As has been widely reported, the UK regional airline Flybe is in financial trouble and is seeking government assistance so that it might be saved from failing.
Airlines have never been a good financial bet. Monarch and Thomas Cook have proved this in very recent years in this country. The argument is, of course, that Flybe is different. Like all airlines it will exist very largely to serve the tourist market. Research has suggested that as many as 92% of all flights are for leisure. Business has already learned of the value of video conferencing. But that said, Flybe is more of a commuter service than most airlines. And that is, no doubt, the basis for its claim for financial support.
It will be argued that Flybe supports regions that will otherwise be even more remote than successive government policy already makes them.
And it will be claimed that regional economic activity will be lost if support is not provided.
And both of these claims are true.
But then, so too is climate change. And what we know is that flying is massively destructive for the climate. What we also know is that relatively small groups in society account for the majority of airline emissions.
These groups include second home in the sun owners, who have massively increased the number of flights to secondary airports of the type Flybe serves.
And they include the dedicated city break enthusiasts, who pick up cheap flight deals to anywhere, numerous times a year.
Whilst in business most people never fly: it is a small proportion who do.
I might add the same is true of academia and I am rather hoping those days are over for me.
And then there is the long-distance commuter, who is perhaps the most destructive airline traveller of all.
Flybe is a specialist at serving these communities. I suspect it has many more repeat or regular flyers than many airlines precisely because it is not on the once a year, holiday in the sun routes, by and large.
The suggested mechanism for saving Flybe is for it to be permitted to waive payments of air passenger duty owed to the government. Air passenger duty is the tax charged, in effect, to compensate for the externalities of flying and varies according to the flight taken. It is a very basic carbon levy. Alternatively, and more pragmatically it might be seen as a substitute for VAT, which does not apply to flights.
Deferring or cancelling this payment does, of course, make no sense. This duty has already been collected by Flybe from its customers. It merely acts as an agent in collecting this sum. To then say it is not due sends out one of three messages.
The first is that the tax is not important. It is. This is not an especially clever tax. Much better alternatives are available. But it's a tax, and it has been paid by the customer who has the liability to settle it. To then permit the agent collecting it to keep it simply suggests that the universal application of the tax - which is a quality all taxes must have if they are to be fair - no longer applies. That is wrong then.
Second, if Flybe is allowed to not pay the tax what it is effectively saying is that it is not charging enough for its services and needs to be subsidised to supply them. Or rather, its customers need to be subsidised to fly on them. Given the nature of air travel, I do not think that this is appropriate. A very few exceptions apart (services to genuinely remote regions where air is the only effective means of transport - and such places do exist in the UK, but are mainly remote and small islands) the case for a subsidy for air travel no longer exists, even if it ever did.
And third, we know that the externalities arising from air travel are much more costly than the tax paid now, but the airline does not want to meet that cost.
Some conclusions follow. The first is that Flybe has its business model wrong. It's either that, or people are not willing to pay enough to fly. Either way it is sending out the message that it is close to being insolvent.
Second, this will get worse. The demand for increased tax on flying has growing public support, and rightly so. And given that I support the case for this being progressive, meaning that many in the Flybe market will have to pay much more for a ticket, its financial situation can only get worse.
Third, Flybe does then suggest that the concept of carbon insolvency that I have proposed as part of sustainable cost accounting does really exist: the pressure of becoming net zero carbon compliant will be too great for some companies and we will necessarily have to change behaviour instead. Airlines are early examples of a trend. We need to get used to it. Things cannot continue as they were.
So is Flybe over? Maybe not. I think carbon insolvency needs to be planned: transitions are required. A temporary stay of execution whilst alternatives are prepared may be appropriate. But, the key word is temporary. The carbon must be eliminated. If Flybe customers won't pay the price of their pollution then their flights must end. All I would permit is an orderly winding up rather than an overnight cessation. But the game is over, come what may. This type of travel cannot survive in a net zero carbon environment.
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Unfortunately Flybe have been in huge financial difficulties for 7 years. They are an excellent airline staffed by pilots who work far harder than anyone else in the industry and often VERY unhealthy shift patterns (early to late shifts and vice versa). About 5 years ago BA poached all theit best pilots and so to retain staff they had to practically double pilot salaries.
Their Senior Management team (were) awful people who would turn up to staff meetings (like when they turned purple ) and cry actual tears with passion about how they want to help save the airline and they are all in it toegther and then were seen leaving the building by people I know saying “what a load of bollocks but i think they bought it”.
Also I was told that all airlines pay their fuel in dollars and since all the Brexit stuff the dollar to the pound has made this v v v expensive.
Southampton airport has the highest local airport taxes (or they did when I lived there) which make it ridiculously expensive to fly.
In my view the main problem will be servicing the channel islands.
There is no tax on the Cornwall to Heathrow flight already (although I understand that service is stopping in March anyway).
Finally a lot of my very good friends work there. They have not been briefed at all they are just hearing what we all hear on the news. Its very very sad.
Naomi
This is why I argue for a transition: there is no room for a brutal change
That I accept, for a great many reasons, and not least for the sake of the staff
Richard
Yes sorry excuse my ramblings, you are definitely right, change is needed. Thanks.
Hello Richard
There is currently no known or conceived technology that will enable airlines to become CO2 neutral.
The logical conclusion would be that all air transport and air travel must cease as all airlines will be insolvent under your proposals.
Is that your conclusion and will you be setting a good example, like Greta Thunberg and refusing to fly any more?
I think government needs a coherent policy
But the reality is most air travel will cease
Err…. Electric planes sounds like a good bet.
https://www.aerospacetestinginternational.com/news/electric-hybrid/rolls-royce-reveals-300mph-electric-aircraft.html
https://www.theatlantic.com/sponsored/thomson-reuters-why-2025-matters/electric-flight/208
>Is that your conclusion and will you be setting a good example, like Greta Thunberg and refusing to fly any more?
This is bullshit…. If someone chooses not to fly, there will always someone who will take their seat, given a low enough price ticket. Which effectively means that by forgoing your seat was pointless, since no reduction of emisions happened.
It will take government intervention, to cut flights. Because free market forces will not.
Richard’s post makes sense. Our airlines are not a free market. It appears they cannot operate unless they get fuel at a price that does not reflect the cost of the externalities they impose. They will adapt or die. That’s capitalism. Fly now while stocks last!
Kristian Bright says:
“There is currently no known or conceived technology that will enable airlines to become CO2 neutral.”
True, but that is what technological research and development is about. There are two ways (at least) to promote that. One is with targeted research funding and the other is through taxation on the undesirable old technology.
Both provide the spur to get animal spirits aroused. Electric powered flight is in its infancy, but hydrogen (or oxygen) powered flight on the face of it looks like a much more fertile avenue to pursue. Constructive taxation of the ‘evil’ fossil fuel power of today would be instrumental in changing the playing field.
The US has done something similar within the oil industry. By aggressively keeping oil prices high, by expensive and destructive foreign military intervention, fracking has become viable. It’s a very expensive way of achieving what could have been done by creative application of taxation policy. Doubly expensive, and damaging since it didn’t need to be done anyway there being no shortage of oil in the first place. 🙁
The third is sustainable cost accounting
“The third is sustainable cost accounting”
I thought I’d covered that with “creative application of taxation policy”, but I suppose ‘application of creative taxation policy’ counts as a distinctly different method, so I’ll let you off 🙂
The objective is not to stop us flying, it is to create the pressure for technological development so we can fly clean and in real terms affordably. That has to be at the core of all ‘Green’ thinking. How do we maintain the good things we have and have them sustainably.
Climate change deniers are holding us in the past. Climate change is a threat or a challenge it’s a matter of mindset.
I seriously doubt that “most air travel will cease” depending on what you mean by “most” I suppose, and yes Phil, “the industry will adapt or die. That’s capitalism” So anyhow:
“Globally, aviation produced 2.4 percent of total CO2 emissions in 2018.”
“Non-CO2 effects, such as warming induced by aircraft contrails and other pollutants, bring the combined total contribution of commercial aviation to approximately 5 percent of the world’s climate-warming problem.”
https://www.eesi.org/papers/view/fact-sheet-the-growth-in-greenhouse-gas-emissions-from-commercial-aviation
See also: https://www.bbc.com/news/science-environment-49349566
Given that existing technology can resolve most of the other 95% its more likely that the world will concentrate on that before they get to the unresolved problems of aviation and shipping.
https://www.eesi.org/papers/view/fact-sheet-the-growth-in-greenhouse-gas-emissions-from-commercial-aviation
Nonetheless I suspect that electric trains will replace a lot of these commercially and environmentally inefficient domestic flights. Growth in air travel will probably slow down and level out a bit as it should.
Current technological improvements in aviation are a bit amibiguous. Aviation biofuel is viable, becoming cheaper and producers claim that the fuel’s “lifecycle carbon emissions” are about 85% lower than conventional jet fuels. But that’s a bit tricky. The CO2 emissions are much the same and the claim relies on lower non-CO2 emmissions plus cleaner production methods and inherent offsets. So, hmmm.
https://www.greenbiz.com/article/shell-support-europes-first-sustainable-aviation-fuel-plant
Still, as solutions go, clean production and and simple efficiencies are a lot more promising and achievable than non-consumption. Those links (above) are all worth a look btw.
This industry paper is is better suited to the dedicated geeks.
https://www.icao.int/environmental-protection/knowledge-sharing/Docs/Sustainable%20Aviation%20Fuels%20Guide_vf.pdf
“Alternatively, and more pragmatically it might be seen as a substitute for VAT, which does not apply to flights.”
No VAT on any flights ?
Is there VAT on rail fares ? Bus and Coach fares ?
Not on trains unless leisure rides
Likewise public transport buses
Sorry Richard, delete if you want, but I hoped to respond to Marco’s comment on the climate change thread after missing my chance :/.
Marco Fante says:
“Durability, repairability and getting rid of planned obsolescence is an important factor. Currently the IT and electronics industry are the kings of planned obsolescence, They are full of superfluous upgrades that offer little or no improvement and are deliberately made hard to avoid.”
—————–
Hmm kind of, but planned obsolescence is a bit more complicated than just companies trying to gouge you for all you’re worth.
The IT industry has to constantly apply patches because there are many people out there who would (and do) make use of software weaknesses for various nefarious purposes. That is not to say that some updates don’t come with bloatware (and in the case of Apple, known to deliberately slow the hardware), but to paint everything that way is disingenuous.
There is then a much more fundamental issue with the hardware: that is, computers etc are constantly becoming more powerful in terms of computing power.
But this comes with trade offs.
Basically, the main driver behind computing power increase is the increase of transistor density on MoS chips. As more transistors are fabricated per unit area, the transistor length has to decrease.
This means that current more easily leaks across/out of the transistors.
Modern transistors are also mostly fabricated with SiGe rather than Si, as Si has pretty much reached its lower limit for transistor length and switching speed.
SiGe is more leaky than Si. The insulating oxide layer grown on SiGe (which is a very important component) is also more leaky than pure silicon’s native oxide (SiO2).
All of this means that modern devices are basically constantly discharging their batteries, even when the device is off, meaning more battery charge/discharge cycles.
Also, I believe, transistors go through more cycles as devices handle ever more tasks.
All of this means that the hardware will stop functioning properly more rapidly, regardless of inbuilt obsolescence/software updates.
Repairability is a difficult one. Trying to carry out replacements is not fun, if not often impossible, but increasingly compact device architecture hasn’t helped, that’s for sure.
The answer? Better recycling and less consumption :). Run your phone into the ground before getting a new one – it’s what I do, but eventually a phone or computer is no longer fit for purpose.
I’ll finish with a top tip: if you have an old-ish windows machine, try loading a lightweight Ubuntu distro onto it. Probably get a few more years work out of it 🙂 (Lubuntu is my favourite go to).
Johan G says:
“….if you have an old-ish windows machine, try loading a lightweight Ubuntu distro onto it. Probably get a few more years work out of it (Lubuntu is my favourite go to).”
I’m with you there, Johan G. The fiction that you need to be a computer geek to use open source software is clearly false. I’ve been using Linux Mint for over a decade, (barring a temporary reversion to Micros**t when Widows 10 appeared and I got a free upgrade on a new second hand machine) ) and I love it. It does everything I want and does it fuss free. 🙂
I don’t understand why the people I know who know far more about computers than I do (or wish to) don’t go for it, but they don’t. Fear of the unknown I guess. What tipped the balance for me was the prospect of having to do the relearning required to get from XP pro to XP Home. I decided I might aswell learn a linux distro and I’m still using basically the same platform entirely oblivious to the pain of Vista, and Widows Seven Eight and lord knows what else by way of disruptive patches and upgrades.
Definitely Andy 🙂
There’s also the added bonus that terminal commands translate directly between Linux and Max OS, as they’re both based on Unix.
I tried using the terminal on a Windows machine recently and had to give up after about 10 minutes.
I’m not familiar with Mint, but it looks similar to Ubuntu which is very Windows-esque. Shouldn’t be an issue for anyone to switch 🙂
[Well, with the proviso that you’ll probably have to do most office things with Libra Office instead of Office365, and gaming can be a faff unless you start Wine-ing everything.]
Anyway, I’ll shut up now before this heads off into a nerdy Linux side thread…
It seems Flybe will be given time to pay its APD tax debt, which seems like a pragmatic outcome if they survive and pay up in full.
But how can the outstanding amount be over £100m, reported by the BBC here: https://www.bbc.co.uk/news/business-51113895
As I understand it, Flybe carries about 8 million passengers a year. They should be in the £13 per passenger rate (I think all of their destinations are in band A – Europe and Maghreb – and I doubt their seat pitch is over 40 inches). APD is payable monthly, but it looks like that would be approaching 12 months worth.
Has Flybe paid no APD for about a year? And how many other airlines owe £100m of back APD?
Good question …….
[…] all the reasons I noted yesterday I am disappointed to note that the government appears to have bailed out […]
“It will be argued that Flybe supports regions that will otherwise be even more remote than successive government policy already makes them.
And it will be claimed that regional economic activity will be lost if support is not provided.
And both of these claims are true.”
But if your national carrier was really a national carrier you could subsidise the public-good services and quite possibly for less than the bailout costs…..
It has become very clear over the past four decades that it is very expensive to motivate the private sector to get out of bed and go to work on behalf of public purpose.
I’ve not seen an explanation of the deal yet, but I wonder if it is really a deferral of future tax payments that are expected to fall due in 2020, rather than a deferral of tax payments that have already fallen due for 2019.
APD is usually paid monthly, but there is provision for an annual APD payment period (usually limited to small businesses with expected liability of up to £500,000). You could imagine a similar mechanism being used to push back the usual monthly APD payments for this year to 2021. If, that is, you buy the argument that APD is causing problems in the business. Flybe accounts for the APD but it is not paying the APD, of course – it collects the tax from the passengers, and pays it over to HMRC, just like VAT or PAYE.
Why is the government propping up this failing business, rather than insisting on the shareholders (who are not short of a bob or two) putting in more money? The argument for government support (i.e. subsidy) appears to be that we are relying on a private enterprise to maintaining an essential public service for remote areas, so shouldn’t we recognise that is plainly state aid anyway.
You might be concerned that selective tax deferral is effectively state aid anyway. I wonder if other airlines will be demanding a similar deal for their APD payments.
I have checked the accounts and will come back to you on this….for the record they probably owe well over £100 million of APD a year
I don’t think the carbon footprint is so clear here. I live in Northern Ireland and my family is in Inverness. I have two choices, a direct Flybe flight of 50 minutes costing on average £100 or a 600 mile return road trip with a ferry crossing costing £350. Take everyone of the plane and put them in a car what would have the greater carbon footprint?
On average a person in a plane has a six times greater carbon footprint
I believe their (dash 8 q400) carbon footprint per person is almost half of a car for the same distance (and apparently lower than trains too).
That is an interesting claim. Can you outline the calculations Naomi? For starters, what load factors are you assuming for the plane (Flybe is typically about 80%) and the car (one person, or more, say four?).
Nothing that clever, didn’t consider time spent in traffic nor angle of take off/ landing neither in journey distance/ engine running time. Purely reported Co2 /km of the turbo prop (84g/km based on all seats being taken) and my car (153g/km) as this was my journey. Looking at my husbands regular trip Newquay to LHR ( 382km) vs the flight (337km). (Appreciate my car is awful, this figure was a suprise to me… it is big, apparently the average is 127.9 g/km)
Thanks Naomi
Thanks, Naomi. Very helpful, and closer than I expected.
It seems a bit odd to compare a completely full aeroplane (in the case of Flybe I understand they are on average about 80% full over the year, so that increases the g/km by 25% to 105) with a car (presumably with four or more seats) carrying only one person: add an extra person as a passenger and your car would be 76; add three passengers and it would be 38. So a full car would be much better than a full aeroplane.
That said, I suppose it reflects normal travelling conditions: your husband would drive himself to London in your car on his own, but would happily share the plane with 70 others… Shows the benefit of public transport or car sharing.
Makes sense, also if you account for the fact that the aeroplane gets to fly direct on this route my one car passenger (who has lost the will to live because of the number of the cars on the road/ breakdowns/ accidents etc) would cause 58kg of Co2 whereas the aeroplane would be 35kg (based on a 20% increase to the g/km) and then like you said it then depends on how many car passengers there are, but lets face it, the cost of a flight i’d defo just drive if possible if there was more than one of us in our party doing a domestic trip. Don’t get me wrong, I fully appreciate this is a really big problem, I was just trying to highlight that their aeroplanes are actually not as bad as other domestic aeroplanes (and not 6 times worse than a car).