14TH OCTOBER, 2019

Flight Shame Has Landed - But Could R&D Be The Aviation Industry's Ticket To Greener Travel?

Although we love to complain about air travel - from the tiny seats and sloppy food to seemingly inevitable delays - our love affair with globetrotting runs deep. Now more than ever, air travel has become more affordable, accessible and easier with 126.2 million Brits taking to the skies in 2018 alone.

Once the preserve of the rich and famous, the cost of flying has now plummeted. Cutting edge aircraft capable of faster speeds and higher altitudes mean we take our far smaller world for granted; but the winds are changing.

This year we have seen climate change fears dominate the headlines, bolstered by the ‘Fridays for Future’ movement headed by Greta Thunberg. Demonstrations have taken place across the world showing an unprecedented strength of feeling amongst the younger generation in particular. Frightening statistics around irreversible environmental damage are fuelling the pressure on Governments and the private sector to cut CO2 emissions and halt global warming - and one of the main industries being targeted is aviation.

So what is “flight shame”?

Air travel is big business and for many people jetting off to the sun is a time for rest and relaxation. However, increasingly there is a shame being attached to flying (shown recently with the media storm surrounding Harry and Megan and their holiday trips by private jet). The name for this new type of shame? “flygskam”. It’s a Swedish word which literally means “flying shame” and refers to a growing movement in Sweden that highlights feelings of embarrassment around flying and how air travel damages the environment. People who instead opt for alternative, more eco-friendly forms of travel also have a name, albeit a more positive one: “tagskryt” (meaning “train-bragging”). It’s certainly catching on.

But why is flying so bad?

Aeroplanes emit considerable carbon dioxide as well as other harmful greenhouse gases and nitrogen oxide. Plane emissions from a flight are in fact around 11 times higher than the equivalent train journey. What’s more, a return flight between London and New York has the same negative effect on the environment as heating your house for a year or eating meat for two years.

A sea change

Environmentally conscious travellers are beginning to turn their backs on air travel, instead favouring greener modes of transport such as the train or ferry, according to a survey by Swiss bank UBS. This “flight shame” is spreading, with 20% of people surveyed saying they had cut the number of flights they took during the last 12 months because of worries about the environment.

Up until now, global air travel has increased by between 4% and 5% a year, meaning the numbers overall are doubling every 15 years. This represents big money, and despite the awareness of a need to be increasingly greener and more energy efficient in their operations, the last thing airlines truly want to see is a slump in passenger numbers. It’s the perfect storm, and one which the aviation industry will need to weather strategically; the key to success could well lie in intensive R&D.

Future targets

The government’s plans are ambitious, with a target of net zero emissions by 2050. Aviation is set to be included in that target, putting pressure on key players like Airbus and Boeing to invest heavily in research and development for greener fuel sources in order to remain profitable.

What “flygskam” has made clear is that most flights we make in our lifetime are non-essential and trends must be reversed. Indeed, keeping the increase in the pre-industrial global average surface temperature to a maximum of 1.5 degrees centigrade necessitates a 45% reduction in worldwide emissions by 2030. But the concern is that technology isn’t keeping up with demand, which is predicted to double worldwide in the coming two decades. The hope is that innovation will move things forward, as long as intensive and timely investments in R&D are made.

What areas of R&D are common in the world of air travel?

Aviation requires a large amount of R&D already thanks to the complexity of aircraft components and constantly changing safety legislation. Innovative activities are often lengthy and very involved, making them ideal for an R&D tax relief claim. The industry brings together a huge range of innovative sectors and talent, all working within areas such as:

  • Software
  • Mechanics
  • Engineering
  • Navigation
  • Atmospheric Science
  • Communications

The UK government has recognised that aviation is a key industry and that technological developments must keep pace. Innovate UK has recently offered a number of financial incentives to enhance the UK’s development in this field, additional to further assistance available through claiming R&D tax relief.

Exciting new developments for the next generation

A big date in the aviation calendar is this Paris Airshow, which was held this year in June. Big players in the market come together to exhibit some of their most innovative environmentally-friendly aircraft prototypes, such as Airbus’ Ecopulse (a 6-seater jet, mixing thermal and electrical energy). EasyJet and Wright Electric also confirmed the unveiling of their new 150 seater, 100% electric aircraft designed for medium-haul flights. These are just a couple of examples of the innovation that’s already taking place, even though many will not be commercialised before the end of 2020-2030. However, they show just how massive and far-reaching the possibilities are for R&D in aviation, working towards a brighter and more environmentally-friendly flying future.

Is your business eligible for R&D tax relief?

The government is keen to support innovation and growth, both in aviation and across the private sector as a whole. Since the year 2000, financial incentives have been available to help cover the costs, as long as the eligibility criteria is met. Relief is in the form of R&D Tax Credits, which can mean a sizeable reduction in your Corporation Tax bill or a lump sum payment. Can you afford to miss out?

If your company, regardless of sector, has made a technical advancement then such activity is likely to mean R&D tax relief can be claimed – and it could be as much as 25%. See our website for more about R&D Tax Credits, eligibility and how to claim or of course get in touch with us for a chat.

Talk to the R&D tax relief specialists

At Tax Cloud, we have years of experience in dealing solely with R&D tax relief claims - it’s all we do. If your company has undergone any R&D work recently, why not book a demo  to see what you could be owed and learn how to maximise your claim. It’s simple and quick to use, and you may well be surprised at what you can claim.

With separate sections for businesses and accountants, we can work alongside you to put together the very best application possible for maximum success.

Call us today on 0207 118 6045 or use our contact page and our friendly, expert team will be pleased to help.

Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
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