Written evidence submitted by the British
Air Line Pilots' Association|
1. The British Airline Pilots' Association (BALPA)
is not indifferent to the environmental impact of our industry,
but believes that Air Passenger Duty (APD) is a poorly designed
tax which will continue to do nothing to tackle carbon emissions.
APD is not an environmental tax, and there is evidence that it
can and will actually encourage activity which will increase carbon
emissions. But there are ways that the Government and industry
could work together to make flying more efficient and reduce carbon
2. Over 80% of the UK's commercial pilots are
members of BALPA and we are recognised as the main partner in
26 airlines covering all major UK operations. In addition over
1,000 commercial pilots have joined us even though their airline
has no partnership agreement with BALPA and this includes a swath
of Ryanair pilots.
3. BALPA was formed in 1937 following the antics
of the CEO of Imperial Airways who was forcing professional pilots
to operate when it was not, in the professional judgment of those
pilots, safe to do so. This led to the Cadman report. Those origins
remain a key feature of our DNA today and which is why our vision
as an association is still "to make every flight a safe flight".
It is also perhaps why a recent public poll by YouGov found that
airline pilots belonged to one of the most trusted professions.
It is a responsibility we take seriously.
4. BALPA is certainly not indifferent to the
impact that aviation has on the environment. We believe that there
is scope for the industry to reduce its carbon emissions, and
do more to promote efficiency. This submission will go on to suggest
ways of doing that, but it is important to set the industry's
impact on the environment in context. Of all polluting industries
and activities, aviation is far from the worst.
5. 2005 figures show that domestic flying accounts
for 0.4% of the UK's CO2 emissions by source.
If we grounded every flight in the UK it would cut global man-made
CO2 by 0.1%.
Adding domestic and international aviation emissions together
accounts for approximately 6% of UK CO2 emissions compared to
31.1% from power stations and 21.6% from road transport.
6. The Government has acknowledged the importance
of aviation to the UK economy and to the lives of a huge number
of people in the UK.
7. The Government has recently stated, "Air
transport provides the international connectivity the country
needs to succeed in a competitive global economy. It makes possible
long-distance travel that connects the remoter regions of the
UK and connects the UK to other countries. It enables people to
travel for business, for employment, for leisure, and to visit
friends and family, and it enables business to transport goods
rapidly to and from markets overseas."
8. HM Treasury has made the case for the economic
importance of aviation too: "The importance of a strong and
healthy aviation sector to the UK economy is evident from the
economic data. In 2009 aviation contributed around £18 billion
to UK output and represented around 2% of gross value added. The
sector employs over 250,000 workers directly and supports an estimated
200,000 additional jobs through the supply chain."
9. We agree with the Government on the importance
of air transport to the UK's economy. We believe air travel is
a force for good and its growth has supported businesses, increased
the ability of families to maintain contact across continents,
provided thousands of extra jobs and held down prices.
10. However, we do not believe that the Government
is clear about whether, in spite of the acknowledged importance
of aviation, it sees its aviation taxation policy as a way of
constraining growth in the industry by discouraging flying or
whether it sees it as merely a revenue-raising instrument which
has no negative impacts on the economy.
11. For instance in the introduction to Reform
of Air Passenger Duty: a consultation one of the Government's
objectives is to establish "
a simple tax system for
air transport services in the UK, which does not hamper growth
[emphasis added] and yet often talk of APD is couched in environmental
terms which can only mean constraining the sector.
12. If the Government does see aviation taxation
as an environmental tax then we would have severe doubts about
the effectiveness of the current regime.
13. The intended nature of APD is a fundamental
question and we are sure it is one that the committee will be
keen to examine: does the Government intend APD to be an environmental
tax in order to restrict growth in the industry or is it intended
simply to raise much-needed revenue for HM Treasury?
14. If the intention is to constrain the
industry we do not believe that is a proportional response given
its importance to the economy, its role as a social good and its
contribution to CO2 emissions vis-à-vis other sectors.
15. In any case, the impact of APD has been and
will to be to encourage passengers to look for ways of avoiding
the tax which can, in fact, encourage behaviour which would increase
carbon emissions (see Global action and international competitiveness
16. Any effort to restrict the industry from
growing by means of fiscal policy and/or capacity constraints
will also have the effect of forcing up prices (again, see Global
action and international competitiveness below).
17. APD is necessarily a very blunt tool to effect
behavioural change, if that is the goal. The banding structure
is very crude and, as mentioned elsewhere in this document, bears
insufficient relation to the true environmental cost of the flight.
18. And we do not believe that APD is a fair
tax. Indeed, we have previously suggested that APD is the "poll
tax of the skies".
The overall cost of APD on an airline fare is often very significant,
it does not apply equally to all carriers, it penalises UK passengers
harshly compared with passengers from other EU countries, there
is a concern about the taxation levels for different cabins (premium
economy passengers are taxed at the same amount as first class
passengers), and it bears no relation to the efficiency of the
19. More than possibly any other industry aviation
has a global context. Not only is our business inherently international
in nature, but we will never be able to tackle climate change
without working with other countries and international bodies.
20. We acknowledge the legal difficulty reconciling
the desire to link taxation to carbon emissions given the UK's
commitments under the Chicago Convention but we believe that more
should be done to investigate this avenue which would be a much
fairer way to take account of aviation's true externalities. For
instance, we would be broadly supportive of an international,
global emissions trading scheme.
21. It is important to note that the UK is in
competition with other EU countries for air transport business.
Flying from UK regional airports to Amsterdam for example to connect
onwards is becoming an ever more attractive proposition for many
due to Schiphol Airport's five runways, 264 destinations and no
aviation taxation (compared to Heathrow's two runways, 183 destinations
and the highest aviation tax in Europe).
22. In a recent poll for BALPA 76% of people
said that they would prefer to transfer via Amsterdam if it meant
This is rational behaviour which would actually increase the amount
of CO2 emissions and is an unintended consequence of APD and capacity
constraints in the UK.
23. We are pleased that the Government is reviewing
Air Passenger Duty and has published a consultation document on
that basis. However, we think that this is a missed opportunity
for a more fundamental review of aviation taxation; one which
really considers how best to reduce aviation's contribution to
climate change while not penalising people who want to enjoy a
holiday or visit friends and family. We believe that is possible.
24. BALPA supports aviation's inclusion into
the European Union Emissions Trading Scheme (EU ETS) but like
many parts of the industry is concerned about the double taxation
situation that will come about with both EU ETS and APD forming
part of the ticket price.
25. Putting a price on carbon, which is what
EU ETS effectively does, incentivises carriers to operate more
efficient aircraft more efficiently. ETS provides a far better
approximation of the externalities of flying and links that to
a financial penalty.
26. Development of new technologies will continue
to be the main and fairest way to tackle climate change across
the board including in respect of aviation. To that end we would
encourage the Government to look at using some of the revenue
it generates from APD to off-set the industry's carbon emissions
and also to provide material incentives to airlines and manufacturers
to invest in research and development and new technologies as
a long-term solution.
27. The International Air Transport Association
(IATA) estimates that Air Passenger Duty produces enough revenue
for HM Government to offset all of the UK's flights four times
28. We believe doing this would make APD a more
palatable tax for the many millions of business, individuals and
families who pay it every year. Indeed, encouraging research and
development into these new technologies would be a massive boost
to UK industries such as Rolls Royce and academic institutions
which are very much at the global cutting edge in this area.
29. There are other things that could be done
relatively easily to improve efficiency. We would support making
the airways as efficient as possible by providing more direct
routings. The introduction of the Single European Sky should encourage
this type of direct routing more and more.
30. Mixed-mode operations at airportsnotably
Heathrowwould reduce hold times and provide a more efficient
31. And increasing the capacity of Heathrow,
which among UK airports suffers the most from being overcrowded,
would relieve the situation of many aircraft having to circle
for many minutes before commencing their approach, needlessly
burning fuel and releasing additional carbon emissions. This is
a notorious problem for carriers and passengers alike, especially
during peak times.
32. As stated above, the current level of taxation
on the industry is sufficient to off-set its impact on the environment
several times over. The industry more than accounts for its environmental
33. The impact of APD on an average family can
be very substantial indeed. Take as an example a family of four
travelling from the UK to the Caribbean to visit family. If the
family chooses to book seats in a "premium economy"
cabin they will pay £656 in Air Passenger Duty from April
2012 on top of the air fare.
34. It is also worth noting as a side issue that
the family would pay the same amount in taxation if they were
travelling on the same route in a First Class cabin.
35. BALPA believes that the current level of
APD is very high and is an excessive burden on many families who
wish to enjoy a holiday or visit friends or family.
36. While we recognise the Government's need
for revenue we do not believe it is fair to expect families, individuals
and businesses to pay ever-increasing amounts for their flights
when doing so will have no direct impact on carbon emissions unless
there is a significant change of policy on carbon off-setting.
37. The overall price of tickets is also likely
to increase with the introduction of aviation into the EU ETS
which will place further burdens on people wishing to travel.
38. And contrary to those who claim that aviation
in an under-taxed industry, it is important to remember that the
aviation industry pays for all of its own infrastructure costs
(airports, air traffic control, security) which other industries
39. We believe the overall level of taxation
is placing an undue burden on the industry and on passengers.
There is a feeling that aviation is being squeezed until the pips
40. Air Passenger Duty is not an environmental
tax. It may hamper growth in the UK aviation marketwhether
by design or notbut the impact of that will not be a reduction
in global carbon emissions. Passengers will be more likely to
connect to long-haul flights in European hubs. Such activity is
likely to actually increase the amount of carbon emitted while
adversely hitting the UK-aviation industry which the UK Government
has acknowledged is so important.
41. The Government often reaffirms its central
aim which is to encourage economic growth. BALPA believes that
substantial reform of APD, and dedication of that revenue to research
and development into new technologies, would assist in that laudable
aim while doing much more to tackle aviation carbon emissions
than the current regime.
42. We hope that BALPA's submission is of use
to the Committee. We believe pilots have unique points of view
with regard to this issue and would be happy to provide more practical
ideas about ways the industry can be more efficient to the Committee
in the future.
28 April 2011
98 House of Commons Official Report
House of Commons Official Report
Department for Transport, Developing a sustainable framework
for UK aviation: Scoping Document, March 2011, pg 6 Back
HM Treasury, Reform of Air Passenger Duty: a consultation,
March 2011, pg 7 Back
HM Treasury, Reform of Air Passenger Duty: a consultation,
March 2011pg 5 Back
Ipsos-Mori Online Omnibus poll, conducted 15-19 May 2009 Back