July, when Dr Barry Humphreys, the Chairman for the last six years, stands down.

Jane said:

“I am delighted to be taking up this role at BATA at such an important time for the industry. BATA has an important role to play in representing its members’ views on issues ranging from airport capacity to tax and sustainability to consumer rights. I look forward to working with Nathan and the rest of team, as well as the members, to ensure BATA remains an effective and efficient voice for the UK airline industry. 

“I also want to pay tribute to Barry, who has performed sterling service as Chairman for BATA over the last six years.”

Jane has a varied and extensive career history in the aviation sector and as a finance professional – most recently as Chairman of the Aviation Club. She is a trustee of a number of organisations, including the RAeS, Airlink and the Dame Kelly Holmes Trust, as well as being an Honorary Air Commodore in the Royal Auxiliary Air Force. Jane has previously been involved at a senior level in the Air League, Women in Aviation International and the RAF Museum. With a business and corporate background, including roles at Rockwell Collins UK, TNT Express and Virgin Atlantic, Jane is now the Managing Director of a business consultancy providing strategic financial management.

Commenting on the appointment of his successor, Dr Barry Humphreys, BATA Chairman since 2009, said:

“I am delighted that Jane has been appointed to take over as Chairman of BATA. Her knowledge of the aviation industry and extensive contacts will prove invaluable in ensuring the continued protection and promotion of BATA member airlines’ interests, and I wish her all the best for the future. It has been an honour and a pleasure to chair BATA over the past six years.  During that time the industry has faced a number of major challenges, which it has met with great resilience, and BATA has similarly had to change. Everyone involved can feel proud of what has been achieved. I will watch future developments with continued interest.”

ENDS

26 June 2015

Scrap flight tax and watch economy take-off, suggests new analysis

New independent analysis of the economic impact of Air Passenger Duty (APD) shows its abolition could boost economic growth, create up to 61,000 jobs, and pay for itself through higher revenues from other taxes. UK airlines have welcomed the findings which suggest that the tax currently suppresses demand for flights by 10%. They have long argued that APD is a tax on trade, productivity and investment, as well as the family holiday.

In 2013, PwC were commissioned by four major airlines – British Airways, easyJet, Ryanair and Virgin Atlantic – to conduct an independent assessment of the abolition of APD. In May 2015, PwC were asked to update this study following publication of new supporting evidence and subsequent public policy changes. Both reports use an economic model to simulate how changes in Air Passenger Duty would affect the rest of the economy. This “dynamic” approach to modelling tax impacts is used by the IMF and the World Bank.

The updated analysis takes into account APD policy changes since 2013 and evidence presented by the Airports Commission in their December 2013 interim report. As part of their assessment for the need for new runway capacity in the South East of England, the Airports Commission assessed the relationship between the aviation sector and GDP. Separately, it found a stronger link than in the evidence used by PwC in their modelling for the 2013 APD study. By factoring in this new evidence the revised APD analysis suggests that the benefits of abolition had been underestimated and are even greater than previously thought.

The economic model has been updated to reflect this new evidence and has produced a new set of results suggesting that:

• APD abolition could boost UK GDP by around 0.5% in the first year, with continuing positive benefits up to 2020;
• the economy could be 1.7% bigger by 2020 than would be the case if APD were to remain unchanged;
• the increased economic output associated with abolition could lead to the creation of 61,000 jobs by 2020 – 1,000 more than the 2013 report found despite recent policy changes; and
• more tax revenue would be raised from other taxes than is lost from abolition, with a net £570m in extra tax receipts in the first fiscal year, and positive benefits through to 2020 that could add up to as much as £2bn additional tax receipts in total compared with the status quo.

The modelling suggests that the boost to GDP from abolition would come from three main sources:

• airline investment to offer new routes and maximise existing capacity to meet an estimated 10% increase in the demand for flights;
• higher productivity, international trade and investment from increased business and leisure travel; and
• a 7% net increase in foreign inbound tourism passengers by 2020 – equating to approximately 200,000 extra inbound tourist arrivals in the UK.

With the Budget less than a month away, the finding that APD abolition could raise more than £350m net in extra tax receipts in each year up to 2020 should interest the Chancellor who will be considering measures to boost the economy, productivity and trade, without losing tax revenue.

Fiscal results for abolition of APD – source PwC

The UK is one of just a handful of European countries to levy an air passenger duty, and in recent years a number of countries have abolished their equivalent taxes to become more competitive. For example:

• Ireland abolished their air travel tax in 2014;
• the Netherlands abolished their air passenger ticket tax in July 2009;
• Belgium abolished its air travel tax in 2008; and
• Denmark phased out its air passenger tax in 2006-07.

Germany has the next highest tax in Europe, but its Aviation Tax raised just £745m in 2014. In contrast, UK APD raised £3.17bn for the Exchequer in 2014/15.

136 countries are more competitive than the UK when it comes air ticket taxes and airport charges according to the World Economic Forum’s biennial Travel and Tourism Competitiveness Report published on 6 May. The UK is ranked 137th out of 138 countries in the WEF’s global Travel & Tourism Competitiveness Index, with just Chad below, propping up the table. Britain trails behind European competitors such as Sweden (26th), Spain (55th), Italy (83rd), Germany (110th) and France (114th). Countries outside of Europe that are actively encouraging the development of their aviation sectors rank highly, including Qatar (12th), India (16th), Turkey (22nd), United Arab Emirates (25th) and China (38th).

Nathan Stower, Chief Executive of the British Air Transport Association, said: “Next month’s Budget must challenge the existing orthodoxy on Air Passenger Duty. The UK is an island trading nation yet we have the highest tax on flying in the world. This independent economic analysis, using methodology used in studies for the Airports Commission, suggests that the question for the Chancellor is not ‘can we afford to abolish Air Passenger Duty?’ it’s ‘can we afford not to?’”

Carolyn McCall, Chief Executive of easyJet, said: “Abolishing Air Passenger Duty would boost the UK economy by supporting tourism, investment and business activity. There is a real opportunity with this for the UK to be more competitive. The Government has already removed the tax for children and we hope that it will abolish this tax completely, helping to make travel more affordable for all passengers.”

Willie Walsh, IAG Chief Executive Officer, said: “APD is an out of control tax. The Government just keeps piling on increases. Despite compelling evidence, the UK Government continues to cling to the notion that short-term gains in taxation trump long-term gains in economic growth and productivity.  It is short-sighted and continues to erode the UK’s standing in a global economy.”

Craig Kreeger, Chief Executive of Virgin Atlantic, said: “APD is a tax on UK exporters, productivity and growth. While we welcomed the recent changes to APD, it is frustrating that it has been left to research from the private sector to conduct a detailed economic analysis of its impact.  It is time for the UK Government to recognise, fully review, and take action to reduce the highest travel tax burden imposed by any nation.”

ENDS

10 June 2015

Airlines call on Chancellor to ‘finish the job’ and abolish Air Passenger Duty to boost growth, trade and tourism

The British Air Transport Association (BATA) has today called on Chancellor George Osborne to use next month’s summer Budget to abolish Air Passenger Duty (APD) to boost growth, trade, and productivity, and encourage inbound tourism.

BATA’s Budget representation, submitted on behalf of UK airlines, highlights how APD has transformed from a £350 million to a £3 billion tax in less than twenty years. It points to a report published last month by the World Economic Forum which found that the UK is ranked 137th out of 138 countries for the competitiveness of its air ticket taxes and airport charges. Evidence is presented showing that the next highest tax on flying levied in Europe, by Germany, raises £2.4 billion each year less than UK APD. BATA also provides the Treasury with a preview of new analysis conducted by PwC to be published next week that updates their 2013 report on the economic impact of APD and suggests that the benefits of abolition have been understated.

The Chancellor is urged to address significant concerns about the impact of the forthcoming devolution of APD on passengers and airlines flying from airports across England as a whole, not just one or two regions. The airlines welcome the Scottish Government’s plans to halve APD leading to full abolition, but argue that the UK Government should avoid ‘seriously flawed’ mitigations for a handful of English regional airports. BATA also argue that a Treasury discussion paper on policy responses to APD devolution planned for the summer must include the options of abolition and significant reductions of UK APD if it is to be credible.

The BATA submission states:

• Following the decision in the last Parliament to abolish APD for children, the Government should now finish the job and abolish APD for all other passengers during this Parliament to transform the UK’s international competitiveness, boost trade, increase productivity, encourage inbound tourism, and support the travelling public.
• In line with this objective, the Government should cancel the RPI increase in APD rates on 1 April 2016.
• The devolution of APD to Scotland and Wales raises significant concerns about market distortions and unfairness to passengers living in different parts of the UK. The UK Government could take a lead and eliminate these concerns by abolishing APD.
• A proposed Treasury discussion paper on policy responses to devolution should consider the widest range of policy options, including abolition and significant reductions of UK APD.

Nathan Stower, Chief Executive of BATA, said:

“The new Conservative Government wants to increase trade with the emerging economies, tackle low productivity and create two million jobs over the next five years. The experience of other countries and economic modelling for the UK suggests that the abolition of APD would make a significant contribution to those aims. The Chancellor should use the Budget to announce plans for the abolition of APD – the highest tax on flying in the world – during the course of this Parliament.”

ENDS

5th June 2015

UK’s ‘sky high’ tax on flying bottom of world league table

136 countries are more competitive than the UK when it comes to air ticket taxes and airport charges according to the World Economic Forum’s biennial Travel and Tourism Competitiveness Report published today.

The UK is ranked 137^th out of 138 countries in the WEF’s global Travel & Tourism Competitiveness Index, with just Chad below propping up the table. Britain trails behind European competitors such as Sweden (26^th), Spain (55^th), Italy (83^rd), Germany (110^th) and France (114^th). Countries outside of Europe that are actively encouraging the development of their aviation sectors rank highly, including Qatar (12^th), India (16^th), Turkey (22^nd), United Arab Emirates (25^th) and China (38^th).

The UK has such a low ranking because most countries do not tax air travel or do so at significantly lower rates. Figures released last week by HMRC showed that passengers paid £3.17 billion in Air Passenger Duty (APD) in 2014-15. Germany has the next highest tax in Europe, but its Aviation Tax raised just £745m in 2014. More than 20 EU countries do not have an equivalent tax on flying.

The Office for Budget Responsibility estimates that the tax take from APD will increase by a further £500 million during the next Parliament. Passengers will be paying £3.7bn a year by 2019/20.

Nathan Stower, Chief Executive of the British Air Transport Association, said:

“We knew UK Air Passenger Duty is sky high compared with our competitors in Europe. We know now that it is one of the least competitive taxes in the world. The next government should end this damaging tax on trade, tourism and families and abolish APD in the new Parliament.”

Commenting on the World Economic Forum’s findings, Carolyn McCall, Chief Executive of easyJet, said:

“The World Economic Forum rankings show that the UK is in the top five of countries with the highest aviation taxes in the world. This is further proof that APD is a tax that is making the UK less competitive, with a negative impact on UK tourism, investment and business activity.‎

“Abolishing APD would boost the UK economy and pay for itself by increasing revenues from other sources. Research by PwC has revealed that the GDP boost to the UK economy would amount to at least £17 billion in the first three years and result in almost 60,000 extra jobs in the UK over the longer term.”

Craig Kreeger, Chief Executive of Virgin Atlantic, said:

“This report highlights once again the damaging impact of Air Passenger Duty. Politicians from all parties are keen to claim that the UK is “open for business”, and yet we rank almost last on such an important measure of economic competitiveness.

“APD is a tax on exports – whether it’s on inbound tourism or business travellers – and the UK’s overall high rank in the report highlights what a disproportionate impact APD is having. Moving the UK up the international competitiveness rankings should be amongst the top priorities for any incoming Government.”        

ENDS

6th May 2015

New statistics show £158m increase in tax paid by air passengers

New statistics published today by HM Revenue and Customs show that passengers paid £3.17 billion in Air Passenger Duty (APD) in the financial year 2014-15 – an increase of £158m or 5.2% compared with 2013-14.

The Office for Budget Responsibility estimates that the tax take will increase by a further £500 million during the next Parliament, despite the duty being abolished for children under 12 from this Friday (and for under 16s from March 2016) and a recent simplification of the duty’s banding system.

By 2019/20, APD is forecast to raise £3.7bn a year – more than beer and cider duties (£3.6bn) and the TV licence fee (£3.3bn), and the same amount as the Bank Levy.

The total number of passengers paying APD in 2014 was 105.9 million – 1.5 million fewer than the pre-financial crisis peak year of 2007. However, the amount of revenue raised by APD has increased by over 70% over the same period – from £1.8 billion in 2007 to over £3.1 billion in 2014.

The UK has the least competitive tax on flying in the world and the highest in Europe by a big margin. Germany has the second highest air passenger tax in Europe, but it raised just £745m from its Aviation Tax in 2014. Most European countries don’t tax their citizens or visitors to fly abroad.

Both the SNP and the DUP have set out their desire to see APD abolished in their respective manifestos which means that a hung Parliament could see political pressure build for further significant action to be taken.

· SNP manifesto 2015 – ‘For our tourism sector, we will press for the early devolution of Air Passenger Duty (APD) so we can use this new power to encourage more direct flights to Scotland, with a reduction of 50 per cent and longer term plans to abolish APD completely.’

· DUP manifesto 2015 – Air Passenger Duty (APD) has a disproportionate impact on the regions farthest from the most prosperous South East. The duty therefore harms Northern Ireland’s business and tourism sectors. It hurts family incomes and harms our economy. The exemption of children from the tax is a partial admission of the negative impact it places on passengers. As the duty is a disincentive to travel – it is bad policy. Over the next parliamentary term Air Passenger Duty should be abolished.

Responding to the publication of the new HMRC statistics Nathan Stower, Chief Executive of the British Air Transport Association, said:

“These new statistics are worrying for anyone who cares about increasing exports, encouraging business growth and investment, and expanding tourism. It’s time to ask ourselves why our competitors either don’t tax air travel at all or do so at significantly lower rates. It makes no sense for an island trading nation to have the highest tax on air passengers in the world. The next government should transform our competitive position and abolish this damaging tax on trade, tourism, families and businesses in the new Parliament.”

Commenting on the new APD statistics, Willie Walsh, IAG Chief Executive Officer, said:

“Passengers paid £3.17 billion in APD in 2014/15 – an increase of 824 per cent since its first full year in 1995/96. Over the same period inflation rose by just 82 per cent.

“This tax is completely out of control. It is the highest aviation tax in the world and it damages economic growth and jobs. No wonder the Scottish government wants to abolish it. APD should be scrapped UK wide.”

ENDS

28th April 2015

British Air Transport Association responds to Liberal Democrat manifesto

Responding to the publication of the Liberal Democrat manifesto, Nathan Stower, Chief Executive of the British Air Transport Association (BATA) said:

“I welcome the Liberal Democrats’ recognition of the value of tourism and heritage to the UK economy and their commitment to make sure the British tourism industry is able to compete with other major world destinations. Unfortunately, their opposition to any expansion at Heathrow or Gatwick (as well as Stansted or a new Thames Estuary airport) will make that task harder over time, and is at odds with their promise to carefully consider the conclusions of the Davies Review.

“The Airports Commission, established by the Coalition Government, has spent over two years looking at whether new capacity is required and has clearly concluded that there needs to be additional runway capacity in the South East of England by 2030 to meet demand, with Heathrow and Gatwick the two shortlisted locations. I urge the Lib Dem leadership to study the Commission’s final report with an open mind.”

Last month BATA published a manifesto on behalf of UK airlines. Ready for take off: our priorities for the new Parliament sets out the vitally important economic and social contribution that UK airlines make to national life. Five key policy areas are identified where action is required in the next Parliament.

• Tax – abolition of Air Passenger Duty to transform the UK’s competitive position, lower the cost of flying and deliver significant benefits to the economy
• Airport capacity – the green light for new runway capacity without imposing pre-funding on today’s passengers, alongside further improvements to surface access to support airline growth at other airports.
• Sustainability – including support for the commercialisation of sustainable aviation fuels and controlling development near airports to support the industry’s actions in limiting the number of people seriously affected by noise.
• Border & Visas – keep Britain open for business and tourists whilst protecting the border, including providing Border Force with the resources it needs to maintain service levels and the need to make further progress on visa accessibility and competitiveness.
• Protecting passengers – secure lasting reform to European law to deliver clearer consumer rights and support industry progress in improving the passenger experience for persons with reduced mobility.

ENDS

15th April 2015