The British Business General Association Association (BBGA) has pledged that it will oppose further increases to the current air passenger duty (APD).
Earlier this year the Association was notified of potential changes to the current APD charging process. Such proposals have simplified the charging process for scheduled airlines and indeed reduced APD charges in that sector, which are still the highest in Europe. In contrast, however, business aviation has been specifically targeted to pay more. The proposed increased charges next year are considerably higher, in terms of the specific amount and the additional cost, owing to banding changes.
For example, while the majority of outbound sectors are currently charged at a rate of £276 per passenger, from Apr 15th 2015 they will be charged £427 per passenger = a 54% increase. In contrast first class airline passengers will enjoy significant reductions on legs above 4,000 miles
- a situation, states BBGA, which is unfair and inequitable.”
Speaking at BGAD Cambridge on Tuesday, BBGA CEO
Marc Bailey said: “The proposal for charges to business aviation aircraft with MTOW above 20,000Kg is neither fair nor balanced. “We thought initially that the Treasury had made a change that adversely impacted on business aviation as an unintended consequence. Now it is clear that, using an arbitrary threshold, the Government has deliberately chosen to tax our clients. Our sector has been penalised because of 'the relative spaciousness and comfort merits such as a progressive approach to rates, compared with commercial aircraft that have a higher seating density, or less overall cabin space', according to Priti Patel MP, Exchequer Secretary to the Treasury."
Furthermore, unlike the previous APD discussions in 2012, BBGA was not consulted either formally or informally. “This whole process undertaken by the Treasury, is duly completely unacceptable and unfair from an industry perspective,”
he added.
Current APD Charging
Proposed APD Charging
The tables above demonstrate how much charges will increase on larger business aircraft flying missions beyond 2,000 miles and how much higher they will be than the standard rate ( ie that charged for a scheduled airline’s First or Business Class Seat).
"While the BBGA does not object to the scheduled airlines receiving a reduction in APD (it advocates a full abolition of APD for all operators in aviation.) we do object to the arbitrary selection of 20,000Kgs as the point at which the higher rate tax is imposed."
"The majority of passengers using these aircraft are not flying for leisure, rather they are travelling on business. Only a small proportion of these flights are used by what the Government calls ‘High Net Worth individuals’. Secondly the nature of UK operations is such that many of the aircraft sectors completed outbound falls into Band B operations."
BBGA is now recommending that it takes the opportunity to lobby their local MP’s and government contacts. “If we allow such changes to be implemented, along with other increased charges on our sector, we will soon find that our market is under threat, seriously damaging not only our own business but also inward investment and regional development in the
UK,” Bailey concluded.
BBGA teams with two industry specialists - Emerald Media and WINGX
Advance
As it faces fresh new challenges including APD on business aviation and the threat of
unwelcome border force charges at its FBOs, the British Business General Association
Association has announced a new association with specialist aviation PR firm Emerald Media
to assist its inhouse team with external communications advice.
Chobham, Surrey-based Emerald is the leading comms agency serving the bizav sector,
supporting clients in a raft of activities - from aircraft charter, airport operations and executive
inflight catering through to MRO, completions and satellite communications. Now in its 21st
year, it has focused on business aviation for a decade.
Emerald is also aligned with data research consultancy WINGX Advance, who will duly be
extending its support to BBGA, also as a new member of the Association. It will start to supply
regular market intelligence and data for the UK market, as it currently sources data for business
aviation associations EBAA, MEBAA and CEPA.
Based in Hamburg, Germany, WINGX, headed by joint managing directors
Richard Koe and
Christophe
Kohler, specializes in providing actionable market intelligence to the global
business aviation industry. Its expertise includes market trackers and data feeds; customized
insights; market surveys and strategic consulting. Customers include aircraft operators,
airframe, engine and avionics OEMs, airlines, maintenance providers, airports, fixed base
operators, fuel providers, legal advisors, leasing companies, banks, regulators, investors and
private jet users.
“We are very pleased to be able to call on these two notable industry firms, especially as we
prepare to ready our public awareness campaign next year,” said
Marc Bailey. This is going to be a very important initiative because we need to push for recognition among politicians and get
them to consult us on such matters as APD - and right now, this is not happening. We have a
big job to gain recognition for business aviation and how it benefits the economy. Our politicians
are blinded with the false perception that our industry is all about high net worth individuals,
champagne and caviar.” |