Association of Asia Pacific Airlines fires broadside at UK aviation policy

AAPA’s General Director, Andrew Herdman, found nothing positive to say about the APD. “The UK Government has performed repeated flip flops, on occasion trying to justify APD, entirely spuriously, as an environmental measure, but later admitting that it was purely a revenue-raising fiscal measure, that extracts GBP2.5 billion (USD4 billion) a year from the travelling public. The APD is entirely ineffective as an environmental measure, to address climate change and reduce emissions, for the simple reason that none of the funds raised are directed towards achieving any environmental benefit,” he said in a press release.

“The APD is the world’s most expensive and economically damaging aviation tax, imposing discriminatory taxes on both UK citizens and foreign visitors to the UK.  Whilst the Government has embarked on a series of consultations regarding the future development of UK aviation, the current policy vacuum is doing untold harm to the UK economy, hampering growth, and undermining the role of aviation in promoting sustainable travel and tourism, as well as a catalyst supporting broader economic and social development.”

No relief for airport congestion in sight

In commenting on the lack of airport expansion, the statement cited ongoing congestion caused by key UK airports constantly operating at capacity and, doubtless in reference to last year’s snow, “leads to situations where routine bad weather or other disruptions to air traffic flows can lead to the complete collapse of the system for several days or more”.

The following chart, compiled from data supplied by the UK CAA, shows the general traffic decline, not only from Asia but also from prime African markets as well. Especially troubling are the falling numbers from the US, the largest UK international market.

UK international passenger traffic by region (all reporting airports, in thousands)

Source: UK CAA
*Peak number 2000-2010

UK air links in general, decade-long decline

Between 2009 and 2010, passengers between the US and UK declined by more than 3% and over the decade, numbers dropped by more than 16%.

Even more worrying are the numbers between the UK and Asia, soon to be the world’s dominant aviation region. India showed a miniscule rise between 2009 and 2010, but the overall trend across the region has been negative, with Japan having halved its traffic over the decade.

The governments of the Caribbean have also been very critical of the APD and again the numbers reveal that fears of traffic declines are valid.

To be fair, there are a few bright spots, the Middle East, for example. While perhaps good news for the UK, with a 272% increase over the decade, the Gulf carrier invasion has been detrimental to UK carriers and, even on prime connecting routes such as Australia and New Zealand, has not stemmed the ebbing passenger tide. The Gulf carriers are getting a larger slice of a smaller pie.

While long-haul and non-EU “others” have shown minimal loss, the air traffic to EU countries is also showing significant decline.

Government intransigence mystifying

Given the global opposition to the APD and constrained facilities, supported by statistical evidence, it is mystifying as to why the UK government is so intransigent. The AAPA statement echoes many others when it states: “As a result, Heathrow is steadily losing share to competing aviation hubs, threatening its long-term competitiveness.”

In an environment when revenue is in short supply and any source of additional funding is desirable, this may indeed be a sterling example of a government being “penny wise and pound foolish”.