Legal Challenge By US to German Environmental Aviation Tax



Guardian.co.uk



US legal complaint filed against Germany’s air transport tax.

Overshadowed here in London last week by the UK budget, news broke about further dissatisfaction with European legislation which impacts on the business performance of overseas airlines.  Within the next two months, the US aviation trade body A4A will file a detailed complaint with the German Fiscal Court in Kassel about the estimated €1 billion a year German air passenger tax, introduced in January 2011.  At the same time it will urge a referral of the case to the German Federal Constitution Court.   This news is in addition to the possibility of current threats of international retaliation against the EU because of the EU’s insistence on the imposition of a €4 million annual cost on international airlines through the EU Emissions Trading Scheme.  The ETS was introduced last year but Airlines do not have to pay the EU until 2013.  Hence despite current brinkmanship by the EU Environmental Commissioner over threats of trade sanctions and retaliation from many countries,  a compromise may eventually be agreed on and avoid a potential tit-for-tat trade war.

Unlike the UK’s much more expensive Air Passenger Duty that the UK recently declared was not an environmental tax but a debt reducing  revenue earner,  Germany’s estimated €1 billion passenger tax is described as an environmental tax.  It costs €45 per passenger on long-haul, €25 on medium-haul and €8 on short-haul flights and charges airlines with U.S. flights the highest of three tax brackets imposed by the scheme

Representing  fourteen North American airlines,  A4A said in a statement  last week http://www.airlines.org/Pages/news_3-21-2012.aspx  that while its members had until now complied with the German tax under protest, they were now pursuing legal action because it ‘violates several long-standing international agreements, including the Chicago Convention, the US-EU Open Skies Agreement and the German Constitution’.

“Germany cannot arbitrarily close its budget gap on the backs of the U.S. airlines and their passengers who already pay taxes at excessive rates. This is a short-sighted cash grab that will do more harm to the German economy than any short-term benefit that the tax revenue may bring the country’s coffers.”

These are all things the UK airlines, aviation industry experts, the unions, MP’s and UK business bodies have said repeatedly about the UK’s Air Passenger duty whose four distance related bands go up by 8% this Sunday 1^st April.  Economy passengers flying from UK airports to the USA will pay £65 APD - that’s €77.75!!  Premium cabin passengers will pay double.    It will be interesting to see if the A4A action is successful and if so,  whether APD will be next in line for an overseas legal challenge.

Babel on a Plane? Internet Connectivity in Flight

TAP A330 Cabin

 No Escape! TAP Introduces Internet Connectivity for Its Airbus 330 Transatlantic Routes

Many years ago I was asked by BT to write an article about their video conferencing that was becoming available to companies.  This was at a time when it took all night to send twenty or so presentation slides to Australia via something they called the internet. The company I was consulting to at the time used video conferencing between our several UK, US and Australian offices via especially dedicated lines.  Mobile phones had moved on from the Nokia “Bricks” that looked like US army surplus walkie-talkies to more portable bits of kit so connectivity for the individual and companies had moved on tremendously.  

BT wanted to show that video conferencing saved travel money and executive time in transit as it undoubtedly did.  However with the use of mobiles soaring and home internet beginning to grow, a conscientious exec was never really out of reach from his office unless they seriously wanted to (for whatever reason!!!).  The CEO was already complaining that he had very little down-time to think and plan as he was always available.   The irony was that the only place an exec could really enjoy communications down-time was up in the air – especially on a long haul flight.    This gave many the chance to think, plan or work – tho’ at that time without laptops; they had a choice as to whther to work, or to refresh the mind and spirit by catching up on sleep, reading or watching the inflight movie.  

However Passengers flying TAP’s transatlantic routes in Airbus A330 aircraft will soon be denied that quiet interlude of being out of touch.  They will soon be able to use on board installed Internet OnAir to access the web using their Wi-Fi enabled personal electronic devices, such as iPhones, iPads and BlackBerrys, as well as laptops.  TAP is one of the first European airlines to introduce this connectivity and I am not sure it is one I welcome.  At least  BA restict the service to their exclusive Club World London City 32 seat Business Class only flights from the City Airport to JFK. 

I have to ask - Will planes become “Flying Tubes of Babel”  - With the addiction to their phones that many people display on the ground , will the mobile competing conversations of dozens of fellow passengers and the click of internet-busy keyboards or online games music, gunfire and sound effects drown out the sound in your  in-flight entertainment earphones?  Even those excellent Bose noise-cancelling head-sets can’t cope with babies crying or people talking I am told – so what hope is there for a relaxing 8 or more hour flight with such total connectivity available to neighbouring passengers!!  The only moderating factor is that the service does have to be paid for.    I guess that there is always the hope that like the railways there may be quiet zones introduced.  However, dividing cabins with no more than a curtain won’t solve that one.  Especially from those mobile addictees that find it necessary to shout down the phone and to share their conversations with everyone within twenty yards.

 Airlines sensibly got rid of smoking on board but are now introducing another form of air pollution – noise pollution!  It may not give you cancer from passive inhalation but one’s mental health might suffer on an 8 or more hour transatlantic flight….

If you have any opinions or suggestions on this subject – please do share!

3rd HTR Runway? Its Potentially Six Miles Away

                                                                       Northolt 1950

HEATHROW THIRD RUNWAY?  THERE IS ONE ALREADY (SORT OF)

26 March 2012 - John Barrington Carver  writes:  It’s gratifying when a suggestion one has gone public with actually may have been seen by those that count and that may now be being taken seriously.  I have been blogging on the subject of lack of capacity at Heathrow for years as a travel expert on the news.cheapflights.co.uk site.  My suggestion was made on 6^th February in my news.cheapflights.co.uk Travel Expert comment:  http://news.cheapflights.co.uk/wintry-weather-heathrow-in-the-headlines-again/ .  

Heathrow had come in for a huge amount of stick because they cancelled a number of flights in advance of expected snow storms because, at 99% operating capacity, they had no surplus capacity to deal with weather related delays.   To save you linking to what I wrote was:   “The Boris Island airport as an alternative to Heathrow?  –   I don’t believe so….Even if it gets past the considerable environmental hurdles that the location presents there is still the matter of funding the estimated £40 billion cost.  Also by the time it got to be built, the opportunities for the national economy and for job creation will have passed by the UK.   Anyway if a Thames Estuary site were eventually to built, Willie Walsh says BA/IAG would not move there. 

Here’s a thought– Surely Northolt makes a common sense alternative opportunity to rapidly address the runway capacity problem around London?  In the post war years until 1952 it was London’s main airport whilst Heathrow was being built – with its road rail and tube access to central London and proximity to Heathrow it would be a natural location for a third runway.  It’s 1,687x46 metre runway is large enough to operate Airbus320s and Boeing 737s and might take Heathrow’s domestic and short haul flights . Perhaps the R.A.F. could be persuaded to share Northolt?  Even better, the MOD, ever seeking savings, has in fact just announced it is currently considering the sale of Northolt.”

It was good therefore good to see in e-tid’ s ‘Monday Update) that ‘George Osborne is secretly pushing for a third runway at Heathrow in a dramatic move that threatens to break apart the coalition and overturn a Conservative manifesto promise. Secret plans being drawn up in Whitehall include the possibility of transforming the runway at RAF Northolt, a tiny airport six miles from Heathrow, into an effective third runway (Independent). Prime Minister David Cameron and Osborne have been convinced of the need to act after being lobbied by overseas leaders and business figures who warn that trade will move elsewhere unless the airport is expanded. The Thames Estuary option is considered too expensive, and in the wrong place, but another alternative could be a second runway at Gatwick (Observer).’

I understand that there is no firm industry consensus on Northolt as opinion is divided as to whether it is viable or not technically.  However as the Bard said “Where’s there’s a will there’s a way” and the urgency of solving the capacity problem at Heathrow may just make Northolt a possible stop-gap solution.   Gatwick does have land set-aside for a second runway but legally they are unable to develop it until 2019.  Northolt may therefore provide an opportunity to allow a U-turn given it’s already in existence and because of the broad support a third runway has from all business sectors and the Unions.  Today news broke that a cross-party group of MPs and peers have launched an inquiry into UK aviation as it looks like the Government may re-think Heathrow.
If the inquiry supports expansion either actually at Heathrow and/or at Northolt an all party report, together with industry, union and even overseas business groups pushing for more capacity, then the Government may be able to claim it had to abandon its anti position on expansion and save political face - tho' the Right Hon Member for Putney, Justine Greening might not be too happy about that!!!!

Norman Foster Thames Estuary Airport - Comment 3 Nov 2011

                                            Richard M. Montgomery Masts Off Gravesend

                              http://www.bbc.co.uk/coast/images2/prog8_montgomery_masts.jpg

http://www.bbc.co.uk/coast/images2/prog8_montgomery_masts.jpg

LONDON’S LACK OF PLANS FOR NEW RUNWAYS - LORD FOSTER JOINS CHORUS OF CONCERN

3rd November, 2011 

John Barrington-Carver writes:   Architect Lord Foster has joined the increasing chorus of business people and aviation industry experts voicing mounting concern about the runway capacity bottleneck facing London and the South-East.  This week Lord Foster has given another airing to the UK’s lack of ability to compete in future with rival European airports particularly Paris, Frankfurt and Schiphol (Amsterdam).  He has unveiled an alternative (four runway) airport in Kent by the Thames Estuary.  Built partly on The Isle of Grain and on reclaimed land the airport does at first appear to have advantages over London Mayor Boris Johnsons’s floating airport.  Importantly flight paths would be almost all over the sea so reducing noise pollution for local residents.

BUT and it is a big BUT, there are a number of practical considerations to take into account. 

·         The Isle of Grain is home to a huge Liquefied Natural Gas terminal which from the artist’s impression of the proposed airport published last November would be just yards to the west of the main runways and adjacent to taxiways.  The prospect of a plane crash on or close to the LNG terminal does not bear thinking about.

·         The whole of that part of the Thames and Medway Estuaries is sacred to the RSPB and the local wetlands are used by thousands of migratory birds;  never a good mix with high speed jet aircraft on take-off and landing despite the relative robustness of modern jet engines.

·         Possibly, if the airport were to be shifted across the river Medway to the Isle of Sheppey it would reduce the risk to the LNG terminal ; also Sheppey appears from Google to have ample reclaimable marshlands as well as farmland space for  it.

·         Furthermore as an alternative Sheppey already has good road access to mainland Kent and the M2 motorway plus a single track rail link to Sittingbournethus potentially linking the airport with the existing Eurostar rail to London (and the Continent).  However the RSPB have the Elmley wetlands nature reserve right in the development area for the airport and the political clout of the RSPB should not be underestimated!

·         It is also interesting to consider whether the proposed additional Thames Barrier could have serious environmental consequences for the Isle of Sheppey and the Medway and Swale Rivers.  If the new barrier were to be closed and a tidal surge occurred forcing water back into the Estuary not only to the Isle of Grain but up the Medway, the Swale and Isle of Sheppey, it could result in the inundation of both sides of the Thames Estuary.

·         A major consideration for any airport located off Sheerness is the 1944 wreck of the ammunitions ship the SS Richard Montgomery lying on the Nore sandbank off Sheerness  which would be in the flight path of the Lord Foster  runways.   Its masts still visible, the corroding wreck contains 2,000 cases of cluster bombs, nearly 600 500lb bombs and more than 1,000 1,000lb bombs.  Should it detonate it’s suggested the blast would hurl a 1,000ft wide column of water, mud, metal and munitions almost 10,000ft into the air and drive a 3 to 4 foot tsunami across the estuary. 

On paper the Lord Foster proposal seems an elegant solution to the serious problem of London’s lack of runway capacity, but already there are voices raised in opposition citing the points above.  It’s also certain that given the UK’s NIMBY attitude that plans would be fought all the way -  even if the billions of investment required can be raised.

With Heathrow operating at 98% capacity and Gatwick restricted by covenant  to one runway until 2019, what Lord Foster has done  is draw further attention to the dire need for more runway capacity in South East England.  Not only that but the urgent need for a bold resolution to the problem if the UK is not to lose its competitive edge economically and fall behind its European rivals. 

Post Budget Reflections re travel

?

La plus ca change la plus c'est la meme (With apologies to missing accents and circonflexes!)

Given the propensity these days for our leaders to pave the way for new legislation, taxes etc by leaking to the media, there were no real surprises for the travel industry in the budget.

There were no concessions on APD; there was nothing really new in the announcement that Theresa May will pronounce on the consultation on the UK aviation industry this summer and there was certainly no reduction in VAT for the UK tourism industry that they had asked for....That said the Chancellor did say that they were going to suspend the Sunday Trading Laws during the Olympics to allow retaillers to (hopefully) benefit from Olympic visitors presence in London.  Given that reportedly no Olympic city has actually made money for the past 5 Olympics, retailers may be disappointed!

However the media do seem to have come up with a concensus that the PM might announce a U-Turn on the third Heathrow runway.  The airlines, the Unions (yes the Unions!!) MPs and UK business all want and support the third runway.  However, unless the Government has leaked something in order to alter people's expectations on the issue I am not sure the PM is in a strong enough political position to make such a U-turn.  Indeed The Secretary of State for Aviation, Justine Greening was elected to her Putney constituancy on the promise that HTR3 would not be built under the Tory party - it sits, as I have reason to remember, right under the Heathrow flightpath.  With the Lib Dems also having a strong West London following of supporters, they are generally opposed to Heathrow thus a u-turn might be the the issue that causes a break up of the coalition.  Something I imagine neither party wants to face at this time.

The Boris Island scheme is also mentioned again in the media as a possibility.  Given the problems facing such an ambitious project, even if that turns out to be the eventual solution, "eventually" is the right term.   By the time its open for business the lead gained by competitors for the accolade of being the main European hub airport and for access to cities in the growing BRICS market will have opened considerably, leaving UK "Limited" trailing.  No apologies for the word limited because that what the UK will be  - limited by airport capacity and lack of connectivity to those markets.

It's a pretty odd boast by the Chancellor this week to claim that the UK is "open for business" when as an island, not only do we lack sufficient connectivity and air passenger capacity, but we also have the highest tax on flying in the world.

EU ETS Posturing Continues - EU adamant on Including International Carriers

Connie Hedegaarde

EU Carbon Trading Scheme Posturing Continues But Short of Trade War (Yet)

John Barrington-Carver writes :  Talk of a trade war is now in the open over the insistence by Connie Hedegaard, the EU’s Commisioner for Climate Action since 2010,  that there would be no exemptions for foreign airlines using EU airspace from the EU’s Emissions Trading Scheme.   As a long term climate change person she returned to politics in 2004 after 14 years in journalism to become the Danish Environment Minister.   Following her appointment the international global warming debate reached a furious climax with the BBC broadcasting footage of inundation (“due to rising sea levels”) on a south sea island.  No one bothered to establish though if the island, situated on the Pacific Ring of Fire, might not have been sinking because it was on tectonic plate that was being depressed.   

There was I recall an almost religious acceptance that global warming was a fact and an immediate threat to the world.  Aviation was singled out as a major culprit despite the fact that its global CO² footprint was only 2% - and despite the fact that as an industry it had made huge strides in fuel efficiency.  Furthermore it had industry wide action plans to address emissions and noise pollution.  Its worth looking at the UK aviation industry plans to address emission on the Sustainable Aviation site which was never mentioned by the eco warriors at the height of the assault on aviation.  Such was the anti-aviation clamour that the Bishop of London even declared it is a “sin to fly” (although in what context I am not sure).

Its only in the past year or so that the global warming debate has calmed down and with it media attacks on flying.   The credibility of the science behind the global warning protagonists’ position came under scrutiny and evidence has been put forward recently that there is a current period of global cooling.  It’s worthwhile reading Michael Crichton’s excellent  novel  “State of Fear “ published by HarperCollins in 2004.  It is incredibly well researched and even handed leaving its readers to decide on the merits and demerits of the global warming arguments.

This period of debate about global warming and Ms Hedegaard’s  active involvement in climate change, including her hosting the UN Climate Change Conference in Copenhagen 2009, may well have shaped her laudable commitment to achieving a global approach to curbing greenhouse gas emissions.   The focussing at that time  on aviation as a major polluter,  despite its actual contribution, may lie behind Connie Hedegaard’s current refusal to stand down on the EU’s unilateral legislation to include global airline’ in the EU ETS.  This is despite the real and voiced concerns of EU manufacturers who may suffer as a result of her stance. 

However,  airlines do not have to pay for their emissions until April 2013 so there is a little time for the international community to try to work out the current impasse and avoid the threatened trade war. Whilst claiming in today’s FT that the international community cannot threaten the EU with a trade war just because EU unilateral legislation is not to their liking, she is also talking of working hard to achieve the ICAO’s global aviation carbon trading scheme.  Let’s hope that all parties can talk fast enough to avoid the 1^st April 2013 payment deadline becoming a flash point for the potential trade war.

Oil price gusher to subside?

The FT just reported "Saudi Arabia’s powerful oil minister Ali Naimi sought to cool overheating oil markets on Tuesday, saying high oil prices were “unjustified” and that the kingdom could boost its output by as much as 25 per cent if necessary".

This is potentially good news for the global aviation industry which currently is facing a jet fuel price of $139.5 per barrel and an average price of $132.7 per barrel this year.   IATA now expects Global airlines to be operating on a wafer thin 0.5% margin in 2012 and to collectively return a relatively modest $3 billion profit.   Hence any moves to subdue the gusher in oil price rises will be welcomed not just by the aviation industry but by fare paying passengers and by motorist now paying £1.39 at forecourt pumps.   

Travel Expert Migrates from Cheapflights Newsblog

Just thought I should explain that this new travel blog is actually a continuation of my writing corporate comment press releases and newsblogs for Cheapflights Media over the past 9+ years. We are parting amicably but I shall now continue to comment and rant about travel industry issues, particularly those affecting aviation. Given the significant growth of the cruise industry I will now start commenting on news and issues there . Well, for example today (20 March) a collision beween a cruise ship and a container ship entering harbour i in Vietnam was reported. No injuries I'm pleased to say - apart from to the Captain's professional record and a few dents to the ship!

I will be populating this blog with some old posts as well as new ones obviously and will be linking to Facebook and Twitter as is usual these days. Meantime here's a little about me....

Why do I like travel? I got a taste for it early. My first trip abroad was to France aged seven. It gave me a taste for garlic, "cuisine-grandmere", wine, Brigitte Bardot (and her compatriotes) and an appreciation of French culture, which, I am glad to say, has continued to this day many, many years later.

A stint in the Royal Navy gave me the chance to visit places which at the time had no direct air access. Islands like the Seychelles, Lamu, Zanzibar, Pemba, Madagascar, the Comoros Islands and Mauritius not to mention the Cape Verde Islands. The Caribbean islands and the then British Guyana all added to my early tally of countries visited These were almost all off the tourist map except for the most adventurous – some still are. I was also fortunate to live in Kenya for a couple of years and folowed up having left the Navy with three years living in Tokyo.

Today, my travel requisites are for comfort and convenience rather than adventure. Hence, I favour Barbados, which I first visited in 1961. Tourism there has almost completely replaced sugar and rum (not the local Mount Gay Rum though!!). Hotels and services are now second to none but the island still retains that local buzz and character. Also, the weather is great for most of the year. Hurricanes usually oblige by swinging away from the island and only seriously visit once every ten years or so.

I will obviously try other destinations, but if you know what you like, trying another destination is taking a risk with your hard-earned holiday cash. I have pretty well done experimenting unless I have a really reliable recommendation. After all its good for the ego is it not when you are greeted on your return somewhere with recognition and a warm smile.??