Further to my recent post about local councils (those affected by the airport) charging for landing slots, I can now put some numbers on it.
In yesterday's City AM, it was mentioned that Continental had paid £100 million for four take-off and landing slots. Seeing as you need a 'pair' (one to take off and one to land), that's £25 million per pair that airlines are happy to pay. Assuming that Continental amortise this over ten years at the longest, that's £2.5 million per slot per year, divided by 365 days = £7,000 per take off.
The figures are all over the place; peak slots and slots to New York are of course worth more than early or late slots to Manchester, other figures quoted are 'Up to £20 million per pair'; '£30 million for seven or eight more daily flights'; £20 million or £30 million per slot pair. So let's go low, say £10 million for an average slot, amortised over 10 years divided by 365 days is about £3,000 per flight. Add on £30 per passenger average Air Passenger Duty x 300 passengers = £9,000, £3,000 plus £9,000 = £12,000.
We can ignore landings and assume that the charge is just for taking off. Airlines would still be profitable even if they were charged an average of £12,000* for each take off (Air Passenger Duty would be scrapped of course). Those airlines that have paid through the nose for slots would be spitting feathers, of course, but that's just tough. As the amount of noise and air pollution and strain on local infrastructure round the airport is much the same whether an aeroplane is flying to Manhattan or Manchester is neither here not there.
Heathrow has 471,000 aircraft movements a year, so call it 235,000 take-offs**. 235,000 x £12,000 = nearly £3 billion*** in totally non-distortionary tax each and every year to be spent on public transport, local infrastructure, sound insulation etc.
* Obviously, the exact rate would be set by auction. Airlines would submit sealed bids for how much they offer for how many slots, they would then be allocated in order of who offered most. Some airlines will collude, of course, but on the whole airlines hate each other, so there will always be some outsider prepared to offer that little bit more, just to rub BA's nose in it, if nothing else.
** Check: one take-off per minute, twelve hours a day for 365 days a year = 262,800, so seems about right.
*** Check: total APD receipts 2007-08 £2 bn, maybe £3bn is a tad on the high side for just our largest airport, but it can't be miles off.
Pondering assassination
1 hour ago
6 comments:
Its a good argument and follows the principle of [noise]polluter pays, which is where you started.
You could add an element for type of plane based on, say, fuel effeciency. This could have a multipler effect on the bid - the highest polluters having a multiplier of less than 1 so they would have to pay more to win the slots.
This could be developed quite well to cover all bases without over complicating it.
BA wouldn't like it at all.
Thanks for putting some numbers on it - however vague. I've long advocated this bu never bothered to try and work out the scale.
A couple of things...
First, I would do this for all UK landing slots. If you only ever implemented one type of "land tax" this would be the one for me, because airports make such a big difference to the economic viability in international markets of an area (most of western South East England's economy is totally dominated, and overheated by, proximity to Heathrow - according to SEEDA at least) forcing airlines to most efficiently use all the ports in the UK would raise the economic situation of all areas around viable airports.
Second, in response to the great simpleton no, I wouldn't add a fuel efficiency quotient personally. I think the landing slot price would take that into account. For the same profit a company using highly efficient engines could pay more for their slots, pricing the firms with older planes out. I doubt that when you buy a slot anyway you nominate precisely which plane you will use for it. I think if you want a fuel efficiency cost add it to the fuel (though I recognize the international implications of this - we are talking theory at the moment aren't we!). Also fuels efficiency of the plane itself is only half the story I would say - you could have a less fuel efficient plane paying less for its landing slot at Manchester than at Heathrow and it would still be potentially more efficient if it were serving a more local passenger catchment area, say.
GS, thanks.
Jock, yes of course it should apply to all airports, I just took Heathrow as an example. As you say, the fuel efficiency issue evens itself out. I could add that, for a given take-off fee, airlines will prefer to fly the longest route possible (it's a fixed cost). Aeroplanes use disproportionately more fuel when taxiing, taking off and landing, so this means that long haul flights will become relatively cheaper and domestic flights relatively more expensive, so encouraging people to use train for domestic journeys while making UK airports relatively more attractive as international hubs, so hopefully foreign tourists in transit spend a fortune at the airport shops. It's all good.
Thanks for the numbers, Mark. It is a great idea, taxing the eocnomic rent, which is efficient and non-distorting. It would be simple, transparent, 'green', and push the value into the local community, avoiding perhaps the worst elements of monopoly. Perhaps worth a short paper to take to the CPS/ASI and feed into the govt. consultation?
Public transport, infrastructure, and sound insulation?
Nah....
Councillors' expenses and gold-plated pensions for their staff more likely.
Anon, there is waste and corruption at every level of government. As long as Air Passenger Duty and VAT is collected by central government, the chances of anything filtering back down and being spent locally is nil.
If twenty local councils get given £150 million each, this will appear in their accounts as income, and they have to explain to local voters how it is being spent. So the chances are that quite a lot of it will be spent on something half-way sensible.
Post a Comment