Ensuring a ‘Sustainable Framework for UK Aviation’

The Airport Operators Association (AOA) has submitted its response to the Coalition Government consultation on a ‘Sustainable Framework for UK Aviation’. The AOA calls on the Government to:

Recognise just how important aviation is to the UK economy, which provides £50bn+ GDP, £8bn to the Exchequer and enables the connectivity required to export abroad and attract investment into the UK
Show leadership in the Sustainable Framework it is developing, by positively encouraging the airport and aviation sector to grow in ALL parts of the UK, reducing unnecessary constraints where possible, enabling creation of jobs and growth in what are tough economic times – already aviation sustains around 1mn jobs, and massively supports a tourism sector which employs over 2.5mn people
Promote a positive planning regime, which recognises airports are key nationally and regionally important strategic infrastructure and enables them to grow
Actively pursue a “one-in, one-out” philosophy on airport and aviation regulation, including the formation of a Cabinet Committee dealing with regulatory burdens, and the introduction of “sunset clauses” to ensure regulations are up to date and relevant
Support UK aviation’s call for a global cap and trade scheme on carbon, following its entry into the EU Emissions Trading Scheme next year – the Department for Transport now needs to actively push for this deal to prevent Europe from being at a competitive disadvantage
Avoid a one-size-fits-all approach to noise around airports, and instead set out a range of options, to enable airports and local communities to consider an approach that works best for them; and accept night flights are crucial, for example to the UK express industry, which is worth more than £10 billion of exports a year, and in terms of fostering the UK’s ties with the fast growing markets of the Far East

Darren Caplan, Chief Executive of the AOA, said:

“This Sustainable Framework for UK Aviation is a crucial in the development of a policy framework which benefits not only the airport and aviation sector, but also the wider UK economy. UK plc simply depends on aviation as key infrastructure providing the regional, national and international connectivity crucial for a successful trading nation such as ours, and so policy should reflect this.

“The new Secretary of State for Transport Justine Greening, must now seize this opportunity to recover the ground lost in not having a recognisable aviation policy between May 2010 and the production of this Framework in 2013. And she must actively promote a sector at which the UK is so good at and which also does so much good for the UK. A flourishing airport and aviation sector is crucial to a successful UK economy – and we look forward to working with Ms Greening and the Coalition Government in delivering on this agenda, to ultimately create jobs and growth in what are tough economic times.”

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For further info, please contact: Rachel Dorban on 020 7340 0990 or Luke Law on 07827 931480.

Notes to Editors:
About the Airport Operators Association

Who we are:
The Airport Operators Association (AOA) is the trade association that represents UK airports.

What we do:
Our mission is to see UK airports grow sustainably. We represent the views of UK airports to Government, Parliament and Regulators to secure policy outcomes that help deliver our mission.

Who we represent:
The AOA represents some 70 airport operators in the UK. For more information, please visit www.aoa.org.uk.

AOA 2-PAGE EXECUTIVE SUMMARY: Ensuring a ‘Sustainable Framework for UK Aviation’

The UK is a trading nation and flying is a key driver of wealth creation in the economy – airports provide connectivity, linking the UK to the rest of the world
If growth in business use of aviation services (both passenger and freight) were held back by 1% a year over a 30 year period, there would be loss in potential GDP of 1.8% a year by the end of the period
Airports are key to an export led recovery

o   Air transport takes goods and services to foreign market, where they are sold, bringing wealth and jobs back to the country, with 40% of UK trade (by value) beyond Europe going by air – the express freight industry alone contributes £1billion+ to the economy, with 55% of exports of manufactured goods to countries outside the EU transported by air
o   Many key imports depend on air services too -more than 60% of imports of machinery, mechanical appliances and electric equipment from outside the EU are carried by air
o   Passenger services play an important role in supporting trade – nearly two-thirds of companies report that passenger services are either vital or very important for sales and marketing
o   Business Aviation plays a strong role in facilitating trade, connecting cities that do not have demand levels to justify regular services, acting as an 'on demand' service for international trade links
o   Air services are particularly important for the UK’s trade with developing nations, such as India and China, and will become more important to the UK’s ability to compete in the world economy

Airports facilitate inward investment

o International transport links are a determining factor in business location decisions and thus encour-age inward investment – 52% of European’s top companies considered transport links a vital factor in deciding where to locate, and 58% identified good access to markets, customers or clients as essential

Airports create jobs

o Aviation has a significant and positive impact on the UK economy, accounting for close to 1mn jobs
o Airports play a strong role in employment creation across the UK – for example, the North West Development Agency statistics show that 26% of inward investment projects in Manchester are from China, and are responsible for 5% of jobs created in the region

Airports support inbound tourism

o   Tourism is a key industry for the UK, providing employment for over 2.6 million people, and supporting more than 200,000 businesses – almost 10% of the UK’s economy
o   David Cameron sais in August 2010, “I want to see us [the UK] in the Top 5 destinations in the world. Currently we have 3.5% of the world market for international tourism. For every ½% increase in our share of the world market we can add £2.7bn to our economy, and more than 50,000 jobs”
o   The Coalition Government has signalled that it believes tourism is key to the success of the UK econ-omy, with one of its main goals to increase the share of tourism from the Indian and Chinese markets
o   Three-quarters of international visitors to the UK arrive by air, with spending by visitors who arrive by air is equivalent to 1.1% of the UK’s economy and generating 226,000 jobs – air services also allow UK tourists to enjoy a much wider range of overseas holidays than would otherwise be the case

Airports infrastructure is privately funded, lightening the load on the public purse

o The benefits airports bring to our economy and society come largely at no cost to the public purse, with aviation unique in improving UK infrastructure and national assets with little or no public funding

Airports and aviation support the public sector

o When ignoring Air Passenger Duty (APD), the “Tax to Gross Value Added” ratio for the aviation sector is about 32%, almost identical to the economy as a whole; but adding in the effect of APD, the ratio rises to the nearly 55% – 70% higher than a typical sector of the same size
o Aviation contributes more than £8 billion to the Exchequer, enough for more than 30 new schools or 15 new hospitals every year

Climate Change

o   The AOA supports aviation’s entry in to the EU Emissions Trading Scheme (EU ETS) as a good first step towards a global cap and trade deal, and the AOA and its members continue to lobby for this
o   The aviation sector believes it is entirely feasible that real UK aviation emissions could be returned to 2005 levels by 2050 - the scenario presented in Sustainable Aviation’s Roadmap, through a combination of EU ETS targets, manufacturer research commitments, fuel prices, tax, airspace constraints, the cycle of fleet airline renewal, and industry reputational management
o   The AOA does not support a unilateral UK aviation target – recent analysis carried out for the DfT on Marginal Abatement Cost (MAC) curves for possible UK-only policy levels demonstrates that a unilateral UK solution would be significantly more costly than dealing with carbon through EU ETS – the extra cost of dealing with carbon unilaterally, rather than through international mechanisms, such as the EU ETS, could run into hundreds of millions of pounds and thousands of jobs by 2020

Planning

o The 2008 Planning Act and the creation of the Infrastructure Planning Commission (likely to become the Major Infrastructure Planning Unit (MIPU)) address the question of major national infrastructure and efficient process for major developments seeking to secure planning permission – however, due to the Coalition Government’s cancellation of major airport expansion in May 2010, at present there are no planned airport projects that meet the criteria for ‘major infrastructure’
o Yet many future airport developments will be significant as international gateways, supporting broad geographic areas of the economy – this means that as things stand no mechanism is in place in the planning system to consider such developments

Red Tape

o   The AOA welcomes the “one-in, one-out philosophy”; the formation of a Cabinet Committee dealing with regulatory burdens, and the introduction of “sunset clauses” to ensure regulations are relevant
o   The AOA is keen to work with the Coalition Government on this question and recommends a working group should be set up under the auspices of the DfT to focus on the regulatory burden in aviation, requiring e a commitment of resource from both officials and the Coalition Government
o   A key area of focus for the DfT in addressing the regulator burden is its current work on Outcomes Focused Risk Based (OFRB) security – .AOA fully supports the development of the OFRB Concept and will continue to engage with the Coalition Government on its development

Noise

o The AOA supports further exploration of the concept of a ‘noise envelope’ set with a framework governed by agreed principles, with an airport’s neighbours and stakeholders
o the Coalition Government must strive to avoid a one-size-fits-all approach, which could risk crude and non-ideal solutions for local communities and seriously hamper airport operational flexibility – instead the Coalition Government should aim to set out a range of options, and to enable airports and local communities to consider an approach that would work best for them

Night flights

o   It is right that the Coalition Government reviews its approach to night flights periodically
o   The UK express industry transports more than £10 billion of exports a year, including goods which are generally high-value items, including: electronics; components for the immediate repair of goods from computers to aircraft; pharmaceuticals; and important financial services documents
o   Night flights at Heathrow airport alone have a value to the economy of more than £1 billion, and the closure at night of the major freight hub airports, including East Midlands and Stansted, could be detrimental to the economy by the order of several billions of pounds a year in the near future
o   Night flights are important to the UK’s ties with the fast growing markets of the Far East – passengers in the Far East depart for the UK in the evening and arrive in the early morning UK time, so restricting night flights reduces connectivity between Asia and the UK, harming prospects for business people