Ben Webster, Transport Correspondent
We've made some changes
to The Sunday Times
More than a quarter of passengers at Britain’s most congested airport are overseas travellers who are stopping only briefly to change planes, according to figures obtained by The Times.
The number of passengers arriving at Heathrow from abroad and transferring to another international flight has trebled since 1991 to 18 million a year, and is expected to be double that by 2030. This costs the Treasury millions in lost potential revenue because transfer passengers do not pay air passenger duty.
Such travellers spend only a few pounds each in the departure lounges but are highly profitable to British Airways, which operates 40 per cent of Heathrow’s flights, because they help to fill empty seats. But every seat sold to a foreign transfer passenger costs the Exchequer up to £80 in lost revenue.
If all their seats were occupied by people either starting their journeys at Heathrow or transferring from a domestic flight, the Exchequer would gain more than £500 million a year.
The figures call into question the Government’s plan, due to be confirmed this summer, to permit the demolition of 700 homes to make way for a third runway at Heathrow. The capacity of the runway, which would open in 2020, would be equal roughly to the number of foreign transfer passengers in 2030.
Airlines argue that foreign transfer passengers are essential to maintain the high number of destinations served by Heathrow. But the rapid growth in their numbers has coincided with a decline in destinations, down 21 per cent since 1990 from 227 to 180.
Ruth Kelly, the Transport Secretary, says that Heathrow must expand because it is Britain’s “main gateway to the global economy”. She argues that better international connections are needed to attract companies to invest in Britain and to protect London’s status as a leading financial centre.
But figures from the Civil Aviation Authority reveal that, in the past 15 years, the proportion of seats on Heathrow flights taken by foreign transfer passengers has grown at the expense of British passengers and foreign visitors.
In 1991 16 per cent of Heathrow’s passengers switched from one international flight to another. By 2006 the proportion had risen to 26 per cent and is forecast to rise to 31 per cent by 2010. Norman Baker, the Liberal Democrat transport spokesman, said: “These are devastating figures which show that the third runway, for all its massive cost and environmental damage, is being built to help international transfer passengers who never leave the airport. If the number were reduced, we wouldn’t need a new runway and we would have more space at Heathrow for people from this country. 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 Spanish-owned airport operator].”
A BA spokesman 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.”
Lord Soley, director of Future Heathrow, a lobby group supporting the third runway and funded by the aviation industry, said the airport needed to attract foreign transfer passengers to compete with rival international hubs in Paris, Frankfurt and Amsterdam.
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So the truth is out there. A high proportion of the passengers using Heathrow are changing planes or holidaymakers who could quite easily use other airports. Surely we should encourage passengers to fly direct than go into Heathrow and out again? Does West London really need more airport jobs?
BB, Luton, Bedfordshire
A new tax on foreigners to prop up the British economy sounds a great idea. But it's another tax change with hidden implications.
A return flight from Scotland to New York via London or Manchester will attract 3 taxes (1 departure plus 2 transits) instead of 1 at present.
Regional MPs wake up!
Andrew Clarke, Chobham, UK
Introduce a tax on transit passengers and watch the need for a third runway at Heathrow vanish like a puff of smoke. It is just another tax grab by a government that is crazy for monies from anywhere. If the objective is to cut travel - then tax it out of existence except for the politicians.
Michael, Malaga, Spain
George Orwell was right - we really have become Airstrip 51!
K John, London, UK
There is no tax on childrens shoes. Think of the money the Treasury could reap if they did that.
Hey, I've just stumbled on a cool plan to help out Gordon and Alistair. Lets tax EVERYTHING !
TrevorH, OXON,
This is rubbish. The treasury has lost nothing. This is not news.
Nick, Bournemouth , UK
Close Heathrow now !!!
Michael Ball, norwich, UK
Heathrow should manage to reduce passengers without any help the way it is going.....I'm sure most the people going through Heathrow haven't done so through choice so why tax them and increase their misery?
Mags, Nr Oxford, UK
This is a scandalous tax anyway, so why should foriegn passengers transfering have to pay.
It is just another way of Labours desire to seperate us from our cash!
Pete, St Albans, England
If Heathrow introduced a transit tax then this might encourage other airports to do the same. So a passenger flying from Heathrow to Australia via Singapore might then have to pay a transit tax in Singapore and hey presto the whole cost of flying goes up.
Best to keep it as it is.
Len, Brussels, Belgium
Well I wouldnt worry because the way that Heathrow runs it wont be long before overseas travellerss book transfers through ,Madrid,Barcelona,Amsterdam,Frankfurt,Paris,Berlin and avoid Heathrow all together.. you cant tax them just for stepping briefly on UK soil,surely??
Mike, London,
Lets discourage them from using LHR, which will release capacity and enable Heathrow to be a gateway to the UK, not a hub that benefits only BA and BAA. No 3rd runway would be required in the short term and BA could concentrate on offering the frequencies and destination that the UK economy needs.
Max, London, UK
More and more pollution to achieve greater profits for BA and little, if any, benefit to the UK economy. If these transit passengers transit somewhere else, so what?
David Leslie, Perth, Scotland
Why should transit passengers pay tax to the treasury? Frankly, if there is a direct flight available at the same cost, I would take it, as it's preferable to waiting in departure lounges. Otherwise, things would get silly, like how we had to pay Japanese departure tax for staying only 1 night.
Graeme Phillips, London, UK
And the reason we can't tax the transit passengers is?
Graeme, Newcastle,
that's like saying if the tickets were twice the price ba would make more money and if they were half the price.....
Phil Barnes, preston, england
It costs the taxman nothing, if the HMRC was to tax this people would just transit through other major cities. Therefore there is nothing to gain by taxing transit passangers but there will be job losses at our airlines and airports if they are taxed.
Paul, London, England
The point of the tax is to hammer passengers for flying: remember it was meant to be a green tax. Why on earth should passengers who take two flights escape the tax?
Peter, London, UK
Has your correspondent never heard of an airline HUB. By definition, passengers fly into, then out of a hub, using it to change flights. The airline benefits by collecting revenue for both the inbound and outbound flights. How much tax is collected from this combined revenue?
Bill Peter, Kuala Lumpur, Malaysia
If it moves tax it! All britain cares about these days.
Andy, Correze, France
The Exchequer has lost nothing. Why should people be taxed just for changing planes ?
roger sykes, christchurch,
Former BA Chief Executive, Bob Ayling, went on record last week to destroy the myth that transit passengers benefit the UK economy. He probably understands the facts more than most and no longer having a paymaster has no axe to grind.
Brian Ross, Birchanger, Herts
Passengers that transfer at Heathrow don't make UK their final destination. So why tax them like they are?
The benefits for UK passengers is more frequent flights and more varied destinations. Ever wondered why there are so many direct flights to so many places from London? Blame the untaxed.
Ajay, Famington Hills, USA
With less transfer passengers their would be less flights to a "swath of destinations" ?(BA)
I accept there would be less frequent flights, but not fewer destinations. I don't see British business interests seriously affected, only BA and BAA interests.
John Morgan, Chesterfield,
I am sure that the government is working, furiously, to increase costs to transit and final destination passengers traveling through Heath Row.
Prepare for airlines and passengers to prefer Paris, Frankfurt and Europe to London. Eurostar to London would be an option if the passenger could bothered.
Tony Atkins, Cairns, Australia
The more Labour tries to increase the tax take the more there are loopholes for non residents. The losers as always are those trapped as UK residents having to pay the exorbitant taxes to subsidize others.
Mike, Alicante, Spain
Paris, Frankfurt and Amsterdam are better airports suited to this extra traffic.
William, LOndon, UK