Honorary Member Of Forums4airports
- Jan 14, 2009
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For the Welsh government it would be a development tool to encourage existing airlines like Flybe and Ryanair to operate new routes and expand their operations and and to have something to go to new airlines to offer as an incentive especially for long haul. Considering CWL is a small airport the loss for the Welsh government wouldn't be as much as the Scottish or UK.
Some people have pointed out that if Wales did gain APD powers and abolished the tax it would be able to do so partly because of the Westminster block grant that is funded by all UK tax payers, with the Westminster Treasury's coffers enjoying an APD take. This would mean that airlines at small English airports such as Exeter would be generating APD tax that would help the Welsh Government abolish APD in its country, so indirectly EXT would be subsidising CWL. The same principle would apply with the Scottish and Northern Ireland governments' grants from Westminster.
It does seem manifestly unfair that airports in Scotland and Wales, and thus their economies, would be able to enjoy the benefits of lower or no APD because they have devolved governments whereas airports in England, the largest constituent country in the UK by a huge margin and thus the largest generator of taxes in the UK, would not see similar benefits.
I find it interesting that in these APD debates the Republic of Ireland never gets mentioned. They have a low APD and i'm sure it helps both Aer Lingus and Ryanair be competitive in the Irish market and Aer Lingus in the trans atlantic market and encourages new airlines like Hainan.
As for the airlines i doubt very much they would pass the reductions onto the customer but it would enable them to make more money and incentivise them to grow at airports with low APD.
The Republic of Ireland did have an Air Travel Tax at one point. It was introduced in 2009 at 10 euros per passenger for flights over 300km from Dublin and 3 euros for shorter flights. The EU didn't like that so two years later a blanket 3 euros per passenger was introduced. Following sustained pressure from the tourism industry and airlines the tax was abolished in 2014.
I remember Ryanair making its anti-aviation tax point by saying it would be putting in more aircraft and flights in the ROI when the tax removal was announced.
DUB has grown markedly since 2009 when it was handling 20.503 mppa which has risen to 29.582 mppa in 2017. How much this is due to the removal of the tax (a small tax at that when compared with the UK's long haul rate) I don't know. What is obvious is that the abolition has done little for the smaller airports. In 2006 Shannon was handling 3.639 mppa but this had dropped to 1.751 mppa in 2017. Cork saw 3.258 mppa in 2008 but only 2.308 mppa in 2017. So there is little to suggest that the removal of the tax has helped those airports.