Airline tax hike will help video conferencing market

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The eight percent hike in plane tax announced last weekend could have a positive knock on effect for web conferencing, analysts have said.

Over the weekend, HM Treasury announced that it would be raising air passenger duty (APD) airport departure tax by around eight percent, pushing ticket costs up in an already struggling economy. The government has also decided to levy this tax on private business jets for the first time.

Although this is bad news for tourists, according to Melissa Fremeijer, a senior research analyst for IDC, it could have a positive outcome for video conferencing.

“Airline fuel has been going up and up. In December it was 99p a barrel and now it’s around £1.15ish,” she told ChannelBiz.

“Looking at video conferencing we have seen it grow rapidly. It rose by around 20 percent in 2011. A lot of companies have adopted this with travel being a main driver. The eight percent increase in plane tax announced last weekend,  and a slight increase in fuel may push this.

“The EU has the Emissions Trade System, which costs airlines and airports money. They also need to ensure that emissions meet the agreed Kyoto deal. There’s more criteria for companies to now look at web conferencing.

“The ETA, however, forecasts that in the US and Latin America travel will grow by four percent as business and consumer confidence increases. In Europe there has been more confidence but not as much as in the US.

“However it’s too early to say whether the hike in tax will have an effect on video conferencing.

“As the hikes could also have an impact on ticket prices – vendors will of course include this hike into their plans for clients showing them that video conferencing will save money over travel.

“And in Europe this could be a trigger for some companies who haven’t already considered this technology. However, it’s also important to note that travel isn’t the only driver for video conferencing. In a recent survey we conducted of CIOs and IT managers in EMEA, 51 percent said the main factor for using this technology was for collaboration.

“Vendors and service providers are also incorporating this technology into their offerings. Cisco for example has a UC call manager platform while service providers use this as part of a unified comms package.”

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