Heathrow Responsible for Millions of Pounds in Lost Tax Revenue
14th May 2008
Figures obtained by reporters at The Times indicate that over a quarter of passengers at Heathrow Airport are overseas travellers who are stopping there only to change planes.
Since 1991, the amount of international passengers arriving at Heathrow Airport in order to just change planes has trebled to a massive 18 million. This figure is expected to double by 2030, potentially costing the treasury millions of pounds in lost tax revenue because passengers using the airport to make a transfer do not have to pay air passenger duty.
These travellers at Heathrow, which is the most congested airport in the UK, are very lucrative for British Airways, which operates around 40 per cent of all flights from the airport, because they fill up empty seats. However, these seats are certainly not as profitable to the Exchequer, as each seat taken by foreign transfer passengers costs the exchequer up to £80 in lost tax revenue. If those starting their journeys at Heathrow Airport or even transferring from a domestic flight took all British Airways seats, the Exchequer would gain over £500 million in tax per year.
These figures are particularly controversial due to Heathrow Airport’s plans for a new runway. Many argue that a reduction in the number of foreign transfer passengers – which, after all, are not proving to be good value for anyone other than BA – would reduce the need for this costly and environmentally damaging runway. This is particularly true as the capacity of the new runway, which is expected to open in 2020 if it goes ahead, would be roughly the same as the number of foreign transfer passengers that are expected to be using the airport by 2030.
Many airlines, including British Airways, are keen to defend the need for foreign transfer passengers and claim that foreign transfers are necessary in allowing Heathrow to continue serving a wide range of destinations. A British Airways spokesperson said: “Without seat purchases from overseas transfer passengers, many long-haul routes from Heathrow would be unviable. That would mean that passengers in London and the South East would lose direct flights to a swath of destinations, putting businesses here at a serious disadvantage.” However, statistics disprove this argument as the rapid growth in the number of these passengers has coincided with a real decline in destinations, which fell by 21 per cent since 1990 from 227 to 180.
Norman Baker, who is a spokesperson for the Liberal Democrats, said that “we don’t need” foreign transfer passengers in order to make Heathrow a successful airport. He said: “With ever-increasing demand from British passengers to use Heathrow, we don’t need foreign transfer passengers to make routes viable. They are there simply to satisfy the greed of BA and BAA (the operators of Heathrow).”
Source:
The Times