11th November 2006
Cheap flights – Poor need not apply
News that it is the wealthy and not the poor who are benefitting from cheap air travel will come as a major embarrassment to the Government with the publication (9 November) of Civil Aviation Authority (CAA) statistics on airport use.
The average income of UK leisure passengers travelling through cheap flights mecca Stansted Airport topped £50,000 in 2005 for the first time according to the CAA’s 2005 Passenger Survey Report. The actual figure was £51,141 a year, dispelling the Government myth that cheap flights are somehow democratising air travel by providing opportunities for poor people to fly.
The CAA survey also shows that 83% of passengers using Stansted Airport in 2005 were A/B/C1s the most affluent socio-economic groups, whereas only 7.7% were D/Es the poorer members of society.
The difficulty, of course, for those on lower incomes is that it is all very well to buy a cheap flight to Marseille, Milan or Madrid but a weekend break for two could still cost the best part of £500 when the cost of the hotel, meals, taxis and of course the airport car parking bill at Stansted are added together.
The Government has long argued that the reason it allows continued tax exemptions for aviation on everything from tax free aviation fuel to the VAT exemption and the highly profitable business of allowing duty and tax-free sales is because it doesn’t want to “price poor people off planes”. However, this latest data clearly demonstrates that it is the richer sectors of society who are reaping the benefits of cheap flights.
This is reinforced by the fact that Ryanair’s annual advertising budget with The Telegraph is reportedly in the region of £2 million per year, outstripping its expenditure with any other national newspaper. Meanwhile, even the Financial Times knows its affluent readership likes a bargain, focusing in its November luxury magazine “How To Spend It” on the opportunities to combine luxury holidays with cheap flights. Examples included using Ryanair ‘cheapies’ to reach a Lake Garda hotel where prices start at £339 per night and of a 5-Star Venice hotel whose private water taxi regularly meets the Easyjet flight from Stansted.
While the poor need not apply, those on lower incomes are the ones who lose out in other ways to subsidise cheap flights. Motorists, for example, pay a staggering 70 percent on every litre of petrol in tax while airlines get away scot free, with the tax breaks on aviation fuel worth some £8.8 billion a year. If aviation were to be taxed at the same rate as road fuel, this would be more than enough to end means-tested pension credits and pay for a £35 a week uplift in the basic state pension for a single person and a £56 a week uplift for a married couple a 40 percent increase in each case.
While this might not entirely eliminate pensioner poverty, it would make a far greater contribution than the annual £8.8bn of tax breaks to the aviation industry which allow such cheap flights.
The Government is under increasing pressure to curb the growth in air travel as a result of the dire predictions about its impact upon climate change and its support for cheap flights under the pretext of ‘helping the poor to travel’ is disingenuous according to Stop Stansted Expansion.
Last year’s Tyndall Report (‘Decarbonising the UK: energy for a climate conscious future’) showed that the rapid growth in air travel threatens to wipe out all other planned savings in carbon emissions over the next thirty years if left unchecked. The Stern Report commissioned for the Chancellor and published by the Government on 31 October also highlighted the cost of not taking decisive action now to curtail our carbon emissions while another recent report from Oxford University’s Environmental Change Institute (‘Predict and decide: aviation, climate change and UK policy’) published on 17 October called for higher taxes on air travel as a means of reducing the unsustainable growth in aviation.
“Aviation is the fastest growing source of global warming emissions yet it continues to enjoy the most favourable tax treatment of any industry, resulting in artificially low prices which stimulate demand. Calls for its true costs to be reflected in pricing continue to be resisted by the Government which panders to the aviation industry’s demands for business-as-usual,” said Brian Ross, Stop Stansted Expansion’s Economics Adviser.
“The Government must face up to its responsibilities by recognising that encouraging a switch to low energy light bulbs (for example) might be an important first step but pales into insignificance in comparison to the enormous impacts of the carbon emissions arising from unsustainable growth in air travel,” he concluded.
Highlights of the 2005 Passenger Survey Report were issued by the CAA on 24 October but the publication of the detail of the findings for Stansted and other UK airports was delayed until 9 November. See www.caa.co.uk/default.aspx?categoryid=81&pagetype=90&pageid=6554.
Details of SSE’s calculations of the annual value of the fuel duty and VAT exemption on air travel, and of the costings for increasing the basic state pension are available upon request.