Policy & Campaigns
The AOA’s principle objective is to promote the importance of aviation and support sustainable growth for the sector. Aviation is one of the UK’s success stories, connecting a global Britain to the world. The UK has the largest aviation market in the EU and the third largest aviation market in the world, after the USA and China. In 2016 alone, more than 268 million passengers travelled through UK airports – a record number.
As a sector, aviation makes its own distinct contribution to employment and growth across the UK. £1 billion a week is generated towards UK GDP by aviation and this is made possible by the nearly one million people working in and around the industry. This generates almost £10 billion in tax revenues.
The aviation sector is also a crucial enabler for the rest of the UK economy, providing the domestic and international connectivity that enables people to visit friends and relatives or go on holiday and that links UK businesses to their customers, as well as helping governments deliver on their priorities.
For example, with nearly three-quarters of all visitors to the UK travelling by air, aviation helps the tourism sector to flourish. This creates a further £20bn a year towards GDP and supports half a million jobs in all parts of the country.
Exporting business benefit too, with around 40% of the UK’s exports by value to non-EU countries using aviation to reach their destinations. That includes high-value goods like jewellery and machine parts, as well as products that need to arrive to the customer quickly, like Scottish salmon or medicines.
Through the Sustainable Aviation coalition, airports work together with airlines, aerospace manufacturers and air navigation services providers to ensure that the future of aviation is cleaner, smarter and quieter. This enables a collective approach to ensuring that growing public demand for aviation to be met sustainably. This work also an opportunity to generate green jobs and growth and ensure the UK is a world leader in sustainable aviation.
International connectivity is a cornerstone of a global trading nation. Aviation is one of the principal ways such connectivity is facilitated – it provides the infrastructure that allows goods and services to flow freely and is a pre-condition for the success of trade agreements.
However, aviation does not itself form part of the World Trade Organisation system. Instead, countries negotiate bilateral or multilateral air services agreements to provide airlines with the legal rights to fly to certain places. These can be very restrictive (e.g. one flight a week to a specific airport only) or very liberal (anywhere at any time).
The UK currently has agreements with 155 countries. Of these, 44 countries have air services agreements with the UK through the UK’s membership of the EU and they account for around 85% of UK aviation traffic. After the UK leaves the EU, new agreements will be needed to ensure that there continues to be a legal framework that allows airlines to fly to all these destinations from the UK. If there are no such agreements by the time the UK leaves the EU, the UK’s connectivity will be undermined and its ability to trade will be made significantly more difficult.
That is why AOA is working with the Government to ensure that early certainty for the industry through transitional agreements and securing new air services agreements as part of the exit negotiations is prioritised. New agreements should seek to replicate, as far as possible, the benefits that UK and EU consumers currently derive from the close integration of our respective aviation markets.
Maintaining the UK’s international competitiveness requires world-class airport infrastructure. Demand for flights is expected to rise to double by 2050, requiring both the best use of today’s airports and investment for tomorrow. The Department for Transport’s expected Aviation Strategy must set out a fair framework for growth for all airports, helping to deliver, sustainably, the connectivity the country needs for a flourishing economy across the UK, creating jobs and growth as a result. This will sit alongside the Airports National Policy Statement which sets out the need for expansion in the South East – with the Government’s preferred option a third runway at Heathrow Airport.
A crucial part of the strategy must be to make best use of existing capacity, which can accommodate significant growth in demand. This will require, for example, improved surface access to airports so that more businesses and consumers have fast access to domestic and international destinations.
The UK’s airspace is our invisible infrastructure in the sky, vital to the success of aviation and the wider economy. It has a finite capacity and has changed little since its creation in the 1960s. Unless modernised, it will not handle expected levels of traffic without increased delays, with one in three planes expected to depart more than 30 minutes late by 2030.
Since its inception, aircraft technology has continued to develop, yet the current route network has not adapted to match the advances in aircraft technology or the significantly increased demand. It is still designed for aircraft that have long since retired, which flew lower and were slower and noisier.
It is essential to modernise our airspace to match the capability of today’s aircraft. Modernisation will reduce complexity, improve safety, increase capacity and enable the industry to operate to a single aligned plan. This will bring clear benefits, in addition to mitigating the risk of exponentially increased delays:
- Research by IATA shows that modernisation across Europe will deliver over £29 billion to UK GDP and 116,000 jobs between 2014 and 2035 through improved connectivity, reduced journey times and lower airline costs.
- Airspace modernisation will bring clear environmental benefits, including a potential CO2 saving of 9%-14% through reduced fuel burn; more ways to avoid noise-sensitive communities, such as curved approaches and steeper climbs and descents; and lower emissions, which will have a positive impact on air quality.
As the UK leaves the EU, it will need a competitive aviation sector to ensure that British business can take advantage of the opportunities Brexit brings, both in existing and emerging markets. UK Air Passenger Duty (APD) is among the highest in the world, which is why the British Chamber of Commerce called it a ‘tax on global traders’. Just six other EU countries levy a similar tax, all at substantially lower rates:
- UK short-haul APD (£13) is 43% higher than the next highest tax (Greece – £9). Band A is more than double the rate in Germany (£5.70) and more than triple the French rate (£4.20).
- UK long-haul APD for (£75) is more than double the level of the next highest tax for long-haul journeys, which is levied by Germany (£32). It is more than five times the rate levied by France (£14.50).
This poses a problem for UK airports, as airlines have a choice where they put new routes or expand existing ones. UK airports compete to attract airlines against airports in neighbouring countries with no or much lower taxes, harming the UK’s competitiveness. This helps to explain why the UK has less connectivity to China, Brazil and South Korea than Germany or France have.
We continue to play a key part in the industry alliance group ‘A Fair Tax on Flying’, helping to raise support for the campaign among parliamentarians and the wider public.
The Scottish Government’s intention to cut APD
The Scottish Government has recognised the burden of APD and is intending to cut its new Air Departure Tax by 50%, compared to APD. This will have a very detrimental impact on airports in the north of England, as airlines and passengers will seek to take advantage of the lower costs of flying from Scotland. The AOA calls on the Government to ensure that a cut in APD anywhere in the UK is matched immediately and fully in the rest of the UK, to prevent regional economic distortions.
Promoting a ‘better passenger experience’ is an issue the AOA has been keen to progress for some time. The AOA’s work in this area involves four strands:
- Engaging positively with the CAA’s Consumer Panel;
- Working with AOA members to develop a better security experience for outbound passengers;
- Calling for a better experience for inbound passengers at the UK border;
- Working with airlines, airport retailers, airport police and airport bars and restaurants to reduce the small number of distruptive passengers even further through the Aviation Code of Practice on Disruptive Passengers
- Promoting the great work AOA airports are doing to develop a ‘better passenger experience’.