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Possible reduction of APD on UK domestic flights to save Flybe - impact on BA

Possible reduction of APD on UK domestic flights to save Flybe - impact on BA

Old Jan 14, 20, 1:13 pm
  #76  
 
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Originally Posted by Ldnn1 View Post
Please don't be ridiculous
I think a website and a poster would bear the responsibility of any legal issues should they be raised. Canít remember the exact circumstances, think it was someone posting a you tube video of ATC at LHR and someone pointed out the individual was breaking a law as well as someone pointing out how the website could be held accountable and a radical clean of the thread was done.

I donít think Flybe are guilty of fraud, as others have said mismanagement and robbing Peter to pay Paul. Typically a vendor will get their monies from card transaction processors 2 working days after the event, such processors would potentially have to refund card holders in the event Flybe failed so would likely keep hold of this money for a few days longer to prevent themselves from losing out. Such delays are like a big game of Jenga Flybe precariously on the edge but some money comes in and they pay a few bills and live to see another day. I suspect someone playing Flybe Jenga thought we can only pull out 2 more bits before our tower collapses so we need to do something about it.

What does annoy me is that SRB is quite happy to take Flybe feeding passengers and money from our government with Virgin Care contracts and indeed sued the NHS out of principle but wasnít going to put his hands in his pocket again re Flybe. That seems to be changing now so letís see what happens to Flybe and other airlines.
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Old Jan 14, 20, 1:14 pm
  #77  
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@ navylad ... I have no doubt that UK Govt will recoup that somewhere, whichever angle you are looking from!
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Old Jan 14, 20, 1:36 pm
  #78  
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Originally Posted by Ldnn1 View Post
Please don't be ridiculous
Directive 2000/31/EC says itsmeitiss is correct.
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Old Jan 14, 20, 1:38 pm
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Originally Posted by fransknorge View Post
Directive 2000/31/EC says itsmeitiss is correct.
No it doesn't.
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Old Jan 14, 20, 1:39 pm
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Please correct me if I am wrong. APD is payable by the passenger. The airline collects this on behalf of the Government. Thus the Government would be allowing the duty paid by the passenger to be used to bail themselves out rather than pay the Government - for now. Rather than give or lend them money, they use the money that they were going to use to pay the Duty for themselves. However, it is the passenger who have paid this. Something does not seem to make sense to me.
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Old Jan 14, 20, 1:46 pm
  #81  
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BBC reporting that Government have promised a review of APD and that has assured the investors to pump in some cash and Treasury will agree a repayment plan for the APD overdue for payment.

Of course no guarentee that the Government will actually abolish APD on purely domestic flights though they might reduce it.

https://www.bbc.co.uk/news/business-51113895


I'm thinking the introducion of an economy domestic rate (maybe half or 75% of the reduced rate) in addition to the current reduced and standard rate so a flight MAN-LHR would get the domestic rate but a MAN-LHR-AMS would pay the current standard rate

Last edited by UKtravelbear; Jan 14, 20 at 2:01 pm
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Old Jan 14, 20, 1:51 pm
  #82  
 
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Originally Posted by PUCCI GALORE View Post
Please correct me if I am wrong. APD is payable by the passenger. The airline collects this on behalf of the Government. Thus the Government would be allowing the duty paid by the passenger to be used to bail themselves out rather than pay the Government - for now. Rather than give or lend them money, they use the money that they were going to use to pay the Duty for themselves. However, it is the passenger who have paid this. Something does not seem to make sense to me.
Its a free Government loan to Flybe. Flybe collects our tax money, and keeps it. I wish I could do that with my vat bill.
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Old Jan 14, 20, 2:39 pm
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Originally Posted by tobsw View Post
But aren't APD and taxes PAYED by the traveller, but collected by the airline to make things easier? There are many places in the world where you pay tax at booths at the airport.

Isn't it FRAUD when someone collects a tax/duty and doesn't channel it further? Or better said,,, they've been using the money they've collected as APD for something else; which I think is infuriating and not transparent.

If they can't run profitably, they should just close the shop. Someone else will cover their place.
It is in the nature of all governments to make things legal, when it suits. Here and now, one expects it suits. It is the job of the electorate to hold governments to account*. The electorate will eventually decide.

* I could go on, but that would get me exiled to Omni. Just reminding you of a couple of very basic principles in the thoroughly imperfect world we have.
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Old Jan 14, 20, 7:24 pm
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Originally Posted by Ldnn1 View Post
Please don't be ridiculous
It's not ridiculous. You can be sued for libel for anything said on the internet and those that publish it can also be sued. Whether it is likely is another matter, but it isn't sensible to accuse identifiable people and bodies of fraud.
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Old Jan 14, 20, 10:20 pm
  #85  
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Originally Posted by flatlander View Post

I wouldn't sling words like "fraud" about if I were you, unless you have some concrete evidence (which you don't, in this case).

In the UK, taxes and duties are included in the sale price and not itemised. That's the law. The price you're paying is set as a price from the retailer including taxes and duties payable to HMRC and the retailer's other costs and profit. The retailer can vary the price as they wish, while they still have to pay the taxes and duties to the central government (usually, to HMRC). The Treasury may reduce tax or duty rates to give the retailer a greater margin of the price, but there is no "fraud" if the retailer does not vary the price downwards. You might think the retailer is overcharging in that case, but that's your opinion and you're free not to buy if you don't want to. Meanwhile, the Government is hoping that the retailer might reduce prices, but they are still not obliged to do so. In a highly competitive market, a competitive retailer might reduce their prices (after a tax or duty decrease) while preserving their profit margin.

Occasionally, the Government tries to regulate prices more closely but that is not the case with air fares.
I suspect the objective is to make domestic flights more price competitive. We are in a situation where demand is too low and costs are covered by increasing seat sales. Once you have costs covered you can then look at dynamic pricing plus premium cabins to drive profitability along with extra fees such as priority boarding, reserved seating, baggage, beverages and food etc.

As to refunds I am not sure. If the tax is due on sale then refunds are not likely as taxes paid on sale are due then as with VAT (Sales Tax). However if the tax is only payable to HMRC on completion if flight then they should be refunded.

what many posters miss is the Government proposal allows Flybe to postpone a very substantial tax payment which gives them time to hopefully rearrange their finances along with Virgin and Stobart.

They would be very convenient to me flying Newquay to Heathrow but the cessation of Embraer RJís to Turbo Props and the minuscule carry on allowances (which involve checking computers and corporate paperwork on business trips) make it unusable for me. Back on A30/M5/M4 reluctantly. I think they have a good grasp on the discount leisure traveler but not the business traveler and this is one reason why they continue to stumble. Domestic flights are very specialist market and the business model needs to reflect that.
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Old Jan 15, 20, 1:58 am
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What I find odd is by deferring the ADP the Gov are giving a loan. But what will fundamentally change in the underlying Flybe business to allow it to both repay the loan (ADP), and not just continue to spend any further ADP to support the unprofitable business?
If they canít pay the 100 million, what use is an additional 20 million?
A family member once asked me to lend them x, part if their justification was they could pay me back the money already owed which was about 40% of x. I declined.
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Old Jan 15, 20, 2:01 am
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Interesting Willie Walsh is moaning about the bail out this morning saying its anti-competitive.

I find this a bit rich as BA bailed on its regional operations when it sold BA connect.

But as others have said where is Virgin et al in all this ; have they lumped any money in; are they operating Flybe at arms length. No attempt at rebranding has happened yet or that much rationalisation of services. There has been little detail on this in the press
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Old Jan 15, 20, 2:36 am
  #88  
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Originally Posted by dougzz View Post
What I find odd is by deferring the ADP the Gov are giving a loan. But what will fundamentally change in the underlying Flybe business to allow it to both repay the loan (ADP), and not just continue to spend any further ADP to support the unprofitable business?
If they canít pay the 100 million, what use is an additional 20 million?
A family member once asked me to lend them x, part if their justification was they could pay me back the money already owed which was about 40% of x. I declined.
The company will have had to present evidence to the Government that there is a viable business plan to return the airline to profitability and a sustainable future. BEIS will have officials who work on this specific circumstance (which happens quite a lot these days), and I expect the Government may have a contract with a Ďbig fourí firm of professional advisors to provide them with an independent view of whether what the company is telling them is credible or not.

Obviously political considerations come into play here too. The number of jobs at stake, FlyBeís presence at BHD, holding of PSO and NHS contracts, etc. all will have played a role.
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Old Jan 15, 20, 3:31 am
  #89  
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Originally Posted by dougzz View Post
What I find odd is by deferring the ADP the Gov are giving a loan. But what will fundamentally change in the underlying Flybe business to allow it to both repay the loan (ADP), and not just continue to spend any further ADP to support the unprofitable business?
If they canít pay the 100 million, what use is an additional 20 million?
A family member once asked me to lend them x, part if their justification was they could pay me back the money already owed which was about 40% of x. I declined.
There is also the possible change in domestic APD rates in the next government budget in March. Which could reduce ABP (even retrospectively) so they would then need to payback less.
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Old Jan 15, 20, 3:35 am
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Originally Posted by Akoz View Post
The Scottish Air Discount Scheme is completely sperate and applies to people living in those postcode areas, plus some others. It is a membership scheme, where members are able to book discounted fares on eligible flights. You have to book these via airlines ADS portal. You are right - this scheme is funded by the Scottish Government. Application form & information here.
It covers travel within Scotland and onwards connections to and from Inverness, Aberdeen, Bergen, Manchester, Glasgow, Edinburgh and London Southend.
The APD exemption is over and above this and covers Highland and Island airports (NOT ABZ) and some in Northern Ireland and is open to everyone using those airports.

Your trip is not covered by ADS but as you are leaving from Kirkwall means it will attract not APD for your onwards connection to SIN.

APD and its exemptions was started by a Westminster government in the 1990's, and subsequently amended serval times. It has now been devolved to the Scottish government as part of the aim of making the Scottish government more responsible and accountable for fund raised in Scotland and corresponding amount removed from the block grant priced at the time of devolution. The Scottish government have the power to alter it, but never have.
Actually it is definitely covered by ADS. I booked through https://www.britishairways.com/trave...t/public/en_gb




There is a price difference with and without ADS. (had to choose a different outbound flight for the non ADS as the same flights as ADS cost far more)
ADS - £671.66
Fare - £292.00
PSC - £85.16

Non ADS - £757.99
Fare - £377.00
PSC - £86.49
(Price difference was something like £600 v £760 when I booked 5 months ago)
Neither has APD, which is why I suspect the exemption for APD also covers airport areas with the same postcodes as ADS although I had not found any information clearly stating this.

Furthermore, ADS is for people living in some postcode areas, not based where you depart from. The application includes sending proof of address and they keep a keen eye on things, For example, from personal experience, if someone register at my address at a later date after I had registered, they will write to me to confirm, with a request for proof, that I am still at the same address or withdraw my membership. Also, in my most recent booking, I forgot to add my daughter whom turned from an infant to a child to my membership, SG contacted me to demand payment for just under £100, which is the fare difference I think.
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