Now that the party hats are put away, it’s time for the ball to drop on a few New Year regulations affecting business travel and travel expense management. Governments in the United States and Europe have been talking about everything from ancillary fees to passenger taxes, and their 2013 resolutions will implement some big travel expense policy changes that are bound to trickle down – and show up on your expense report.
So which rulings on rules should business travelers and travel managers look out for?
U.S. ancillary fees and the DOT
The DOT, the NPR and the OMB – OMG. It might be a lot of acronyms, but one of the most highly anticipated policy issues will come from the Department of Transportation (DOT) regarding airline ancillary fees early in 2013. For about five years, airlines have been charging ancillary fees for everything from baggage to in-flight peanuts without oversight.
The DOT has submitted a Notice of Proposed Rulemaking (NPR) to the White House Office of Management and Budget (OMB) for review on this hot-button issue, which has riled consumer advocates. The way ancillary fees are charged is scheduled to change with the NPR, setting a new precedent to better protect and inform leisure and business travelers. The decision has been anticipated for months, but murmurs suggest the DOT will make an announcement on this issue in a matter of weeks.
UK Air Passenger Duty
Economy flights out of overburdened, international hubs like Heathrow and Gatwick airports in the United Kingdom are predicted to go up by an average of £92 ($150) when the widely unpopular Passenger Duty is implemented on April 1.
Britons already think air tax is too high and loudly oppose the 2.5 percent hike. The UK’s Office of Budget Responsibility further complicated the argument for the tax last month when it admitted that it would collect nearly £1 billion less than predicted from the Air Passenger Duty over the next five years – despite the new increase.
And it appears disapproving travelers will find a work-around: a recent study by the Department for Transport predicts fliers would simply switch to smaller regional airports to avoid paying the tax.
With all the public outcry, the policy’s fate is still up in the air. Stay tuned on the tax.
EU carbon tax freeze
In November, the European Commission decided to freeze plans to charge non-European Union flights a carbon emissions tax, avoiding an international trade war.
The EU wanted to require all airlines that fly to and from Europe to buy permits that offset their carbon emissions. But about 30 governments, including the United States and China, balked, opposing the charges and threatening counter fees for European airlines.
The EU Commission’s decision to freeze the tax is only good for a year – some diplomacy and negotiations are required to get the proposal off the ground. But by the end of the year, either expect to hear a new proposal – or see a carbon offset tax included on the price of your ticket to Paris.
The New Year is a time for new beginnings, and decisions by governments around the world will affect the way we travel in 2013, from travel managers to business travelers. Ancillary and environmental fees, as well as passenger taxes, will continue to be big issues in the New Year, ticking up the cost of doing business at home and abroad.
With all these changes, will you be updating your travel and expense policy? If so, this expense policy template can help.
Featured image by sylar_major.