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Written evidence from Elizabeth M. Balsom (AS 01)

Heathrow

I have just watched your video on the Parliamentary website, and am writing to you as Chairwoman of the Transport Select Committee because more flights to are back on the political agenda. Noisy, well-remunerated advocates suggest that an additional 60,000 flights a year could access this ill-sited airport via mixed-mode, despite the cataclysmic effect this would have on the lives of those of us under the flight path. I am writing to you in the hope of bringing home to decision makers just what it is like to live with unrelenting . I feel I am paying for the mistake I made in coming here 31 years ago, when planes were not the disturbance they are now. I would leave, but I have made a life here, and I have nowhere to go. I take the strongest exception to those expansionists whose attitude to me is: Tough put up and shut up.

1.Committee Membership

It is disappointing and regrettable, indeed it is shameful, given the destructive impact of aircraft noise, that Parliament’s committee on this subject has no members whose constituents’ lives are blighted by aircraft noise. Please can you explain why this is? No doubt you know that people in Putney are troubled and confused at the treatment of Justine Greening, a decent, hard-working MP who is widely liked and respected, and whose efforts to protect us from the hell of yet more aircraft noise are valued by us, yet seem destined to be ignored. I have found media reports of briefings against her distressing. Furthermore, the “money talks” modus operandi and mentality which now permeates every pore of our society is alarming and depressing, breeding cynicism and distrust in the political process and public life.

I well remember that during the Labour government’s consultation on the third , week after week on the House, Tom Harris, a member of your committee, would appear to proclaim that a third runway was essential for his constituents. Why should a Scottish MP tell people under the Heathrow flight path that we must put up with even more aircraft noise for his constituents? If he’s so potty about planes, what’s wrong with Prestwick?

Friends who lived opposite me moved to Sunbury in Spelthorne constituency five years ago, partly to be nearer their daughter, but principally because they could no longer bear aircraft noise in Putney. Because of the flight patterns, Spelthorne, although near the airport, does not suffer as we do, as committee member Kwasi Kwarteng, a vocal promoter of expansion, is surely aware. I was shocked by his comments in the Evening Standard, July 9, and am grateful to the Standard for allowing me the opportunity to respond. I noted Mr Kwarteng’s comments that people should be paid £500,000 to get out of their homes, so a third, fourth and heaven knows how many runways could be built at Heathrow. This sort of attitude is beyond the pale. Perhaps Mr Kwarteng can come up with a figure for compensating those of us whose lives are blighted by aircraft noise. I am serious when I suggest £1,000 a week. After all, when everyone else is on the make, getting something for nothing, why shouldn’t I get something for something: putting up with aircraft noise.

2.Advocates of Expansion

We are entitled to ask just who are the people clamouring for more flights to Heathrow and why they are doing so. For some inexplicable reason, every time the then prime minister Tony Blair decreed that Heathrow must expand, particularly at PMQs, the phrase cui bono? flashed into my mind. Mr Blair has certainly done well since he left office.

One of the most recent and loudest expansionists is Tim Yeo. I found the following on his website: www.timyeo.org.uk ‘Tim Yeo has pledged his full support to opponents of a wind farm at Chedburgh. He told a packed meeting at Hawkdeon village hall: "I fully understand why anybody in a community as beautiful as this will be concerned. On shore wind turbines are visually a very considerable intrusion on any landscape. This happens to be one of the most beautiful parts of my constituency which stretches from here to the coast."

"I can hardly think of a less suitable place to put up a series of very, very large wind turbines six and a half times the height of the village church here in Hawkdeon. They would dwarf the cathedral in Bury St Edmunds as well."’

Mr Yeo’s hypocrisy was further outlined in the Mail Online 16/8/12. “He’s the Tory who chairs the Commons climate committee but earns £140,000 from green firms. And he wants to carpet Britain in wind farms (except in his own backyard).”

So Mr Yeo expects other MPs’ constituents to put up and shut up when they object to more aircraft noise, yet supports his own constituents’ objections to a development that will adversely affect them – despite accepting consultancy fees from “green” companies. This is contemptible.

I hope your committee will consider whether MPs whose constituents are unaffected by the noise generated by should have any voice in a development that will devastate the quality of life of hundreds of thousands of people in west . We should be told whether they have any financial relationship with the aviation interests demanding expansion. It really is unconscionable that any civilized society should expect a large chunk of its citizenry to tolerate the intolerable.

3.Impact of Noise

How many constituents of MPs pushing for Heathrow expansion are woken by planes at 4.40am as we are? Here in Putney planes continue until 11 pm and some like Emirates want to land throughout the night. Planes fly over my house every 90 seconds at 2000 ft. As soon as one has gone, another takes its place. Think Phil Spector’s “wall of sound”. I have double glazing, but they are still audible. Outside, you can‘t hear what someone a few feet away is saying. Gardening is stressful; it is impossible to enjoy a summer's day. Please don’t believe the spin that planes are getting quieter. I often wonder if Willie Walsh goes to plane makers and says: “gimme the noisiest thing you’ve got.”

Has anyone affected by aircraft noise every appeared before your committee to give personal testimony of what living with the noise is like? The screech as the planes pass over my house is indescribable. You need to experience it. If you are in the garden talking to a friend, you have continually break off conversation as a plane passes over. I remember an incident when my gardener, a man in his 50s with no hearing problems, was pruning a rose in my small garden. I went to the kitchen door and shouted “David, don’t forget there’s a rose at the front.” He turned, came into the kitchen and said: “couldn’t hear you. A plane was going over.” He was all of 10 ft away from me. I remember one June afternoon in 2008 when a friend brought her then two and a half year old daughter to visit. We went outside. To my surprise the little girl suddenly pointed skywards and said: “noisy aeroplane”. She continued to repeat this as the planes kept coming. A small child, unaware of the political dimensions of Heathrow expansion, was struck by the noise of the planes.

The third runway is a totemic slogan that slips easily off the tongue. What matters is that Heathrow airport should not be expanded, via mixed mode, more runways, or any other trickery the expansionists come up with. When the inspector gave the go-ahead for T5 he did so on condition that aircraft movements at Heathrow should not exceed 480,000 a year, because to go beyond this would inflict on intolerable burden on the quality of life of those under the flight path.

Please could your committee get expansionists to justify why we should be expected to endure more when the devastating effect of aircraft noise has long been recognised? Please could your committee address the implications of studies by Professor Stephen Stansfeld on the deleterious impact of aircraft noise on children’s learning (e.g. at ’s ), and against this background seek justifications from those who seek to increase the number of flights?

Please could your committee explore the opposition of residents under the flight path (admittedly hundreds of thousands fewer than under the flight path to Heathrow) to more flights, and their objections to night flights (FAZ 27/6/12) not least when airlines like Emirates are seeking to fly into Heathrow at all hours of the night. Obviously my concern is my quality of life in Putney, but it is time for the aviation industry and its supporters to recognise the havoc that it wreaks. People are fed up with aircraft noise.

4.Regional and Other London Airports

At all events, I question the need to focus so much airport expansion on Heathrow. On September 8, Radio 4 news reported that French detectives investigating the Annecy killings flew into .

On Feb. 5, the day when Heathrow cancelled hundreds of flights because of a dusting of snow, a friend's niece flew into airport on time from Islamabad with airlines. She was on a British Council programme at northern universities and had neither need nor desire to visit London. In December I met up with English friends who live in Adelaide. Because of family business in it was convenient to fly to Birmingham, again with Qatar. Not everyone in the whole wide world wants to fly to Heathrow.

I trust your committee will examine the potential for developing regional airports. Germany has important airports in addition to Frankfurt: Dusseldorf, Munich, , Berlin; I realise that Germany is both a larger land mass than the UK and a federation, but there must surely be lessons here. However, one lesson the expansionists should learn from Germany is that residents under the Frankfurt flight path, albeit hundreds of thousands fewer than under the Heathrow flight path, are no more welcoming of aircraft noise than we are.

5.Economic Case

According to WTO figures (FT: 11/4/12), Germany exports eight times more to China than the UK, ten times as much to Russia, twice as much to India (which should be our own backyard). Do expansionists expect me to believe this is because Heathrow has only two runways? Did Dassault win the Indian airforce fighter aircraft contract because Cde G has more runways than Heathrow? I suspect something more fundamental is going on, and this will not be rectified by concreting over yet more of west London.

Perhaps my scepticism was formed ‘in the late 1970s and early 1980s when I worked at the National Economic Development Office with responsibilities for the food and drink manufacturing sector. My colleagues covering a range of industries and I did not see our task as the much derided "picking winners" but in trying to identify why many British companies across the industrial spectrum were less efficient and competent than foreign counterparts and why many, particularly in food manufacturing, seemed reluctant to get involved in exporting. Our balance of trade was negative in most sectors.

Most of the companies I knew well have either folded or are in foreign/private equity hands: Cadbury, Rowntree, Bass, Allied Lyons, Courage, Scottish & Newcastle, United Biscuits, Huntley & Palmer,, Unigate, Greenall Whitley, Avana. Only Unilever is still standing and independent. The passing of ICI and British Steel into foreign hands suggests this pattern may be replicated throughout British industry.

It is immensely encouraging and reassuring that the CEO of Exova Group (letters 15/5) believes this situation can be rectified by building a third runway at Heathrow. and that if this is built, British exports will soar. Based on my experience and looking back over the past 35 years, my reaction is "pull the other one” ’. (Letter published in 18/5/12, reprinted in The Week.)

Expansionists peddle the “hub” argument which some of us find hard to understand. I know Heathrow is a virtual shopping mall, with more shops than seats for passengers, but do people actually buy more suitcases, shoes, booze etc when their hold luggage is already in transit and cabin is limited? I understand that transit passengers need cafeterias, but even seasoned travelers tend to be most concerned about getting to the for their next flight than getting out their credit cards. How much money do transferring fliers actually spend, and how much of this filters down to UK plc? I am not interested in the financial health of Spanish companies except in so far as that country’s dire economic plight impacts on the UK.

6.Sharing the Riches

Please can your committee explore how I, as a pensioner with a small fixed annuity (I lost money in Equitable Life), whose savings are generating zilch and whose value is being eroded by QE, can share in the exponential growth in wealth the expansionists claim will result from ever more flights to the ill-sited Heathrow. After all, as we know, many of the people who take the decisions affecting our lives are on “nice little earners” from this interest or that. Why should I lose out?

We're a pathetic country if the only way of meeting its country's aviation needs is by imposing further misery on hundreds of thousands of its citizens. We rightly despise other countries that act in similar fashion; Stalin’s collectivisation of the kulaks comes to mind. Aircraft noise is not a joke. When I came here in 1981 planes were not an issue; now they represent an ever present degradation of my quality of life. The prospect of more flights via mixed-mode is unendurable. At the very least we need our half day respite.

One recent night, about 11.00 pm, I was cleaning my teeth, getting ready for bed. The planes had been overhead, non-stop since 3.00 pm. For some inexplicable reason I was suddenly jerked back to being a very small child when, as I was getting into bed, my mother would say, “say your prayers”. It occurred to me that if I still got down on my knees before getting into bed I would say, “Please Jesus, Take the noise away”. It really is that bad and the noise is getting worse. I’m not alone in feeling this. I trust your committee has the scope to reflect on this.

18 September 2012

Written evidence from Mr Ken McDonald (AS 02)

I have submitted my comments to the on its Draft Aviation Policy Framework (DAPF). I would like you also to consider my concerns regarding the context in which long term aviation policy is being discussed.

The first sentence of the executive summary of the DAPF is “The Government’s primary objective is to achieve long term economic growth”. I submit that this is an unsound premise. Sustained global economic growth was possible when the Earth’s human population was relatively few in number and the demand per capita placed on Earth’s finite resources was modest, but the industrial age and the dramatic and accelerating growth over the last two centuries in both world population and average personal consumption has brought us to an unsustainable position. Global consumption is already greater than the Earth’s capacity to renew its resources, so further global economic growth is not sustainable.

The longer that global economic growth is maintained, the greater will be the resource deficit that has to be faced in due course. The longer we wait before admitting the inevitable, the bigger will be the bubble that bursts. It is like borrowing further and further beyond one’s means until there is no option but to default on the debt. Yet, there will be no banker to default on when we do come to terms with being unable to feed and warm all the human race because the Planet has insufficient resources.

The bubble may not burst within the life of this Government, but this Government risks being judged by the next generation as turning its back on UN General Assembly Resolution 42/187 that defined sustainable development as “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. If the Government is consciously forecasting long term global economic growth, despite the “One Planet” theory, then its rationale should be explained. If, on the other hand, it is this Government’s belief that the UK can continue to grow, against the inevitable tide of global reality, then that rationale should be explained.

If it is accepted that economic growth is dependent on the ongoing renewal of resources, then it is only a matter of time before the inevitable turnaround from growth to contraction arrives. When this general tipping point will be reached (or perhaps, when it was reached) is a matter of conjecture, but it is certainly unsound to expect economic growth to continue long term, either globally or nationally.

Within the broad picture of sustainable economic growth and availability of finite resources, aviation is at the leading edge of one of the dilemmas of finite resource, being heavily dependent on fossil fuel. The use of fossil fuel has increased dramatically over the last century and the ongoing high of usage relative to the Earth’s diminishing and non-renewable resources indicates that availability of this particular finite resource is likely to start to decline in the foreseeable future. Given that fossil fuel has many other uses, the presumption that some degree of long term priority or parity of supply should be afforded to aviation is highly questionable, especially the majority of aviation which is leisure orientated.

The opening paragraph of the Executive Summary goes on to say “The aviation sector is a major contributor to the economy and we support its growth within a framework which maintains a balance between the benefits of aviation and its costs, particularly climate change and noise”. This introduces a key factor, climate change, which we cannot afford to be treated as subsidiary to the search for the holy grail of economic growth.

The second bullet of para 1.4 refers to the need for proportionate action to be taken at the international level, yet the aviation industry continues to receive the unfair and unjustified protection of the 1944 Chicago Convention and continues to benefit, to the detriment of other sectors, by the success of ICAO in retaining that protection. Until that exceptional degree of protectionism is unwound, the aviation industry will continue to operate with the uncertainty that the bubble in which it operates may one day burst.

Thus it is against the background of the rather distorted and unreal world, in which the Government expects perpetual economic growth and aviation operates under a cloak of outdated and outlandish protection, that we are being asked to comment on the UK’s aviation policy. These factors are so fundamental (one might say the two elephants in the room are so huge) that I felt unable to offer further meaningful comment on the DAPF.

I hope the Transport Committee may be able to ensure that these fundamental issues are addressed before the next stage of the Government's aviation consultation, thereby providing a clear context against which I and others may comment on the Government's proposals.

20 September 2012 Written evidence from Mr Philip Greswell (AS 03)

AVIATION STRATEGY CONSULTATION.

In considering points for this strategy, I set out below briefly issues and facts I have been made aware of over the years which must be carefully considered by the Committee.

• According to the Department for Transport (DfT), the UK has enough airport capacity, even in London and the South-East, until almost 2030.

• London remains the top city in the world to do business. A principle reason for this is its excellent connectivity. That’s according to global property consultants Cushman & .

• Heathrow has more flights each week to key business centres of the world than its two closest European rivals, & Frankfurt, put together, according to a report from WWF and AirportWatch

• A big majority of companies expect to reduce their flying over the next few decades and use video conferencing more, according to a WWF survey of the top 350 companies. The DfT expects this will reduce demand by 10%.

• If Hong Kong is included, the UK has more flights to China than any other European country. The main deterrents to Chinese people coming to Britain are the cost and bureaucracy of getting visas and the fact that a bilateral agreement limits passenger flights between the two countries to 62 per week.er

• The Davies Commission should include consideration of how future oil prices, income levels, population growth and climate change targets will impact on the demand for air in both the industrialised and industrialising countries.

• Aviation’s contribution to the economy is less than the aviation industry suggests. Government policy is still based on the Labour Government’s 2003 Air Transport White Paper which, in turn, is based on a report largely paid for by the aviation industry. The report, The Contribution of Aviation to the UK Economy was carried out by consultants Economic Forecasting in 1999 with an update in 2006. It ignored the tax- breaks the industry receives through tax-free fuel and being zero-rated for VAT. Nor did it factor into its calculations the huge cost aviation imposes on society and the environment, which are estimated to be around £16 billion a year. Independent experts argue that the report over-estimates the number of jobs aviation expansion would create. And it skated over the point that UK air passengers take more money of the UK on their foreign trips to spend abroad, than foreign visitors bring in on their visits.

• The tax-breaks Airlines pay no tax on aircraft fuel and no VAT. The resulting loss of revenue is over £11 billion a year. Only just over £2.5 billion per year is brought in from Air Passenger Duty. To achieve fair tax with motorists, air passenger duty would need to be more than quadrupled!

• The tourist deficit – the difference between what British people spend abroad and visitors spend in this country - was £14 billion in 2010, down from a high of £20 billion in 2008. Most of this deficit is accounted for by and closely parallels the rise in low-cost flights. All regions of the country, except for London and the South East - where there is a slight surplus – are in deficit. This deficit is damaging the economy and exporting jobs.

21 September 2012

Written evidence from Howard and Diane Turner (AS 04)

As a private individual, together with my wife, I would like to put on record our opposition to Air Passenger duty per se. We consider this a stealth tax which limits people’s freedom to travel by air and therefore to ‘broaden their horizons’ and gain a greater understanding of the wider world.

If one wishes to travel to visit areas of the world beyond mainland one realistically has to travel by air. The additional costs of ‘Air Tax’ severely restrict the extent to which the voting public, living on limited budgets, can afford to exercise its freedom of choice with regard to air travel. It makes it particularly difficult for families living in different parts of the world to reunite on a regular basis; times of economic hardship aggravate the problem even more!

With regard to the other issues covered by the committee I have no relevant knowledge as our home is many miles from the nearest civil airport and therefore cannot comment.

Please abandon this unfair stealth tax.

25 September 2012

Written evidence from the London Medway Airport Group (AS 05)

Summary

• The South East of is already critically short of airport capacity; costing the UK economy millions - potentially billions - of pounds a year. With politicians deliberating whether Heathrow needs a 3rd runway, it is clear that this would be just a short-term, quick-fix solution.

• Heathrow is now redundant, and will become increasingly useless in future years. Expansion does not make sense.

• The answer lies away from Heathrow; London, the South East and indeed the UK, needs a new, state-of-the-art hub airport that will fulfill the aviation needs of Britain for centuries to come.

• A site in the North Marshes, north of Cliffe, is perhaps the most prime piece of land for development in Europe. We believe it is already in public ownership.

• Easy connections and transport links. Up to 100,000 new jobs for Medway. A new multi-modal road/rail/air/sea powering the UK economy.

1 The importance of Aviation

1.1 With the level of globalisation increasing around the world, an able to meet the needs of both business and leisure travelers is vital to the UK economy. Providing a crucial link between the UK and the rest of the world, a good international airport can bring massive benefits to the UK. The impact of aviation on the economy cannot be underestimated, encouraging companies to locate in the UK and making it easier for UK businesses to expand into foreign markets. These links are already very significant, but over the next few years, the role of an international airport will becoming increasingly important. With a lack of air links with the emerging economics, such as Brazil and India, the UK economy will start to suffer.

1.2 As the gateway to the rest of the world, an international airport supports billions of pounds of exports, thousands of jobs and gives the UK a crucial advantage over other countries when businesses decide upon where to locate. With 52% of Europe’s Top 500 companies considering transport vital when deciding to locate, the access to markets is vital. The services sector, which contributes 70% of UK GDP has been heavily dependent on the air transport links provided by an international airport. Connectivity is especially significant in London, with the City’s financial, insurance and banking companies reliant on air services; requiring on average six times more air travel than other businesses. Without these international links, companies will consider locating elsewhere, and investment will be given to other countries, meaning that the UK will lose out. Foreign direct investment is worth more than £52 billion each year, worth 27% of London’s economy, has brought more than 500,000 jobs to the area. Although the companies choose London and the UK for a variety of reasons, transport has been seen as essential to attracting the multinational corporations as well as the small and medium enterprises. Links to places like the United States and India, the leaders in numbers of inward investment projects in London, are very important, and a lack of these will mean that the UK could lose out of future investment.

1.3 Capital and and labour can relocate quickly, especially given the single market of the European Union, allowing these factors of production to move if the UK infrastructure is seen as inadequate. With an effective hub airport, travelers can access a massive number of destinations making the UK very attractive, but this advantage is being eroded by the progress of other countries. Other competing cities, including Paris, , Dubai, Frankfurt and Berlin, are all investing in new capacity, hoping to gain from some of the benefits that the UK has enjoyed from Heathrow over the past few decades, including that seen with the growth of the financial services industry. This means that they have been able to increase the number of destinations they serve significantly, while the number served by Heathrow has decreased over the past twenty years. Therefore, the UK is in danger of losing its status as a world leader, losing the direct benefits of inward investment and increased exports, as well as the indirect benefits seen from the jobs and tax revenue supported by these transactions.

1.4 Economic growth and development at a regional level is also reliant on the UK having a global hub airport. As a trading nation, businesses both large and small rely on a hub airport to be able to reach worldwide destinations from their local airport by that can only be served by connecting at a hub airport. This means that a strong aviation policy not just affects London, but also supports jobs and benefits the rest of the country. No other form of transport can match aviation in speed, efficiency and the level of connectivity that a global hub provides. In business, the Department for Transport states that “faster and more reliable journeys in the course of work represent a productivity gain.” A lack of connections to a hub airport then harms businesses, as it takes longer for them to reach destinations. This has been seen recently, with Heathrow falling behind Paris and Amsterdam in terms of flights to UK regional airports, thus leading to a productivity loss and harming GDP. In the short term, the regions will start to lose out due to higher costs due to the lost productivity, while also seeing wider long term disadvantages. With problems accessing international markets, businesses will then see lower exports, leading to lower growth. Less jobs will then be created, leading to lower tax revenue and increased regional inequality as London benefits from the hub airport, leading to wider issues. A strong international hub airport connecting the rest of the UK to the rest of the world is important not just locally, but for the whole of the UK.

1.5 It is clear that aviation can clearly benefit the whole of the UK economically if there is a strong airport with wide international links. Domestic businesses will find it easier to access emerging markets, bringing the increase in export, along with international multinational firms supporting the UK with inward financial investment, supporting jobs and benefitting the wider economy. Without this, the UK will start to lose out to its international competition, having a massive economic impact that cannot be understated, with the importance of aviation going everyday due to increasing globalisation.

2 The Problem with Heathrow

2.1 Heathrow Airport has served the as a principle hub airport for the best part of 60 years, growing year on year to reach its busiest ever year in terms of passenger traffic in 2011; handling almost 70 million passengers (69,433,230). 2011 was also Heathrow’s busiest year in history in terms of cargo; it processed over 1.4 million metric tonnes of freight. The continued growth of Heathrow shows the demand for air travel, and spare aviation capacity in the South East.

2.2 Unfortunately, Heathrow has no spare capacity. This has been apparent for some years, although the airport continues to see small single digit increases in passenger traffic each year, with the advent of larger aircraft. The ‘fight for flights’ at Heathrow, regarding the lack of capacity and landing slots, has pushed aviation prices up dramatically for consumers. Flights from Heathrow are regularly seen to be significantly more expensive for travellers than at rival ‘hub’ airports, such as Paris, Amsterdam or Frankfurt. Indeed, the media recently reported that a direct flight in from Heathrow to Los Angeles would cost on average £5,777. They found that it would actually be cheaper to fly via connecting flights at European hubs, costing just £3,421 when going via Amsterdam. These prices are unfair on British consumers, damaging to British business, and completely uncompetitive in a growing aviation market. Such extortionate prices at Heathrow are almost completely down to the high expense of landing slots.

2.3 The location of Heathrow itself, is frankly bizarre. Major hub airports should be within easy reach of the city they serve, but not within the actual city limits. Heathrow’s position has ruined the day-to-day lives of millions of people; it’s congested flight paths are directly over the City, and it’s runways are nestled amongst built-up, urban areas. The noise from aircraft experienced in some residential dwellings has been recorded as a breach of basic human rights and residential law in the United Kingdom.

2.4 It is argued that point 2.2 can be easily rectified with a 3rd runway. Any 3rd runway at Heathrow would require the complete destruction of the villages of , Sipson, and potentially Harlington too. Thousands of residents would have their homes bulldozed, only to be relocated elsewhere against their will. This is an abhorrent measure that could severely affect their livelihoods. Moreover, an even bigger problem would be yet further increases in the number of flights landing at and taking off from Heathrow, due to the much needed extra capacity brought by a 3rd runway. The West of London would have their misery compounded by even more unjust aircraft noise. Perhaps an even bigger problem, is that the planned 3rd runway would most likely only be a maximum of 2,200m long, which pales in comparison to the 3,900 and 3,600m length runways currently in use at Heathrow. While this would undoubtedly be beneficial in taking smaller aircraft onto the 3rd runway, allowing larger aircraft to use the original 2 runways, it would be of no use long-term, as more flights use bigger aircraft.

2.5 While a 3rd runway at Heathrow could be a quick, easy and (relatively) cheap fix to the problem of aviation capacity in the South East, it will not be able to fulfill the needs of future generations. In 30-40 years, we could quite easily be having the same consultations; a 4th runway will be needed, as demand continues to grow. So what would be the answer then? Continue to knock down residential areas to continue the expansion of an aged, creaking hub airport? It doesn’t make sense, long-term, to expand Heathrow any further.

3 The Future Lies at Cliffe

3.1 The UK simply needs a long-term, state-of-the-art international hub, capable of meeting the demand of air passengers for decades and indeed centuries to come. It should be multi-modal, and act as a melting pot for road, rail, air and sea logistic networks, in terms of both passengers and cargo.

3.2 As outlined by section 1 of this evidence, the economic importance of aviation to London (and the entire UK) is vast. With Heathrow increasingly losing out to the likes of Frankfurt, Paris and Amsterdam, action needs to be taken immediately by the Government, and the answer lies in a new location, East of London, with fast connections to the City.

3.3 Our proposal is ‘London Medway Airport’ (LMA). A 4 runway multi-modal gateway to the World, this airport has the potential to transform London, the UK, and Europe. It will totally replace Heathrow, and be located on the , just to the North of the village of Cliffe in Medway, Kent. Being an onshore location, construction costs would be dramatically reduced in comparison to offshore and partially offshore proposals, such as ‘Boris Island’ and Foster’s ‘’ airport respectively. We believe the total cost of the project, including all the related infrastructure, would be around £25bn, significantly less than almost all other Estuary proposals. Additionally, the vast majority of this would be funded by private investment, overseas sovereign wealth funds, pension funds and corporate partnerships. Only a small amount of tax-payer capital would be needed to directly fund the project.

3.4 The Heathrow site will be closed. The site is prime for development; 3,000 acres with extensive rail and underground links to central London, next door to the M25, and in the relatively wealthy West of London. £Billions could be raised from the sale/development of the land, creating the thousands of affordable, sustainable houses that London is crying out for, alongside one of Europe’s largest business developments. Light industry and office space could cover a large proportion of the land, creating thousands of jobs, and covering the loss of jobs suffered due to the closure of the airport. Heathrow can become a sustainable, futuristic garden city, and raise significant funds for LMA at the same time.

3.5 London Medway Airport would feature 4 fully operational runways. This automatically brings a doubling of Heathrow’s capacity, although unlike Heathrow, our new hub airport would not be restricted during the night. Heathrow can not operate large aircraft overnight due to nearby residential areas, but the wilderness of the Hoo Peninsula would allow 24/7 operation. 24-hour operation, coupled with 4 full-length runways, and a vast passenger terminal would give capacity for up to 140 million passengers per year. This would be around twice the amount that Heathrow can currently handle. In terms of cargo, an extensive logistics village with warehousing and terminals, would allow the airport to handle up to 3.5million metric tonnes of cargo per annum (in comparison to 1.5m at Heathrow). The importance of cargo at the airport is vital, as a means of British businesses exporting to new markets, and also due to the proximity to the under construction London Gateway Port, directly opposite our proposed site. By 2016, it is estimated that around 70% of the UK’s container traffic will be processed through ports within 40 miles of our proposed airport location.

3.6 Amongst the most important parts of supporting infrastructure with regards to LMA would include the construction of a new local road and - crucially - a new Lower Thames Crossing. Ideally a bridge, but potentially a , this would not only ease the current congestion seen on a daily basis at Dartford, but also provide direct access onto the airport site. The new crossing would be the focal point of a new local road network connecting the M25 with LMA, London Gateway Port and the M2. These new roads would enable swift access by road to the airport site, as well as good connectivity with the London Gateway Port and Logistics Park, just a 5-10 minute drive away from LMA via the new crossing - this is vital for the cargo sector of the airport.

3.7 The Rail Link (HS1), would be extensively upgraded as part of the plans. With a new branch leaving the main line south of Ebbsfleet, and going directly into the passenger terminal building, the airport would be reachable from Stratford International (zone 3) in 18 minutes, and St Pancras International (zone 1) within 25 minutes, via a regular and fast express shuttle service between these London stations and the airport. The new branch could potentially be built into a cutting, to avoid any visible destruction of the landscape as it passes relatively close to some homes in the Medway area. We would anticipate that up to 70% of LMA passengers would travel to the site by this new rail link, with the airport station capable of handling up to 80 million passengers a year. St Pancras meanwhile, will form a new national and local rail hub, along with nearby Kings Cross and Euston stations - within walking distance. The extensive availability of different lines at Kings Cross St Pancras tube station and Euston/Euston Square tube station would make the St Pancras area an ideal connectivity hub for the new airport. It is also more than possible for continental trains on HS1, such as (Potentially also Deutsche Bahn) to call trains at the airport from cities such as Paris and Brussels.

3.8 Heathrow is redundant because of the local area; it can not expand without destroying villages. It cannot continue to operate in its current state because it causes misery for thousands. There are no current homes on the proposed LMA site, or indeed any buildings whatsoever. There are very few homes under the closest aircraft approaches. LMA makes sense because it would affect very few people. Our core objective is to ‘significantly improve the lives of Medway residents, without directly affecting them on a day-to-day basis”. This can be achieved by creating the world’s first community airport. The airport operators, airlines, on-site hotels and businesses would be required to take on significant numbers of staff from Medway where possible. Additionally, work- experience/apprenticeships for North Kent students will be of paramount importance, with all components of the airport having close relationships with local secondary schools, utilising the educational potential of a major international airport, in the fields of science, engineering, maths, business and tourism. The airport shall also have a large scale charitable programme, donating almost exclusively to local charities, community groups and sporting clubs.

3.9 Medway has serious pockets of deprivation in its larger towns, and a higher than normal unemployment rate. It may not automatically be considered as a deprived area by the uninformed from elsewhere in the country, but the failure of planned regeneration projects has continued to drive down average wages and employment rates during the economic downturn. The region is now suffering, and needs a huge investment to turn it around. London Medway Airport is that investment. The corridor of redevelopment projects has (largely) stalled, but that would no longer be the case if LMA was to be constructed. The region would become highly desirable, vibrant and cosmopolitan. Developers would be keen to invest in stalled projects, an eventually the entire area could be regenerated into one of the most desirable parts of the UK.

3.10 Heathrow is currently the home of around 75,000 on-site jobs. In addition to this, it is estimated that it indirectly supports around 115,000 further jobs off-site, in the local area and throughout the South East. London Medway Airport would be far bigger than Heathrow, and we estimate that around 90,000 jobs would be created on-site upon opening. Of course, this would grow substantially when more passenger and cargo capacity is utilised, up to around a maximum of 120,000 employees eventually. All current Heathrow employees would be offered the chance to transfer their jobs to the new site, although it is expected that only around 60% would wish to do so. This means that in total, around 45,000 new directly supported jobs would initially be created at LMA, and priority would be given to Medway and Kent residents. At the time of writing, the latest unemployment figures show that 135,000 people are unemployed in the South East, including almost 40,000 in Kent itself. The impact of the airport on the local area would also be great in terms of indirectly supported jobs.

3.11 Wildlife on the North Kent Marshes remains of vital importance. Wildlife is a great passion of the founders of the London Medway Airport movement, although it is totally possible that an airport could be built here without a single animal being harmed. A long-term wildlife management strategy could be implemented to encourage the natural migration of the thousands of local bird species away from the site, to a new nature reserve. It is our ambition to create one of Europe’s largest conservation areas elsewhere in the South East through sizeable investment, creating up to three times the land lost by the development of the airport. Due to this long- term programme, the eventual risk of once the airport was operational, would be no higher than other major UK airports.

Further Information Extensive details of London Medway proposals can be found on our website, as well as a useful Map, outlining our specific airport plans. The map can be seen here: http://www.londonmedwayairport.com/map/

25 September 2012 Written evidence from Peter McManners (AS 06)

1.0 Summary 1.1 The outcome of the current debate about airport capacity will have significant consequences for infrastructure investment and the position of UK within the European transport network. This is an industry with long time horizons such that decisions taken now will have an impact well beyond 2020. Over this timescale, it is likely that there will be substantive action to deal with emissions from aviation as part of sustainable policy. Therefore, pragmatic policy should factor in sustainable policy requirements, whilst remaining sensitive to short‐term considerations. Through the lens of sustainability, when all factors are considered, the preferred option is to commit now to a new airport in the , concurrent with taking a leading role in renegotiating the international aviation policy framework. Such a balanced approach will deliver a resilient strategy for UK airport capacity planning.

2.0 Introduction 2.1 Current international aviation policy is inherently unsustainable, locked into a policy framework established at the end of the Second World War. Today’s priorities are different, with concern over climate change growing and sustainability rising up the policy agenda. Aviation policy is not adapting fast enough to deal with this emerging challenge. Effective strategy for aviation should look ahead to the future when sustainable policy holds sway. A simply extrapolation of the status quo would not be sufficient and would lead to policy that would not endure for more than a few years.

2.2 Deciding strategy for aviation capacity, without further delay, is important because decisions taken now will take many years before the required infrastructure is delivered. The decision is particularly important because aviation is a global industry with long time horizons. Policy enacted now will have consequences up to the middle of this century. Getting it wrong could set the UK back in this important area but getting it right could put the UK in a leading position as the parameters of aviation in the 21st century start to take shape.

2.3 The context of the current debate makes it difficult to reach the best and most appropriate decision because discussion is highly polarised between environmentalists and other stakeholders; and the loudest voices are from those with a vested interest in maintaining the status quo. Incisive balanced analysis is in short supply, but using the overarching policy of sustainability the debate can be shifted onto a firmer basis. There can be little doubt that the influence of sustainability on policy will grow and the current debate over airport capacity should mesh with this bigger picture.

2.4 The route to formulating effective strategy for aviation is to focus on getting it right over the long‐term before considering how to address immediate and near‐term challenges. In the years ahead, it is expected that the consequences of climate change will become a clear and present danger to society. The strategy for airport capacity should factor in the resulting switch in people’s attitudes in favour of low‐carbon aviation solutions.

3.0 Objectives of Aviation Policy 3.1 A primary objective of UK aviation policy should be to ensure that it is future‐proof to the unfolding policy of sustainability and the expected shift in public attitudes towards effective emission control measures.

3.2 The reason to elevate the environmental impact of aviation from secondary to a primary issue is that the required response is deep‐rooted change and a complete rethink of some aspects of aviation policy. Unless these changes are factored in at the foundation of policy, the whole strategic framework could collapse when public attitudes start to support sustainability measures. It would be better to craft a resilient strategic framework that can bend with the coming changes providing a clear and consistent policy framework to be able to make the required investment in a timely manner.

3.3 There are a number of short‐term concerns, which will require a response, but these should not be allowed to drive strategy. For example, airport capacity is needed during the current period of growth in conventional aviation but this bulge in demand is unlikely to endure. Another example is policy for Air Passenger Duty (APD). One reason for this tax is as a proxy for a tax on aviation fuel which is currently tax‐free through outdated international agreements. It is becoming widely accepted that tax on aviation fuel will be the most effective lever to drive change and facilitate a transformation of the industry. But resistance to this sensible policy is stiff, particularly from the United States. The government should plan for, and help to orchestrate, the change in international agreements to be able to tax aviation fuel, not assume that high levels of APD will continue to be the UK solution.

3.4 Aviation should be an integral part of the overall transport strategy leading to consequences beyond aviation. For example, short‐haul capacity is likely to be squeezed particularly hard to deliver emissions reductions as there is an alternative in the rail network. Aviation capacity policy has therefore a corresponding strategic objective to improve and expand capacity on the rail network. Again, timescales are long and strategy is required without delay. Improving and decarbonising the rail network will take decades to complete but is required to support contraction in short‐haul flying capacity.

4.0 Best use of Existing Capacity 4.1 The current regulations for airport design are highly prescriptive to ensure all international airports can serve the current aircraft fleet. The next generation of air vehicles will require a different ground infrastructure. Which comes first, the new air vehicles or the new ground handling facilities? The UK aviation strategy has to be able to handle this dilemma. Investment in increased capacity for conventional aviation is likely to be wasted unless part of a coordinated sustainable infrastructure plan.

4.2 Strategic capacity planning requires an understanding of the likely shape and scale of aviation beyond 2020. It will depend on how quickly the world responds to concerns over the role of emissions from aircraft in climate change, but it is safe to assume that curtailing emissions will be required. Attitudes could change fast as climate change starts to have real impact on people’s lives. The infrastructure needs inbuilt flexibility to support change as a wave of innovation engulfs the industry.

4.3 The broad outline of the changing passenger and freight demands can be ascertained (McManners 2012). Conventional fast will continue to be required using aircraft that are an evolution from current models. The newest models now coming off the production lines – such as the and the – are expected to remain flying for the next two or

three decades but older aircraft will be retired early, as fast flying becomes much less affordable. Fast jets will be for people under time pressure such as senior government officials and business leaders. As ordinary people are priced off conventional aircraft the demand for cheaper alternatives will support the development and deployment of a new generation of relatively slow air vehicles where the aero engineers trade speed for fuel efficiency, and passengers trade time for money. Despite a short‐term backlash against high tickets prices for jet travel, the passenger experience in this new breed of relatively slow air vehicle will be much improved and become embedded as the low‐cost air transport method for passengers and air freight.

4.4 This transformation in aviation could take less than one decade from the point when world leaders decided to act. Strategic airport capacity planning in the UK should accommodate the new parameters whilst continuing to be able to support the industry as it is now. The initial conclusion is that existing conventional airport capacity should be squeezed to accommodate expansion in the short‐term with minimum additional investment whilst making plans to invest in the new future transport infrastructure.

5.0 Constraints 5.1 Question: Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

5.2 Answer: Noise reduction is an important issue from a local environmental perspective but is also a potential distraction from the bigger picture. Focussing too much on noise limits could hold back development of more efficient engines, such as open‐rotor jet engines. Noise limits should be set that allow the new generation of aircraft to be built with an uncompromising commitment to low emissions without excessively onerous noise reduction targets. Some flexibility with regard to noise limits should be allowed if this leads to significant efficiency improvements.

5.3 Question: Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

5.4 Answer: This is the key question at the heart of aviation strategy. The simple answer is that current policy will not be effective in reducing carbon emissions, but the government is in a difficult position. For the UK to take unilateral action and set appropriate, effective policy for aviation emissions would impact the UK economy disproportionately hard compared with other countries. It is proposed that the UK government deploys a two‐pronged approach. The first is to understand sustainable policy for aviation and formulate appropriate policy aspirations. This will then require a long‐game to push for the necessary changes in the international agreements that shape aviation. Meanwhile, the second prong is to craft pragmatic policy that delivers sufficient support for UK aviation whilst the global industry remains stuck in the current policy stalemate.

5.5 Question: What is the relationship between the Government’s strategy and EU aviation policies?

5.6 Answer: The EU has made a well‐intentioned move – which it believes will contribute to sustainable aviation policy – by including aviation in the EU Emissions Trading Scheme (EU ETS). This has caused an international outcry, with the United States and China particularly incensed by unilateral EU policy impacting upon their flights. In reality, this is a very small step which will not lead to a more sustainable aviation industry and could even make it harder to broker sustainable aviation

policy through raising the prospect that carbon trading could the source of a solution, which in aviation is unlikely (Lawson 2012).

5.7 The UK government should, of course, continue to work with the EU over aviation policy but there is a danger that policy, seen from outside Europe as primarily environmental, will be blocked in international negotiations. Environmental concerns are the prime reason to drive change but the better tactics might be to focus on transforming the industry to serve passengers better, support a sustainable economy and curtail carbon emissions. The UK is well placed to make a robust balanced case for sustainable aviation building on its heritage as a pioneer in aviation, using its close links with the United States and utilising its expertise in the technology and knowhow required.

6.0 A new Airport for London 6.1 Extrapolation of historic trends indicates that conventional aviation will continue to expand and that the South will run out of airport capacity. Options being considered include a third runway at Heathrow or a new airport in the Thames Estuary. The vision of increasing demand for conventional aviation arises from a blinkered perspective that the status quo will remain unchanged. Examination of aviation through the broad lens of balanced sustainable policy delivers a vision with a much sharper focus. This perspective points towards the counter‐intuitive conclusion that a new airport is the preferred long‐term solution.

6.2 The argument in favour of a new airport is that it supports resilient policy that is flexible to accommodate future changes in the industry. The rough outline of 21st century aviation includes a much reduced fast jet capability (relative to now) supplemented by the development and deployment of a new type of air vehicle that is highly efficient and slow (relative to current jet ). These are likely to be hybrid air vehicles with the characteristics of both a plane and an airship, but the exact design will not emerge until policy changes and make such vehicles commercially viable. The ground handling requirements between these two classes of ‘aircraft’ will be different.

6.3 The UK will have a choice, to build new facilities for the new air vehicles or reconfigure existing airports to accommodate them. One option is to design London’s new airport to be the first major airport in Europe designed to the new parameters. The early stages of the planning approval process could commence without making the final decision whether to build for conventional aircraft or for new air vehicles. The decision in principle could be taken now, to proceed with a new airport, whilst holding back finalising the design until there is more clarity with regard to international aviation policy.

6.4 Attitudes to aviation policy could reach a tipping point where policy change is rapid (McManners 2012: 158‐160) but it is also possible that the transition to sustainable aviation remains stalled. In such circumstances, the new airport in the Thames estuary could be built for conventional fast jets, which would have the convenience that many flights would approach and take off over water. When completed, Heathrow would become available for redevelopment, perhaps as a hub for the new generation of air vehicles.

6.5 Committing now to a new airport for London, but remaining flexible over the detailed design, is proposed as resilient and sustainable aviation capacity planning strategy.

7.0 Cost and benefit analysis 7.1 Many countries in Europe have invested substantially over the years in new hub airports. The UK has been saddled with Heathrow which has evolved in piecemeal fashion without the security of a long‐term strategic plan. This has been a fortunate oversight because the UK now has the option to ensure that London’s airports conform to the needs of 21st century aviation – when that becomes clear. The future‐proof and cost‐effective strategy is to push for sustainable aviation policy on the world stage whilst designing the appropriate infrastructure for London. This would not only give the UK world‐class international transport facilities but would also provide UK’s innovative aerospace sector with a launch pad to be at the forefront of a renaissance in the aviation industry. I believe that this is a golden opportunity for UK plc but will require bold action by the government to set the appropriate strategy.

8.0 Conclusion 8.1 Airport capacity planning for the UK cannot take place in a vacuum. As major investment in new infrastructure is contemplated, there should be an overall vision for transport and aviation that reaches out to mid‐century. Over this timeframe, concerns over climate change will have a major impact. The government should commit now to a new airport in the Thames estuary concurrent with leading the international dialogue over sustainable international aviation policy. The UK will then be poised to reap the benefits, with the flexibility that few other countries can enjoy through what is likely to be a difficult transition.

28 September 2012

References: Lawson, C. 2012. Aviation lock‐in and emissions trading, Cambridge Journal of Economics 36(5): 1221‐1243.

McManners, P. J. (2012) Fly and be Damned: What now for aviation and climate change? UK: Zed Books.

Written evidence from No Estuary Airport campaign () (AS 07)

Jon Fuller is an environmental campaigner working with a number of NGOs on a voluntary basis. In December 2011 he was approached by several Essex residents and was asked to form a campaign group to fight the emerging proposals.

It was noted that a well organised campaign was being developed by Medway Council with the support of other Kent based local authorities, but concern existed that this might focus upon short term economic factors and ignore some overriding scientific and humanitarian considerations. So a separate campaign was formed to gather the facts that would prove that an Estuary Airport was unwarranted and disseminate this information through the media and electronically to the widest possible audience. Supporters of this campaign are kept up to date with regular e-mail updates.

The facts will demonstrate conclusively that no airport should ever be constructed within the Thames Estuary. Furthermore the scientific facts, and the humanitarian response to the science, demand that aviation capacity now be constrained.

Summary

1. The threat of climate change is now so great that greenhouse gas emissions must be tackled as a matter of urgency. 2. The public response to agricultural damage and disruption to the food supply associated with climate change and bio-fuel production will necessitate a dynamic response from government. 3. The DfT predictions for future growth in aviation are overly optimistic and need critical examination. 4. The economic case to connect with the north of the UK is being overlooked. 5. The case against a Thames Estuary airport: • National “The very worst spot” to put an airport • EU Habitats Directive: the law precludes an airport within the estuary • Medway Council infrastructure/plans: the Isle of Grain schemes are not viable • SS Richard Montgomery: WWII munitions obstacle to an estuary airport scheme • Adverse impact upon south Essex tourism industry • Erosion and impact upon DP World (London Gateway new port) 6. Conclusion.

1. Aviation: The Science

1.1: The Transport Select Committee is requested to seek the input of the UK Government’s Chief Scientific Adviser, Sir John Beddington, to ensure that its recommendations take full account of the science relating to the impact of aviation on greenhouse gas emissions and climate change. It is absolutely vital that government should not cut itself off from the world of science. It must not determine policy on short term economic issues that will not withstand the scientific reality that will shortly transform all our lives.

1.2: Space constraints suggest that a limited number of references be provided, so just four are offered here to underscore the scale of the threat posed: the Intergovernmental Panel on Climate Change, the United Nations Environment Programme, the World Health Organisation and the DARA group report of September 2012: - http://www.ipcc.ch/publications_and_data/publications_ipcc_fourth_assessment_report_synthesis_ report.htm http://www.unep.org/pdf/UNEP_CC_STRATEGY_web.pdf http://www.who.int/mediacentre/factsheets/fs266/en/ http://daraint.org/climate-vulnerability-monitor/climate-vulnerability-monitor-2012/

1.3: In the light of the scale of recent climate disruption, particularly that which has caused so much damage to food production, the Transport Select Committee is requested to call Sir John Beddington to provide current scientific opinion on the scale of the threat of climate change to food production and human health. Indeed the DARA report shows that climate change is now contributing to the death of 400,000 people per annum and costing the global economy $1.2 trillion per annum.

1.4: This evidence shows that climate is changing rapidly and that the adverse impacts will necessitate a reduction in greenhouse gas emissions from all sectors, including aviation. The Transport Select Committee may well establish that the Committee on Climate Change target to see greenhouse gas emissions from aviation return to their 2005 level by 2050 does not go far or fast enough. If the UK is to avoid significant disruption to the food supply, much deeper cuts in greenhouse gas emissions will be needed, and as a matter of great urgency.

2. The humanitarian response and bio-fuels in aviation

2.1: The Transport Select Committee is requested to consider the humanitarian response to the emerging disruption to food that is now being caused by climate change. The European Union climate commissioner Connie Hedegaard has indicated that the EU will scrap its 10% target for bio-fuels used in transport, opting instead for a 5% target. “The Hunger Grains” report from Oxfam demonstrates that the humanitarian instinct in us all will ultimately stop policy makers from feeding cars and planes instead of humans: - http://policy-practice.oxfam.org.uk/publications/the-hunger-grains-the-fight-is-on-time-to-scrap- eu-biofuel-mandates-242997

2.2: In the light of these pressures the Transport Select Committee is asked to establish two facts: -

a. How much will third generation bio-fuels, that do not impact upon the food supply (e.g. algae) cost in comparison to fossil fuel based aviation fuel; and b. How much will that extra cost impact upon the demand to fly?

2.3: Given the triple, substantial risk to expansion of the aviation industry (climate change/ cost of third generation bio-fuel/ the understandable humanitarian response) the Transport Select Committee should conclude that multi-£billion investments into airport infrastructure cannot be justified. Investment can only be justified if the industry is on a scientifically proven route to the use of zero carbon/carbon neutral fuels and that these fuels can be produced at a rate that does not suppress demand for aviation.

2.4: The Transport Select Committee is asked to critically examine claims made by some in the aviation industry that alternative fuels will soon be commercially viable. One scheme proposed by Solena and BA in 2010 announced, with great confidence, that aviation fuel would soon be manufactured from waste destined for landfill. However there has still been no planning application made to build the plant that was originally proposed. The committee needs to establish just what the economics are of the various alternative fuels that are regularly appearing in the media. There must be a very real risk that carbon neutral fuels will add sufficient cost to flying that it reduces demand, negating the argument for expanding airport capacity.

2.5: It cannot be emphasised strongly enough that growing any energy intensive industry, like aviation, that will cause the runaway greenhouse effect, destroys everything we stand for as human beings. It destroys our humanity just as it destroys the environment. No decent, right minded person can ever support expansion of an activity that will cause immense human suffering and death.

3. Future demand for aviation: Department for Transport projections.

3.1: The Transport Select Committee is asked to consider two crucial facts relating to the projections offered by DfT for future demand for aviation: -

• What will be the likely impact upon future demand given the decline in UK GDP? • What will be the likely impact upon the UK economy in the light of the scale of financial loss from the EU of 2 trillion Euros per annum for imported fossil fuel?

3.2: Given the scale of the financial downturn and the likely growing burden of ever higher oil prices, the evidence suggests that demand for aviation will soon decline.

3.3: In 2007 the DfT predicted demand at 2030 of 500MPPA (million passengers per annum). But the prediction issued by DfT in 2011 was down a very long way - to 343 MPPA. Given the scale of the recession and the horrific wealth EU nations now export, in order to purchase oil and gas, surely demand projections must continue to fall?

3.4: The Transport Select Committee needs robust evidence on the likely cost of oil in 2030 and 2050 and determine from this whether aviation demand will decrease, stay flat or if it might increase. If demand is likely to grow, but remain below current UK capacity then it would be a gross dereliction of duty to spend many £billions on infrastructure development that will not be fully used. An Estuary Airport, perhaps costing £72 billion, would be the greatest white elephant of all time, a true monument to short-termism.

3.5: The Committee should not only seek the input of DfT, explaining the various calculations and scenarios for future aviation demand but it should also seek the input of the previous government chief scientific officer, Sir David King, to explain the calculations he gave to the ReSource conference in July. It is vital that the Transport Select Committee not only consider the implications of rising fuel prices upon the UK economy but consider the wider economic implications of the entire EU block losing ever larger revenue to purchase oil.

3.6: The Committee should also familiarise itself with the achievement associated with the WWF “1 in 5 challenge” that had huge success in reducing business flights. While it is the case that business leaders need face to face contact, to forge new partnerships and trade, once those relationships are in place, demand for flights can be reduced significantly by the use of new technology. It is vital that the Committee understands the pace with which super fast broadband and new communication technologies and tools will impact upon future business demand for flights. There is real potential here to reduce business flights, saving firms time and money.

3.7: Doubtless, when the DfT data is properly considered, the Transport Select Committee will conclude that the claims often made by the aviation industry of vast growth in demand are unrealistic and extremely optimistic.

3.8: Crucially, there is a very real possibility that existing capacity can meet demand by better regulation to ensure long haul business connections are served at Heathrow and Gatwick and short haul flights are moved from these airports to others with greater spare capacity. See Page 5 of this joint WWF and AEF paper: - http://www.aef.org.uk/uploads/WWF_AEF_airport_capacity_report_FINAL_July_2011_1.pdf

3.9: It is vital to understand that the very nature of the competition between airports means that the aviation sector does not always work in the national interest. It is a market that fails and requires intelligent regulation and direction. Government needs to regulate to ensure that the national interest to make good connections with emerging markets abroad is met. It cannot be right that BAA at Heathrow is permitted to expand short haul flights at a time when it is nearing capacity. While it might be good for BAA business to serve Alicante, other Mediterranean tourism destinations and run 81 flights per week to Manchester, this is not good for the UK. Short haul destinations must be moved to high speed rail and/or other airports.

4. Aviation: The economic imperative to head north.

4.1: If it were possible to make the industry carbon neutral then it follows that, baring concerns regarding noise upon residential areas, the economic benefits of aviation connections throughout the UK be considered. So far the media debate relating to aviation capacity has tended to focus upon the South East, but that fails to address the need to improve business links to the north of the country. Some who oppose expansion at Heathrow, and others who oppose expansion in the Thames Estuary have suggested alternatives such as expansion at Gatwick, Stanstead or , or a combination of airports into a “virtual”, high speed rail connected hub.

4.2: Yet the south east has overheated, it is too densely populated and the north has greater capacity to grow, attract business investment and business partnerships with the emerging/ growing economies. The UK needs foreign investors to make a greater focus upon the north of the country and southern , and so must encourage greater aviation capacity in the north (provided this can be done without increasing greenhouse gas emissions).

4.3: The Transport Select Committee should ensure that it has evidence from business interests outside of the south east. They too must be given a voice to express their best interests. Interests that might otherwise be drowned out by the short term interests of BAA at Heathrow.

5. No Thames Estuary Airport: Not now, not ever.

5.1: These are the main arguments against a Thames Estuary Airport: -

National Air Traffic Control “The very worst spot” to put an airport

5.2: When the CEO of NATS (Richard Deakin) was interviewed in connection with the Isle of Grain (Foster & Ptns) scheme he is said to have made the point that such an airport would cut across 4 of the 5 flight-paths of the other London airports. He is quoted as saying it would be “the very worst spot” to put an airport: - http://www.guardian.co.uk/uk/2012/apr/13/thames-hub-airport-worst-spot

5.3: When Jon Fuller put this point at the recent “Will it ever be time for T.E.A” debate hosted by Brian Donohoe MP in Parliament, a spokeswoman for NATS was present and was asked to comment. The lady was a little more cautious but advised those present that an airport in the estuary would require significant changes to the flight paths of a number of airports, possibly including Schiphol. She added that it might not necessarily require the closure of Heathrow but would require very significant analysis and change. She did not answer specifically the question about the impact upon smaller airports such as Southend and Manston but the implication was that these may have to close.

5.4: The Transport Select Committee is asked to establish from NATS whether the construction of an estuary airport would in fact serve to reduce capacity in the south east by reducing capacity at the other regional airports.

EU Habitats Directive: The Birds

5.5: Around 350,000 migratory birds use the Estuary every year. The UK has both national and international obligations to ensure their protection and the larger birds pose a significant threat to aircraft.

5.6: Evidence given by Paul Outhwaite of RSPB at the “Will it ever be time for T.E.A” debate in Parliament showed that: -

• Flying from an estuary airport would be 12 times more dangerous than flying from any other UK airport (Source: International Bird Strike Committee); • The Thames Estuary provides a unique habitat of fresh warm water from rivers and cold north sea salt water. This unique habitat cannot be recreated elsewhere in the UK nor, probably, anywhere else in the EU; • The Foster & Ptns scheme involves destroying 20 km² of tidal habitat and it is suggested that this be compensated by building a 60 km² zone off the east coast of the Dengie peninsular in Essex – but this cannot replace the same habitat; • The EU Habitats Directive stipulates that for any scheme to proceed, the habitat must be compensated for elsewhere (which the scheme cannot do); and • The EU Habitats Directive requires that any such scheme can only be carried out if it is genuinely in the overriding national interest and there are no other alternatives - there are other alternatives, they may be unpalatable but there are other alternatives.

5.7: There were very good reasons why plans for a Maplin airport and another scheme at Cliffe were rejected. It is a waste of public money to have to go through the entire exercise again repeating these “killer arguments” against any estuary airport scheme.

Medway Council infrastructure/plans

5.8: From two presentations given by Robin Cooper of Medway Council the following crucial issues have emerged: -

• The Medway Council new housing allocation necessitates the construction of sufficient new homes on the Isle of Grain to increase the population from 20,000 to 40,000 people. If an estuary airport scheme is permitted this will double the number of homes that will have to be demolished; • The closure of Heathrow would necessitate moving around 75,000 directly employed staff and perhaps another 41,000 people employed in ancillary jobs, from the west of London to north Kent and possibly south Essex. Never before in peace time history have local authorities been asked to cope with such mass migration of population. The cost and other infrastructure implications are almost incomprehensible; • Medway Council challenges the cost of the Foster scheme, claiming that it would cost at least £72 billion (a significant proportion of the Foster error is attributed to the failure to properly cost the scale of compensation that would have to be paid in connection with the closure of Heathrow); • If just one new runway and one new terminal at Heathrow is set to cost £9.6 billion the cost of an estuary airport and associated infrastructure will clearly be far greater than indicated by Foster. • The Foster scheme has not costed the need to move the Isle of Grain gas terminal – 20% of UK gas supplies are now brought ashore there; and • The private sector will see an estuary airport scheme as posing too great a risk and will not invest; especially given the fact that the aviation industry does not want to move from Heathrow (in a survey, 86% of airlines indicated they want to stay at Heathrow).

SS Richard Montgomery

5.9: There is no agreed method for dealing with the threat of the 1,400 tonnes of unexploded WWII munitions, but there is common agreement that a threat this great cannot be left unattended at the end of a busy new airport runway. Media reports have suggested that if the materials were to explode, as a result of work associated with the construction of a new airport, the blast would cause very significant damage to property either side of the estuary, including a wave of between 4 and 16 feet: - http://en.wikipedia.org/wiki/SS_Richard_Montgomery

South Essex Tourism

5.10: The Essex Chamber of Commerce and all but one Essex MP oppose an estuary airport. There are many reasons behind this but one significant factor is the huge detrimental impact an estuary airport would have upon those living in south Essex and the Southend tourism industry. Very few people want to holiday or day trip to look at an airport. And that would be the spectre people would face if visiting south east Essex. The Transport Select Committee is asked to ensure it has properly costed both the adverse economic impact upon tourism and the adverse impact upon property prices in south Essex and north Kent.

Erosion and impact upon DP World (London Gateway port).

5.11: The dredging of the channels associated with DP World are already causing unexpected erosion from south Essex shores. What is becoming clear is that it might be impossible to predict the impact of major new construction projects upon tides and erosion within the Thames Estuary. It is absolutely vital that no estuary airport is constructed unless the impacts upon the newly dredged channels that service DP World are fully understood.

6. Conclusion

6.1: The arguments set out here show the enormous strength of the case against aviation expansion and against the construction of an airport within the Thames Estuary. The Transport Select Committee is urged to not only heed these but examine critically whether the case being argued by the other side represents nothing more than a ruse to serve the business interests of BAA at Heathrow. The business interests of BAA at Heathrow are not the same as the national security, humanitarian and economic interests of the United Kingdom.

4 October 2012 Written evidence from Gatwick Area Conservation Campaign (AS 08)

1. GACC is the main environmental body concerned with Gatwick. Founded in 1968, we have as members nearly 100 Borough, District and Parish Councils and environmental groups covering about a twenty miles radius from the airport.

2. This response has been approved by the GACC Committee.

3. In the interests of brevity we answer some but not all the questions set by the Committee. In several instances we suggest that the Select Committee might wish to seek information from government departments. Please be assured that this is not an impertinent attempt to tell the Committee how to run their inquiry: merely a desire to establish factual information that can help forward the debate on aviation policy.

1.b. What are the benefits of aviation to the UK economy?

4. The benefits are regularly exaggerated by the lobbyists for the aviation industry, and the DfT are too inclined to accept biased statistics uncritically. In particular -

• the figures for economic output are misleading because they do not include depreciation, eg the need to replace old aircraft. We suggest that the Select Committee may wish to ask DfT to produce statistics for the net value added by the air transport industry, after depreciation.

• The number said to be employed in air transport has fallen from 200,000 in the 2003 Air Transport White Paper to 120,000 in the Draft Aviation Policy Framework (paragraph 2.2). The industry and DfT have recently attempted to confuse this fact by using figures which include aerospace.

• It is poor statistical practice to include figures for indirect and induced employment. Any industry could exaggerate its own importance in this way.

• Claims for social benefit are suspect – similar claims could be made by any other industry. For example, road transport could claim very similar social benefits.

1 c. What is the impact of Air Passenger Duty on the aviation industry?

5. The impact is very much less than if the industry had to pay tax on aviation fuel and if air tickets were subject to VAT. We suggest that the Select Committee may wish to ask the DfT (or the Treasury) for an estimate of the benefit received by the aviation industry from the absence of fuel tax and VAT.

6. If any witnesses suggest that APD should be reduced, the Select Committee may wish to ask them what taxes they would increase instead, or what public services should be cut.

7. The demand for air travel, and hence the requirement for more airport capacity, is artificially inflated by the lack of fuel tax and VAT, only partially compensated by APD. The Select Committee may wish to ask the DfT to run their computer model

to provide an estimate of what the demand for air travel would be in 2030 if by then international agreement has been reached to tax aviation fuel at the same rate as petrol for motor vehicles in the UK, and if the EU had reached agreement to impose, in lieu of VAT, a 20% ticket tax on all flights departing from EU airports.

3 a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

8. Noise is still a serious problem at Gatwick. Complaints are received regularly from people living up to 20 miles from the airport. For instance in September 2012 a lady wrote to us from near Tunbridge Wells, 19 miles from Gatwick to say:

“When I bought my house I was unaware that it was on a plane flight path until of course it was too late - I'd moved in. I've been here 3 years now. .... I find the plane noise from arrivals in this area extremely disturbing. For example, last week I woke from a dream where I was being attacked by bees, only to find it was a low flying aircraft outside making the noise, lights blazing, at 4am. I sleep with earplugs. I have double glazing and my windows were closed. I always sleep with my windows closed at night, even in summer when its sometimes hot and stuffy in my bedroom because of the racket outside. Summer is the worse time for the planes, and from late afternoon onwards they are less than 2 minutes apart coming thick and fast.

“Aeroplanes ... turn with a heavy screeching and droning right over my back garden, which (laughably) is supposed to be within an 'area of outstanding natural beauty'. ... For example, last Sunday (9th September), my family and I wanted to make the most of what is probably going to be the last really sunny weekend by sitting in the garden to eat a meal. This was at 5:30pm and we could barely hear ourselves talking from the plane noise.... Our garden is no sanctuary by day and nor by night...” 9. It is intolerable that this degree of misery should be caused by the aviation industry.

10. GACC welcomes the statement in the Draft Aviation Policy Framework that ‘our overall objective is to aim to limit and reduce the number of people in the UK significantly affected by aircraft noise.’ But this needs a proviso: to concentrate flight paths may reduce the number of people affected but would be undesirable if it were to cause extreme misery to a few. GACC has welcomed several of the minor measures to reduce noise, as set out in the Draft Aviation Policy Framework, but much tougher action is needed.

11. The Select Committee may like to recommend that no planning applications for airport expansion should be approved if they do not comply with the Government objective quoted above.

4. Do we need a step-change in UK aviation capacity? Why?

12. The forecasts produced by DfT have consistently been too high. In the 2003 White Paper, demand was forecast to reach 500 million in 2030. That figure has already been reduced to 335 million in the 2011 forecasts.1

13. The 2011 forecasts show that the three main London airports will not be full until 2030. But these forecasts may also be too high. After the fiasco the Select Committee will wish to examine carefully the assumptions on which the 2011 forecasts are based. In particular the assumption that oil prices will be no higher than $90 per barrel in 2030.

12. It may also be unrealistic to assume that there will be no increase in the taxation of air travel by 2030. If there is a major international disaster, the nations of the world may well decide to raise the necessary funds by imposing a world-wide tax on aviation fuel.

13. Climate change rules may rule out any step-change in aviation activity. The Climate Change Committee has recommended a 55% limit on the growth in flights by 2050. If there were to be a step-change in airport capacity in the South East (matched by an equivalent increase in the amount of air travel), that would imply a ban on any expansion of all regional airports,

14. A new runway at Gatwick could not provide the answer if a step-change in capacity were required:

a. A new runway could not legally be built until after 2019, and would therefore not help to provide jobs now.

b. The location of a new runway as shown in the latest Gatwick master plan (as Ltd admit) is comparatively close to the existing runway.2 As have commented, this would leave insufficient space for aircraft to manoeuvre or to use piers connected to a new terminal.3

c. All other runway locations have been examined many times in the past and have been repeatedly ruled out as impractical (because of a range of hills) or as causing unacceptable environmental and heritage damage.

d. Since there is hardly space for one new runway, there is no possibility of making Gatwick a four-runway airport to compete with Paris, Amsterdam or Frankfurt.

e. All previous attempts to run Gatwick as a subsidiary hub to Heathrow have failed. Details are set out in a GACC paper on hub airports.4

f. Public protest at Gatwick has been quiescent since 2003 because there has been no actual runway proposal. But if any serious proposal were to be made, opposition can be expected to be just as strong as at Heathrow or Stansted in recent years.

17. The idea of a high-speed train link between Gatwick and Heathrow has been described as unrealistic by the airport owners at both ends - BAA and Gatwick Airport Ltd. The idea is flawed because:

a. If the line followed the M25 it would not be straight and thus not high speed;

b. a straight high-speed train line, if over-ground, would cause unacceptable environmental damage. If underground it would involve unacceptable expense;

c. passengers would need to pass through immigration and customs at both ends; even if they were to be locked into the coaches, an airport hub with two runways at Heathrow and two at Gatwick is unlikely to prove attractive compared to four-runway hubs on the continent.

d. claims that the journey would only take 15 minutes ignore the time needed to walk to the train station and wait for the next train;

e. as shown above, there is insufficient space for a new runway at Gatwick.

5 October 2012

1 http://assets.dft.gov.uk/publications/uk-aviation-forecasts-2011/uk-aviation-forecasts.pdf 2 Gatwick master plan July 2012 . Paragraph 10.3.6 3 Response to consultation on the Future of Air Transport. 2003. 4 www.gacc.org.uk/aviation-policy Hub airports

Written evidence from Dr Patrick Hogan (AS 09)

I would ask the committee to make the calculation as to whether any expansion at all would be required given the following scenario:-

Almost all domestic flights to be scrapped as we have a perfectly good rail system.

Most near and middle continent flights to be scrapped and replaced by the Eurostar and onward rail systems.

The capacity thus saved would be enough to enable the additional long haul flights to Chinese cities etc that business feels are needed and would avoid the negatives of increased noise, carbon emissions and expansion costs.

5 October 2012

Written evidence from HACAN (AS 10)

1. The objective of Government policy on aviation

1.1 The objective should be the development of an aviation policy which benefits the economy while respecting environmental limits.

2. The economic benefits of aviation

2.1 International aviation brings benefits to the economy in terms of international connectivity, trade, investment and employment.

2.2 However, the situation is complex. The growth in short-haul budget flights has reduced those benefits. There is a direct correlation between the growth in budget flights and the tourism deficit (the difference between what visitors spend in this country and what Britons spend abroad). The tourism deficit reached a peak of £20 billion in 2008 but fell back in 2010 to £14 billion. We are sceptical about the “huge” contribution which ABTA claims travellers flying abroad make to the economy through their spending in this country associated with the trip. The UK Tourism Satellite Account is cautions about this spending: “One area where data remains poor is in assessing spend by UK residents travelling abroad before they leave the country…….” In our view, therefore, the fact that there is a substantial tourism deficit has not been disproved.

2.3 The economic benefits of aviation are also reduced though the costs it imposes on society and the environment. The economic costs of the noise, air and the climate change gases aviation produces need to be subtracted from its economic benefits.

2.4 The Exchequer also looses out through the tax-free fuel the airlines enjoy and their VAT zero-rated. It has been calculated that, if VAT was paid and fuel was taxed at the same rate as petrol in cars, the Exchequer would receive around £10.5 billion a year. We understand the argument made by the industry that it pays for a lot of its own infrastructure. We also appreciate that and rail travel enjoy some tax breaks. The only point we want to make here is that, when calculating the true contribution of aviation to the economy, the tax-breaks it enjoys need to be factored in.

2.5 Air Passenger Duty raised £2.6 billion for public finances in 2011/12 and this is planned to increase to £3.9 billion by 2015/16. APD would, however, need to rise to four times its current level to offset the exemption from fuel duty and VAT.

2.6 It needs to be stated clearly that APD is not an environmental tax. It was introduced by Ken Clarke, the then Chancellor of the Exchequer, because he considered the aviation industry to be lightly taxed compared to other sectors, largely arising from its exemption from fuel duty and VAT. This means that APD should be paid in addition to any environmental taxes. APD is not a substitute for the EU Emissions Trading Scheme. They serve different puposes.

2.7 The levels of APD paid by most passengers must not be exaggerated. In 2010/11, the latest year for which figures are available, 77% of passengers paid APD at the short haul economy rate (Band A): £13 for a round trip.

2.8 And the UK is not alone in having a ticket tax. Spain has recently increased the amount of its departure tax it charges from €5 to €9. The tax is charged to the . Germany imposes an ecological departure tax, in 3 bands, from €8, €25 and €45 for the longest trips. Austria has two bands, of €8 for short haul and €40 for long haul. In , air passengers pay a Passenger Solidarity tax, (around €5 - €6) which goes to Unitaid, which buys HIV/AIDS, malaria and TB drugs.

2.9 If APD was to be abolished, the Exchequer would be looking to recover that tax by imposing higher taxes elsewhere.

3. The importance of international connectivity to the economy

Current connectivity 3.1 The starting point needs to be a clear recognition that London is already the best- connected city in Europe. Its excellent air transport links make it the top city in Europe to do business, according to global property consultants Cushman & Wakefield. Their 2011 survey of business-friendly cities placed London in first place. It retained its position for the 22nd year in a row. The influential survey, The European Cities Monitor 2011 (1), based on interviews with the bosses from Europe’s 500 largest firms, found that London had the best external transport links, internal transport and telecommunications of any European city. (It scores much more modestly in terms of noise, air pollution, traffic congestion and general quality of life).

Cushman & Wakefield commented:

“London is still ranked – by some distance from its closest competitors – as the leading city in which to do business. Paris and Frankfurt remain in second and third place respectively, although the gap between the two has widened.”

3.2 The findings of the Cushman & Wakefield study were reinforced by International Air Connectivity for Business (2), published last year by WWF and AirportWatch which found Heathrow to be ‘in a class of its own’ as far as business links are concerned. It has around 990 departure flights each week to the world’s key business centres, that is more than its two closest rivals, (484) and Frankfurt (450), combined.

3.3 And Heathrow must be looked at in the context of all London’s airports. London with 6 airports and 7 runways, has more runways than any of its European rivals, except Paris: Paris is served by 3 airports and 8 runways; Amsterdam by 1 airport and 6 runways; Frankfurt by 2 airports and 5 runways; and Madrid by 1 airport and 4 runways. London has more flights to key business destinations in every continent, except South America, than its European rivals. 3.3 It is also important to stress that Heathrow is not full. As far as runways are concerned it is operating at 99% capacity, but it has the terminal capacity to take another 20 million passengers a year.

3.4 It is equally important to scotch the myth about Heathrow capacity being the main deterrent to Chinese firms locating to the UK. The cost and difficulty of getting a visa is a key deterrent. Adam Marshall, of the British of Commerce:

“China is a fast-growing trading partner for Britain, so we need to do our utmost to welcome both tourists and business visitors from the world’s largest country. Unfortunately, businesses trading with Chinese firms report that the process of securing UK visas is both expensive and cumbersome. If individual tourists and Chinese companies can secure more flexible Schengen visas at a lower cost, the sad reality is that many companies here in Britain could lose substantial business”.

3.4 And of course there is a bilateral agreement between the UK and mainland China which limits the number of flights between the two countries to 62 a week.

Future connectivity 3.5 What of the future? The Department for Transport has concluded that the UK will not need extra airport capacity until nearly 2030. So, it is not urgent. However, as new runways (if they are needed) take time, it is prudent to start considering future capacity needs now.

3.6 Before any decision is taken on future capacity needs, the country needs to make as accurate an assessment as it can about future demand. This needs to include an assessment of future oil prices, the impact of a growing population, demand from the emerging economies, future levels of taxation, the potential of modal shift to rail, the future use of video-conferencing and the impact of any climate change and noise targets. Only when this is done is the UK in a position to assess what capacity may be required and only then to look at where that capacity might be found.

4. Community and environmental constraints on capacity

4.1 In order to protect communities and the planet there need to be constraints on capacity.

4.2 The Committee on Climate Change has advised that flights should not grow by more than 60% if the UK is to meet its climate change targets. This allows for improvements in technology and in operational practices. That should be a firm limit.

4.3 There also need to be noise limits. Ideally they should be included in an EU Directive along the lines of the Air Quality Directive and should be based on the limits recommended by the World Health Organisation. However, it is unlikely that is going to happen. The most effective noise limit is a cap on the number of planes using an airport. It is the sheer growth in flight numbers which has been the cause of so much annoyance and concern in local communities over the last 15 years.

4.4 The air pollution legal limits outlined in the Air Quality Directives need to be respected 5. Heathrow

5.1 The Government has that its opposition to Heathrow expansion “was, and continues to be, determined in large part by a concern about the scale of the noise impacts at the airport”. We believe this is correct. The sheer numbers of people impacted by noise from Heathrow – over 720,000, 28% of all people disturbed by aircraft in Europe – should, in itself, rule out any further expansion of the airport.

5.2 But expansion at Heathrow would also run into air quality problems. At present there are small areas close to Heathrow which have air pollution levels in excess of the EU limits. Even with the introduction of cleaner planes, it is very hard to see how an increase from 476,000 flights to 560,000 with mixed-mode, far less the 702,000 if a third runway was built, could not lead to regular exceedences of the EU legal limits.

5.3 Even with the inclusion of CO2 emissions in the EU Emissions Trading Scheme, if a third runway was built at Heathrow, it will rule out expansion anywhere else if the UK is to stay within the limits recommended by the Committee on Climate Change.

6. What would be the implications of failing to provide additional capacity?

6.1 It cannot be assumed that, if no more airport capacity is built in London and the South-East, there will be a reduction in flight numbers to the key business destinations of the world. The market will determine which destinations are served. The likely scenario is that airlines using a constrained Heathrow will concentrate their resources on their most profitable, inter-continental routes which attract a significant number of business passengers. Many of the short-haul flights, particularly those primarily serving the leisure market, will be squeezed out (and are likely to relocate to some of the other London airports where there is spare capacity). The airlines will ditch short- haul European destinations if it is more profitable to serve Chinese cities. The trend will be towards the use of larger aircraft, each carrying more passengers, utilizing the spare terminal capacity at Heathrow.

6.2 It has been argued that fewer short-haul flights at Heathrow would reduce its ability to function as an effective hub. While its hub status has been important to business, there is evidence to suggest that that importance has been overstated. We can find no hard evidence that the London economy will lose out if Heathrow does not expand as a hub. The reason for this is London’s importance as a destination to business people. This was emphasized in Transport Statistics Great Britain 2011 (3), from the Department for Transport which showed that, worldwide, Heathrow had the largest number of terminating passengers on international flights in 2010. An earlier report from the Dutch economists CE Delft made a similar point. In The economics of Heathrow expansion (4) they argued that a third runway was not required at Heathrow because, for business as a whole, other factors, such as the vibrancy of London’s financial centre, were of greater importance than the size of Heathrow. This is not to argue that Heathrow’s hub status brings no economic advantages; simply that the links between London’s economic performance and the size of its hub airport is complex and requires further assessment.

6.3 It could be that further deregulation of the aviation industry is of more importance to UK plc than the provision of extra capacity. At present, for example, the number of flights between the UK and China is limited to 62 a week by a bi-lateral agreement. The impact of a more deregulated market requires further study. That could include an assessment of the way restrictive practices over slots at Heathrow is preventing a more flexible use of the existing capacity.

6.4 Much has been made of the fact that, without airport expansion, business people will not be able to fly directly to London from many of the emerging cities in Asia and South America and so businesses locate in or relocate to European cities which may provide such direct flights. There are three points to make.

First, as stated above, it is likely that, in a constrained scenario, airlines using UK airports will respond to market forces and serve more destinations in the emerging economies, possibly at the expense of short-haul European destinations.

Secondly, it is unrealistic to think other European cities will ever have more than a limited number of flights to second-tier cities in other continents. Some interchange seems inevitable. It would take place at the hub airports which will develop in Asia, Africa and South America or at major new airports like Dubai which are specifically designed to facilitate an easy and quick interchange for inter-continental passengers. They can provide the links between Europe and a whole range of cities in other continents. As such they can and will enhance business connectivity. They should be seen as an opportunity, rather than a threat.

Thirdly, public opposition to new runways and new airports in Western Europe has become, and is likely to remain, a powerful obstacle to expansion. Plans for a third runway at Heathrow had to be scrapped. A fourth runway at Frankfurt was only built in the teeth of massive protests, including the sight of thousands of people occupying the nearby woods. And protests have continued since it opened in October 2011. Every Monday evening up to 5,000 residents occupy the terminal in protest against the impact of the new flight paths. In Munich earlier this year residents blocked a third runway by voting against it in a city-wide referendum. Plans for Nantes International Airport have faced long-term opposition, including a 28 day hunger strike by protesters. The safest assumption is that airport capacity in Western Europe will remain much as it is now over the coming decades.

7. Conclusion

7.1 Any aviation policy needs to operate within an environmental framework set by Government. That framework needs to take account of residents’ health and quality of life as well as the future of the planet. It is within these parameters that future demand and capacity must be considered.

7.2 Good connectivity is good for business. Improved connectivity to the emerging markets of the world is important. Many short-haul leisure flights contribute little to the economy and, indeed, because of the tourist deficit may be a drain on the economy. Government has the option of using fiscal measures to restrain short-haul flights to create extra capacity for more long-haul flights from the emerging economies if the environment framework it sets requires choices to be made.

5 October 2012

References:

(1).https://www.cushwake.com/cwglobal/docviewer/2120_ECM_2011__FINAL_10O ct.pdf?id=c50500003p&repositoryKey=CoreRe

(2).http://www.aef.org.uk/downloads/Business_Connectivity_Report_August2011.pdf

(3).http://assets.dft.gov.uk/statistics/releases/transport-statistics-great-britain- 2011/tsgb-2011-complete.pdf

(4). http://www.cedelft.eu/publicatie/the_economics_of_heathrow_expansion/817

Written evidence from the Royal Aeronautical Society (AS 11)

Summary

• The objectives of policy should be to promote sustainable operations to the benefit of the United Kingdom as a whole: a simple statement, but inevitably complicated to implement. • HMG has an opportunity to make a positive impact on the future of UK civil aviation. There are emerging technological and managerial solutions to pressing environmental challenges that should be encouraged to improve the sustainability of civil aviation and to reduce its overall environmental impact locally, nationally and internationally. • There is an urgent need for a satisfactory and timely solution to the airport capacity problem in the SE of England that will require compromise in the national interest by all concerned. • Air transport connections – both international and domestic are vital to the UK economy and to bolster political influence abroad. • Aviation generates a similar range of direct and quantifiable benefits in terms of employment and foreign earnings, as well as the more qualitative returns associated with “connectivity”. • There is little, if any, resilience at Heathrow which is essentially operating at its maximum slot capacity. The development of regional airports and improved terrestrial links should help, but this will be limited. • Given improvements in aircraft performance, and under stringent conditions, a third runway at Heathrow would help significantly to ease capacity problems. • Improvements in technology and more effective air traffic management should enable the aviation to meet the 2050 carbon targets. • In principle, there is a need for a new London hub airport; but proposed solutions may be too late, and may not reflect national requirements.

Introduction

1. The Royal Aeronautical Society is the learned society for the aerospace and aviation community. It has over 17,000 members world-wide. Its activities are supported by a number of Specialist Groups, including Air Transport, Space and General Aviation and Greener-by-Design, a group of senior academics, industrialists and aviators concerned to promote environmentally sustainable aviation.

Objectives of Government aviation policy

2. The objectives of policy should be to promote sustainable civil aviation operations to the benefit of the United Kingdom as a whole: a simple statement, but inevitably complicated to implement.

3. The current state of UK civil aviation is the product of decisions and failures to act strategically over several decades. The current impasse in resolving the airport capacity crisis in the SE of England, the failure to overcome Heathrow’s evident frailties as a national hub airport stems from a failure to develop a more appropriate hub airport in the late 1960s and early 1970s.

4. The UK is a relatively “open” aviation environment in terms of inward and outward investment in infrastructure and airline competition. This is not of itself a weakness, but

concern should be expressed if UK national priories and interests are vulnerable and negatively affected by investment decisions made offshore. Similarly

5. HMG has an opportunity to make a positive impact on the future of UK civil aviation. There are emerging technological and managerial solutions to pressing environmental challenges that should be encouraged to improve the sustainability of civil aviation and to reduce its overall environmental impact locally, nationally and internationally. Measures can be taken to encourage the expansion of capacity at UK regional airports that will ease the pressure on the SE of England, but more important act to stimulate regional economies.

6. However, it should be stated from the outset, there is no easy solution to the crisis in airport capacity affecting the SE of England. This has become one of the most intractable public policy issues of the decade. In the final analysis, a satisficing rather than an optimal strategy may be the only cost-effective and publically acceptable approach. But there is an urgent need for a satisfactory and timely solution that will require compromise in the national interest by all concerned.

The importance of connectivity

7. Air transport connections – both international and domestic are vital to the UK economy and help to promote both trade and inward investment. There is also a political dimension where connectively may be interpreted as implying diplomatic importance to HMG.

8. At a simplistic level, and despite the considerable advances made in the speed and economy of land and sea connections, the multi-island geography of the UK underlines the importance of air connections. Improvements in road and especially faster rail connectivity has improved domestic connectivity, but the growing congestion of the former and the price of the latter, ensures a continuing importance attached to accessing easily the regional airports and the national hub airports at Heathrow and Gatwick.

9. A hub airport will maintain the UK’s connectivity to its main markets. It will also provide economic benefits to the airport operator and to UK airlines. It encourages the interchange between routes either by a single carrier or alliance, as well as access to other routes served by other airlines. The hub concept is enhanced by the fact that many long haul services are only feasible with traffic provided by feeder routes. While transit and transfer passengers are less important to the UK economy directly, indirectly they represent visible sign of the vitality of an airport as a hub or transfer point and help to maintain the viability of services in general.

10. A hub facilitates access directly by providing a greater range of destinations and indirectly by ensuring that most other destinations are accessible by a single overseas connection. An international hub also supports a national airline industry by affording local carriers a strategic position that underpins competitiveness and their ability to lead rather than to follow developments in the international airline industry.

11. Transfer via a foreign rather than a UK hub is likely to involve longer flight times and a greater environmental impact. It will take longer and will be perceived as more difficult, especially for non EU citizens, who may face additional visa issues. This could seriously discourage inward investors and tourists to the UK regions.

12. However, it must be emphasised that network connections are an airline responsibility. Few routes are now maintained for social reasons, although this is more common in other parts

of the world. However, it is in the UK national interest to maintain and to develop strong connectivity with economically important regions, especially in the emerging economies. While airlines will reflect the changing patterns of demand and try to anticipate growth through opening new routes or changing priorities for services, HMG should ensure that it does not place unnecessary barriers to growth and where it has power to influence events, such as negotiating access rights, it should be ready to encourage new links or to expand existing services.

The benefits of aviation to the UK economy

13. There are widespread benefits to the UK from a strong and healthy aviation sector. In 2009, aviation contributed around £18 billion in UK output and represented about two per cent of gross value added. The sector currently employs over 250,000 workers directly and supports an estimated 250,000 additional jobs through the supply .

14. Aviation generates a similar range of direct and quantifiable benefits in terms of employment and foreign earnings, as well as the more qualitative returns associated with “connectivity”. Studies of the location choices of high value activities in finance, corporate head quarters and R&D refer to the importance of good international transport links, which for the UK still implies air transport for most of Western European destinations and of course for global access. As the disruption caused by the 2010 volcanic ash cloud demonstrated modern production depends on a continual flow of components and supplies. The interests of both dedicated air freight operators and freight carried by scheduled airlines should be considered as part of a national air transport strategy. These are clearly not sufficient conditions to generate economic and social return, but they are necessary.

15. In terms of airport development, current Government policy will mean that there is likely to be stronger growth at UK regional airports, particularly those with good surface access links. Whilst this will undoubtedly benefit those living in the regions, there will be a significant level of unmet demand for air travel to and from London and the South East which will have important consequences for economic growth both in London and the South East and more generally for the UK as a whole.

Making the best use of existing aviation capacity

16. There is little, if any, resilience at Heathrow which is essentially operating at its maximum slot capacity. As a major international hub, it requires sufficient slot capacity for sufficient point to point and feeder services in order for it to compete with other European hubs. Some increase in Heathrow’s slot capacity could be achieved through mixed mode operations. Further, but limited, increases in slot capacity at Heathrow and Gatwick should be possible through improved ATM procedures. Passenger capacity will also be increased through the use of larger aircraft.

17. However, it is abundantly clear there is no spare capacity at Heathrow for large numbers of additional flights, forcing the airlines to go either to other less attractive airports in the UK, or abroad. It is likely many airlines will prefer this option, causing the UK to miss out on improved air transport links with these developing countries, and to miss out on the associated tourism, business and jobs

18. There are a number of smaller airports and ex-MOD airfields that could be used for commercial passenger and freight services, although clearly there will be environmental and

local constraints. Whilst demand management measures are not generally desirable, it is possible that differential taxes may be used to promote the use of certain airports.

The role of other UK airports

19. Airports outside of the SE region already play an important role in increasing overall national capacity. Under current DfT traffic projections, by 2050 Manchester could be handling as many ATMs as Heathrow does at present, suggesting that resilience could be an issue unless further runway capacity is provided. In principle other UK airports could absorb some of the demand pressures on the south-east airport network. However, capacity does not alone dictate attraction, and the bulk of UK demand for air travel is in the SE of England. Airline business models again shape access. A number of new services have been launched successfully from provincial airports, usually to serve other European or global hubs. Direct services on thinner routes have proven less resilient. Even if acceptable to HMG, there is little scope under EU rules for financial incentives to encourage provincial services.

20. However, there is currently surplus runway capacity in the UK. Manchester is the only other two-runway airport other than Heathrow. Birmingham is also increasing the length of its single runway and upgrading terminal facilities. Many of the provincial airports are well served by land access, including in some cases fast inter-city services. However, growth in demand has been less than in the southeast, and most regional airports suffered more during the last down turn than Heathrow or Gatwick. The development of a “limited hub” airport will in the final analysis depend on airline strategies and their assessment of revenue earning potential. To date much of the growth in new services has been by airlines seeking to feed their own home-hub airports. This, in the scheme of things might ease the impact of future growth on the southeast, but it may not be to the benefit of UK based airlines.

21. Some demand in the south-east may therefore be met by the regional airports, although this is likely to be limited. New point to point services may emerge at the regional airports, thereby reducing the requirement for those passengers based in the regions to travel via the main London/SE airports. Similarly, improved surface access (such as the proposed HS2 rail link to ) could enable some London/SE based passengers to travel from a regional airport. Absolute capacity constraints on the most popular southeast airports might force a redistribution of traffic through natural market forces and passenger satisfaction. However, this is most likely to affect the more northerly London airports that might lose traffic to airports in the Midlands and perhaps Manchester.

22. There is a case for a limited number of protected slots for feeder services into Heathrow and possibly Gatwick – particularly from poorly served regions including the South West and Scotland. Several studies have demonstrated the value of regional connectivity to promote inward investment.

23. But Heathrow is the national global hub, and despite high costs and user charges, the major airlines have naturally sought to exploit its connectivity. Gatwick and Stansted have tended to attract the low cost carriers (LCCs) and charter business. The regionals have had some success in building local traffic, but their place in the national air transport economy will always be second place to London and to Heathrow in particular by commercial natural selection.

The impact of fast rail

24. In the case of short haul traffic, there will be inevitably a continuing shift towards rail travel, particularly as high speed rail networks develop. Fast rail has an economic advantage for journeys of less than 400 kilometres and has already had an impact on UK domestic air travel. But there are limits as surface access times will not be reduced for many transfer passengers. Furthermore, a combined rail-air (rather than air-air) journey may be less convenient in terms of baggage, and ticketing. Competition between air and rail should not be distorted by public subsidisation.

25. Improving the direct links between airports is of value in its own right as a means of improving connectivity and reducing the environmental impact of air travel. Strategically, this implies linking major airports to a fast rail system (which need not be HS2, but existing or proposed electrified fast long distance services).

The constraints on increasing UK aviation capacity

26. Increasing aviation costs from rising fuel prices, environmental charges and other taxes will increase air fares in the medium to long term and will provide some constraint on demand. It is likely that the gap between the legacy airlines and the LCCs will reduce as both seek to exploit each other’s markets.

27. Clearly, the immediate impact of aviation on communities is a constraint on capacity. Noise is a particularly vexing issue. It is preferable to minimise the total number of people affected by aircraft noise. This can be achieved by careful routing and technical improvements; although routing decisions designed to lessen the average impact of noise may increase noise for some.

28. Noise Action Plans have a key role in predicting and demonstrating an actual reduction in noise levels. To give local communities confidence that action is being taken to reduce the noise impact around airports, there is a need to demonstrate hard results and Government should introduce measures to incentivise airports to deliver against their statements of intent in such action plans.

EU aviation policies

29. Given the role of the EU in economic and environmental regulation, there are important links between national and European aviation policies and initiatives. In particular, there is a critical relationship between strategies designed to improve the management of European airspace. As demonstrated in the EU’s SESAR Programme, there will be some capacity improvement resulting from integrated network planning, collaborative decision-making and improved ATM procedures.

30. Europe’s investment in advanced air traffic management technologies, such as navigation satellites, is critical if the easing of congestion is to be achieved. In the past, the DfT has sometimes been unenthusiastic about European investment in such systems. The Society urges the DfT to recognise that these investments are for the benefit of the aviation community and will make a major contribution to reducing its carbon footprint.

31. The introduction of the EU ETS scheme should help to cap the impact of aviation emissions, although opposition from non-EU carrier and governments is causing considerable uncertainty in the airline and aerospace industries. However, HMG should continue to press for the development of global emissions standards through ICAO.

Sustainable aviation

32. Pollution and noise in the vicinity of airports are currently subject to regulation, both internationally and in some cases locally. These impacts are being progressively reduced, despite traffic growth, through the replacement of older aircraft by newer, cleaner and

quieter types. Advances in technology – including low NOX combustors and higher engines – will reduce these impacts further. Improvements will be captured in more stringent regulation. The possible introduction of contra-rotating propellers on the next

generation of short-medium-haul aircraft, in order to minimise fuel burn and CO2 emission, would result in aircraft noisier than equivalent powered aircraft but still comfortably within the current noise regulations. Stricter local regulation is unlikely to constrain traffic growth, although local political pressures may in some cases limit traffic growth at a particular location, diverting some of that growth to other airports.

33. From an environmental standpoint, there is a case for regulation to reduce fuel burn and

CO2 emissions. Higher fuel prices should play a significant part in reducing CO2 emissions.

New technological concepts could substantially reduce CO2 emissions. But the degree to which radical design improvements will be introduced into the world fleet will depend on airline business models and the trade-off between the cost of new equipment and the long term savings and improvement in emissions. Regulation may be required in order fully to exploit the potential full of these advances in order to increase the relative cost of operating conventional aircraft. The timescale for action is short. If the intention to regulate, at least at a European level, has not been declared by the time the key design decisions are made on Airbus A320 and successors, an opportunity to influence the climate impact of this generation of aircraft will have been lost. But given likely technological improvements

and operating procedures, a 60% increase in air traffic is possible whilst still achieving CO2 emissions 2050 targets.

The need for a step change in UK aviation capacity

34. Unless further capacity is provided at Heathrow, the UK will lose out in terms of key transfer traffic markets and in providing a wider range of point to point destinations. Heathrow is also the UK’s high value airport: 34% of its passengers are travelling on business compared to 18% at the other London and provincial airports. This is also shown by the high proportion of long haul tourist using Heathrow and the fact that 60% of UK freight comes in via scheduled airlines.

35. This gets to the heart of the connectivity question and the virtuous circle between airports and economic activity. And just as easily, airports can enter a cycle of decline if they fail to meet new demand and to respond to changing international economic geography. Heathrow is not able sufficiently to provide direct access to the newly emerging economic power houses in Asia and Latin America. To some extent this reflects some commercial realities, and that UK airports operate in a free market – if subject to some crucial regulative constraints. There is little incentive for airlines voluntarily to give up currently lucrative routes such as North Atlantic services to the US and the Caribbean in favour of speculative, developmental routes to provincial Chinese cities.

The need for a new hub airport

36. Heathrow seemed a reasonable place to build an international airport back in the 1940s; but proximity to central London, its westerly location, and urban development (often drawn out towards Heathrow by the search for connectivity) with attendant local objections, has

increasingly stymied easy expansion. Even a new terminal (T5) took years to navigate the planning process.

37. The attractions of an all-new airport in the Thames Estuary have received much attention, if only to minimise the inevitable local objections to Heathrow and other airport expansion schemes to meet equally inevitable access issues, this implies that the new airport must be at the centre of a sophisticated terrestrial transport network, preferable linked to the putative high-speed railway system. This is essential if London (East) is realistically to serve as an environmentally sustainable national hub, because to be east of London is far less convenient for most potential travellers from the north or west of England. No one doubts either that its likely cost could exceed £40 billion.

38. Significantly, several of the major carriers have been very quiet about the opportunity costs of moving. And while west Londoners might object to Heathrow as a neighbour, there is also an awareness of how much it contributes to the local economy. BAA, owners of Heathrow would also have something to say about a competitor being developed with public money. Initial reaction from BAA has been to hope that any consultancy exercise might reconsider the third runway option. This, however, seems to have already been ruled out – a very odd way to approach cost benefit analysis. It is not clear whether the proponents of an Estuary airport envisage a gradual transfer of flights or the adoption of a “big bang” close and move approach. The latter would ease the air traffic issues associated with opening a new airport under Heathrow approach paths, as well as maintain vital connectivity. It would, on the other hand, pose the most challenging problem for easing economic disruption to West London and the Thames Valley

39. Indeed, it may be too late for any all-new airport to solve the current and medium term problem of London’s “connectivity crisis”. With a new airport at least a decade away – probably nearer two – the damage of lost or declining relative connectivity may already have been done. From this perspective, a less than optimal approach may be the most realistic way forward.

40. The noisiest of the current aircraft types operating on the two existing runways will be replaced by significantly quieter technology over the next ten years. A typical example of this is the Boeing 747 currently being replaced by the Airbus A380 and Boeing 787. It should be noted that much of this new technology has been designed and produced in this country.

41. The impact of noise from aircraft using a 3rd Runway will depend on the aircraft types using the runway and the approach pattern used. A short runway would limit the type of aircraft to the twin-engined small or medium-sized jets. Coupled with a steeper approach path and no night-time operations, the noise footprint from a 3rd Runway could be very much less than that experienced under the current runways. Some of the new capacity provided by a 3rd Runway could also reduce, if not eliminate, the queuing of arrival aircraft (known as stacking) with its attendant delays and emissions.

42. More immediate palliatives, such as mixed mode runway operation, and new approach patterns could help to ease stress on Heathrow’s capacity, but these would not create sufficient additional capability to meet rising demand. Improvements in ground based connectivity such as will also help, but the concept of a “virtual hub” linking all of London’s major airports has little credibility.

43. Whilst it is recognised that it is current Government policy that there should be no further runways at Heathrow, Gatwick or Stanstead, this constraint will severely impact how UK aviation will develop in the next 40 years. There is a strong argument for some airport development in London and the SE. Indeed it has been pointed out that an additional runway at Heathrow would produce a 10% increase in traffic levels by 2050, which would be well within the carbon targets for 2050 without compromising future regional airport development.

44. This points, albeit reluctantly, to further development at Heathrow, backed by similar expansion at Gatwick. This is not the ideal solution, and in many respects, a site to the North of London, which might include consideration of a substantial upgrade to Stansted, accessing the national motorway and existing fast rail network (or one capable of further modernisation) or the putative HS2, would be a more optimal national solution than one to the east of London. If London is to claim a status as a “national” global airport, consideration of future options must include consideration of national factors as a key element in resolving the issue.

9 October 2012

Written evidence from Mrs Caroline Tayler, Mrs Jane Vogt

and Mr Stuart McLachlan (AS 12)

The following submission for consideration by the Committee is in response to question 3a in the Terms of Reference. The aim is to draw the Committee’s attention to the unintended consequences of Government policy in relation to the impact of aircraft noise on rural communities

3a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

1. The Draft Aviation Policy Framework states ‘our overall objective is to aim to limit and reduce the number of people in the UK significantly affected by aircraft noise’.

2. The above intention might appear good, but in order to comply with the recommendation to reduce the number of people affected, airport operators are likely to preferentially route aircraft over villages and communities in rural areas with lower population density.

3. The resulting concentration of aircraft over fewer people means that these rural communities will have far higher levels of aircraft noise imposed on them than on urban communities.

4. Rural areas, particularly Areas of Outstanding Natural Beauty, have low levels of background noise making aircraft noise very intrusive. High ground compounds the problem, as arriving and departing aircraft are obviously closer, for example in the High Weald AONB and Hills AONB around Gatwick.

5. The concentration of aircraft noise over rural residents by arriving and departing aircraft following similar tracks causes great distress and despair. At times some residents endure low flying aircraft passing overhead every two minutes. There are also serious health implications associated with long term exposure to noise.

6. Many rural businesses, particularly those associated with tourism, depend on the tranquillity that is associated with the low population density in the countryside and especially within an AONB. The rural economy, particularly in an AONB where planning restrictions limit activities, is fragile and dependent on maintaining the tranquillity that attracts tourists if it is to prosper.

7. The above points demonstrate the damage that can be done to the well- being of rural communities and viability of rural businesses where high levels of noise are imposed by concentration of aircraft. Planning restrictions protect communities at ground level, but the same level of protection is not afforded to communities from disturbance over their heads.

8. Surrey Hills AONB facts, www.surreyhills.org. Designated in 1958 as a unique landscape in the UK. Over 600,000 visitors during 2009 (figures from the National Trust); the land is up to 1000 feet in elevation with many local businesses dependant on tourism particularly at weekends. On a given Sunday up to 15 take- off aircraft pass very close to the AONB between 6 and 7am. Also, over 1 million visitors go to the High Weald AONB www.highweald.org every year.

9. The Government’s overall objective to reduce the number of people affected is therefore not sufficiently robust nor properly thought out. By reducing the number of people affected, the levels of noise on those still affected would significantly increase and this is not acceptable.

10. Despite making the lives of some people a misery by concentrating aircraft movements over them, the Government would still be able to claim that it had succeeded in its objective and few would ask by what means this had been achieved.

11. The Government should therefore direct its efforts towards mitigating the effects of aircraft noise for everyone rather than being content with just reducing numbers of people affected. Concentrating aircraft over rural communities is not an acceptable solution to the problem of aircraft noise. Current Government policy does not sufficiently protect people living in the countryside from what can at times be continuous and overwhelming aircraft noise.

8 October 2012

Written evidence from Professor David Metz and Dr Anne Graham (AS 13)

David Metz, visiting professor, Centre for Transport Studies, University College London Anne Graham, Reader in Air Transport and Tourism, University of Westminster

Introduction

1. We offer some observations and analysis that bear upon the Committee’s inquiry.

2. It is noteworthy that the Department for Transport’s (DfT) Draft Aviation Policy Framework of July 2012 omits projections of the future demand for air travel. Such projections were included in previous consultations on the development of airport capacity and the impact of the aviation sector on UK carbon emissions. The DfT has nevertheless published projections of aviation demand and carbon emissions, most recently in August 2011.

3. Inclusion of aviation in the EU Emission Trading Scheme is now seen as the main means by which aviation carbon emissions can be managed, consistent with an overall carbon emission cap for all sectors and allowing aviation to purchase credits from sectors with lower abatement costs.

‘Predict and provide’ or demand management?

4. Omission of projections of demand for air travel from the Draft Framework raises a question about the relevance of such projections to planning future airport capacity. Previously, projections of substantial future growth were invoked to make the case for investment in further capacity, for instance a third runway at Heathrow. Such a ‘predict and provide’ approach had in the past been used to justify investment in the trunk road system, but more recently has been rejected on account of public resistance to new road construction. Accordingly, more weight has been given to demand management measures, for instance in the form of road pricing or congestion charging, the effect of which is to reduce usage by those least able to pay and thus lessen the need for new capacity. A demand management approach to aviation would have attractions, and is indeed widely used in the form of setting fares flexibly to respond to demand, as in yield management.

5. Passengers on business trips are a minority at UK airports. Of all passengers, 12% are UK residents and 11% are foreign residents who are making journeys for business purposes. The three-quarters of airport users are travelling for leisure. Even at Heathrow, 70% of passengers are travelling for leisure rather than business. If it is the case that growth of business travel is important for growth of the economy generally, there is ample airport capacity for increased business travel by air, including at Heathrow, by displacing leisure travellers. Business travellers would generally be prepared to pay a price premium for a

convenient airport. Ticket pricing based on yield management pricing allows this to happen naturally.

6. A market in landing and take-off slots, as is being developed, would facilitate preferential allocation to flights catering substantially for business travellers. BA recently acquired the BMI business, which gives it an additional 42 slots at Heathrow, to be switched to more profitable long-haul flights. Point-to-point flights for leisure purposes are shifted to airports with spare capacity, including regional airports beyond southeast England.

7. To illustrate the argument, consider scheduled flights to and from UK airports to Nice, France, a destination for both leisure and business travellers. Of the 1.5m passengers in 2011, those departing from the main originating airports are as follows: Heathrow, 536k; Gatwick, 324k; Luton, 146k; and Stansted, 91k. 12 other airports supplied a total of 430k passengers. It is likely that a large proportion of the 35% of passengers who flew from Heathrow were UK residents travelling point-to-point, and who therefore could therefore have used an alternative airport, and who indeed would have done so had a significant price differential existed.

Heathrow hub

8. BA urges the expansion of Heathrow, its main base. Of passengers using UK airports to make connections between flights, the large majority use the (86% of international connections in 2010, 65% of domestic). BA would doubtless prefer to continue to operate short-haul flights, such as those to Nice (currently 13 BA outward flights a day), from Heathrow, both for operational efficiencies and to take advantage of transfer passengers coming from origins beyond London. Nevertheless, from the UK passenger’s point of view, there are generally acceptable alternatives to Heathrow for short haul point-to-point flights, and also alternative hubs for transfer to long-haul flights – at Paris, Frankfurt and Madrid, for instance. It is often significantly cheaper to fly from London to a long-haul destination via a European hub than fly direct, allowing the leisure traveller to trade off the extra travel time and inconvenience against cost-saving. Closer commercial relations between the airlines, for instance BA’s merger with , point to the possibility of making more use of European hubs. Pricing based on yield management allows use of European hubs with spare capacity to happen naturally.

9. The increased utilisation of airport capacity at the Heathrow hub for business travellers would allow the development of connectivity to new destinations in developing economies. This would be fostered by the use of larger aircraft such as the Airbus 380 (terminal capacity being easier to increase than runway capacity). However, higher fares on long-haul flights, a consequence of increased demand from business travellers, may inhibit the growth of tourism, both inward and outward, to and from more distant destinations, Asia in particular.

10. Inward tourism, currently 30m visitors a year, has doubled over the past 25 years, although spending at constant prices has remained surprisingly

unchanged at about £10bn pa. Of the 30m, 7m are business travellers, 12m are on holiday, 9m are visiting family and friends, and there are 2m other. London, the most visited city in the world, has over 15m overseas visitors a year, including 7.6m on holiday, together with some 5m visitors from within the UK.

11. The Government’s 2011 Tourism Policy seeks to increase inward arrivals by 4m over the next 4 years. In a speech on 14 August, the then Secretary of State, Jeremy Hunt, went further, inviting the tourism industry to commit with the government to increasing the number of overseas visitors to the UK to 40 million by 2020. Generally, first-time visitors will want to visit the main sites of London, the capacity of which may be reaching their practical limit. There is substantial congestion in the summer season at heritage locations such as the Tower of London, and at some stations that need to be part closed, such as . There would therefore be a good case for seeking growth from European repeat visitors who could use regional airports to travel beyond London.

12. Displacement of leisure travellers from the Heathrow hub may, depending on growth of this market segment, lead to capacity constraints at other airports. However, this seems unlikely to be a pressing problem given that the DfT’s most recent aviation forecasts project an increase in passenger numbers at UK airports of 60% by 2030 even with no new runways. If slots are tradable, fares might rise somewhat, which would in turn act to constrain the growth of demand, particular at time of peak usage. However, given the low prices currently available on the low cost carriers, public acceptability should be manageable.

13. While expansion of airport capacity at Heathrow would allow carriers based there to increase the numbers of passengers they serve, the consequence for profitability is less obvious. In general, a capacity constraint in any industry allows incumbents with property rights to achieve higher returns than would occur if new entrants could take advantage of additional capacity to compete.

Demand for air travel

14. We have suggested that allowing the market to operate could substantially accommodate the likely growth of demand for air travel in the medium term, utilising existing airport capacity. There may, nevertheless, be a commercial case for building new runway capacity for the longer term, depending on how demand develops.

15. Air travel has grown hugely since the 1970s. Passengers using UK airports increased from 45m in 1976 to reach a peak of 240m in 2007, since when numbers have fallen back, to 220m a year in 2011 (see Figure). The question is to what extent this break in the long-term growth trend is a consequence of the economic recession, and to what extent it may reflect an approaching saturation of demand for air travel. A further question is the impact of higher fares on the growth of demand.

300000000

250000000

200000000

passengers 150000000

100000000 Terminal

50000000

0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 16.

17. Daily travel per capita in Britain and other developed economies has stabilised. In Britain, the average annual distance travelled (by all modes except international aviation) has settled at about 7000 miles per person per year since the mid- 1990s.1 This has been interpreted as reflecting saturation of demand for daily travel.2 It is to be expected that air travel by UK residents will likewise at some point cease to grow.

18. Air travel growth can occur when existing passengers fly more often and/or when new passengers travel for the first time. It is usually assumed that in developed economies growth will predominately come from existing passengers, whereas in developing economies growth arises from new passengers, as the result of growing incomes and greater accessibility. For this reason the limited research concerning market maturity of UK air travel has focused on considering the amount of travel undertaken by current regular flyers in the future.3

19. An important consideration is that the time people have available limits the amount of travel. For daily travel, it is all the tasks to be done within the 24- hour day, which limits travel time to an hour a day on average. For flying, it is time that can be spent away from home or the office, and the time available for vacations. An ageing population may mean more leisure time for the retired, but the worsening prospects for pension income may inhibit the growth of leisure travel. The impact of time constraints on the scope for people making more trips is researchable through both qualitative and quantitative studies.

20. Little attention has been given to people who are presently not flying, or flying infrequently, and whether they will fly more regularly in time to come. In 2010, 56 million UK residents travelled abroad by air, amounting on average to just under one return journey per person per year. However, surveys show that half the population do not fly in any one year – the ‘infrequent flyers’. Frequency of air travel increases from lower to higher socio-economic status group, is higher

with younger people and rises with income. Nevertheless, around a quarter those in the top social group or in the highest income quintile took no flights in the previous year. The prospects for the growth of demand for air travel depend importantly on whether these ‘infrequent flyers’ are likely to change their habit in the future.

21. The group of infrequent flyers is heterogeneous. Some people have never flown; some fly rarely; others regularly take annual holidays abroad but may have missed a year for a particular reason such as illness; and some may make a nil return in a survey because the interval between annual holiday trips is greater than 12 months. Some current infrequent flyers may have flown frequently in an earlier phase of life. Surveys of passengers using UK airports show that over the past ten years, less than one per cent of passengers are adults flying for the first time. This indicates that much of the UK resident growth in passenger traffic in recent years has come from existing passengers travelling more often. The implication is that of the infrequent flyers, those who have never flown may be unlikely to change their habits.

22. The future behaviour of the infrequent flyers is important for understanding future growth patterns and the degree of demand maturity that must be a central consideration in planning future airport capacity. This aspect is disregarded in conventional econometric analysis used to inform growth projections, it being implicitly assumed that attitudes and behaviour do not change except where driven by model parameters such as income. The likely future behaviour of the infrequent flyers is researchable, however, and needs to be investigated.

23. When thinking about future demand for travel, it is helpful to distinguish between per capita behaviour and population effects. It would be reasonable to allow straightforwardly for UK population growth when projecting future demand for air travel. There is also the growth of the middle classes of the developing economies who may wish to travel to the UK. Here the issue may be the capacity to cater for mass tourism at the major London locations, a topic worth investigating.

24. These considerations are relevant to the state of maturity of the UK market for air travel. The DfT’s Aviation Forecasts 2011 include a discussion of market maturity, incorporating a sensitivity in which faster maturity reduces demand in 2030 by 35m passengers pa compared to the central case, equivalent to about 10% of projected demand. The DfT recognises that maturity is hard to infer from historic data and that any conclusions that can be drawn from recent changes in the air travel market as to the existence of market maturity are subject to very high levels of uncertainty.

Low demand growth scenario

25. Given the importance of market maturity for future demand, it would be worth considering a scenario approach, as an alternative the standard forecasting with a central projection plus high and low variants. Scenarios have long been used by energy sector businesses to help address the implications of the impact of exogenous uncertainties.4

26. A low aviation demand scenario might involve earlier maturity of the various market segments considered in the DfT forecasts, informed by the findings of research on the behaviour and expectations of both regular and infrequent flyers, as discussed above.

27. Such a scenario may be important for the robustness of the business case for any new runway capacity. In this context, it is not the DfT’s forecasts that matter, but rather those made by the likely investors and their advisors, given that airports are for the private sector to develop. It is worth recalling that the private sector consortium members that built the Channel Tunnel Rail Link (now known as HS1) lost their investment when passenger numbers proved to be far lower than forecast, due to the competitive response of the low cost airlines and the ferries. Consideration would need to be given to the likely competitive response by airports in the South East under separate ownership to the opening of an additional runway at Heathrow.

28. The possibility of low demand plus a competitive response suggests the need for a significant tranche of equity finance. The CAA as regulator would need to permit charges that allow this equity to be suitably rewarded.

29. The government would need to take a view of the planning aspects of any new runway capacity, a difficult matter given the range of conflicting interests. In this context it is worth recalling the planning inquiry held in 1988-89 that led to the granting of planning consent for the controversial Hinkley Point C nuclear power station, which has not yet been built because of lack of financial viability.

Conclusions

30. New airport capacity to meet demand growth would be funded by the private sector. Because of the major planning implications of new runway capacity in the South East, government endorsement would be essential. However, it would be difficult for the government to come to a view on location, given the range of conflicting interests.

31. Moreover, the uncertainty of future demand growth may make it difficult for a robust investment case to be made for new capacity in advance of clearer evidence of the state of market maturity. There is scope for market research to yield insight into expectations of existing and potential air travellers.

32. It may therefore be sensible to defer decisions until the future development of demand is clearer. In the meantime, efforts should be made to optimise the efficiency of utilisation of existing capacity, not least by allowing the market to give priority to business travellers willing to pay premium prices for the convenience of using Heathrow.

33. While this approach might be criticised as a policy of procrastination, it would make sense for the government to avoid commitment to a location for any new runway capacity until it is clear that there are investors willing to invest.

8 October 2012

1 National Travel Survey data. 2 Metz, D. (2010) Saturation of demand for daily travel, Transport Reviews, 30(5), 659‐674. 3 DfT UK Aviation Forecasts 2011, Annex B 4 See for example www.shell.com/home/content/future_energy/scenarios/

Written evidence from City Airport Watch (AS 14)

1. Executive Summary

1.1. In this submission, we respond to two of the questions posed by the Committee in its terms of reference for the above inquiry, namely:

1.1.1. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

1.1.2. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

1.2. We have focused our comments on the Department for Transport’s (DfT’s) Draft Aviation Policy Framework. We are extremely disappointed with this document. It is quite wrong that the Government should propose that the only real mechanism for the regulation of the caused by non‐designated airports in the UK – which form the vast majority of the UK’s airports – should be better engagement between airports and local communities.

1.3. It is inconceivable that the Government would permit the sole mechanism for the regulation of air or water pollution, or pollution from waste, to be left to a laissez faire system of “better engagement” between the polluting company or organisation in question and the local community. These forms of pollution are all subject to strict controls which are monitored and policed closely by the statutory environmental agencies in each of the UK territories.

1.4. Moreover nearly all other forms of noise pollution are subject to stricter controls through the statutory powers exercised by local authorities.

1.5. We believe that the proposals set out in the Draft Aviation Policy Framework fall far short of what is required to ensure that all airports in the UK minimise the noise pollution which they produce. The adverse impacts of aircraft noise on health, education and quality of life are well established. The DfT needs to take decisive action to produce the better balance which it claims it seeks between the commercial interests of the aviation sector and its adverse impacts on local communities.

1.6. In particular, we would like to see the following measures:

1.6.1. robust and ongoing mapping, monitoring and regulation of noise pollution caused by the all the UK’s commercial airports – carried out by the DfT (and devolved administrations, where applicable), or by the Civil Aviation Authority (CAA), rather than by the airports themselves

1.6.2. both the monitoring and the noise regulations must properly reflect the true impact of aircraft noise on health, education and quality of life, as evidenced in the substantive relevant research, and must reflect best practice as set out by the World Health Organisation in its relevant guidance 1.6.3. the Government should commit itself to a specific reduction in the number of people in the UK significantly affected by aircraft noise over the next 10 years – we suggest a 10% reduction

1.6.4. airports should be required to reduce the level and frequency of aircraft noise within the areas which are significantly affected by noise – priority should be attached to achieving this objective at the airports affecting the largest populations, and at those which affect large populations, and also duplicate the services of an airport nearby

1.6.5. no further growth should be permitted at airports which affect large populations in terms of noise, and which duplicate the services of an airport nearby, unless the airport operator in question can prove that any planned growth will not result in an increase in noise pollution

1.6.6. all airports whose noise pollution affects significant populations (and/or any schools) should be required to meet specified targets for reducing those levels of noise over a five year period – there should be serious penalties for airport operators which do not meet these targets

1.6.7. the Government should make it clear in its Aviation Policy Framework that it is abandoning its outdated guidance stating that the 57 dB LAeq,16h contour marks the approximate onset of significant annoyance, and should introduce more sophisticated guidance which better reflects the considerable body of recent international research in this regard, and which properly reflects international research on health and education impacts of aircraft noise

1.6.8. the Government should either refine the current system of air passenger duty so that a higher rate is levied on those flights having the most serious adverse noise impact, or it should use its existing powers to enforce airports to use differential landing fees to reflect the noise impacts of flights

1.6.9. at airports where aircraft noise affects a significant number of people (and/or affects schools significantly), any noise envelope should only be used as a device to ensure that the level and frequency of aircraft noise pollution does not get worse and/or is reduced over time – it should not be used as a device to permit any increase in the amount or frequency of noise at such airports

1.6.10. the Government should give serious consideration to the results of the EU‐ sponsored MIME study, which developed a model of tradeable noise permits for airports, with a view to its possible introduction in the UK

1.6.11. the Government should require airports to provide comprehensive and robust effective insulation (not just double or triple glazing) to all homes seriously impacted by aircraft noise, and not only those at 63 LAeq 16h

1.6.12. the CAA should be given an enhanced role – but it must have a consistent, proactive and tough regulatory and enforcement role, similar to the Environment Agency

2. About Belfast City Airport Watch

2.1. Belfast City Airport Watch (BCAW) is an umbrella organisation which represents 21 affiliated organisations, 20 of which are residents associations or community groups in areas affected by aircraft noise linked to George Best Belfast City Airport (see Appendix 1). BCAW also has 550 individual associate members.

3. Introduction

3.1. We warmly welcome the decision by the Transport Select Committee to hold its very timely inquiry into aviation strategy and, in particular, the fact that the terms of reference for the inquiry specifically include an investigation into the adequacy or otherwise of the Government’s proposals with regard to the reduction of the impact of aircraft noise on residents.

3.2. We are extremely disappointed with the Draft Aviation Policy Framework. In her foreword to the document, the former Secretary for State says:

A better balance than in the past needs to be struck between the benefits aviation undoubtedly brings and its impacts, both at a global and at a local level.

3.3. We would concur totally with the statement. However, she then goes on to say:

This will require much better engagement between airports and local communities, with greater transparency to facilitate informed debate and help to build mutual trust. This is one of the key themes running through our draft framework and the Government is encouraged that some airports are already working to improve local engagement. Nevertheless more needs to be done.

3.4. “Better engagement” between airports and local communities is, indeed, the only real mechanism which this document is proposing should be used for the regulation of the horrendous noise pollution caused by the vast majority of airports in the UK which are not designated “national” airports. This is despite the fact that many of those airports already create noise pollution which affects far larger numbers of people than is the case at two of the three nationally designated airports which are subject to Government noise controls. Many non‐designated regional airports also have plans for expansion which are likely to increase the noise pollution they produce.

3.5. It is inconceivable that the Government would permit the sole mechanism for the regulation of air or water pollution, or pollution from waste, to be left to a laissez faire system of “better engagement” between the polluting company or organisation in question and the local community. These forms of pollution are all subject to strict controls which are monitored and policed closely by the statutory environmental agencies in each of the UK territories.

3.6. Moreover nearly all other forms of noise pollution are subject to stricter controls through the statutory powers exercised by local authorities.

3.7. Why then is the DfT proposing that this laissez faire approach, which has patently failed to minimise noise pollution associated with airports to date, should continue?

3.8. We believe that the proposals set out in the Draft Aviation Policy Framework fall far short of what is required to ensure that all airports in the UK minimise the noise pollution which they produce. The adverse impacts of aircraft noise on health, education and quality of life are well established. The DfT needs to take decisive action to produce the better balance which it claims it seeks between the commercial interests of the aviation sector and its adverse impacts on local communities.

3.9. Below and overleaf, we provide our responses to the Committee’s questions of particular relevance to the local communities which we represent i.e. those living under or close to the flight paths from George Best Belfast City Airport, which is one of the non‐designated regional airports where the current inadequate system of noise regulation and control has led to far more people being affected by what the Government deems to be a serious level of noise pollution than is the case at two of the designated national airports, Stansted and Gatwick.

4. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

4.1. The Government’s current strategy – as articulated in the Draft Aviation Policy Framework ‐ undoubtedly fails to make the best use of existing capacity at airports outside the south east. In determining how to make the best use of existing capacity, the Government must take into account the noise impact of each airport (measured in terms of the severity of the noise impact on affected individuals and schools, and the population numbers and numbers of schools affected). We are especially concerned where there are instances of duplication of services at airports close to each other, where one of those airports is causing a serious noise impact.

4.2. The Department for Transport’s Draft Aviation Policy Framework should identify those regional airports which are affecting a large population (e.g. greater than 10,000) at 54>LAeq 16h and/or any schools at 57>LAeq 16h and/or which experience noise events at 35> LAeq during class time, and which are also duplicating services provided at another airport nearby (i.e. within one hour’s ground travel time or less). The Framework should clearly state that no further growth in traffic is permitted at those airports unless the airport operator in question is able to prove that any planned growth will not result in an increase in noise pollution.

4.3. A particular instance of this issue is the current duplication of air services at George Best Belfast City Airport and at Belfast International Airport, which sit 16 miles apart and within 30 minutes’ drive of each other. At present, the former, which has a serious adverse noise impact on tens of thousands of local residents, is being permitted to grow and to become an international airport to the detriment of Belfast

International Airport, which is in a greenfield site, affecting a relatively small number of residents, and with plenty of existing spare capacity.

4.4. Just a few months ago, announced that it was transferring its Northern operation from Belfast International Airport to Belfast City Airport. This move had two important negative strategic impacts on the competitiveness of Belfast International Airport and on the wider Northern Ireland economy:

4.4.1. It reduced the prospect that Northern Ireland will be able to host additional long haul routes; as Aer Lingus operates long haul routes from Airport, it could have commenced long haul routes from Belfast International Airport – an option not open to it at Belfast City Airport for both runway capacity and noise impact reasons. At present, Belfast International Airport has only one long haul route, compared to its competitor, , which has 12 long haul routes.

4.4.2. It removed any direct link to Heathrow from Belfast International Airport which, given its geographical position, is located in a much more convenient position for businesses and individuals in much of Northern Ireland than Belfast City Airport.

4.5. The move by Aer Lingus would not have been possible if a strategy was in place which earmarked International Airport as the regional gateway airport for Northern Ireland at which the development of international air routes should be focused.

5. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

5.1. As outlined previously, we believe that the proposals contained in the Government’s Draft Aviation Policy Framework are entirely inadequate with regard to reducing the impact of noise on local residents. We address below some of the main issues. For ease of reference, these are dealt with in the same order as in the Draft Aviation Policy Framework and its accompanying consultation questionnaire.

5.2. Designation of airports for noise management purposes 5.2.1. We agree that the Government should continue to designate the three largest London airports for noise management purposes. However, we believe that it is equally important to provide a robust and consistent noise management regime at all the UK’s commercial airports. Consultants’ reports commissioned by George Best Belfast City Airport show that, in 2010, 11,422 local residents suffered from aircraft noise at 57 LAeq 16h or over. By comparison, in 2010, a mere 1,400 people suffered from noise at the same level close to Stansted airport, and just 2,850 experienced this level of noise near Gatwick, according to figures from the DfT.

5.2.2. At many UK airports, there are a higher (and in some cases far higher) number of people affected at 57 LAeq 16h or over than at either Stansted or Gatwick. The relatively low numbers at Stansted and Gatwick may be, in part, a result of the Government’s noise management regime. However, they are not a reason for doing away with designation at those airports. Instead, all the UK’s commercial airports should be designated in this way so that there is the right balance between the commercial interests of the aviation sector, and the health and quality of life of local communities.

5.3. The Government’s overall objective on aviation noise 5.3.1. The wording of this objective, as stated in para. 4.22 of the Draft Aviation Policy Framework – “to limit and, where possible, reduce the number of people in the UK significantly affected by aircraft noise” – leaves open the possibility that the number could actually increase. At the very least, this objective should read:

… to ensure there is no increase in the number of people in the UK significantly affected by aircraft noise.

5.3.2. However, we would like the Government to commit itself to a specific reduction in the number of people in the UK significantly affected by aircraft noise over the next 10 years. We would suggest the Government should aim for a 10% reduction.

5.3.3. At the same time, it is not sufficient to limit the Government’s approach to aviation noise to striving to ensure there is no increase in or to reduce the number of people significantly affected by aircraft noise. As the Aviation Environmental Federation (AEF) has pointed out, such a policy can act as an incentive for airports to greatly concentrate noise pollution within the narrowest possible corridor.1 This policy does nothing for those residents under a flight path and potentially increases the level of noise pollution which they suffer. The report cites the approach to noise management taken by the Australian Government which attempts to ensure that aircraft noise pollution emanating from any airport is spread more evenly over a number of communities, ensuring there are also periods of respite from noise. We commend this approach and believe that, in addition to ensuring there is an overall reduction in the number of people significantly affected by aircraft noise, airports should also be required to reduce the level and frequency of aircraft noise within the areas which are significantly affected. Priority should be attached to reducing the level and frequency of aircraft noise at the airports affecting the largest populations, and at those which affect large populations, and also duplicate the services of an airport nearby.

5.4. Mapping of noise exposure around airports 5.4.1. We believe it is imperative that the Government maps noise exposure at all commercial airports in the UK, and monitors noise exposure closely on an ongoing

basis. However, it must also properly regulate noise exposure to ensure that it does not increase. Noise mapping should include:

5.4.2. noise contours, with maps and details of the affected populations, at the following noise levels: 50> LAeq 16h, 54> LAeq 16h, 57> LAeq 16h, 60> LAeq 16h, 63> LAeq 16h and 72> LAeq 16h– and which also includes measurements which allow for and properly reflect the greater annoyance, disruption and health risk experienced by residents in the evening, night‐time and early morning, and measures which reflect noise pollution caused by particularly noisy individual aircraft events (using Lden, LAeq 8h and LAMax Fast measurements) [with appropriate adjustments to the 16h metric where airports, like George Best Belfast City Airport, are not fully operational for 16 hours] 5.4.3. details of all schools within the 54> LAeq 16h contours, and/or which experience noise events at 35> LAeq during class time [with appropriate adjustments to the 16 hour metric as above]

5.4.4. In Appendix 2, we outline some of the substantive body of evidence and guidance which exists which should inform the Government’s noise mapping and noise regulation. We are especially concerned about the evidence regarding the negative health and education impacts of aircraft noise which is currently being disregarded by the Government and by the Draft Aviation Policy Framework.

5.5. The Government’s noise envelope proposal/tradeable noise permits 5.5.1. We are very concerned that the Draft Aviation Policy Framework proposes only that a noise envelope should be set at “any new national hub airport or any other airport development which is a nationally significant infrastructure project” (para. 4.41). As stated previously, the Government must monitor and regulate noise properly and effectively at all commercial airports in the UK, and not just airports deemed to be of national significance. It must also regulate noise robustly at existing airports – and not just with regard to new airports or new infrastructure at existing airports.

5.5.2. The noise envelope proposals, as set out, are too vague. The UK should be seeking to make use of its existing aviation capacity in the most efficient and noise‐efficient way possible, without further expanding the number of people affected by noise at a significant level.

5.5.3. We believe the Government should give serious consideration to the results of the EU‐ sponsored MIME study which developed a model of tradeable noise permits for airports.2 If this was implemented by the UK, it would have the potential to act as a real incentive for airlines to take mitigation measures which would minimise or reduce the degree of noise exposure for residents. The permit scheme could also take into account the type of traffic generated by a particular route; for example, flights on ‘bucket and spade’ routes to ‘sunshine’ destinations outside the UK, which merely suck

tourist revenue out of the local and national economy, could be subject to a higher ‘price’ under this scheme.

5.5.4. We would strongly oppose the use of a noise envelope as a device to permit any increase in the amount, level or frequency of aircraft noise where a significant number of people are currently affected or will be affected at a level which is likely to have adverse health, education and/or quality of life impacts. The impact on schools must also be taken into account in this regard.

5.5.5. We would support the use of a noise envelope as a device to ensure that the level and frequency of noise pollution did not get worse and/or was reduced over time.

5.5.6. We believe that a noise envelope must include a mixture of both maximum noise levels and noise event thresholds, and restrictions on the number of flights and passengers (or, as with George Best Belfast City Airport) seats offered for sale. We believe it is totally unsatisfactory that airports are currently permitted to monitor and report on their own noise levels. However, while this system of self‐monitoring pertains, it is essential to have in place tangible restrictions on the scale of airport operations which can be easily monitored and regulated externally.

5.5.7. It is also vital that any noise envelope contains additional restrictions on flight numbers, average noise levels and noise event thresholds for early morning, evening and night‐time which properly reflect the additional negative impact on health and quality of life.

5.5.8. We believe that the following system of noise regulation should apply and should be implemented by the DfT (and by the Department for Regional Development in Northern Ireland):

5.5.9. The DfT’s Aviation Policy Framework should identify those regional airports which are duplicating services at another airport nearby, and which are affecting a significant population (e.g. greater than 10,000) at 54> LAeq 16h [or equivalent] and above and/or any schools at54> LAeq or more and/or which experience noise events at 35> LAeq during class time. The Framework should clearly state that no further growth in traffic is permitted at those airports unless the airport operator in question is able to prove that any planned growth will not result in an increase in noise pollution.

5.5.10. The DfT and, in Northern Ireland, the Department for Regional Development (DRD) should use their existing legal powers to require all airports which cause significant noise pollution (i.e. which are affecting a large population at 54> LAeq and above (e.g. greater than 10,000) and/or any schools at 54> LAeq or more, and/or which experience noise events at 35> during class time) to meet specified targets for reducing those levels of noise over a five year period. The precise requirements for each airport would depend on the strategic importance of that airport as measured by the indicators (routes, duplication of services, purpose of trip) as outlined previously. All airports which fail to meet these targets should be subject to significant fines, commensurate with the scale of their revenues.

5.5.11. Date collected from monitoring noise near all airports should be collated and published on an annual basis. The DfT and DRD should review this data after five years and set targets for all airports which meet the above criteria and/or which have failed to meet targets which were previously set. If an airport operator fails to meet these targets on more than one occasion, its licence should be revoked.

5.6. Respite from aircraft noise 5.6.1. We are very disappointed that the section on respite from aircraft noise in the Draft Aviation Policy Framework (paras. 4.52 – 4.55) refers solely to Heathrow. Most UK airports provide no such respite for residents and we would like the Government to include provision for respite within the far more robust system of noise regulation which we would like to see.

5.7. The Government's proposals on noise limits, monitoring and penalties 5.7.1. Paragraph 4.68 of the Draft Aviation Policy Framework states “Local communities need to have confidence that airport owners take noise impacts seriously.” That is not correct – what local communities need to have is the confidence that the Government takes noise impacts seriously. If the Government did take the impact of aircraft noise seriously, it would be designing and implementing a robust system of noise regulation which would actually address the problem properly.

5.7.2. Airports are commercial entities which exist to make a profit. It is unrealistic to expect airports to voluntarily implement an effective system of self‐regulated noise management – and it is quite unfair to expect local communities to rely on the goodwill of their airport in order to have that effective regulation. As previously stated, it is the clear responsibility of the Government to regulate noise pollution effectively, just as it does with others forms of pollution, such as air and water pollution (and, indeed, other forms of noise pollution).

5.7.3. Moreover, paragraph 4.68 appears only to apply to the three designated airports as it refers to departure noise limits which do not apply, as far as we are aware, at most other airports and certainly not at George Best Belfast City Airport.

5.7.4. We would certainly welcome the introduction of a robust system of departure noise limits for all airports which have a serious noise impact which affects a significant number of people. However, the system should be completely transparent and should be implemented by the Government rather than the airports.

5.7.5. Similarly, the Government should carry out its own monitoring and reporting of noise in affected areas around commercial airports. However, this should be carried out at all airports – whether or not they appear to affect significant numbers of people, and whether or not they are nationally designated. This is because only a transparent and fully independent system of monitoring is reliable. It may well be the case that some airports do not have sufficiently accurate systems of noise monitoring and modelling,

and under‐reporting of the full extent of noise pollution may occur as a result. Airports and airlines should pay for the costs of the monitoring.

5.8. Differential landing fees/APD 5.8.1. We are aware that some airports, such as Luton and Stansted, already operate differential landing fees, designed to encourage airlines to use quieter aircraft. However, it is unlikely that an airport such as George Best Belfast City Airport would take such a step voluntarily, as it is in strong competition with both its neighbouring and longer‐established Belfast International Airport and with Dublin Airport. Low landing fees are one means of attracting the airlines required for commercial survival. Doubtless, there are a number of UK airports which, due to being in close proximity with a neighbouring airport offering similar routes, compete on landing fees.

5.8.2. However, the current system of air passenger duty (APD) could be refined so that a higher rate is levied on early morning and night‐time flights from airports which have a serious adverse noise impact on a significant number of people. In addition, flights from these airports which use quieter planes could be subject to a lower level of APD.

5.8.3. Alternatively, we note in para 4.76 of the Draft Aviation Policy Framework that the Government does have the power to require airports to use differential landing fees to reflect environmental impacts and we therefore believe that, if APD is not used as an instrument in this regard, the Government should use its power to require airports to employ differential landing fees.

5.8.4. Where differential landing fees or APD is use to control noise from night‐time flights, the term “night‐time” must include the early morning period during which it can be assumed that most people would still be asleep i.e. “night‐time” should include 11pm to 7am, and 11pm to 9am at weekends. Evening flights which disrupt children’s sleep should also be subject to differential APD or a differential landing fee.

5.9. Airport compensation schemes 5.9.1. The consultation questionnaire accompanying the Draft Aviation Policy Framework asked whether respondents felt that airport compensation schemes were reasonable and proportionate. The more pertinent question is not what we think of the compensation schemes offered by those few airports which go beyond what they are required to do by Government, but what we think of the Government’s requirements with regard to compensation. Like many airports, George Best Belfast City Airport takes the position that it will only offer to pay for noise insulation to homes affected at 63 LAeq 16h or above, in line with the Government’s requirement on insulation. There is ample evidence, as outlined in Appendix 2, that people suffer tangible health, quality of life and, in the case of children, educational impacts at levels well below 63 LAeq 16h.

5.9.2. Insulation does not solve the problem of aircraft noise, because people still need to open their windows. However, it can help to mitigate the adverse impacts of noise, and it is ridiculous that houseowners and landlords are currently forced to foot the bill where insulation is required primarily because of aircraft noise. As with other forms of pollution, the ‘polluter should pay’ principle should be followed – and required by Government. Where airports are required to fund insulation programmes, these should include a comprehensive package of noise insulation measures, and not just double or triple glazing.

5.10. The integration of noise regulation into a broader regulatory framework 5.10.1. We would like to see the integration of noise regulation into a broader regulatory framework which tackles the local environmental impacts from airports. We would also like to see robust regulation of localised air pollution from aircraft, and of fuel dumping.

5.11. The role of Airport Consultative Committees 5.11.1. As stated previously, we are very disappointed at the emphasis which the Draft Aviation Policy Framework puts on the role of Airport Consultative Committees in regulating noise at airports. It is quite inappropriate for airports to effectively regulate themselves via Airport Consultative Committees which are run by airports. Airports are commercial entities and the noise pollution they cause needs to be regulated externally in the same way that any other form of pollution is regulated. 5.11.2. We would like all commercial airports to have consultative committees, but it is vital that noise pollution at all commercial airports is effectively monitored and regulated by the Government. Aircraft noise pollution must be subject to a robust and consistent system of external monitoring, reporting and regulation, operated by the Government and paid for by the industry.

5.12. The role of the Civil Aviation Authority 5.12.1. The Draft Aviation Policy Framework (paras 5.19 – 5.24) sets out a proposal for the Civil Aviation Authority to have a role in providing independent oversight of airports’ noise management. However, while this proposal would certainly be an improvement on the current situation, it does not go far enough. What is required is a body which acts like the Environment Agency, and which has tough powers to monitor and enforce a consistent system of noise regulation properly. Given the body of expertise within the CAA, it may well make more sense for the CAA to take on this role. It should be responsible for noise monitoring and reporting, as well as enforcement. This cost should be borne by airports and airlines – and it may well make sense for these costs to be met through a system of differential aircraft noise levies and/or tailored APC as described previously.

5.13. Noise action plans 5.13.1. The Draft Aviation Policy Framework refers to airport noise action plans and seems to regard these as part of the solution. However, airport noise action plans are no more than token documents. For example, the current Noise Action Plan for George Best Belfast City Airport merely restates the existing steps taken by the airport at the time of writing or already planned, and the existing regulations to which it is subject. It further stated that it did not expect the number of people affected by aircraft noise to reduce over the period covered by the Plan (2008 – 2013).3 In fact, that number increased significantly to 2010. 5.13.2. Noise Action Plans do have the potential to form part of a robust system of noise regulation – but not unless relevant airports are required to have targets for reducing noise, and to commit themselves to the necessary steps needed to meet those targets.

6. Proposed recommendations

6.1. We would like the Committee to make the following recommendations:

6.1.1. That the Government implement robust and ongoing mapping, monitoring and regulation of noise pollution caused by the all the UK’s commercial airports – carried out by the Department for Transport (DfT) (and devolved administrations, where applicable), or by the Civil Aviation Authority (CAA), rather than by the airports themselves

6.1.2. That both the monitoring and the noise regulations must properly reflect the true impact of aircraft noise on health, education and quality of life, as evidenced in the substantive relevant research, and must reflect best practice as set out by the World Health Organisation in its relevant guidance

6.1.3. That the Government should commit itself to a specific reduction in the number of people in the UK significantly affected by aircraft noise over the next 10 years – we suggest a 10% reduction

6.1.4. That airports should be required to reduce the level and frequency of aircraft noise within the areas which are significantly affected by noise – priority should be attached to achieving this objective at the airports affecting the largest populations, and at those which affect large populations, and also duplicate the services of an airport nearby

6.1.5. That no further growth should be permitted at airports which affect large populations in terms of noise, and which duplicate the services of an airport nearby, unless the airport operator in question can prove that any planned growth will not result in an increase in noise pollution

6.1.6. That all airports whose noise pollution affects significant populations (and/or any schools) should be required to meet specified targets for reducing those levels of

noise over a five year period – there should be serious penalties for airport operators which do not meet these targets

6.1.7. That the Government should make it clear in its Aviation Policy Framework that it is abandoning its outdated guidance stating that the 57 dB LAeq,16h contour marks the approximate onset of significant annoyance, and should introduce more sophisticated guidance which better reflects the considerable body of recent international research in this regard, and which properly reflects international research on health and education impacts of aircraft noise

6.1.8. That the Government should either refine the current system of air passenger duty so that a higher rate is levied on those flights having the most serious adverse noise impact, or it should use its existing powers to enforce airports to use differential landing fees to reflect the noise impacts of flights

6.1.9. That, at airports where aircraft noise affects a significant number of people (and/or affects schools significantly), any noise envelope should only be used as a device to ensure that the level and frequency of aircraft noise pollution does not get worse and/or is reduced over time – it should not be used as a device to permit any increase in the amount or frequency of noise at such airports

6.1.10. That the Government should give serious consideration to the results of the EU‐ sponsored MIME study, which developed a model of tradeable noise permits for airports, with a view to its possible introduction in the UK

6.1.11. That the Government should require airports to provide comprehensive and robust effective insulation (not just double or triple glazing) to all homes seriously impacted by aircraft noise, and not only those at 63 LAeq 16h

6.1.12. That the Government should introduce an enhanced noise regulation role for the CAA – but it must have a consistent, proactive and tough regulatory and enforcement role, similar to the Environment Agency

6.1.13. That the Government should introduce a requirement that all commercial airports affecting a significant population through noise pollution should provide periods of respite from aircraft noise for residents, similar to those which exist at Heathrow and at London City Airport

Appendix 1 – organisations affiliated to BCAW

The 21 organisations which have affiliate membership of BCAW are as follows:

1. The Bridge Community Association 2. Carew II Family and Training Centre 3. Connswater Community Centre/Connswater Community Group 4. Cultra Residents' Association 5. Dee Street Community Centre/The Klub 6. Dee Street Computer Group 7. Dee Street Mums and Tots Group 8. East Belfast Healthy Living Project 9. East Belfast Toddler Group

10. GMB Trade Union Branch 252 11. Hampton Park Residents’ Association 12. Holywood Airport Action Group 13. Lagan Valley Group Residents’ Association 14. Lower Woodstock Community Association 15. Marlborough Park Residents’ Association 16. Newtownards Road Women’s Group Ltd. 17. Old Stranmillis Residents' Association 18. Park Road and District Residents' Association 19. Ravenlink Residents’ Group 20. Ulidia Residents' Group 21. Wise Men of the East Network (network of nine affiliated east Belfast mens’ groups)

Appendix 2 ­ Relevant research and guidance

1) The World Health Organisation (WHO) recommends that community noise (which includes aircraft noise) should remain below 50 LAeq, averaged over 16 hours (50 LAeq 16h) in outdoor living areas, if moderate annoyance is to be avoided. It further recommends that noise should not exceed 55 LAeq 16h if serious annoyance is to be avoided. 4

2) WHO makes further specific recommendations with regard to the following:

a) The level of community noise in indoor environments should be less than 35 LAeq 16h to preserve speech intelligibility and prevent moderate annoyance b) To avoid sleep disturbance at night: c) The level of community noise in indoor bedrooms where windows are closed should be less than 30 LAeq 8h and 45 LAmax Fast5 (The latter is a more effective measure with regard to individual noise events) d) The level of community noise in bedrooms where a window is open should be less than 45 LAeq 8h and 60 LAmax Fast e) The level of community noise in school classrooms and pre‐school indoor environments should be less than 35 LAeq during class to preserve speech intelligibility and message communication, and to prevent disturbance of “information extraction” f) The level of community noise in school playgrounds should be less than 55 LAeq during playtime to prevent annoyance

3) WHO sets out the purpose of these guidelines as follows:

a) For each environment and situation, the guideline values take into consideration the identified health effects and are set, based on the lowest levels of noise that affect health (critical health effect). Guideline values typically correspond to the lowest effect level for general populations, such as those for indoor speech intelligibility. By contrast, guideline values for annoyance have been set at 50 or 55 dBA, representing daytime levels below which a majority of the adult population will be protected from becoming moderately or seriously annoyed, respectively.6

b) In other words, the WHO guidance recommendations are designed to ensure that adults and children are protected against critical adverse health impacts, the disruption of children’s learning and of social interaction, and moderate or serious levels of annoyance.

c) In 2009, WHO issued guidance related specifically to night‐time noise for member states of the European Union which stated:

… an Lnight,outside of 40 dB should be the target of the night noise guideline (NNG) to protect the public, including the most vulnerable groups such as children, the chronically ill and the elderly. Lnight,outside value of 55 dB is recommended as an interim target for the countries where the NNG cannot be achieved in the short term for various reasons,and where policy‐makers choose to adopt a stepwise approach.7

d) Although WHO did not specify the hours within which this guidance should apply, it stated that a period of 8 hours was required for ‘minimal protection’ (protecting 50% of the population) and that, on Sundays, people tend to sleep for an hour longer, probably to catch up on sleep missed during the week.8 This implies, therefore, that the period of protection on Saturday night/Sunday morning should be 9 hours.

e) The Government’s guideline that “significant community annoyance” is likely to be caused at 57 LAeq for daytime (16h) is clearly out of date. As the Government is well aware, it commissioned an expert report into the impact of aircraft noise which was published in 2007, and is known as the ANASE report.9 This found evidence that intolerance of aircraft noise has increased and that the proportion of people who are very annoyed by aircraft noise generally starts rising once a level of 43 LAeq 16h is reached.10

f) The study further found that a level of just above 50 LAeq 16h can trigger a significant level of community annoyance (i.e. the average level of annoyance within the community at this point is ‘moderate’) and that, from 56 LAeq 16h, most communities will register an average level of annoyance which is either ‘moderate’ or higher.11

g) However, the study also found that the LAeq measurement was insufficient as a measurement of likely annoyance levels, and that a measure needed to be devised which more accurately captured the actual impact of aircraft noise.

h) In addition, an international team of researchers – the HYENA study – investigated attitudes to aircraft noise in six European countries. This found that annoyance ratings were higher than predicted by the European Union standard curve used to predict the number of people highly annoyed by aircraft noise. It concluded that attitudes towards aircraft noise had changed over the years, and that the EU standard curve for aircraft noise should be modified.12

i) For these reasons, we believe that the Government’s guidance with regard to the 57 LAeq 16h noise level is outdated and fails to reflect the actual community impact of aircraft noise.

j) Moreover, there is plentiful research which shows that, regardless of annoyance levels, aircraft noise has serious impacts on health and education which must be fully taken into account in determining the noise impact which an airport is permitted to make.

4) Health impacts of aircraft noise

a) There is an extensive body of international and local research evidence which demonstrates the considerable adverse health impacts of aircraft noise. It must be borne in mind, when considering this evidence, that a considerable proportion of the population which falls within the areas worst affected by aircraft noise relating to George Best Belfast City Airport also suffers from considerable economic and social disadvantage which is known to increase the likelihood of ill health. Thus, any adverse health impacts are likely to further exacerbate the already relative high level of ill health experienced by those in this category. We understand this is also true with regard to the communities worst affected by noise at a number of other UK airports.

b) These include:

i) lack of sleep – (1) in a survey carried out by Belfast City Airport Watch in 2009, more than three‐ quarters (78%) said that aircraft noise affected their sleep, with almost 1 in 5 (19%) stating that they weren’t getting enough sleep13 (2) of those respondents with children, nearly half (46%) said their children weren’t getting enough sleep because of aircraft noise.

ii) adverse effect on blood pressure – in 2003‐5, a major EU‐funded international study investigated the impact of aircraft noise on blood pressure. The Hypertension and Exposure to Noise near Airports (HYENA) study examined the impact of aircraft noise on 5,000 individuals, aged 45‐70 years, living close to six major European airports. Its findings, reported in 2008, concluded that night‐time aircraft noise, including that occurring in the late evening or early morning, caused a significant increase in blood pressure among participants.14

iii) heart problems and abnormally high blood pressure – in 2007, a German study found night‐time aircraft noise increased the prevalence of prescriptions for antihypertensive and cardiovascular drugs, irrespective of social class15 iv) an increase in the level of anti‐anxiety and blood pressure medication prescribed – the HYENA study found an association between the use of anti‐anxiety medication and aircraft noise, both day‐time and night‐time) in all six countries in which its study was carried out, an association between the use of medication used to treat high blood pressure and night‐time aircraft noise in both the UK and the , and an association with regard to the latter medication and day‐time aircraft noise in the UK 16

v) an increase in stress and anxiety ‐ the BCAW residents’ survey found that: (1) three‐quarters of respondents (75%) said they often had to stop talking when a plane flew over because they couldn’t be heard (2) 71% said aircraft noise made their gardens less pleasant to be in (3) more than two‐thirds (68%) said they often couldn’t hear the TV and/or radio when a plane flew over (4) 66% said aircraft noise made their homes less pleasant places to be (5) nearly half (49%) said aircraft noise made their lives more stressful

c) In addition, the WHO working group which drew up its guidance on night time noise concluded that:

there is sufficient evidence that night noise is related to self‐reported sleep disturbance, use of pharmaceuticals, self‐reported health problems and insomnia‐ like symptoms. These effects can lead to a considerable burden of disease in the population.17

d) It carried out a comprehensive review of the relevant research and produced a table which summarises the health impacts of night‐time noise:18 The working group found that adverse health effects are observed at levels of 40 LAeq night,outside and above. At above 55 LAeq night,outside, WHO finds that “..the situation is considered increasingly dangerous for public health”, there are frequent adverse health effects, a sizeable proportion of the population is highly annoyed and sleep‐disturbed, and there is evidence that the risk of cardiovascular disease increases.

5) Educational impacts of aircraft noise

a) There is a considerable body of research which demonstrates the considerable adverse educational impacts of aircraft noise. The relevant studies include the following:

i) a survey of schools, under or close to the Belfast City Airport flight path over the city, undertaken by Belfast City Airport Watch in 2008, which found: (1) 12 schools said pupils’ concentration was adversely affected by aircraft noise (2) 9 schools said aircraft noise disrupted teaching and/or classes (3) 11 said aircraft noise made outdoor activities in school grounds less pleasant (4) 8 said aircraft noise made their school a less pleasant place to work in19

ii) a comprehensive review of research on the impact of aircraft noise on children’s learning, carried out by the Civil Aviation Authority in 2010, concluded:

..there is evidence to suggest that chronic aircraft noise has a deleterious effect on memory, sustained attention, reading comprehension and reading ability. Early studies highlighted that aircraft noise was also implicated in children from noisy areas having a higher degree of helplessness i.e. were more likely to give up on difficult tasks than those children in quieter areas….

Reports often indicated that children exposed to chronic aircraft noise showed a higher degree of annoyance than those children from quieter areas. Evidence has been presented to suggest that children do not habituate to aircraft noise over time, and that an increase in noise can be correlated with a delay in reading comprehension compared to those children not exposed to high levels of aircraft noise.20

iii) a major international study, carried out in 2002, found that exposure to aircraft noise is related to impaired performance in reading comprehension in primary schoolchildren.

The RANCH Project – which examined the academic performance of 2,010 children aged 9‐10 years in three countries, including the UK ‐ found that exposure to aircraft noise was correlated negatively with children’s reading comprehension and recognition memory, even when other factors were taken into account. No similar effect was found with regard to road traffic noise. The results of this research were published in 2005 and 2006.21

iv) a smaller follow‐up study, carried out six years later in the UK with a sample of 461 of the original participants, now aged 15‐16 years, found that, although no significant long‐ term effect of aircraft noise exposure at primary school or secondary school on reading comprehension was found, there was a trend for both types of exposure to be associated with poorer reading comprehension. The authors concluded that the findings indicated that exposure to aircraft noise at school may have long‐term implications for children’s cognitive development.22

b) While we accept that the conclusions of the smaller, longitudinal study are more tentative as regards the long‐term impact of aircraft noise on reading comprehension, the adverse effect on both the reading comprehension and recognition memory among the 9‐10 years olds examined in the original RANCH study was very marked. The findings of the original study have particular relevance for primary schools in areas of Northern Ireland affected by noise, as the children in question will be at a disadvantage compared to their peers in schools unaffected by noise if they sit the unofficial transfer tests still used by most grammar schools in Northern Ireland. (These tests are normally undertaken at age 10.).

12 October 2012

1 AEF (2010) Approach Noise at Heathrow: Concentrating the Problem (London: AEF for HACAN)

2 Gühnemann, A., Nellthorp, J. and Connors, R. ‘Designing a market model to analyse tradable noise permit schemes for airports’. Institute for Transport Studies, University of . 2010 conference paper. Available at: http://intranet.imet.gr/Portals/0/UsefulDocuments/documents/02815.pdf

3 George Best Belfast City Airport Directive Noise Action Plan September 2009. Available at: http://www.doeni.gov.uk/george_best_belfast_city_airport_action_plan_‐ _final_agreed_plan_for_adoption‐2.pdf

4 The specific World Health Organisation guidance on noise levels is available at: http://www.who.int/docstore/peh/noise/Comnoise‐4.pdf (section 4.3.1). The full report WHO Guidelines for Community Noise, 1999, is available at: http://www.who.int/docstore/peh/noise/guidelines2.html

5 LAmax Fast measures the sound pressure level averaged over 0.125 seconds.

6 WHO, op. cit., pp. 55‐56.

7 WHO, Night time noise guidelines for Europe, p. vi.

8 WHO, op. cit., p. 7.

9 MVA Consultancy et al. Attitudes to noise from aviation sources in England, 2007.

10 op. cit., para. 11.3.9, Figs 7.2 and 7.3, and para. 7.3.4.

11 op. cit., para. 7.3.6 and Fig 7.4.

12 Babisch, W. et al. ‘Annoyance due to aircraft noise has increased over the years – Results of the HYENA study’ in Environment International, November 2009, Vol. 35, Issue 8, pp. 1169 – 1176.

13 The survey was carried out by BCAW between March and June 2009. 412 respondents were questioned in a door‐to‐door survey. Each respondent was from a different household. Of the 412 respondents, 281 lived in east Belfast, 99 respondents were from south Belfast, while 32 were from Holywood. All respondents lived in areas which are either under or close to flight paths in and out of George Best Belfast City Airport.

14 EC News Alert Issue 103. Available at: http://ec.europa.eu/environment/integration/research/newsalert/pdf/103na1.pdf. See also Haralabidis, Alexandros S. et al. (2008) ‘Acute effect of night‐time exposure to aircraft noise on blood pressure in populations living close to airports’ in European Heart Journal. Available online at: http://eurheartj.oxfordjournals.org/cgi/content/full/ehn013v1

15 Greiser, E., Geiser, C. and Janhsen, K. ‘Night‐time aircraft noise increases prevalence of prescriptions of antihypertensive and cardiovascular drugs irrespective of social class—the Cologne‐Bonn Airport study’ in Journal of Public Health, Vol. 15, pp. 327 – 337.

16 Floud S. et al. Medication use in relation to noise from aircraft and road traffic in six European countries: results of the HYENA study, Occupational and environmental medicine, Vol. 68, pp. 518 – 524. Abstract published online at: http://oem.bmj.com/content/68/7/518.abstract

17 Op. cit., p. xi.

18 Op. cit., Table 3, p. xvii.

19 35 nursery, primary, post‐primary and special schools responded to the survey. All are situated under or close to City Airport flight paths. The survey was carried out in June 2008. 45 schools were sent postal survey forms. Non‐respondents were followed up by telephone.

20 Jones, K., (2010) Aircraft noise and children’s learning, CAA, p. 18.

21 Clark C. et al. ‘Exposure Effect Relations between Aircraft and Road Traffic Noise Exposure at School and Reading Comprehension, The RANCH Project.’ In American Journal of Epidemiology, 2006, vol. 163, no. 1, pp. 27 – 37, and Clark C. et al. ‘Aircraft and road traffic noise and children’s cognition and health: a cross‐national study’ in The Lancet, Vol. 365, 1942 – 49.. Latter available at: http://aje.oxfordjournals.org/cgi/reprint/163/1/27

22 Clark, C., Head J., and Stansfeld, S. ‘The long‐term effects of aircraft noise exposure on children’s cognition: findings from the UK RANCH follow‐up study’ in The Journal of the Acoustical Society of America, April 2012, Vol. 131, No. 4.

Written evidence from Airport (AS 15)

1. What should be the objectives of Government policy on aviation? a. How important is international aviation connectivity to the UK aviation industry? b. What are the benefits of aviation to the UK economy? c. What is the impact of Air Passenger Duty on the aviation industry? d. How should improving the passenger experience be reflected in the Government’s aviation strategy? e. Where does aviation fit in the overall transport strategy?

A key objective for the Government should be to nurture and support UK airlines and airports, particularly during these challenging economic times. The UK aviation industry is amongst the most heavily taxed in Europe. As a result, growth in the industry is being stifled – at a time when the aviation industry could be helping to fuel economic recovery.

The aviation industry is a key driver for the UK economy, particularly in regional Scotland, where it also provides an important social lifeline. A study undertaken by the Airport Operators Association shows that the aviation sector generated £18.5 billion, or 1.5% of the UK economy. The sector also supports 234,000 jobs across the UK.

Aberdeen Airport alone contributes £126 million a year to the Scottish economy and supports almost 3,900 jobs. Based on current levels of employment and passenger growth forecasts, an additional 1,110 jobs are expected to be created by 2040, generating an extra £42 million GVA for the Scottish economy per annum.

The airport is also an important enabler for the oil and gas industry, both as the gateway to Europe’s energy capital but also as a commercial heliport serving the oil and gas rigs in the north sea. Aviation also supports inbound tourism in the north east. In 2010, the Aberdeen region attracted almost 1.4 million UK and international visitors, generating almost £300 million for the local economy; 92% of those visitors arrived by air.

In 2011, a new £10 million runway extension was opened at . The investment is designed to expand Aberdeen’s international reach by accommodating larger aircraft that can travel longer distances. Ultimately, our aim is to offer more international destinations, particularly in the underserved leisure market.

Aberdeen Airport is performing well through the recession but there is no doubt that our ability to grow our international route network is being compromised by Air Passenger Duty, which is already the highest in the world and rising. At a time of recession, and with so many jobs dependent on the aviation sector, we believe that the UK Government should reconsider future increases in APD.

We have serious concerns that Scotland’s ability to compete for international routes – in what is already an intensely competitive market - will be undermined by further rises in APD. It already costs airlines more to fly to Scotland because our relative isolation means that airlines require more fuel and cannot operate as many rotations during the course of a day. As a result, Scotland is already at a competitive disadvantage, even before APD is added to the mix.

There is therefore a real risk that airlines looking to serve new markets will choose other European countries at the expense of Scotland. This in turn will have an impact on employment, business connectivity – including exports – and inbound tourism.

A recent study commissioned by BAA in Scotland found that further increases in APD could cost Scotland’s airports around 1.2 million passengers over three years.

The loss of so many passengers would have a particularly serious impact on Scotland’s tourism industry, at a time when the tourism market in Scotland is showing little growth. The BAA study suggests that around 148,000 trips and £77 million in visitor spend will be lost over the next three years as cost conscious visitors abandon Scotland for other, perceived better value destinations.

The UK Government has already taken action to reduce APD in Northern Ireland, and devolve responsibility for the tax to the Northern Ireland Assembly. We believe the Government should take similar action in Scotland in order to give our airlines and airports a fighting chance to compete.

APD was originally introduced as an environmental measure but successive Governments have simply used this tax to generate income for the Treasury, with no benefit to the environment. Given the environmental advances made by the aviation industry, including the creation of a European wide emissions trading scheme, we believe there can be no justification for further rises in APD.

2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? c. How can surface access to airports be improved?

Scotland’s geographic location on the periphery of Europe means that air links are vital to the country’s global competitiveness. Aberdeen’s distance from London and other key cities makes rail travel largely impractical, particularly for time pressured business travellers.

Access to London, in particular, is of critical importance to the north east, given Aberdeen’s status as an energy capital and financial centre. Aberdeen is relatively well connected to London’s airports, with daily services to Heathrow, Gatwick, Luton and a recently launched service to London City – a route which is of particular importance to the business community.

However, for many regional airports, Heathrow remains the greatest prize, not just in terms of point to point travel, but in terms of the international connections it provides as the UK’s hub airport.

In recent years, the number of regional airports with links to Heathrow has diminished significantly. In 1990, 18 UK destinations were served from Heathrow. Today, only seven UK airports – Aberdeen, Belfast City, Belfast International, , Glasgow, Leeds

(from December) and Manchester – have access. It is worth noting that Paris CDG and Amsterdam serve more UK regional airports than our own hub airport.

The lack of capacity at Heathrow also has a direct impact on Scotland, both in terms of the passenger experience – flights are often cancelled during bad weather and flights are routinely held in air traffic control holding patterns – and in the number of available services.

A number of Scottish airports have recently lost services to Heathrow – in 2008 and Glasgow in 2011. With Heathrow operating at near capacity, UK based airlines – under pressure to maximise their commercial return – have increasingly opted to switch from serving the domestic market to operating in the more lucrative medium and long haul sectors. This was evidently the case at Glasgow in 2011 when operator BMI announced new services to North Africa and the Middle East on the day it suspended its Glasgow service.

The loss of bmi, which serves Edinburgh and Aberdeen, will further dilute the number of services operating between Scotland and Heathrow. We welcome the prospect of a new operator utilizing the remedy slots between Aberdeen and Heathrow and the additional capacity this will produce for our domestic market . However, this will not address the fundamental problem: the lack of physical capacity at Heathrow and, increasingly, at Gatwick.

Additional runway capacity would undoubtedly address some of the congestion issues at Heathrow, and ultimately deliver a better service for passengers (with fewer flight delays). It would also enable Heathrow to deliver a wider network of international destinations – which would also ultimately benefit the regions.

However, a third – or fourth runway – at Heathrow would not necessarily guarantee regional access to the hub - airlines would likely use the additional landing slots to serve lucrative medium and long haul destinations, at the expense of UK regions. Therefore, we believe there is a need for Government to intervene to safeguard slots, particularly at Heathrow.

We welcome the recent Opinion of the Committee of the Regions (2012/C 277/11), which considered this issue and called for “appropriate measures to ensure that regions are connected to the worldwide aviation network.” We would urge the UK Government to consider all possible options to enable regional airports, such as Aberdeen, to maintain their links with Heathrow.

3. What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? c. What is the relationship between the Government’s strategy and EU aviation policies?

The UK aviation industry has made real progress in terms of managing its environmental impacts. BAA was instrumental in setting up a European wide emissions trading scheme, and many UK airlines, such as and easyJet, are pioneering new sustainable fuel technologies. Noise is a challenge for all airports; and one Aberdeen Airport takes extremely

seriously. The industry has shown its willingness to respond to community concerns on this issue through the development of quieter, cleaner aircraft. At a local level, senior manager from Aberdeen Airport – including the Managing Director – meet regularly to discuss concerns with local residents, and the recently published draft Aberdeen Airport Master Plan outlines a series of measures designed to mitigate the environmental impacts of airport growth, including noise. Providing the industry maintains its willingness to engage constructively on this issue, and airports commit to delivering sustainable growth, it should be possible to strike a balance between securing growth – with all the social and economic benefits that generates – while managing concerns about the environment. It is a difficult balancing act, but absolutely achievable.

4. Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where? b. What are the costs and benefits of these different ways to increase UK aviation capacity?

There is absolutely a need for a step change in UK aviation policy. More than two years into the Coalition Government, there is no sense of a strategic long term vision for the UK aviation industry.

The UK is widely regarded as the aviation hub of the world, with Heathrow still the world’s busiest international gateway. But for how long? Airports across Europe and the Gulf are investing heavily in additional runway capacity, while successive UK Governments have continued to ponder the future of Heathrow.

Frankfurt has recently opened its fourth runway, Amsterdam is planning its seventh runway and a new airport – set to become the world’s busiest – has opened in Dubai. Meanwhile, China and India are building new airports at a remarkable pace.

While Heathrow remains the busiest international hub, many of its European rivals – Amsterdam, Paris CDG and Frankfurt, for example – offer a more extensive global network of destinations, particularly to the emerging markets of Brazil, India and China. With significantly more runway capacity than Heathrow, all three are expected to overtake Heathrow in terms of passenger numbers by 2020.

Airlines such as British Airways and Etihad have recently warned that the lack of capacity in the south-east and Heathrow, in particular, is harming Britain’s competitiveness and will ultimately damage the UK’s status as the aviation hub of the world.

The issue of air capacity is a controversial one but it is one we must address once and for all if we are to maintain our status as the world’s aviation hub. If not, we risk losing our competitive edge to airports in Europe and the Gulf. While we welcome the appointment of an independent commission to consider this issue, the proposed timeline means that we are three years away from any meaningful decision on the future of Heathrow. That uncertainty is bad for business and bad for our airline partners.

11 October 2012

Written evidence from the London Borough of (AS 16)

Thank you for the opportunity to participate in this Inquiry. I am submitting this evidence on behalf of the London Borough of Hillingdon. I have been the Leader of the London Borough of Hillingdon since 2000 and am a local councillor for the Ward. I am one of the key partners of the 2M Group, an all-party alliance of local authorities concerned about the environmental impact of Heathrow operations on their communities. The Group, which took its name from the 2 million residents of the original 12 authorities, now represents a combined population of 5 million people and was successful in 2010 in overturning plans for a third runway at the airport. The Group is not anti-Heathrow but works together to improve the environment and protect the quality of life for local people.

My response is set below in an Executive Summary and under the specific questions that the Committee has agreed to pursue.

Executive Summary

The main points and key recommendation for action by the Government or others which I would like the Committee to consider for inclusion in its report to the House are as follows:

Main Points

a) It should be acknowledged that the provision of capacity is not necessarily synonymous with increased connectivity, especially at congested airports like Heathrow. The Government need to identify what interventions they are able to impose upon airlines to ensure they play their part in maintaining connectivity. If not, local communities could be subjected to yet more increases in noise and pollution to find that airlines simply fly to the same destinations at a greater frequency. b) Aviation must form part of an overall strategic national integrated transport infrastructure framework that encompasses airports, roads and rail, including any potential high speed rail. Without such a framework, airport growth will remain constrained by poor transport links to the detriment of the national economy and continue to have adverse social and environmental impacts to the detriment of local communities. c) If the Government is determined to postpone the decision on airports until post 2015, it should also call a halt on the proposal for HS2, as it currently stands, and align the two strategies accordingly. d) Airports cannot be allowed to have increased capacity at any cost. There must be sufficient weight given to complying with relevant European environmental legislation on issues such as local air quality and ensuring the avoidance of significant adverse noise impacts in order to protect the health and well being of local communities. e) A more accurate measure of community exposure to noise must be adopted as soon as possible, including recognition that the frequency of flights is an important aspect rather than just the noise of an individual flight, plus accounting properly for the impacts associated with noise at different times of the day, especially night noise.

f) I would support the investigation by Government into measures such as extending fifth freedoms, reviewing the current slot mechanism and offering bilateral partners unilateral open access to other UK airports, to ensure best use of regional airports to relieve the pressure at congested south east airports. g) The provision of resilience must be built into the operating model of any airport. I would support the Mayor of London’s proposal that any runway utilisation should be at no more than 75% to avoid congestion on the ground, congestion in the air and to improve the passenger experience in terms of the airport’s ability to recover from disruption. h) Before any decisions are made on the provision of extra capacity or whether the hub model is the correct operating model for increasing capacity and maintaining connectivity, the impacts of various changes should be appropriately taken into account including new technologies such as video-conferencing; substitution of short haul for rail trips; increasing oil prices; constraints in terms of reducing climate change emissions; and the impact of new generation aircraft, such as the Boeing 787 which will have the ability to fly longer distances. i) An international hub needs to be situated where there is sufficient land to facilitate its function as a hub. It must have sufficient runway capacity; be managed at a level to ensure operational resilience; and be located so as to minimise harm to the environment and most importantly to local communities.

Key recommendation I would ask the Committee to recognise that a third short runway at Heathrow is not likely to be sufficient in the long term and there will inevitably be pressure for a 4th runway. There is insufficient land for Heathrow Airport to expand to meet the long term requirements of a hub airport. To attempt to propose airport expansion in such an already congested location, with the devastating impacts arising from the demolition of homes and the loss of communities and the unacceptable levels of noise and air pollution that this would be bring to large areas of London, is not logical or rational in any future aviation policy.

Question 1 - What should be the objectives of Government policy on aviation?

a. How important is international aviation connectivity to the UK aviation industry? 1 The Government’s draft Aviation Policy Framework consultation states that international aviation connectivity is important to the UK. It follows, therefore, that the aviation industry has a role to play in ensuring that the UK remains a well connected nation. However, the question itself asks whether international connectivity is important to the UK aviation industry.

2 Our experience at Heathrow doesn’t allow the conclusion to be drawn that international connectivity is necessarily important to the aviation industry. Increases in capacity have not been synonymous with the provision of increases in connectivity.

3 When permission was given for the building of Terminal 5, it included a capacity increase up to 480,000 Air Transport Movements a year. Despite the increase in flight numbers, over time there has been a decline in destination choice with airlines simply operating more profitable routes at a higher frequency. The number of destinations served has dropped from 227 in 1990 to 180 today, despite the permitted increase in

capacity. (page 24, All Party Parliamentary Group Inquiry into Aviation Policy and Air Passenger Duty (APPG Report), August 2012).

4 Maintaining diverse international connectivity for the UK has therefore been sacrificed for frequency on the same profitable routes. As this experience indicates, maintaining connectivity cannot be left to the airlines. This aspect is highlighted in the APPG report: “airlines cannot be expected to substitute established and successful routes which provide an economic return for unproven new routes.” (page 24)

5 Given this statement, if diverse international connectivity is vital to the UK economy, there do not appear to be the appropriate Government interventions available to ensure that airlines play their part in maintaining and increasing international connectivity, nor any means of ensuring consolidation where slots are being used uneconomically and to the detriment of the UK’s international connectivity. There is no evidence to suggest that the repeated calls for capacity increases are a guarantee of better international connectivity. This is especially relevant at congested airports such as Heathrow.

b. What are the benefits of aviation to the UK economy? 6 I have not focussed on this question.

c. What is the impact of Air Passenger Duty on the aviation industry? 7 I have not focussed on this question.

d. How should improving the passenger experience be reflected in the Government’s aviation strategy? 8 Whilst the provision of a good passenger experience is an important aspect for UK business, and its reputation internationally, sufficient weight needs to be given to protecting the needs of the local communities in close proximity to large airports.

9 Whilst the provision of jobs to local communities is a positive aspect of close proximity to an airport, the negative impacts such as increased pollution; increased noise; transport congestion on road networks; and over-crowded can outweigh any benefits.

10 The Government has a duty to protect the health and well being of local communities, as well as having a legal obligation to comply with relevant European environmental legislation on issues such as local air quality. This needs to be reflected, and given sufficient weight, in any future aviation strategy. This aspect must not be sacrificed by simply putting in measures and policies to prioritise improving the passenger experience.

e. Where does aviation fit in the overall transport strategy? 11 At present, aviation doesn’t fit in the overall transport strategy. This is something that needs to be addressed urgently. Aviation must form part of an overall strategic national integrated transport infrastructure framework that encompasses airports, roads and rail, including any potential high speed rail.

12 As an example, decisions on (HS2) have already been made for a preferred westerly route from London to incorporate a spur to Heathrow, described in the HS2 Decision documentation as the country’s major hub airport. This is not aligned to the timescales for the Independent Commission chaired by Sir Howard Davies to look at the requirements for future aviation capacity, including the potential for a new hub airport, which will not report until 2015.

13 Should the Independent Commission Review recommend a new hub airport in a location other than Heathrow, then the HS2 route and appropriate links would need complete re-assessment because it would not need to go west from London in order to link with Heathrow airport. If the Government is determined to postpone the decision on airports until post 2015, it should also call a halt on the proposal for HS2 as it currently stands and align the two strategies accordingly.

Question 2 - How should we make the best use of existing aviation capacity?

a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? 14 There are airports that are currently not at capacity which could be used to take the pressure off congested airports, such as Heathrow. The Government has suggested extending the fifth freedoms policy to Gatwick, Stansted and Luton. This policy grants rights to allow an airline of one country to land in a different country, pick up passengers and carry them on to a third country. By extending it to include Gatwick, Stansted and Luton, there are likely to be new services attracted to these airports and additional stop- over flights, which would support London's and the UK's aviation connectivity and the UK’s economy. The Government has also suggested other measures such as offering bilateral partners unilateral open access to UK airports away from the congested South East airports and reviewing the slot mechanism. I consider such measures are worthy of investigation.

15 The provision of resilience must be built into the operating model of any airport. At Heathrow the number of air transport movements has been set too high, i.e. at the actual capacity limits of the runways, as opposed to an operational capacity which would allow for the provision of resilience. This is considered to be unacceptable for two reasons. Firstly, appropriate limits on air transport movements at airports would ensure greater resilience and thereby improve the passenger experience in relation to punctuality and delays and also have environmental gains in aspects such as reducing stacking in the air and congestion on-airport. Secondly very high air transport movements has detrimental impacts on the surrounding communities, who have to cope with the extra measures which are put in place by airport operators to cope with congestion and improve resilience.

16 A recent statement from the Mayor of London (speech to Business Leaders, City Hall, 4th Oct 2012) has proposed that any runway utilisation should be at no more than 75% to avoid congestion on the ground, congestion in the air and improve the passenger experience in terms of the airport’s ability to recover from disruption. I would support this view.

b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? 17 I have not focussed on this question. c. How can surface access to airports be improved? 18 Currently different aspects of transport are looked at in isolation, for example, the high speed rail route and link to Heathrow has been given approval, yet the aviation strategy in relation to the potential expansion and location of future hub capacity is currently postponed to post 2015. There must be a strategic national integrated transport infrastructure planning framework. Without such a framework, airport growth will remain constrained by poor transport links to the detriment of the national economy and continue to have adverse social and environmental impacts to the detriment of local communities.

19 In terms of regional access, although an airport will have a clear objective to improve surface access for its passengers and workers, this must be delivered as an integral part of the whole surrounding road and public transport network, to ensure implementation of the best option for the region and local communities.

20 Heathrow airport is situated in a congested part of west London with motorways, local roads and public transport networks, including rail and serving central London, west London and the Thames Valley Corridor as well as several local borough networks. The development of the airport and its associated surface access infrastructure has been piecemeal. The result is a very congested road and public transport network, with traffic serving a large international airport having to compete with all other transport users. The consequences of a busy international airport in a very densely populated area include both congested road networks, resulting in unacceptable levels of air and noise pollution, and also unsatisfactory public transport, with commuters competing for space with airport passengers and luggage. Whilst further improvements to surface access may be feasible at Heathrow, they are limited given the existing congestion and the density of development in the area.

Question 3 - What constraints are there on increasing UK aviation capacity? a Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? 21 Where an airport is located in a densely populated area, environmental constraints pose a serious limit on its ability to increase capacity. At Heathrow, both air and noise pollution levels exceed acceptable limits. Where local communities in close proximity to an airport suffer from unacceptable levels of noise and air pollution, benefits in technologies such as quieter aircraft cannot be used as an opportunity to increase flight numbers but must be directed towards improvements in the health and well being of local residents. Due to the constrained nature of the airport location, Heathrow has developed to operate at capacity with no resilience. It is not acceptable to increase the burden on local communities by introducing extra measures to attempt to make an inappropriately located international airport more effective.

22 The wrong location for an international airport becomes its own constraint in terms of future growth. Heathrow is a two runway, segregated mode operation airport

with an annual aircraft movement limit of 480,000. Its operation already causes intolerable levels of noise for swathes of Londoners, and, due to its congested urban location, is a main contributor to levels of air and noise pollution above health based standards for surrounding communities. In order to maintain its international hub status, Heathrow will inevitably require 4 runways and therefore continued incremental growth will not be practicable or sustainable in the future.

23 The constraints of noise, air pollution and operational resilience on increasing UK aviation capacity are discussed in more detail below.

i) Noise impacts

24 Heathrow is unique in Europe in terms of the magnitude of the noise impact on the surrounding densely populated area, with thousands of people living on a daily basis with an aircraft overhead every 90 seconds and with flights that disturb sleep from as early as 4:30 am. The levels of air pollution are above those set for the protection of health and the surrounding roads and public transport networks are congested. This has been the case for a number of years and it was these conditions which helped the Coalition Government decide that expansion in this location was not tenable. “The quality of life impact of a third runway with up to 220,000 more flights over London every year, would be massive and there is no technological solution in sight to ensure planes become quiet enough quickly enough to make this burden in an way tolerable. So we need another solution…” (our emphasis), , Transport Times Conference, April 2012

25 Where an airport is located in a densely populated area such as London, its growth will be seriously constrained by the requirement to meet the Government aviation policy objective to reduce and limit those impacted by noise, and, to meet the National Noise Policy Statement for England objective to avoid significant adverse impacts on the health and well being of local communities, becomes a constraint on growth

26 Heathrow Airport accounts for approximately 70% of people in the UK exposed to aircraft noise, and the noise impact from this one airport easily exceeds the combined impact of all the other hub airports in Western Europe. The European Union Noise Directive requires the use of the 55 dB Lden contour which also takes account of the differing impacts at different times of the day, night noise being the most intrusive. The outdated DfT measure of 57dB LAeq16h, uses a higher noise level and is measured as a straight average over a 16hr day. The extent this difference has on the estimation of the impact on local communities is discussed below.

27 The DfT measure (57 dB LAeq16h contour) for Heathrow in 2010 covers an area of 106.3sqkm in which 224,550 people live, the EU Noise Directive criteria (55 dB Lden contour) covers an area of 222.3 sq km in which 712,100 people live. It is totally unacceptable to use out-dated metrics. A more accurate measure of community exposure to noise must be adopted as soon as possible, including recognition that the frequency of flights is an important aspect rather than just the noise of an individual flight, plus accounting properly for different times of the day, especially night noise. I have attached a technical paper which gives evidence to support our view (Appendix A)

b) Local air quality

28 Local air quality is a significant constraint to expansion at Heathrow with levels in the surrounding communities exceeding European health standards. The annual mean nitrogen dioxide standard was required to have been met by 2010. The UK Government Air Quality Plan which was submitted in September 2011 to the European Commission as part of its legal obligations for meeting air quality limits has predicted that this area will not be in compliance with this standard until at least 2020. This would appear to be unacceptable.

29 The previous Government’s proposals for expansion of Heathrow (Adding Capacity at Heathrow, 2008) relied heavily on assumptions that significant improvements in road vehicle technology would create the necessary level of “headroom” in which more flights could be added. This reliance has proved to be misplaced. As the Government Air Quality Plan submission to Europe has reported, limits will not be met, even under present operating conditions, until at least 2020. Given the legal significance of the UK Government being in breach of the legislation to meet European Union limit values for local air quality, this becomes a serious constraint on any future capacity increases in urban locations such as Heathrow.

c) Operating at capacity without resilience

30 Because Heathrow is operating at capacity, the airport has no operational resilience. To allow an airport, which is an uncontrolled source of emissions, to operate at capacity in such an urban location has proven to be a mistake to the detriment of local communities who have suffered as a result.

31 Measures are currently being tested at Heathrow to improve resilience through trials of operational freedoms, but it is the local communities who will again bear the brunt of this with encroachments into much valued respite periods being one of the potential outcomes.

32 I support the Mayor of London’s recent view that maintaining runway utilisation at 75%, as opposed to the 99% at Heathrow, could bring about improvements in congestion on the ground; reduce stacking in the air; and improve the passenger experience in terms of speedier recovery from disruption. Maintaining resilience becomes a constraint in terms of increasing capacity because in order to operate more efficiently, the current levels of air transport movements at Heathrow need to be actually decreased not increased.

b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? 33 I have not focussed on this question.

c. What is the relationship between the Government’s strategy and EU aviation policies? 34 I have not focussed on this question.

Question 4 - Do we need a step-change in UK aviation capacity? Why?

a What should this step-change be? Should there be a new hub airport? Where? The requirement for extra capacity 35 Before deciding on the need for a step change in capacity increases, there are a number of questions which require examination. Changes including new technologies such as video-conferencing; substitution of short haul for rail trips; increasing oil prices; and constraints in terms of reducing climate change emissions could all have an impact on the need for, and the magnitude of, any increases in capacity. In addition, the impact of new generation aircraft, such as the Boeing 787, which can potentially provide a point to point service over a greater distance, should be appropriately taken into account.

36 These issues need to be understood before any decisions are made on the provision of extra capacity or whether the hub model is the correct operating model for increasing capacity and maintaining connectivity.

The objective behind the need for capacity increases 37 If the Government objective is to maintain and improve international connectivity, there needs to be a recognition that extra capacity does not necessarily lead to extra connectivity. This has been proven by experience at Heathrow.

38 Airlines cannot be forced to either provide new routes or maintain existing ones where market forces dictate otherwise. There must be recognition of the risk that increased connectivity is not a guaranteed outcome, especially in situations where airports become quickly constrained, as would be the case of an additional short third runway at Heathrow. This aspect must be taken into account before decisions are made.

Hub location 39 The number of runways and the associated facilities to maintain a hub airport are larger than a traditional point to point airport, due to the nature of the hub operation and the requirement for feeder flights. Unless the hub airport is sited in a suitable location, maintaining its hub operation will become constrained by land availability and environmental issues, which is what has happened at Heathrow.

40 Heathrow is unusual in being a successful hub airport with only two runways and generally other successful hubs have more runways. In comparison, Schiphol has six runways; and Charles de Gaulle and Frankfurt have four. Given the pressure for future expansion to align with the predictions in aviation growth, and the need to connect with emerging markets such as Brazil, Russia, India and China, it is clear that there is growing concern that in order to maintain a successful hub operation, there is a need for more capacity and for additional runways. A third short runway at Heathrow is not likely to be sufficient in the long term and there will inevitably be pressure for a 4th runway.

41 The location of Heathrow Airport has become its own constraint. To attempt to propose airport expansion in such a congested location, with the devastating impacts arising from the demolition of homes and the loss of communities and the unacceptable levels of noise and air pollution that this would be bring to large areas of London, is not logical or rational in any future aviation policy.

42 A hub airport needs to have sufficient capacity to allow for growth in the feeder flights which are needed to maintain the hub model of operation and for it to be operated at a level where there is operational resilience. I support the Mayor of London’s view (Aviation speech, City Hall, 4th Oct 2012) that maintaining runway utilisation at 75% could bring about improvements in congestion on the ground, reduce stacking in the air and improve the passenger experience in regard to speedier recovery from disruption.

43 A hub airport must also be situated in a place which minimises harm to the environment, and, most importantly, people. West London is not somewhere that fits these criteria and a successful hub airport cannot be ‘shoe-horned’ into Heathrow.

44 If the UK requires a hub airport for London, then other options for its location must be appraised against the national Aviation Policy Framework, including wider objectives such as the well being and quality of life of local residents. b. What are the costs and benefits of these different ways to increase UK aviation capacity? 45 Up to now the main evidence for increasing aviation capacity has been based upon economic gain. I support the draft Aviation Policy Framework approach of achieving a better balance than in the past between the benefits aviation brings and its impacts. The impacts must be accounted for at both a global level, and at a local level in terms of health and wellbeing of communities and the environment.

46 If this objective is taken seriously, it is obvious that increasing capacity at Heathrow is not the answer to increasing UK aviation capacity because this would result in the demolition of hundreds of homes; the loss of communities; increased noise for millions of people; and unacceptable pollution levels above European Union legal standards for health.

Appendix A

New evidence on aircraft noise annoyance Introduction This paper presents evidence that there is a useful correlation between the aircraft noise annoyance studies reported in European Environment Agency (EEA) report 11/2010 and the UK Government's ANASE study. Both sets of studies have found a significant shift in that aircraft noise now causes annoyance at lower levels than it did previously. The significance of this, in relation to the Draft Aviation Policy Framework consultation, is that it provides some support for the use of the ANASE findings in the development of future aviation policy. This is important, as without this support, the ANASE findings have been set aside. However, until the ANASE issue can be resolved, the conclusion is that the EEA findings should be accepted for the development of future aviation policy, in relation to annoyance. There remains an important caveat to this, in that the EEA evidence itself needs to be improved by including the significance of flight numbers in any noise annoyance assessment. Only once this is resolved can the question of acceptable aviation capacity be addressed fully. So, in spite of the various study deficiencies, the message remains clear,

that aircraft noise now causes annoyance at lower levels than it did previously, and this issue must be addressed in any future aviation policy.

EU and UK models for aircraft annoyance European Environment Agency report 11/2010 [1] is a good practice guide intended to assist policy makers and competent authorities in understanding and fulfilling the requirements of Directive 2002/49/EC [2], commonly referred to as the Environmental Noise Directive, relating to the assessment and management of environmental noise. It summarises the latest European view on issues such as exposure-response relationships and thresholds for health endpoints (annoyance, sleep disturbance, cardiovascular effects and cognitive impairment). Individual annoyance relationships with the noise metric Lden are given for road, rail and aircraft noise.

Figure 1: Comparison of EU and UK aircraft noise annoyance models

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0 43 48 53 Lden (dB) 58 63 %HA EEA post-1990 %HA EEA pre-1990 %HA ANASE-derived trend points %HA ANASE-derived %HA CAP725 HA = “Highly annoyed” The EEA report gives a previously used European aircraft noise annoyance relationship based on studies carried out prior to 1990. This is the same relationship as given in the 2002 EU Position Paper [3]. The relationship gives an estimate of the percentage of persons highly annoyed at a given Lden noise exposure. The EEA report mentions studies showing a trend change in annoyance around 1990, and gives an updated European annoyance relationship based on aircraft noise studies carried out after 1990. These were all European studies (Switzerland, Germany, Netherlands) regarded as more appropriate for the EU than the pre- 1990 studies, which were mainly carried out in the USA and Australia. Figure 1 gives the results for the pre-1990 and post-1990 studies in terms of percentage highly annoyed in relation to Lden. It can be seen that levels of annoyance at a given noise level are much higher for the post-1990 studies than for the pre-1990 studies. The analysis given in Figure 1 is confined to the range of noise levels in the ANASE study (40.9 to 64.2 dB LAeq,16h).

At 59 dB Lden, for example, the relationship adopted for the pre-1990 studies in Figure 1 gives 16% highly annoyed. In the case of the post-1990 studies, the relationship adopted gives the same percentage highly annoyed at around 49 dB Lden. Thus, the EEA report suggests that levels of annoyance (expressed as percentage highly annoyed) that occurred at 59 dB Lden in the pre-1990 studies occurred at around 49 dB Lden in the post-1990 studies, a reduction of around 10 dB Lden.

The Government’s aviation policy uses 57 dB LAeq,16h as the level of daytime noise marking the approximate onset of significant community annoyance. This level is based on the Aircraft Noise Index Study (ANIS) [4] carried out in the UK in the 1980s. The CAP725 document [5] produced by the Civil Aviation Authority in 2007 outlines methodologies for environmental assessment of an airspace change proposal. It gives an aircraft noise annoyance response relationship for calculating percentage of people highly annoyed using LAeq,16h noise levels. The relationship is based on the Schultz curve produced in 1978 [6]. The document states that the ANIS results exhibit the same general trend as the aircraft studies in the Schultz analysis. The EU annoyance relationships use the Lden noise metric rather than the LAeq,16h noise metric used in the UK. Analysis of data [7,8] relating to Heathrow airport in 2006 shows that Lden is typically around 1.7 dB higher than LAeq,16h. This 1.7 dB adjustment has been used to convert LAeq,16h to Lden to give the CAP725 annoyance relationship shown in Figure 1.

The Attitudes to Noise from Aviation Sources in England (ANASE) study [9] reported in 2007 that annoyance with a given level of aircraft noise is much higher than when the ANIS study was carried out. The ANASE study made a direct comparison with the ANIS study in terms of “mean annoyance” with aircraft noise. This showed that the level of mean annoyance found at 57 dB LAeq,16h in the ANIS study was found in the ANASE study at a level of just over 50 dB LAeq,16h, a reduction of just less than 7 dB LAeq,16h.

The Government accepted that the ANASE study demonstrated that annoyance with a given level of aircraft noise is higher than found in the ANIS study. However, on advice contained in an independent peer review report [10], the Government decided that the detailed findings of the ANASE study should not be relied on.

Most of the analysis in the ANASE report related to “mean annoyance”, and trend lines were fitted to graphs of mean annoyance versus LAeq,16h. Figure 7.2 of the ANASE report gave a graph of percentage “at least very annoyed” versus LAeq,16h, but no trend line was fitted to the plotted data points. In the ANASE study, responses from respondents were recorded using an annoyance scale of (i) “Extremely annoyed”, (ii) “Very annoyed”, (iii) “Moderately annoyed”, (iv) “Slightly annoyed” and (iv) “Not at all annoyed”. The annoyance scale did not include a response of “Highly annoyed” as used in the EEA and CAP725 reports so comparison of the results of the different studies is not straightforward.

However, section 6 of the ANASE peer review report [10] assumes that the ANASE term “at least very annoyed” is equivalent to the term “highly annoyed” used in other studies. This assumption allowed the peer reviewers to deduce (apparently by eye) two trend points for the plotted ANASE data points. The two ANASE trend points given in the peer review report are 8.5% highly annoyed at 47/48 dB LAeq,16h, and around 40% highly annoyed at 57 dB LAeq,16h. These trend points relate to the corrected version of ANASE report Figure 7.2 given in the Erratum dated 1st November 2007 contained in the ANASE final report dated October 2007.

The two ANASE derived trend points are plotted in Figure 1, after converting LAeq,16h to Lden by adding 1.7 dB, derived from Heathrow data for 2006. Using the same assumptions that (i) the ANASE term “at least very annoyed” is equivalent to “highly annoyed” in other studies, and (ii) Lden can be estimated from LAeq,16h by adding 1.7 dB, the results derived for all ANASE sites have been plotted in Figure 1. That figure also shows a third order

polynomial trend line fitted to the ANASE derived results. The relatively poor agreement between the plotted data points and the fitted trend line (R2 = 0.67) reflects the spread of the data points, but this is not unusual in social surveys of this kind.

It is important to note that Figure 1 shows that the annoyance levels at a given noise level are much higher for the EEA post-1990 studies than for the EEA pre-1990 studies. For example, percentage highly annoyed at 57 LAeq,16h (approximately equivalent to 58.7 dB Lden) is more than doubled from around 15% for the pre-1990 studies to around 37% for the post-1990 studies. It can be seen from Figure 1 that the annoyance levels for the UK’s CAP725 relationship are generally lower than given by the EEA pre-1990 studies relationship, and much lower than given by the EEA post-1990 studies. This implies that continued use in the UK of the CAP725 annoyance relationship will seriously underestimate levels of aircraft annoyance. The ANASE trend line is generally similar to the EEA post-1990 studies relationship, and certainly in much better agreement with the EEA post-1990 studies relationship than is the CAP725 relationship.

The Government rejected the detailed findings of the ANASE study and continues to rely on the ANIS, Schultz and CAP725 aircraft noise annoyance relationships, even though these relationships are based on social surveys carried out more than 25 years ago. It seems doubtful that these relationships remain in calibration for current public attitudes, flight numbers, aircraft fleet mixes and aircraft noise characteristics. The EEA report supports this doubt on the continued validity of these relationships. This is because the EEA report suggests that levels of annoyance at a given noise level are much higher than suggested by previous European guidance. Furthermore, these EEA findings of much higher levels of annoyance seem to be replicated by the results of the recent ANASE study.

Objectives and findings of the ANASE study The ANASE study was commissioned by the Government in 2001 in order to update the ANIS study of 1982 which led to LAeq,16h noise index being adopted by the Government for measuring aircraft noise. The ANASE report recognises that the amount of air traffic has increased significantly since 1982 whilst the sound levels generated by individual aircraft events have been significantly reduced as older, noisier aircraft have been replaced by more modern aircraft types with quieter engines and much improved climb performance. It is also recognised that attitudes to aircraft noise may have been changed due for example to the general growth in personal income, higher expectations of a peaceful living environment and less tolerance of environmental intrusion.

The main findings of the ANASE study are reviewed below against the study objectives.

Objective 1: Re-assess attitudes to aircraft noise in England The study found that the annoyance level of respondents increased as the noise indicator LAeq,16h increased, and that a large proportion of measured variation in annoyance can be accounted for by LAeq,16h. However, for a given LAeq,16h, there is a range of reported annoyance indicating that annoyance is not determined solely by the amount of aircraft noise as measured by LAeq,16h. The main additional influences on the level of annoyance were found to be respondent’s household income and socio-economic group.

The study found that for the same amount of aircraft noise, measured by LAeq,16h, people were more annoyed in 2005 than they were in 1982.

The study showed that people are much more sensitive to aircraft noise at night (particularly around midnight and the early hours thereafter). In contrast, people are least sensitive to aircraft noise in the morning and early afternoon. Ideally, therefore, a noise indicator for aircraft noise should reflect these times of day sensitivities. In contrast, LAeq,16h does not reflect weighting for sensitivities by time of day.

Objective 2: Re-assess their correlation with the LAeq,16h noise index The study considered whether LAeq,16h is the appropriate measure of aircraft noise for predicting annoyance. The study found that while LAeq,16h continues to be a good proxy for measuring community annoyance at a given point in time, the relationship between LAeq,16h and annoyance is not stable over time. Because of this, use of LAeq,16h to predict future levels of annoyance may be misleading. In particular, where numbers of aircraft are increasing significantly, the ANASE results suggested that under-prediction of annoyance is likely.

The study recognised that the LAeq,16h noise index incorporates a mathematical trade-off of 10 between event noise level and number of noise events1, which means that each doubling or halving of the numbers of aircraft noise events counts as equivalent to a 3 dB increase or decrease in average noise levels2. The results from the study suggested that the LAeq,16h noise indicator gives insufficient weight to aircraft numbers, and a relative weight of 20 appears more supportable from the evidence than the relative weight of 10 inherent in LAeq,16h.

Objective 3: Examine willingness to pay to remove aircraft noise The study was required to examine (hypothetical) willingness to pay in respect of nuisance from aircraft noise, and whether attitudes might be affected if cash transfers or, for example, noise insulation grants were made available. The study found that aircraft event noise level, aircraft type, time of day and personal characteristics (in particular household income) influence annoyance and willingness to pay.

Aircraft noise action plans The EEA report 11/2010 [1] provides the dose-effect relationships intended to be used to assess the effects of noise on populations as required by the Directive [2]. Section 6 of the EEA report suggests that the lower noise thresholds for mapping are intended to delimit the area where noise is “considered to be a problem”. These thresholds are noise levels above which health effects start to occur.

The EEA report accepts that use of the current threshold levels for noise mapping of 55 dB Lden and 50 dB Lnight is understandable as a first step because of the large scale noise mapping required. However, the report points out that Member States are free to choose their own noise thresholds from where to start action planning, and the Lden threshold for noise mapping of 55 dB Lden does not take into account differences that exist between different noise sources. These differences are illustrated in Table 6.1 of the EEA report giving respective percentages highly annoyed at 45, 50 and 55 dB Lden for road, rail and aircraft noise. Table 6.1 of the EEA report is reproduced here (in part) as Table 1.

Table1: Transportation noise annoyance (reproduced from EEA report)

1 LAeq,T = SEL + 10LogN – 10LogT, where SEL is event noise level (dB) for N events in T seconds 2 10Log(2/1) = +3 and 10Log(1/2) = -3

Percentages of highly annoyed Lden Road Rail Aircraft 55 dB 6% 4% 27% 50 dB 4% 2% 18% 45 dB 1% 0% 12%

The EEA report states that while 55 dB Lden is a “fair” threshold for rail noise, use of 55 dB Lden for other noise sources leads to an underestimate of the actual burden. Table 1 gives the percentage highly annoyed at 55 dB Lden for rail noise as 4%, while the percentage highly annoyed at 45 dB Lden for aircraft noise is given as 12%. This means that to achieve annoyance levels approaching that regarded as “fair” for rail noise, the threshold for aircraft noise may have to be lower than 45 dB Lden. In fact, Section 2 of the EEA report gives 42 dB Lden as a general noise threshold above which annoyance effects start to occur or rise above background. It would therefore appear that the EEA report implies that the threshold for noise mapping where aircraft noise is considered to be a problem should be significantly lower than 55 dB Lden as currently used.

Conclusions The EEA report recognises that levels of annoyance with aircraft noise are much higher for post-1990 studies than for pre-1990 studies. This paper compares the results for different annoyance models over the range of noise levels in the ANASE study (40.9 to 64.2 dB LAeq,16h). This analysis shows that annoyance levels predicted by the UK’s CAP725 relationship are generally lower than given by the EEA pre-1990 relationship, and much lower than given by the EEA post-1990 relationship. In contrast, the analysis shows that the much higher annoyance levels in the EEA post-1990 studies seem to be replicated by the ANASE study. Despite this, the Government continues to rely on the ANIS, Schultz and CAP725 aircraft noise relationships derived from social surveys carried out more than 25 years ago.

Until the issues of the ANASE study are addressed, it is suggested that Government policy should be based on guidance in the EEA report, including the specified relationship between annoyance and aircraft noise level. Although the EEA report gives increased levels of aircraft noise annoyance, it does not address all the objectives of the ANASE study. These objectives include the suitability of LAeq,16h as an indicator of community annoyance, the importance of numbers of aircraft flights, the relative importance of different times of day, and determining willingness to pay to reduce annoyance from aircraft noise. Further work is necessary to address these objectives.

It is concluded that there is an urgent need for updated guidance from the Government on the annoyance relationship for aircraft noise, and the threshold level at which aircraft noise is considered to be a problem.

References [1] Good practice guide on noise exposure and potential health effects. EEA Technical Report No. 11/2010. European Environment Agency, 2010. [2] Directive 2002/49/EC. Directive of the European Parliament relating to the assessment and management of environmental noise, 2002. Official Journal of the European Communities, L 189, 12-25. [3] Position paper on dose response relationships between transportation noise and annoyance. European Commission Working Group, 2002.

[4] United Kingdom Aircraft Noise Index Study. DR report 8402, Civil Aviation Authority, 1985. [5] CAP725, CAA Guidance on the application of the airspace change process. Civil Aviation Authority, 2007. [6] Synthesis of social surveys on noise annoyance. Schultz, Theodore J. Journal of the Acoustical Society of America, 64(2), 1978. [7] London Heathrow Airport Strategic Noise Maps 2006. ERCD Report 0706. Civil Aviation Authority, 2007. [8] Noise exposure contours for Heathrow Airport 2006. ERCD Report 0701. Civil Aviation Authority, 2007. [9] ANASE: Attitudes to Noise from Aviation Sources in England. Final Report prepared for Department for Transport by MVA Consultancy, October 2007. [10] Attitudes to Noise from Aviation Sources in England. Non SP Peer Review. Civil Aviation Authority and Bureau Veritas, draft July 2007, final October 2007.

Written evidence from Mr Basil Hutton (AS 17)

I am a retired headmaster. I was a school head for 20 years, served on the Board of Studies of the Education Departments of Queens University Belfast and Stranmillis and St Mary’s Colleges of Education. I taught part-time on their undergraduate and post-graduate courses. I was awarded the M.B.E. for services to education in 2000. I am a member of Stranmillis Residents Association.

1 My main concern with the Policy Document lies in the question posed by your Committee in paragraph 3A:” Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on the local residents” 2 I was very disappointed with the direction and thrust of the Draft Aviation Policy framework. I was astonished to find that only the 3 main London Airports have been designated for noise management purposes. In the case of our own local noise polluter, George Best Belfast City Airport, it is even more astonishing. The document talks about the impact of noise at 57db at Gatwick and Stansted where together, only 4,200 people are affected, compared to the 11,500 similarly affected at GBBCA. Noise management is to be left to “better engagement” between airports and local communities, laissez-faire waffle at its woolliest. Governments should look after the overall welfare of its voters, but our Government has a completely cavalier attitude to its electors when it comes to aviation. Aviation seems to be cocooned in a world of its own and seems to operate in an unrestricted environment which is granted to no other industry.

3 Almost proudly the document admits that Heathrow’s environmental impact exceeds the combined impact of all the other hub airports in Western Europe! It is also worth noting that it has been voted the third worst airport in the world on CNNGo’s website.This should tell anyone that there is something seriously wrong with our current airport strategy.

4 Government must come to terms with the environmental impact of aviation and ensure that, as in Australia, the pain is fairly shared amongst as many people as possible, particularly those who preach about the evils of NIMBYism. The Government seems to have no will to take on the aviation industry and its political cowardice is cloaked in the weasel phrase “consistent with the Governments location policy” There is no policy, apart from a policy to do nothing. All other potential polluters, water, sewage, waste disposal, the oil and gas industries, sea and bathing water quality and so on, are all subject to strict regulation and centralised planning. Where is the control here? I don’t think that this document in its present form and scope will supply it.

I have now appended some comments and suggestions on the framework document.

Do you think that the government should map noise exposure around the designated airports to a lower level than 57dbs?

5 Noise levels should be mapped by government at all commercial airports and not just the 3 designated ones. They should be mapped according to the World Health Organisation’s recommendations at 40db, 50db and 55dd. The 2009 WHO survey in particular gives excellent guidance on what constitutes tolerable levels of noise at different times of the day and in different situations.

Health impacts of aircraft noise 6 The impact of aircraft noise has been well documented most notably in the HYENA study which showed a significant link between aircraft noise and hypertension. No government worthy of the name and with an ounce of empathy for their citizens who live under a flight path should ignore this. There are very many other studies showing the malign effects of aircraft noise and these cannot be ignored or wished away.

Educational impact of aircraft noise 7 All research in this area consistently shows a strong link between aircraft noise and underachievement.The most recent study that I have seen, the 2010 CAA report concludes that it affects memory, concentration, comprehension and reading ability, four good reasons for people to be NIMBYS.

Noise envelopes and the Government 8 These should be set up, monitored and regulated centrally by government. I don’t believe that airports can or should do this themselves. Their business is making money for their owners and they are not greatly concerned either with their environmental impact or the welfare of the people who live under a flight path. If all other sources of pollution are centrally controlled why should airports be allowed to be basically self-regulating.

Government, noise impact and penalties 9 Government should design and implement a robust system of noise regulation which would address this problem properly and which had appropriate penalties, especially for breaches of the night time curfew.

Airport compensation schemes 10 Airport should be required to offer compensation for proper sound insulation of homes where the noise level is greater than the WHO recommended maximum of 50db. Compensation should also be paid for loss of value to houses that are under a flight path.The principal that the polluter must pay is paramount.

Conclusion 11 Naturally enough my main interest in the Policy Document lies in how it could affect our own situation in Northern Ireland. The lack of an overall aviation is most starkly illustrated in how the two Belfast airports compete to the detriment of both and to the detriment of Northern Ireland business. We have two half airports, neither with decent road or rail links to the the east or west of the country. GBBCA in particular is already one of the noisiest in the UK and why it has been allowed to expand to the detriment of the only airport with the potential to fulfil all of the country’s aviation needs, Belfast International, is a disgrace and an indictment of our local politicians. Compared to the shiny new airports I have seen, especially in South East Asia, ours are antiquated and shabby, with little or no IT connectivity. Our problems are compounded as Dublin Airport is less than 2 hours away for most of Northern Ireland and where APD is minimal. Governments must address not only noise but the unnecessary duplication of routes such as we have in Northern Ireland. This results in avoidable greenhouse gas emissions and the flying of half -full aircraft into the same airports.

12 My wife and I recently returned from an extended holiday in South-East Asia. We flew into Kuala Lumpur (pop 7 million, one airport) on to Hanoi (pop6 million one airport) on to Hue (pop 2 million one airport) next to Saigon (pop 12 million one airport) and finally to Bangkok (pop 7 million one airport). We then flew home to Belfast (pop 500,000 two airports) Malaysia Vietnam and Thailand have one common pressing need and that is to secure a large and growing tourist business. They are doing this by concentrating their resources on building large modern airports with excellent road and rail links. Comfortable seating and cheap or free Wi-Fi and internet facilities are the norm. We in Northern Ireland need one International airport operating 24 hours a day with sufficient capacity to cater for any potential increase in traffic for the foreseeable future. It needs good road and rail links both to the east and west of Northern Ireland. The only airport that can satisfy these criteria is Belfast International and all future development should be based there.

14 October 2012 Written evidence from Peter Tomlinson, Iosis Associates, Bristol (AS 18)

The Author

Peter Tomlinson MA(Oxon)1 Dip Theol (Bristol) is an independent consultant currently specialising in ticketing and journey management technology for public transport. He is a Member of ITSO Ltd, the government controlled smart ticketing technology company, has been so from its launch, and in its early days was a Director of the company. He is currently involved in editing documents for the SEFT (South East Flexible Ticketing) project.

Some aspects of the link between aviation and ground transport

Summary

In the current concern to plan and deliver appropriate additional airport capacity in England, primarily driven by London Heathrow traffic having reached capacity, there is an obvious desire that the further capacity be delivered quickly. Indeed, in an email from the Office of the Mayor of London [1], I read:

The Mayor regards the need for a solution as urgent.

Also, on 29th September the BBC’s Stephanie Flanders reported the government’s desire for ideas about infrastructure projects that can deliver in short order [2], partly because of the benefit that appropriate construction will bring, and partly, during the development phases of such projects, as a contribution to the immediate need to stimulate the UK economy.

This submission to the Transport Committee is intended to urge planners to stop thinking about a brand new hub airport, or about enlarging Heathrow, but instead to start by looking closely at the linkage between ground transport and air transport, at UK spatial geography, and at emerging improvements to UK surface rail capacity. The author’s small scale study leads to a suggestion that planners should examine the idea that the redundant Lyneham airfield be rapidly developed as a commercially close‐coupled satellite of Heathrow (i.e. operated by the operator of Heathrow). The author has been in contact with the Geography Dept at the University of Manchester (Prof Cecilia Wong), which has done relevant work and is prepared to take that work further.

Background

1 BNC (1962), Natural Sciences (Physics) Recent material in the media about future developments in civil aviation in the UK indicates that suggestions and studies have taken a new turn. There will, we now read and hear, be a new study about alleviating the problem of congestion at Heathrow, but no decision until after the expected 2015 General Election. The study will be in two parts: a quick review, then another 2 years of in‐ depth study. Discussion read and heard tends to revolve around three topics:

1. expanding Heathrow, 2. expanding other existing civil airports in England, and 3. developing a brand new UK national ‘hub’ airport.

One missing topic in the material is a sufficient treatment of the problem of surface transport to and from airports, and that is the area that I try to explore here. But it isn’t just a matter of trying to get heard by the team developing the main post 2015 report, for:

‐ that team is said to be providing an interim report in short order; ‐ the Parliamentary Transport Committee (chaired by Louise Ellman MP) is starting a study for which they want written submissions by 19th October this year – only a month away as these notes started to be written

Hence this submission to the Committee.

My mind went back to a 2009 GMPTE2 hosted conference at which Manchester University Geographers presented data about ground transport in and around major conurbations and also to and from major airports. The presentation was made by Prof Cecilia Wong, Professor of Spatial Planning.

My particular interest over the last 14 years has been electronic methods associated with surface public transport: ticketing, journey management and journey reporting. That leads me to look at patterns of public transport and the reasons why and how people do (or do not) use it – not just in the UK but to some extent across mainland Europe. Also I travel 2 or 3 times a month between Bristol and London, and thus I am well aware that we have a redundant airfield at Lyneham, in just south of both the M4 and the Brunel corridor.

The dominant problem in UK surface public transport is usually seen as the Monday to Friday daily commuting peaks, requiring investment in infrastructure and equipment that is intensively used only during those peaks, and causing staffing problems because split shift and 12 hour working are no longer acceptable or, in some cases for drivers, no longer legal. For rail services in the South East and on some longer routes radiating out of London, there is a current DfT funded project to encourage more flexible travel patterns, thus contributing, along with more flexible working patterns implemented by the employers of a growing proportion of those travellers, to spreading the weekday peaks over longer periods3. The methods developed there will feed into the forthcoming new rail franchise contracts, and will help with the operation of rail services that feed airports.

2 Greater Manchester Passenger Transport Executive, now an Integrated Transport Authority: Transport for Greater Manchester 3 The project is South East Flexible Ticketing (SEFT), about which the first public presentation was at the Travel2020 conference on 11/10/12 But the dominant problem with the recent discussions is the combination of first a statement that our only major hub airport, Heathrow, is full to capacity for all of its operating period (early morning to late evening), and then a conclusion that we must somehow ensure that we develop an ever bigger single national passenger aviation hub. Suggestions that we expand other existing civil airports near London (Stansted and Gatwick in particular) are consistently rejected on the grounds that having in effect a distributed hub network, comprised of independently operated airfields scattered around the extended London area, connected by rail to different terminal stations in London, just doesn’t give the required travel experience. Examples of cities in other countries that have developed new hubs or extended existing ones are regularly cited, but also I have heard it said that none of those hubs are as busy as Heathrow. It does seem that being sited on the Meridian makes this country unique as far as the demand for air passenger travel is concerned.

Analysis

In thinking about the airport problem I remembered that some while ago I had taken a quick look at some material about travel by road and rail (partly as a result of that 2009 GMPTE conference). Certainly the pattern of commuting into cities is growing all around the world, but there is a big difference between England and many other countries. I express that difference by stating that England is like a squeezed up version of France: similar population but one third the land area, and characterised by metropolitan areas (plus smaller conurbations) in and out of which workers commute. The ‘squeezed up’ difference is that the hinterlands of major conurbations in France are quite widely separated, while those of our conurbations now significantly overlap, and the policy (illustrated at the GMPTE conference by Janice Morphet) of putting more money where the wealth is (i.e. in the metropolitan conurbations) is making both the commuting problem and the hinterland overlap worse. In 2009, material from Prof Cecilia Wong of Manchester University showed that the volume of commuting into the metropolitan areas is growing and the average commute distance is also growing – but quite a lot of that material is several years old, some as old as 2001, so we could do with an update.

But the significance of more recent Manchester University studies is the importance of travel time rather than distance, although the cost of that travel is obviously another factor affecting the decisions of commuters4. Prof Wong pointed me to a study that they have recently completed for the Royal Town Planning Institute: a Map for England [6]. The aim of that study is to help encourage progress on joined‐up spatial planning.

With improvement in surface transport comes reduced journey time – until congestion because of corridor overload kicks in, of course. The rail infrastructure updates and new build, and the new trains currently funded for the and Crossrail, will bring both greater capacity and reduced journey times on that historic corridor and its extension through London. Bristol is already only 90 minutes from London (using the route from Bristol Parkway station), but Paddington is not ideally situated for many people. After the improvements, and after also adding a new spur into Lyneham, the journey time from Lyneham to several central London

4 For example the usage of local services on the HS1 line is reported to be not as high as predicted, despite the half hour reduction in journey time for some of the journeys destinations (including other mainline termini) is estimated to be 60 minutes, and not much longer to the eastern side of .

Then there are interchange air travellers, landing at Heathrow and flying out of Lyneham, or vice versa. Their rail journey is expected to be 40 mins – and the intention in suggesting that Lyneham be a commercially close coupled satellite of Heathrow is that their interchange journey should be seamless, with luggage transfer on the same train arranged for them.

For reference, for other suggested but longer term solutions:

‐ a new Thames Estuary Hub will be in the wrong place for those whose surface starting point or destination is anywhere other than Greater London or the nearby east coast and north Kent counties; ‐ an /Berkshire hub will be in the wrong place for large numbers of people (something that we could alleviate with a massive development of new very high speed railway services – we will not do that); ‐ expansion of Heathrow by simply extending its surface area in order to build more runways appears (particularly to those many people living nearby) to be an unacceptably disruptive solution, so we must search for a viable alternative;

I submit therefore that a viable alternative, providing both air and ground transport capacity, ought to be one that is capable of being developed in a short period of time, and that, if we can identify it, we should immediately start detail planning of the development.

Synthesis

Now I have been told (but have not searched for the evidence) that an early study into possibilities for expansion of airport capacity looked at not only expanding Stansted and Gatwick but also at bringing into use some new capacity at other airfields not too far from London. My correspondent said that one of the sites considered was RAF Lyneham, due to be vacated (indeed now almost entirely vacated) by the RAF, but it was declared to be a non‐starter. That was then; now we have major surface rail network enhancements (including electrification and new trains) under way along and close to a very long corridor (Brunel’s Great Western Main Line) from and South West England in the west, passing close to Lyneham, along the Thames Valley, continuing as Crossrail through (actually underneath) central London (with interchanges with London Underground, major radial surface rail termini, and through rail routes) and out as far as the eastern fringes of the London metropolitan area. The line from the with the Great Western at Didcot Parkway through Oxford and up to the is also to be electrified. Lyneham is also close to the M4. And, for air travel, Lyneham is outside the western boundary of the congested South East airspace. Further, much of the land around Lyneham is sparsely populated (although I do respect the fact that developing Lyneham will cause very great disturbance to those whose land will be required, and therefore trust that they will be given full support if they have to relocate, and that others living nearby who decide to relocate should also be supported). So I thought: let us throw away those comparisons with air transport hubs in other countries, and consider a new configuration: Lyneham as a commercially close coupled satellite of Heathrow.

Before considering further the possibilities it is necessary to look for government plans for the RAF Lyneham site. An 18th July news article [3] shows that the MoD is considering moving several existing army and support units to the Lyneham site, but the material in Hansard [4] indicates that the plans are not yet finalised. The 18th July statement reported in Hansard (made by Dr Liam Fox MP, then Secretary of State for Defence) did however include the information that a further statement is expected before the end of the year – so there is no time to waste if we are to have placed in the ground a stake that says “Look at Lyneham for civil air travel”.

As a further aside, recently yet another study into the UK air travel capacity problem has been published [5]. Its authors Policy Exchange claim that their paper “examines all of the options for increasing airport capacity in the UK” – but it does not mention Lyneham.

So what does ‘commercially close coupled’ mean?

It means that, for the air traveller, their experience is that they are using one airport, whichever airfield they are physically travelling from and/or to, and that transfers between the airfields are managed by the common airport operator.

As well as the obvious journey using ground transport to/from the airport from/ to which you fly, for example you could:

Drive to Heathrow, fly out of Lyneham

Drive to Lyneham, fly out of Heathrow

Seamlessly fly into one airport and out of the other

Land at either airport and take the train to the final destination

And, if one airfield is partially or completely closed when you arrive by air, the airline lands at the other airfield, with the train taking you onward.

What next?

Who could do the modelling associated with Lyneham as satellite of Heathrow? Why not ask Manchester University or my alma mater Oxford? Since I read Physics, I don’t know any Oxford Geographers, but in 2009 at the GMPTE conference I did experience a little of the Manchester work. So this paper is also being sent to Prof Cecilia Wong, Professor of Spatial Planning at Manchester University.

15 October 2012 Annex: supporting material

Parliamentary Transport Committee http://www.parliament.uk/business/committees/committees‐a‐z/commons‐select/transport‐ committee/news/aviation‐‐‐tor/

There may be found the Parliamentary Transport Committee’s “terms of reference for a new inquiry that will examine the Government's aviation strategy and will focus on aviation capacity in the UK”, plus a short video in which Louise Ellman MP, Chair of the Committee, explains their inquiry and invites input. Closing date for submissions is 19th October.

Relevant rail services

The Brunel Great Western Main Line passes close to Lyneham.

Major capacity and service quality enhancement for the GW Main Line is in progress. There will be a new spur to Heathrow to/from the west. Electrification will extend all the way to Bristol (possibly further into the South West)) and to Swansea, including branches to Oxford and other towns, and onwards to the Midlands. Reading Station capacity enhancement is not far off completion. New trains have been ordered. Smart Media ticketing is specified in the new Great Western franchise.

The Valley Lines will be electrified.

Crossrail construction work has started. It will deliver journeys from the Thames Valley section of the GW Main Line, through Central London, and on to the eastern outskirts of Greater London. It will provide interchanges with other termini and with the north‐south through London service.

Relevant air routes

Lyneham is outside the congested airspace of the south east, facilitating routing of aircraft in a westerly direction (including Atlantic crossings) and also both north and south.

Relevant road routes

Capacity improvements to the M4/M5 junction in the Bristol area are being constructed. The Second Severn Crossing was completed in 1996.

[1] Email exchange with the Office of the Mayor of London

Dear Mr Johnson,

Another way: develop the redundant RAF Lyneham as a commercially close-coupled satellite of Heathrow. Quick to develop, leverages use of the results of investment already under way and committed to the railway network (Great Western Main Line and Crossrail and the route via Oxford to the Midlands), is situated at the western edge of the congested South East airspace so that delays to flights will be reduced. I'm sure that they will make space for your bikes on the high speed shuttle trains that will run to and from the airport.

I'm working on a paper for submission to Louise Ellman MP's Commons Transport Committee enquiry.

Dear Mr Tomlinson,

Thank you for writing to the Mayor.

The UK's sole hub airport, Heathrow, is operating at nearly 100% of its capacity and, in the Mayor's view, cannot be expanded further without unacceptable consequences for the hundreds of thousands of people who live nearby. But the Mayor acknowledges that Britain does need a well- functioning hub airport if it is to continue to attract investment and tourism and so generate jobs and continuing economic growth. The country needs a new hub airport, located to minimise impacts on built-up areas. The Mayor is keen to explore a range of alternative solutions that meet the necessary requirements and to have a broad and open-minded debate about them. At this stage, the Mayor is not wedded to any single location; rather he is keen to ensure that decisions are made by those responsible on a proper basis, following a rigorous assessment not only of the economic costs and benefits, but also the social and environmental impacts of the various options.

The Mayor regards the need for a solution as urgent. He is therefore disappointed that the Davies Commission, appointed by the Government to look into these questions, has been asked to report in mid-2015. But he does intend to submit detailed evidence to the Davies Commission and he is currently undertaking work that includes consideration of options for the location of a new hub airport.

The Mayor and his staff greatly appreciate the time people take when they contact him with ideas for improving important aspects of life in London. As you can imagine, the Mayor receives hundreds of ideas and offers of advice from members of the public every year. They are gratefully received, and all suggestions are noted, recorded and given due consideration. We cannot respond to all in detail, but we will contact you again if we need help in taking any specific ideas forward.

I would like to thank you again for getting in touch with the Mayor of London on this important matter.

Yours sincerely

Nick Waterman

Transport Team,

[2] Stephanie Flanders on BBC Radio 4 Today on 29/9/12:

Stephanie Flanders asked for ideas for public sector investment, particularly in infrastructure, that could get started quickly – but not to send them to her. So I sent her an email about Lyneham and smart rail ticketing topics…

Stephanie,

Investment that can start quickly?

First: develop the now redundant RAF Lyneham (just off the M4 and the Great Western railway line) as a commercially close-coupled satellite of Heathrow Airport (and forget the ideas for a new hub airport). With help from material prepared by Manchester University's Geographers (Prof Cecilia Wong's team) for other purposes, I'm preparing a paper for Louise Ellman MP's Transport Committee (deadline 19th Oct). The design work could start immediately. Such a development will take advantage of investment already committed for the railways, some of it already being spent, and would hopefully trigger a speeding up and expansion of the rail projects.

Second (a smaller amount): we are already developing new electronic ticketing methods for rail services in an area stretching from across to Reading, down to the South Coast and east of there to encompass all the rail services south and east of London (the SEFT project - South East Flexible Ticketing - for which £45M was allocated in the last Autumn Statement by the Chancellor, but DfT has not publicised it, although Norman Baker was talking about it at the LD Conference this week). But the core technology (for which the government owns the ITSO specifications) needs further investment in order to ensure that it fully supports emerging technology developments and, crucially, in order to ensure that the emerging national network of data processing and security management nodes is of adequate capacity, is highly reliable and resilient, operates securely, and continues to address the growing IT security threats. The govt controls the core company ITSO Ltd, but is starving it of development and management money. And, alongside the SEFT project, there is a commitment in the new rail franchising programme for the operators to fully implement the ITSO methodology - but, on past performance, they will be very unwilling. New ticketing and journey management methods in public transport benefit the passenger more than the operating company - i.e. the business cases for the operators are always weak - so there has to be a fund created to assist in paying for the rollout and operation of the technology across the rail network (including providing training programmes - for the civil servants as well as for the service operators).

Declaration of interest: I am a founder Member of ITSO Ltd (a company limited by guarantee without shares but with Members), and have recently been retained by another company to do technical writing work for the SEFT project.

Further updates:

‐ On 11/10/12 DfT made a presentation about SEFT to the Travel2020 Conference (a Landor event) ‐ a recent report by PwC to DfT is known to have recommended that DfT consider further interventions along the lines of the SEFT development.

[3] : http://www.lynehamvillage.com/news/lynehamraf/defencetech180711.html

RAF Lyneham to be Defence Technical Training Centre

18th July 2011

THE former RAF Lyneham base is to remain under military occupation it has been announced. The move is part of a £1.5 bn investment in UK reserve forces over the next 10 years as part of a wide-ranging shake-up of the UK's military.

Defence Secretary Liam Fox told parliament this afternoon that defence technical training programme will move to the former RAF base ‘guaranteeing its future’.

Dr Fox told MPs that the Territorial Army would form around 30 per cent of a 120,000- strong Army by 2020. In a statement to MPs Dr Fox announced major changes in the basing of forces, with RAF installations set to be taken over by Army units returning from Germany.

Speaking after the announcement, North Wiltshire MP James Gray said: "We fought long and hard to keep the RAF at Lyneham, but sadly failed, so I was delighted by the Secretary of State's announcement today that the base will instead be used by the defence technical training establishment.

"This will mean that at least 1,500 Service personnel will be moving into Lyneham in the near future to replace the departing RAF which is good news for everyone in the area".

Dr Fox told MPs £400m would be spent this Parliament on boosting the reserve forces, with the possibility of new legislation to ‘ensure that the reserves are more readily usable on operations’.

He said the growth in the Territorial Army's strength would allow a ‘progressive adjustment’ in the balance with regular troops.

"The overall package I have announced today is good news for our armed forces and means they can look forward to the future with renewed confidence because the defence programme I have announced is underpinned with real resources,” he said

Military lecturer Peter Caddick-Adams, at the Defence Academy in Shrivenham, described the announcement as "excellent news". He said: "There was a great fear that the Lyneham estate would be sold off, which made no sense. It's a very intelligent use of the estate, which has had a lot of money put into it over the years and it would be a shame to see it sold off quite cheaply.

Defefence Secretary Liam Fox was saying about Lyneham - RAF Lyneham is the preferred location for future Defence Technical Training. This confirms that the Department will withdraw from Arborfield, in Berkshire and Bordon, in , releasing the sites for sale by 2014-15 at the latest. This announcement in no way threatens the existing Defence presence at St Athan. There are no plans to move or reduce the 300 technical training posts as part of the rationalisation to Lyneham. Indeed plans to relocate additional Defence units to St Athan are being developed, and if those plans come to fruition, they will bring a major uplift in employment at that base. We intend to make an announcement before the end of the year. Arborfield - Arborfield is currently the location of the Regimental Headquarters of the Corps of Royal Electrical and Mechanical Engineers of the . Within the Garrison is a significant area of housing, containing a mixture of military and civilian properties.

The garrison contains Hazebrouck Barracks, which is a training base for the Royal Electrical and Mechanical Engineers (REME) School of Electronic and Aeronautical Engineering (SEAE). The potential craftsmen within SEAE, study in the school to learn a trade as aircraft technicians, avionics technicians, and electronics technicians, (which encompasses all maintenanence operatives for all land based electronic equipment).

The Defence College of Aeronautical Engineering (DCAE), established on 1 April 2004 as a result of the Defence Training Review (DTR), is responsible for training of aircraft and avionic technicians. This college from its conception has been integrated as part of SEAE.

Bordon - The School of Electrical and Mechanical Engineering (SEME) is a training school, providing trade (Phase 2) training for soldiers of the Royal Electrical and Mechanical Engineers (REME).

SEME is the UKs largest electro-mechanical engineering teaching establishment. At any time there are approximately 1500 soldiers at SEME undertaking career and equipment courses and gaining transferable qualifications ranging from NVQ level 2 to HND.

SEME is committed to delivering relevant training in support of current operations, consequently the number and diversity of our technical courses is greater than ever. Their mantra is 'Soldier First, Tradesman Always' and so maintaining and developing soldiers' military skills, in parallel with their trade, is at the heart of what they do.

Currently, SEME also offers soldiers the opportunity to participate in a wide range of sporting and adventurous pursuits. The Bordon gymnasium, swimming pool and sports pitches are second to none. Also available are first class medical, dental and physiotherapy facilities.

SEME is constantly updating and modernising its technical training courses and teaching techniques. They have recently invested in new computer based learning for soldiers undertaking the Common Foundation Module and further investment this year will see Armourers' training being transformed.

Prior to today's annoucment SEME were under the apprehension that a move was on the cards. In around 2015, the Defence Training Review will relocate SEME and other Service schools to a brand new Defence Technical College at St Athan in South Wales.

SEME offers real opportunity to those seeking a challenging and rewarding career within the Army. Our courses will test soldiers' determination and commitment and in doing so prepare them for their first and future assignments.

The Secretary of State for Defence Dr Liam Fox said "This commitment to increase Defence equipment funding after 2015 will ensure our Armed Forces remain a formidable fighting force on the world stage. I am determined to maintain Britain's position in the international premier league and to ensure that our , Army and RAF are given the tools they need to do their vital work.

[4] The substantive part of the actual statement on 18/7/12 by the then Secretary of State, as recorded in Hansard, is:

http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110718/wmstext/110718m000 1.htm#1107182000375

DEFENCE

Defence Transformation

The Secretary of State for Defence (Dr Liam Fox): The strategic defence and security review (SDSR), announced last October, marked the start of the process of transforming defence to meet the challenges of the future. It set out a path to a coherent and affordable defence capability in 2020 and beyond; and some of the key building blocks—such as the return of the Army from Germany, and a (RAF) structured around fewer, more capable fast jets.

This statement provides detail of our intent on future armed forces basing and rationalisation of the defence estate.

.

.

RAF Lyneham is the preferred location for future defence technical training. This confirms that the Department will withdraw from Arborfield in Berkshire and Bordon in Hampshire, releasing the sites for sale by 2014-15 at the latest. This announcement in no way threatens the existing defence presence at St Athan. There are no plans to move or reduce the 300 technical training posts as part of the rationalisation to Lyneham. Indeed plans to relocate additional defence units to St Athan are being developed, and if those plans come to fruition, they will bring a major uplift in employment at that base. We intend to make an announcement before the end of the year.

[5] Bigger and Quieter: The right answer for aviation, Policy Exchange, 5 October 2012

http://www.policyexchange.org.uk/publications/category/item/bigger‐and‐quieter‐the‐right‐ answer‐for‐aviation

Bigger and Quieter: The right answer for aviation examines all of the options for increasing airport capacity in the UK. It supports placing four runways immediately west of the current Heathrow site. This would double the existing capacity to 130million passengers, cementing it as Europe’s premier hub. If this was politically unfeasible, then a four runway airport at Luton would be the next best option.

The report says that the UK needs a new hub airport located in the South East which has spare capacity to accommodate the likely increase in demand, especially to cope with the rise in middle class travellers from emerging markets.

It doesn’t rule out the current proposal to build a third runway to the north of Heathrow, but claims that less people would be affected by aircraft noise if the four runways were instead located 3km to the west of Heathrow.

To reduce the effect of noise the report proposes:

• A complete ban on the noisiest aircraft at all times, rather than just at night. Airlines would have to ensure their fleet complied with new decibel measures by the time the new runways were ready for use • Imposing a complete ban on night flights. The increase in the number of slots available would mean no planes would arrive or depart between 11pm and 6:15am • Landing narrow bodied planes at a steeper angle as they already do at London City airport. This again means they are higher over any part of West London on their descent. For example, a plane would be 925m rather than 260m above • In addition, moving the airport west means planes will be higher over London than at present

Because the proposal reuses existing terminals and infrastructure, the price is likely to be around half that of Foster’s proposal for an estuary airport. Approximately 700 properties would need to be demolished compared to the 1,400 that would need to go to make way for the estuary airport. The cost and ease of travel to Heathrow as well as the fact many businesses are already located near the current airport makes it the most suitable site.

The report says that other than Heathrow, Luton is the best located London airport. It is close to a high quality, four track rail line that goes to London St Pancras in 21 minutes as well as to key cities in the Midlands. It is also close to the M1, arguably Britain’s most important road. If expanding Heathrow is politically unfeasible, Leunig proposes a four runway Luton Hub with two terminals, the first adjoining the M1, the second the rail route. The disadvantage of Luton over Heathrow is that the terrain is much more challenging, and the location is not as strong.

The paper rules out:

• Foster + Partners estuary airport (aka “Boris Island”) as it is too hard to get to for too many people. The environmental and construction challenges are also much harder to overcome than at Heathrow • Connecting Heathrow and Gatwick to become a single hub. The two airports are 25 miles apart meaning that a direct high speed rail link would cost approximately £15 billion • A four runway airport at Gatwick. The costs are higher than for Heathrow, and the location is not as good. Instead Gatwick should consolidate its position as a good quality base for point to point traffic geared towards leisure travel and short haul flights • A four runway airport at Stansted. Like the estuary airport proposal, Stansted suffers from a poor location, with a weak hinterland and slow connections to London and the rest of the country

No mention there of Lyneham…

[6] Royal Town Planning Institute

http://www.rtpi.org.uk/knowledge/core‐issues/map‐for‐england/

Map for England

Why do we need a Map for England?

Despite the generally recognised and accepted need to ensure a joined up approach to planning infrastructure and services, there is remarkably still no single place or data source within government that makes all of these maps available to view.

Good progress has been made in various areas but with an overarching framework - a Map for England - policy makers could make better judgments about how individual policy proposals interact with and affect development of the country as a whole. It would also increase consistency in appraisal, improve security and resilience, and provide a better understanding of sectoral issues that might complement or conflict with each other.

Listen to our podcast on why we need a map for England.

Additional benefits of a Map for England include:

Helping to boost growth. Housing, industry and business would be able to make quicker and better informed investment decisions which are more closely aligned to public sector infrastructure funding plans.

Being much more transparent. Local communities would be able to find out about how government plans affect their areas and to influence them.

Saving time and money. When writing new strategies, government departments could see the existing plans for different parts of the country and relate their new strategies to them. Datasets drive innovation.

Helping to coordinate infrastructure across borders with Scotland and Wales.

Research findings

We commissioned a study from the University of Manchester examining a broad range of existing government policies and how they relate to each other. See the study (pdf, 17.7 MB) and a compendium of policies in map form (pdf, 9.7 MB). To reach their conclusions, the researchers examined government web sites, individual policy documents and large numbers of reports to find policies and programmes that have strong spatial aspect to them: policies which potentially have a different impact in different parts of the country. It was a major task in itself to pull together almost 100 policy maps.

In about one third of these documents the implications for different places are made explicit but in fully two thirds they are not.

By overlaying a number of these maps and diagrams together, the researchers demonstrated that some policies and programmes, when considered against each other in relation to different parts of the country, may have unintended consequences.

For example, the study revealed that there is considerable overlap between broad areas where housing growth is projected in the future and where there are the greatest environmental and policy constraints to growth. These constraints include the risk of flooding and expected future household water shortages.

Written evidence from Mr Francis Joseph McGlade (AS 19)

I am responding, as a private individual, to the Select Committee's invitation to comment on the Government's draft Aviation Framework Document. I reside under the flight path of Belfast City Airport, a regional airport where the number of residents affected by aircraft noise exceeds by a considerable margin the numbers affected at Gatwick and Stansted combined. I would preface my comments by saying that the Framework Document leaves one with the impression that it was written with the south-east of England primarily in mind. This is disappointing.

My comments refer mainly to Chapter 4, or the Select Committee's point (3a).

1. Noise is a form of pollution and should be recognised as such. All other common forms of pollution are properly legislated for and independently monitored. To leave it to the airports to self-monitor noise levels is wholly unsatisfactory and clearly isn’t working. Penalties should be set at a level that provides a realistic deterrent to polluters.

2. The proposal to allow the noise contour to remain at 57 dB LAeq,16h is too simplistic and out dated. It doesn't adequately identify peak occurrences, and additionally, people's noise tolerance threshold has reduced considerably since it was first introduced. It doesn't recognise the now well-researched impact that exposure to excessive noise has on health, particularly stress and blood pressure levels, and heart disease. Neither does it recognise the detrimental effect the level of noise it permits has on children's education as a result of sleep deprivation and the reduced ability to concentrate.

I believe therefore that the 57 dB LAeq,16h contour is much too favourable to the airports and airlines. The 2009 World Health Organisation guidelines would, if adopted, go a considerable way towards correcting this imbalance.

3. The document as written contains no incentive to airlines to adopt quieter aircraft. Measures such as variable landing charges or APD could be used as a tool to provide such an incentive. This would help correct the present situation where landing charges are used by competing airports as a means of winning business from rivals, thus obliging the airlines to use older, noisier aircraft.

4. Noise reduction and a reduction in CO2 emissions need not be mutually exclusive.

5. My personal experience of Airport Consultation Committees is that they are wholly ineffective as a means of improving environmental conditions for those whose lives are blighted by airports. They are merely puppets of the airport, which uses them to claim that they have "consulted" the local community. If local collaboration is to be effective airports must not be permitted to control the selection of the Consultative Committee, and it should have an independent Chair and minute taker.

Finally, but not directly related to noise issues, regional airports tend to make inflated claims about the economic benefits they bring to the local community – claims that do not bear close scrutiny. Of particular note is that airports that service the "bucket and spade" destinations make a negative contribution to the economic well-being of the community in which they are based.

15 October 2012

Written evidence from the Board of Airline Representatives in the UK (BAR UK) (AS 20) BAR UK is the airline association for scheduled airlines with an UK operation or presence. Comprising over 80 airlines, our membership includes two major UK airlines (British Airways and Virgin Atlantic) and a wide range of non-UK airlines from all around the globe. Full details of BAR UK can be found on our website www.bar-uk.org . The Committee’s Inquiry into UK aviation strategy is of immense interest to them all. The core issue is that of the country’s hub airport that has been fully utilised for years. Until any clear policy direction emerges, and allowing for due planning processes to be completed, the UK is effectively advising airlines, especially those from outside of the UK, that no additional hub airport capacity will be available for at least 10-15 years. That’s a terrible indictment for a country that intends to trade its way out of recession. In fact, capacity is so full that, even with slot trading permitted, the costs are so high, or the timings of the slots so unattractive, that existing airlines are hampered in their efforts to improve, and many new entrants simply cannot bear the costs, especially when normal start-up costs are so high in any event. The result? Those airlines outside of the UK, who take strategic decisions years in advance, are simply beginning to ignore London in their expansion plans. Should no slots be available at ‘LHR’, their planners/schedulers generally don’t then look at ‘LGW’ or ‘STN’, they simply look at the opportunities presented in flying from their home base to other countries and operate additional flights to them instead of to the UK. Those countries then become the beneficiaries of the vacuum in the UK’s aviation policy that denies any additional hub airport capacity; it’s as simple as that. As even a 3rd runway at Heathrow, if approved this year, would possibly not be operational until at least the mid 2020s, the UK is effectively telling the world that no additional trading opportunities will exist at our hub airport for at least 12 years. That, in UK economic recovery terms, seems completely unacceptable. In respect of the questions posed, we have endeavoured to provide high-level responses, remain readily available to provide any further information that may be required, and are ready to appear as witnesses at the public hearings that the Committee may hold.

BAR UK Responses

1. What should be the objectives of Government policy on aviation? A: The overarching objective should be to permit the operation of a market-driven industry that meets the needs of its customers (freight clients as well as passengers) whilst adhering to all relevant environmental standards and policies.

a. How important is international aviation connectivity to the UK aviation industry? International connectivity is paramount. Any country that is not well- connected to its trading partners, future as well as present, will not be in a position to grow, and risks stagnation and decline as competing States take precedence. Connectivity means a world-class hub airport, if the UK is to compete on a global basis. The UK’s hub airport is Heathrow and has been operating to capacity for many years. A direct consequence is reduced capacity and a propensity for arrival and departure delays; in turn, these create additional emissions. Additional capacity at Heathrow has been required for several years, and the Committee is asked to note that it is the aviation industry that would finance the additional capacity, not the public purse. There are many facets to what constitutes a hub airport, so the Committee’s attention is drawn to the points of reference below: • ʻConnecting for growth: the role of Britainʼs hub airport in economic recoveryʼ by Frontier Economics for Heathrow. (hub.heathrowairport.com/index.php/download_file/view/15/1/) • London’s Connectivity Commission – Britain and the World, Transport links for economic growth (http://bit.ly/QULCCF) • Response of BAR UK to the DfT’s consultation ‘Developing a sustainable framework for UK aviation: Scoping Documentʼ (http://bar-uk.org/consultations/response2011.htm) b. What are the benefits of aviation to the UK economy? The UK economy benefits enormously from its aviation industry, and government needs to ensure its advancement if it is not to decline. There are 186,000 jobs directly created as a result of airport and airline activities within the UK, and a total of 520,000 directly and indirectly. Collectively, the UK benefits from direct economic activity to the value of £11.2 billion. Separately, the inbound travel market arising from aviation generates another £12 billion in economic activity, generating an additional 170,000 jobs in the process. By value, 55% of exports to non-EU countries are carried by air. Source: The Economic Contribution of the Aviation Industry in the UK, Oxford Economic Forecasting, 2006 (http://bit.ly/O2mXPk)

There is a good range of studies that confirm the huge value of aviation to the UK economy. They include: 1. ʻFlying in the face of jobs and growth: How aviation policy needs to change to support UK businessʼ by British Chambers of Commerce

2. What is the contribution of aviation to the UK economy? Report for AOA by Oxera (via http://www.aoa.org.uk/reports-and-publications.htm) c. What is the impact of Air Passenger Duty on the aviation industry? Originally quite a small tax, Air Passenger Duty is harmful to the UK economy, not just to the aviation industry. APD rates have become so high, that they are the cause of objections, from overseas (including diplomatic protests) as well as within the UK, and are causing a resistance to visiting the UK. Originally devised as an environmental tax, the Treasury now openly admits that APD is simply a revenue-raising device. By its name, it is targeted solely at air passengers, with rates having increased since 2007 by over four-fold on long-distance routes e.g.: Jan 2007 April 2012 Basic £20 £92 Premium Economy/Other classes £40 £184 Such high rates of taxation act discriminately against the airline industry as other forms of transport have no such tax levied against them. It can be seen that, for a family of four, the tax take on many long-haul routes is so high that it can be the equivalent of paying for five tickets but only getting four. The Committee is asked to remember that potential visitors from overseas have a choice of whether or not to visit the UK, or to go elsewhere. Evidence exists that they are beginning to go elsewhere, e.g. continental Europe, rather than pay APD. The ‘A Fair Tax on Flying’ alliance (www.afairtaxonflying.org) has seen its activities result in over 200,000 people lobbying either their MP or, if from overseas, the Chancellor. As an immediate priority, the first aim must to be to freeze the future increases to APD that the Chancellor has publicly planned. d. How should improving the passenger experience be reflected in the Government’s aviation strategy? The ‘passenger experience’ can be complex, with a natural focus on the departure experience; however, recent events have shown that the arrival experience can be totally disruptive, and extremely distressing, if resources are not in place. The well-known, and unacceptable, queues of 2+ hours at the UK Border during this summer provide the main case in point, and are a direct

consequence of government policy on one hand, linked to outdated processes and concepts on the other. The amount of passenger data provided by airlines, in advance of travel, through the e-Borders programme should provide the stepping stone to move from a manually-intensive set of border checks to a knowledge-based (not risk-based) system. A more specific strategy should be to continue the campaign for speedier implementation of the Single European Sky (SES). The benefits of this programme, if comprehensively implemented, would spread far and wide. More direct flight routeings would be available, emissions would be reduced and so would delays to passengers. It is recognised that the UK government is a leading proponent of SES and its efforts to date are valued. In broader terms, the government’s role in respect of the passenger experience should be to ensure that relevant passenger legislation is complied with by airports and airlines, and to undertake any major review where major lapses seem to occur. However, it should not be the role of government to interfere with the market-place competition that is the backbone of airline and airport services.

e. Where does aviation fit in the overall transport strategy? Aviation should be regarded as an absolutely essential component within the UK’s transport infrastructure; by definition, it should also be an essential part of the country’s overall transport strategy. Aviation is a multi-layered spectrum. Within are included scheduled airlines, charter airlines, all-freight airlines, and business/general aviation. Within that spectrum, scheduled airlines play a vital role through the provision of passenger and belly-hold freight capacity, linking the UK to the rest of the world, including its import and export markets. Integration with surface transport/access is just as vital. BAR UK subscribes to the DfT’s Low Carbon Surface Access strategy, which aims to increase the use of public transport to and from UK airports.

2. How should we make the best use of existing aviation capacity?

a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? The use of London airport capacity is largely determined by market needs. Most significantly, this includes which London airport is considered for the marketplace.

Prime amongst market needs is a global hub, an aspect that is considered essential by BAR UK airlines. For the sake of clarity, that hub airport is Heathrow. That spare runway capacity may exist at other London airports is, largely, of little consequence or comfort. Should it be the only available option, and it’s not the preferred one for airlines, then Mixed Mode operations should be considered as an extreme option. Whilst additional capacity could be generated on the current two- runway system, by gaining maximum use of them both, the resilience of the airport, already very fragile, would be reduced considerably further. The concept of a ‘virtual hub’ e.g. Heathrow linked to another London airport, is theoretical at best and highly impractical for a variety of reasons. Should the airlines deem the concept practical, then they would readily advocate it. In respect of passenger experience, various research, including the CAA’s, shows that overall satisfaction levels are high, although there is always room for improvement. However, resilience is another matter. Any airport operating to maximum capacity and pace has little room for manoeuvre when circumstances change. Heathrow is in that position, and has been for several years. It is why airlines there, with BAR UK’s full support, have been lobbying for a third runway.

b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? The government’s strategy allows for market forces to operate at all airports, so those outside of the South East already have the tools at their disposal to obtain better utilisation of their capacity. BAR UK airlines have reasonable degrees of operations at airports such as Manchester, Birmingham, Glasgow and Edinburgh, but London and the South East dominates their market needs. Ultimately, the issue is whether or not routes which they operate to/from regional airports are actually viable in their own right. Whilst there may be a proportion of the ex-UK market for which travel from a regional airport may be practical, are there enough inward travellers who also wish to use that airport – or is London, as the UK’s capital, still the prime destination?

c. How can surface access to airports be improved? BAR UK fully supports the concept of improved surface access to airports, especially if there is a reduction in overall emissions as a direct result. Any improvement programme would be specific to each airport, and the business case rationales for transport providers.

3. What constraints are there on increasing UK aviation capacity?

a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? The environmental questions asked here are broadly contained within the DfT’s consultation ‘Aviation Policy Framework’. The Transport Committee’s attention is drawn to the fact that the aviation industry at large, not just the airlines, has a consistent track record of significantly reducing the impact of aviation noise. Evidence of this can be seen by the fact that the noise contours for Heathrow have shrunk so significantly. 1988-2011: whilst flights increased from 352000 per annum to 480,000, the area affected by noise, using the DfT’s own metric of 57dBA summer day Leq, plummeted from 331 sq. km to 110 sq. km. (Source: ERCD, CAA – Annual Noise Contour Reports)

b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? Carbon emissions from aviation are, essentially, a global issue. They are being managed through a mix of regulation on one hand, and industry cooperation on the other. The UK strategy of working in conjunction with global efforts, and the industry’s own collaboration on noise, emissions and efficiencies continues to make aviation even more sustainable.

c. What is the relationship between the Government’s strategy and EU aviation policies? The government’s strategy is one of support for EU policies.

4. Do we need a step-change in UK aviation capacity? Why?

a. What should this step-change be? Should there be a new hub airport? Where? There is a step change required, and now. It needs to be one based on recognising that the UK is losing out on air connectivity to competing countries. Airlines make their strategic plans, for new routes and for new aircraft types, a number of years in advance; they are not made on a whim. The lack of a clear airport capacity policy, allied to slot constraints at Heathrow, is already providing feedback that the UK is losing out to new routes and airlines. Consequently, this policy vacuum is making it easy to take decisions in overseas boardrooms to give the UK a miss, and no publicity will attach itself to such decisions. Competing states will continue to be the beneficiaries until the time that the UK takes a firm grip on aviation policy and states what its intentions are.

Additional airport capacity needs to be provided as soon as possible. The quickest way is still the provision of a third runway at Heathrow. When and where a new hub airport may be required cannot be answered at this stage. There are far too many unknowns, not least the funding provisions for it, and what the situation may be in respect of the unamortised investments, paid for by airlines, at Heathrow. BAR UK looks forward to contributing to the work of the Independent Commission, to be led by Sir Howard Davies. At that time, BAR UK will urge that all options will be considered.

b. What are the costs and benefits of these different ways to increase UK aviation capacity? Reference is made to Question 4 a. regarding the funding of current airports, as well as any new one. There are no known answers at this stage, merely many questions.

15 October 2012

Written evidence from Dr. Peter W. Skelton (AS 21)

Executive Summary Construction of a new airport in the Thames Estuary would pose three unacceptable risks: (1) major impact on an internationally important area for wildlife conservation, particularly for birds; (2) increasing likelihood of surge tide flooding due to geological subsidence of the area combined with global sea-level rise; and (3) necessity for expensive and widely disruptive transport infrastructure development to facilitate access for the majority of potential UK users. Any proposal for such an airport should thus be rejected on both environmental and economic grounds.

Details of submitter Retired academic geologist (currently Visiting Reader) from The Open University, Faculty of Science (Department of Earth, Environment and Ecosystems), with forty years experience of geological research and teaching, including Earth System Science and the geological record of climate change.

Arguments against proposals for a new Thames estuary Airport The Committee’s Issue 4(a) asks if there is a case for a new hub airport and where it might be sited. One proposal widely discussed in the media is for the construction of a completely new airport in the Thames Estuary (the so-called ‘Boris Island’). This proposal should be rejected on the grounds of posing at least three unacceptable risks:

1. Wildlife conservation. According to the RSPB, the area is “a vital migration hub for hundreds of thousands of wildfowl and wading birds”, its global significance being “recognised by its status as a Special Protection Area (SPA)”. Construction of an airport there would pose a major threat to this internationally important area for wildlife conservation, which would be further exacerbated by the ongoing need to prevent the risk of bird-strikes over a wide area. The proposal thus flies in the face of the National Ecosystem Assessment recommendation that "Sustainable management of Coastal Margin habitats must be holistic, taking into account physical, chemical and biological processes, spatial and temporal scales, drivers of change, and cultural elements. Most large Coastal Margin sites are designated as Special Areas of Conservation (SACs) under the Habitats Directive, or are Sites of Special Scientific Interest (SSSIs); therefore, the protection and maintenance of the biodiversity, natural processes and geomorphological interest remain primary objectives" (UK National Ecosystem Assessment (2011) The UK National Ecosystem Assessment: Synthesis of the Key Findings. UNEP-WCMC, Cambridge, p. 76). Moreover, as the NEA synthesis notes (p. 25) in relation to wetland and coastal hydrology "The breakdown of waste and detoxification of freshwater runoff … is locally problematic in estuaries and coastal waters". The widespread environmental disruption caused by development of such an airport and the extensive drainage of approach areas would thus be likely to have a profound impact upon the hydrological and ecological 'services' provided by this major estuary, eventually requiring costly remediation.

2. Flooding. Geologically, the estuary area is subsiding (Shennan, I. & Horton, B., 2002, Journal of Quaternary Science, 17, 511–526), in places currently at a rate of up to 2.1 mm/year, based on satellite measurements over the period 1997-2005 conducted for a DEFRA/Environment Agency-funded case study investigation of flood risks (Land vs sea level rise case study: London, ‘Terrafirma’, ESA Global Monitoring for Environment and Security (GMES) Initiative). With the current global rise in sea-level estimated by the Intergovernmental Panel on Climate Change (IPCC) at 3.1 mm/year, the relative rise in sea level in the Thames Estuary area should thus reach over 5 mm/year. Over several decades, a significantly increased risk of damaging surge tides could therefore be expected in the area, against which costly defensive systems would be required.

3. Access. The majority of UK travellers using the proposed airport would have to pass through or around London to reach it, necessitating considerable additional expenditure on transport infrastructure for access, not to mention the associated widespread disruption that it would cause. In the event of sharply increased air travel costs resulting from a combination of rising fuel costs and “the proper incorporation of environmental costs in the market pricing of air transportation” (Seely, A., 2012, ‘Taxing Aviation Fuel’. House of Commons Library, Business and Transport Section, Standard Note SN00523), many travellers might opt instead for alternative, more convenient and ‘greener’ modes of travel to the continent, such as high-speed rail, such that the proposed airport would ending up becoming a massively expensive white elephant.

In short, the Thames Estuary is both environmentally and economically a most unsuitable place for a new airport – if, indeed, any such expansion of aviation capacity can be considered desirable given the increasingly pressing need to curb carbon emissions, particularly by aircraft.

15 October 2012 Written evidence from IAAG (AS 22)

Government's UK Aviation Strategy with focus on Aviation Capacity 1-WHAT SHOULD BE THE OBJECTIVES OF GOVERNMENT POLICY ON AVIATION? a) Connectivity This can be defined as providing an infrastructure of land sea and air routes from all parts of the UK to major overseas destinations, important for:

1) Maintaining and developing British commercial and trading interests with developed and developing world 2) Maintaining links with British and related communities in the commonwealth, other major countries i.e USA & Argentina 3) Encouraging the correction of trading deficits and tourism imbalances by providing connection and connectivity from these markets into the UK. Providing links from other domestic points for discretionary low cost travel is of less relative importance.

Connectivity from and into UK is therefore not ideal when defined as non-stop direct services to these destinations However due to the inability by BA to mount additional profitable capacity and the congested nature of LHR, connectivity is increasingly provided by non-British air carriers operating from all parts of the UK through their superior hubs to all important international points of origin and destination. This is becoming an irreversible trend and is outlined in more detail in other sections of our papers.

In overall terms connectivity is well provided to the UK especially in connecting services through European and Middle East and Far Eastern hubs (altogether 8 hubs and 8 high quality and aggressive and expanding hub carriers. This is at the expense of British aviation interests but not necessarily of British consumers nor overseas visitors. More later on this key subject. b) Benefits to the UK economy. A strong high quality aviation sector is important to the British economy in: 1) Preserving the notion of the UK’s centrality in world financial markets 2) Preserving the UK‘s reputation for incoming tourist and VFR traffic. 3) Maintaining and enhancing the UK’s reputation worldwide as a place to do business and base executives, families & investors. Unfortunately the UK has lost its leadership position in these aspects. It has lost its centrality because of the low quality experience of Heathrow, difficulties of efficient connecting service networks and the apparent absence of purpose in developing a satisfactory air travel experience through major airports to/from ultimate destinations. c) APD. Has rendered air travel more expensive than UK’s major competitors. It is shrinking demand and encouraging passengers to connect through European points where there is much less or no APD equivalent. Demand management is a dirty word and is seriously disadvantaging UK aviation and crippling demand. Baby and bathwater come to mind whereby by attempting to reduce highly price sensitive traffic to holiday destinations by LCC (Low Cost Carriers) it is forcing business and VFR traffic to seek non-British carrier solutions via European points. Even, however a UK carriers are participating in this feeder services i.e. and easyJet by special prorate agreements with foreign carriers. d) Improving the Passenger Experience This is a key component and centres around 2 subjects: 1-Delays inbound and outbound at Heathrow, unacceptably high and persistent. This seriously impacting the desirability of using the Heathrow “hub” 2-Inefficient and eccentric quality levels of ground services. IAAG has a detailed plan already published as to how to transform these manifest shortcomings. Please see below how these problems can be resolved in the short term at no cost and with enormous benefits. e) Overall transport Strategy Aviation has become the unwanted toxic chill of Government policy Little or no co-ordination of overall road, rail sea and air transport policy is being conducted. Policy making is hesitant & piecemeal. Ministries are not competent to deliver the required investments and resultant benefits. This saps confidence in the government when considering the GWR debacle and procrastination and un-deliverability in HS2 and Aviation infrastructure development. IAAG has always tried to establish a multiple transport mode dynamic which is the only approach that will bear fruit. Please see our past and updated papers on this key subject. Strategy must absolutely deliver an acceptable cost/benefit ratio; acceptable ROI’s and incentives for overseas investors which we maintain will be the only source of large scale funding. Government strategy must be to create partnerships with investors, leasing and taking golden shares without tax payers cash which in the aviation context is the only way forward. This provides a much needed participation in a large strategically vital segment of the British economy over which the government has presently no control. 2) THE BEST USE OF EXISTING AIRPORT CAPACITY The present government has characterised improvement at British airports as “better not bigger”. IAAG‘s guidance is “Use what you’ve got” whilst considering expansion of the asset base. Govt’s measures are currently insignificant. They seem unable to address straightforward issues and find solutions. a) What can be done to improve the passenger experience? The most serious shortcoming is the poor on-time record for both arrivals and departures. The most common excuse is that Heathrow is “full” which is incorrect. With the demise of several airlines and the reduction in frequency of several operators there are slots available, prominently those of BMI, inherited in part by BA, which are not being used to reinforce long-haul routes as expected. Liberia and Sri Lanka are not considered critical routes; Leeds and Strasbourg are hardly important routes. However “use it or loose it” is the abiding rule and BA’s Fortress Heathrow policy is designed to minimize competition even in spite of prevalent open-skies policies of most major destinations. Exploitation of open-skies and competitive excellence has created and grown large hubs with fast expanding carriers even though the local population base is tiny. For Example: - Hong Kong and Cathay Pacific pop 8 million - Singapore and Singapore Airlines pop 4.5 million - Dubai and Emirates pop 2 million - Amsterdam KLM pop 1.5 million . b) Mixed Mode A dramatic improvement in on-time achievement, major reduction in kerosene burn, reduction in pollution, elimination of stress and cutting crew time and passenger delays can be achieved by the following:

- Use both runways when required to cater to diurnal peaking of activity. For example, this means that when there is pressure for long-haul arriving aircraft between 0630 and 0830 both runways can be used for landing.

- Similarly from morning peak take-off timings both runways can be used for take-off. This of course does not prevent aircraft landing on one or both r/ways. . This is exactly what happens at Gatwick which has only one runway & most other multi-runway airports around the world.

However, it is absolutely essential that the government assemble all local stake-holders, HACAN etc and provide a solid pledge that this heightened efficiency will not be used to gain extra frequency. Otherwise the process will be stopped in its tracks as in 2009 when BA suggested that this would release extra frequency.

Incomprehensibly BA & BAA are opposed to this process when BA in particular will be able to save millions by drastically reducing fuel burn & other related costs resulting from i) Queuing on take-offs on Heathrow congested runways ii) Circling/Stacking on landings due congested final approaches to highly congested Heathrow runways which will result in enormous savings on improved Aircraft/Crew Utilisation and on reduced “Delayed Passenger Compensation” ....then progress can be made to regenerate confidence in the airport.

IAAG can help in devising a strategy in this respect in dealing with local groups who may be in opposition if inadequate presentation is made. It will help also to assemble exact numbers on what financial savings will be made. c) Operational management As well as mixed mode IAAG proposes that operational management techniques are introduced to allocate targets for performance to all service providers at the airport including the Border Agency to be strictly enforced by the chief executive of the airport. As in Hong Kong, Essential Service Legislation should be introduced to prevent wildcat or unauthorised stoppages in this strategically critical area as is the case in many other airports. d) Improvements outside the South East Several improvements are currently forthcoming, i.e. runway extensions at Birmingham & other UK Regional Airports largely for the benefit of foreign carriers, especially the long-haul carriers like Emirates, Qatar & Etihad operating very large aircraft (A380s and Boeing 777s) to the fast-emerging markets in the Middle East & the Far East get the benefit of these Runway Extensions NOT the British Carriers as they do not operate from the Midlands, The North & Scotland direct from these UK Regional Airports to these highly-lucrative markets. e) Surface Access Surface access is poor at Heathrow and Stansted resulting in congestion & stress and in the Heathrow case, pollution since 80% of traffic arrives by petrol and diesel burning vehicles. HSR2 will not solve the major problems. Crossrail is eventually able to relieve some congestion and the branch of the GWR.

3) CONSTRAINTS ON INCREASING UK AVIATION CAPACITY a) Impact on the environment Presently the government does not have a viable policy to reduce noise impacts on local populations. In fact the opposite, the refusal to abandon the 3rd runway debate will only severely exacerbate the massive and persistent opposition to government laissez-faire in this respect. Even the European directives demand a reduction in noise and pollution in the Heathrow area.

Without mixed mode or draconian measures to reduce frequency and tighten night curfew controls will the Government even begin to demonstrate a sympathetic understanding and corrective measures for adverse environmental impact on local residents and more broadly as much as 3 million residents under or near the glide path and take off paths of aircraft departing and arriving at Heathrow.

The solution proposed by IAAG and also by the Mayor’s team is to design and build a new large hub airport in the Thames Estuary, in IAAG’s case near Cliffe. This is outlined in detail in the submissions which we will attach for your reference and will drastically reduce the impact of noise and chemical pollution on surrounding areas. b) Government’s proposals to reduce carbon emissions Only if the Government adopts the mixed mode plan and cap frequency at Heathrow will any progress be made. Converting all service vehicles on the airside of the airport will any impact be made on the level of carbon emissions. Much more important CO2 emissions are toxic chemicals such as sulphur dioxide, nitrous oxide and carbon monoxide all of which can lead to premature death as recently proven in the MIT study published this month Oct 2012. We will examine this important finding later in our paper.

Aviation can be made more sustainable by lifting the burden of escalating APD and other taxes and the threat to include the European directives on carbon emissions to UK carriers. Competitive carriers in other countries are not subjected to the same level of taxes and consequently UK carriers and UK aviation suffer from diversion of traffic through other points, particularly in continental Europe. Helsinki is now added to the list of Paris-CDG, Frankfurt & Schiphol. c) EU aviation policies There appears to little productive dialogue with the EU in terms of facilitating and protecting UK aviation. Continental EU administration are quite happy to see the discomfort of UK carriers since it continues to enhance the competitive position of their own national carriers.

4) STEP-CHANGES IN UK CAPACITY Government policy presently does not include increases in Frequency at S.E. Airports i.e. Heathrow, Gatwick & Stansted. The 3rd runway will not be built at LHR which adds very little frequency, anyway, on a short runway. a) Should there be a new hub airport? Where? IAAG ‘s proposal has always been that plans must be finalised for a large “hub” airport to be built in the Thames Estuary at Cliffe. Comprehensive supporting document are submitted to explain and emphasise the justifications in this respect. b) Costs and benefits of increasing UK aviation capacity There is no cost benefit available in the other proposals to consider a 3rd Runway at Heathrow or a large airport on the Isle of Grain or 11miles N.E. of in the North Sea. Detailed analysis is contained in the following IAAG’s supporting documents sent to you earlier today (15 October 2012) namely:

16 October 2012

EXECUTIVE SUMMARY OF IAAG SUBMISSIONS – OCTOBER 2012

A) GENERAL OUTLINE The general outline of events is that the question of capacity at London’s airports has become a hot topic with all shades of professional and lay opinion being expressed. Out of the confusion the following three proposals have been exposed. These are the only proposals to have received serious attention. 1-Third Runway at Heathrow 2-Boris Island either in the North Sea or on the Isle of Grain (Lord Foster and group) 3-The-IAAG proposal, first drafted and publicised widely in the press in April 2009 for an airport at Cliffe. This has been updated regularly and we have submitted these newer versions to you in hardcopy. The foundation for this work was SERAS 2001/2. This in detail recommended that in the absence of extra Runway capacity at Heathrow, Gatwick and Stansted, the Cliffe site on the Hoo peninsula was the favoured and recommended option. This comprehensive and authoritative work was well received by Government and formed the basis of the government White Paper. This is compulsory reading for any study group wishing to formulate conclusion and draft policy. The financial analysis for the Cliffe option is still largely true today and simply needs to be adjusted for inflation. There have been other eccentric contributions which do not deserve serious attention. IAAG’s views on these 3 proposals are as follows: 1) The proposed 3rd Runway at Heathrow This is confronted by serious opposition, political, financial and environmental. It is a short runway costing £7-8 Billion will take 8 years to build and will not attract sufficient funding and does not have a viable ROI or any cost benefit ratios. In our view no more time should be wasted on this consideration which is being propped up by a collection of vested interests which will not carry the day or provide a solution for the deficit in Government policy. This has no accompanying short or medium term solutions and will result in the accelerating decline of aviation activity in the UK. The only beneficiaries in this void of 7-9 years will be filled the continuing expansion of foreign carriers draining UK originating and destination business from domestic points in the UK which BA has abandoned to boost European hubs even further. FLY BE is the main feeder and short haul carrier in the UK and western Europe but has no connecting services into LHR at all. It therfore progressively feeds Continental hubs such as Frankfurt-FRA, Amsterdam-SPL and Paris-CDG Other large Low Cost Carriers (LCCs) such as easyJet and have signed commercial agreements (special prorate agreements) with Continental competitor carriers. This further contributes to the decline of Heathrow-LHR and reduction in the number of destinations served. The only solution for a declining LHR is to adopt IAAG’s 3 stage plan and eventually combine BA & FlyBe and even Ryanair and easyJet, (supported by commercial agreements) in one major hub in the Thames Estuary i.e IAAG’s project at Cliffe-LGA the “London Gateway Airport”. IAAG has fully explained all other reasons why this project will never succeed, in hardcopy papers submitted separately.

2) “Boris Island” There seems to be a reluctance, deliberate or otherwise to identify the most important feature of a new airport, which is its exact location. The initial selection by Douglas Oakervee of the North Sea location on Shimmering Sands is clearly totally unacceptable, too far from population centers 10.5 miles N.E. of Whitstable with no ROI and impossible to finance. We have submitted a hardcopy paper rebutting this absurd initial choice. The Foster proposal which followed for a location at the Isle of Grain involves the following. 1) Demolishing a new power station, a gasification plant, large gas storage containers and an ocean terminal for very large LNG carriers off loading nearby. 2) A town of 7,000 people in Grain who work on these strategically important and sensitive installations is clearly poorly researched and impossible. This would involve the evacuation of the entire town protected by a Health & Safety perimeter. It also does not fit the ICAO and IATA criteria for Airport design. No airport with 4 runways can be built on this site. Minimum runway width and separations are not complied with and will not be allowed 3) The SS Montgomery is in the final glide path and must be avoided since there are 4.000 tons of unexploded ordinance. 4) The London array of wind turbines lies in the approach and will be identified as a hazard 5) Thamesport lies close to Grain and hosts large container ships arriving at the confluence of the Medway & Thames estuary. 6) Grain is at a dead end served by one of the most dangerous roads leading from Thamesport . Pipelines carrying gas products the length of the South part of the Hoo Peninsula are a hazard for any development of communications 7) Economic geography dictates that any important hub will only grow at the intersection of connecting routes. Grain is the antipathy of this concept, Cliffe fits it exactly 8) There are wildlife issues and the approach will be over the island of Sheppey which has a substantial residential population 9) It is too far from both supporting markets and destinations from labour supply. 10)The cost of building supporting transportation infrastructure will be prohibitive & will never attract public or private investment All of the above 10 reasons are killer-blows in their own right . It is strongly suggested that this project is relegated to the undo-able bin before even more amounts of public or private money is spent needlessly.

B) IAAG Proposal This has been extensively described in the 4 papers mailed to you on 15 October 2012 and is built on the following criteria: 1) Airports must be treated in a similar way to other major infrastructural undertakings. A realistic pay-back period (ROI) and acceptable financial ratios must be justifiable, agreed and sufficient to attract overseas investments, since UK sovereign finance is most unlikely to be forth coming. 2) Connecting surface infrastructure must synchronise easily with the airport location. Larger projects such as the Lower Thames Crossing can be tolled and therefore funded, again from overseas sources. 3) We have described in detail how existing communications by road, rail and sea can be utilised focused on the land hub of Gravesend with onward transmission to the airport services complexes both north and south of the Thames, can be enhanced by relatively inexpensive additions. This is in strong contrast with the Grain project which will cost in excess of £30 billion and will not attract overseas investors nor produce any ROI whatsoever. 4) Please refer to the colour brochure to observe how rail connections from 5 main rail terminals in London can connect with Gravesend for short onward transmission to the LGA airport 7 miles away by local shuttle on the Hong Kong format.

Likewise rail connections can be extended through Tilbury and Crossrail extended (which is the intention) though the Lower Thames crossing thus connecting Medway with Essex and Dubai World Container Port. The lower Thames crossing will create great synergies for local regional and airport related travel. This can be funded from overseas since it can be tolled and produce revenue. It will also have a very beneficial effect on relieving congestion at Dartford on the M25 and enable direct connections from the A13 to the A2 and A20.

3) This growing infrastructure must be multi-use directly benefiting local populations and a Logical Hub for distribution by road and rail traffic as well as air routes.” “Use what you’ve got”” and extend and enhance accordingly 4) Create a dynamic for growth and regeneration on the Dutch Mainport Model i.e. the “multiplier “ effect (i) 5) Investment must create a value-added activity. Simply building housing gives rise to more debt. Job creation must come first. 6) It is essential to create a complete 3-stage plan, short, medium and long-term all of which must fit logically in place and be supported by government and the private sector and public opinion 7) This has the enormous advantage to government for the following reasons: a) It refocuses on the absolute requirement for long-term planning to deliver LONG term benefits breaking the mould of patch, mend and muddle through b) It delivers achievable results in the very SHORT term to improve greatly the performance of LHR which has to be used for the next 10 –12 years anyway. It will thereby boost confidence in the government, the industry and public opinion. It will in short restore self-respect and demonstrate there is a quick answer to Heathrow’s biggest problems - - -Delays c) It brings breathing space where additional capacity can be introduced in the medium term at LGW. This will need to be tackled promptly and with diligence. The land is available, the location secure and the finance presumably available through partners and shareholders. Standing in the way is a local agreement not to build before 2019. In the national and local interest it would be sensible to override this undertaking. Having only 1 Runway with in excess of 360,000 movements a year is not “resilient” in the event of any even minor mishap on the main runway which would mean closure of the airport with severe consequences. Thus Gatwick can expand more freely and retake some of the traffic it lost to LHR. LGW could then as it is now re-establish hub status. There is no reason why there should not be more than one hub airport in the South of England as long as viable connecting services grow as a result of sound and profitable commercial airline planning. (i) www..com/corporate/en/images/008372%20Factsheet%20network_tcm729- 342204.pdf http://www.ejtir.tbm.tudelft.nl/issues/2001_02/pdf/2001_02_02.pdf

Short term a) Introduce Mixed-Mode at Heathrow WITHOUT placing additional frequencies. Binding government guarantees must be given to all stakeholders to this effect. The result will be a dramatic improvement in on-time performance for all users with millions of £s savings in fuel, aircraft and crew utilisation and the removal of the most bitter point of contention at Heathrow, i.e. poor time-keeping. b) Introduce essential service legislation c) Introduce a system of Operational Management with targets enforceable on all service providers including Border Agency and Security. The above can be explained in detail in the question and answer sessions. Medium term 1) Within 5 years open a 2nd runway at Gatwick which is fast improving and attracting long-haul and connecting-hub-traffic. Delays will be reduced and runway congestion reduced. Land has been allocated and private funds should be forthcoming. Overdue enhancements to rail and road access can be introduced. 2) Open Manston for all-cargo services. This has already been done on a limited and temporary basis in the past. Improved surface communications must be established with the main road hubs i.e. A13, M20 and M25 and with London Gateway Airport, when it is built, Cliffe location will act as a clearance facility for cargoes. Also Dubai World through its logistics centre will be able to distribute and collect cargo and mail and package traffic from all parts of the UK. 3) Open for general aviation traffic on a very limited basis thus relieving LHR of congestion of slots.

Long term Commence immediately detailed costing and research into the Cliffe IAAG Proposal. This is the only realistic, fundable proposition left standing. Before having finally to commit the government to long-term project, we will have seen real improvements made to LHR and will be progressing in the reshaping and expansion of LGW at no cost to the taxpayer. There is therefore no risk to the national best interest and sensible, informed careful but timely large infrastructural planning can take place. London Gateway Airport-LGA near Cliffe. The government owns large tracts of the Hoo Peninsula through MOD and PLA . The Church Commissioners are also landowners. This can be consolidated and then offered for lease to sources of investment on long leases thus creating an income stream and an element of control by government which they presently do not enjoy. A “golden-share” in the aggregated investment can encourage both investors and government to work closely together to move the project forward efficiently. Healthy interest has been expressed from Middle East sources in what will be an iconic and attractive investment.

When the project is completed, it can be opened in stages: London City Airport can be absorbed into LGA, a new 24 hour airport with excellent connections to the City and Canary Wharf through road, rail and Crossrail links. (see the colour brochure). When the new London Gateway Airport (LGA) is completely opened Heathrow will be closed and Heathrow operators invited to relocate to LGA or possibly to Gatwick with a second runway to meet Govt & Industry objective of creating healthy competitions between airports in SE. The site at Heathrow will be opened for development as an ECO City and should realise in excess of £5 billion and provide a large number of jobs for developers at the new site. T5 can be used as a new Earls Court. T4 can be used as a permanent exhibition centre for British Industry with subsidised stands for exhibitors and run by the CBI. Power will be supplied by solar panels and geothermal energy. Blocks will be highrise residential and commercial. Training colleges will be established and educational research and entertainment centers encouraged. Useful transport links can be maintained and hotel accommodation utilised. Extensive water features can easily be designed with the aggregate removed for building requirements. Local transport within the security boundary will be all electric cars, and taxis.

The model for this bold ECO investment has already been established in several Chinese cities with help from Singapore interests who are respected masters of urban planning. Land values are suggesting that the LHR area would be valued at circa £5 to £6 billion more than any value of the area as an airport. Several potentially interested parties are expressing interest.

The main point to be made here is that there would be continuing interest and development available for Heathrow after its substitution as an airport. It would be a wealth generating entity creating many new jobs of all categories and serve as an icon in Europe as a truly ecological and sustainable environment and world leader.

Thus, wholesale redevelopment in the Thames Estuary would be matched by an existing project to the west at Heathrow, both equidistant from the new London landmark the “Shard” which itself is close to which would serve as a collection and dispersal point for all traffic.

Both areas should be awarded ”Enterprise Zone” status.

C) Principals at stake 1) Without question there is a need for extra runway capacity in the SE of England - - now

2) Aviation needs however better facilities, better managed and serving the best interests of consumers and providers (airlines)

3) This requires a mix of short term, medium term and long term commitments to be infused now in principal and in practice. The political risks of embracing this strategy are very small and the national interest will be well served with Government taking most of the credit.

4) IAAG will fully cooperate and assist in advancing the process for everyone’s benefit.

5) The main events are : a) Modernise and improve airports and aviation both in shape size and function. b) Create a sustaining dynamic infrastructure based on a new airport in the Thames estuary and a new eco city in the west of London at a newly revitalised Heathrow site. c) This will resolve the failed Thames Gateway Project d) This will resolve the problem of toxic chemical and noise pollution affecting several million Londoners. This will decongest west and two of the most un-resolvable black spots of the UK e) It will re-awaken interest in sea and estuary access to the airport both for staff and travelers (see brochure for details) f) Decongest Britain’s stumbling and outdated transport system and revitalise commercial and economic interest in building and maintaining the world class facilities it deserves.

D) CONCLUSIONS These papers and written material have been assembled over a period of 4 years. IAAG has not changed its views over this time having presented to government, public bodies and private institutions. Inflation over this period and also since the publication of the SERAS report has been modest. We expect therefore by making generous allowances for mitigation and inflation the delivered cost to overseas investors will be circa £12-13 billion.

This can be built in 10 years from approval, creating income for the government in partnership with the principal investors. Government’s role is to take early action to embrace the package of measures which only IAAG has been able to assemble. It will be the task of the private sector to deliver and execute to end decades of indecision and procrastination. IAAG remains at the disposal of Parliament to progress these vital issues for the sake of the future of aviation and the national interest.

Written evidence from the Chartered Institute of Logistics and Transport in the UK (AS 23)

Summary

• International connectivity is the most important benefit of aviation to the UK economy. • Air Passenger Duty is damaging the UK economy and should be reviewed now that the EU ETS includes aviation. • In the longer term, the passenger experience will only be satisfactory if the aviation system operates well within its practical capacity. • Aviation can be aligned with current policies for other modes, in particular for rail. • Best use of existing capacity can be achieved by the removal of barriers which prevent a level playing field and by the application of common standards. This means the removal of price regulation, except at Heathrow, leaving normal competition law to apply, and the recognition that all major airports other than Heathrow can be promoted as 'National' airports. • Government policy should always try to seek a balance between the economic benefits and the environmental impacts, both global and local. Growth is the key without which benefits and reduced impacts will not be achieved. • EU aviation policy is generally helpful, with some exceptions. • Rather than a step change, the UK needs a continual growth of aviation capacity to meet its short, medium and long term needs in line with its climate change targets.

Introduction

The Chartered Institute of Logistics and Transport in the UK - CILT(UK) - is the professional body for individuals and organisations involved in all aspects of transport and logistics. It has over 19,000 members in numerous disciplines, including the aviation industry and transport planning. As it is not a lobbying organisation it is able to provide a considered and objective response on matters of transport policy. Through its structure of forums and regional groups it provides a network for professionals in the transport industries to debate issues and disseminate good practice. This response has been prepared by the CILT(UK)’s Aviation Forum, the Chairman of which has previously appeared to give evidence to the Select Committee.

Question 1. What should be the objectives of Government policy on Aviation? a. How important is International aviation connectivity to the UK aviation industry? b What are the benefits of aviation to the UK economy?

International connectivity is one part of the benefits from the airline industry and, for the UK economy, it is the most important one. Connectivity has been crucial to UK business since the Industrial Revolution because of the UK’s geographic position and the need to export in order to achieve continued growth.

After the Second World War technological advances in aircraft design progressively raised the profile of air travel as an essential generator of economic growth. It is now crucial both to growth of the economy and to the prosperity of key industries such as financial services, the high tech sector and inbound leisure. The most obvious example of this is at Heathrow where

nearly two thirds of passengers are business or inbound leisure and there is ample evidence from numerous studies of the economic benefit from international routes at airports throughout the country.

Equally the outbound leisure sector has, over the last 15 years, been radically changed by the “no frills carriers” whose business model is substantially different from both the “legacy carriers” and also the inclusive tour charter airlines (who were the originators of low cost air travel within Europe). The ability of the no frills airlines to set up operating bases at local airports throughout Europe has revolutionised the network of scheduled services to the detriment of both charter and legacy airlines. These networks offer substantially more options for business and leisure travellers to use direct air services from local airports and generate significant employment around many of those UK airports.

In addition to being a local employment generator, leisure air services meet the aspirations and expectations of the UK population for worldwide travel, to holiday overseas, visit friends and relatives and attend international sporting events etc. In the earlier days of the low cost carriers there was concern that promotional fares during low season periods (e.g. 1million tickets at £1) created “unnecessary” and environmentally unfriendly travel. The hike in both fuel prices and APD has largely removed that issue. It should also be emphasised that for legacy carriers the frequency and range of international destinations that is so important to the business sector is normally only possible due to the significant contribution to load factors and revenue from leisure travel.

Transfer traffic benefits the UK by making routes viable that would not be so if they relied on point-to-point traffic alone. Transfers have grown steadily as sophisticated yield management systems have enabled airlines to attract non UK passengers, which then benefits the UK economy by ensuring that routes are operated more frequently or to a wider range of destinations. Detailed evidence is given in the Frontier Economics report of September 20111. c. What is the impact of Air Passenger Duty on the aviation industry?

The Institute's response to the All Party Parliamentary Group on Aviation Competitiveness2 made the following points:

• The level of APD is now damaging to the UK economy and the UK airline industry and an unreasonable cost to UK business. • The structure of APD works against establishing business and exports in new markets and emerging economies. • The structure of APD is anomalous and arbitrary. The class bands are economically damaging to UK airlines and the inbound leisure sector, whilst the distance “banding” is quite simply discriminatory. • APD discriminates against travel (particularly business travel) in those areas further away from London and the SE - the more so for the north and Scotland. • APD should be radically reviewed if the EU’s ETS is successful. d How should improving the passenger experience be reflected in the Government’s aviation strategy?

1 Connecting for growth: the role of Britain's hub airport in economic recovery, Frontier Economics, September 2011 2 Submission by the Chartered Institute of Logistics and Transport in the UK to the All Party Parliamentary Group on Aviation Inquiry into Maintaining the Competitiveness of UK Global Aviation, 15 May 2012

The Government's South East Airports Taskforce, in examining how the passenger experience at airports could be improved, highlighted some problems under Government control which could benefit of both passengers and airlines – in particular the Border Agency’s staffing of immigration checks and a more holistic approach to security. At Heathrow, the operational freedoms should enable a reduction in delays, although at this time there is little evidence to show how effective NATS has been in making use of this.

For many years, passengers have compared their experience at Heathrow unfavourably with modern facilities in the Middle and Far East and, more recently, with new airports are being developed throughout the BRIC nations. Primarily this is due to delays caused by the planning system before Terminal 5 could be completed, and the knock on delays to passenger terminal redevelopment in the Central Area. The current hiatus affecting any further development strategy for airport development in the South East will inevitably have a similar knock-on impact in years ahead. A longer term strategy is essential to safeguarding the passenger experience in future years. e. Where does aviation fit in with the overall transport strategy?

It is questionable whether an overall transport strategy exists, but the objective is clearly to deal with congestion which is inhibiting economic growth. The combination of current policies for various modes could, however, be considered as an overall strategy. Aviation strategy should be aligned with these other modal strategies under an overall objective of transport to support sustainable economic growth and contribute to social welfare.

The relationship of aviation to the road strategy is relatively straightforward. There is now only limited new road building, and the emphasis is on better use of existing roads through management, the continuing drive to improve safety and environmental improvements. This means that airport development should be located in places where the existing roads can be adapted to accommodate growth, which in some cases this will mean road capacity increases. In the longer term, the method of payment for roads will have to change with the reduction in fuel duty revenue, and new payment methods will better reflect the benefit obtained. It is likely that airport road access will be valued more than many other road trips, which will enable airport road access achieve an appropriate priority.

Complementary rail strategies are critical to the development of aviation. The UK led the way in establishing rail access to airports, but some current trends are resulting in a deterioration in the relationship. Gatwick and Stansted Airports once had, and Heathrow still has, successful dedicated express rail services which segmented the market, provided excellent service and brought in premium revenue. Although such services are highly efficient in terms of all day usage, at peak hours they are seen to have spare capacity when commuter services are full. This capacity has then been reallocated to commuter services and the effect has been, and will increasingly be, to make the services less attractive to air passengers. This will reduce overall rail mode share at airports, re-introduce the conflict between air passengers and commuters, reduce rail revenue (because passengers will not pay a premium fare for a non premium service) and inhibit the growth of these airports. Non dedicated rail services operate satisfactorily as a complement to the dedicated services at the large airports (eg. the Line to Heathrow). At smaller airports, or outside the London area where rail commuting is not so significant, non dedicated services can provide a satisfactory airport link.

The strategy for HS2 should also be consistent with aviation policy. Ideally, airports should be served by High Speed Lines but the benefits to air passengers are limited, and may not sufficient to overcome the costs and time disbenefits to non air passengers. Thus the Birmingham International Station on HS2 is appropriate because it does not require a significant time penalty

and also serves other markets in the West Midlands, but it will be difficult to justify a spur to Heathrow.

CILT's study of the Transport Use of Carbon3 shows that rail generally uses less carbon than air travel, but this is critically dependent on the decarbonisation of electricity and there are plenty of examples of sustainable short haul air travel. Passengers will also benefit if air services are not prevented from competing with rail. It is also clear that high speed rail will not substitute for air travel to an extent that would significantly reduce the need for additional airport capacity.

Local transport strategies are generally well aligned with aviation strategies. Airports were among the first organisations to develop travel plans for their employees and there are numerous examples of local bus marketing support, car sharing, cycle initiatives and other sustainable transport activities, involving many local stakeholders and organised through Airport Transport Forums.

It is legitimate for policy to require the aviation industry to contribute to the cost of a surface access improvement to the extent that it benefits, although an airport is a part of the transport network and not the same as a commercial developer. Neither should this be an excuse for Government to abrogate responsibility for the provision of transport improvements where these benefit the wider population, but happen to also serve an airport.

Question 2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

Essentially, we should let the market operate, with competition where possible and a level playing field and impose restrictions only where necessary to ensure that community impacts and benefits are balanced.

After the sale of Stansted by BAA, all the London airports will be in separate ownership (with the exception of Gatwick and London City having a degree of common ownership). It is difficult for airlines to obtain new slots at Heathrow, but there are slots available elsewhere, and different types of airport facilities are available in different locations in the South East. This means that passengers also will have a choice of airlines and types of service which leads to better passenger experience and competitive price.

With separate ownership, there is no theoretical reason for price regulation at any of the airports. However, Heathrow holds a unique position in the UK in terms of the long term shortage of capacity, its unique role as an international transfer hub (where it competes with other major European hubs) and its proximity to the high yield passenger market in London for which there is limited competition with London City). Years of price regulation with a shortage or runway capacity has distorted demand and led to a grey market in slots. Equally there is no evidence that airlines have chosen not to operate from other London airports because of the lack of price differentials.

On balance, we are in favour of ending specific price regulation at Gatwick and Stansted, noting that all airports are subject to normal competition law. In the case of Heathrow it is difficult to see how the removal of price regulation would be generally acceptable. However it is evident that the single till approach is now counterproductive (and there is also little to

3 Transport Use of Carbon, CILT, November 2011

commend a dual till approach). The CAA needs to develop a more constructive approach which puts customer experience in a more central position.

In terms of other regulations, we would support the extension of fifth freedom policy to all London airports other than Heathrow, on the grounds that it would enable all these airports to compete for new services. But we would not expect it to generate much in the way of additional flights.

To ensure the balance of benefits with impacts, we support the application of common standards in terms of noise and other local impacts. It is quite clear that Heathrow's noise impact is very much greater than that of other London airports, but it is possible to relate this to the benefits to give a benefit/impact ratio. This will then provide guidance towards how much mitigation is appropriate and, more significantly, will enable an evidence based comparison of alternatives for expanding capacity. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

There are few restrictions on the use of airports outside the South East but, if any restrictions do arise which are stopping the introduction of new routes, such as the necessity of achieving bilateral agreement, they could be removed on a case by case basis.

We would agree that the distinction made in the past between the South East and the rest of the UK has not been helpful. We would instead suggest that, for the short and medium term, all of the UK's airports which can accommodate long haul international flights should be designated as 'National Airports' which would then enable them to be promoted around the world (eg. at airline scheduling events, or as part of trade missions) as gateways to the UK. This would mean that the situation is actively managed rather than simply waiting for the commercial decisions of airlines. Heathrow would, in practical terms, be the exception to this designation because it is effectively full and therefore is only be available for new services if slots can be acquired at excessive cost. c. How can surface access to airports be improved?

As noted in our answer to Question 1e, aviation is a transport mode and should not be treated as simply a commercial developer required to fund transport improvements. While it is legitimate to seek contributions to transport improvements associated with airport expansion, such contributions should be related to the benefits received. We would also wish to repeat the point made in answer to Question 1e that degrading dedicated airport rail services will reduce the attractiveness of rail as an airport access mode, re-create the conflicts between airport and non airport passengers that were the reason for introducing dedicated services, reduce revenue to Government and constrain the growth of airports.

Where airports are growing, it then becomes possible to justify surface access improvements. For example, if Heathrow grows, a western rail link at Heathrow would provide a welcome addition to the airport's rail catchment area provided it can be cost effective. Similarly, a HS2 link, initially via and ultimately by a direct route, will provide a choice for journeys currently made by road. A HS2 station linked to a growing Birmingham Airport and, possibly in Phase 2, to , would provide passengers with a greater choice through better accessibility.

Question 3. What constraints are there on increasing UK aviation capacity?

a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

Government should always seek a balance of impacts and benefits, so the reference in the Draft Aviation Policy Framework to the balanced approach is absolutely correct.

There are several ways of measuring aviation noise, but the 57 dB LAeq16h contour has the merit of being consistently measured across many airports over a long time, and should be retained. When considering expansion, alternatives should be compared in terms of the absolute numbers of people affected, the change over time, the change resulting from the expansion and the addition or reduction of noise impact over particular communities. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

CILT supports the policy objective as set out in the Draft Aviation Policy Framework (paragraph 3.4). The Committee on Climate Change indicated that UK aviation can both grow and reduce carbon emissions significantly to achieve the UK carbon targets. CILT supports the inclusion of aviation in the EU Emissions Trading Scheme as an interim measure pending a world wide scheme implemented through ICAO. We also support the other measures outlined in Chapter 3 of the Draft Aviation Policy Framework, noting that they are all fully supported by the aviation industry through the Sustainable Aviation Group. Evidence from the US shows that, unless the industry is financially sound and growing, there will not be investment in new, more technologically advanced, aircraft. c. What is the relationship between the Government’s strategy and EU aviation policies?

The relevant EU policies include those relating to airspace, emissions trading, noise mapping, slot regulation, competition, bilateral agreements and passenger rights. In most cases, UK Government policy is aligned with these although there are examples where other EU countries do not appear to have the same enthusiasm for full implementation as the UK (eg. noise mapping). There are also examples where the EU seeks to resolve issues in some countries which are not a problem in the UK where competition is generally stronger (eg. ground handling).

In general terms EU aviation policy does not act as a constraint on increasing UK aviation capacity. It could be argued that EU policy encourages more growth than does the UK, as is evidenced by the faster growth rates achieved at many EU non UK airports. EU airspace policies such as the Single European Sky are particularly helpful in seeking to enable the sustainable growth of aviation, albeit they are very slow in being implemented.

Question 4. Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where? b. What are the costs and benefits of these different ways to increase UK aviation capacity?

Since the 1960’s aviation policy has developed and been liberalised . Progressively from the early 1980’s the tight noose on the airports outside the London area – rigid Treasury controls on investment; the “Gateway” designation for long haul routes; rigid bilateral air service agreements, and Fifth Freedom restrictions on both cargo and then passenger services – have been removed. The London area Traffic Distribution Rules were removed more than 20 years ago.

However, expansion of airport runway capacity in the South East has fallen foul of successive governments - the reversal of projects to develop incrementally a four runway airport at Stansted, (which came out of the Roskill Commission), Foulness (advocated by one member of the Roskill Commission), the decision to shelve RUCATSE conclusions and finally the current administration’s reversal of the 2003 Aviation White Paper strategy.

Recent debate has been about a “hub airport for London” – this is an international transfer hub and is different to the “hub and spoke” model for domestic traffic so popular in the US. Over the last 20 years there has been a growing impetus in the number and size of international transfer hubs throughout the world. With the exception of those in the Emirates, this has been stimulated by the strength of the three main airline alliances.

Heathrow is now the only transfer hub airport in the country but its traffic mix is complex. Around 36% of Heathrow’s passengers were transfer journeys with a third not on British Airways. The closure of BMI will reduce non British Airways transfer journeys and has raised serious questions about the 's ambitions to build a competing transfer hub using the new Terminal 2. Virgin Atlantic is trying to establish some domestic flights to replace feed lost from BMI. On the other hand British Airways now has sufficient new slots to handle its medium term ambitions – in any case over the last two years BA’s commercial priority has been to start additional European routes (i.e. Paris Orly, Gothenburg and Bologna) rather than new destinations in the BRIC countries.

The group of airlines which have least opportunity to expand flights or start services into Heathrow are long haul carriers who either are not in alliances or are not leading members. These airlines cannot afford the inflated price for such slots that become available at Heathrow. One or two have begun to use Gatwick but it is the failure to provide capacity for these airlines which is also reducing connectivity out of London.

Although there are examples around the world of cities with several airports (New York, Moscow), none of these are multiple transfer hubs. Like the airports serving London, each airport serves a particular market segment.

Turning to the “No Frills Airlines”, recession and the combination of escalating fuel prices and APD has significantly reduced short break travel volumes and this looks likely to result in an adjustment to medium term demand for airport capacity in the South East.

All this raises the question of whether there is a real case for a “step change”. Since RUCATSE CILT has consistently supported the development of a third runway at Heathrow, but it has to be recognised that the political will to deliver that is now uncertain to say the least.

The need for additional airport capacity exists in the short term and will continue in the long term. Rather than a step change, we need a continual growth in capacity, to match the demand that the Committee on Climate Change says is compatible with the UK's carbon targets. Any airport should be permitted to grow, within this overall limit and within local limits determined by whether the balance of benefits and local impacts. This implies that Heathrow should be maintained as the UK's hub with additional capacity permitted only if the significant local environmental impacts, in particular noise, can be addressed. Additional runway capacity at Gatwick and Stansted may also be justified in due course. At the other 'national' airports, additional capacity should be permitted, again within the overall CCC limit and in accordance with the local benefit/impact balance.

Allowing existing airports to expand will mean that the private sector will meet the entire costs of the expansion programme. Airports are all commercially operated and their income is from airlines and the passengers they serve, with no public subsidy.

The alternative proposed for a hub airport in the Thames Estuary has the potential to deliver a “World Class” facility when compared with capital cities with super-airports elsewhere. However, it raises many unanswered issues although there can be no doubt that it is technically achievable. These issues include the routes and costs of fast road and rail links to Central London; a rail terminus that has connections to distribute passengers around Central London; similar links to main catchment areas in the Home Counties; air traffic control conflicts internationally and with other London airports; the availability of sufficient public finance; risks from migrating wild fowl, and the massive scale of support infrastructure.

Perhaps the most unquantifiable risk concerns the inevitable closure of Heathrow which will be necessary to give any hope of a financial case for an estuarial airport. With so many businesses located to the west of London and the Thames Valley because of global connectivity there has to be uncertainty over how many will relocate premises and staff to the east of London or will they simply move to other centres in Europe.

16 October 2012

Written evidence from Dr William D Lowe (AS24)

1. The following is a personal and individual submission dealing primarily with making better use of existing aviation capacity at Heathrow and the reduction of some of the constraints on expansion of capacity, in particular noise and oxides of nitrogen.

2. The author has a Degree in Engineering, PhD in Applied Science and Honorary Doctorates from the University of Birmingham and London City for services to aviation. He was Director of Flight Operations for British Airways for five years and Chairman of the UK Flight Operations Director Group. He has served as President of the Royal Aeronautical Society and Master of the Guild of Air Pilots. He is a non-executive Director of Regional Airports Ltd and a Trustee of CHIRP. In addition to being a Concorde Pilot for 25 years, he was also Commercial Manager responsible for Concorde profitability within British Airways.

3. The submission suggests: a) Doubling the capacity of Heathrow without building a new runway. b) A means of reducing dramatically the noise footprint of aircraft arriving and departing from Heathrow. c) A method to reduce the concentration of the oxides of nitrogen in the north-eastern corner of the Heathrow runway and road complex.

4. The suggestions on capacity and noise can all be adopted separately but clearly provide the maximum benefit in terms of aircraft movements and noise reduction if applied together.

5. Doubling Heathrow Runway Capacity without a New Runway The two existing runways at Heathrow are longer than and twice as wide as required. By extending both existing runways to the west, towards but not as far as the M25, the length of both runways can be 20,000ft or more. This would allow the simultaneous use of each runway, the first part being used for landing whilst, at the same time, the second part is used for take-offs.

6. The four segments of the runways can be of different lengths to accommodate varying aircraft requirements and a large section in the middle will be the “safe zone”, to accommodate over-runs etc. Further amelioration of safety concerns can be introduced such as using the left side of the runway for landing and the right side for take-offs, high speed turn-offs and operational procedures.

7. The significant increase in landing and take-off slots will provide expansion for decades to come and, for some considerable time, will provide operational flexibility to allow non-mixed mode for periods of the day which will provide some noise relief.

8. One further advantage would be available for the early morning arrival bulge. As there are no departures, the second part of the runway could be used for landings. This would serve to further reduce the arrival noise footprint at a troublesome time by moving it westwards for the majority of arrivals.

9. There do not appear to be any regulations which would preclude the adoption of this suggestion.

10. Reduction of Noise Footprint This suggestion is not new but does not appear to have been adequately assessed. It involves a number of elements..

11. Firstly, the intermediate approach height of aircraft into Heathrow currently has a base of 4,000ft. This can be raised to approximately 7,000ft. This alone will reduce the noise levels for a large part of London.

12. The approach slope to Heathrow can then be divided into two segments. The first, steeper segment, will start at 7,000ft and be at approximately five or six degrees as opposed to the current three degrees.

13. The steeper slope will translate into a normal three degree slope at approximately 1,500ft. This gradual transition will ensure that the stabilised approach gate required by many airlines at 1,000ft will be achieved.

14. In this respect, this procedure is fundamentally different from that adopted at London City Airport where approaches of five and a half degrees are flown down to ground level.

15. This will mean that the aircraft engines will be close to idle power and by changing the operating procedures, the drag features of the aircraft can be spoilers/speed brakes which are located on the top side of the wing which reflects the noise upwards, rather than large settings and undercarriages which send noise downwards.

16. This should preferably be an autopilot flown procedure although this is not essential.

17. Additional electronic guidance will need to be provided, using microwave landing systems (already installed at Heathrow) and/or GPS.

18. For a number of reasons, overall safety levels will be improved by the adoption of this procedure, in addition to the reduction in noise.

19. Modern guidance systems, such as MLS or GPS allow curved approaches to be flown although they are more difficult to integrate into the long established air traffic control procedures. By adopting the use of curved lateral approaches with the two segment vertical approaches, further noise mitigation can be achieved.

20. Once the intermediate approach height is raised for approaches, steeper initial climb- outs are also possible. This, too, would also significantly reduce noise, except for those under the immediate take-off path (1-2 miles from the airport).

21 Reduction of Oxides of Nitrogen in the North-East Corner of Heathrow One significant constraint on the increase in movement rate of aircraft at Heathrow is the recorded level of the various oxides of nitrogen, particularly in the north-eastern corner of the airport.

22. This build up is caused by the road use and emissions of aircraft on take-off. The problem is primarily in existence in the presence of the prevailing south-westerly wind.

23. The road traffic emissions can be reduced by the use of electric airport vehicles and the exclusion of some high emission diesel vehicles from the road system.

24. The bulk of the aircraft emissions could be channelled by the prevailing wind through ducts located at a safe distance from the side of the runway but within the airport boundary. The normal venturi effect should be adequate but, if not, fans such as those present in road could be used to augment the wind flow.

25. Most of the oxides are heavier than air and so lend themselves to this solution.

26. Once channelled through the ducts, extraction of the oxides of nitrogen is a relatively cheap and easy process using water scrubbing or ammonia extraction.

16 October 2012 Written evidence from the Greater Manchester Chamber of Commerce (AS 25)

Introduction

We are the UK’s largest Chamber of Commerce representing almost 5000 businesses, employing over 300,000 employees, a third of the total workforce in Greater Manchester. Our purpose is to articulate the views and needs of our members whatever their size, sector or location. We welcome the opportunity to provide evidence to this enquiry, constituting views from discussions at our Transport & Infrastructure Committee, Regional Chambers Transport Group meetings and various meetings with our members.

Q. What should be the objectives of Government policy on aviation? a) How important is international aviation connectivity to the UK aviation industry? b) What are the benefits of aviation to the UK economy? c) What is the impact of Air Passenger Duty on the aviation industry? d) How should improving the passenger experience be reflected in the Government’s aviation strategy? e) Where does aviation fit in the overall transport strategy?

1. In the first instance, the Government needs to understand the role of aviation in supporting UK PLC going forward, and develop policy that allows for developments within agreed guidelines. Aviation policy should be developed that is looking clearly at the medium to long term but allowing for short term manoeuvre to manage the blips relating to external factors such as recession, security fears and natural phenomena like volcanic ash. There needs to be cross-party political consensus on the long term role of aviation in the UK.

2. Without international aviation connectivity, the UK aviation industry is irrelevant. Without aviation connectivity, the UK economy will fail. The Chamber’s quarterly economic surveys have consistently shown that businesses that export are doing better that those that don’t export. The Government has clearly articulated that exporting is a fundamental element to recovery from recession – to do this there needs to be direct aviation access to the growing markets, not just the BRIC countries (Brazil, Russia, India, China) but also the emerging markets of Cambodia, Indonesia, Vietnam, Egypt, Thailand, South Africa (CIVETS).

3. There is not a clear picture of the impact of Air Passenger Duty on the aviation industry – all the studies so far have not been done from an independent perspective which is why we have joined the “Fair Tax on Flying” campaign to urge the Government to invest in an impartial study. Anecdotally, we know that airlines have been deterred from flying to Manchester Airport, citing APD as a contributory factor. It is also clear that the Government does understand the potential barrier that APD causes by their agreement to devolve the setting of it to the Northern Ireland Assembly in order to protect the from Belfast that helps to support their financial services industry. There are a number of options available on APD, including variations on geographic location, variations based on the emissions of the aircraft, or perhaps a waiver for business travellers.

4. Aviation is a fully commercial, competitive industry that relies heavily on passenger experience to gain repeat business. It is fair to say that passenger expectations are higher than in the past, regardless of the perception of lower quality from the low cost airlines. Whilst the passenger experience is largely the responsibility of the airports and airlines, there are elements that the Government needs to be mindful of, particularly security issues and the investment into surface access to the airports. Public transport access to airports is improving but often does not support airline timetables – the busiest times at most airports is the morning peak and check-in for a 6am flight is 4am when most public transport is not running.

5. The Government needs to develop a comprehensive national transport strategy that incorporates aviation and focuses on integration of all modes to allow transport to truly be an enabler of economic activity.

Q. How should we make best use of existing aviation capacity? a) How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? b) Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? c) How can surface access to airports be improved?

6. There is considerable aviation capacity in the UK however the airports serving the higher growth economic regions in London and the South East, particularly Heathrow and Gatwick, are experiencing capacity problems. The proposal to conduct a study that does not report until 2015 is a disappointing delay to any effective action being taken in the short time.

7. There are only a small number of levers that the Government can use to encourage best use of airport capacity outside the South East because of the commercial nature of the aviation industry. We believe that applying a variation to Air Passenger Duty is the best way to try to influence the airlines choices in the shorter term. Clearly any commitment to building greater capacity in the South East airports will impact on usage of regional airports.

8. There is the need to improve the accessibility to airports, particularly for business travellers who tend to be higher value passengers. A commitment to building the High Speed Rail network that connects Heathrow and Manchester airports offers some different options for travellers in terms of accessing direct flights however, given that the two airports are in competition, this does not necessarily mean a complementary rage of destinations for the UK traveller or overseas visitor.

9. For the regions, there is still a great deal of concern that there is no single body looking at the strategic role of airports and the required surface access infrastructure. For Manchester Airport the main surface access issue is the capacity of the , that has a direct spur, but other airports are not so fortunate to have rail, and motorway access that support the accessibility of staff, passengers and freight.

Q. What constraints are there on increasing UK aviation capacity? a) Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? b) Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? c) What is the relationship between the Government’s strategy and EU aviation policies?

10. From a general business perspective we support the initiatives to reduce the impact of aviation on the environment in terms of noise and carbon emissions. We have a considerable number of businesses within the environment sector and measures to make aviation more sustainable could help to support that sector.

11. However, looking at the track record of APD which was introduced as an environmental tax, which is now just a tax on flying regardless of how “clean” the aeroplane may be and is probably damaging the UK’s aviation industry, we would be reluctant to see very many more measures introduced unless they had been worked on in collaboration with the aviation industry internationally.

Q. Do we need a step-change in UK aviation capacity? Why? a) What should this step-change be? Should there be a new hub airport? Where? b) What are the costs and benefits of these different ways to increase UK aviation capacity?

12. We believe that there is currently sufficient aviation capacity in the UK however is it not necessarily in the right place for current demand and is unlikely to be suitable for the future. Whether it is easier to build a new hub airport rather than further develop Heathrow as the recognised hub for the UK is not for us to decide. There are many factors to consider, not least that it is politically highly contentious. The impact of building a new hub airport needs to be considered from economic, environment and social perspectives, not least what would happen to Heathrow and west London if a new hub airport were built.

13. In conclusion we would like to see: • an independent review of the impact of APD, perhaps leading to a full aviation taxation review, but a short term measure of varying regional APD • the outcomes of the aviation review developed with cross party support so that action is taken on aviation capacity sooner, for the medium to long term.

17 October 2012 Written evidence from the Environment Agency (AS 26)

SUMMARY • The Environment Agency agrees that noise is the highest profile local environmental issue arising from aviation. However, airport operations may have other local environmental impacts which need to be taken into account in developing a strategy for aviation capacity in the UK. These include air quality, water quality, waste management, water resources, flood risk and impacts on conservation. • The Environment Agency welcomes the government’s suggestion to better align Airport Surface Access Strategies with Airport Master Plans and further suggests that their role might be widened and strengthened to provide a framework within which local impacts could be dealt with in a more integrated manner. • The Environment Agency welcomes the Government’s commitment to developing an Airports National Policy Statement for nationally significant airport infrastructure and suggests that the statement needs to identify clearly the need for consideration of local environmental impacts and measures to adapt to climate change. • The Environment Agency believes that there can be significant benefits in early engagement over development proposals. This will aid faster decision making whilst reducing costs and protecting the environment.

1 INTRODUCTION

1.1 The Environment Agency has a role to protect and improve the environment in England and Wales and is the Government’s principal advisor on the environment. It was established to bring together responsibilities for protecting and improving the environment, to enable an to be taken integrated approach and to contribute to sustainable development.

1.2 As part of its inquiry into aviation strategy the Transport Select Committee has indicated that it is seeking evidence on potential constraints on increasing airport capacity. The Environment Agency is pleased to have the opportunity to provide evidence on the potential local environmental impacts of aviation and how the UK’s future airport capacity could be met whilst still protecting the environment.

2 LOCAL ENVIRONMENTAL IMPACT OF AVIATION

2.1 In its Draft Aviation Policy Framework, published in July 2012, the Government identifies noise as the highest profile local environmental issue arising from aviation. However, airport operations also give rise to, or may be affected by, a number of other environmental issues which, depending on location and circumstances, can be important and will need to be taken into account in developing a strategy for aviation capacity in the UK. Local issues which may need to be given particular consideration are air quality, water quality, water resources, flood risk and impacts on conservation. The nature and likely scale of these impacts, particularly for the south east of England, have been detailed in Annex 1.

3 AIRPORT MASTER PLANS and AIRPORTS NATIONAL POLICY STATEMENT

3.1 Large airports may give rise to releases of some pollutants and impacts which are of an equivalent level to major industrial operations, for example, coal fired power stations. However, the assessment and management of local impacts arising from airport operations is often fragmented. For example, noise may be subject to government controls, planning constraints or action plans prepared under the Environmental Noise Directive. Vehicle emissions and nuisance from local ground transport may be considered as part of surface access strategies. The Environment Agency may regulate: point source emissions to air from large industrial boilers; waste; water quality discharges; and water abstraction. At some airports, local authorities may also be involved in developing local transport plans or dealing with releases to air from smaller activities taking place on site.

3.2 The Environment Agency is consulted for advice on the environmental impacts of proposed developments. It advises developers and planning authorities at the pre- planning application stage to allow early consideration of all the fundamental issues relating to whether a particular development will be acceptable in principle. The Environment Agency encourages developers to make contact as early as possible in the process and believes that this will help to reduce costs and burdens on developers, operators, and planning decision-makers. Early engagement will identify potential problems quickly and increase certainty over planning and permitting requirements that are needed to both develop the UK’s aviation capacity and protect the environment.

Airport Master Plans 3.3 The primary objective of voluntary Master Plans is to enable future development of the airport to be given due consideration in local planning processes and to encourage the aviation industry and local stakeholders to strengthen and streamline the way in which they work together. The Environment Agency welcomes the government’s suggestion in its draft Aviation Framework to align better Airport Surface Access Strategies with Airport Master Plans and further suggests that their role might be widened and strengthened to provide a framework within which local impacts could be dealt with more effectively in an integrated manner.

3.4 In its Draft Aviation Policy Framework the Government suggests that airport Master Plans will address, amongst others, the "core" areas of impact on people and the natural environment and identify proposals to minimise and mitigate those impacts. The Environment Agency welcomes consideration of these areas and suggests that Government provides further guidance on how they might be addressed, particularly in relation to the issues identified in Annex 1.

3.5 This approach would enable local impacts to dealt with in an integrated manner and provide a mechanism for better local engagement and consultation with the Environment Agency.

Airports National Policy Statement 3.6 The Environment Agency supports the approach of using an Airports National Policy Statement (NPS) to set out the national need for airport capacity and suggests that the local environmental issues (Annex 1) are also taken into account in developing any Airports NPS. It welcomes, too, the policy aim of looking for the least environmentally damaging solution to maintaining sufficient airport capacity.

3.7 The Environment Agency also believes that both the guidance for Airport Master Plans and the Airports NPS should make clear that all airports should formally assess their risks from a changing climate, and develop and implement plans to manage those risks.

4 CONCLUSIONS

4.1 The Environment Agency believes the government is right to identify noise as a key issue which needs to be considered in developing a UK aviation strategy.

4.2 In developing a UK aviation strategy, in addition to noise, consideration needs to be given to the local environmental impacts of any new airport capacity including air quality, water quality, water resources, flood risk and biodiversity.

4.3 The Environment Agency believes there would be significant benefits from early engagement with airport operators and developers on local environmental impacts. To realise these benefits it suggests that these local impacts are taken into account in any Airports National Policy Statement and in developing and strengthening the role Airport Master Plans.

17 October 2012 ANNEX 1 – POTENTIAL LOCAL ENVIRONMENTAL IMPACTS FROM AIRPORT DEVELOPMENT

Air Quality

There is evidence that airports (and associated surface transport movements) can have a significant impact on local air quality and this should be taken into account in developing a strategy for airport capacity.

The main pollutants of interest arising from aviation are oxides of nitrogen and particulate matter. They may arise from aircraft in flight, during take-off and landing, from service vehicles on the ground and vehicles accessing the airport. Oxides of nitrogen and particulates can have direct effects on human health and are also involved in the formation of ozone and secondary particulate matter which affect human health. Oxides of nitrogen also contribute to acidification and eutrophication of sensitive ecosystems.

Nationally, emissions of oxides of nitrogen from airports and aviation are equivalent to approximately 15 per cent of total emissions in the UK and are equivalent to around 50 per cent of the total emissions from major industrial sources regulated by the Environment Agency. Airports and aviation are therefore a major source of oxides of nitrogen pollution in the UK.

Although aircraft engines do have standards for oxides of nitrogen emissions and these have tightened, to some degree, over the years, oxides of nitrogen emissions from airports are not directly controlled. To put this into context, emissions from a major airport, for example, Heathrow airport, are broadly comparable with those of a major industrial installation, such as a power station.

The contribution that airports’ emissions of oxides of nitrogen make to ground level pollutant concentrations will depend on the type and number of flight movements and volume of road traffic movements within and accessing the airport.

Annual average concentrations of nitrogen dioxide in the vicinity of Heathrow airport are in the region of 40-50 μg/m3 (depending on the monitoring site) and are expected to continue to exceed the EU air quality limit for the foreseeable future1. Air dispersion modelling studies suggest that approximately 30 to 45 per cent of local oxides of nitrogen concentrations at some monitoring locations could be attributed to airport operations, 30 per cent to traffic and the remainder to regional background sources.

Analysis of air quality data upwind and downwind of Gatwick and Heathrow during the April 2010 volcanic ash cloud event, when there was little activity at the airports, suggested that the airport contribution of oxides of nitrogen reduced to nearly zero at Gatwick and to 15 per cent of normal levels at Heathrow.

Both oxides of nitrogen and particulate matter (PM10) may lead to long term effects on human health at a regional or national scale. A study carried out with respect to

1 Clearing the air The Mayor’s Air Quality Strategy 2010 Heathrow airport indicated that the monetised cost of air emissions for the period 2015–2080 for the baseline airport operation (that is without expansion) would be approximately £750 million of which nearly 70 per cent could be attributed to particulate matter (PM10).

Depending on location, increasing airport capacity may also lead to impacts on the natural environment. Semi-natural ecosystems may be sensitive to levels of oxides of nitrogen, either directly or indirectly through nitrogen deposition. The effect of increases of oxides of nitrogen or nitrogen deposition will depend on the magnitude of the release, the sensitivity of the local environment and the contribution from background concentrations.

Air dispersion modelling2 for a number of airports in England suggested that they may contribute an additional 1.5 – 20 μg/m3 of nitrogen dioxide equivalent3 to approximately 0.2 – 2.9 kgN/ha/yr in increased nitrogen deposition. In sensitive habitats this could lead to a reduction in species richness of up to 50 per cent depending on background rates of deposition. We believe that any new policy framework should consider how the aviation sector can manage its impacts on ecosystems, particularly for European designated sites and Sites of Special Scientific Interest.

Water Quality

The Water Framework Directive (WFD) requires the Environment Agency to manage the water environment to consistent standards including both the chemical and ecological quality of surface waters and the chemical quality of ground waters. Good quality water is essential for drinking water, industry and wildlife and the Directive requires the UK to aim to achieve good chemical and ecological status for all water bodies by 2015, or, if that is not possible and subject to Directive requirements, by 2021 or 2027.

As with all developments, airports and their associated infrastructure pose potential threats to water quality. Of particular relevance to airports is their potential to add to the existing pressures of urban development on the water environment, as well as more specific concerns such as fuel spills and the use of pesticides and de-icing agents used to keep runways clear.

All groundwater bodies in the Thames basin have been designated as Drinking Water Protected Areas. Groundwater is under pressure from pollutants such as nutrients, solvents, pesticides and hydrocarbons. For example, a spill of aviation fuel at Heathrow which contaminated groundwater led to an estimated cleanup cost of over £1 million for the company concerned.

Water Resources

The Environment Agency has a duty to manage water resources in England and (currently) Wales. It does not manage water availability in isolation; it needs to consider managing flood risk and improving water quality to protect supplies, fisheries and natural habitats. Water availability also has to be looked at in terms of the potential impacts of climate change and population growth. These impacts will vary from place

2 Derivation criteria for Review and Assessment of Airports- 2008 update. 2008. Air quality consultants Ltd. Bristol 3 Assuming a 50% conversion of nitrogen oxides to nitrogen dioxide and a nitrogen dioxide deposition velocity of 0.0015m/s. to place, however, those areas already experiencing water stress, particularly the Thames basin and the south east, will face a potential increase in population by the 2050s of more than 40%. The combined impacts of climate change and population indicate there could be less water available for people, businesses, agriculture and the environment.

Using a variety of scenarios (looking at demand, governance and societal behaviour), the Environment Agency has estimated potential water availability in the 2050s. For example, the Thames river basin district shows that although demand currently exceeds supply by approximately 35%, this could increase to between 50 – 127% depending on the scenario considered.

In the light of the existing stresses and future projections it is clear that any airport development will need to be carefully planned so as not to exacerbate the pressures on water availability and ensure that there will be sufficient water for people and the environment in the future.

Flood risk

The Environment Agency has responsibility for managing flood risk in England and Wales. Over 5.5 million, or one in six, properties are at risk of floods across England and Wales. There are also risks to national infrastructure, with over 55 per cent of water and sewage pumping stations, 20 per cent of railways, ten per cent of major roads, 14 per cent of electricity and 28 per cent of gas infrastructure in England which are located in areas at risk of flooding. Population growth and the latest UKCP09 climate change projections indicate rising sea levels and increasingly severe and frequent rainstorms mean that unless appropriate measures are taken the risk of floods will increase.

Airfields, by design, cover large areas with hard surfaces thus reducing the capacity for infiltration of rainwater and potentially increase the likelihood of surface water flooding.

Biodiversity

The Environment Agency is responsible for helping to conserve and enhance the diversity of native wildlife and habitats in England and Wales, particularly in the water environment. It works closely with Natural England to ensure that designated species and areas are protected or improved to achieve favourable condition. Any airport developments will need to take account of designated habitats (European, National and local) and species.

In the south east, for example, of the 136,000 hectares of nationally designated Sites of Special Scientific Interest, 90% are in favourable or unfavourable recovering condition. And under the Water Framework Directive 38% of waters are in good status for fish. These indicators have shown gradual improvement over the last few years and it is important that future airport development does not threaten this recovery. Of particular importance in coastal or estuary areas is the potential for disruption to migratory birds, fisheries and fish nursery grounds. Written evidence from Mr John G Miller (AS 27)

Proposed closure of Filton Airfield

1. Possible relief to S.E. England airports runway congestion.

2. Resulting loss of existing Facility.

______

1.a) The runway at Filton Airfield is one of the largest in the country.

And is one of only three that can handle the A380 aircraft.

Which would be a valuable asset in an emergency.

b) Although regular scheduled passenger flights are not allowable on the airfield. It

it is fully capable of handling any of todays aircraft.

c) Has CAA Licence and still has flight handling capability in place. Eg. Flight Control.

d) Is adjacent to motorways and rail. Giving good access to all parts of UK. e) Would provide good capability for most ‘freight only’, that is currently handled by S.E. Airports.

f) Fleet maintenance and any other aircraft maintenance could be handled.

g) The Airbus company scheduled flights (to other company sites) can continue.

h) Airbus components can be flown to other sights, as at present.

i) Current emergency services can continue. (Police and Air Ambulance)

2.a) The Airfield is an integral part of the only remaining facility in the U.K. with the capability to Design, Develop, Manufacture, Maintain, Flight Test and Development, of Civil Aircraft. This would no longer be the case if the airfield closed.

And although not currently utilised in this manner, the potential should remain, otherwise it is the case that this country will never again engage in full aircraft assembly of civil aircraft.

Recommendations.

This airfield must remain operational. And B A E Systems must be directed to not carry out their intentions at the end of the year.

A negotiated purchase should be made by use of a 10year Public Works type Loan with first two year interest roll-up. A Management Group of suitably experienced persons set up, with a mandate to operate and develop the airfield business. With a view to selling the business on in five years.

17 October 2012 Written evidence from the West Windsor Residents Association (AS 28)

1. AVIATION STRATEGY

a. West Windsor Residents Association represents more than 1000 households in the Royal Borough of Windsor & Maidenhead. Our members include many people who are currently employed, or have worked in the airline industry over the past six decades. They also have experience of living under a flight path into Heathrow, where there is often no respite from aircraft noise between 4am and 11pm. Thus, we not only understand the adverse impact that the aviation industry has on our environment but also the service it offers and its positive impact on the economy.

b. Many of our members have a good working knowledge of the functioning of airline operations, including flight operations, aircraft and crew scheduling, maintenance and ground operations, passenger service, security and catering. We also have two chartered civil engineers on our committee.

c. We do not have access to current data that is available to larger organisations, particularly airport authorities and airlines. However, we can bring to any discussion related to expansion of airport capacity, not only non-politicised common sense, but a wealth of experience.

d. Capacity, connectivity and competition are three key issues that have to be addressed when considering the strategic needs of the aviation industry and the U.K economy. Within this context, the provision of good levels of service, security and safety have to be addressed and the potential environmental impact has to be considered. All too often opinions are expressed without adequate consideration of this range of issues.

2. CAPACITY

a. The capacity limitations of airports are generally expressed in terms of the number of air transport movements (atms) per annum. However the key consideration is the capacity to handle the number of movements scheduled during peak periods. These often last for two hour periods or more and may be caused by the terminal and ground service limitations, runway capacity or the surface access to airport facilities. A key factor is often the scale of a hub operation.

b. At Heathrow, for example, there appears to be ample terminal capacity planned but both runway capacity, surface access and support services are lacking. During periods of major disruptions, all the local hotels have often been full and passengers left to fend for themselves. Traffic bottlenecks on the M25 around Heathrow also have a significant impact.

The Hub Operation

c. It is easy to understand the attraction of the hub operation to the airlines. It facilitates the concentration of resources, aircraft and crew scheduling and permits greater control of fare structures for an airline whose operation dominates at a given hub. However it contributes significantly to the creation of peak periods, and, when taken to excess, imposes considerable stress on air traffic control, security and the ability to handle off schedule operations

d. Passengers normally want to travel directly from one point to another. If not, they want as rapid a connection as possible. Taken together with the fact that there have always been certain hours that are the most popular and convenient on given routes, the demand to operate during those times can readily exceed capacity. Passengers that transit on the same aircraft are not a problem but if they need to transfer from one aircraft to another or between airlines they add to the general congestion.

e. Hubs are said to enable the operation of routes at a frequency that would not be feasible without accommodating transfer passengers. That is true but when this becomes excessive at an airport that is already operating at or near peak capacity, they inhibit optimum use of that airport to provide proper connectivity. An example that should be considered is the 9000 flights per annum from Heathrow to New York.

f. In 2009 nearly 38 per cent of the passengers using Heathrow were transfer passengers. They appear to contribute little or nothing to the U.K economy.

g. We suggest that the Committee would be helped by an update to the 2003 Mott MacDonald report on Key European Hubs.

3. CONNECTIVITY

a. The important consideration here is the degree of connectivity between cities rather than the connectivity to given airports. London, for example, is served by three major airports Heathrow, Gatwick and Stansted as well as two other very significant airports, London City and Luton, all of which are suitable for regular scheduled service. Others, such as Manston are completely underutilised in large part because of the lack of good surface access.

b. There is considerable debate about the provision of High Speed Rail and, properly planned, it will relieve some of the domestic demand for air travel, albeit only 7 to 8 pc of the passengers arriving at Heathrow are using domestic flights. Consideration should be given to the probability that the considerable pressure for these rail services to concentrate on Heathrow will only cause the airlines to seek to use Heathrow for even more international services. Thus, no relief to the congestion at Heathrow is likely to be achieved and the potential adverse impact of this on airports serving Birmingham, Manchester and Edinburgh needs to be considered, given their vital roles in developing the regional economies.

c. Consideration should be given to connecting Heathrow, Stansted and Gatwick by using existing rail networks or new ones to connect to CrossRail rather than expensive tunnels between Gatwick and Heathrow. Equally, Gatwick could possibly provide a good connection to Eurostar through Ebbsfleet.

d. In this manner, the airports serving London would become the hub for the U.K and would seem to provide the possibility of better connectivity that that provided to Paris through Orly and Charles de Gaulle or to New York through Kennedy Newark and La Guardia.

e. Stansted, apart from serving London appears to offer excellent access to the Midlands. This must surely be an important consideration in any attempt to seek balance to the development of the U.K economy.

4. COMPETITION

a. If we are to expect airlines to cooperate in reallocating the use of the available airport capacity, more must be done to allow key airports to operate in an even manner. Airlines will not willingly move away from Heathrow, unless the alternative airport offers the possibility of an equal or better operation than that afforded at Heathrow. Their cooperation is needed because, apart from other considerations, the outdated slot allocation system together with the “grandfather” rights gives them the right to remain.

b. One of the key attractions of Heathrow has been the extent to which Fifth Freedom rights have been granted to routes through Heathrow which permits foreign carriers to compete on more even terms with U.K. Based carriers. To date those rights have not been available on routes operated through Gatwick and Stansted. Equally, if other airports are to be used to relieve the pressure on Heathrow by attracting airlines to use them they must be accorded equal consideration in terms of surface access and all other facilities.

Available Alternative Airports

c. Heathrow is clearly the airport of choice for airlines serving the U.K but it is at full capacity. There is a considerable possibility that it could be used more efficiently, particularly in view of the fact that, to make the routes served viable, it needs more than 37 pc of transfer passengers to support the frequency of those routes and as previously noted those transfer passengers are of little or no benefit to the economy and exacerbate the problems of the “peak” periods. It is possible that the available capacity of Heathrow is excessively committed to leisure travel, which currently has a negative impact on the U.K. Balance of payments.

d. There has been renewed lobbying for a third runway at Heathrow. Apart from the numerous environmental problems this would cause, it would seem ridiculous to consider a developing an airport with an operation such as that at Heathrow with a very busy trunk road running through the middle as well as numerous hotels situated between two busy runways. Also a commitment to the further expansion of Heathrow would generate the need for a fourth runway, which would result in a second trunk road between two runways. This and the increased need for further hotel as well as the impact on other services, schools, housing, transport etc. should exclude such an idea from serious consideration.

e. The United Kingdom is unique in the developed world in the number of its major or significant airports are limited to a single runway. Gatwick is prevented from building a second runway until 2019 but surely it is time to start planning for one now. The same applies to Stansted. Both airports can accommodate a second runway with considerably less adverse impact on the environment than other options. Improved access can readily be provided, to permit them to offer a considerably better service to London than is currently available.

f. The runway at Luton needs to be extended together with additional taxiways in order to extend flexibility to its utilisation. Manston is another airport that should be considered for development. It has one of the longest runways in the country and much of the approach to Manston is over the sea. Its final approach is over Ramsgate but there is space to extend the runway to the west, which would allow that approach to clear Ramsgate at a higher altitude. Its other major problem is poor surface access which would need to be addressed. Lyneham, also, is deserving of consideration in view of the improved rail service serving London from the west.

g. Before leaving this subject it is necessary to address the proposals to build a new airport east of London. Fifty years ago this seemed feasible and might have prevented many of the present day problems. Now it appears too costly both in terms of building the airport itself, providing the necessary infrastructure to support it and addressing the problems and costs in making such a move. The risk of adverse impact on Heathrow and the Thames Valley economy would be a major consideration.

Utilisation of the available airports.

h. Although there is considerable conjecture on the rate that aviation needs will increase there is less information as to the form that increase might take. The rate at which ‘full service, low cost/no frills’ and ‘charter’ flights might increase relative to each other would have a significant impact on how the various airports should be used to accommodate flying in the future.

i. One might reasonably assume there will be more demand from the full service passenger for more convenient point to point routes particularly with new aircraft such as the 787 to fly further. Leisure travel from China and other developing countries will undoubtedly increase and do something to balance the leisure travel economy

j. Equally an important consideration will be the extent that routes at a given airport are operated by an airline based at that airport vs. airlines operating into or out of that airport from a base situation elsewhere.

k. At first sight it would appear logical to consider Heathrow and Gatwick to predominate in the long haul intercontinental market and Stansted to be the main hub for low cost operations.

l. The roles of Manchester, Birmingham and Edinburgh will largely depend upon how the economies in those areas develop for which we have little information.

Air Traffic Control

m. Regardless of how it is considered desirable to distribute the increase in anticipated aviation activity, it will be necessary to insure proper coordination with the various air traffic control functions in order to avoid conflict with existing procedures,

5. ENVIRONMENT

Air Pollution

a. It appears obvious that the aviation industry will not be able to meet WHO guidelines in the foreseeable future and the short fall must, therefore be taken from other industries. We have no expertise to comment further.

Disturbance Related to Aircraft Noise

b. The problem in addressing this concern is that the attempts are being made with no commitment to properly understand it. It has been clear for at least twenty years that averaging noise energy levels, which is based on research conducted more than thirty years ago, no longer properly reflects the level of disturbance. Abandoning the ANASE report, for all its shortcomings, reflected the lack of commitment to do achieve full understanding.

c. With that in mind, the only reliable noise abatement measure that can be consistently relied upon is runway alternation as currently practised for easterly landing at Heathrow. Consideration of runway alternation should be a standard at all two runway airports and capacity limited accordingly. This provides scheduled periods of relief. Also the alternation of runway use for night flying as practised at Heathrow should be adopted as standard.

d. The lack of awareness of the importance of scheduled relief is demonstrated by the failure to inject any urgency into doing the necessary work on Heathrow taxiways and hard standing which would permit runway alternation on easterly landings. It is now nearly four years since the Cranford Agreement was abolished and little or no progress appears to have been made.

e. There is no valid reason for continuing to ignore actual noise measurements for landing aircraft and noise limits should be introduced similar to those applied to take offs with appropriate penalties. The noise disturbance caused by landing aircraft has become of increasing concern.

Night Flying

f. Considering that we believe that more long haul point to point routes are both necessary and desirable and considering the varying time clocks around the world, there will no doubt be demand for some night landings. However, it the current frequency of night flights appears excessive and we believe that such flights should be allowed only after stringent reviews of the necessity of each flight. There should also be restrictions requiring the use of the quietest aircraft.

g. Finally serious consideration should be given to adopting European Time as standard in order to avoid the excessive problem of early morning arrivals currently experienced between 0600/0700

17 October 2012 Written evidence from Bluespace Thinking Ltd (AS 29)

Bluespace Thinking Ltd have no commercial interest in aviation and are not located near or impacted by any airport. Our objective in submitting evidence is solely to provoke objective thought and hopefully help improve Government and parliamentary decisions. 1. Summary 1.1 Currently there is spare capacity at Stansted and Gatwick also Heathrow is 5-6% below its previous peak demand level. It is possible to get a flight the next day to and from London to virtually anywhere in the world, if booked further in advance air fares are competitive, cheaper than rail and road and many are less than the cost of a taxi to the airport or car park fees. 1.2 Public transport to and from the principle areas of passenger usage (London and the South East) is not particularly good. For many people the duration of travel to the airport, security checks, check in or bag drop off times and immigration checks take longer than the flight. 1.3 The majority of passengers at the airports are travelling for leisure, any major increase in demand will therefore lag not lead an economic recovery. 1.4 The key question being asked by politicians and the public is whether a third runway at Heathrow, a new Thames airport or expansion at Stansted, Gatwick and the smaller airports are the most appropriate solution to the need for increased airport capacity over the next 20 years. 1.5 Our analysis shows that extension of Stansted, Gatwick and the smaller airports is a viable solution. The DfT Draft Aviation Policy Framework July 2012 [1] along with a short visit to the relevant locations provides compelling evidence that the social impact of noise at Heathrow should preclude its further expansion. The analysis of DfT and CAA data shows that there is no economic benefit in trying to extend Heathrow hub services 1.6 A new major hub airport in the Thames or elsewhere at a cost of about £50 billion is unnecessary and would be uneconomic however additional capacity equivalent to Heathrow will probably be required in 20-25 years time so if a major new airport is not built significant expansion at Gatwick, Stansted and the smaller airports along with larger aircraft and more direct flights (less hub services) will be required. 2. Bluespace Thinking Analysis 2.1 The key to deciding how to provide additional airport capacity in London and the South East is to analyze and understand the passenger markets. DfT segment the markets into Domestic/International, Leisure/Business, UK/Foreign residence, regional destination and market maturity. 2.2 DfT reports [2] have been aimed primarily at predicting overall future growth however the key to deciding if a major new hub airport or the expansion of Heathrow is required is to segment and analyze the markets based on whether passengers have a London/SE origin or destination or whether they are “domestic” or “international to international” hub transfer passengers. 3. Understanding the markets 3.1 The graph shows the growth of these markets over the last 40 years. The data comes from the CAA airport surveys [3], which along with CAA reports and commentary and DfT forecasts and studies provide a good evidence base for understanding the market. 3.2 Based on what has “actually happened”, as opposed to a narrative interpretation, the graph shows that while the origin/destination market is growing the hub/transfer market is not.

4. Key past events 4.1 Between 1972 and 1990 there is limited publically available data, it has been necessary to interpolate between the available data points. The increase in growth starting in 1992 is as a result of EU deregulation of the air industry enabling the emergence of lower cost direct routes. The dip in 2001 is as a result of the events of 11th Sept 2001. The decline from 2007 is in part due to the economic situation but appears to start a year or more before the recognized economic slump. The figures for 2010 are depressed due to the Icelandic volcano, without this a recovery from 2009 would be more evident. Preliminary part year 2012 data suggests a further 1% increase in total numbers. 5. London & SE Airports origin and destination passengers 5.1 Due to the “events” since 2001 it is not possible to predict deterministically the rate of growth that will occur as GDP eventually starts to improve. It is however logical that it will increase at between 2-4% /year due to a combination of population increase and more disposable income for holidays and trips. 5.2 The majority of these journeys through the airports are for leisure by those in the 20-55 age band living in Greater London. At some point the amount of time this working age group has available for leisure purposes will restrict the growth however if it were to continue for 20 years it could add about 60 million passengers. Business travel may re start to grow or may be curtailed by the further use of information and communication technologies however this will not make a significant impact to the level of overall growth. 6. Hub transfer passengers 6.1 This market shows a very different trend, although passenger numbers grew between 1992 and 1997 as a result of deregulation, from 1998 there is a picture of classic market maturity, saturation and decline. As European, world and UK regional economies grow it is logical that there are more direct flights between locations and in a relatively mature market, as in the UK and Europe, London Hub transfer passenger numbers would stay flat or decline irrespective of the capacity available. 6.2 DfT analysis carried out in 2009 shows this clearly; the detailed work shows that domestic transfer passengers at airports in the UK are predicted to decline by about 60% by 2030. Although one could carry out more detailed analysis it is unlikely an accurate deterministic prediction could be established. Given the past trend it is probable that the total hub transfer market will decline in the range of zero to -2% /year. Probabilistically over the next 20 years this could decrease the London Hub market by about 8 million passengers/ year. 6.3 London has been the major hub location for European flights to North America as it lies on the shortest great circle route to many European destinations. However for Far and Middle East routes German hubs are much better located. For passengers from Scandinavia and mainland Europe their journey would be significantly longer if they were to route through London. Geographic location will work against London capturing a larger share of a declining hub market but this is not the same as London capturing further business opportunities by having an airport infrastructure plan that substantially improves journey times, passenger experience and available capacity, from journey origin to destination. 7. Economic value of additional airport capacity 7.1 Establishing the value of the London & SE origin and destination market is complex. With available capacity at Gatwick and Stansted it is unlikely that leisure flights or business opportunities are currently not occurring because of airport capacity restrictions however within 20 years the value of the lost opportunity, if capacity is not increased, will be measured in £billions. 7.2 The value of the hub transfer market decline is easier to estimate. The value to the UK is the airport fees charged and any retail expenditure at the airport. This is probably about £20 for each arriving and departing passenger, valuing the potential 8 million passenger decrease at about £160 million/year. There is a debate about whether the hub/tranfer market is being curtailed by capacity restraints; certainly operators would like to fly more flights out of Heathrow. However It is difficult to see that there is an economic case for providing more hub/transfer capacity when what is needed is more capacity for origin/destination passengers with ease of access to and from their London and SE home and business locations. 8. The question(s) to be answered 8.1 The Independent Commission [4] set up by Government has a remit that presupposes that maintaining the UK’s position, as “Europe’s most important aviation hub” is synonymous with providing the best possible airport infrastructure to enable and support UK economic growth. Is Government’s objective to have “Europe’s biggest airport” or to grow the economy with jobs and a good quality of life for all? 8.2 Questions that seek to understand and allow for the evolving nature of air travel particularly the increase in direct flights from regional airports in the UK, Scandinavia and Northern Europe and the emergence of hubs in the Far and Middle East maybe more helpful. Below is our response to the main questions; clearly there are also many more detailed issues that need to be addressed. 8.3 Do London and the SE need additional airport capacity? – Yes but not urgently, a good plan however is required to provide confidence. It would be preferable if the plan encompassed all relevant major rail and road strategic decisions and improvements to local transport networks to work towards a strategic integrated plan. 8.4 Does London need a new hub airport or a significant extension (third runway) at Heathrow? - Probably not, the value and economic role of hubs could well become less significant to the UK as the market further matures. Development at Stansted, Gatwick and the smaller South East airports could provide a better alternative for the next 20 years than a new Thames airport 8.5 Should, as the DfT have proposed in their Draft Aviation Policy Framework, the management and control of noise be a key objective in evaluating options for increasing air port capacity? Yes the brief evidence included in the policy framework is compelling in the need for noise to be considered, page 49 of the framework document provides the key data. A short visit to communities near to the runway takeoff routes painfully enforces the point. 17 October 2012

References and Data sources

[1] DfT Draft Aviation Policy Framework July 2012 http://assets.dft.gov.uk/consultations/dft-2012-35/draft-aviation-policy-framework.pdf [2] DfT UK Aviation Forecasts August 2011 http://www.dft.gov.uk/publications/uk-aviation-forecasts-2011 [3] CAA Airport Surveys 1990 – 2011 http://www.caa.co.uk/default.aspx?catid=81&pagetype=90&pageid=7640 [4] Secretary of State for transport announcement Sept 2012 http://www.dft.gov.uk/news/statements/mcloughlin-20120907a/

Written evidence from Rothwell Aviation Ltd (AS 30)

1. WHAT SHOULD BE THE OBJECTIVES OF GOVERNMENT POLICY ON AVIATION?

To implement policies which sustain the UK’s aviation industrial and technological base and provide air transport facilities to access global markets such that the national economy can be developed and the protected.

The UKs industrial aviation base must be protected by government through support for civil and defence projects, export activities and joint international projects where these are in the national interest.

Access to global markets requires that the UK maintain connectivity directly with international markets and regions which encourage tourism. This involves facilitating the expansion of air transportation infrastructure.

(1a) How important is International Aviation Connectivity to the UK Economy.?

International Connectivity is vital

(1) UK business trades 20 times more with new markets which have direct daily flights to UK (Frontier Economics) (2) Improvement of 10% in connectivity would improve economic growth by £890m per year (Oxford Economics) (3) 67% of business leaders in BRIC countries prefer business in Europe rather than UK because of better connectivity of European hub airports.(British Chamber of Commerce BCC) (4) 92% say direct flights are critical for inward investment (BCC) (5) 62% say they will only invest in UK if air connectivity is improved.(BCC) (6 ) Frankfurt Paris and Amsterdam with 14 runways operate to 760 destinations; Heathrow with 2 runways operates to 162 destinations. (7) Strong correlation between UKs Trading Success and visits from UK businessmen (CAA) (8) Foreign Direct Investment in the UK increased from £294 to £654 Billion between2000 and 2009. (Office of Nat Statistics) (9) Emerging & developing economies will grow to 5% per year and account for 72% of global growth between 2011 & 2030(Boeing Market Outlook) ********* Registered in England Company Number 04738117 (10) Air travel and economic growth are directly related. (ICAO, GDP growth- IMF)

(1b) What are the Benefits to the UK Economy ?

Aviation is not a government subsidised industry but it supports directly 921,000 jobs across the country and provides the very best of cutting edge design and technological innovation. It is an economic catalyst that underpins the whole of the UK economy representing 3.6% of UK GDP or a contribution of £49.6 billion.

(1c) What is the Impact of Air Passenger Duty(APD) on the Aviation Industry?

(1) APD is costing the UK working economy some 91,000 jobs per year. (2) Government advised that APD was an environmental tax to reduce CO2 emissions. In reality it is a tax on travel by air. (3) When the EU Emission Trading Scheme (EU-ETS) was introduced the UK retained both APD and ETS taxes. Germany is to reduce & cancel APD . (4) Jeff Smisek, CEO of the merged United & Continental Airlines operating 1,252 aircraft said “There will always be services to the UK; but there will be fewer services and fewer jobs. If you choose a tax to destroy an industry APD is doing a pretty good job” (5) APD for a family of 4 travelling to Florida has risen from £40 in 1994 to £260 in 2012. (6) APD in UK is 8.5 times greater than in any other EU country; this is totally irrational and is driving passengers to EU airports. (J. Smisek CEO United/Continental Airlines)

(1d) How should improving the passenger experience be reflected in the governments aviation policy?

(1) Reduction of Air Passenger Duty (2) Provide dedicated air passenger, road and rail links to airports with systems designed to manage easy baggage handling. (3) Permit modern IT system for check in procedures (4) Greatly improve and immigration systems which ensure rapid management of passengers (5) Increase runway capacity to enable airports to overcome incidents and the unforeseen which cause landing and take off delays.

(1e) Where does Aviation fit in the overall transport strategy?

(1) Given that the UKs economy relies almost completely on trading globally in remote markets, aviation is fundamental and critical to the nation’s economic future and quality of life. (2) Aviation provides the swiftest, and often, the only access to global destinations (3) Aviation is a key facility in the development of the economy in that it serves several commercial and industrial sectors and is a source of scientific and technological development which is used across a multiplicity of industries. (4) Air transportation is used by business persons, the leisure and tourist sectors and increasingly for freight. Freight fleets will also double in size over the next 25 years. (5) The location and purpose of airfields must be determined before road or rail links are established. There is a need for an overarching national infrastructure plan supported formally by all main political parties.

2. HOW SHOULD WE MAKE THE BEST USE OF EXISTING AVIATION CAPACITY?

(2a) How do we make best use of existing London aviation capacity and are the governments current measures sufficient?

(1) It is difficult to see how the ad hoc development of privately owned airfields located around London can now be altered radically to achieve greater capacity and coherence. These airfields have tended to specialise in certain types of air transport operation.

(3) Luton is structured to manage low cost (Easy Jet) operations. Stansted is similarly built for low cost operations and is essentially a base for Ryanair. Both of these airports have relatively small terminal buildings and limited first class facilities. Gatwick is a holiday and tourist traffic airfield. London City is structured for the business passenger. Southend is now focussed on freight operations. Farnborough is exclusively a business and VIP passenger airfield. Heathrow is the Nations HUB for global business, tourist travellers and freight and is by far the most comprehensively equipped .

(4) Airfields are therefore not all equipped to be used in the HUB , freight or budget airline roles and they are not all directly connected except via London. Only Heathrow has 2 operational runways which are operating at 98% , but other London airfields could accept some more traffic if airlines care to operate from such airfields.

(2b) What could be done to improve airport resilience and the passenger experience?

(1) Airport resilience is a function of airport capacity. Runways provide the operator with the facilities to adapt daily routine to cope with the unforeseen. Single runway airports have little or no real resilience or self contained capability to manage such scenarios without delays.

(2) The “passenger experience” is universally measured as the length of time it takes a passenger to get from getting on transport to the airport to getting airborne or vice versa. The shortest time gains the highest points score. (3)It is directly a function of the organisation of vehicles to deliver passengers and the speed with which passengers can be relieved of cumbersome baggage. Check in, customs and immigration processes need to be extremely swift and responsive. There are plenty of examples around the world of excellent terminal facilities but like hotels, customer facilities have to be regularly updated and refurbished.

(4) For transatlantic passengers there is much praise for the BA flight from City Airport via Shannon to the USA . The high scoring benefit is being able to clear US customs and immigration at Shannon whilst the aircraft is refuelled. This idea should be examined in more detail for wider application.

(2c) Does the government’s strategy make best use of airports outside the South East?

(1) There is no identifiable government strategy and no infrastructure plan to exploit airports outside the South East except to use them. Airports are businesses structured and equipped to operate in their primary role effectively and profitably. They are staffed appropriately for these operations; immigration and customs staff are provided to meet the primary business of the airfield.

(2) Birmingham and Manchester could accept increases in passenger throughput but additional flights will generate more noise and that that will precipitate the same protests which occur around Heathrow ,Gatwick and Stansted. Government policy is to prevent aviation noise becoming a nuisance; not to spread it.

(2d) How can Surface Access to Airports Be Improved?

The immediate answer would be link airports to key cities by rail. That perceived wisdom needs to be tempered by the fact that the percentage of air passengers actually using air/rail terminals on airfields at Seoul, Narita (Japan) and Frankfurt are respectively 4%. 39% and 13% and these facilities are modern, integrated and tailored to the task.

The reasons given for this low level of usage were baggage handling on to and off trains, matching rail and flight schedules and the availability of rail stations on the HS line (s) serving the airport. For example if HS2 ,were routed via Heathrow, this would not reduce conventional high speed travel times because passengers wanting to use it would have to drive to Birmingham first as there are no stations on the HS line between London and Birmingham. The journey time between departure address and London would be longer and the matching of air and rail schedules would become even more difficult.

It would be possible to return to a concept used by BOAC /BEA where check in for flights took place at a terminus located in central London. There would have to be arrangements for operating this scheme for inbound passengers as well. In effect a central London location would become the . In any event before more roads or rail lines are built it is absolutely essential to determine where the new national hub airfield is to be sited.

3. WHAT CONSTRAINTS ARE THERE ON INCREASING UK AVIATION CAPACITY ?

Constraints will include noise, runway capacity, airspace management ,terminal infrastructure and political courage.

(1) Airspace management will be greatly improved by new technologies both on the ground and in the air with the greater use of modern satellite navigation systems. These will only be used when there are sufficient runways to accommodate the flow rates which will follow a doubling in the passenger carrying strength of the global air transport fleet

(2) Increased connectivity is a function of increased runway capacity which inter alia creates an increase in aviation noise . Rationing use of our airfields adversely affects connectivity and prompts UK business to relocate to countries where business development is assisted through direct trade contacts. Aviation noise will be reduced by engineers and scientists not politicians. It will not be eliminated and will increase temporarily with more movements.

(3) Rationality ,courage , logic and business acumen are factors in very short supply in the Whitehall village. There is however a surfeit of hearing impaired egos who see admission of error as a heinous character defect.

(3.1) Are the Governments Proposals to Manage the Adverse Effects of Aviation Noise Sufficient ?

(1a) No. The only proposal government is to spread the noise across the country to city and provincial airports irrespective of whether airlines consider that city and provincial airports provide sufficient business to make it worth while holding dispersed and expensive ground handling or engineering equipments at remote locations.

(2b) There are other techniques which can be used to lower the impact of noise but some are counter productive and others require procedure developments and adapted aircraft control systems. Each will have an impact but non will be absolute.

(3c) The future rests with the separation of aircraft noise from human beings who will continue to use their franchise to make sure political parties prevent noise expansion or intensity. However 21st century airfields will have to be able to operate on a 24/7 basis to achieve best return for the high cost of infrastructure and to optimise use of expensive aircraft fleets.

(4d) There are only 2 solutions; (a) conclude an all party agreement to a site for a new hub airfield and recompense those who need to be relocated or, build an airfield where noise does not affect people. One of these options must be approved within the next 18 months . If decisions cannot be made until after the next election (2016 ) then by 2024, when some relief facility could be constructed , Heathrow’s connectivity will have fallen to the point where hub activities have been transferred to Europe and London will no longer be part of the global aviation network.

(4c) By delaying decisions on the nations connectivity, to accommodate party political agreements, government has announced that its sectional interests are more important than saving the national economy and a final phase in the diminution of UK PlC’s influence in international affairs will have been reached . That will prove to be as cataclysmic as the decision to abandon manufacturing to concentrate on investment banking and the City of London as the UKs route to economic success

3b Will the governments proposals help to reduce carbon emissions and manage the impact of aviation on climate change.?

No . The cancellation of R3 at Heathrow in 2010 was justified on the basis that it would substantially increase pollution and noise around Heathrow and that the UK was obligated to reduce UK Aviation Emissions and join the EU Emission Trading Scheme.

Notwithstanding public statements on emission pollution, the government knew that;-

1. the UK had no sovereign control over UK Aviation Emissions because they could not be quantified. (DfT Forecasts 2011) and they did not therefore exist. 2. that the EU Emissions Trading scheme was not only ineffective and costly to administer but it was strongly opposed by the USA, Russia, China and India because it was not a globally agreed scheme to reduce pollution but a tax on flying. The USA has by law made it impossible for US operators to make ETS payments. 3. that a lack of adequate runway capacity in the London area was, annually ,t wasting fuel and creating emissions in holding patterns over London which equated to that used and produced by 2500 transatlantic crossings per year. 4. that holding thwarted the introduction of the European Single Skies plan which was designed to reduce flight times , fuel burn and emissions by using direct airport to airport routes.

There has been little said about emission pollution which has been taking place for decades because of a lack of runway capacity but those who live around London’s airports have been vociferous about noise and that is the issue which exercises the general public

3c How can Aviation be made more sustainable ?

(1) Current international aviation emissions are estimated to be 2% of all global emissions. (2) Reductions in aviation CO2 emissions have been agreed internationally to achieve carbon neutral growth by 2020 and reduce CO2 emissions by 50% between 2005 and 2050. (3) To achieve these targets government must support development of more efficient aircraft and engines ,large scale deployment of sustainable fuels, cooperate in efficient air traffic management and globally agreed carbon reduction systems and provide adequate and modern airport facilities.

(4) Science and technology will provide fuel efficiencies of 10% by managing aircraft in the air and on the ground more efficiently. Technology will increase engine and airframe efficiency by 17% in18 yrs and a further 26% over the period 2025 to 2050.

(5) If governments meet their obligations, scientist engineers and industry will be able to meet their targets and greatly improve sustainability. Aircraft manufacturers are competing to secure orders for the enhanced global fleet of passenger and freight transport aircraft. They are already highly incentivised and progress is good.

3d What is the relationship between Governments Strategy and EU Aviation Policies?

See 3b above

4. DO WE NEED A STEP CHANGE IN UK AVIATION AIR TRANSPORT CAPACITY AND WHY?

Yes ; if the UK is to overcome recession and grow the national economy. Aviation makes a sizeable economic contribution in supporting 921,000 jobs across the country directly. It represents the very best of cutting edge design and UK innovation and is much more than just one sector. It is an economic catalyst which underpins the whole of the UK economy representing 3.6% of UK GDP or a contribution of £49.6 billion. (Oxford Economics)

(4a) What should the step change be ?

(1) The increase in disposable incomes in BRIC country economies is forecast to increase the number of passengers using UK airports from 211 million in 2011 to 335 million in 2030 to 474 million in 2050. (DfT Forecasts 2011).

(2) Globally 630 airports are being developed to meet this challenge. The UK government is actively delaying the decision over whether it should build one airport but the nation is advised that there are plans to develop the economy !

(3) The step change needs to acknowledge the debilitating affect on the economy of not addressing with determination and purpose the building of aviation infrastructure to accommodate these huge increases in the size of the current global air transport fleets and the passengers.

(4b) Should there be a new hub airfield ?

(1) Most certainly Yes; because there is no other way now to scale the mountain before us. The UK lags woefully behind European competition in the number of runways that need to be provided, As each day passes airlines are planning to base their expansion on established modern hubs in Europe and in the Middle East.

(2) British global travellers speak of Heathrow as a third nation airport. It is also a blighted aviation facility because it is located in an urban area where aircraft noise is a nuisance to local residents . In order to make sure that Heathrow noise does not increase , locals use their franchise and the associated gerrymandering prevents growth and development.

(3) If R3 at Heathrow is ever built it will be regarded as the start point for the creation of a new hub on the Heathrow site. However under current policy no decision on aviation infrastructure can be made before 2015/16. Runway 3 cannot therefore be built until 2023. At that stage Heathrow will have passed the point at which it is necessary to expand air transport infrastructure. UK will have already become the branch line station to the global aviation network and that status will be reflected in the UK economy.

(4) The only realistic solution will involve the creation of a major multi runway hub which can be operated on a 24 hr basis. The global community recognised that reality a decade ago.

(5) The second reality is that Airlines decide where they want to fly to and from not government ministers. The most favoured airport in the UK is Heathrow because it is an Air Transport hub where airlines will find the greatest concentration of passengers and where passengers can access the greatest number of destination options and airlines to transport them. If government restricts the development of airfields then airport businesses will fail and airlines will go elsewhere and there are plenty of international airports to welcome them.

(6) Airlines cannot be likened to franchise operators for railways. A 3500 yd runway provides direct access to the worlds runways not just a departure point and a destination joined by miles of railway line which will require government maintenance, protection and subsidy throughout its life.

(4c )What are the costs and benefits of increasing UK Aviation capacity?

(1) Such is the state of the economy that at some stage in the near future the government will be forced to admit that the nation cannot afford concurrently two major infrastructure projects and that does not take into account the need to import labour on a huge scale. A choice will have to be made between HS2 the high speed rail line from London to Manchester and Leeds via Birmingham and a new hub airport for the nation.

(2) The final costs of HS2 are not yet finalised because the extensions to Manchester and Leeds have not been planned but a figure of £40 billion from existing estimates has been tabled. Figures for the development of the Foster project in the Thames suggests a figure of £55 to £60 billion which has not been validated.

(3) If the government is serious about managing transport costs responsibly ,after the fiasco of the West Coast Line Franchise , it must subject both projects to an independent review to determine which delivers the best benefit / cost ratio for the tax payers money The sooner this takes place the less tax payers money will be wasted because in national economy terms there can be no doubt that a new hub airport will yield the better benefit /cost ratio by some very considerable margin.

5. MANAGING THE STEP CHANGE.

(1) The UK’s global economic competitiveness is being seriously undermined because Heathrow is unable to match the capacity and connectivity of European airports and domestic flights are already operating directly into these locations for international connections. As a consequence Heathrow becomes steadily marginalized and a permanent pattern of business behaviour is being established. It is therefore imperative that Heathrow’s current levels of connectivity are sustained until a new hub is operational.

(2) Over the last 3 years Rothwell Aviation has developed a solution to this immediate problem which in no way affects the solution which the Davies Review must recommend.

(3) It involves the immediate development of the nearby airfield at RAF Northolt to meet CAA airport safety standards for the operation of short haul commercial aircraft thereby releasing capacity at Heathrow for long haul flights to new market destinations.

(4) To achieve Civil Aviation Authority certification, the feasibility of which has been confirmed, the Northolt runway must be re-orientated to parallel those at Heathrow and lengthened to produce a paved surface of circa 2,400 metres. This would provide 80,000 plus movements per year (18% - 20% of Heathrow ATMs), would harmonise Heathrow and Northolt air traffic movements, diffuse noise pollution and provide an additional 30 million passengers per year over 20 years.

(5) Heathrow and Northolt would be connected by a dedicated surface rail link for the transfer of passengers and baggage, within 15 minutes, between the 2 sites. This is a modest inter runway link compared with many airport sites around the world. An associated ‘Air-Rail Terminus’ built at RAF Northolt could, also provide a fast surface rail link directly to Paddington.

The Benefits of Rothwell Aviation’s Interim Solution:

• The adaptation of RAF Northolt would preserve the connectivity of London quickly • It does not compromise or predetermine the location of the essential replacement hub airport. • The airfield would be developed for military and civil use, and would not affect the strategic military nature of the air base. A realigned and resurfaced runway would benefit the RAF and Government in the short, medium and long term. • Revenue would be generated for Government from the joint use of this operational facility for the purpose of the Interim Solution, whilst retaining the base’s long term role and value. • Rothwell Aviation has confirmed that the infrastructure build would be funded from private venture investment. • Northolt would be adapted in four years by a consortia of Companies. There would be no disruption to Heathrow operations. • Military/government air operations can be accommodated during the runway reorientation programme. • Extending the runway length would provide 80,000 ATMs per year. (18 to 20% of Heathrow’s current ATMs) or an extra 30 million passengers per year over 20 years. • The facilities produced at RAF Northolt would be operationally comparable to those planned for R3. • Heathrow’s international Hub status would be preserved and it would retain its position in the expanding Global Aviation Network pending the building of the new hub. • Reorientation of the runway would harmonise Northolt and Heathrow Air Traffic Control and being 6 miles north of Heathrow this would diffuse noise. • However if R3 were built it is probable that RAF Northolt with its current runway orientation would have to close. • The project offers cost effective use of an under-utilised airfield which would otherwise require public investment to make it suitable for strategic military flying operations in the 21st century. • The project would create jobs during construction, during the period that the Heathrow replacement Hub is being built and for those who currently work at Heathrow. • RAF Northolt is the only airfield which can be easily linked to Heathrow by rail to create the vital London Hub facility. • The Royal Air Force would, on completion of the new hub airport, receive a legacy in the form of a modern and useful runway within the M25, a modern air traffic control system and terminal facilities. • At no cost to the treasury, government will be seen to be proactive and innovative in using one of its own underutilised facilities to help resolve an economic crisis which is fast becoming a national embarrassment. • The adaptation could be authorised immediately and independently as a response to the Heathrow runway capacity crisis because it has no effect on any decisions about the future of a main transport aviation hub. • It is a stand alone political and economic lifeline .

Observations

• Increased air activity at Northolt will cause objections but 3 points need to be made; • firstly the economic imperative to support global position secondly the need to make the right decisions about a new hubs location • thirdly the temporary nature of the Northolt interim solution because Heathrow plus Northolt can only hold the line for a maximum of 20 years during which time a new hub must be built. • The building of R3 will raise suspicions that clearance has been tacitly agreed for the full multi - runway development of Heathrow. • Detractors, or those just “change averse” will claim that closure of Heathrow will mean job losses and require the building of a new town to support the new hub. • Jobs will not be lost, they will be relocated and building more houses in a new town to service a new hub airport is just what the nation needs. Heathrow is an ideal site for both business and domestic development but not for a major airfield for the 21st century. It could become the Canary Warf of West London. • There should be a reasonable expectation that this logical and necessary approach could gain all party support in the interests of the nation. • For 40 years prevarication and political gerrymandering have prevented this issue from being resolved. • This is the last opportunity to prevent Heathrow’s relegation to a second tier feeder airport or to salvage any influence it might have on the recovery of the UK’s economy or the City`s key financial role.

*************** Reflections

• UK business trades 20 times more with new markets which have daily direct flights to UK. • 92% of BRIC business leaders say that direct flights are critical for inward investment and 62% say they will only invest in the UK if connectivity is improved. (CofC) • New economies will account for 72% of global growth between 2011 and 2030 • Air travel and economic growth are directly related (ICAO,GDP growth- IMF) • Aviation supports 1 million jobs across the country and provides the nation with cutting edge design and technological innovation. It is an economic catalyst which underpins the whole of the UK economy representing 3.6% of UK GDP or a contribution of £49.6 billion. (Oxford Economics)

17 October 2012

Written evidence from the Save Filton Airfield Campaign Group (AS 31)

Introduction

The “Save Filton Airfield” campaign group was set up in 2011 in response to an announcement by BAE Systems that they intended to close and redevelop Filton Airfield in north Bristol.

The group is made up of local engineers, politicians and employees of the aerospace industry who feel that this decision represents a threat to the future of local aerospace design, manufacturing and supporting businesses, and to the ability of Bristol to provide a complete aviation solution to the wider UK economy.

The decision to close the airfield has been dismissed in many quarters as a purely commercial decision for BAE Systems and outside the control of local or national government, despite local and national policy having asserted protection for the continuing operation of its runway and facilities.

Public consultation revealed that local opinion favoured retention of the airfield as a keystone of aerospace and aviation activities. 1

We would like to explain to the Committee how Filton Airfield and similar airfields under threat should be employed in addressing the overall picture for future aviation capacity needs. Whilst it is clear that there will be a requirement for large-scale capital investment in the South East of England to address long term demand in commercial passenger aviation, well equipped secondary airfields such as Filton can help to alleviate the situation in the short to medium term, at lower cost.

We consider it vital that this Inquiry addresses aviation policy which covers ALL UK airfields and not just commercial airports in the South East of England.

Current Capacity Issues

In addressing the issue of aviation capacity in the South of England, it will be important to identify where and how bottle-necks will occur in the future and over what time frame. It is clear that the imminent issue is that of commercial passenger services where demand is currently greatest – that is to say, in the South East of England.

In evaluating demand, we need to examine the current model of both international and domestic flight operations. In recent years, there has been much debate concerning the “hub” based model of passenger aviation versus the “point-to-point” model. In attempting to address this, industry players seem to have reached their own, varying conclusions. Clearly, there are merits in both models, with a trade-off between cost of operations and flexibility for customers, but the reality is that there is likely to be a balance between the two. This choice will be influenced by national policies and availability of routes, airspace and airport facilities.

In the UK there has been a trend since the early 1990s for long-haul operations to be centred on two major cities - London to serve the population in the south, and

1 South Gloucestershire Council Core Strategy Post‐submission Engagement Statement. November 2011

Manchester for the population in the north. British Airways has opted to concentrate all of its international operations on Heathrow and Gatwick, providing domestic feeder flights from regional airports. This has undoubtedly exacerbated the number of movements in the London area, contributing to aviation congestion there, and particularly to the pressures on Heathrow.

A city such as London requires world-class airport facilities with easy access to the city, and in the longer term a radical solution is required, be this by building a new hub airport at a new location, or by extending the physical boundaries of Heathrow.

However, neither solution is the complete answer to aviation capacity needs; a single major airport will always suffer issues as a result of heavily concentrating activity in one area: localised pollution and noise, surface access congestion, congested airspace and a lack of redundancy for emergencies. On a wider note, there is a risk that economic activity could become over centralised in the South East and leave inadequate provisions for transport, especially aviation, in the regions.

A more geographically distributed solution to aviation capacity would yield many socio- economic advantages, but policies must be drafted carefully to ensure that the needs of the whole aviation community and the public are satisfied. This will ensure that investments from both Government and the private sector will return the greatest benefit.

Providing Relief for London’s Airports

Any solutions to long-term capacity requirements of London’s airports will inevitably require significant capital investment and will not happen overnight. History warns us that large infrastructure projects are mired in drawn-out public inquiries, political and public opposition, legal issues, lengthy tendering and building programmes and issues with commissioning.

It is therefore imperative that the Government considers interim solutions that can be delivered in the short to medium term. It should examine integrated solutions involving re-organisation of commercial and ancillary aviation services. This must account for economic development policies and the changing landscape regarding surface access.

The first and most obvious solution is to identify any types of movement that occupy airspace capacity, landing/take-off slots and ground operation requirements at the most congested South East airports, and to move them to suitable secondary or regional airports.

Such movements should include:

• Short-haul commercial passenger flights • Maintenance operations • General Aviation (GA) • Freight

Commercial passenger flights may seem a difficult issue to address; airlines have chosen to base operations around London due to a lack of viable alternatives, this serves only to perpetuate further demand in London.

In light of current policies concerning economic displacement from London towards the regions, Government must evaluate how much demand for these services is likely to come from other areas of the country and whether this could be satisfied instead by services from regional airports. With the advent of a high-speed rail link to Birmingham, and with fast and improving links via Heathrow and all the way through to the West of England and South Wales, it is important to examine whether demand from north and west of London could be better served by point-to-point services from airports such as Birmingham and Bristol.

However, we must be careful to ensure that increased usage at these regional airports does not jeopardise other economically important aviation activities.

Filton Airfield

Filton Airfield lies just within Bristol’s urban area, 5 minutes from the M4 and M5 motorways and the local A38 trunk road, providing it with excellent road transport links to London, the Midlands, South Wales and the South West. Also within 5 minutes is Bristol Parkway railway station which is served by high speed rail services on Great Western and Cross Country mainlines. The freight line from Avonmouth Docks passes through the airfield site and provides connections to these mainlines in all directions.

The site comprises just over 140 hectares of land and possesses a CAA Ordinary Licence allowing for the public transport of passengers, general aviation, commercial operations and for flying instruction and has full customs facilities. The concrete runway is significant in length at 2,467m, and is one of the widest in the UK at 91m (one of the few able to accommodate the Airbus A380). It is equipped with full runway lighting and an Instrument Landing System (ILS), a control tower, providing full radio telephony services to users, including a Lower Airspace Service (LARS) for the north Bristol area using the on-site RADAR, and Category 6 fire cover. 2 3

The airfield is owned and operated by BAE Systems (Aviation Services) Ltd. having been transferred to their predecessor, British Aerospace PLC, in 1977 and then to the current legal entity of the same company under privatisation .

In recent years it has hosted a variety of aviation businesses, including freight, aircraft maintenance, aircraft livery services, business aviation operations, medical and police helicopter operations and flying schools. Whilst BAE Systems themselves do not make significant use of the airfield, the main economic user is Airbus Operations (UK) Ltd., whose activities employ approximately 4,500 people on the site in Research & Development and manufacturing, much of which is subcontracted to GKN Aerospace. 4 The situation is similar at Airbus’ other UK manufacturing site at Broughton, which is also owned by BAE Systems.

2 http://www.bristolfilton.co.uk/pilot_information/runway.php 3 Pooleys Guide 4 http://www.airbus.com/company/worldwide‐presence/airbus‐in‐uk

Airbus uses the airfield in two main roles. The first is to transport large wing assemblies from the manufacturing facilities to final assembly, such as the A400M military transporter aircraft wings which are shipped direct to Seville, Spain. The second is to provide the employees with shuttle flights to other Airbus sites within the UK and Europe, allowing staff to travel to technical meetings and back again, often on the same day.

Commercial passenger services for the West of England are currently only provided by at Lulsgate in rural North Somerset, some 7 miles south west of the city.

The Economic Case

Decentralisation from London

The UK Government has in recent years made overtures about decentralising economic activity and power-making from London in an attempt to prevent uncontrolled growth in the South East and avoid economic stagnation in the regions. 5 As well as public bodies, institutions such as the BBC have already started to move some functions to regional centres, including Bristol. The financial services sector in the Bristol is also growing and will be spurred on by the Temple Quarter Enterprise Zone which will generate local business rates income as part of the City Deal. The scope for such new activity will represent an added pressure on both domestic and international transport links for the region. Domestically, it is hoped that this will be assisted by the planned upgrades to the Great Western mainline. Internationally, this will be served by local airports.

Locally displaced aviation

These high-value growth industries will require access to both scheduled flights and business aviation services. The latter are typically provided by secondary airfields where civil and immigration processes do not obstruct the required fast, hassle- free transfers. Locally, commercial flights will be operated from Bristol Airport.

In 2011, Bristol Airport serviced 5.7m passengers with aircraft movements over 66,000. The airport projects growth of passenger figures to between 8m and 9m by 2015 and up to 12m by 2030. 6 As part of this anticipated demand, the airport is currently investing in further enhancements to its passenger facilities by expanding the terminal building and adding new air bridges, multi-storey car parking and new aprons. In the longer term, it is considering an extension to the 2,011m runway and a possible second terminal building to the south of the runway, though absolute runway capacity is anticipated to be limited beyond the 2030 projections (approx. 140,000 movements). Although much expansion is planned, no improvements to the transport infrastructure between the airport and Bristol or the M5 motorway have been included in the plans, leaving it accessible only by country roads.

General Aviation (GA) is an important sector. Nationally, it is currently valued at £1.4bn to the economy, 8% of the total Commercial Air Transport sector. 11,600 people are employed in GA, operating a fleet of some 15,500 active aircraft, and accounting for

5 HM Government: “Decentralisation and the Localism Bill: an essential guide” 6 http://www.airport‐technology.com/projects/bristol‐international‐airport

4.6 million movements annually. This doesn’t include the value added to other businesses which rely on GA. 7

Mixing GA with larger aircraft affects overall capacity for an airport because under CAA regulations, movements of lighter aircraft require increased separation from large commercial aircraft due to wake vortices and also light aircraft tend to operate at lower airspeeds. 8 Therefore, to facilitate greater overall capacity for passenger flights, aviation policies must emphasise provision for separate GA airfields.

If regional civil airports such as Bristol are to take up demand for commercial services, we need to be very careful that there is no jeopardy to either the business aviation or GA sectors. As these are increasingly likely to be displaced from primary civil airports to make way for passenger travel, there needs to be clear policy in protecting secondary airfields in every region to provide the necessary facilities. It should also be noted that if such airfields are allowed to close, these movements must be accommodated at other suitable airfields, exacerbating the problem. Filton, for example, averages approximately 28,000 movements per annum, which would be displaced to either other secondary airfields, or Bristol Airport. 9

Examples of regional airports where provision should be made for local secondary airfields to alleviate potential movement separation issues include:

• Bristol • Bournemouth • Cardiff • Edinburgh • Exeter • Glasgow • Liverpool • Leeds-Bradford • Teeside

Manufacturing

The government has repeated a desire to embrace high-value manufacturing exports as way to grow the economy out of the current recession.

A prime example of this desire is the UK aerospace industry, the second largest in the world and one of the most successful sectors of UK manufacturing. 10 This industry is largely centred around the Bristol region for historic reasons. Nationally, the sector has a turnover of £24.2bn and directly contributes £11.4bn to the UK GDP. Civil aerospace in particular remains in a strong growth phase, with revenues increasing by 5.1% in real terms in 2011. Traditionally this sector has been supported by localised aviation

7 General Aviation Awareness Council: Fact Sheet 14 – GA value to the UK economy 8 CAA: CAP 493 – Manual of Air Traffic Services Part 1, section 9.5.1 9 BAE Systems/Terrence O’Rourke: Filton Airfield Aviation Options Report 2011 10 House of Commons Trade and Industry Committee: The UK Aerospace Industry, Fifteenth Report of Session 2004‐05

capacity. No Airbus manufacturing site is currently without an operating airfield for this reason.

In the UK, the main company involved in civil aerospace is Airbus. In 2011, the company took orders for 1,608 aircraft, as airlines seek ever more efficient fleets. This leaves the order backlog at over 4,300 aircraft. 11 Finding manufacturing capacity to meet this demand is both a commercial and political issue as governments around the world seek a slice of the work. The main UK sites for manufacturing are at Broughton in and the site at Filton Airfield, both centres of excellence for wing design and manufacturing, working closely with sites in Bremen, Germany, and Toulouse in France. Currently this work directly and indirectly supports 140,000 jobs. 12

At Filton, over 2,000 engineers are employed in developing wing parts, with a further 2,500 at subcontractors GKN Aerospace. This workforce also supports EADS latest foray into defence aircraft by supplying wing assemblies for the A400M military transporter, which is assembled in Seville.

The current threat to this site from the potential loss of airfield capacity stems from a complex history with BAE Systems and its forerunners. BAE previously held a 20% stake in Airbus’ parent company, EADS, but sold this in 2006 to concentrate on what it perceived would be its core business in defence contracts. The Filton site was a result of this earlier collaboration as an offshoot of BAE’s former manufacturing operations there. BAE continue to own the airfield and underlying land and Airbus pay rent to BAE for its office and manufacturing facilities.

As the global recession has taken hold and BAE have relied heavily on defence contracts, primarily in the US, it has seen its own revenues fall, and has become increasingly indebted (to the tune of over £16bn net). As it has reduced its exposure to UK markets, it has sought to sell off real estate assets acquired during privatisation. Such real estate includes ex munitions works, manufacturing sites and airfields. It would appear that in order to maximise value from the real estate at Filton, BAE has sought a change of land use through the local planning authority (who had been given an increased house-building target of 26,400 homes – up from 21,500 - as a result of BAE’s announcement of their intention to close the airfield 13 ).

In order to facilitate this, Airbus were offered for sale 50 hectares of land so they could relocate their aerospace activities from BAE-owned land. In response, Airbus have claimed that they can “mitigate” the impact to future manufacturing sites by transporting wing assemblies by road to Avonmouth docks, then by sea to northern France and then by air for the last leg to final assembly (e.g. Seville). Employees attending meetings at other sites would have to use services from commercial airports such as Bristol or Heathrow. Travel between the two UK sites would have to be by road.

Perhaps, as less-than-willing tenants to BAE, Airbus felt they could continue with office operations at lower overall cost by agreeing to this deal, albeit adding to the risks and costs associated with manufacturing and transportation. However, there is genuine concern (including by employees of Airbus) that the mitigating operations being

11 EADS Annual Review 2011. Progressing, Innovating, Transforming 12 http://www.airbus.com/company/worldwide‐presence/airbus‐in‐uk 13 South Gloucestershire Council: Supplementary Housing Paper. December 2011 (section 7.1)

proposed could cause a threat to the viability of current manufacturing, and stifle any new large-scale projects that Filton could otherwise accommodate.

We contend that this scenario is not as might be outwardly presented by Airbus, and it will manifest itself as a major threat to the local economy. It is vital that local capacity is protected to support these operations.

Supplementary Operations

As well as secondary airfields being used to support important economic activities such as manufacturing and for relieving regional airports of conflicting aviation, there are supplementary operations that they can support which would fit in with both the desire to decentralise economic activity and relieve some capacity at congested airports.

Freight

Whilst most air freight is carried in the hold of passenger flights, there remain a substantial number of dedicated cargo services operating out of London airports carrying approximately 1.8m tonnes per annum. The two main airports handling cargo- only flights are Stansted (10,200 movements pa.) and Heathrow (2,500 movements pa.) 14 . With improved surface links between London and the regions, secondary airfields with sufficient facilities can be used to relieve these operations from London, freeing up capacity for more passenger flights. They are also an ideal alternative to congested passenger airports where time-sensitive logistics operations are concerned.

Maintenance

Passenger (and freight) aircraft maintenance is a necessary operation for all airlines. Much maintenance occurs during layovers at commercial airports but heavy maintenance can, and often is, provided offsite at secondary airfields. Airfields such as Filton, which have excellent links for the timely sourcing of parts and engineers, must be considered as part of aviation policy as a means to support the sector, and to mitigate unnecessary movements at congested airports. In particular, as the need arises to maintain very large aircraft such as the A380, there must be an adequate provision of sites with runways wide enough to handle these. In the UK, there are very few such runways. It is notable that the exceptionally large at Filton can accommodate large aircraft such as Boeing 747s.

Social and Environmental Factors

As well as the arguments made here about directly and indirectly relieving capacity at the most congested airports, there are other considerations to be made concerning regional airports and secondary airfields.

Convenience

Encouraging local provision for air services has numerous benefits for the public. It minimises the need for passengers to spend time and money travelling to London

14 BAA: Patterns of Traffic at BAA Airports 2010

airports. It can also help airlines keep their costs down by having access to a greater pool of employees.

Pilot Training

In order to achieve a sustainable supply of pilots for all aviation sectors, secondary airfields are paramount for training. The RAF also requires airfields with full commercial instrument and radio services in order to train their pilots (Filton, for example, is used by the RAF for instrument approach training, which may now have to be displaced to commercial airports.

Emergency runway capacity

Throughout the UK, adequate provision must be in place for emergency situations, both for in-flight aircraft problems and airport diversions as a result of accidents, fire, terror incidents or poor weather. In particular, as aircraft sizes increase for hub operations, there needs to be specific provision of emergency airfields with sufficiently large runways.

Support for emergency services

Most regions now rely on police air operations units and medivac and air ambulance operations. These typically require an airfield which can provide fuel and maintenance support at a location as close as possible to major regional population centres. The fast- response nature of these services are not well suited to mixing with the traffic at commercial airports, meaning suitable secondary airfields must be protected for their use.

Pollution

Over-concentration of aviation contributes to localised and global pollution. By reducing as far as possible movements in London airspace and moving as much as possible to regional airports and airfields, the stacking of aircraft on approach can be kept to a minimum, improving the fuel efficiency of flights.

Minimising surface journeys to airports also offsets car journeys, reducing road congestion and pollution along major routes.

Finally, encouraging ancillary operations such as freight, business aviation and maintenance to locations with a good local urban density (again, as is the case with airfields like Filton) reduces the need for the associated workforce and patrons to make longer surface journeys by car.

Recommendations

In light of the arguments made in this submission, the Government must take steps to reverse the trend for important airfields to be redeveloped. This requires addressing the motives for owners who take these decisions.

In the case of airfields like Plymouth and Filton, the closure decisions have arisen from the landowners’ desire to maximise real estate values in order to turn short-term profits

and as a result of pressures placed on local authorities to identify housing land supply to meet government targets. Therefore it requires all Government departments to work together to avoid conflicting and potentially damaging policy as a result of a failure to understand the bigger picture.

In addition, the Government needs to be very cautious of claims made by private airfield owners, whose motives are often purely financial.

With this in mind, we make the following general recommendations:

• Reverse the automatic “brownfield” status of closed airfields until their potential can be evaluated by the DfT for aviation needs.

• Ensure there is a sufficient supply of suitable secondary airfields to support functions that are in the national interest (such as supplementary aviation capacity, pilot training or potential military requirements).

• Analyse and consider reducing central Government housing targets where they are likely to add pressure on local planning authorities to make detrimental decisions concerning airfield redevelopment.

• Aviation policy is rigidly accounted for in local planning policy.

With regards to the specific concerns of this group, we also recommend that the Government use their influence over BAE Systems to ensure that their significant holding of UK airfields is evaluated and, where necessary, ring-fenced and protected, in the national interest. We recommend that the Government liaises with BAE management to come an agreement to keep Filton Airfield open until the issues raised in this submission can be fully assessed.

17 October 2012

Written evidence from Mr Joe Watson (AS 32)

Response to Governments Draft Aviation Document

I am extremely disappointed with the Draft Aviation Policy Framework. It is quite wrong that the Government should propose that the only real mechanism for the regulation of the noise pollution caused by non‐designated airports in the UK – which form the vast majority of the UK’s airports – should be better engagement between airports and local communities.

It is inconceivable that the Government would permit the sole mechanism for the regulation of air or water pollution, or pollution from waste, to be left to a laissez faire system of “better engagement” between the polluting company or organisation in question and the local community. These forms of pollution are all subject to strict controls which are monitored and policed closely by the statutory environmental agencies in each of the UK territories.

Moreover nearly all other forms of noise pollution are subject to stricter controls through the statutory powers exercised by local authorities.

I believe that the proposals set out in the Draft Aviation Policy Framework fall far short of what is required to ensure that all airports in the UK minimise the noise pollution which they produce. The adverse impacts of aircraft noise on health, education and quality of life are well established. The DfT needs to take decisive action to produce the better balance which it claims it seeks between the commercial interests of the aviation sector and its adverse impacts on local communities.

In particular, I would like to see the following measures:

• Robust and ongoing mapping, monitoring and regulation of noise pollution caused by the all the UK’s commercial airports – carried out by the Department for Transport (DfT) (and devolved administrations, where applicable), or by the Civil Aviation Authority (CAA), rather than by the airports themselves

• Both the monitoring and the noise regulations must properly reflect the true impact of aircraft noise on health, education and quality of life, as evidenced in the substantive relevant research, and must reflect best practice as set out by the World Health Organisation in its relevant guidance

• The Government should commit itself to a specific reduction in the number of people in the UK significantly affected by aircraft noise over the next 10 years – I suggest a 10% reduction

• Airports should be required to reduce the level and frequency of aircraft noise within the areas which are significantly affected by noise – priority should be attached to achieving this objective at the airports affecting the largest populations, and at those which affect large populations, and also duplicate the services of an airport nearby. The noise levels that emanate from George Best City Airport affects my sleep, I don’t get enough which leads to sleep deprivation. I can’t open my windows during the summer as the noise levels throughout the morning, afternoon and evenings is extremely noisy and impacts on the quality of life for me, my family and local residents. I am also frightened in relation to the adverse impact it may have on the future health of my family and local residents in general. It affects my television reception and I have to stop talking when using the phone when a plane is overhead. It disrupts conversations with my neighbours and affects any social activities that I organise in my garden. I used to take my young grandchildren to my local Victoria Park a gem of an oasis in the heart of east Belfast. However, I had to cease this social and family outing as my grandchildren where petrified from the noise emanating from the aircraft. Local residents do not have to be subjected to this intrusion and daily disruption of their family lives. There is an International Airport less than 30 minutes’ drive away which is better placed and equipped to handle European/International flights.

• No further growth should be permitted at airports which affect large populations in terms of noise, and which duplicate the services of an airport nearby, unless the airport operator in question can prove that any planned growth will not result in an increase in noise pollution

• All airports whose noise pollution affects significant populations (and/or any schools) should be required to meet specified targets for reducing those levels of noise over a five year period – there should be serious penalties for airport operators which do not meet these targets.

• The Government should make it clear in its Aviation Framework that it is abandoning its outdated guidance stating that the 57 dB LAeq,16h contour marks the approximate onset of significant annoyance, and should introduce more sophisticated guidance which better reflects the considerable body of recent international research in this regard, and which properly reflects international research on health and education impacts of aircraft noise

• The Government should either refine the current system of air passenger duty so that a higher rate is levied on those flights having the most serious adverse noise impact, or it should use its existing powers to enforce airports to use differential landing fees to reflect the noise impacts of flights

• At airports where aircraft noise affects a significant number of people (and/or affects schools significantly), any noise envelope should only be used as a device to ensure that the level and frequency of aircraft noise pollution does not get worse and/or is reduced over time – it should not be used as a device to permit any increase in the amount or frequency of noise at such airports

• The Government should give serious consideration to the results of the EU‐ sponsored MIME study, which developed a model of tradeable noise permits for airports, with a view to its possible introduction in the UK

• The Government should require airports to provide comprehensive and robust effective insulation (not just double or triple glazing) to all homes seriously impacted by aircraft noise and not only those at 63 LAeq 16h.

• I support an enhanced noise regulation role for the CAA – but it must have a consistent, proactive and tough regulatory and enforcement role, similar to the Environment Agency • Belfast International Airport should be earmarked as the regional gateway airport for Northern Ireland at which any further expansion, particularly of international routes, should be focused, if such expansion is deemed desirable.

17 October 2012 Written evidence from the Aviation Foundation (AS 33)

A successful aviation industry means a successful Britain

• Introduction • Why aviation is a popular and essential industry • How aviation benefits local communities where you live • Four key tests to secure a credible and lasting aviation policy

Introduction

1. The Aviation Foundation is a non-profit organisation, established by British Airways, Virgin Atlantic, BAA and Manchester Airports Group. It is supported by the British Air Transport Association, the Airport Operators Association, ADS Group, BAR-UK and the Baltic Air Charter Association, between them representing the entire sector. The main purpose of the Aviation Foundation is to promote the economic and social benefits of aviation to the UK.

2. Set up last year, the Aviation Foundation has so far received the backing of more than 150 organisations and businesses, including trade organisations, FTSE 100 companies, universities, car manufacturers and football clubs. These supporters represent hundreds of thousands of businesses and millions of employees across the UK. All have signed the Aviation Foundation pledge to demonstrate how a successful aviation industry is vital to their work at home and abroad in light of the government review. (See Annex A for the pledge and current list of signatories).

3. This Aviation Foundation paper focuses on the terms of reference which cover international connectivity and the benefits of aviation. Sustainable Aviation will submit a detailed response focusing on the excellent progress made by the industry’s campaign to tackle environmental issues head-on. The Aviation Foundation is submitting this summary to make three key points. We think it is important to: a) Highlight the strength and depth of support for aviation in Britain b) Demonstrate aviation’s positive impact on everyday life in local communities c) Set out four tests that Government must adopt to deliver a policy that works.

Why aviation is a popular and essential industry

4. Aviation collectively creates over £50 billion of wealth for the UK each year and protects almost one million British jobs.1 In addition, the 150 supporters of the Aviation Foundation offer a powerful insight into how many more jobs and businesses rely on air travel. Despite this, the aviation industry and its supporters are often taken for granted.

5. Aviation is not an abstract concept and nor should it be treated as such in the national debate – it has real meaning in the lives of the vast majority of the UK population. Being able to travel is essential to doing business, enjoying a holiday and keeping up with family and friends, making the world smaller, more open and accessible. More than 210 million passengers pass through UK airports each year.2

6. UK residents make over 43 million visits abroad by air each year.3 These include more than five million visits by people on business. Also, nearly nine million trips are made by low to middle income families, shattering the myth that air travel is the preserve of the rich.4 22 million international tourists visit the UK by air each year, generating around £14 billion annually across the economy.5

7. Aviation keeps friends and family in touch. In 2010, UK nationals made around 10 million visits to see friends or relatives abroad. Heading in the opposite direction, 8.4 million people visited friends or relatives in the UK, the vast majority travelling by air. Of these, two million were UK nationals who live overseas.6

8. We agree with the government that the priority should be to ensure that the UK’s air links continue to make it one of the best connected countries in the world. Yet the meaning and value of UK connectivity will decline dramatically if we continue to ignore what is happening elsewhere in the world. The Institute of Directors is one of our 150 pledge signatories. The IoD’s director-general Simon Walker said: “Aviation is vital to UK trade and investment, but we are already falling behind our competitors in Europe. We urge the Government to be bold when drawing up its final framework”.

9. While leading trading nations across the globe have quickly recognised that a thriving aviation industry is vital to future economic growth, British politicians have debated this point for almost fifty years without effective action (for an example using a timeline, see Annex B). As a result Britain is falling behind as an economic powerhouse at the worst possible time.

1 Oxford Economics, Economic Benefits from Air Transport in UK, 2011 2 UK Civil Aviation Airport Statistics, 2011 3 Travel Trends, International Passenger Survey, ONS 2010 4 CAA Passenger Surveys 1996-2009 5 HM Treasury consultation paper on Air Passenger Duty, 2011 6 Visit Britain, VFR facts and figures, 2011

10. We know that UK businesses trade 20 times as much with emerging market countries that have a direct daily flight to the UK as they do with those countries that do not.7 Whether addressing capacity needs, a prohibitive visa regime or uncompetitive taxes, now is the time to make sure our island nation really is ‘open for business’ in the coming years. This is particularly important if the government wants to capitalise on trade and tourism opportunities presented in the post-Olympic glow.

How aviation benefits local communities where you live

11. There is considerable scope for understanding better the sheer scope of aviation’s impact on the everyday lives of us all. Despite being integrated into so many aspects of our lives, by and large the benefits of aviation are taken wholly for granted. While this demonstrates the penetration, strength and fundamental importance of aviation to our society, it runs the risk that aviation becomes insufficiently nurtured because the roles it plays, for example in many supply chains and in providing or supporting jobs, are largely invisible. This contrasts sharply with, say, a small but visible protest outside an airport.

12. Aviation brings goods to our shops, performers to our festivals, sports stars to our stadiums, art to our galleries, tourists to our attractions and most importantly friends and family together. The electrical components which make our computers and IT gadgets work, the car parts that keep us on the road, the life-saving medicines, international aid and letters to our armed forces are all delivered by plane. The computer you may well be reading this on and the smartphone in your pocket, like so many everyday necessities, were almost certainly brought to you by plane.

13. We have argued that the benefits of the aviation industry are widespread, impacting on so many lives across the country at a very local level. To demonstrate this, we have analysed three important sectors which are crucial contributors to our economy and are dependent on aviation for their continuing success. These are tourism, inward investment and exports. We have concentrated on England, Scotland and Wales, where all sets of figures were readily available at local authority or regional level (see Annex C for region and country figures).

i. Employment in the tourism industry

7 Frontier Economics, Connecting for Growth, September 2011

ƒ Aviation plays an essential part in the continuing success of the tourism industry, punching above its weight since those arriving by plane spend more than those arriving by other means. 75% of the 30 million visits to the UK by overseas residents in 2010 were by air but they spent 83% of the £17 billion earned from all such visits.8 This is a significant contribution to the tourist infrastructure which helps to establish its viability for all tourists both foreign and domestic.

ƒ What this means for vital jobs at the local level becomes evident by analysing the impact on each local authority. Using England as an example where there are around 2.5 million tourist industry jobs, in broad terms around one fifth of local authorities rely on tourism for more than 10,000 jobs (many of them well over 10,000). Of the remaining local authorities in England, around half have 5,000-10,000 tourism jobs and the other half 1,500-5,000.

ƒ The Aviation Foundation is currently researching local populations at considerable distance from a major international airport to demonstrate that in every corner of Britain there is an irrefutable reliance on air links. Sue and Warren Holt run the Crossroads House B&B in Carlisle. Whilst many of their guests are from Britain, they are typical of thousands of B&B owners who depend on international visitors to run a viable business. Mr Holt said: “If foreign visitors who travel by air found it difficult to do so, it would have a big impact on us. It’s the difference between being comfortable and getting by.”

ii. Employment in foreign-owned companies

ƒ Inward investment has always played an essential role in the economy of the UK where 3.7 million jobs can be directly attributed to foreign- owned companies.9 Last year more than 112,000 jobs were created and protected in the UK by foreign direct investment.10 Transport links and easy access to markets are absolutely essential for more than half of global companies deciding where to locate their businesses.11

ƒ Aviation is a crucial factor in providing the right kind of environment which encourages foreign companies to invest in the UK. As the Secretary of State for Transport said in his written statement to Parliament on 7 September 2012, the aviation industry “provides this

8 Travel Trends, International Passenger Survey, ONS 2010

9 Oxford Economics, The Value of Aviation Connectivity to the UK, 2011 10 Department for Business, Innovation and Skills press release, July 2012 11 European Cities Monitor 2010, Cushman and Wakefield

country with the global connections which our businesses need to sell their products abroad and which inward investors to the UK demand.”

ƒ Over a quarter of local authorities in England each relies on inward investment for more than 10,000 jobs. For more than half of these, the total rises to over 20,000 jobs. Foreign owned companies provide 5,000-10,000 jobs in half the remaining local authorities, with the other half falling in the 500-5,000 jobs range.

ƒ The tourism industry and foreign owned companies taken together account for employment in the tens of thousands in nearly two-thirds of local authorities in England. That is the case for nearly half of local authorities in Scotland, rising to nearly 60% of local authorities in Wales.

iii. Exports by air

ƒ The aviation industry plays a crucial role in boosting UK exports. In 2010, goods worth £60.3 billion were exported by air, 28% of all goods exported.12 Dr Neil Bentley, Deputy Director-General of the CBI, another Aviation Foundation supporter, said: “Aviation is important, particularly for an export-led recovery.”

ƒ The table in Annex C shows the importance of exports by air for Scotland, Wales and each English region. Just over one-third (£20 billion) of total exports by air from England (£54 billion) were from London and the South East. The remaining two-thirds came from the other seven English regions ranging from £3.3 billion in to £7.3 billion in the North West.

ƒ Air freight is essential for high value or time critical goods. Many sectors in the Government’s Plan for Growth cannot function without this crucial link in the supply chain. During a keynote speech in September 2012, the Secretary of State for Business, Innovation and Skills said: "We must get behind successful British-based firms in vehicles, aerospace, life sciences and creative industries and our world-class scientists and universities." These sectors almost all depend on air freight. The majority also rely on air links to export knowledge and conduct effective business through their global networks.

ƒ The aerospace industry is a key part of the advance manufacturing sector, which relies on good air links and air freight. According to Paul Lindsay MBE of Aerospace Wales Forum, there are approximately 160 companies in

12 Oxford Economics, The Value of Aviation Connectivity to the UK, 2011

aerospace and defence in Wales. This £5bn industry that directly employs 23,500 people in Wales provides yet another example of aviation keeping Britain moving.

Four key tests to secure a credible and lasting aviation policy

14. Unlike the majority of the transport network, the aviation industry is funded through private investment at limited cost to the taxpayer. However, it still requires the long-term certainty that can only come through a credible and lasting aviation policy from Government. If this is in place, the aviation industry can play a full and proper part in boosting economic growth.

15. This was at the heart of a call made by aviation, business and trades union leaders in the lead up to the announcements of the consultation and the independent Commission. Chief Executives of the companies which established the Aviation Foundation - BAA, British Airways, Manchester Airports Group and Virgin Atlantic - along with heads of the British Chambers of Commerce and the TUC, called on the Government to adopt four key tests:

i. Deliver a clear policy conclusion that can be progressed without further delay. With years of government inactivity on aviation policy, the draft framework and the Commission’s work must result in a plan of action and the commitment to see it through - “not another fudge”, as Willie Walsh, CEO, International Airlines Group, put it.

ii. Aim for cross-party consensus and a commitment that lasts beyond the term of one Parliament and ensures the policy will be implemented. Whatever decisions emerge from the latest policy process, history shows they will not be implemented without real leadership by all political parties. It is time for narrow political interest to be put to one side and for our political leaders to grasp the nettle and work together for the good of the UK as a whole.

iii. Achieve cross-departmental consensus and support Britain’s economic growth, consistent with our trade, tourism, transport, environmental and climate change strategies. In the past decade, there have been eight Transport Secretaries, six Business Secretaries, six Home Secretaries and nine Tourism Ministers, but not a single strategic aviation policy that has met the country’s needs. Different Government departments promote policies on air passenger duty, visas and planning that actively work against boosting trade and tourism. If aviation is to play its full part in getting this economy moving, Treasury, BIS, DCMS, DCLG, Home Office and DECC should be working together on a long-term aviation policy to help growth.

iv. Be based on a policy process that has considered all options rationally and objectively on their merits. UK aviation is a hugely significant creator of wealth and employment in its own right. However, its importance goes much further than that, which is why this country should have an aviation policy that truly addresses the needs of all, whether it is business or leisure, passengers or freight, hub or point to point. In areas of the UK where recession has hit particularly hard, economic growth driven by aviation is needed more than ever.

16. There is wide support for these tests with both the British Chambers of Commerce and the TUC solidly behind the Aviation Foundation’s drive for a successful aviation policy. Brendan Barber, TUC General Secretary, said: “Trade unions have pushed the Government for a meaningful growth strategy and the aviation sector clearly has a central role to play. Aviation provides hundreds of thousands of skilled, well-paid jobs for our members. In these difficult times, such jobs are at a premium. Of course, it is vital that our environmental and climate change commitments are taken into account as we develop the sector, but I am confident that that can be done.”

17. John Longworth, Director-General, British Chambers of Commerce said: "British businesses are busting a gut to increase their exports to new and growing markets across the globe. If we want them to succeed, we urgently require an aviation strategy that delivers capacity and connectivity for today, for tomorrow, and for the long term. The government must stop tip-toeing around on aviation because of short-term political considerations. Unless politicians grasp the nettle and make some tough decisions, both our export and inward investment potential will suffer. My message to Westminster is clear: don't condemn Britain to second-class status as a trading nation. Deliver an aviation strategy that's actually worth the paper it's written on."

18. The four key tests are the benchmark against which the aviation industry, businesses and unions will judge the outcome of this policy process. The Secretary of State has already acknowledged that “the aviation industry in the UK is extremely successful”. This is no historical accident but a result of world-beating innovation during the past 100 years. Now is not the time to stagnate whilst our competitors race ahead. It is essential that Government delivers a successful aviation policy in the national interest for the benefit of the UK in the decades ahead.

18 October 2012

ANNEX A

The following 154 organisations have signed the Aviation Foundation pledge:

“We support a successful UK aviation industry because it is vital to our work at home and abroad”

5plus Architects Aberdeen & Grampian Chamber of Commerce Aberdeen Business School, Robert Gordon University ABTA ADS Group Ltd ADT Workplace AEGIS ALG-Europraxis Consulting Ltd. Ashley Riley Communications Asian Business Association Assembly Studios Association of Event Organisers Association of Event Venues Association of International Accountants Association of International Courier and Express Services Association of Leading Visitor Attractions Atlas Infrastructure Management Limited AviaSolutions

Ball Packaging Europe UK Baltic Air Charter Association Board of Airline Representatives in the UK Beamish Associates Bentley Motors Best of the Best Bird & Bird Boeing UK Brazilian Chamber of Commerce Bridge the World British Chambers of Commerce British Hospitality Association British International Freight Association British Vehicle Rental and Leasing Association BritishAmerican Business Brodericks Love Coffee Bruntwood BT Burges Salmon Business to Business Business Visits and Events Partnership

Cambridgeshire Chambers of Commerce CBI CBRE Ltd

Chelsea FC China-Britain Business Council CMS Cameron McKenna Confederation of Passenger Transport UK Creative Solutions Critical Divide

Daisy Group Demys Limited

Event Supplier and Services Association Eversheds EYE

Flower Import Trade Association Flower Wholesale Trade Association Free The Children Freight Transport Association

G4S GE GMB GTMC

Harbottle & Lewis Aviation Herbert Smith Hounslow Chamber of Commerce

ICAP Institute of Directors Institute of Travel & Meetings International Export Supplies Ltd

JAB Business Services Jaguar Land Rover James Aviation JP Morgan Cazenove

Kia Motors UK Kier Infrastructure & Overseas Ltd KKR

L.E.K Consulting Leeds, York & North Yorkshire Chamber of Commerce LeighFisher Liverpool FC Lloyds Bank

London Chambers of Commerce London Stock Exchange Group

M2 Macfarlanes Management Consultancies Association Manchester Central Convention Complex Manchester City Council Manchester Science Parks Manchester Vending Services MAPP IT & Business Management Recruitment Specialists Marketing Kinetics Marsh Middle East Association MWH

Nathaniel & Partners National Private Hire Association National Taxi Association Newport Business Association Chamber of Commerce NSG Group Nuance

p3 property consultants Pannone LLP PAPR Pascall+Watson Architects Petroplastics and Chemicals Ltd Planit-ie Ltd Polymorph

RDC Aviation Renault UK Rexam Road Haulage Association Robertson Group Rolls-Royce Russo-British Chamber of Commerce

Salans Scottish Chambers of Commerce Scottish Council for Development and Industry Simpson Thacher & Bartlett SNR Denton UK STA Travel Stansted Airport Chamber of Commerce Stork & May

Suffolk Chamber of Commerce Swordpoint Advisors Ltd

T2 Impact T2 Impact Ltd The Caribbean Council The Licensed Private Hire Car Association The Meetings Industry Association The Monarch Travel Group The Original Factory Shop TheCityUK Tie Rack TIGA Timeshare Association (TATOC) Tourism Alliance Tower Hill Merchants Transport for Greater Manchester TUI Education TUI Travel

UK Inbound United Utilities University of Glamorgan University of Salford Urban Futures

Virgin Money

Warren Partners Whitbread WHR Property Consultants World Duty Free WPP Group

ANNEX B ANNEX C

Exports by Tourist Region13 Inward investment Tourist industries Region/Count 2010 industries & inward ry 14 Foreign Owned investmen Total By Air Local Units15 t Employme Employme Employme £m £m % Units nt nt nt

East Midlands 15,210 4,759 31 195,600 5,625 249,565 445,165 East of England 22,732 6,299 28 241,300 8,215 301,305 542,605 London 28,446 7,287 26 518,800 19,140 737,077 1,255,877 North East 11,924 3,559 30 105,300 3,190 143,179 248,479 North West 24,659 7,262 29 323,900 9,910 375,866 699,766 12,19 South East 41,956 8 29 408,300 15,260 583,502 991,802 South West 11,100 3,530 32 287,100 7,535 256,507 543,607 West Midlands 17,450 5,410 31 226,400 7,695 314,345 540,745 Yorkshire and 14,039 3,294 23 229,400 6,960 255,706 485,106 The Humber 187,51 53,59 Total England 29 2,536,100 83,530 3,217,052 5,753,152 6 8

Scotland 14,658 2,932 20 273,100 7,770 270,509 543,609 Wales 11,800 2,775 24 128,900 3,250 139,438 268,338

213,97 59,30 TOTAL 28 2,938,100 94,550 3,626,999 6,565,099 4 5

13 Oxford Economics, 2010 14 Business Register and Employment Survey, ONS, 2009 15 ONS, Count and Employment of VAT and/or PAYE based Foreign Owned Local Units by Region and Country of the UK by employment size band for 2010 Written evidence from Vanderlande Industries UK Ltd (AS 34)

Introduction This submission is made on behalf of Vanderlande Industries UK Ltd, part of Vanderlande Industries, the Dutch automated material handling systems provider that ranks among the top five worldwide in the materials handing field and is the largest supplier and operator of baggage handling systems in the world.

1. Vanderlande Industries UK The main activity for Vanderlande Industries UK is the development, design, installation and maintenance of innovative baggage handling solutions for airports of all sizes. As a result, the company helps to create and sustain a secure baggage handling process with the highest passenger satisfaction and the lowest total cost of ownership.

Vanderlande Industries UK contends that: • environmentally friendly, cost effective and state-of-the-art baggage handling systems are a major cornerstone in developing an integrated and sustainable UK aviation policy; • any sustainable UK aviation policy must entail capital investment in the infrastructure around regional UK airports; • rigorous R&D around baggage handling systems plays a crucial role in developing existing and new handing techniques that are energy efficient, cost effective and environmentally friendly; and are capable of reducing the energy consumption of the by up to 50 per cent, or up to 10 per cent of an airport’s overall energy consumption.1 • State–of-the-art baggage systems can make a significant contribution to balancing resilience and capacity within current areas of terminal real estate, and can help airports deal more efficiently with increasing volume of passengers while also reducing check-in queuing, improving the passenger experience and energy consumption.

2. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How can this be improved?

2.1 Vanderlande’s views By careful terminal design an up-to-date check-in and baggage handling system can be used to increase capacity in the UK’s existing infrastructure in an environmentally friendly way, and to improve an airport’s overall profitability. Regional airports can and do absorb the pressure not only on the constrained major airports, but also on rail and road links by being part of an integrated air transport system. Efficient regional airports with efficient check- in and baggage handling systems encourage people to fly from their nearest regional airport rather than travel to major airports. This has positive environmental and energy reduction implications.

2.2 Supporting background information a. Vanderlande Industries UK aims to help airports minimise waiting times at check- in and reduce cost by using innovative baggage handling technology, thus avoiding the need for additional space to cope with growth. It provides airports with a consultative sales approach that includes advice on how they can do more with less, with an eye for increasing airport revenue. b. Vanderlande Industries helps airports increase profitability by helping to provide the means to handle additional passenger numbers, while maintaining energy efficiency. Vanderlande Industries systems are fast and efficient, allowing passengers to move to airside facilities quicker, giving them more time to use air- side retail outlets. Self-tagging automated check-in kiosks and automated early bag storage facilities provide this efficiency. c. Vanderlande Industries UK is making a significant contribution to balancing resilience and capacity within current areas of real estate. Vanderlande Industries UK’s state of the art technology such as BAGLOAD, integrated robotic baggage loading helps airports deal with an increasing volume of traffic and minimises delays for flight make-up. This not only improves the passenger experience, but also reduces handling costs for airlines as well as adapting the process and environment to a higher degree of automation. The BAGLOAD system together with Vanderlande Industries UK systems integration, work together to provide airports, airlines and ground handlers with the optimum level of automation. It saves costs through efficient employee assignment, integrated baggage reconciliation, less health related costs and efficient use of space. It also improves employee working conditions; improves process quality by reduction of errors and improves bag security. d. Vanderlande Industries UK’s work with regional airports is aimed at making these airports as efficient as possible without having to expand. Increased efficiency encourages local passengers to use their regional airports, thereby making the airports more profitable. Vanderlande is developing and improving a number of baggage handling systems that can be tailored to the size and capacity of the airport. e. Vanderlande’s BAXPACE concept is especially interesting for regional or smaller airports that are looking to automate their baggage handling process. BAXPACE is a compact and cost-efficient solution integrating all baggage handling tasks including check-in, early bag store, screening, manual coding and flight make-up within existing terminal baggage halls. Baxpace can help an airport realise a reduction of up to 30% in labour costs and up to 40% savings on energy consumption. f. BAXORTER from Vanderlande is a cost effective mid-range baggage sorting system that meets a wide range of airport demands. The BAXORTER has a capacity of 2,500 bags per hour and high flexibility in number of outputs to flights or destinations. This makes it ideal for many smaller to medium-size airports, where it meets demands for cost effective solutions for a wide range of environments; flexibility in system layout and configuration; and scalability for future needs.

3. How do we make the best use of existing London airport capacity? What more could be done to improve passenger experience and airport resilience?

3.1 Vanderlande’s views Efficient air transport connections – both international and domestic - are important for the fast movement of goods and people and, therefore, make an important contribution to the competitiveness of the UK economy. An integrated air transport system reduces carbon footprints (less reliance on cars), saves energy (more efficient means of transportation) and is cost effective. However an integrated air transport system will only begin to meet its environmental, energy reduction and cost effective targets if its airports have an efficient and up to date automated baggage handling and check-in system. The two most important aspects of the passenger experience are speedy movement through border control and deposit/collection of baggage.

4. Do we need a step-change in UK aviation capacity? Why? What are the costs and benefits of these different ways to increase UK aviation capacity? How should improving the passenger experience be reflected in the Government’s aviation strategy?

4.1 Vanderlande’s views To date UK aviation policy has largely ignored the contribution state of the art baggage handling systems can make to the passenger experience, environmental, energy efficient and profitability of UK airports. Vanderlande believes that this is a mistake and any sustainable UK aviation policy should take into account the central role that modern baggage handling systems play in fulfilling such a policy’s aims. In particular, up to date baggage handling systems improve the passenger experience as a result of less queuing at check-in, a swifter move airside, the speedier movement of bags to a secure area, less disruption of flight schedules and a reduction of congestion in terminals. Furthermore, any sustainable UK aviation policy must entail capital investment in the infrastructure around regional UK airports

4.2 Supporting background information a. Vanderlande Industries UK makes an important contribution to the local economy at the airports where it has installations, by enabling airports to operate more profitably, efficiently and in an environmentally friendly manner. In particular, it has made a substantial contribution to the creation of permanent jobs by helping airports increase capacity and providing a better passenger experience. b. At its UK offices in Harlington, Hayes, Vanderlande Industries UK employs 64 staff and at Heathrow Airport, employs 185 staff. c. A ComRes Omnibus Poll commissioned in April showed that 76% of respondents thought that state of the art baggage handling systems free up terminal space and lead to improved passenger experience in airports while only 7% disagreed.2 d. In the same ComRes Omnibus poll 80% of respondents thought that any sustainable aviation policy must include investment in UK airport buildings in order to provide better facilities such as more terminal space and better baggage handling systems while only 6% disagreed.2 18 October 2012

References 1. From a power consumption study carried out by Vanderlande Industries at a UK Regional Airport in 2011 2. ComRes Omnibus Poll – Baggage Handling Systems and a Sustainable Framework for UK Aviation, April 2012

Written evidence from Zac Goldsmith MP (AS 35)

Summary

• A third runway at Heathrow would be a noise and air quality disaster and would lead to a serious reduction in the quality of life for hundreds of thousands of London residents. • If there is a need for a four-runway ‘hub’, as most airport expansion advocates maintain, that is unlikely to be delivered at Heathrow. Indeed even the proposed third runway would be less than full length. The third runway therefore represents a dead-end investment. • The UK is currently one of the best-connected countries in the world and London remains the top city in Europe to do business. • We should focus on making better use of London's existing airport capacity through more efficient airport slot allocation and improving the transport links to London’s other airports (such as a Crossrail extension to Stansted) so that Heathrow could shed some of its short-haul and ‘point-to-point’ traffic to concentrate on long haul services to the emerging markets. • There is something approaching consensus that the independent commission on aviation chaired by Sir Howard Davies should bring forward its timetable so that the Government can make clear its position on Heathrow for the next Parliament ahead of the 2014 London local elections.

Maintaining the UK's international aviation connectivity

1. It is a myth that the UK is falling behind in its international aviation connectivity. According to the Department for Transport: “The UK is currently one of the best connected countries in the world. We are directly connected to over 360 international destinations”i. In 2011 there were more scheduled flights from Heathrow to both India (over 5,500 scheduled flights) and China (over 4,500 scheduled flights when Hong Kong is included) than any of its continental rivals. There were also over 1,000 scheduled flights from Heathrow to Brazil. New direct routes are opening up from London to the emerging economies including Heathrow to Guangzhou (China Southern Airways, June 2012) and Gatwick to Beijing (Air China, May 2012).

2. A recent report published by AirportWatch finds that Heathrow is in a class of its own as far as connectivity with more flights to business destinations than any other airport in Europe, in fact more than the combined total of Charles de Gaulle and Frankfurt. The Heathrow pro-expansion lobby try to argue that Paris and Frankfurt enjoy 1,000 more flights per year to the three largest cities in China than Heathrow does, but if you look at Heathrow’s connectivity to China’s cities ranked by GDP rather than population alone, Heathrow is well placed. For instance, Heathrow has 1,938 more annual flights to Shanghai, Hong Kong and Beijing than Frankfurt and 1,426 more than Paris Charles de Gaulle. Furthermore, whilst Heathrow offers non-stop service to 82 long haul destinations, compared with 77 from Paris and 75 from Frankfurt, its lead in the numbers of seats is extremely large: 25 million, compared with 14 and 13 million for Paris and Frankfurtii. Heathrow remains the EU’s busiest passenger airport with 66 million passengers handled a yeariii.

3. According to the World Economic Forum Global Competitiveness Report 2011/2012, using available kilometres as a connectivity metric, only China’s and the USA’s aviation networks are more extensive than the UK. Germany and France are in fifth and eighth place respectively.iv According to an assessment of the current aviation connectivity of London by the Civil Aviation Authority (CAA), the five main London airports serve more routes than any other European cityv

4. In addition, London remains the top city in Europe to do business and for business as a whole, other factors such as the strength of the business environment are of greater importance than the size of Heathrow. The World Bank ranks the UK as the market leader for ease of doing business amongst the major European economies. The , through its fDi Intelligence Report 2012, ranks the UK as the primary FDI location in Europe. UNCTAD reported 7 per cent growth in the UK’s FDI inflows to reach US$53.9 billion in 2011. It also confirmed the UK as the largest recipient of FDI stock in Europe, and second in the world behind the US, ahead of Hong Kong and France. The level of FDI stock in the UK rose 3 per cent to reach US$1,198 billionvi.

5. According to UKTI, Foreign Direct Investment in the UK manufacturing sector increased in 2011/2012 by 22 per cent from 2010/11 with existing investors showing their confidence in UK manufacturing with substantial investments from Tata, Nissan, Toyota, Honda, Sahaviriya Steel Industries and Nestlé in 2011/12. China was the third-largest investor in the UK, up from seventh the year before, with investment increasing by over 55 per cent. Examples include the establishment of Agricultural Bank of China’s UK subsidiary, the first step in its global programme, and Huaweivii.

6. It is important to note that all these foreign companies invested after the Government had cancelled the BAA application for a third runway and a sixth terminal at Heathrow and made clear its opposition to further expansion. These recent investments reinforce the underlying message that the strength of the business environment is of greater importance than the size of Heathrow, and that London remains the “best city in terms of external transport links”. These were the words of the annual and influential survey carried out by global property consultants Cushman & Wakefield, The European Cities Monitor. London topped the league table “by some distance from its closest competitors – as the leading city in which to do business” for the 22nd year out of 22viii.

How should we make the best use of existing aviation capacity?

7. I recognise that Heathrow is the UK's busiest and most capacity constrained airport, and the importance of securing both Heathrow's hub status and increasing its links to the emerging markets in Asia and South America, but new runways or a new airport are not the answer. We should focus on making better use of London's existing airport capacity and existing runways. After all, if the logic of the pro-expansion argument is followed to its natural conclusion not only should a third runway be added but also a fourth. The solution is a better not bigger Heathrow. This could involve a number of steps:

8. Planes aren’t full. In 2011, the average seat occupancy rate on flights at Heathrow was estimated to be 73% on both departing and arriving flightsix. More occupied planes mean more people can fly without any rise in the number of flights. Given concerns

over the legality and feasibility of introducing a per-plane Air Passenger Duty (APD), I would urge the Committee to consider the alternative proposal for introducing a tax on slots for arriving and departing aircraft.

9. In addition, Heathrow could shift some of its short-haul traffic to concentrate on long- haul services. A large number of runway slots at Heathrow could be usefully allocated to longer-haul business flights — the category deemed most beneficial to the UK economy. According to Department of Transport’s figures, of the estimated 35 million passengers arriving at Heathrow in 2011, almost a third (11 million) were terminating passengers coming off short-haul flights: Heathrow Airportx

The estimated number of terminating and transfer passengers arriving from short and long haul routes at Heathrow in 2011 is given in the following table.

Estimated number of arriving passengers million Terminating Transfer Short-haul (including domestic) 11 5 Long-haul 12 6 Total 23 12

10. While many short haul flights are important to Heathrow’s hub status, and would be less suited to shifting elsewhere, many are simply clogging up the slots that could be better used by intercontinental flights from the emerging markets. The recent Policy Exchange report on aviation stated that “there are many airlines with very few connecting passengers who continue to use Heathrow. The CAA state that the Skyteam has just 400,000 connecting passengers a year. With around 300 departures per week from Heathrow this implies about a dozen connecting passengers per flight. Given that some will have more connecting passengers, and some fewer, it must be the case that some have very few connecting passengers at all.”xi Furthermore, given that 66% of passengers arriving at Heathrow are terminating passengers, nearly double the number of transfer passengers, it suggests that they could easily use another London airport.

11. To relieve pressure on Heathrow, and boost its hub status, a priority must be to shift point-to-point tourist flights to non-business places (like Cyprus and Greece which between them take up nearly 2 per cent of slots).These less economically important routes could be shifted to another airport to free up slots for new, predominantly long- haul routes to more economically important countries.

12. London is served by six airports and seven runways; compared to Paris by three airports and eight runways, Amsterdam by one airport and five runways; Frankfurt by two airports and five runways; and Madrid by one airport and four runways. Collectively there is spare capacity. Stansted is only operating at 50% capacity and actively seeking

to add more airlines flying to more destinations. Stansted has spare capacity now – enough to handle double the number of passengers it does today and any aircraft from anywhere in the world.

13. Airlines could relocate their operations from Heathrow to Stansted without the need for runway expansion. It has the space, infrastructure and planning permissions in place to serve 35 million passengers a year on the existing single runway - passenger numbers are currently just under 18 million. It is worth noting that the conditions that were agreed as part of the planning process provide a robust and comprehensive package of noise and environmental controls for the benefit of the local community.

14. To enable full use of Stansted, the Government should press ahead with major rail improvement schemes to Stansted. It should also consider improvements to links from central London to Luton and Gatwick, and regional airports near London such Birmingham, and London .

15. The Government says that the UK Government and Civil Aviation Authority have no role in airport slot allocation processes as EU regulation governs the allocation, transfer and exchange of slots at Heathrow, Gatwick, Stansted and London City airports; and Airport Co-ordination Ltd, as the UK's independent slot co-ordinator, manages slot allocation at these airports. However, Section 31 of the Airports Act 1986 provides the Secretary of State for Transport with powers to introduce air traffic distribution rules (TDRs) relating to airports on the UK, provided that they comply with EU lawxii. If we are to see better coordination between airports, and better use of existing capacity, the Government will need to adopt a proactive role in slot allocation.

16. The European Commission published its "Better Airports Package" on 30 November 2011, which includes a range of legislative proposals, including proposals to amend the EU Slot Regulation, which are intended to help boost capacity, reduce delays and promote quality at Europe's airports. The Department for Transport has already stated that it is “working with the EU, in the context of the Commission’s proposals on reform of the rules on landing slots to secure measures to support UK regional connectivity, such as protecting the provision of air services between Northern Ireland and Heathrow”. I believe that the Government should similarly take steps to explore options, within the EU legislative framework, to regulate the distribution of air traffic and allocation of slots between the airports to secure measures that both increase Heathrow’s international aviation connectivity and ensure that slots at Heathrow are used in the way most economically beneficial to the UK. Airlines that are likely to be attracted by the freed capacity would include the various Asian airlines that would be able to acquire a relevant number of slots for the first time and thereby increasing the range of destinations served from Heathrow. I urge the Committee to explore this policy avenue.

How can surface access to airports be improved?

17. The Government says that it recognises the importance of good surface access transport links to airports and the crucial role the public sector must play in their delivery.

Customers prefer Heathrow to either Gatwick or Stansted because it is easy and cheap to get to. If surface access transport links to airports were improved, that will allow airlines currently operating at Heathrow to consider moving to another airport. As stated above, Stansted is massively underused, currently by about 50 per cent, and with proper rail links to the City, it would be the natural place for point-to-point flights that do not require transfer passengers to be viable.

18. Steve Norris has argued for a Crossrail extension to Stansted: The Crossrail links east and west London via a tunnel under the heart of London. It joins the City and Canary Wharf to Heathrow and transforms Farringdon and Smithfield. From east of Stratford a 10- kilomietre rail tunnel spur emerging at Fairlop Water and following the line of the M11 could link Stansted directly to Central London. There is the capacity for six trains an hour, more than the Heathrow or Gatwick expresses. Journey times to Court Road or would be around 40 minutesxiii. A Crossrail extension to Stansted now has the support of the Mayor of London Boris of Johnson: “You could be [up there] just as fast, if not faster, than at Heathrowxiv.

Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

19. The current 480,000 air transport movement cap was set as a condition of the Terminal 5 planning consent in 2001. A third runway would require an increase in the number of air transport movements allowed at Heathrow. To change or remove the cap would require a planning applicationxv. The Labour government constrained capacity at Heathrow with a third runway until at least 2020 to 605,000 ATMs - and full capacity would have been 702,000 ATMs. 605,000 ATMs equates to 125,000 additional movements compared to the current cap of 480,000 ATMs at Heathrow; 702,000 ATMs equates to 222,000 additional movements.

Noise

20. The Government consultation on its draft aviation strategy stated that “The Government’s opposition to the building of a third runway at Heathrow was, and continues to be, determined in large part by a concern about the scale of the noise impacts at the airport”xvi. More than a quarter of all people in Europe who are affected by aircraft noise pollution are under the Heathrow flight path. Estimates for the number of people affected vary from 700,000 to as high as 2 million, depending on the study and the level of noise taken as sufficient to cause a nuisance. A third runway at Heathrow would only increase the scale of the noise impact.

21. Furthermore, as the Environment Committee of the highlighted in its report ‘Plane Speaking: Air and noise pollution around a growing Heathrow Airport, March 2012’, of particular concern is the significant contribution to poor air quality made by people using private cars and taxis to get to and from the airport. At the moment almost two-thirds of the 66 million passengers using Heathrow every year travel by car. Once the current redevelopment and construction projects at the five terminals are completed, from around 2014 onwards Heathrow will have the capacity to

handle up to 95 million passengers a year. This will clearly have implications for local residents and communities, facing the probable prospect of increased road traffic, even poorer air quality and more noisexvii.

22. A third runway with the accompaniment increase in the number of air transport movements would only serve to compound this impending impact further with the ensuing increased road traffic, poorer air quality and more noise - and a serious reduction in the quality of life for hundreds of thousands of people. The aviation industry has not explained how London is supposed to deal with the estimated 25 million extra road passenger journeys each year to and from Heathrow. It seems likely that such an increase would cause gridlock, with dire consequences for London’s economy.

Air Quality

23. Aviation contributes to nitrogen dioxide pollution near airports through aircraft engine emissions, airport operations and road transport to and from airportsxviii. EU air quality limits for nitrogen dioxide (NO2) are not met at Heathrow and the surrounding area. A third runway would lead to 702,000 flights using Heathrow a year, a 46% increase on today, and, as the Government has said, would result in an unacceptable level of environmental damage to the quality of life of local communities. It's self-evident that the lives of two million Londoners would be significantly affected by aircraft noise if Heathrow expansion goes ahead.

24. London already has the worst air quality of any European capital. There were a near- identical number of deaths reportedly from air pollution in London in 2008 as the 4,000 people who died as a result of the Great Smog of London in 1952. Heathrow expansion would undoubtedly make the situation much worse. Given that legal air quality limits are already breached at Heathrow and the surrounding area, the event of a third runway would make compliance impossible.

25. Paragraph 22 of the Environmental Audit Committee’s report on Air Quality statedxix:

Defra’s consultation for an extension to meet EU NO2 limit values states that Greater London compliance is not expected to be achieved before 2025.xx EU air quality limits for NO2 are not met at Heathrow and the surrounding area. DfT recognises that aircraft engine emissions, airport operations and road transport to and from airports contributes to NO2 pollution near airports.xxi In the event of a third runway being developed at Heathrow, compliance with NO2 limits would be impossible. The Government has made clear their opposition to a third runway at Heathrow and BAA announced in May 2010 that it had stopped work on a planning application for such a proposal. However, for the Government to make the case that compliance with EU air quality limits throughout Greater London will be maintained beyond 2015, their application for an extension to meet EU limit values, the forthcoming Sustainable Framework for UK Aviation and the forthcoming Aviation National Policy Statement must contain an explicit prohibition of a third runway at Heathrow.

26. The Government’s response to the EAC’s report cited the commitment made in the National Infrastructure Plan (NIP), published on 29 November 2011, that the draft aviation policy framework would “explore all the options for maintaining the UK's aviation hub status, with the exception of a third runway at Heathrow: “The Government has therefore made absolutely clear its opposition to a third runway at Heathrow”. However, the fact that the Government has asked the independent commission on aviation chaired by Sir Howard Davies to conclude just a few weeks after the election shows that the Government has no opposition to a third runway at Heathrow proceeding in the next Parliament. Transport Secretary Patrick McLoughlin confirmed this when he said that ‘all options are on the table' in his first major interview in postxxii.

27. The UK has already requested a five year extension to the 2010 compliance deadline for 24 of out of the UK’s 43 air quality zones last year. However, the commission has rejected the request for 12 of the zones on the grounds that the UK had not demonstrated that compliance with limit values could be achieved by 1 January 2015 or earlier (EC Commission decision 25 June 2012). The Government has to demonstrate compliance with the limit values in London by accepting the EAC recommendation and set out an explicit prohibition of a third runway at Heathrow. I urge the Committee to reject the ‘all options are on the table’ approach and recommend that the Government accepts the recommendation of the EAC.

Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

28. The Government has not made a decision on accepting the recommendations of the Committee on Climate Change in its report, Meeting the UK aviation target-options for reducing emissions to 2050, December 2009. And, the Government has made no assessment of the compatibility of a third runway at Heathrow with the Committee’s recommendationsxxiii.

29. I urge the Committee to press the Government to make a decision and accept the recommendations of the Committee on Climate Change and undertake an assessment of the compatibility of a third runway at Heathrow with the Committee‘s recommendations.

Do we need a step-change in UK aviation capacity? Why?

30. Relying on capacity at different locations will cater for point-to-point demand and relieve pressure on Heathrow, allowing it to maintain and improve its hub status. This, coupled with improved transport links to Stansted, will create a dual hub, with high value eastern-facing business journeys making use of Stansted, and western facing flights making use of Heathrow. Other suggestions for improving connectivity include proposals for a 15-minute airside high-speed rail link between Gatwick and Heathrow to create in effect one London hub airport over two sites with three runways, with one airport as a terminal of the other, but given its position, extra capacity and the potential to link it to the City by extending Crossrail, Stansted seems to offer the best solution.

More point-to-point routes meanwhile could be handled from Gatwick and other airports.

18 October 2012

iDepartment for Transport. Draft Aviation Policy Framework. July 2012. http://assets.dft.gov.uk/consultations/dft‐2012‐35/draft‐aviation‐policy‐framework.pdf iiFrontier Economics. Connecting for growth. September 2011. http://www.frontier‐economics.com/_library/publications/Connecting%20for%20growth.pdf Table 5. iiiEurostat. Air passenger transport in the EU27 in 2010. 14 May 2012. http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/12/72&format=HTML&aged=0&language=E N&guiLanguage=fr iv Department For Transport. Draft Aviation Policy Framework. July 2012. http://assets.dft.gov.uk/consultations/dft‐2012‐35/draft‐aviation‐policy‐framework.pdf v CAA. Aviation policy for the consumer. vi World Investment Report 2012, UNCTAD. vii UKTI. Inward Investment Report 2011/2012. 26 July 2012. viii Cushman & Wakefield. The European Cities Monitor. 2011. ixHansard. Heathrow Airport. 2 July 2012: Column 441W http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120702/text/120702w0002.htm#120702 47001246 xHansard. High Speed 2. 3 October 2011: Column 1387W http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm111003/text/111003w0001.htm#111003 3001277http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120903/text/120903w0007.htm #12090412001445 xi Policy Exchange. Bigger and Quieter – The right answer for aviation. 5 October 2012. http://www.policyexchange.org.uk/images/publications/bigger%20and%20quieter.pdf xiiHansard. Air Traffic. 9 July 2012: Column 67W http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120709/text/120709w0003.htm#120710 4000650 xiii Steve Norris in The Times. Expanding Stansted is the least worst option. 13 September 2012. xiv Daily Telegraph. backs new runway at Stansted. 18 June 2012. http://www.telegraph.co.uk/news/aviation/9339749/Boris‐Johnson‐backs‐new‐runway‐at‐Stansted.html xvHansard. Heathrow Airport. 3 October 2011: Column 1387W http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm111003/text/111003w0001.htm#111003 3001277 xvi Department For Transport. Draft Aviation Policy Framework. July 2012. http://assets.dft.gov.uk/consultations/dft‐2012‐35/draft‐aviation‐policy‐framework.pdf xviiLondon Assembly. Plane Speaking. March 2012 http://www.london.gov.uk/sites/default/files/Heathrow%20airport%20‐%20Final%20version_0.pdf xviii Hansard, Heathrow Airport Pollution, 23 May 2011: Column 373W http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110523/text/110523w0001.htm#110523 29000177 xix Environmental Audit Committee Air quality: A follow up report. Ninth Report of Session 2010–12. 14 November 2011. xx Defra, Air Quality Plans for the achievement of EU air quality limit values for nitrogen dioxide (NO2) in the UK, 2011 xxi DfT, Developing a sustainable framework for UK aviation, 2011 xxii Evening Standard. 'I wasn't made Transport Secretary to push through third runway at Heathrow...all options are on the table' 27 September 2012. http://www.standard.co.uk/news/politics/i‐wasnt‐made‐transport‐secretary‐to‐push‐ through‐third‐runway‐at‐heathrowall‐options‐are‐on‐the‐table‐8181588.html xxiiiHansard. London Airports. 16 April 2012: Column 55W http://www.publications.parliament.uk/pa/cm201212/cmhansrd/cm120416/text/120416w0003.htm#120416 26000294

Written evidence from Assurity Consulting (AS 36)

1. Assurity Consulting is an independent workplace compliance consultancy specialising in health, safety and environmental solutions. We provide services to large corporate companies, property management companies, charities, independent schools, universities and colleges, both nationally and internationally. We employ 70 people at our offices in Horsham, , which is within the Gatwick Diamond business area.

2. As a company that uses all forms of transport to travel to our customer’s sites we need sufficient aviation capacity along with a fair tax regime to ensure we remain competitive both nationally and internationally. Many of our corporate customers are moving to single suppliers to support them across Europe, Middle East and Africa. To ensure we are able to compete for this work we need to be able to demonstrate an efficient and cost effective service. With the uncertainty over UK aviation strategy and the cost of Air Passenger Duty, this is becoming increasingly difficult to achieve.

3. As an example of the additional cost we have to recover when quoting for work, which involves air travel, our company paid £3,300 in Air Passenger Duties on 214 flights during the last year (October 2011 – September 2012). This equates to 11% of the total cost of the flights. This means we have to add 11% of the flight cost to all our quotes to recover the cost of this Duty. This makes us less competitive when quoting for work, which involves air travel. Alternatively, we can absorb this cost, which means we have less profit to re-invest in our company. Therefore, we would like to see Air Passenger Duty reduced or better still scrapped.

4. As we are based in West Sussex our local airport is London Gatwick. We prefer to use this airport for air travel as it allows us to reduce our travel time, cost and carbon emissions. At the current time, it only has one runway, which reduces the number of flights that can take off and land at times convenient for business travelers, i.e. early morning and early evening. Therefore we would like serious consideration to be given to installing a second runway at London Gatwick Airport, so it can better service the needs of companies based in the Gatwick Diamond business area.

5. Finally, the surface access to London Gatwick Airport relies on a ‘free-flowing’ M23. When this road is blocked or restricted by road works, severe congestion quickly occurs, which can result in our employees missing their flights. An alternative route to London Gatwick Airport should be considered, which is of an equal standard or better to the existing motorway. This will help ease congestion and will also allow for the growth in traffic that will occur if a second runway is installed.

I hope these items will be included in the Transport Committee’s inquiry into aviation capacity in the UK and the Governments aviation strategy.

18 October 2012

Written evidence from Marilyn Fletcher B.Sc.Ph.D. (AS 37)

2c) HS2’s Access to Britain’s Hub Airport

1. The Secretary of State appears to have concerns over how HS2 is connected to Heathrow. On 29 September 2012 the Telegraph newspaper reported Mr McLoughlin saying that HS2 may have to be “adapted” depending on what Sir Howard Davies, the economist leading the Government’s airport commission, recommends about Heathrow.

2. Sir Howard’s full report is due in 2015.1 According to the newspaper, aides acting for the Secretary of State made it clear that the route could be redirected towards Heathrow if Sir Howard recommends expanding the airport.2

3. How has HS2 been allowed to get so far without any decision on Britain’s hub airport?

How has the Government allowed itself to commit £750 million of public money in this Parliament on laying down a route for HS2 before it decides on the location for the hub airport?

19 October 2012

1 “Aviation” delivered by the Secretary of State 7 September 2012 http://www.dft.gov.uk/news/statements/mcloughlin‐20120907a/

2 Sunday Telegraph 29 September http://www.telegraph.co.uk/news/uknews/9576183/HS2‐rail‐line‐could‐be‐ re‐routed‐to‐Heathrow.html Written evidence from Newcastle International Airport Ltd (AS 38)

1. What should be the objectives of Government policy on aviation?

The objectives of Government policy on aviation should be to:-

- place aviation at the centre of economic policy, with the aim of using it to help grow the economy and making the UK more competitive; - recognise the economic benefits of providing more airport capacity, and plan for this alongside other infrastructure requirements; - view aviation and high speed rail as being complementary to one another, ensure that they are properly integrated, and recognise that for regions further north aviation is a better option than even high speed rail for domestic and short haul journeys; - recognise that it is in the interests of the UK that it retains its important hub role, and plan for additional hub capacity to serve London and the rest of the UK. Heathrow Airport presents the most viable and deliverable option in the medium term, although other options should be considered; - ensure that as part of the planning permission for the above that some of the additional capacity is ring-fenced for regional air services; - create the conditions for regional airports to flourish, including the use of differential rates of Air Passenger Duty (APD) to stimulate new regional air services, thereby encouraging the use of under-utilised runways in the regions, and reduce the need for surface travel within the UK; - ensure the environmental costs of aviation are balanced with the economic benefits.

a. How important is international aviation connectivity to the UK aviation industry?

The UK economy, including regions like the North East, must compete within a global marketplace. Businesses require convenient access to key markets, headquarters, customers, offices, factories, conventions, etc. and will make their locational and investment decisions based on this. In our preparations for this Inquiry we asked businesses in the North East for their views, and we have included (separate supporting document) in this response a number of case studies showing the extent to which they reliant upon aviation.

Of particular note are the comments from the following.

“Without Newcastle Airport, the Company would need to take some serious decisions regarding its operations in the North East” - Arriva Plc

“Formica has its European HQ in the North East. The services that Newcastle Airport offers are an important part of what makes the region a viable location for the company HQ” - Formica

b. What are the benefits of aviation to the UK economy?

Aviation and airports are critical in supporting economic activity, in keeping people and businesses moving, and in linking places that are trading as part of a globalised economy. Aviation accounts for 3.6% of the UK economy, creates wealth of about £50bn and sustains 921,000 jobs. Newcastle Airport delivers multiple benefits to the North East economy, including connectivity, jobs, GVA, inbound tourism, journey time savings, exports and revenues to the exchequer. In 2012, we commissioned York Aviation to assess the economic impact of Newcastle Airport, and their key findings were as follows:-

- The Airport supports 7,800 jobs, including 3,200 on site, a further 500 off site through direct effects, and a further 4,100 across the North East through indirect and induced effects;

- A total of £402.5m in Gross Value Added is generated annually; - The Airport supports £57m per year via tourism impacts, and 1,750 tourism jobs;

- The journey time benefits generated as a result of services provided by the Airport will bring net economic benefits to the region of £243.3m in 2012. Journey time benefits are derived from shorter journey times for passengers and businesses, and the producer benefits triggered by these;

- The value of exports shipped via the Airport is £173.6m per annum. Of this £150m is carried on the Emirates service, which highlights the transformational effect a single long haul scheduled service can have;

- APD paid by passengers flying from Newcastle in 2012 is expected to be £48.8m, compared to a total turnover for Newcastle International Airport Ltd of £52m. This highlights the scale of tax take compared to the overall size of our business. In 2013 APD take will outstrip turnover. Newcastle Airport is a public-private partnership between a private sector shareholder and 7 Local Authorities (Durham, Gateshead, Newcastle, Northumberland, North Tyneside, South Tyneside, and Sunderland.) In addition to providing the Local Authorities with dividends, we work very closely with them, the North Eastern LEP, and the North East Chamber of Commerce on a range of economic development, tourism and inward investment activities.

c. What is the impact of Air Passenger Duty on the aviation industry?

Air Passenger Duty has reached levels that are making the UK economy uncompetitive. We recognise that it raises important income for the Exchequer but believe that lowering APD would generate other taxation revenues. With this in mind we support the calls for a comprehensive review of the impact of APD on total tax take and the economy. We would also request that government is more joined up, i.e. that aviation and taxation policy and looked at alongside each other.

Regional Airports have long argued APD has a disproportionate impact on the regions. Regional airports and airlines have a lower percentage of business travellers or inbound tourists than the London airports and have been hit hard by the economic downturn.

International air connections are recognised as a key factor in determining where companies choose to locate and invest. The region is already relatively poorly connected when compared to other UK and European city regions. The loss of a number of critical air services would be a significant blow, setting the region back both in terms of private sector activity and the outlook and aspirations of its population. Large and international employers could have to review their presence in the region.

We believe the Government should provide economic incentives to encourage airlines to make better use of those regional airports where capacity is available. A ‘congestion charge’ on the busiest London airports, or a lower rate outside of London, could have a transformational impact in terms of protecting key routes and attracting new ones.

The Government has stated that it wants to explore how to create the right conditions for regional airports to flourish. We are strongly of the view that intervention in respect of APD is by far the biggest lever available, and that the Government should act now, before it is too late. The possible devolution of APD to Scotland raises huge issues for other regional airports, particularly those closer to the Scottish border. Devolving APD to the Scottish administration, given their keenness to reduce the rate of APD in order to give Scotland a competitive advantage, would have a damaging impact upon Newcastle Airport and the North East region.

A devolved approach, whereby passengers – who are essentially mobile between airports – could pay significantly less north of the border than they would pay south of the border, would in our view be certainly very unfair. It would lead to the loss of a significant number of direct and indirect jobs in the North East of England and make this region even less competitive.

In the event of devolved APD, and should the elect to reduce the rate or cancel the Duty altogether, we anticipate that both passengers and airlines would move from North English airports to airports north of the border, particularly Edinburgh and Glasgow.

We are aware that the Treasury and HMRC carry out detailed modelling of taxation scenarios, and that the Department for Transport carries out regular modelling and forecasting of passenger numbers at all airports. As a next step in this dialogue, we request that the government uses its modelling capabilities to assess the potential impact of differential APD rates between congested and non-congested airports and compares the outputs to alternative scenarios whereby APD is devolved. In a recent written answer, the Economic Secretary to the Treasury confirmed that this work had been done by HMRC, and that the results would be published in due course. d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

The customer experience is at the heart of our business, and we firmly believe that in order to compete with other airports and alternative modes of transport we must make Newcastle Airport the first choice of our customers. We have worked hard on processes, made investments of over £100m since 2000, and implemented cultural change and staff training.

Every single member of staff has been given training on the Big 6 and the positive impact of this has been noticed by our customers. This is clear evidence that the market and competition, not regulation, can drive improvements in the customer experience. e. Where does aviation fit in the overall transport strategy?

Aviation must sit within an overall transport strategy that aims to integrate various modes, such as rail, road and air, and ensure that they complement one another. Policy must move away from an assumption that rail is good and air is bad, and that high speed rail will replace domestic aviation. For regions further north, including the North East, the high speed rail journeys to London, to connecting flights at Heathrow, and to near continental destinations, will be too long compared to the equivalent air services.

The suggestion by the Government that demand for UK internal flights could be reduced by the introduction of high speed rail may well be correct, but such a displacement would not be in the best interests of the more peripheral regions, including the North East. There are a number of aspects to this concern, as set out below.

Almost 500,000 passengers fly between Newcastle and Heathrow each year. Of these, half are connecting and the remainder travel point to point. Some of those travelling point to point between the North East and London/South East may well be well served by a HSR alternative, but given that the rail market share between Newcastle and London is already 64%, one has to assume that those flying are doing so for a good reason, for example business trips to West London and the M4 corridor, which are very conveniently served via Heathrow.

Almost 250,000 passengers connect via Heathrow to a wide range of European and long haul services. HSR will not provide an acceptable alternative for these customers. Connecting air services allow passengers to clear security and check in baggage to their final destination, rather than carrying it on and off trains, with at least one rail to rail interchange, and at least two security screening processes. The projected journey time savings between conventional rail and HSR are highly questionable, with the HSR assumptions seemingly based upon unrealistic connection times and timetabling.

HSR will not adequately serve connections between the North East and other major cities in the UK. Abstraction from air to HSR of just a few passengers could nevertheless undermine the viability of services to centres such as Southampton, Bristol, Cardiff, and Exeter. Often business travellers need to make short trips to these places, sometimes in a day, and rail travel, even with HSR, would not permit this.

The assumption that short haul aviation could be reduced by further international high speed rail services from cities across the country using a direct link via the line to the Channel Tunnel is not practical. Those regions furthest north, including the North East, are the least likely to benefit from such provision. Journey times of 7, 8 or 9 hours to cities such as Paris, Brussels, Amsterdam and Frankfurt are far too long for business travelers. Furthermore, if we assume that people from the North East are no longer connecting by air via Heathrow, then there would be a greater reliance on connections via the near European hubs. Should these services be undermined by competition from international HSR, particularly in respect of leisure passengers, then the connectivity of regions like the North East will again be seriously threatened.

2. How should we make the best use of existing aviation capacity?

a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

We would support mixed mode operations at Heathrow in order to unlock extra capacity, and we would be supportive of additional capacity at other South East airports, but none of this would override the need for significant expansion of hub capacity.

b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

Newcastle is the largest airport in the North East of England and 11th largest in the UK, serving a catchment area that includes Tyne and Wear, Northumberland, County Durham, Teesside, as well as parts of Cumbria, North Yorkshire and Southern Scotland. The Airport is critical to the economy of the North East. The Airport supports 7800 jobs in the region, and contributes almost £402m to the regional economy every year. Our Airport accommodated 4.4 million passengers in 2011, but has terminal capacity to handle between 7 and 8 million, and a runway that could accommodate 20 million or more. There are relatively few environmental constraints to the future development of the Airport, a lower noise impact than most other airports, strong regional support and a balanced view from the local community about the benefits of having an airport. Newcastle has a reasonable network of air services across the UK and Europe, and in 2007 secured its first long haul scheduled service with Emirates’ daily flight to Dubai. The Emirates service has helped significantly increase the region’s connectivity and led to increased economic activity in the region with a positive impact upon employment. The service has had a significant impact upon the level of business activity, for example assisting an increase in trade between the North East and Australasia from under £150m in 2007 to just under £275m in the last 12 months, and trade with the UAE, Saudi Arabia, and other more easily accessed economies has grown strongly. The service has recently been enhanced through the introduction of a larger -300 aircraft. The Government should recognise the scale of the benefits that just one route can have, and build a policy framework which encourages the establishment of more game-changing services at regional airports. Our view is that the biggest single lever that is available is APD, and that other measures, such as planning, will have little effect. If EU State Aid rules were relaxed, then perhaps route development funding could assist.

c. How can surface access to airports be improved?

Surface access to airports, including both road and public transport, should be prioritised within funding allocations. Newcastle Airport benefits from both good trunk road and Metro access, but the A1 Gateshead Western Bypass is heavily congested at peak times. This will act as a brake on the regional economy unless a capacity enhancement is brought forward.

In the longer term, we believe there is the potential to improve rail access to Newcastle Airport. With this in mind we have assessed the feasibility of heavy rail track share with the existing Metro service and have secured the Benton Curve, which links the ECML with the Metro line to the Airport.

3. What constraints are there on increasing UK aviation capacity?

a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

We recognise that noise is an important issue, particularly at larger airports. At airports like Heathrow it important that the impact that noise has upon significant numbers of people in the SW London is balanced with the benefits that airport brings to millions of people and businesses across the UK.

The noise climate at Newcastle Airport causes fewer issues. For over 60,000 annual aircraft movements, we get around 100 noise complaints. It is essential that Noise Management Plans, an approach that we support, are tailored to local circumstances. At airports where there is local support, and where expansion would benefit the economy, measures such as night-time bans, quota counts or noise enveloped could be inappropriate and damaging. At Newcastle, a system of noise preferential routes, monitoring and other procedures help to keep the matter under control.

b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

It is clear that aviation emissions must be dealt with if the sector’s businesses are to grow. We believe that the best way to do this is through a global cap and trade deal. Its members have worked under the auspices of various groups to call for, and progress this.

Second best is to deal with emissions at European level. We supported the entry of the aviation sector into the European Emissions Trading (ETS) scheme because the scheme incorporates a real cap on emissions from European Member States, while at the same time providing flexibility for participant sectors to trade with each other; depending on how cost-effectively they can deliver cuts in carbon emissions. Having said that, we are now concerned that the combined impact of ETS and APD will have an unacceptable impact upon regional air services, particularly if APD rises further.

We do not support a unilateral UK aviation target. The UK has a significant unilateral aviation tax (APD) which serves to capture UK aviation’s external costs and we do not believe this should be supplemented with a further hard target. While the sector believes that it is entirely feasible that real UK aviation emissions can be returned to 2000 levels by 2050, the scenario presented in Sustainable Aviation’s 2008 Roadmap, we believe that the compound effect of EU ETS targets, manufacturer research commitments, fuel prices, tax, airspace constraints, the cycle of fleet airline renewal, and industry reputational management, provide sufficient motivation to achieve the road map’s aims. A key point is that improvements in negatives requires investment in new technology yet government is taking money away from airlines which could be used to invest in this new technology.

c. What is the relationship between the Government’s strategy and EU aviation policies?

It is important that any UK Aviation Strategy is not undermined by EU State Aid, airspace, security, a rapidly escalating ETS or other regulations.

4. Do we need a step-change in UK aviation capacity? Why?

Yes. The political parties need to stop treating aviation as a ‘political football’ and take brave decisions on major capacity projects. The UK will otherwise fall behind not only the European countries we are competing with, but also the emerging economies where dozens of runways are being built.

a. What should this step-change be? Should there be a new hub airport? Where?

We strongly support the retention and expansion of prominent hub airport on UK soil. We continue to support a third runway at Heathrow and a second runway at Gatwick, although other options should be considered. We remain unconvinced that a Thames Estuary airport would be deliverable or indeed affordable for regional air services. Some of the additional capacity provided should be ring-fenced via planning agreement from regional air services.

The development of an alternative hub and possible closure of Heathrow would have serious consequences. A massive amount of investment has been made in the facilities at Heathrow, including a huge new terminal still under construction. It is nonsensical to think that this could all be scrapped at a time when resources are so scarce. Moreover, businesses have located in west London because of Heathrow. Its demise could have a damaging impact on many companies, their employees and the wider economy.

Expanding Heathrow would support the continued role of London as a global business centre and would have a number of positive impacts on the UK economy. It would allow BA and Virgin to grow and increase employment within the UK. It would also ensure that the UK remains in control of its own destiny as there is no guarantee that UK airports will have access to European hubs as these hubs become congested. A strategy which is based upon UK regions being served solely through overseas hubs would mean that its future was based upon the decisions of other Governments or foreign businesses regarding capacity at airports over which we would have no influence.

A region like the North East will always be reliant upon a mix of hub and point to point connections. In addition to UK hub connections and other domestic services the key destinations for Newcastle are continental European hubs (Paris, Amsterdam, Brussels, and, in the future, Copenhagen and Frankfurt) together with Dubai (secured) and New York (target.) There will need to be more connections, both direct and via hubs, to the rapidly increasing number of airports in emerging economies, including China, India, Brazil, and SE Asia. We see hub connections at Dubai and New York as assisting significantly with this requirement in respect of the North East of England.

b. What are the costs and benefits of these different ways to increase UK aviation capacity?

There will be significant costs, particularly in terms of noise, but these must be balanced with the much larger benefits to the whole of the UK and its competitive position.

18 October 2012

CASE STUDIES

This document contains information supplied directly from each of the organisations listed

1. Depa Ltd 1.2 Depa Ltd. is an international company which specialises in the full-scope turnkey fit-out and furnishing of five-star luxury hotels, yachts, apartments, and other fine private and public facilities in Dubai and around the world.

1.2 The business has steadily grown and expanded throughout Europe, Africa, Asia, and the Middle East. Headquartered in Dubai, the company has an expansive network. All UK operations are run by a 15 strong team in from Middlesbrough, Teesside. The team consists of designers, logistics, and quantity surveyors.

1.3 Tight adherence to clients' needs is essential to the business. The CEO of the UK operational function uses Newcastle Airport three to four times a month to connect to the headquarters in Dubai and beyond. For Depa, business is growing in Europe and Russia, new and additional routes would help the business grow in the region. The airport’s connectivity is key to the organisation.

2. Durham County Cricket Club 2.1 Emirates Durham International Cricket Ground is a world class sporting and music venue which regularly attracts visitors from all over the world. The complex, which in addition to being, the home of Durham County Cricket Club, includes a Playing for Success Learning Centre which is located on the ground floor of the Media and Education Centre. Emirates Durham ICG also offers a meeting and events facility for local businesses. Durham FA, Riverside Physiotherapy, le Street Council Sports Pavilion, the Indoor School and Bannatyne’s Health and Fitness Club are also located at the Riverside.

2.2 The club uses the airport regularly for cricket tours and individual business travel.

The services at the airport have had a direct positive impact on the business due to the ease of arrival for overseas players and teams to be able to fly direct into the region.

2.3 The bids for Emirates Durham ICG to host major international matches has been boosted by Emirates presence at the airport and in the region, the route provides great travel access to the region for the overseas teams/visitors/supporters.

3. Ecco finishing supplies 3.1 Ecco Finishing Supplies Ltd is an SME based in Middlesbrough, Teesside. The company is a major supplier to a wide range of Motor Vehicles manufacturers across the globe. Their equipment can be found applying paint to a motor car, to the hull of a ship, mobile telephones, bathroom ceramics, and laptop computers.

3.2 From the Middlesbrough base, the company delivers products direct to customers. The products they supply are from world leaders in their field such as Ecco Finishing AB, Graco and Wagne Spraytech as well as their own manufactured blast units. Their workforce consists of engineers and a sales team.

3.3 The business uses the airport frequently to Dubai, Europe and North America. This connectivity is used to move products into the UAE very quickly, it’s had a very positive impact on the business.

4. Hart Door Systems 4.1 Hart Door Systems is a specialised engineering company which has pioneered the development of industrial door systems including its own exclusive ‘Speedor’ range which is operational in over 14 countries world-wide. The SME is based in Newcastle upon Tyne and employs around 30 people.

4.2 Exports have been slow over the past 12 months, but this is expected to up turn during next few months and into next year.

4.3 The organisation uses air travel as required depending on the needs of the business and which projects are being worked on. Travel is mostly to the Middle East and Africa.

4.4 Staff travel to support distributors in the UAE and the Middle East region, and clients and distributors in the UAE visit the region. The managing director and sales manager are travelling to Brazil in November. The contract manager to meetings in Cairo and needs to visit both UAE and Saudi before the end of year. The company’s fitting team travel to Cairo regularly. For a small business, the airport is used frequently.

4.5 The team use Emirates’ daily service to Dubai. It has had a very positive impact on the company and the North East business community as a whole. Being able to connect the export business to the Middle East region has proved vital to its growth and development.

4.6 When giving presentations in UAE to potential clients, the Dubai connection is a key selling point. It extremely important that customers have easy communication with the company from the UAE, Emirates and Newcastle International Airport provide this.

5. John Lilley & Gillie Ltd 5.1 The organisation are United Kingdom Hydrographic Office (UKHO) International Chart Agents, this means that they sell “ADMIRALTY” navigation charts and publications to our customers all over the world. Two of their largest fleet owning customers are both based in the UK, BP Shipping and OSG. However, the greater majority of the other chart customers are worldwide.

5.2 The equipment customers have historically been based in the Far East- Japan, Korea, and Taiwan. Now they have penetrated new markets in Singapore, China, India, Vietnam and the Middle East.

5.3 They were recently awarded a contract worth £137k to supply magnetic compass systems to an Indian Shipyard. Partially because they have been able to demonstrate to their client that they have the ability to have our Technicians and Engineering staff attend the shipyard to carry out installation and commissioning / operator service training there is a very real chance that they will be in a good position for any similar projects that come along.

5.4 Over the last 20 years the Sales force has been located in North Shields and they have used Newcastle International Airport for all their business air travel. However, within the last 3 years a Technical Salesman has been recruited who is based full time in Singapore. The Emirates service to Dubai from Newcastle Airport, with direct connection to Singapore, was a major factor in the decision to reinforce their position there. It is unquestionable that without his presence their business would not be as successful as it is.

5.5 The company would expect to make in excess of 40 trips from Newcastle Airport this year, mostly to Dubai, but then with connections onto Singapore, China, India etc. However, they have some of the other largest Chart customers based in Hong Kong, Turkey, Egypt, Vietnam, Mexico and Brazil. They will have departed from Newcastle then joined a flight elsewhere to visit their truly worldwide customer base.

5.6 In the main, the reasons for their business travel are threefold:

a. Firstly, regular meetings with existing clients and distributors for the purposes of account management, training, product familiarisation, etc. It is their experience that without building up a really close relationship with our distributor network they would lose business. It is also their experience that, particularly with Indian clients, that a personal relationship is vital to business success.

b. Secondly, specific visits tailored to meeting with new / prospective clients. Earlier this year a team of Technical Salesmen and IT Technicians were sent to Hong Kong to demonstrate the operation of their new ECDIS equipment and a Digital Data service to a prospective client in Hong Kong.

c. Thirdly, trade shows or exhibitions attendance. A case in point being that the Sales Manager has only just returned from an exhibition in India, and is about to fly out again to Singapore for another on Sunday 16th October.

5.7 Clearly the introduction of the Emirates service at Newcastle Airport has had a very direct and beneficial impact on this business. Through Dubai they feel they have a gateway to their world-wide customer base.

5.8 At present the business is in the early stages of establishing a Joint Venture in Dubai for the Charts distribution business. Quite clearly, without the Emirates Service from Newcastle Airport the business feels this would be a far less attractive proposition.

5.9 The following table demonstrates John Lilley & Gillie Limited’s employment & trading figures over the last 5 years.

YEAR ENDED TOTAL TUNOVER = DIRECT OVERSEAS NUMBER OF UK £’S SALES = £’S EMPLOYEES

To 30/09/2011 6584826 4609378 61

31/12/2010 7121063 4663620 53

31/12/2009 7063413 4944389 57

31/12/2008 7505696 5253987 56

31/12/2007 6267260 4387082 54 31/12/2006 6213770 4349639 51

31/12/2005 5694989 3986492 49

These show an improving trend, and they are expecting total turnover this year to exceed £7.8m.

6. Newcastle United Football Club "The excellent International air links provided by Newcastle International, such as the Emirates Service and its network, certainly helps the club's international activities. It’s also a service used and appreciated by the staff and players at the club for business and leisure purposes.”

Newcastle Falcons Rugby Club

“A number of southern hemisphere players have joined the club in recent years, and have regularly used the Dubai to Newcastle flight. Newcastle Falcons is a very ambitious club and the connectivity from Newcastle Airport helps greatly in attracting top class rugby players to the North East. The route to Dubai is very accessible for the players and has allowed loved ones to visit them and vice versa.”

7. Northumbria University

“Northumbria University is the largest recruiter of international students in the North East and having the Dubai route has made travel easier for a very large number of our international students. Many prefer the convenience of flying directly into Newcastle International Airport where we meet them. The Emirates service is also very popular with University staff who regularly travel to our major overseas markets.”

Director of International Development

8. Sage UK 9.1 Sage is a global enterprise software company headquartered in Newcastle upon Tyne with over a thousand people employed at this office. It is the world's third-largest supplier of enterprise resource planning software, the largest supplier to small businesses, and has millions of customers worldwide. It has offices in over 20 countries worldwide and its products and services are available in more than 160 countries. It is listed on the and is a constituent of the FTSE 100 Index.

9.2 Sage make thousands of inbound and outbound business trips every year from Newcastle Airport to meet with customers, attend events, attend internal meetings, and to conduct training. These meetings attract new customers, develop the expertise of staff and grow internal relations.

9.3 The company travel uses domestic air services frequently across the UK and Ireland, and international routes to the USA, the Middle East, Far East, and Europe. It also plays a major role in bringing people into the region

9.4 Sage's business travel clearly demonstrates the companies heavily reliance on the air services and connectivity offered at Newcastle Airport.

9.5 “Newcastle airport is instrumental in transporting our people across all our locations, it is just 10 minutes' drive from our global headquarters and really helps us to get out there and do our business without a second thought! It's a real asset to our region and something we rely heavily on.”

UK Travel and Facilities Manager

9. Sunderland Association Football Club 10.1 The premier league team uses Newcastle Airport regularly. They fly to games in the south of the UK, and also pre-season if outside of UK.

10.2 With the International expansion aspirations, the club would expect International travel in- coming and outgoing to expand, for example they have recently had two trips in the past month to Korea forge stronger links where the striker Ji Wong will be playing for his national team.

10.3 The club are also in process of speaking with Ryanair about re-establishing links and fan travel etc. with Ireland via their links. Building partnerships is key.

10.4 The clubs feels the success and development of Newcastle Airport has a direct impact on improving their connectivity, especially as they develop the brand over coming years to move into a global position. The airport also has a positive impact on the businesses within the city; it has become an integral part of the region’s infrastructure and economy, providing an invaluable service to the public and businesses in the North East, including Sunderland AFC.

10.5 The services at Newcastle Airport have made the journey to and from football grounds around the UK a much shorter and more pleasant experience for the team and many of our supporters, while also continuing to be an essential gateway for holidays, commuting and building closer relationships with international partners.

10. Thermal Resources Management Ltd (TRM Ltd) 11.1 The TRM Group of Companies is the world’s largest manufacturers of Mineral Insulated Heating, thermoelectric and fireproof wiring cables, heating elements and temperature measurement probes and assembles. The head office operates from Washington, Tyne and Wear, and workforce of approximately 50 people comprises of former BICC senior managers and technicians.

11.2 The business uses Newcastle International Airport to travel every week. The team use Emirates going East, KLM for European destinations, and British Airways for travel to the USA.

11.3 Eighty per cent of the companies produce is exported. The team travels to make agreements and win orders etc. This business development would be difficult to achieve without the connectivity at the airport. Access from the head office to the airport is quick and easy.

11. University of Sunderland "The connectivity and route via Dubai from Newcastle Airport as an international travel hub has provided improved access for all of our international students coming to us from many countries around the world".

Head of International Business Development

Written evidence from Foster+Partners (AS 39)

[incorporating technical advice from Ltd]

Introduction

1. This joint response from the promoters of the Thames Hub (www.thameshub.com) focuses on the Committee’s questions 1 and 4. We have not specifically addressed questions 2 or 3. Also, rather than responding to each of the subsidiary questions in turn, the document is structured around four key points, which incorporate the issues raised by the subsidiary questions.

Summary

2. To sustain economic growth the UK needs additional hub airport capacity to improve its international connectivity. Heathrow, the UK’s hub airport, is full and a proposed third runway would not provide the level of extra hub capacity required over the long term. Neither can that capacity be achieved by building more runways at other, point-to-point, airports, or by splitting hub operations. A new four-runway hub airport, located on the Isle of Grain in the Thames Estuary, with flights approaching over water, is a feasible proposition that could deliver that capacity. The new hub airport offers the prospect of the complete closure of Heathrow which would provide noise relief for 700,000 people. The new hub would also offer a step change in passenger experience compared to Heathrow and be connected to Central London using existing HS1 and other rail lines and an extension of Crossrail. The proposed, more flexible, economic regulation regime for airports would enable the airport to be funded from a mix of landing charges, adjacent property development revenues and receipts from the sale and redevelopment of Heathrow as a commercial and residential centre.

3. The new estuary airport has been developed as part of a suite of individual projects which are not necessarily dependent on each other, but could provide an integrated infrastructure development strategy for the longer term. The airport can be developed as a first stage standalone project. The high speed rail links from the airport could cross the Thames, using a combined road/rail crossing and integrated flood protection/tidal energy barrier. The flood protection afforded by the new barrier could maximise the upstream land that could be developed for housing, with a levy imposed to fund the infrastructure, and would act as a catalyst for the regeneration of the Thames Gateway. The rail lines from the airport could link to a new orbital rail line to the north of London that would connect the key radial routes into the capital allowing fast to the new airport from the Midlands, the West and the North.

Key point 1

To sustain economic growth the UK needs a significant increase in airport capacity in order to provide the required international connectivity for passengers and goods. More capacity and greater connectivity will facilitate trade and encourage inward investment, help to rebalance the economy and deliver more jobs. In recent years other European countries have overtaken the UK in terms of their international air connectivity, particularly with fast-growing emerging markets.

4. Since 1990 air passenger numbers through UK airports have risen by 4% per annum and air freight has increased by 3% per annum, although only one new runway has been built, at Manchester Airport.1 These increases have been driven by domestic factors and rapid growth in global demand. Over this period the UK’s population grew by five million (1.3 million of these in London), average incomes rose in real terms by 54% and there has been a large fall in average air fares (down 50% between 1997 and 2006).2,3,4 These rates of airport growth are similar to those experienced globally.5,6,7 This is relevant because of the Government’s desire to retain the UK’s status as a global aviation hub. Even with the global economic downturn and current airport capacity constraints, the Government’s central case estimate is that air passenger travel at UK airports will increase by 60% by 2030.8 If capacity constraints were removed, the Department for Transport (DfT) expects that air traffic would increase by 150% by 2050. This is broadly consistent with Boeing’s prediction that global air travel demand will increase by 5% per annum over the next 20 years.9

5. Failure of UK government policy over many years to accommodate growing airport demand should be of concern because of aviation’s significant impacts on the UK economy. These impacts are:

i) Direct – employment and income wholly, or largely, related to airport operations; ii) Indirect – employment and income generated by businesses in the airports supply chain; iii) Induced – employment and income generated due to spending by direct and indirect airport employees; and iv) Catalytic – employment and income generated by the role of airports in increasing levels of trade, improving the productivity of businesses and attracting inward investment and tourism.10

6. Recent estimates of the contribution of aviation to the UK economy range from 0.7 to 1.3% of economic output.11,12,13 The aviation industry employs around 200,000 people and a further 500,000 jobs are dependent on the industry. However, employment and income impacts are only relevant in economic terms because they result in changes in Government tax revenues. The rationale for this is that it is likely that, if people were not employed in air transport, they would be employed in other sectors.14

7. Therefore the key impacts of aviation on the economy are its catalytic impacts on businesses and tourism, which are facilitated by greater connectivity. In effect, connectivity means the ease with which air passengers can find a route they want at a flight time that suits their needs. This concept encompasses the number of destinations offered and frequency of services. Connectivity is important for businesses, not just in terms of company location and investment decisions, but in securing more trade in goods and services through increased client contact, access to a wider set of input and output markets, and economies of scale. Air freight (including belly freight transported on passenger aircraft) accounts, by value, for 25% of the UK’s international trade in goods and 35% of manufacturing trade with economies outside the EU. To boost growth the Government wants to increase UK exports of manufactured goods and make the economy less reliant on services. Leisure travel is also important, not just in terms of the income generated, but in terms of the global connections made. In addition to holiday- makers, around one third of Heathrow’s passengers are travelling to visit friends and relatives.

8. Having led the world (outside the US) in the development of global aviation, Heathrow’s competitiveness has suffered due to a lack of capacity. Heathrow’s two runways operate at 98.5% capacity (based on existing operational rules) and are effectively full for the greater part of every day. As a result the airport has higher combined landing and passenger charges and operates fewer air traffic movements than its rival European hub airports, Paris Charles de Gaulle (CDG) and Frankfurt.15,16 Heathrow also serves a smaller network of destinations than these airports and Amsterdam Schiphol. By 2014 Heathrow is projected to lose its status as the world’s busiest airport for international passengers to Dubai. Heathrow’s position has not been helped by the UK Government’s imposition of Air Passenger Duty (APD) rates that are much higher than those in other countries, such as France and Germany. The Belgian and Dutch governments have recently abolished their APD regimes because they were perceived as constraining air travel.17,18

9. The lack of capacity at Heathrow, compounded by poor public transport access (other than local bus services) from places other than central London and high APD rates, has been encouraging passengers to use UK regional airports to fly to competitor European and Middle Eastern hubs rather than use Heathrow. In particular, the annual number of passengers flying from Manchester, Birmingham, Glasgow and Newcastle Airports to Middle Eastern hubs (Doha, Dubai and Abu Dhabi) has grown from a few thousand in 1996 to two million today.19 CAA airport data shows that Dubai is Heathrow’s second busiest international route and that between 1990 and 2011 Amsterdam handled an extra 400,000 passengers to and from UK regional airports.

Key point 2

The nature and level of the additional capacity and connectivity required can only be delivered at a hub airport. It will not be achieved by expanding airports where point-to- point traffic dominates. This is because transfer passengers at a hub airport supplement point-to-point passenger numbers. This additional demand enables full service international airlines to operate services to a much wider range of destinations at the

frequencies required to achieve viable and sustainable financial yields. Hubbing also benefits regional and domestic carriers, as the greater choice of long-haul services at the hub helps to fill seats on feeder routes that might not otherwise be viable.

10. The reasons why Heathrow has lost its international competitiveness are the same reasons why expanding regional airports, or developing a split hub, will not provide the level of capacity required, or provide it where it can be effectively used. Airline revenues are driven by first and business class passengers who place high values on their time. These passengers demand high air service frequencies. An airport with spare capacity allows airlines to provide more frequent services, which raises yields and so makes more routes viable. This in turn enables airlines to develop new services to marginal destinations, particularly if these are supported by transfer traffic. The network effect of airport hubs means that the number of destinations that can be served by a hub airport is much greater than the number from airports serving mainly point-to-point traffic. This advantage for hubs becomes more pronounced as more routes are added.20 More capacity may be required at certain point-to-point airports, such as Gatwick or Luton, but this does not reduce the need for more capacity at the hub. There is plenty of spare capacity at Stansted Airport today but, despite much lower landing fees than at Heathrow, none of the full service airlines that use Heathrow choose to operate from Stansted.

11. The lack of capacity at Heathrow, where 35% of passengers are transferring (due to its hub operation), has meant that it has had to focus on serving its core routes with larger aircraft and has retrenched from low viability ‘thin’ routes.21 Heathrow, which handles 70 million passengers and 476,000 aircraft movements (an average of one movement every 45 seconds of the operating day), is only able to operate at this high level because a ten minute average delay is built into planned slot times at the airport. In the second quarter of 2012, 27% of departures from Heathrow were over 15 minutes late.22 It is routine for aircraft to have long taxiing times prior to departure (20-40% higher than at Paris CDG, Amsterdam or Frankfurt) and to be held in stacks prior to final descent, due to the lack of runway capacity.23 These delays are inefficient, resulting in longer end-to-end journey times for passengers and additional fuel costs for airlines. They are also environmentally damaging as each delayed aircraft emits more CO2 and other pollutants.

12. This over-scheduling in the use of the runways at Heathrow also reduces the airport’s resilience in that it is less able to cope with, and recover from, events that disrupt arrival and departure schedules, such as bad weather or technical failures. Because of its role as a hub airport for Europe, disruption at Heathrow also has knock-on effects that quickly result in delays at many other European airports.

13. The high levels of landing and passenger charges and prices at which runway slots are traded – Continental Airlines recently paid US$116 million for a pair of slots at Heathrow – are indications of the high level of latent passenger demand to use Heathrow.24 Based on comparable growth at similar hubs, it is likely that the additional capacity provided by a third runway – if used to increase aircraft movement and passenger numbers – would be used up within 10 years of opening. It would also ‘lock in’ current delay levels and the existing poor passenger experience provided by Heathrow.25 The additional capacity could be used to reduce average delay times and thereby increase the airport’s resilience and improve the passenger experience.26 However there would then be little increase in the overall number of air traffic movements or passenger numbers using the hub airport, which is the fundamental requirement for the UK.

Key point 3

The nature of airport hub operations, combined with the UK’s geographical size, means that the country can only sustain one hub airport. Dividing the transfer traffic that hubbing depends on reduces the choice of connections and dilutes the transfer passenger demand that supports routes and frequencies. The hub airport also needs to be located close to London, the largest air service market overall and the only area capable of supporting viable hub operations. Over 50% of its traffic comes from Central London and effectively Heathrow is London’s airport. However proximity to high speed rail provides an opportunity for the location of a new hub airport to serve and provide economic benefits for the rest of the UK.

14. Unlike the United States, which is geographically large and has enough domestic traffic to support multiple hubs, such as those at Atlanta, Chicago and Los Angeles, the size of the UK means that it can only support one hub airport. Attempts by British Airways to operate split hubs have not been successful. In response to the development of slot allocation rules by the government, British Airways attempted to operate Gatwick as a second hub in the late 1990s. It spent many millions of pounds operating large numbers of flights from Gatwick alongside its core operations at Heathrow. However, the venture was not commercially successful and BA ceased its hub operations at Gatwick. Now that Gatwick and Heathrow have different owners, it is even less likely that a split hub would work financially. The proposal, which involves constructing a £5 billion high speed rail between Heathrow and Gatwick, would be uncompetitive. Transfer passengers would not accept the long transfer times involved – and would go to other hub airports – and the capital and operating costs would have to be paid for by the airlines. This is because it would not be viable to require transfer passengers to pay fares to use the rail service when they can transfer without cost at other hubs. In addition the proposal would not generate any more runway capacity and would not provide any environmental benefits.

15. A new UK hub airport outside the South East would not be viable. With 80% of Heathrow’s demand coming from passengers in the South East, the location of hub airport capacity has to remain close to the capital. These passengers would not accept the high costs of getting to an airport outside the South East. However, the UK’s regions would benefit from better public transport access to the UK’s hub airport.

Key point 4

In deciding where additional hub airport capacity should be provided, the Government needs to consider four key issues – noise, passenger experience, capacity and integration with surface transport modes. Having carried out studies on these topics, we believe that, rather than expanding Heathrow with a third runway, a new four runway hub airport, with an ultimate capacity of 150 million annual passengers and capability to operate 24 hours a day, should be developed in the Thames Estuary and that Heathrow should be closed.

16. Four key issues should guide the Government’s decisions about hub airport capacity.

1) Noise: The UK’s prevailing south-westerly winds mean that, because of the airport’s location, 760,000 people suffer from aircraft noise due to Heathrow (one quarter of all the people impacted by aircraft noise within Europe).27,28 A third runway at Heathrow would lock in and exacerbate this noise nuisance. Noise impact also means that night- time operations at Heathrow are strictly limited. Even with significant improvements in noise emissions from newer aircraft, this issue is always likely to be a major factor for Heathrow. This would be much less of a constraint for a new hub airport in the Thames Estuary, where most of the time aircraft could approach over water. Departure routes, and arrival routes when there are easterly winds, could be planned to avoid urban areas. Such an airport would provide noise relief for around 700,000 people.29 In addition planning controls could be implemented to ensure that any future new housing developments are built outside aircraft noise footprints. A recent study by the Massachusetts Institute of Technology found that the south-westerly winds that result in noise problems around Heathrow also cause 100 extra deaths per annum compared to a Thames Estuary Airport, due to the transport of aircraft air pollution over London.30

2) Passenger Experience: The lack of spare runway capacity at Heathrow directly harms the passenger’s experience at the airport. To make more slots available, delays are built into aircraft departure and arrival schedules. This is inefficient, environmentally damaging and reduces the airport’s ability to cope with, and recover from, events that disrupt these schedules. The impact of disruptions is quickly transferred to other European airports. Unless the capacity provided by a third runway was used to reduce delays and improve resilience, the additional aircraft movements and passenger numbers from an additional runway would ‘lock in’ current delay levels and poor passenger experience provided by Heathrow.

3) Capacity: It is recognised that the construction of a third runway at Heathrow would require a major reconfiguration of the whole airport. This would introduce major risks to the current operation of the airport that could adversely impact its capacity whilst the reconfiguration took place. Such a runway would also not provide the level of additional hub airport runway capacity and connectivity required for the UK over the long term. It would take around 10 to 12 years to plan and construct the runway and this could be only a 2 to 3 years less than the time to plan and build a completely new hub airport. This is because the statutory planning processes would be the same for both.31 The current level of latent demand by airlines for runway slots at Heathrow is an indication that an extra runway would be full within ten years of opening. Given that it would be very challenging to build a fourth runway at Heathrow, the difficult issue of where to provide more hub runway capacity would have to be revisited again and would be even harder to resolve. Further, with just one extra runway, Heathrow would not benefit from the full scale of construction efficiencies that a brand new, purpose designed airport could provide. We estimate that an estuary airport, with an appropriate initial rail access strategy, could be opened by 2028 with an initial capacity of 110 million passengers per annum. At a later date the airport could be expanded to an ultimate capacity of 150 million passengers.

4) Surface Access: Apart from its current links to Central London (and Crossrail connection from 2017), Heathrow is poorly connected to the rest of the UK by rail. This factor has contributed to the erosion of Heathrow’s global competitiveness and limited its ability to act as a hub that can benefit people across the UK. Greater use of rail, including its use for access to airports, could be encouraged by the development of a national transport policy framework that optimises road and rail journeys to reflect their economic costs and minimise carbon emissions. However the provision of additional hub airport capacity must include competitive surface transport links. In this regard what matters most to passengers is not an airport’s geographical location, but the overall time, cost and convenience (including minimal changes) of their journey to an airport. High speed rail links could connect an estuary airport to multiple London termini and have the potential to provide faster access times to and from the rest of the UK than are achievable at Heathrow.

17. We estimate that the costs of the new airport would be £20 billion, all of which could be funded and financed by the private sector.32 This figure has been independently reviewed by an international firm of cost consultants and found to be broadly reliable. The new, more flexible, economic regulation regime for airports proposed in the Civil Aviation Bill would enable the airport to be funded from a mix of landing charges (without an increase in those charges), property development revenues and receipts from the sale of Heathrow, which would be redeveloped as a commercial and residential centre.33

18. The estuary airport has been developed as part of a suite of individual projects which are not necessarily dependent on each other, but could provide an integrated infrastructure development strategy for the longer term. The airport can be developed as a first stage standalone project. High speed rail services from the airport could cross the Thames via an integrated flood defence barrier and road/rail crossing. The flood defence barrier would replace the life-expired and incorporate hydropower generators, allowing the airport to be completely powered by green energy. The additional land thus protected could be developed for housing, with a flood protection levy to help fund the integrated crossing / barrier. This would provide the necessary catalyst for the long overdue regeneration of the Thames Gateway. The high speed lines could then link to a new four track orbital line around the north of London. This would include a number of interchange stations with parking, providing ten minute access times for over two million passengers and the potential to deliver high levels of public transport access to the airport.

19. The orbital line would also pick up key radial rail routes into London and connect HS1 to HS2, providing connectivity to and from the airport for most of the UK's major conurbations and Northern Europe via the Channel Tunnel. The high speed rail lines, if supported by passing loops, also have the potential to be used by non-airport traffic. An expanded Heathrow would not address any of these wider issues. The costs of the orbital rail link, Thames barrier and crossing and other supporting infrastructure would be a further £30 billion. Our initial assessment is that the potential benefits of such an integrated project would be worth £150 billion to the UK economy.

18th October 2012

End Notes

1 CAA Airport Statistics: http://www.caa.co.uk/default.aspx?catid=80&pagetype=88&pageid=3&sglid=3 2 Office for National Statistics: ‘2011 Census - Population and Household Estimates for England and Wales, March 2011’ (July 2012) http://www.ons.gov.uk/ons/dcp171778_270487.pdf 3 Office for National Statistics: ‘Statistical Bulletin 2011 Census - Population and Household Estimates for England and Wales’ (March 2011) http://www.ons.gov.uk/ons/rel/census/2011-census/population- and-household-estimates-for-england-and-wales/stb-e-w.html#tab-The-populations-of-the-regions- and-where-these-have-changed-the-most 4 Committee on Climate Change: ‘Demand for Air Travel’ http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel 5 Royal Aeronautical Society: Aerospace Insight Blog ‘London’s Thames Estuary airport plans – déjà- vu all over again’ (September 2012): http://media.aerosociety.com/aerospace- insight/2012/09/07/londons-thames-airport-plans-deja-vu-all-over-again/7288/ 6 Airport Watch: ‘2011 ICAO: Passenger traffic up 6.4% in 2011, to rise 4.5% annually going forward’ (March 2012) http://www.airportwatch.org.uk/?p=1516 7 IATA: Air Transport Market Analysis (July 2012) http://www.iata.org/whatwedo/Documents/economics/MIS_Note_Jul12.pdf

8 Department for Transport: ‘UK Aviation Forecasts’ (August 2011) http://assets.dft.gov.uk/publications/uk-aviation-forecasts-2011/uk-aviation-forecasts.pdf 9 Boeing: ‘Current Market Outlook 2012-2031’ http://www.boeing.com/commercial/cmo/ 10 Airports Council International: ‘The economic and social impact of airports in Europe’ (January 2004) 11 Oxera: ‘What is the contribution of aviation to the UK economy? Final report prepared for Airport Operators Association’ (November 2009) 12 Oxford Economic Forecasting: ‘The Economic Contribution of the Aviation Industry in the UK’ (October 2006) 13 Department for Transport: ‘Written Ministerial Statement on Aviation’ (7th September 2012): http://www.dft.gov.uk/news/statements/mcloughlin-20120907a/ 14 NERA: ‘Representing International Business Impacts in Transport Appraisal’ (April 2010) 15 The Air Transport Research Society: ‘Key Findings of 2011 ATRS Global Airport Performance Benchmarking project’ http://www.atrsworld.org/docs/Key%20Findings%20of%20%202011%20ATRS%20Benchmarking%20 Project%20-%2027July2011.pdf 16 The aviation web site ‘Anna aero’ reports that Frankfurt serves 235 destinations, Paris CDG 234 and Schiphol 195. Heathrow’s web site currently states that it serves 183 destinations and Dubai Airport states that it serves 220 destinations. See ‘London Heathrow’s third runway; never let the facts get in the way of a good story…’ (2009) http://www.anna.aero/2009/01/23/london-heathrows-third- runway/, http://www.heathrowairport.com/about-us/facts-and-figures and http://www.dubaiairports.ae/en/about-da/Pages/OrganisationStructure.aspx 17 BBC fast:track: ‘The air travel taxes influencing how far we fly’ (1st October 2010) http://news.bbc.co.uk/1/hi/programmes/fast_track/9043892.stm 18 Ministry of Infrastructure and the Environment, KiM Netherlands Institute for Transport Policy Analysis: ‘Effects of the Air Passenger Tax Behavioural responses of passengers, airlines and airports’ (February 2011) http://english.verkeerenwaterstaat.nl/english/Images/EffectsoftheAirPassengerTax_tcm249- 303066.pdf 19 Civil Aviation Authority: ‘Aviation Trends 2012 Q2’ http://www.caa.co.uk/docs/80/RPG_AviationTrends_Q2_2012v2.pdf 20 Frontier Economics: ‘Connecting for growth: the role of Britain’s hub airport in economic recovery. A report prepared for Heathrow’ (September 2011) 21 BBC News: ‘BA-owner IAG completes BMI takeover’ (April 2012) http://www.bbc.co.uk/news/business-17786998 22 Civil Aviation Authority: ‘2012 Q2 Airport Punctuality Statistics’ (September 2012) http://www.caa.co.uk/application.aspx?catid=14&pagetype=65&appid=7&newstype=n&mode=detail& nid=2172 23 Mayor of London: ‘A new airport for London – Part 2: The economic benefits of a new hub airport’ (November 2011) http://www.london.gov.uk/sites/default/files/Anewairportforlondon_part2.pdf 24 Flight Global: ‘Heathrow slot values under pressure?’ (November 2009) http://www.flightglobal.com/news/articles/heathrow-slot-values-under-pressure-335348 25 Civil Aviation Authority: ‘The Through Airport Passenger Experience: An assessment of the passenger experience and airport operations at Heathrow, Gatwick, Stansted and Manchester airports’ (March 2009) http://www.caa.co.uk/docs/33/Passenger_experience.pdf 26 The third runway, at 2,200 metres, would be 60% of the length of Heathrow’s existing runways – see Department for Transport: ‘Britain’s Transport Infrastructure: Adding Capacity at Heathrow: Decisions Following Consultation’ (January 2009) http://webarchive.nationalarchives.gov.uk/+/http://www.dft.gov.uk/pgr/aviation/heathrowconsultations/ heathrowdecision/decisiondocument/decisiondoc.pdf 27 Mayor of London: ‘A new airport for London – Part 1: The case for new capacity’ (January 2011) http://www.london.gov.uk/publication/new-airport-london 28 This is the number of people who live within Heathrow’s 55dB Leq noise contour, which the World Health Organisation says is the contour within which people suffer from health impacts. See European Environment Agency ‘Good practice guide on noise exposure and potential health effects. Technical Report No 11/2010’ (November 2010) http://www.eea.europa.eu/publications/good- practice-guide-on-noise Many more people suffer from aircraft noise at Heathrow. 29 Foster+Partners and Halcrow: ‘Thames Hub Technical Annexes’ (unpublished) (2011) 30 The Independent: ‘Heathrow third runway 'would triple pollution deaths' (October 2012) http://www.independent.co.uk/news/uk/home-news/heathrow-third-runway-would-triple-pollution- deaths-8210058.html. Here is a summary of the study http://lae.mit.edu/wordpress2/wp- content/uploads/2012/10/LAE-2012-010-R-v1.pdf and the full study report http://lae.mit.edu/wordpress2/wp-content/uploads/2012/10/UK-airports_Part2.pdf 31 The Planning Inspectorate: ‘National Infrastructure Planning’ http://infrastructure.planningportal.gov.uk/application-process/the-process/ 32 Foster+Partners, Halcrow and Volterra: ‘Thames Hub: An integrated vision for Britain’ (November 2011) http://www.thameshub.com 33 UK Parliament: ‘Civil Aviation Bill 2010-12 to 2012-13’ http://services.parliament.uk/bills/2012- 13/civilaviation.html

Written evidence from IATA (AS 40)

The UK plays a key role in international air transport. After the US, it is the largest market for international passenger services. If our forecasts are correct, in 2015 we expect 205 million people to travel to or from the UK—accounting for about one in every seven international air travelers. The UK will also rank seventh for international freight by handling about 2.2 million tonnes of cargo. Today, the contribution of aviation to the UK economy is substantial. The Aviation sector contributes 49.6 billion pounds (or 3.6%) to UK GDP. It supports 921,000 jobs in the UK, and pays 7.9 billion pounds in tax.

1. What should be the objectives of Government policy on aviation?

Recognizing the critical role of aviation in the British economy and society, the overarching objective of UK government aviation policy should be to promote the growth of aviation connectivity in a safe, cost-effective and environmentally sustainable manner. a. How important is international aviation connectivity to the UK aviation industry? International aviation connectivity is critical to the UK aviation industry, to UK businesses and to the UK economy as a whole. According to the UK Civil Aviation Authority, 80% of passenger trips are international. As an island nation, international air connectivity is essential for the UK aviation industry to compete and grow in a global market. Such connectivity is maximized via a world-class hub airport. A hub adds economic value by facilitating connectivity that could not be supported independently. The UK’s international aviation hub is Heathrow, and has been for decades. But Heathrow is falling behind in connectivity. London has less frequent links to 27 emerging market destinations than the daily connections offered from continental European hubs. There are no direct services, for example, to major cities such as Jakarta, Manila, Santiago or the major Chinese cities of Guangzhou, Chengdu or Shenyang. If the UK wants to do business with these developing markets, air connectivity is the enabler. But with Heathrow operating at 99% capacity, new services can only be introduced at the expense of downgrading existing connections. Recently Frontier Economics calculated the cost of declining connectivity at GBP 14 billion in lost trade over the next 10 years. As a consequence of constraints at Heathrow, airlines are unable to expand their route networks to serve growing international demand. The Frontier Economics study estimated that Heathrow could serve far more destinations than it currently does. The connectivity gap includes 45 long haul destinations that could be viably added to airlines’ route networks, including 15 in emerging markets, while the frequency of service on existing routes could be enhanced. b. What are the benefits of aviation to the UK economy?

Aviation in the UK is at the center of over GBP 90 billion of economic activity and supports the livelihoods of nearly 1.8 million people. But aviation’s influence extends much further. Could London function as a global financial center without air transport linking the City to its global customer base? Would the UK be a leading force in global culture without access to global influences? How would exporters get time sensitive shipments to markets around the world, or just-in-time manufacturers receive component parts? And would it be possible for the UK to derive the economic, social and national branding benefits of hosting 17,000 athletes, 60,000 support staff and hundreds of thousands of spectators for the Olympics? The UK punches above its weight globally because of air connectivity. And its economic prospects grow in tandem with air service improvements. Oxford Economics tells us that for every 10% improvement in connectivity, GBP 890 million is added to the UK’s long-run annual GDP. c. What is the impact of Air Passenger Duty on the aviation industry?

The ever increasing Air Passenger Duty (APD) is a GBP 2.9 billion annual burden on UK businesses reliant on connectivity. Passenger demand is growing more slowly than at other European hubs because the APD is pricing air travel out of the range that consumers can bear. In Northern Ireland, APD meant that international services could no longer be competitive. APD there was reduced to retain the economic benefits of air connectivity. Unfortunately the wisdom of that decision did not extend to the rest of the UK. To put some numbers to the economic burden of APD, we estimate that the planned increase in the APD alone will result in GDP losses of about GBP 300 million per year and 7,000 job losses. To ensure that the UK is “open for business,” the national aviation policy must include bringing the cost of connectivity down to make the cost of doing business here competitive. Furthermore research commissioned by the World Travel and Tourism Council and carried out by Oxford Economics shows that abolishing the APD would result in an increase of up to 4.2 billion pounds in UK GDP and create up to 91,000 jobs. IATA notes that there have, in recent months, been increased calls from some regional airports for introducing regionally variable APD, or devolving APD to the devolved administrations. Such calls are made on the basis that this policy would support regional economic development, or increase the fiscal independence of devolved administrations. IATA believes that such proposals are short-sighted and risk fundamentally undermining the competitiveness of the UK aviation sector. APD is a uniquely distortive tax, and the best way to address its distortive effects is to reduce or abolish the tax, rather than introduce additional distortions. Devolving or varying APD by region would introduce unforeseen, perverse anomalies and incentives, which would not serve regional economies’ long-term interests, and could have significant, negative externalities. d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

It is the market that should enforce airline delivery of the passenger experience. Aviation, compared to other national and international forms of transport, is burdened with regulation.

The market forces of choice and competition empower passengers and are the best way to drive up service levels so long as governments also do their part by addressing passenger inconvenience in the area of security and customs, often the most painful point in a passenger’s journey. Recently there have been long security queues at Heathrow's security due to enhanced screening requirements. We have been made aware by an airline operating from Heathrow that, over this period, a number of its passengers missed their connecting flights due to being delayed at security.

IATA has been promoting an airport Checkpoint of the Future that will make passenger security more effective, efficient and convenient by:

• Differentiating screening based on risk using passenger data that is already collected for immigration checks at the end of the journey, and • Developing technology that will allow our customers to walk through checkpoints without stopping, undressing or unpacking. • Trials on differentiated screening are delivering positive results in the US and the technology has a 7-10 year development horizon. We are making good progress in cooperation with the EC and our other important partners including the US Transportation Security Administration, the International Civil Aviation Organization (ICAO), Interpol and many governments. The UK is also supportive of the effort which is well aligned with the Department for Transport’s Outcome Focused Risk Based Security initiative. This should feature prominently in UK government policy.

The UK Border Agency has a central role to play in delivering improved passenger experience. While intense competition between airlines, (combined with economic regulation of dominant airports and robust powers for the Civil Aviation Authority to collect and disseminate information on the passenger experience contained in the Civil Aviation Bill) mean that airlines and airports have clear incentives to maintain high standards of passenger service, the UK Border Force has no such clear incentive, relying instead on effective oversight by ministers and parliament. It is essential that, in the formation of a new aviation strategy, the Department for Transport works with the Home Office and the UK Border Force to establish clear and robust lines of accountability, and puts in place an effective performance management regime to ensure that the Border is not allowed to undermine the efforts to which airlines and airport operators go to facilitate smooth passenger journeys. e. Where does aviation fit in the overall transport strategy?

An integrated strategy that allows for efficient use of different transport modes to get people and goods from one place to another is critical to ensure the UK’s competitiveness. Aviation must sit at the heart of that effort. While 300 km of rail completes a journey from London to Manchester, three kilometers of runway facilitates journeys worldwide. As the only rapid worldwide transportation network, aviation enables world trade. It allows countries to participate in the global economy by increasing access to international markets and allowing globalization of production. The total value of goods transported by air represents US$5.3 trillion, or 35% of all international trade. It is also critical to bringing in the approximately 30 million tourist arrivals the UK sees every year. Some good examples of country governments where the positive impact of a low tax regime has a knock-on effect on jobs and the broader economy are Hong Kong and Singapore. These governments are building their economies around connectivity. The result is a virtuous circle. They are great markets for airlines. Businesses prosper from connectivity. And governments reap the benefits of increased employment and a stronger tax base. In Singapore, aviation accounts for 5.4% of GDP and supports 119,000 jobs. Governments will actually increase their tax revenue if they stop viewing aviation as a cash cow and start using it – as they do in Singapore and Hong Kong – as a stimulant for economic growth, job creation, international trade and inward investment. Imagine the opportunity for growth if government policy was better aligned to support the industry.

2. How should we make the best use of existing aviation capacity?

As noted above, a critical constraint in UK relates to capacity availability at Heathrow. a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

Building in resilience at the UK's major airports, especially those that are already slot constrained, i.e. LHR & LGW, is essential if the Government's aim to improve passenger satisfaction and service quality is to be realized. There is some scope to improve efficiency in airport operations for example, the Operational Freedom Trials at Heathrow which are running until Mar 2013 will result in enhanced resilience but the impact of these improvements is likely to be very limited at slot constrained airports .

There are only a few ways to build in significant or meaningful levels of resilience at these major airports. The most sensible option is to increase capacity through construction of additional runways at airports that are already slot constrained. While this option may raise concerns related to the local impacts from the potential increased traffic flows, there would be significant economic benefits at local, regional & national level. In addition to improved passenger satisfaction and service quality, there would be benefits within the vicinity of the airport as enhancing capacity can support agglomeration at airports, which as noted earlier would lead to accelerated productivity and growth over and above the gains from better connectivity. At the economy level, this can help improve connectivity and support growth and development.

Another option is to revisit the issue of mixed mode as a short-term fix, although it would not adequately address the chronic shortage of slots and hourly movements available, which if introduced on a permanent basis, for example at LHR, has the potential to lift the number of slots and hourly movements available. However, it is important to note that, while mixed mode operations could deliver an increase in the number of air traffic movements, if such additional capacity were fully utilized, it would bring no additional resilience to operational shocks or adverse weather conditions, and the airport would remain, to all intents and purposes, full. As noted above, the best way to increase capacity at these major airports is through construction of additional runways. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

Evidence would suggest that there is limited or no scope for some of the demand from the constrained airports to be transferred to regional airports as this opportunity currently exists and is not being utilized in a market where airlines address the mobility needs of their passengers. This solution is adding additional capacity at the hub airport to match the forecast demand. c. How can surface access to airports be improved?

In many continental countries the public sector has adopted an integrated transport approach together with substantial investment in High Speed Rail (HSR) at airports such as Frankfurt, Paris, and Amsterdam etc. Several HSR proposals are being considered in the UK but are unlikely to be operational before 2025. Classic rail projects such as Crossrail will increase Heathrow’s catchment area, enhance local connectivity for passengers, and reduce road congestion and emissions. Any improvement program would be specific to each airport and the business case rationales for transport providers.

3. What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

The environmental questions asked here are broadly contained within the DfT’s consultation ‘Aviation Policy Framework’. The Transport Committee’s attention is drawn to the fact that the aviation industry at large, not just the airlines, has a consistent track record of significantly reducing the impact of aviation noise. Evidence of this can be seen by the fact that the noise contours for Heathrow have shrunk so significantly. 1988-2011: whilst flights increased from 352000 per annum to 480,000, the area affected by noise, using the DfT’s own metric of 57dBA summer day Leq, plummeted from 331 sq. km to 110 sq. km. (Source: ERCD, CAA – Annual Noise Contour Reports)

As stated previously, the UK is falling behind in connectivity. That has dire consequences for British business and for the potential of aviation to play in the UK economy and society. Capacity constraints at the key hub airport, Heathrow, are already reducing Britain’s economic potential. Airlines are unable to expand their route networks to serve growing international demand. Heathrow could serve far more destinations than it currently does. The connectivity gap includes 45 long haul destinations that could be viably added to airlines’ route networks, including 15 in Emerging Markets, while the frequency of service on existing routes could be enhanced, according to research by Frontier Economics.

A key constraint on the development of a coherent and enduring strategy for aviation in the UK has been the remarkable lack of political consensus which has characterized the debate on airport capacity in recent years. As a matter of vital national interest, IATA believes that, while there is scope to debate the merits of individual policy options and interventions, it is imperative that a space is created in which long-term policy can be made on which there is a genuine willingness to reach political consensus among the main political stakeholders. Such a consensus will be necessary to ensure that, following any decision, progress can be made to deliver key infrastructure projects without the uncertainty which has blighted aviation policy to date. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

Carbon emissions from aviation are, essentially, a global issue. They are being managed through a mix of regulation on one hand, and industry cooperation on the other. The UK strategy of working in conjunction with global efforts, and the industry’s own collaboration on noise, emissions and efficiencies continue to make aviation even more sustainable.

Aviation’s license to grow depends upon managing its environmental impacts. We have a long history of doing precisely that. Over the last three decades Heathrow’s noise contour was reduced by 60%. And we have managed to contain aviation’s emissions at 2% of global manmade CO2 with a 70% improvement in fuel efficiency over the last four decades. While continuing to reduce noise we are stepping-up efforts on carbon emissions. Airlines, airports, air navigation service providers and manufacturers have made three sequential commitments with which I am sure that you are all very familiar: • Improving aircraft fuel efficiency by 1.5% annually to 2020 • Capping net CO2 emissions from 2020 with carbon-neutral growth • Cutting net carbon emissions from air transport in half by 2050 compared to 2005 c. What is the relationship between the Government’s strategy and EU aviation policies?

The government’s strategy is one of support for EU policies and to strive to align itself in full.

4. Do we need a step-change in UK aviation capacity? Why?

Yes, absolutely. As stated above, global connectivity provided by a hub airport is essential for the UK to maintain its economic competitiveness and provide greater social benefits to the British population. Heathrow is the UK’s only hub airport. Its global role in connecting people and business generates some 220,000 jobs and GBP 11 billion in economic activity. But it is operating at 99% capacity, so new vital services can only be introduced by adding capacity. And about GBP 5.0 billion is being invested over the period 2008-2013 to expand its terminal capacity. But terminal capacity without runway capacity can only take growth so far. And failure to grow in an expanding market puts one on the road to irrelevance by shifting the demand to alternative European hubs. In this scenario Heathrow could decline from a world class to a local airport. a. What should this step-change be? Should there be a new hub airport? Where? b. What are the costs and benefits of these different ways to increase UK aviation capacity?

With such high stakes for the UK, a number of proposals have emerged on how to provide a step change in capacity in the country.

There is, for example, the proposal for “Heathwick” with a high speed train link between the two airports (Heathrow and Gatwick). But no matter how efficient the connection, it will never rival single airport connections at competing hubs the likes of Munich, Madrid, Frankfurt, Paris, Amsterdam, Zurich, Dubai, or Abu Dhabi. And absent more runway capacity the train wouldn’t solve the problem. Lord Foster’s Thames Estuary Hub is a further interesting and very expensive proposal. But we could get all the additional capacity needed to ensure that Heathrow continues as a great aviation hub for only a fraction of the cost and without the economic dislocation of moving 220,000 jobs. We must learn from mistakes that have already been made in the area of airport capacity management. For example, in Osaka and in Montréal, new airports were built while old ones remained open, with wasted costs and capacity as a result. If a major hub is built, the main competing airport—in this case Heathrow—needs to close. More importantly, Heathrow has the potential to expand. For that reason, the UK government should make Heathrow expansion a priority in a competitive new UK aviation policy. Aviation plays a vital role in this great country. The national aviation policy discussion is a great opportunity to replace the tax, regulate and restrict policy trajectory of today with one that supports connectivity, jobs and economic prosperity with sustainable growth. By refocusing the policy agenda towards competitive, cost-efficient and sustainable growth, aviation can do so much more than the already impressive support for GBP 90 billion of economic activity and 1.8 million jobs. A strong aviation industry is a foundation stone of an economically strong and competitive Great Britain.

18 October 2012 Written evidence from Tim Gresty, Cognitio (AS 41)

A. PROLOGUE

A.1 The oil and gas rich sovereign Arab state of Qatar has massive investments in UK plc, including , Sainsburys, the London Stock Exchange, Canary Wharf and Harrods.

A.2 At an Aviation Club Lunch on Wednesday 17th October 2012, Qatar Airways CEO Akbar Al Baker spoke with the authority of Qatar and its sovereign government . He was vocal in support for a third runway at the world’s busiest international airport to remain competitive with rival European airport hubs. In his speech, Al Baker said the third runway debate ‘was not an option, but a necessity’ to overcome the capacity crunch Britain’s premier airport was currently facing.

A.4 “Heathrow is bursting at the seams and has already reached a critical point,” he said. “Already heading towards a double dip recession, the UK cannot afford to lose out on the huge benefits a third runway would bring to the economy in and the country as a whole through the creation of more jobs and more business opportunities. No capacity increase will inevitably lead to further economic hardship with job losses and businesses closing down.

A.6 “Heathrow is already losing out to European neighbouring hubs that have the resource to expand capacity. Measures to expand need to be taken soon to avoid a catastrophic situation in the future. The UK government cannot afford to immerse itself in long winded debate and public enquiries. Action needs to be taken.”

A.7 “The government needs to understand the importance of allowing airlines to expand and keep them at Heathrow otherwise there is a risk carriers will move away.”

A.8 UK Government, and the Transport Select Committee, would do well to heed his powerful words, spoken with the authority of the world’s second-richest per capita country, and heed the risk that “carriers will move away”. From recent strategy and policy framework consultations, it is clear they do not.

B. OVERVIEW

B:1 In the Foreword to the Department for Transport’s Draft Aviation Policy Framework published July 2012, the then Secretary of State for Transport Justine Greening MP made no mention of the word ‘airline’.

B:2 In the following Executive Summary, there was only a single mention of ‘airline’ (1.22 : “provide passengers and other airport users with more information about airline and airport performance”). Similarly, there was no mention in either of these parts of the Report, or anywhere else in its 98 pages, of the key word “profit”, the element that makes possible the operation of air routes by airlines into, from and within the UK.

B:3 By focusing its Draft Policy Framework on passengers, airports, local residents and other stakeholders, and ignoring the vital role of airlines which are based increasingly away from the UK, the Government shows a woeful lack of understanding of the mechanisms of today’s global air travel business. Strategies based on such misunderstanding are unlikely to be successful, a mirror of the situation that has marred air travel planning in the UK since 1946

B:4 In its introduction to the Aviation Strategy consultation, the Transport Select Committee makes an identical error – and evidences a similarly woeful lack of understanding of air transport serving the UK.

B:5 If the UK is to retain sustainable air services, to the benefit of its commercial, political and social interests, that sustainability must be based on the ability of airlines to provide route groupings and individual routes which serve passengers and freight customers at a consistent and reasonable profit. Without profit, those globally- focused airlines will turn their backs on the UK, and focus their swiftly-transferable aircraft assets on those emerging and established markets which deliver them the potential for traffic and profit which they need to reward their employees, and their investors.

B.6 In recent years, airlines have learned the importance of profit, based on rigorous cost control and acerbic evaluation of route sustainability. They have also moved on from narrow national interests : • The focus of our once-British national airline has moved to Spain as a British Airways sub-brand of International Consolidated Airlines Group (IAG), whose its shares are traded on four Spanish stock exchanges alongside London. BA has abandoned its UK regional operations, for financial reasons • Loss-making BMI, once the UK’s second airline, has been eradicated by new owners IAG.

• International minnow (but accomplished flag-waver) Virgin Atlantic is owned by Singapore Airlines (49%) and Virgin Group (51%), whose financial operations are managed from . • Ryanair, the UK’s largest low-cost airline operator, is Dublin-based, with substantial ownership by USA investment funds. • EasyJet’s second-largest base is Milan-Malpensa : the airline’s focus is increasingly Europe. • Europe’s leading lo-co Air Berlin has largely withdrawn from serving the UK, attracted elsewhere by routes offering better profit potential. A alliance member, Air Berlin is 29% owned by Etihad. Each of these airlines is focused on building profit through carrying passengers (and freight) on routes which deliver financial sustainability.

B.7 Any Policy Framework or Aviation Strategy Consultation that ignores airlines and profit, the key drivers of international and domestic air travel, is ill-conceived, and misguided. Airlines are no longer beholden to Governments, or to individual countries, as Michael O’Leary’s curt rebuttal of the Transport Select Committee demonstrated. Without the ability to attract and retain the operation of air routes serving the UK by internationally-focused airlines such as Ryanair, BA, Air Berlin and EasyJet, the UK’s vital network of air links will wither, and our trade-based commercial lifeblood will thin : the implications for employment, inward investment, community support and infrastructure affordability are dire.

B.8 Such international airlines must be regarded as potential friends, to be nurtured and encouraged. They are not enemies, to be discouraged by capacity constraints, unnecessary fiscal and legal controls, and the imposition of Government revenue-driven disincentives such as APD, and thus driven to focus their investment and route networks elsewhere, to the benefit of our competitors.

B.9 Government should recognise that its Air Transport Strategy must prioritise the attraction and retention of routes operated profitably by major international airlines if it is to serve its people, its workforces, and its businesses.

B.10 If the airlines are to be attracted to and retained by the UK, investment must focus on building the UK’s primary international airport currently serving the capital and regions of the UK. London Heathrow must be developed, with priority for the following key aspects : • Capacity enhancement, via Runway 3 and potentially Runway 4 • Integrated public transport access : local and regional. For employees, travellers and freight. • Fast-rail links to key regional transport hubs including Manchester, Leeds, Birmingham and Bristol via HS2, HS3 and more. • Enhanced transfer speed and convenience between incoming and outgoing routes, and between terminals. Including UK regional airline feeds. • Establishing greener credentials in airport and airline operation, through utilization of ‘tight site’ Heathrow, and the restriction of access to new routes and Runways (R3, possible R4) to ‘latest generation’ cleaner aircraft, operated at maximum loads for minimized environmental pollution per passenger.

C. QUESTIONS SPECIFIED BY TRANSPORT SELECT COMMITTEE

C.1 As an initial observation, I would suggest that the questions listed demonstrate a limited comprehension of the aviation business serving the UK in its global environment, and a shallow understanding of what drives the provision of air routes by airline serving airports which provide air transport opportunities to their local and more distant markets for passenger travel and freight transportation.

C.2 That limited comprehension and understanding undermines the credibility of this Aviation Strategy Consultation, and its potential effectiveness as a check and balance to the parallel (and even more heavily flawed) Aviation Policy Framework consultation carried out by the Department for Transport. A disappointment, with long- term and wide implications.

C.3 Sadness is added to that disappointment by the lack of appreciation by DfT and the TSC that the failure of successive Governments to provide a proper Strategy and Policy Framework for the growth of aviation serving the UK has already gravely damaged the international prospects of our country, and imposed irrecoverable disadvantages versus our key international competition. I am not by nature a negative person, seeking clouds to accompany silver linings. However, it is difficult to be anything but negative in the context of Government inaction, and ill-advised misdirection in aviation strategies, tactics, objectives and policy.

D : Question1 What should be the objectives of Government policy on aviation?

D.1 Primary Objective is to define and serve the economic, social and environmental interests of the peoples of the UK, in its capital city, and in all its regions.

D.2 In achieving this objective, Government should adopt the tactic of prioritizing the retention and attraction of international airlines (including those based in the UK), and their investment in the routes which serve the capital city and regions of the UK.

D.3 As airlines are increasingly focused on profit, to enable the retention and reward of their investors and stakeholders, Government must ensure that airlines attracted to serve the UK are enabled to achieve revenue and profit returns which compare with those available to them in countries and on routes which are their alternatives to the UK.

D.4 That implies that Government must pull back strategically from opposition to airlines, obstacles to investment and reward, and the artificial erection of fiscal and legal constraints which could turn these most mobile of businesses away from the UK, and into the hands of eager and better-advised competitor markets.

E : Question 2 How important is international aviation connectivity to the UK aviation industry?

E.1 Vital. In the global 21st century, and in centuries to come, international connections for trade and friendship are the vital lifeblood of a country and its sustainability. Our colleagues and competitors, in the developed world and in emergent economies from Scandinavia to Shanghai, recognise that fact, and are investing accordingly in financially- sustainable travel links. For decades, the UK has not matched their endeavours. Today, there is a danger that economic and environmental constraints will lead our Government to kick the challenge of infrastructure development even further into the long grass. Our descendents, lacking the jobs and income that development could deliver, will not thank us for our lack of foresight.

F : Question 3 What are the benefits of aviation to the UK economy?

F.1 This question can only be addressed by exploring the four sectors of air travel. Each is of differing importance to the UK’s social and financial economy, and its benefits of each should be rated by importance. To add complexity, those benefits vary according to whether the air travel is inward, or outward. The brief response preferred by the Transport Select Committee permits only an initial flavour of that exploration. • Business Travel • Holiday & Educational Leisure • VFR (Visiting Friends + Relations) • PfP (Purely for Pleasure)

F.2 Benefits of Business Travel F.2.1 The UK is a trading nation, depending on international relationships for a large part of its wealth, status and employment. While e-communications have reinforced and speeded written links, nothing has yet replaced personal contact in establishing the relationships on which business and trade are built – as our competitors in Europe, in the Middle East, in North America and Asia recognise. Business travel, serving routes to our current and potential partners, suppliers and customers, is a vital ingredient of our manufacturing, service and support economies, both in taking us abroad, and in encouraging others to visit. It is also vital to secure the inward investment which funds an increasing proportion of our businesses, our infrastructure and our institutions.

F.2.2 Inward business travel also delivers benefits in the conference, exhibitions and incentives sector, supporting modern facilities in our capital city and in the regions. Freight aviation is vital to support our businesses and industries, both in exporting goods and services, and in importing ingredients, parts, spares and equipment as well as expertise.

F.2.3 Of all aspects of aviation, business travel is the most important – yet, curiously, it is in this sector that APD is most damaging in discouraging ‘front cabin’ business travellers, whose high value and expenditure make them particularly valuable to our investment, trade and business relationships. As London is clearly the epicentre of our business and trade world, it is London’s airports led by predominant Heathrow and their network of routes serving business and trade capitals that are the most important to this top-priority sector.

F.3 Benefits of Holiday & Educational Leisure Travel F.3.1 This is the traditional ‘two weeks holiday’ sector, including longer-stay visits abroad by UK citizens – and similar trips into the UK from overseas. It also includes ‘educational’ tourism, from short visits to and from the UK to longer-term residence such as university and college courses provided in the UK, or taken overseas.

F.3.2 While it may be damaging to our economy and employment for overseas travel by UK citizens to be encouraged, that damage can be minimized where the airlines and airports serving this market are British, or at least provide employment in the UK. On the other hand, the encouragement of overseas tourism into the UK remains a

key part of our national economic ambitions – and our need to boost younger-person lower-skills employment in the tourism and travel sectors.

F.3.3 While Holiday & Educational Leisure Travel may be less directly beneficial to the UK economy than Business Travel , the inward tourism element of this sector is vital – and particularly where emergent countries and sub- continents including India and China grow in wealth, and ambition in travel and education.

F.3.4 I therefore rate the benefits of Holiday & Educational Leisure Aviation second to Business Travel.

F.4 Benefits of VFR F.4.1 In our increasingly global world, where inter-country migration for business and social reasons increases annually, the market for Visiting Friends and Relations grows accordingly. UK citizens moving abroad for business or retirement provide airline demand (eg Monarch and other airlines serving the Iberian peninsula and Balearic Islands), and immigrant communities’ links with their ‘home countries’ accelerate as their earnings and accomplishments grow (eg growth of Pakistan International UK route network serving Manchester, Leeds/Bradford and Glasgow as well as London Heathrow).

F.4 2 While the social benefits of this sector of inbound and outbound travel may be significant in building relationships and understanding, the economic benefits are more limited – particularly where the ‘inward travel’ benefits of additional expenditure within the UK are minimized by accommodation and subsistence provided by hosting families and friends, and less is therefore spent with hotels and catering in the UK.

F.4.3 The loco airlines led by Ryanair have significantly grown this sector for short-haul travel, but this growth has been largely in increased frequency of travel, in the form of frequent repeat visits facilitated by ‘cheap as chips’ ticket prices. This has replaced the traditional ‘once-in-a-while’ VFR visits, for special occasions and celebrations, which was the norm for UK>

F.4.4 In the UK, I feel this market is approaching saturation, driven by loco airlines’ eager search for Loads at the expense of Yields. It is of limited benefit to the UK economy, and should be rated well below Business Travel and Holiday & Educational.

F.4.5 Longer-term, growing demand for more frequent VFR travel in such emergent economies as China, India and Brazil will drive airline growth, delivering considerable volume but at low prices. The limited economic value of this sector of travel delivers little benefit, but the environmental impact of the burgeoning growth in routes and flight frequencies is massive. An area of primary concern, where the environmental impact of increasing air travel continues to pose a problem. One day, we may need globally to explore constraints on VFR travel.

F.6 Benefits of PfP F.6.1 Purely for Pleasure flying is an extension of the short ‘pleasure flights’ of a previous age – a decision to fly which is based on minimal pricing and increased leisure time, rather than planned Holiday or Educational travel, celebration-driven VFR, or travel for business.

F.6.2 Where return travel can be purchased for less than £100, and where holiday entitlements in work and training are extensive, PfP flying becomes an alternative to a night out at the cinema with meal, or a shopping trip to Westfield or the Centre. A weekend on Prague or Paris, or a short break to Nice or the Nile, becomes an easy-to-access indulgence, rather than a justified journey or a well-earned reward.

F.6.3 Where airlines operate routes that depend for a significant proportion of their revenue delivery on PfP, those routes contribute to environmental emissions while delivering little benefit to the UK economy. That applies to incoming PfP tourism by overseas visitors as much as outbound PfP tourism by UK citizens. As the least beneficial, it should be encouraged significantly less than air travel for Business, Holiday & Educational, and VFR. At some stage, we may wish to explore constraints on this category of flying.

G : Question 4 What is the impact of Air Passenger Duty on the aviation industry?

G.1 We should not deceive ourselves that the impact is devastating. At worst, it is significant. At best, and in some of the four sectors, it could be beneficial to the UK. The vociferous lobbying of airline characters and their lobbyists must not convince that APD deeply damages the economics of airline operation.

G.2 It is, however, iniquitous that APD distorts competition, and provides a very uneven playing field in an internationally-competitive marketplace. The retreat from APD by competitor countries such as Netherlands and Ireland delivers them with advantages that hurt our airlines, airports and air transport employees – and their ability to contribute taxes and expenditure to our economy.

G.3 Business travel is essential to the profitable functioning of UK business. APD acts as an additional discouragement to airlines, signaling that the UK does not welcome them or their routes, and emphasising that, in a free worldwide market, there may be more attractive countries to serve. The example of VLM Airlines, and its withdrawal of its key routes linking Manchester and Liverpool to London’s City business airport, is evidence here : CEO Johan Vanneste is on record as attributing their decision in part to the discouragement of a country which sought to encourage investment from Belgium-based and Dutch-owned VLM in its domestic routes, but then imposed direct APD disincentives that were not equally applied to competition from medium-speed rail.

G.4 Where the travel is for VFR, for PfP or even Holiday & Educational Leisure, the impact of APD may be beneficial by discouraging unnecessary outbound travel, or minimizing travel which has a negative effect on the UK economy. For example, a significant percentage of flying with Ryanair, EasyJet and other loco operators is at minimal prices, facilitating increased outbound frequency of travel for VFR, an increase in overseas holidays and longer cultural and educational stays - to the cost of UK-based alternatives, resorts, tourism attractions and destinations. On the other hand, higher APD may act as a disincentive to inbound travel, which is a growing form of export, with benefits to UK trade, income, tax and employment.

G.5 Impact ? Variable, and uncertain. On balance, negative – but not unacceptable, particularly if it were restructured to encourage more environmentally-efficient aircraft operations.

H : Question 5 How should improving the passenger experience be reflected in the Government’s aviation strategy?

H.1 A confused question. The absence of clarification or definition of ‘passenger experience’ inhibits comment.

H.2 I have assumed the relation between passenger experience and the Government’s aviation strategy is limited to those areas where Government activity and responsibilities affect passengers.

H.3 Assuming ‘passenger experience’ means those aspects of the passenger’s experience during travel, then the Government’s aviation strategy should concentrate on those aspects of the passenger’s travel directly affected by Government-sponsored activity. This is primarily Government-specified security checks (particularly prior to departure) and arrivals checks by HM Customs on and contraband.

H.4 The aspects of ‘passenger experience’ that requires inclusion in the Government’s aviation strategy are : • the waiting line times that mar the passenger experience • the attitude and treatment provided by those from HM Customs and others who implement those checks • the lack of welcome and appreciation implied by the impersonal and at times inhuman attitudes of the Government-sponsored personnel applying the checks. Where a traveller is a visitor to our shores, and therefore a potential source of income to our country, they should be welcomed as a potential friend – and not treated automatically as a potential enemy. Long waiting lists, threatening treatment and impersonal attitudes do not friends make. Where the traveller is a UK citizen returning to his or her homeland, the need for a welcome expressed in minimal queuing and appreciative treatment is equally justified.

H.5 Having experienced the ‘passenger treatment’ from government agencies on arrival in many less democratic countries in the old Eastern bloc, and in passenger-ferocious airports in the USA, I am sad to note that the UK has begun to overtake them all as an unfriendly ‘passenger experience’ where airport security, passport and other arrivals checks are concerned. Government aviation strategy should explore that, and the negative knock-on effects such passenger treatment has on the decisions of airlines on whether to invest in routes serving UK airports. To remind ourselves, the Government’s primary tactic should be to maximise the retention and attraction of international airlines, and their investment in the routes which serve the capital city and regions of the UK. Providing a welcome to an airline’s passengers, a vital component of their appeal to customers, is an essential element of that tactic.

I : Question 6 Where does aviation fit in the overall transport strategy?

I.1 Airports represent the most immobile and concentrated elements of the overall transport strategy. Air routes are a vital part of our nation’s interconnectivity, and our ability to earn and profit in our global world. Airlines are the unequalled arbiters of our nation’s air transport facilities, as it is they who decide whether a route exists or closes. Their decisions are increasingly based on the actual or perceived profitability of each individual route.

I.2 Therefore, aviation should be at the centre of the Government’s overall transport strategy. Airports must be integrated within the transport infrastructure. Local, regional and national transport must integrate airports, both in terms of location and timing, to ensure transport infrastructure serving airports does so at times which support the through-the-day-and-night ebb-and-flow of airport operations, airline arrivals and departures, and the transportation needs of the employees who keep the airports and airlines efficiently operational.

I.3 The absence of effective integrated transport planning incorporating airports has long been a concern of those who would maximise usage of public transport, and minimize the environmental and traffic impacts of airport operation. Far too high a percentage of passengers and freight (particularly at regional airports) arrives and departs by private road vehicles – a situation where airports parking receipts can discourage airports from motivating public transport usage. We need better integration of all aspects of public transport across the UK, and particularly in the provision of access to airports by passengers, freight and employees.

J : Question 7 How should we make the best use of existing aviation capacity?

J.1 By maximizing the usage of existing airports, starting with London Heathrow.

J.2 There are lessons to be learned from the failure of London Stansted to build traffic, encourage international airlines to maintain routes serving Business Travel and Holiday & Educational Leisure, and its resulting over- dependence on PfP and VFR travel, much of which is socially unwarranted and encouraged by loco airlines’ ‘cheap as a pair of cinema tickets’ pricing. You cannot force passengers to use airports that do not suit their needs, and you cannot force airlines to use UK airports that do not appeal to them, their passenger projections or their financial requirements.

J.3 Routes are initiated and promoted by airlines at airports which they want to use, and which they perceive their potential customers want to use. That is why London Heathrow has over-demand, where its siblings at Stansted, Luton and even Gatwick suffer from too much capacity chasing too little airline demand. And that is why leading regional airports such as Manchester, Birmingham, Newcastle and Glasgow have suffered from shrinking route networks, and fluctuating passenger numbers

J.4 This implies very simply that, for aviation and air travel to best serve UK plc, the Government must prioritise the development of London Heathrow. That covers access transport enhancement and integration (including fastrail such as HS2), the improvement of inter-terminal connectivity to build transfer traffic from within the UK and internationally – and the unpalatable but unavoidable expansion of airline operational capacity by the agreement to and swift construction of Runway 3, followed by exploration of opportunities for Runway 4. The salient words of Qatar Airways’ CEO Akbar Al Baker should ring in our ears.

K : Question 8 How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

K.1 The UK needs to augment existing London airport capacity by providing additional slots at the airports where airline demand for additional routes and frequencies exists today, and in the future. As the succinct summary by Qatar Airways’ CEO firmly records, if UK plc is to benefit from aviation policy, there must be a third runway at the UK’s primary hub of London Heathrow – and quickly.

K.2 Recent encouragements to airlines to add routes and frequencies at the other London airports of Stansted and Luton have failed : many airlines do not want to fly from those airports, because their passengers do not want to use them. Those airports are the preserves of the point-to-point loco airlines largely serving the VFR and PfP markets, with the low levels of service and minimal prices those markets need if they are to flourish.

K.3 Similarly, airlines are loathe to take up the limited available capacity at London Gatwick, as it is a less attractive option to airlines and their passengers than Heathrow. This undermines the 17th October 2012 proposal of a second runway at London Gatwick announced by the airport’s owners US-based investment fund Global Infrastructure Partners (GIP), which is on record as planning to sell off its investment to a range of parties by 2018 : that, of course, could be the reason for their announcement of expansion plans post-2020.

K.4 London City, also owned by capital-gains-driven GIP, is full – and there is little opportunity for additional slots at times to suit its largely-business target markets.

K.5 Therefore, Government’s measures to “make the best use of existing London airport capacity” have failed.

K.6 To improve passenger experience and airport resilience (ie the ability of airports to react and change in the face of changing market conditions and demands), the Government must add capacity where the passengers, the markets and the airlines demand them. That means more capacity at London Heathrow, delivered by at least one additional runway, and before more “resilient” competitor hub airports in near-Europe, Middle East and beyond corner markets for international travel, take our trade, and endanger our economy and employment.

L : Question 9 Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

L.1 The best use of existing capacity at airports outside the south east is decided by the airlines that choose to serve them. I understand London Heathrow and London City are the only two airports in the UK where there is insufficient capacity to meet airlines’ demands for new routes and added frequencies – although major regional airports such as Manchester and Birmingham have limited capacity during morning and (to a lesser extent) evening peak times to meet all demand for new timeslots.

L.2 Where Government aviation strategy encourages airlines to maintain and add new routes serving airports outside the south east, and helps convince them they will be able to operate those routes with acceptable profitability, demand may grow. Those encouragements include financial incentives rather than penalties such as APD, enhanced ATC for access over the rest of the UK, improvements in integrated transport serving the airports, and other aspects which demonstrate the UK welcomes the airlines and their routes, and does not regard them primarily as tax-gatherers, pollution-creators, noise-deliverers and problem-bringers.

L.3 Where Government’s Aviation Strategies and Policies discourage those airlines by fiscal charges such as APD, and by other constraints and limitations, those airlines will turn their backs on UK regional airports, and on the UK as a market.

M : Question 10 How can surface access to airports be improved?

M.1 By the better integration of local and regional feeder services by rail and bus, particularly to regional airports but also to London’s further airports at Stansted and Luton. That applies to routes, to frequencies and to service timings that cater for early flight departures and late arrivals – and for the local staff who man those flights and provide airport support. UK airports have a poor track record of proper integration of surface transport, way behind competitor airports such as Zurich, Frankfurt and Amsterdam – although improvements have been noted over recent years. A great deal of the problem is the chicken-and-egg situation of not enough demand for public transport links, and therefore lack of provision under shorter-term financially-driven franchise structures.

M.2 Swift access to London Heathrow by rail from anywhere other than Central London is poor : the dedicated if expensive non-stop runs from relatively isolated Paddington Rail Station, as does the lower-price alternative. The from Victoria is effective if expensive, with marginally-slower stopping services at lower prices. These options are good, but inadequate for airports serving the whole of the UK.

N : Question 11 What constraints are there on increasing UK aviation capacity?

N.1 There is more than adequate airport capacity in the UK to serve the country’s cumulated inward and outbound needs. The trouble is, it’s not been built in the right places – yet Government seems to believe that travellers can be persuaded to use airports which are less than convenient for their needs.

N.2 Failure to build adequate capacity in south east England, and particularly at the country’s primary hub at Heathrow, has put damaging constraints on the economic contribution of aviation to UK plc.

O : Question 12 Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

O.1 Yes. Airlines share Government ambitions and green activists’ aims to reduce the environmental impact of flying, particularly as lower noise and lower emissions are delivered by more modern aircraft design, greater engine efficiency and lower fuel consumption.

O.2 Airport operation in the UK has become significantly quieter over recent decades, and emissions per passenger kilometre reduced, as aircraft manufacturers have reacted to airline pressure to deliver aircraft with lower fuel consumption. Latest generation jet and turboprop aircraft have engines which are less noisy and more powerful, and which are increasingly fuel-frugal. In addition, weight of aircraft per passenger have been reduced, as demonstrated most effectively by Boeing’s new 787 Dreamliner, and also by Airbus’ large-capacity A380 Series. Additionally, and partly driven by the ‘pared to a minimum’ attitudes of the new breed of loco airlines such as Ryanair, operational wastage of fuel has been minimized, and fuel frugality put high up the airlines’ priority list. That is the best way of minimizing the environmental and noise impact of aviation.

P : Question 13 Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change?

P.1 No. Air travel is a global business. In China alone, there are agreed plans for the construction of nearly 100 new airports and 150 commercial runways – including the monster Beijing Daxing Airport, opening in 2017 with 4 operational runways, plans for 4 more runways, and a capacity of up to 200 million passengers per year in addition to the existing Beijing Capital International’s 3 runways and 85 million passengers. The impact of UK aviation on climate change would be marginal even if the number of flights serving the UK doubled overnight.

P.2 It is right that the UK should encourage its air transport business to minimize environmental impact by encouraging the usage of the most enviro-efficient aircraft available – a decision to upgrade airline fleets that is heavily influenced by airline’s route profitability. However, it would be unfortunate if UK Government policies aimed to help reduce carbon emissions put us further behind in our fight for international trade and exports, and thus reduced the ability of airlines serving our airports to generate the profitability and healthy balance sheets that facilitate investment in replacement higher-efficiency aircraft, and the disposal of the many old gas-guzzling airliners which remain on UK airlines’ fleet lists, such as British Airways’ aged 737, 767 and 747 Boeings.

P.3 One key way of using Government strategy to reduce carbon emissions, reduce the impact of our aviation on climate change, and provide leadership by example to the rest of the world would be commission Runway 3 at London Heathrow as the world’s first ‘green runway’, by insisting (through fiscal and planning incentives) that only the most fuel-efficient aircraft, carrying the maximum Loads and resulting passenger numbers, are permitted to use that runway.

P.4 Other than that, whatever the Government’s proposals, they will make minimal impact on climate change. As a tiny country, we are simply too small an act to have any material effect on world-spanning climate change.

R : Question 14 How can aviation be made more sustainable?

R.1 If this means ‘more environmentally sustainable’ rather than ‘financially sustainable’, by encouraging: • the purchase of latest-generation fuel-frugal aircraft • the selection of larger-capacity aircraft, to minimize energy usage per passenger kilometre • the maximization of Loads on all routes (ie % available seats occupied per flight) • the provision of new runway capacity whose usage is restricted to the most fuel-efficient aircraft, with maximized Loads and passenger occupancy.

S : Question 15 What is the relationship between the Government’s strategy and EU aviation policies?

S.1 Disjointed and distant – and set to deteriorate, as the anti-EU stance of the Coalition Government, the media and other vocal opinion-leaders grows in breadth and momentum. Sad, because – having lost our leadership in aviation development – there is a great deal we can learn from the EU, and its progressive aviation policies and strategy development.

T : Question 16 Do we need a step-change in UK aviation capacity? Why?

T.1 This is an appropriate and important question. Unfortunately, the Transport Select Committee (and our Westminster Governments) ask the question at least 20 years too late. Aviation capacity is not a national question. It is international. And the UK’s near-Europe competitors have taken steps to build capacity while UK Governments have kept control of airport capacity planning, but have dithered in their thinking and decision-making.

U : Question 17 What should this step-change be?

U.1 A good question, but again too late.

U.2 The UK’s competitor hubs in near-Europe led by Amsterdam, Frankfurt, Paris Charles de Gaulle, Madrid Barajas and Leonardo da Vinci have all worked in association with their ‘local’ airlines to increase capacity by huge investment in new runways, terminals and transport access : • Amsterdam Schiphol 6th Runway (12,350ft) opened 2003 • Frankfurt 4th Runway (9,240ft) opened 2011 • Paris CdG 3rd Runway (8,850ft) opened 1998, 4th (13,780ft) 2000 • Madrid Barajas 3rd + 4th Runways (11,482ft) added 2006 • Rome LdaV (FCO) Current 4 Runways : additional two 10,000ft-plus Runways planned The airlines serving these UK-competitive hubs led by Air France/KLM and have capitalized on their host countries’ vision in investing in airport capacity by providing networks of routes serving UK regional airports, and linking to international and intercontinental routes to deliver UK-sourced revenue to these overseas companies, and jobs to their national communities

U.3 Further afield, the recently-emergent Middle East superhubs have stolen our thunder : • Abu Dhabi two 10,000ft-plus runways in recent years to serve Etihad and others • Qatar new airport adds two 13,000ft-plus runways to one at existing airport 5km away. • Dubai five 10,000ft-plus runways at new Al Maktoum International airport : additional to three 10,000ft-plus runways at Emirates’ existing base In a few decades, the new super-airlines emerging from the UAE have imaginatively spread their wings to become the UK’s regional airlines of choice for inter-continental travel to the East. For Manchester, Birmingham, Glasgow and Newcastle, Emirates via Dubai is first choice – a situation which Etihad seeks to emulate, first from Manchester, and Qatar Airways plans to follow.

V : Question 18 Should there be a new hub airport?

V.1 No. The UK has an adequate number of airports, and those which developed to serve the UK’s international travel are well-located. For example, London Heathrow (the replacement for London Croydon) is close to central London, well-served by public transport links from central and suburban London, and has good car access from the majority of the UK’s regional population, which is located to the North, West and South of Heathrow. The addition of a long-awaited fast rail link to the UK’s regions would transform London Heathrow as the UK’s air travel hub, while maintaining the current business models of regional airports.

V.2 Development of new airports is a fraught business, particularly in high-democracy states such as the UK. Development of existing airports is facilitated by existing infrastructure and intrusion, and by existing travel plans. Additionally, where individual airports are supported by a concentration of lower-income inconvenient-hours jobs filled by local populations with close family and social links, such as the Asian-heritage families supporting Heathrow and the family-home-dependent younger check-in and cabin crew staff supporting resident airlines, transfers of thousands of jobs to a replacement airport situated some distance away causes immense social and employment problems which airlines and local populations are loath to accept. It is wise to listen further than the local Nimby clamour of those who are not dependent on their local airport for their employment, business or social focus, and whose family and friendship lives are not enhanced by the proximity of such employers and related facilities.

W : Question 19 Where?

W.1 The concept of a move of the UK’s prime hub to a Greenfield site, or a ‘Boris Island’ airport in the Thames Gateway, is deeply flawed from the standpoints of staffing (see V.2, above), and the challenges of multi-airport operation faced by key airlines whose smooth-running in demanding times is essential if they are to maintain yields, loads and revenues in fierce competition with alternatives in near-Europe, the Middle East and beyond.

W.2 The ideal location for a UK national hub serving its priority markets of Greater London, the south-east of England and the other regions of England, Wales and Scotland is to the west of central London, within reach of existing transport infrastructure and an appropriate workforce. Heathrow may not be perfect, but it is the best option the UK has to offer.

W.3 In Victorian and Edwardian times, the ingenuity and imagination of UK business capitalized on the great opportunities for international trade and profitable exports by expanding the country’s leading ports in London’s Docklands, at Southampton and Bristol, at Liverpool and inland at Manchester. The benefits to national income, regional employments, educational development and civil progress were massive, and are evident to this day.

W.4 Where decisions were made to withhold investment, and leave the way open for more nimble competitors, the results were catastrophic in employment and social costs. While Rotterdam’s Europort and Belgium’s Antwerp led the way, the UK’s leading port cities of Liverpool, its neighbour Manchester and London’s Docklands were starved of investment, and led the social and economic suffering.

W.5 Where Government neglects to maintain and enhance the appeal to airlines of the UK’s primary international transport hub at London Heathrow, and leaves its competitors in near-Europe, the Middle East and beyond to lead the way in capacity and route development, that decline may well be mirrored in our economy, our employment, our international reputation, and our ability to maintain the profitability of UK plc in a world of merciless competition.

W.6 The enhancement of the UK’s transport infrastructure by the reduction of constraints on development at London Heathrow, and the swift approval and construction of Runway 3, would help UK plc face that competition, and protect our country’s jobs, business development and status. The words of Qatar Airways’ CEO ring true.

X : Question 17 What are costs and benefits of these different ways to increase UK aviation capacity?

X.1 This is too large and detailed a subject for adequate analysis within this initial Consultation, which has in my opinion been inadequately defined, particularly in its recognition of the key influencers and influences of the air travel business.

X.2 The influence of airlines in this subject, and particularly their increasing overseas financial and operational focus, are elements of complexity that make a simplistic analysis of the costs and benefits of increasing UK aviation capacity inappropriate.

X.3 Additionally, there are influencers and influences which lie well outside the orbit and influence of Government, its Department for Transport, and its Transport Select Committee. We live in a global world, and the UK has increasingly failed to maintain its leadership and authority in the world of aviation that links its global constituents.

X.4 For decades, I have worked on many aspects of airline route evaluation and airport route grouping marketing, and for a wide span of airlines based in the UK and abroad. I recognise the complexity of the sector’s decision- making, and the need for forward thinking and long-term vision. I watched in dismay as successive Governments avoided properly-planned development of the airport and runway capacity that serves airlines and their customers' airports – and allowed the UK’s leadership in airline route and operations development to wane, to the considerable economic, investment and employment cost of our country.

X.5 As noted at the start of this response, the DfT’s Draft Aviation Policy Framework is flawed in the way it plans to evaluate future strategies and policy for aviation serving the UK. Its over-concentration on environmental matters, and its complete ignorance of the importance of building partnerships with airlines to encourage route development alongside environmental cleanliness and quietness, indicates a lack of understanding. It also fails to appreciate the massive costs to our country if we continue the policy of failing to provide aviation capacity where it is needed.

X.6 Suffice to say that : • The costs of failing to build aviation capacity in the south east of England, and in particular at London Heathrow, are enormous, in jobs, business and trade, authority and international competitiveness. • The benefits of building that capacity within a swift timescale, before we are edged out by competitor nations with more progressive policies, are huge, and essential if UK plc is to recover and prosper. • That capacity hike cannot be replaced by building capacity elsewhere, or by trying to increase usage of that capacity where it exists at other airports, such as the under-performing medium-capacity airports of Manchester, Birmingham and Glasgow. • Proposals for a new high-capacity airport serving London from a new site away from congested urban areas are a time-wasting and deeply-damaging distraction. Within the 20 years’ planning and construction envisaged for ‘Boris Island’ or its elsewhere equivalent, the predictions of Qatar Airways’ knowledgeable CEO will have come to pass. Carriers will have moved away, and taken the UK’s international trade and related employment prospects with them. We will all suffer from such myopia.

19 October 2012

Written evidence from Stop Stansted Expansion (AS 42)

This submission focuses on the issue of UK airport capacity and simply seeks to address the question: Do we need more runways?

1. In 2011, UK airports handled 2.0 million air transport movements (‘ATMs’) and 219 million passengers, and the Committee on Climate Change (‘CCC’) has assessed that the maximum number of ATMs compatible with the target of stabilising UK aviation emissions at their 2005 level (37.5 MtCO2) by 2050 is 3.4 million per annum.1

2. The UK currently has runway capacity to handle 5.7 million ATMs per annum2 and, with some investment in terminals, taxiways and aprons – but without new runways – this can be increased to about 6.7 million annual ATMs. By way of international comparison, the UK has more commercial runways than Germany, France, Spain and Italy. We even have more runway capacity than Japan even though Japan has twice our population and twice our GDP.3

3. Converting ATM capacity into passenger capacity, in 2011 there were, on average, 110 passengers per ATM4 and on this (simplistic) basis UK airports could handle over 700 million passengers per annum (‘mppa’) by 2030 without any new runways. Moreover, the average number of passengers per ATM has grown by 2% a year over the past 20 years and an increase of just 1% a year between now and 2030 would increase the capacity of UK airports to over 1,000 mppa – three times the most recent DfT passenger demand forecast for 2030.5

4. Ten years ago, in the lead-up to the 2003 Air Transport White Paper (‘ATWP’), the key issue to be addressed was the DfT’s ‘unconstrained’ demand forecast of 500 mppa by 2030. The ATWP set down a policy framework, including four new runways in the UK, to meet a ‘constrained’ demand forecast of 484 mppa.6

5. The outlook today is far less bullish. The latest DfT forecasts, published in August 2011, show unconstrained demand of 345 mppa by 2030, and this forecast was based on: • the IMF’s April 2010 World Economic Outlook; • the OBR’s March 2011 Economic and Fiscal Outlook; and • DECC’s March 2009 Fossil Fuel Price Assumptions. In each of these areas the outlook has since deteriorated, so far as the air traffic demand forecasts are concerned7 and, using the sensitivity analysis provided by the DfT8, it can be estimated that the 2030 unconstrained demand forecast is now about 305 mppa.9

6. It is therefore clear that the challenge of meeting the future level of demand on our UK airports is far less today than was anticipated ten years ago. The reduction in the unconstrained demand forecast is equivalent to the capacity of more than four runways.

7. However, the main shortcoming with all of the above analysis is that it considers the UK as a whole and ignores the over-concentration of air travel on airports in the south east. In 2011, 62% of UK air travel was from airports in the south east but the south east accounts for only one third of the UK population and just 12% of the UK land area. It is the most crowded part of the UK and it has the most crowded airspace in the world.

8. Without additional runways, airports in the south east will be capable of handling c.220 mppa by 2030, i.e. 72% of the projected demand for the whole of the UK, and so even in the south east, taken as a whole, there is more than adequate airport capacity until about 2030.

9. The DfT has produced demand projections beyond 2030 – to as far out as 2080 – which do predict a capacity shortfall in the south east. In our view, however, it is neither sensible nor necessary to look at air traffic demand forecasts for more than 20 years ahead. There are so many uncertainties associated with the future demand for air travel that it is delusionary to try to predict demand more than about 20 years ahead. Moreover, if extra capacity is genuinely needed, it could be delivered within a 20 year time horizon.

10. We acknowledge however that there is a particular problem in meeting market demand at Heathrow, and there are those who believe that there are associated problems arising from the alleged need for more hub capacity. For obvious environmental reasons, we are firmly opposed to the development of a third Heathrow runway, just as we are firmly opposed to any additional runways at Gatwick or Stansted. Instead, we believe that the Government should use the policy tools which it has at its disposal to manage the demand for air travel.

11. Amongst the simplest policy tools available to Government is Air Passenger Duty (‘APD’). Higher levels of APD can be justified at a number of levels (see Annex A) and could quite reasonably and logically be used to temper the demand for air travel. In addition, differential rates of APD could be used to shift demand away from congested airports, and this would have particular implications for Heathrow as a hub airport.

12. In seeking to persuade the Government of the need for more airport capacity, the aviation industry constantly emphasises the importance of connectivity to UK business but the number of business flights by UK residents has fallen by 20% since 2000 and only one in every eight overseas flights by UK residents last year was for business purposes.10 The decline, at least in part, must reflect the fact that companies are increasingly taking advantage of video and web conferencing technology as an alternative to (at least some) face-to-face meetings.11

13. Even at Heathrow, business trips – including by foreign residents and including transfer passengers – accounted for only 31% of its passenger throughput last year, compared to 38% in 2000. Leisure travel, including VFR12, now accounts for 79% of all UK air travel.13 It is true that leisure travellers, when aggregated with business travellers, can sometimes help to justify a route and/or a more frequent service but this is not a universal truth. Some routes fall quite distinctly into one category or the other. In this context, it is worth noting that you can fly every day of the week from Stansted to Palma and Tenerife but there are no flights from Stansted to any of the key European business centres: Frankfurt, Paris, Zurich or Brussels.14 Heathrow also still has its fair share of predominantly leisure routes and, in 2011, flew more passengers to Miami than to mainland China and more passengers to Nice than to Brazil.15

14. In short, we believe that there is considerable scope to make better use of UK airport capacity. Differential rates of APD could be used as a tool to re-distribute demand away from the busiest airports and this would also help to prioritise the use of scarce capacity at our busiest airports because business travel is much less price sensitive than leisure travel.16

Deliverability 15. Finally, we have dealt in this submission solely with the issue of demand and whether or not extra runways are needed to meet that demand. There is, however, another major policy consideration, namely, the question of deliverability. Governments do not build runways – at least, not in the UK – and so there is no point in promoting a policy which is undeliverable for financial and/or commercial reasons. The outcome will finally be determined by market as well as political considerations.

19 October 2012

References

1 ‘Meeting the UK aviation target – options for reducing emissions to 2050’, CCC, Dec 2009. 2 Ibid, based on original estimates in Tables ES.2a and ES.2b, the former adjusted to incorporate developments since 2005 and the latter adjusted to remove capacity relating to additional runways. 3 Boeing Airport Directory, CIA World Factbook 2011, CAA, NATS AIS (Aeronautical Information Service) and azworldairports.com. 4 CAA airport statistics; excludes freight ATMs, which accounted for 2.7% of total ATMs in 2011. 5 ‘UK Aviation Forecasts’, DfT, August 2011, Table 2.7. 6 ‘Passenger Forecasts: Additional Analysis’, DfT, Dec 2003, p6. Note: The ATWP was presented as constraining demand, not ‘predict and provide’ but the policy was to provide for 97% of unconstrained demand (484 mppa out of 500 mppa).

7 For example, DECC’s central oil price forecast for 2030 is now US$130/brl compared to US$90/brl used by DfT – see http://www.decc.gov.uk/assets/decc/11/about-us/economics-social-research/2934- decc-oil-price-projections.pdf and ‘UK Aviation Forecasts’, DfT, August 2011, para 2.33. 8 ‘UK Aviation Forecasts’, DfT, August 2011, Tables 2.9 and 2.10 and Annex C. 9 SSE modelling of the updated IMF, OBR and DECC forecasts/projections. 10 ’Travel Trends’, Office for National Statistics, 2000 and 2011 editions, Table 3.07 air travel data. 11 See, for example, ‘Moving on: why flying less means more for business’, WWF, Feb 2011. 12 VFR = Visiting friends and relations. 13 Weighted average based on Table 2 data from the CAA Annual Passenger Surveys 2009 to 2011. 14 There are flights from Stansted to Frankfurt Hahn but this is 120km from Frankfurt. Also, it should be noted that in past years there have been some winter ‘ski’ flights from Stansted to Zurich. 15 CAA Airport Statistics, 2011, Table 12.1, International Air Passenger Route Analysis shows that Heathrow flew. 954,000 passengers to/from Miami, 663,000 to/from mainland China (Beijing/Shanghai), 537,000 to/from Nice and 526,000 to/from Brazil (Rio de Janeiro/Sao Paulo). 16 ‘UK Aviation Forecasts’, DfT, August 2011, p.15-19, especially the comparable price elasticities in Table 2.1 (p18).

Annex A

Air Passenger Duty – Ten Key Points

1. APD was introduced in 1994 by Ken Clarke, the then Chancellor of the Exchequer, not as an environmental tax but because he considered the aviation industry to be lightly taxed compared to other sectors, largely arising from its exemption from fuel duty and VAT.

2. APD was initially set at £5 for short haul economy flights, which account for three quarters of all air travel. In 1997 Ken Clarke doubled APD to £10 for short haul economy flights.

3. Gordon Brown halved the short haul economy rate of APD in 2001, put it back up again to £10 in 2007 and Alistair Darling raised it to £11 in 2009. George Osborne increased it to £12 in 2010. There was no increase in 2011 but it was raised to £13 in April 2012. Thus, for the vast majority of passengers APD has increased by just £3 (30%) over the past 15 years.

4. APD is payable only on departure from a UK airport and so the basic Band A rate of £13 is for a round trip to an overseas destination. APD is however payable on both legs of a domestic round trip within the UK.

5. APD raised £2.6 billion for public finances in 2011/12 and this is planned to increase to £3.9 billion by 2016/17. APD would, however, need to rise to four times its current level to offset the value of the industry’s exemption from fuel duty and VAT. If airlines paid the same level of fuel duty and VAT as road users, the cost to the aviation industry would be around £10.5 billion a year.

6. Not only do airlines pay no VAT on fuel, they are exempt from VAT on everything they buy relating to the provision of air transport services. Mostly, VAT is not charged in the first place; aircraft and aviation fuel, for example, are zero rated. Where VAT is charged, it can be claimed back. In 2010/11, HMRC paid UK airlines a VAT rebate of £583 million (net).

7. In 2010/11, the latest year for which a detailed HMRC breakdown is currently available, 77% of passengers paid APD at the short haul economy rate (Band A).

8. Whilst it is true that “passengers can end up paying £184 tax on some flights”, as we are repeatedly told by the industry, this is the top rate of APD and applies only to first class and

business class passengers on long haul flights to countries whose capital city is over 6,000 miles from London. Less than 0.4% of all air passengers fell into this category in 2010/11.

9. Regarding the alleged negative impacts on the UK economy of the recent hikes in APD, it is worth noting that overseas leisure trips by UK residents fell from 60.1 million in 2008 to 49.2 million in 2011 – down 10.9 million (21.5%) whilst the number of foreign tourists coming to the UK fell by less than 300,000 (1.6%) over the same period, from 23.8 million to 23.5 million. The effect of this was to reduce the UK’s tourism deficit by £6.8 billion and to boost spending in the domestic UK tourism industry by £5.1 billion over the same period (2011 vs 2008).

10. Finally, those in the aviation industry who are pressing the Government for APD to be reduced should explain how they would propose to make up the revenue shortfall to the Exchequer. Should we sack some more policemen, teachers or nurses? Should we cut pensions or welfare benefits? Or should we raise VAT and/or extend its scope?

WRITTEN EVIDENCE FROM CRAWLEY BOROUGH COUNCIL (AS 43)

Executive Summary

1. Crawley Borough Council is the Local Planning Authority for Gatwick Airport and therefore has a significant interest in the development of the Government’s Aviation Strategy.

2. The Borough Council puts forward the following comments for consideration by the Committee:

• The relationship between the Aviation Policy Framework and the work of the independent Aviation Commission needs to be clear to ensure that all options regarding airport capacity are given full consideration and assessment. • In making best use of existing capacity at airports in the short term, the environmental impact associated with increased passenger throughput needs to be managed. • Proposals relating to capacity at one airport could have a knock on effect on the role of other airports and it is important that this relationship is fully understood and assessed as part of the development of national aviation policy. • There needs to be clear guidance to local planning authorities on the role of safeguarding and protecting areas from “incompatible development” where there are potential options for future runway development. • Greater consideration needs to be given to assessing the surface access implications associated with airports and increases in capacity. • Guidance relating to the onset of community annoyance from aircraft noise needs to be based on more detailed evidence.

Written Evidence

The Benefits of Aviation 3. The importance of aviation to the economy is recognised both at a national, regional and local level. The proximity of Crawley to Gatwick Airport means that around 1 in 7 of Crawley’s residents work at the airport, or in its associated services and industries.

4. The principle of making best use of existing capacity to meet demand in the short term is supported as it is efficient in terms of maximising the use of the existing facilities. However, it should also be recognised that there is an environmental impact associated with increasing passenger throughput using existing capacity and it is still important to ensure that the environmental impact of this growth is mitigated. The existing S106 agreement between the local authorities and Gatwick Airport Limited is based on these principles and sets out various ways in which the environmental impact of the airport will be managed as it grows towards 40 million passengers per annum (the maximum capacity of Gatwick with a single runway).

Airport Capacity 5. This is an issue of fundamental importance to the local area as the implications of any additional runway capacity wherever it is located in the South East will have a significant impact on Crawley Borough. Additional capacity at Gatwick could increase jobs and benefit the economy, but there would be considerable environmental impacts. Alternatively, if another location is identified for growth in hub capacity, there will be long term impacts for all the other airports including Gatwick as airlines potentially re-organise their operations. This could have a detrimental effect on the local economy. The Borough Council and other partners are preparing to undertake an assessment of the impacts of various scenarios of providing additional airport capacity on local and sub-regional employment in the Crawley area and Gatwick sub region. It is hoped this evidence will be useful in formulating the

Borough Council’s contribution to the work of the independent commission dealing with maintaining the hub capability of the UK.

6. There has been uncertainty about future runway development at Gatwick for a number of years, with land currently safeguarded and therefore prevented from being used positively to meet local development needs. It is, therefore, important that the Government keeps to its latest timescales for assessing the issue of long term airport capacity in the UK. This will help give confidence to local and national economies and local communities to plan for the future. The draft Aviation Policy Framework, which is due to be published well in advance of the findings of the independent commission, should make it clear that all options for the long term are to be considered, including the balance between hub capacity and point to point to ensure that all decisions are made in light of all the available evidence.

7. The overall importance of surface access links to airports that is highlighted in the APF is welcomed. There is a particular focus on High Speed Rail 2 being an alternative to domestic and short haul flights but the importance of the role of rail not on High Speed Routes in enabling airports such as Gatwick to achieve their point to point function effectively, is not sufficiently highlighted. There is some reference to working with partners to identify further opportunities to improve rail services but it is important that this ultimately delivers improvements to services and overcomes capacity constraints on the rail network.

Climate Change Impacts

8. Addressing climate change issues at a global level is important to ensure that the whole of the aviation industry addresses the issue irrespective of where they operate from.

Noise and other local environmental impacts

9. The draft Aviation Policy Framework sets out a range of initiatives to manage the impact of airports on noise and other environmental issues. The following paragraphs represent the Borough Councils views on the proposals set out in the Framework.

10. The overall objective “to limit and where possible reduce the number of people in the UK significantly affected by aircraft noise” is reasonable as the principle of this objective is appropriate. The relationship of the “to reduce” part of this objective needs consideration in light of the assessment of the need for additional hub capacity in the UK including the contribution which could be made through increased size of aircraft, noise can be reduced with quieter engines.

11. In the APF the Government recognises that the 57dB LAeq 16hr contour no longer truly reflects the onset of community annoyance. It is therefore not appropriate to continue to use this contour. The Government should examine other indices to measure community annoyance as frequency of flights plays a major part in community annoyance. There is no conclusive evidence as the government has commissioned very little research into the subject. Community annoyance could also vary from urban to rural areas and this needs to be examined in more detail by the government. The daytime 57dB contour also fails to include the impact of night flights.

12. Consideration should be allowed for both a lowering of the finite 57 dB(A) band in tandem with alternative or complimentary ratings such as C weighting due to the noise type and intensity to allow better modelling of the likely community response where noise sensitive premises are exposed to high levels of aircraft movements.

13. There should be a move to the Lden as this reflects the relative impact of evening and night noise. There should also be further examination of LAmax contours, especially at night

where regular sleep arousal can adversely affect health. Contours showing the number of events over 60dB LAmax for night noise would capture this.

14. The use of noise envelopes can be an effective method of controlling noise and can encourage the use of quieter aircraft to increase overall capacity. However as discussed above the frequency of flights can contribute as much to ‘annoyance’ as the actual overall average noise levels, so all envelopes will depend on local conditions. Any envelope agreement must be clearly defined and come with an effective method of control.

15. It is difficult to put one environmental issue above another as all environmental factors need to be considered and given the relevant weight depending on their relative impact on health.

16. The Government should continue to designate the three airports for noise management purposes. There are many conflicting interests surrounding airports and it would be difficult for one authority to independently exercise adequate controls, unless these controls are clearly set out in legislation.

17. Any noise designated airport which has residents adversely affected by noise should be forced to establish and maintain a penalty scheme.

18. The current night quota at Gatwick is under utilised. With Gatwick aiming for 45 mppa this additional headroom is likely to be used as the daytime slots fill up resulting in a substantial increase in night flights. This will presumably be made up of additional holiday/leisure flights. Therefore charging more for night flights may only result in larger profits for the airport and no benefit to residents. To protect residents from the worst aspect of aviation, namely night flights, the Government should aim to reduce night flights incrementally over a period of time.

19. During the day differential landing fees should be introduced as it follows the principle of the ‘polluter pays’ and will encourage quieter aircraft.

20. The present compensation schemes are the minimum that should be offered. The offer to cover the costs of moving only results in one household replacing another and doesn’t recognise that noise at that level could have a significant adverse effect on health. Research is clearly demonstrating that high levels of noise can cause long term health problems and compensation schemes should ensure that those properties suffering high levels of noise are purchased and are no longer used for residential purposes in the future or until noise levels reduce again. The level at which this should happen should be around the 69dB LAeq16hr or 60dB LAeq8hr for night time noise.

21. The offer to cover the cost of moving should also be available to those who have experienced a significant increase in noise due to changes in airport operation or expansion and are exposed to higher noise levels, for example a property exposed to levels above 63dB by changes in airport operation (i.e. new runway/changes in NPRs). Sound insulation only improves the internal noise environment of a home (with windows closed) and not private gardens or the surrounding neighbourhood. The impact of the loss of residential properties on the supply of housing in an area where demand already outstrips supply also needs to be taken into consideration.

Air Quality 22. The APF highlights the impact that airports can have on air quality and that the policy is to seek improved international standards to reduce emissions from aircraft and to work with airports and local authorities as appropriate to improve air quality.

23. The S106 agreement between Gatwick Airport Limited, Crawley Borough Council and West Sussex County Council signed in 2008 contains a number of obligations concerned with mitigating the environmental impact of the growth of the airport. It has been a useful mechanism for working with the airport on a range of environmental matters and whilst it recognises the role of meeting national regulations and targets (e.g. air quality standards) in managing the operation and growth of the airport, it does also give greater reassurance to the local authorities and others of the actions and activities which are being undertaken in order to help meet these targets.

Planning

24. The draft Aviation Policy Framework only touched on planning issues concerning the development of the airport. However, this issue is particularly important to Crawley Borough Council as the local planning authority for Gatwick Airport. As part of its response to the Scoping Document which preceded the publication of the draft policy framework, the Council sought clarity on the issue of safeguarding land for a second runway at Gatwick. Although the airport operator indicates that amount of land that is required to be safeguarded, this does not have any statutory basis unless it is included in the Local Plan.

25. It is felt that this section of the draft policy framework provides a clear steer that land for a second runway should continue to be safeguarded through the Local Plan until conclusions have been reached regarding the potential for future provision of a hub airport in the south east. It is presumed that this will now be provided by the findings of the independent commission which has recently been set up to examine the issue of a hub airport rather than through the Call for Evidence which is referred to in the document. Where airport expansion is a possibility then safeguarding should remain in place until a final decision is made.

26. Given that it has been indicated that the aviation policy framework will be published in advance of the report on hub airports, it is important that the framework continues to provide clear guidance on the issue of safeguarding and that possible options for any required hub capacity are not precluded until there has been a comprehensive examination of the issues through the Independent Commission. The Borough Council is currently preparing its new local plan to cover the period to 2029 and will need to reflect the latest guidance on safeguarding land.

27. It is also felt that further details on the meaning of “incompatible development” would be useful in formulating planning policies for the safeguarded area in order to give an indication of what sort of development is appropriate in the safeguarded area.

19 October 2012 Written evidence from Manchester Airports Group (AS 44)

1 INTRODUCTION

1.1 This is the submission of the Manchester Airports Group plc (MAG) to the Transport Committee’s Call for Written Evidence into the Government’s Aviation Strategy. MAG welcomes the opportunity to respond.

1.2 MAG is the largest UK-owned airport operator and owns and manages Manchester, and Bournemouth airports. In 2011-12 MAG’s airports handled over 24 million passengers and 421,000 tonnes of cargo, contributing around £3 billion to the UK economy. The group’s activities cover air traffic services, car parking, retail concession management, airport security services, fire fighting, engineering and property development.

2 RESPONSES TO QUESTIONS

Q1. What should be the objectives of Government policy on aviation? 2.1 We believe that aviation policy should be focussed on enhancing connectivity and making best use of airport capacity across the UK. MAG would also like to see a more coordinated approach to aviation policy and other areas of public policy, such as visas, planning and particularly taxation.

(a) How important is international aviation connectivity to the UK aviation industry? 2.2 MAG would argue that international aviation connectivity is not just significant to the aviation industry, it is absolutely critical to the continued success of UK plc. As the economic centres of gravity shift away from Europe and the US towards Asia and the Middle East, the significance of international connectivity, particularly long haul, is set to increase yet further. Research indicates that over the next 15 years, 74% of global growth is expected to be in the developing world, and that this growth is dominated by China (29%)1. International air connections will be vital in ensuring that the UK maximises this opportunity.

(b) What are the benefits of aviation to the UK economy? 2.3 Aviation is a success story of which the UK can be proud. It benefits the UK economy both as a wealth generator in its own right, and by facilitating the wider connectivity of people and trade. It also provides wider social benefits such as enabling people to take a well earned holiday.

2.4 In 2009, Oxford Economics estimated that UK aviation contributes nearly £50bn to the UK economy and sustains some 921,000 jobs. For its part, MAG generates around £3 billion for the UK economy and supports over 86,000 jobs2. Around 19,000 people are employed on the Manchester Airport site, with around 42,000 jobs in the region dependent on the airport business. The Airport City development at Manchester is set to create up to 13,000 additional jobs.

2.5 The UK’s premier hub for pure freight is at (EMA). Express freight at EMA supports over 10,000 local jobs and generates nearly £300 million for the regional economy, as well as facilitating the next day delivery that is critical to key UK business in sectors such as pharmaceuticals and telecommunications. Some 45% (by value) of the UK’s exports go by air3.

2.6 Aviation benefits the economy by supporting inward investment, with international transport links being one of the major considerations for companies when choosing where to locate their business. The 2009 Manchester Independent Economic Review (MIER) branded

1 York Aviation, 2011 2 Latest figures calculated by York Aviation, September 2011 3 What is the contribution of aviation to the UK economy?, Oxera, 2009

Manchester Airport as: ‘critical for [the Manchester City Region’s] aspirations of becoming a truly global economy’4.

2.7 Finally, aviation is a major contributor to the Exchequer. The industry contributes around £9bn in tax revenues, of which more than £2bn comes from Air Passenger Duty (APD).

(c) What is the impact of Air Passenger Duty on the aviation industry? 2.8 APD has reached such high levels that it is placing the UK (not just the aviation industry) at a competitive disadvantage with European counterparts who have much lower or zero flight taxes. It is inhibiting growth in a key sector for the UK economy and discouraging airlines from starting new routes, especially from the airports outside London.

2.9 UK aviation taxes are significantly higher than anywhere else in the world, with UK passengers paying almost 400% more tax than most countries in Europe. Excluding APD, aviation’s tax to GVA ratio is about 33%, broadly in line with the wider economy, however with APD it rises to 55%. In the case of Manchester Airport, the estimated tax take on departing passengers is more than double our revenue from aeronautical charges. For every pound airlines pay to land at Manchester, the Treasury takes £2 in APD.

2.10 The recent case of Northern Ireland and APD clearly demonstrates the effects of the tax. APD was threatening the viability of the air service from Belfast to New York, as passengers were choosing to travel instead via the Republic of Ireland, where the tax is just 3 euros. MAG is also aware of anecdotal evidence to suggest that passengers from the UK are buying two separate tickets (e.g. to mainland Europe or Ireland and onward to long haul destinations) in order to avoid the higher levels of APD. Put simply, APD is having a demonstrable impact on passenger behaviour.

2.11 As well as APD’s impact on UK passengers (and visitors) several airlines have told MAG that APD in the UK is a problem for them. Air Asia X has publicly stated that it would have started a new route from Manchester to Kuala Lumpur, but decided instead in favour of Paris Orly due to UK APD.

2.12 There is also evidence to show that APD has a disproportionate impact in the regions outside of London, particularly when it comes to attracting and sustaining long haul routes. This is due to the greater price sensitivity of passengers at regional airports, the lower proportion of business traffic, and the lower demand for premium class travel. For example, since the significant APD increases in November 2010, growth rates at regional airports have remained stubbornly 2-3% below those of the London airports, suggesting that the tax has acted as a greater ‘drag’ on recovery. By 2016-17, if taxes rise as predicted, the decline in growth will be more than double the level at regional airports than it will be at Heathrow and Gatwick5. MAG believes that the impact of APD, as well as the role it could play in maximising the use of existing capacity (see Q2 below), should be considered urgently by the Government.

(d) How should improving the passenger experience be reflected in the Government’s aviation strategy? 2.13 For the most part, the air passenger experience is delivered by the market – airlines and airports – with little input from the Government. However there is a role for Government in certain areas, such as the visa regime and the experience at the UK border, where we would like to see improvements in the passenger experience.

(e) Where does aviation fit in the overall transport strategy? 2.14 International connectivity does not begin and end at airports – the wider transport network is also important. The Government has made a number of important commitments to improving surface access to UK airports, including the Airport Link road at Manchester, the widening of the A453 at East Midlands, and the Hub and other key rail electrification programmes. These are very welcome. We would also strongly support connecting Manchester Airport to the HS2 line.

4 Economic Baseline Unit 4: Place, MIER, 2009 5 York Aviation, 2012

Q2. How should we make best use of existing aviation capacity? (a) How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? 2.15 MAG has no specific comments on Part (a) of the question.

(b) Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? 2.16 With capacity equivalent to fifteen new Runway 3s already available at existing airports across the UK (including in the London system), there is a strong imperative to make best use of the capacity that exists today. Given that any new capacity is unlikely to become available before 2020, the Government is right to focus on existing capacity, particularly in the short term.

2.17 MAG is committed to making a significant contribution to delivering enhanced connectivity to the UK. Manchester is the largest airport outside of London, and provides the UK with a platform for growth, particularly for the types of network and long haul carriers which provide access to emerging markets worldwide.

2.18 Manchester’s catchment area is similar in size to that of Heathrow, with 22 and 24 million people respectively within a 2-hour drive time of the airport. Crucially its catchment has a relatively small overlap with that of Heathrow, unlike Gatwick and Birmingham, which have significant overlaps. Geographically, Manchester’s position in the North of England means that it has the ability to serve the whole of the UK, not just the whole of England. This could be further strengthened by linking the airport to the HS2 network.

2.19 With 2 runways, and capacity enough to support up to 400,000 movements or 55 million passengers, there is considerable scope to increase the number of destinations and frequencies within existing capacity, reducing the need for passengers to make unnecessary journeys to the airports in the South East. DfT forecasts suggest that Manchester Airport could be handling more than 50 million passengers by 2050.

2.20 Last year over 5 million passengers drove from Manchester’s catchment area to fly from Heathrow or Gatwick. Recent experience of growth by the key Middle East carriers serving Manchester illustrates how passenger demand can be clawed back from London, but given the scale of the challenges facing the South East, we would urge the Government to support a positive package of measures to accelerate that process. This could include: • Lower rates of APD at airports which are not congested; • Introduction of US-pre clearance; • ‘Open skies’ in the UK regions; • Proactive promotion of airports outside of London during bilateral negotiations; • A visa regime designed to ensure that the UK is seen as a welcoming place to visit, particularly from key emerging economies such as China; and • Greater coordination between airports, inward investment agencies, tourism bodies, Government Departments and Embassies worldwide to market the UK to global airlines.

2.21 Work is already well underway in many of these areas and we welcome the Government’s initiatives to date. However MAG believes that reform of APD is central to the package of supportive policy measures that can help to make best use of existing capacity and in the case of Manchester Airport in particular, allow it to continue to develop its prominent national role.

2.22 As described above, the impact of APD is uneven. While airlines are keen to serve the London airports – especially Heathrow and Gatwick – because of the higher yields that can be achieved there, MAG’s experience is that it is more difficult to attract airlines to other UK airports. The demographics of the London airports are such (affluent catchment, large proportion of business traffic, large percentage of inbound and outbound traffic) that additional taxation has minimal impact on propensity to fly. However, this is not the case in the non-London airports, where the recession has had a significant impact, and higher taxes are threatening economic recovery.

2.23 This situation has significant implications for the capacity debate. APD is both perpetuating and widening the gap between the congested UK airports and those with capacity to spare. We believe that a more rational approach would be to use taxation to price demand at congested airports more sensibly and to incentivise the use of those airports that are less constrained. This could provide a significant boost to the regions outside the South East, promoting jobs, new routes and services and inward investment, consistent with the Government’s aspiration for more balanced economic growth.

2.24 MAG believes that the time has come to abandon the ‘one-size-fits-all’ approach to aviation taxes. Differential or congestion taxes offer a potentially revenue neutral way of reconciling the Government’s need to raise revenues from aviation with the aim of rebalancing the UK economy and relieving pressure on congested South East airports.

(c) How can surface access to airports be improved? 2.25 MAG welcomes the commitments to date from the Government to improve surface access to airports. We would like to see the Government build on these commitments by confirming that Manchester Airport, as the gateway to the North of England, will be connected to the HS2 line. We look forward to an early commitment to a HS2 stop for Manchester Airport in Phase 2 of the project.

Q3. What constraints are there on increasing UK aviation capacity? 2.26 Noise, carbon emissions and other related environmental impacts are taken seriously by the aviation industry, which is committed to reducing its overall negative impact. MAG is a member of Sustainable Aviation, which is a long term strategy group, setting out the collective approach of the industry to tackle the challenge of sustainable growth.

(a) Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? 2.27 MAG’s track record in reducing the size of its noise contour, whilst simultaneously increasing flights, should be seen as best practice of how airports can balance their commercial interests and community obligations. For instance between 2001 and 2011, the population in Manchester Airport’s daytime noise contour (60dBLAEQ,16h) fell from 25,050 to 7,650 (a reduction of 69 per cent) whilst residents in the night noise contour (60dBLAEQ,8h) fell from 3,250 to 200 (a reduction of 94 per cent). Noise complaints also fell over the same period from 9,557 to 838, a reduction of 91 per cent.

2.28 We are broadly content that the Government’s Draft Aviation Policy Framework supports our locally based approach and acknowledges our close community engagement, targeted mitigation and work with airlines/freight operators to devise appropriate charges and innovative processes such as Continuous Descent Approach. We have suggested that at our airports concentrating flights along defined corridors, rather than dispersing flights over a wider area to provide ‘respite’, is a better way to manage noise.

2.29 MAG also suggests that the Government retains the 57dB(A) noise contour as it is broadly in line with EU standards and provides a long standing benchmark measure. However, this does need aligning with other noise limit controls such as for rail, road and construction and Government could produce better guidance for local planning authorities to clarify where developments can and should be located.

(b) Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? 2.30 Sustainable Aviation published a CO2 Roadmap in March 2012 setting out a credible path to tackle aviation’s contribution to climate change. Overall, the roadmap forecasts that aviation can accommodate significant growth and still reduce net emissions to 50% of 2005 levels. However, this can only be delivered by working in partnership with Government, with a key role to support research and development in aerospace technology, encouraging the introduction of sustainable bio-fuels, delivering on the Single European Sky initiative and

helping to establish a global approach to the regulation of emissions from international aviation based on carbon trading.

2.31 We were pleased to note that the Government addresses many of these roles in the Draft Aviation framework policy; however there is a pivotal role for the Government to play in helping the industry develop a supply chain for bio-fuels that is economically and environmentally sustainable. Currently, bio-fuel subsidies are available for road transport, but not aviation where alternative fuels aren’t as readily available.

(c) What is the relationship between the Government’s strategy and EU aviation policies? 2.32 MAG accepts that the aviation industry should cover its external costs and welcomes the inclusion of aviation within the EU-ETS. As such we urge the Government and EU to seek to resolve the current issues that threaten the success of EU ETS.

Q4. Do we need a step-change in UK aviation capacity? Why? 2.33 The current debate has been characterised as one of Heathrow vs a new hub airport, possibly in the Thames Estuary. While MAG does not dispute that additional capacity will be required in the long term, we would argue that both hub and point to point capacity is needed, and that the short to medium term priority should be how to make best use of existing capacity.

2.34 While there will always be a place for hub capacity, point to point connections remain important – indeed more than 80% of passengers flying from the UK are on point to point flights. The advent of Dreamliner services next year will be a game changer for point to point airports, making direct long haul services to previously unserved destinations commercially viable for the first time.

2.35 While Manchester Airport values its connections to Heathrow and other hubs, we are also committed to pursuing direct connections, as these offer the greatest economic payback to the UK regions6. We know that demand exists for services like Manchester to Hong Kong, and there should be no reason why this demand cannot be met locally rather than via a hub7.

(a) What should this step-change be? Should there be a new hub airport? Where? (b) What are the costs and benefits of these different ways to increase UK aviation capacity? 2.36 MAG is sceptical about the notion of a new hub airport such as the proposed development in the Thames Estuary. We are not persuaded that the proposed airport can ever be financed or made commercially viable without closing Heathrow, which could have devastating implications for the West London economy. In addition, the practical challenges relating to airspace, safety and bird strike, sunken vessel and the sheer scale of new infrastructure required appear likely to prove insurmountable.

2.37 The independent Davies Commission will consider the options for runway capacity in detail and MAG looks forward to playing an active role in the Commission’s inquiry. In the interim however, making best use of existing capacity should be viewed as an urgent priority.

19 October 2012

6 Frontier Economics reported in 2011 that UK businesses are 20 times more likely to trade with emerging market countries when there is a direct daily connection. 7 Over 200,000 people per year from Manchester Airport’s wider catchment area travel to Hong Kong – enough to sustain a direct service.

Further written evidence from the Manchester Airports Group (AS 44A)

The current fifth freedom policy (the presumption in favour of granting fifth freedom rights to UK regional airports), whilst helpful, also requires reciprocal access for UK airlines. Regional airports, such as Manchester, rely on overseas airlines to maximise regional long haul connectivity.

UK airlines have consolidated their international connections at London Heathrow. As they have vested interests in their own services from London, they have in part used this to protect their own parochial interest, at the expense of new services from the regions. An example of this being the Cathay Pacific flight from Hong Kong to Manchester via Moscow in 2006, which was successfully challenged by BMI on account of the Manchester – Moscow leg, and was ultimately withdrawn. In this case, the Russian authorities were willing to grant the necessary rights to Cathay Pacific to operate the Manchester – Moscow route on a code share with a Russian airline. UK airlines, including bmi, objected to the UK DfT agreeing to this because it did not benefit UK airlines. In other words, UK airlines do not want to serve the regions internationally on a point to point basis, but do not want their overseas competitors to do so either. This has been to the detriment of UK connectivity.

Furthermore, international airlines make decisions on which markets to investigate on the basis of how likely they are to secure the flying rights, and how difficult they perceive the process would be to achieve them. We are meeting airlines that are looking to serve the UK on routes to the US, but they perceive the process of being granted these rights by the UK Government to be too difficult based on UK airline objections. UK airlines don’t fly their own scheduled services direct from the regions to key cities in the States or other long haul destinations as their interests are to direct passengers through their London hub, and so the regions suffer in terms of providing connectivity and choice for local people.

This is something that will not be changed, even with the proposal for open skies at UK regions in the Draft Aviation policy framework, which states that although reciprocal access for UK airlines will not be required, each application will be taken on a case by case basis and may not be granted for reasons such as state aid. However, airlines in receipt of state aid already operate to and from the UK. It lacks consistency therefore to restrict fifth freedom rights on this basis, a restriction which would not be in the best interests of passengers or in the interests of rebalancing the UK economy and making best use of existing capacity.

24 December 2012

Written evidence from Lagan Valley Group Residents’ Association (AS 45)

With respect to this inquiry, we would like to comment on paragraph 3 (a), (b) & (c)

We live in a residential area of detached family homes within the city limit of Belfast and about 4.5 miles from the George Best Belfast City Airport. We are under the flight path and many of our residents are seriously annoyed by aircraft noise. Even though we are not in the immediate vicinity of the airport we wish to make it clear that there are serious adverse affects from aircraft noise at a greater distance than is perhaps being monitored.

• Sleep is disturbed by early morning flights. • Listening to TV or radio when the windows are open is difficult • Conversation the garden has to stop when the aeroplane is overhead • Aircraft noise spoils the enjoyment of our gardens • Noise from daily flights is both an irritant and an annoyance

We are fortunate to live in close proximity to areas where we can walk and enjoy nature; The Lagan Valley Regional Park with walks along the towpath beside the river Lagan: Barnett Demesne, The Botanic Gardens and Belvoir Forest Park. The pleasure of enjoying walks in these beautiful and popular surroundings is spoiled by the constant passage of low flying aircraft as they come in to land - the noise is sometimes really deafening and it is frightening for children.

Our residents also have concerns about pollution from aircraft which must be more concentrated since the aeroplanes are lower as they take off or land. One resident had a large lump of ice fall on to her roof as an aircraft was de-icing the wings. Very fortunately this did no damage to the roof (or indeed to anyone passing by) but her garden was covered with shards of ice where it had shattered.

It is well known that many health problems occur with aircraft pollution, both emission and noise. We feel that all airports throughout the UK should be properly and robustly monitored and regulated with tough enforcement when breaches of regulations occur. We need to have confidence that the government takes the impact of airport noise and pollution seriously. We feel that regulation by the airports themselves is unsatisfactory and may not necessarily address the problem properly when their commercial interests are at stake. This should be the responsibility of an independent body.

With regard specifically to Northern Ireland, there is great emphasis to expand the George Best Belfast City Airport, in view of its close proximity to the city and therefore its presumed benefits to the business community. However, the Belfast International Airport at Aldergrove is only about 18 miles from the city and this airport does not cause the serious problems of noise and pollution for thousands of people as is the case with GBBCA. BIA is easily accessible, especially to those living in the north and west of the province. The economic benefits are equally relevant to BIA and this airport should be further developed (not GBBCA) especially in terms of the availability of long haul flights. At present, BIA has only one regularly scheduled long haul flight and we are therefore forced to travel to either Heathrow or Dublin to access most long haul international flights. This increases the amount of air traffic, noise and pollution, much of which could be avoided if BIA at Aldergrove were further developed.

We are very concerned about the EU directive to increase the number of flying hours for pilots to a level which is greater than prescribed by UK rules. Taking account of the fact that pilots need to travel to the airport and complete the check-in routine, both on the ground and in the flight deck, before they take off, the proposed EU rules could result in a very long working day with serious implications for safety.

19 October 2012 Written evidence from the London Chamber of Commerce and Industry (AS 46)

1. London Chamber of Commerce and Industry (LCCI) is a not-for-profit organisation, representing over 2,500 companies in Greater London. We are the capital’s largest and most representative business organisation with a membership ranging from small and medium enterprises to multi- national companies. Our members operate in a variety of sectors reflecting the true make-up of the London business spectrum.

2. We promote and defend the interest of London’s business community, representing our members to the Mayor and the GLA, national government, the opposition, international audiences and the media.

3. LCCI believes infrastructure is central to guarantee sustainable and long-term economic growth. The lack of capacity on our roads, trains and airports is affecting our ability to expand and compete globally, whilst damaging our international reputation and limiting the UK’s capacity to attract and retain investment.

4. LCCI has canvassed its members extensively and according to the LCCI survey in August 2009, 85 per cent of businesses in London see transport as ‘very important’ or ‘somewhat important’ in encouraging a business to locate in the capital.

5. This consultation’s questions ask on several occasions about the Government’s aviation strategy. When surveyed this year, only 16% of LCCI members stated the Government has a coherent national aviation strategy. This reflects the problem that the business community currently face. LCCI believes we are reaching a crucial juncture. If the UK wants to be part of a global, interconnected economy driven by domestic exports then it needs to have the capacity to allow the connectivity to exist to optimise trade with the emerging high growth markets.

6. LCCI believes that if the Davies Commission is to be successful and worthwhile it must create a cross-party consensus around a strategy that resolves our capacity and connectivity concerns. LCCI looks forward to working with the Commission to achieve this. It notes with great disappointment that this process will not report for another three years which is not a satisfactory time period given the need to act.

What should be the objectives of Government policy on aviation?

7. LCCI’s transport and infrastructure policy proposals are focused on making London the most competitive city in the world to do business. Aviation provides the international connectivity that makes London and the UK competitive. It needs to be viewed as one mode in an integrated network to maximise the connectivity and value of different transport modal networks.

8. LCCI primarily views aviation as a means to enable businesses to create economic growth. There are a number of important sectors that rely on having connections with clients and customers in emerging markets. For instance the service industry with consultants and engineers need direct flights to the right parts of the world or they may find it more sensible to switch their European HQ to Frankfurt, Paris or Amsterdam.

9. Another important element to consider is the importance of air freight. These services are a vital ingredient in the UK economy allowing it to function as an international centre of business and high value manufacturing.

10. London has seven airport’s, including its hub airport, Heathrow, four significant sized airport’s City, Luton, Gatwick and Stansted, and two specialist airports, Southend and Biggin Hill.

11. It is worth noting that aviation is a major UK industry in itself, carrying over 235 million passengers a year and over 2.3 million tonnes of freight.1 Furthermore, the UK aviation industry employs

1 Department for Transport http://www.dft.gov.uk/aviation (last visited 04/05/12)

234,000 staff, contributes £18.4 billion to the UK Gross National Product and £7.8 billion in taxation to the Exchequer.2

12. LCCI is a chief supporter of the need to maintain the UK’s position as a regional and international leader in the aviation sector. Therefore, it needs the connectivity to create the through traffic viable to make many destinations feasible for a hub airport. In a recent survey of LCCI members 80% stated the UK needs a hub airport to have the connectivity to trade successfully in international markets.

13. If we do not create the capacity to allow the connectivity to thrive we are at risk of losing out on superior trading relationships in major emerging market centres with high growth rates, as well as key destinations London already has direct flights too. The CAA has listed major routes that would be most likely to disappear without transfer passengers. They are, in order of vulnerability: Mexico City, Lusaka, Beirut, Halifax, Dar-Es-Salaam, Seattle, Phoenix, Chennai, Bangalore, Tripoli, Riyadh, Accra, Ottawa and Dhaka.3 Predictions for increased urbanisation and growing populations across emerging market cities by 2050 will mean that if we do not have the direct links we will not be able to compete with European rivals who have the capacity to create the connectivity to be competitive.

14. LCCI welcomed the Government’s announcement to consult on a new hub airport as recognition of the need for both additional long-term aviation capacity and a national hub airport. The Davies Commission has now been formed and if it can provide political consensus on a long term strategy it will be a worthwhile exercise.

15. However, any decisions on a long-term solution to capacity constraints do not address the urgent issue of London’s short-term aviation capacity constraints. After exhaustive study the only viable solution to these immediate capacity constraints is a third runway at Heathrow Airport.

16. Capacity constraints at Heathrow have led to a reduction in the overall number of destinations served, from 227 in 1990 to 180 today. For example, Chengdu and Chongqing are just two Chinese cities that are experiencing dramatic growth rates, but are not served by a UK airport, severely reducing the ability of the UK’s businesses to expand into those markets. It is worth noting that Heathrow's rival European hubs have more runways, for instance Amsterdam has five, Paris (Charles De Gaulle) has four, Madrid has four and Frankfurt has three with a fourth runway planned4.

17. Moreover, the lack of capacity also leaves Heathrow with no room for any contingency which has a direct negative effect on the airport’s reliability, passengers’ travel experience and, consequently, Heathrow’s and the UK’s competitiveness. It is also important to emphasise the negative effect of capacity constraint including costs and delays at major airports on the UK’s ability to attract significant foreign investment.

Air Passenger Duty (APD)

18. APD was introduced in November 1994 at a £5 rate within the UK and EU, and £10 elsewhere. A senior international business executive, an SME looking to make international export contacts, or a foreign investor considering locating in the UK now has to pay up to £184 per outbound journey to a destination outside of Europe, depending on destination and class of travel. The high cost of APD includes travelling to emerging markets such as Brazil, China, India, Indonesia, Colombia, Venezuela and South Africa.

19. This increase continues to place the UK at a disadvantage to its international competitors. Only five of the 27 European Union countries levy some form of air passenger tax, with Denmark, Norway, and Holland scrapping similar taxes after analysis showed the revenue raised was outweighed by the economic damage.

2 British Air Transport Association http://www.bata.uk.com/ (last visited 04/05/12) 3 http://www.caa.co.uk/docs/5/Connecting_Passengers_at_UK_Airports.pdf table 7-1, p. 25 4 Future Heathrow http://www.priorityheathrow.com/page.php?id=8 (last visited 04/05/12)

20. The four other countries which levy air travel taxes are Austria, Germany, Ireland and France. They are significantly lower than the UK taxes with France and Ireland only levying nominal rates. For instance, the German revenues are roughly a third of the UK level and the German Government has made a commitment not to increase them since the EU’s Emissions Trading Scheme (ETS) has been introduced. LCCI believes the UK Treasury should consider offsetting the income from the EU ETS against APD.

21. It is worth noting that between 2006 and 2012, APD rates have risen 160 per cent on short-haul flights and up to 360 per cent on long-haul flights. In the same time period inflation has risen 18 per cent.

22. The Treasury forecasts that it will raise £2.2billion from APD in 2011/2012, which will rise to £3.9billion by 2016/2017. This is a substantial revenue income in 2011/12, which is set to almost double by 2016/17. LCCI would like to see an acceptance that APD is too high in the UK and should not increase further. The business community wants to fulfil the Government’s aim to have an export-led recovery. Additional tax burdens on exporting will hinder their prospects.

23. Furthermore, a 2009 report by Oxford Economics for the Airport Operators’ Association found that the APD increases in 2009 and 2010 could, by 2020, result in job losses to the wider economy of 1,400 in terms of connectivity, 7,700 in terms of trade, and 22,300 in terms of investment. The same report warned that by 2030, growth in APD of five per cent a year could reduce the aviation sector’s annual GVA by £450 million, with wealth created in the wider economy reduced by £500 million in terms of connectivity, £2.6 billion in terms of trade, and £8.3 billion in terms of investment5. Furthermore, it is worth noting the importance to London’s retail and hospitality businesses of inbound tourism and the disincentive to visit the UK that APD presents. APD is part of a triple whammy that afflicts both the tourism and business sector. The other two issues that need resolving are aviation capacity constraints and the UK visa system.

24. In a survey this year of London’s businesses 57% stated that increasing Air Passenger Duty is a barrier to their future business exporting activities. Therefore, LCCI believes the Treasury should commission its own independent research to analyse the impact of APD on the UK economy and to consider the wider economic and employment effects of reducing or eliminating APD. It is imperative that the UK’s competitiveness is not lost in the short term desire to maximise revenue for the Exchequer.

How should we make the best use of existing aviation capacity?

25. There are a number of airports in the South East and regional airports across the country that could increase capacity. LCCI has the following views:

26. Heathrow: LCCI's position supporting an additional runway at Heathrow is fixed at present in the light of no new evidence to propose a preferred solution. Our stance on Heathrow is clear. A third runway is the only way to retain the UK's leading role as an international hub which can be completed in the short-medium term.

27. Gatwick Airport: Gatwick can grow by around 10mppa with its existing runway, although this would increase utilisation to 95% and reduce resilience. Safeguarding for a second runway to the south of the airport remains in place, and could be implemented in the early 2020s. The main constraint to expansion at Gatwick, and in particular to its ability to serve London, is the limits imposed by rail access. A second runway and an associated third terminal would require major expansion of the rail station and significant upgrading of the rail services.

28. The Heathwick, high speed Heathrow-Gatwick rail link, would not work because the transfer times would be too high. Any expansion at Gatwick must be coupled with major improvements to rail access to London and an acceptance that it cannot become a dual hub with Heathrow but remain a strong point-to-point airport serving international business markets.

5 ‘What is the contribution of aviation to the UK economy?’ Oxford Economics (November 2009)

29. Stansted Airport: A second runway at Stansted is no longer safeguarded, but the previous plans were well developed following a 2006 Government White Paper and showed potential for 70-80 mppa, with expanded road and rail links. A second runway should remain an option for the longer term, so safeguarding should be reinstated and the road and rail upgrades put into the respective long term strategies.

30. Luton: Current ambitions for Luton are limited to 15 or 17mppa compared with 10 at present, and such growth would not enable a transfer hub to be established. It would take significant changes as explained in the Policy Exchange 2012 report for Luton to be significantly expanded.

31. Smaller Airports: The other airports serving London; City, Southend, Biggin Hill, Farnborough, and Manston all have some capacity or potential to serve particular markets.

32. London City is a vital airport for the London business community serving direct links from the near City of London and Canary Wharf to important European trading partners as well as New York. Biggin Hill and Farnborough are niche Business Aviation airports which serve a very important market separate from commercial air transport and LCCI strongly supports these airports and plans to expand. It is worth noting the important role of Biggin Hill and Farnborough on relieving pressure from London Heathrow during the Olympics. LCCI’s support extends to other airports where they can meet a demand that is commercially viable.

33. Airports outside the South East: Some regional airports are making the case for diverting demand from the South East. LCCI supports strong regional airports and supports capacity increases where there is commercial demand. If that demand does not exist LCCI does not believe the Government should seek to implement a centrally planned system where sufficient capacity already exists.

Surface Access

34. LCCI is an advocate of ensuring that the transport modes seamlessly interchange to allow businesspeople to move with ease between regional, national and international networks. Encouraging better rail links has a number of benefits including moving more traffic of the roads network. Surface access is also one of the key considerations an international business will review when deciding where to locate or a city to do regular business with.

35. LCCI was pleased to see the Government recognise the importance of rail-air links in the Department’s Rail Command Paper which outlined this with the point that “international passenger journeys (…) and providing surface access to major airports” are one of six key market segments for rail. LCCI supports a number of surface access improvements across London airports. We support a number of improvements where there is a positive business case.

36. Gatwick Airport is a vital gateway for London’s businesses and international businesspeople accessing the Capital’s market. LCCI would like the Thameslink franchise to mandate the reinstating of the dedicated Gatwick Express, an upgrading of rolling stock to suit the needs of air passengers and the removal of ticket barriers to allow a seamless travel experience for passengers who are currently forced to wait and queue to exit the airport and join the rail network. These changes are all necessary taking into account the nature of passengers using air-rail links.

37. is also covered to the north of London in the Thameslink franchise. LCCI would like the future operator working in partnership with the Airport to utilise the opportunities from the Thameslink project to amend the timetable to improve links to the Airport and maximise its potential as a growth contributor to London and the UK.

38. The rail link between Stansted Airport and desperately needs to be upgraded. LCCI supports implementing improved infrastructure on the Lea Valley Line to enable faster, dedicated services as well as improved commuter trains.

39. LCCI supports the proposal from Wandsworth Council, based on BAA's Airtrack scheme, which would provide four trains an hour from Waterloo to Terminal 5 with stops at Clapham Junction and Putney. It routes two trains an hour from Waterloo via the Hounslow loop and two existing

services on the Waterloo-Windsor line that would split at Staines to provide a further direct link to Terminal Five.

40. The new scheme would require a new station at Staines and a new stretch of track from there to Terminal 5. The rest of the route would run along existing lines. The plans avoid routeing extra trains through level crossings in Mortlake and Egham, a key problem with the original Airtrack scheme.

41. HSR has the potential to decrease the number of domestic flights which would help capacity constraints in the aviation industry. Demand for air travel has been growing, with a five-fold increase over the last 30 years, and is expected to continue to grow to between four and six hundred million passenger journeys by 20306. HS2 could help reduce the number of short-haul domestic and European flights, allowing Heathrow to meet the significant demand to emerging markets. This would be done most successfully if the shift from air to rail is optimised by serving airports directly with high speed trains.

42. Therefore, to maximise connectivity and value HS2 needs to be fully integrated into Heathrow airport to allow passengers to use rail whilst transferring through the UK’s international hub gateway to emerging and developed markets. It is important to note that a reduction in short-haul domestic and European flights would not reduce air travel as demand for more flights and new destinations far outstrip supply of landing slots at Heathrow.

Environmental impact of aviation

43. LCCI believes the two most significant environmental issues are noise and carbon emissions.

44. A 2009 report from the Committee on Climate Change showed that growth in aviation is consistent with the UK meeting its climate change targets. The industry continues to place strenuous efforts on improving fuel efficiency and operational improvements that will lead to significant reductions in carbon emissions per seat km flown.

45. The industry has taken a proactive approach in recent years to tackling environmental issues. The Sustainable Aviation group was set-up to create a long term strategy which sets out the collective approach of UK aviation to tackling the challenge of ensuring a sustainable future for the industry. A world-first, Sustainable Aviation was launched in 2005 and brings together the main players from UK airlines, airports, manufacturers and air navigation service providers. This is an important vehicle for tackling noise concerns as well as emissions.7

46. LCCI believes that the UK must tack a proactive approach to reaching international agreements on tackling carbon emissions. A unilateral policy would damage the UK as a place to do business and have no material impact on global emissions reductions, creating a lose-lose scenario.

47. LCCI believes that investing in technology is the best way to reduce the impact of noise and meet our environmental obligations. This would ensure we do not export jobs and growth to countries that value the importance of a thriving aviation sector.

Conclusion - Do we need a step-change in UK aviation capacity?

48. LCCI believes it’s vital that the Government develop a coherent strategy that details how the UK will create the capacity and connectivity to make London and the UK the most competitive place to do business. This needs a short and long term solution to our current problems.

49. LCCI has consistently argued that we need a hub airport and strong point-to-point airports that can serve high growth emerging market as well as the UK’s traditional trading partners. In the short term we have expounded our solutions above. In the long term it is plausible that a new hub airport will need to be built. LCCI will continue to assess the options put forward and welcomes new proposals.

6 DfT (2003), The Future of Air Transport, aviation white Paper cm 6406; cited in Greengauge 21 (2006): The Impact of High Speed Rail on Heathrow Airport, p. 2 7 http://www.sustainableaviation.co.uk/

50. Most importantly, we need to move beyond the politics to create a consensus around solutions that deliver on capacity, connectivity and the environment.

51. LCCI is keen to engage with the Committee during this inquiry at every opportunity. Please contact David Hodges, Public Affairs Manager, at [email protected] or call 020 7203 1918 to discuss this further.

19 October 2012

Written evidence from Merseytravel (AS 47)

Merseytravel is a public body comprising the Merseyside Integrated Transport Authority (ITA) and the Merseyside Passenger Transport Executive (PTE), acting together with the overall aim of providing an integrated transport network for Merseyside which is accessible to all. Integrated Transport Authorities including Merseytravel have a statutory requirement to produce Local Transport Plans as a result of the Local Transport Act 2008. Via the Local Transport Plan (LTP), the ITA is responsible for multimodal transport policy including freight. However the Passenger Transport Executive (PTE) remains responsible only for delivery of passenger transport, concessionary travel, ticketing, etc and as a result we continue to work in partnership with the local authorities and other partners to deliver the LTP. The new Local Transport Plan 3 and its associated documents came into force on the 1 April 2011 and now form the transport policy framework for Merseyside.

We are also represented on the Airport Transport Forum and Airport Consultative Committee for Liverpool John Lennon Airport.

Our comments on the questions asked by the Committee are as follows.

Questions:

1.What should be the objectives of Government policy on aviation?

We feel it is important that the objectives of the aviation strategy focus on reducing the environmental impacts of aviation as an integral part of the strategy, in order to (a) meet CO2 reduction objectives and (b) reduce the impact on communities through poor air quality, noise and disturbance and (c) reduce reliance on imported, finite fossil fuels. Encouraging sustainable surface access to airports by public transport, walking and cycling and seeing aviation as just one mode within the context of an integrated transport system should be another major focus for the objectives of the aviation strategy. These areas are of particular concern for us as an Integrated Transport Authority and Passenger Transport Executive. More generally the aviation strategy should ensure good international connectivity for all parts of the UK to key destinations and markets globally. It should enable sustainable growth in aviation as part of an integrated transport system within the constraints of noise, emissions and other impacts. The strategy should also move away from the present focus on a single hub approach to connectivity centred on Heathrow and instead go towards a multi-hub approach that makes best use of the capabilities and potential of all airports in the UK and not just those in the Greater South East.

It needs to recognise that aviation is global, market led and rapidly changing so foreign airports now play a role in providing international connectivity for the UK not just airports within the UK. In recent years, due to severe congestion and capacity constraints at Greater South East airports, airports outside London are increasingly turning to major airports elsewhere outside the UK such as Madrid, Amsterdam, Paris or Frankfurt or even airports in the Middle East and further afield to improve their international connectivity. This should be reflected in the multi-hub approach.

The fundamental factor which is critically important is good connectivity for all parts of the UK to key markets and destinations globally regardless of how it is achieved. This improved connectivity will create opportunities across the UK for investment and growth and help enable a more diverse and balanced UK economy. This is especially important in terms of links with the new growth economies such as China, India, Brazil, Middle East, Russia, etc. a. How important is international aviation connectivity to the UK aviation industry?

See answer to b) below. b. What are the benefits of aviation to the UK economy?

According to research by the Airport Operators Association (AOA), the aviation sector in the UK is worth over £18 billion and plays a significant role in the economy and job creation. The aviation sector generates £8.8bn of economic output (measured as Gross Value Added). This increases to £18.4bn, 1.5% of the total economy, when the activity needed to supply the sector is taken into account. The sector accounts for 141,000 jobs in the UK, which rises to 234,000 (0.85% of UK employment) when supply chain employment is also taken into account.

Aviation and its airports also help sustain other sectors and industries such as £115 billion tourism sector. The tourism sector overall employs 2.5 million people and supports more than 200,000 businesses and accounts for almost 10% of the UK economy. The majority of international tourists visit the UK by air.

Airports are a major employer and gateway for inward investment, trade and tourism. Airports have a key role to play in spreading prosperity around the UK. For example, good air transport links are crucial to attracting inward investment from around the globe. The majority of Europe’s top companies regularly say they consider transport links a key factor. In other regions, airports provide vital connectivity allowing business passengers and exports to reach new markets. In recent years UK airports have seen success in securing an increasing number of direct long haul routes connecting our cities to a range of key foreign destinations.

In the longer term, the main influence of the aviation sector on the economy is likely to be the way in which it facilitates improvements in productivity outside the sector. Aviation enhances the ability to conduct international trade by increasing connectivity between the UK and international destinations (and can increase connectivity within the UK as well) which can lead to increased investment and two-way trade.

The role of aviation will play an important role in underpinning and assisting the economic recovery by supporting businesses through international connectivity, the movement of goods and people, and attracting inward investment.

With the rise of new growth economies such as China, India, Brazil, Middle East, etc, these will increasingly become important destinations to be linked with and with new aircraft designs; there may be an opportunity to enable these linkages to be direct from regional airports. New aircraft designs such as the Boeing 787 Dreamliner with its improved capabilities opens up the possibility of long haul fights direct from regional airports such as Liverpool to destinations such as North America (West Coast), South America, Australia, etc, which previously were only possible with aircraft such as 747s which could not be accommodated on many regional airport runways, etc. So this could open up the possibility for regional airports to have direct flights to many destinations that previously were only possible via a major hub.

We feel that there is a significant risk that if development and infrastructure investment continues to be primarily focussed on the Greater South East then this reduces options for the future of the UK economy and is likely to only create a service economy based around London. As the Greater South East becomes increasingly congested and full, this congestion will risk becoming a disincentive to business and they will move to the Continent. But if development and infrastructure investment is well spread across the UK and regions are equally well connected to international markets and destinations, then this will create new opportunities for business to remain in the UK, attract business to the regions and will lead to a more diverse and balanced UK economy. This rebalancing in turn will help take the pressure off the congested Greater South East and airports located there and spread prosperity and opportunity across the whole UK to the benefit of everyone. c. What is the impact of Air Passenger Duty on the aviation industry?

The incentive regime around aviation policy is just as important as the policy itself and these aspects such as tax, emissions trading, visas and security need to be set at a level that does not make aviation in the UK uncompetitive internationally but still mitigates issues such as noise, emissions, security controls, etc. Therefore a joined up approach to these issues is required within Government to tackle this.

It is known that APD is a particular issue of concern to the aviation industry currently, but airports and airlines will be better placed than us to give details on how Air Passenger Duty and the wider incentives framework affect them.

In our opinion, Air Passenger Duty needs to be reformed so that it is much more targeted and flexible and more clearly linked to offsetting the disbenefits of air travel (noise, emissions etc) and not simply be a blanket tax that goes to the Treasury. APD should also be based on factors such as the length of the journey - a domestic flight could have higher rate of APD than a long haul, to encourage travel decisions between air or rail on financial grounds where rail can be an appropriate alternative. But this would need to be flexible and take into account the fact that clearly some domestic routes are essential by air and rail cannot provide an alternative in some cases. There may also be scope for APD to be ringfenced and localised (a bit like Bus Service Operators Grant), so that it can be used to support surface access improvements, provide environmental mitigation, help to offset carbon etc. Also differential APD charging based on age and environmental efficiency of aircraft should be considered so that flights on the newer fleets of planes could perhaps be subject to a slightly lower rate of APD as they have better environmental credentials compared with older aircraft. Although we understand that there may be constraints on this due to the Chicago Convention which was agreed in 1944 and ratified by the UK in 1947, which is the treaty which still governs the conduct of international civil aviation, so this may need reforming as well. If these reforms to the APD etc could be achieved then this would create a more flexible incentive structure to support the aviation strategy. d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

The passenger experience should be not seen as just aviation (airports and airlines) but also include the entire seamless journey experience across all modes as part of an integrated transport system. See also answer to e) below. e. Where does aviation fit in the overall transport strategy?

Aviation is only one mode in an integrated transport system, therefore the aviation strategy needs to be set within the context of a clear transport strategy at the national level and take into account integration with other modes. Travel is just a way of getting from A to B and journeys are often undertaken via several modes. So transport should be seamless across all modes and individual modes should not be seen in isolation. The Government’s strategy can appear fragmented so needs to be much clearer how it sees aviation being part of a single integrated transport system.

2.How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

No comment, as this issue is not relevant for Merseyside b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

We feel that in its current form the Government’s policy remains too focused on the Greater South East and could do more to maximise the potential of regional airports. International connectivity for the regions is important to support economic growth and investment in these areas and the local airport has a role to play in this. Airports are a major employer and gateway for inward investment, trade and tourism. Airports have a key role to play in spreading prosperity around the UK. For example, good air transport links are crucial to attracting inward investment from around the world.

It is important that the role of all airports in the UK in enabling international connectivity is recognised and used to take pressure off the airports in the Greater South East. We believe regional airports have ample capacity to accommodate future growth and absorb some of the future demand from the congested Greater South East. Access from regional airports to key international destinations direct, without the need to go via London would improve the competitiveness and attractiveness of regional cities for investors and thus help provide a counter balance to London. We feel that the aviation strategy needs to consider all options regarding the future of international connectivity in the UK including moving away from the current single hub approach and instead considering a multi-hub approach using a London Airport as well as other major airports in the regions such as Manchester, Birmingham, Bristol, Glasgow etc. In this strategic context for infrastructure planning arguably the regions within England could be seen as , the Midlands, West Country and, of course, the Greater South East. The multi-hub approach needs to also recognise the increasing role played by foreign airports such as Amsterdam, Paris, Frankfurt, Madrid and even Middle East airports and elsewhere in providing connectivity for all parts of the UK. London Heathrow is not the only way to provide connectivity and airports in the Greater South East are just part of the UK’s network of airports and all airports (whether in London or elsewhere) should play a role in providing connectivity for all parts of the UK.

The increasing competitiveness of high speed rail will also be a factor to consider. Between certain cities where high speed rail offers a competitive advantage there may be an increasing reliance on high speed rail rather than domestic flights. This in turn can help relieve capacity constraints at airports. High speed rail may also be able to replace some domestic shuttle flights into major airports that serve a hub role, so linkages from regions into hub airports may not necessarily have to be by air. This could then free up capacity at major airports to offer more long haul flights while maintaining domestic / short haul connectivity into the airport for connections. To achieve this, linking airports into the rail and high speed rail network will be essential.

Like France’s TGV and Germany’s ICE high speed trains, give UK high speed trains so that they can act as “flights” into airports such as Heathrow just like KLM flight from Liverpool to Amsterdam used to feed into their worldwide network. Why do you need a flight when a high speed train can perform a similar role? High speed rail also needs to have stations to serve airports as well as city centre destinations. This way it can link to aviation as well as traditional intercity journeys.

High speed rail can take a greater share of the market currently taken by domestic and short haul air travel but air travel will still have a role to play as well. We are supportive of high speed rail and the role of rail in regard to its ability to provide a better environmental solution for short/medium-term length journeys than air. We suggest that the Government should advocate a hierarchical approach to transport planning (with sustainable modes being the most preferential). We feel that there also needs to be greater synergy between the government’s aviation and high speed rail plans so there is much more joined up approach to transport. All modes of transport should play important roles together as part of an integrated transport system and use and development of one shouldn’t be at the expense of development in another, although the shares of each mode will clearly differ.

Another important area to consider is reducing the need to travel in the first place. With new technology such as video-conferencing, etc, there are more options that mean travel may not even be necessary in some instances.

High-speed internet access is a prerequisite for many alternatives to travel and in some areas of the UK, such access is sorely lacking. Government should invest in the installation of fibre optic cables for the transmission of data as this will ensure a much more robust and secure network for all and allow more people to use these services at the same time, with less disruption to the service.

c. How can surface access to airports be improved?

We feel that surface access to airports is an important issue and encouraging access by sustainable modes such as public transport, walking and cycling in particular. As a result airport surface access strategies need to be aligned closely with the Airport Master Plan as well as with Local Plans and the Local Transport Plan. Where airports undertake new development they should be encouraged to contribute to any surface access improvements that may be required to support the development or their Airport Master Plan proposals via planning obligations.

Merseytravel has, in recent years, been working closely with Liverpool John Lennon Airport to support its Airport Master Plan and Airport Surface Access Strategy. We also are represented on the Airport Transport Forum and Airport Consultative Committee. As a result we have been working in partnership with the airport to improve surface access to the airport particularly by public transport including via Liverpool South Parkway rail station. This rail station is served by several train companies including Electrics, Northern Rail, , and Transpennine Express. We continue to work with the airport to open up the region and enable convenient access for people to the airport.

Merseytravel is represented on the Airport Transport Forum and Airport Consultative Committee. Based on our experience on these groups we believe that the current role of the Airport Consultative Committee (at least in the case of Liverpool’s) strikes the right balance between challenging the airport management over issues that may be of concern to communities close to the airport and recognising the important role this airport has in the current and future needs of the local economy it serves. If Airport Consultative Committees were to increase their remit to look in more detail at certain topics, levels of workload could then be an issue and impede getting a good cross-section of representation from key organisations and interested parties.

Liverpool John Lennon Airport is a major economic driver for Merseyside and indeed the North West Region. Therefore its continued prosperity, development and growth is of paramount importance to the economy. Airports are a major employer and gateway for inward investment, trade and tourism. Airports have a key role to play in spreading prosperity around the UK. Additionally Liverpool Airport is an important contributor and asset as part of the Liverpool SuperPort initiative which aims to develop synergies between the airport and the port and logistics sectors.

3.What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

Noise is an important issue to consider in regard to aviation strategy and this is partly caused by older, noisier and less efficient aircraft. But just tackling this with replacement of old aircraft with newer, more efficient ones will not solve all of the issue. Frequency of flights can also contribute to noise for local communities due to the cumulative effect. But this understandably is quite hard to tackle. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

Climate change will be one of the major challenges especially in a sector that is growing. There are a number of issues that can be addressed such as direct emissions from the airport through efficient asset management and operation efficiencies.

Emissions from the flights themselves will need to be reduced in order to contribute to carbon reduction targets. Alternative fuels will have a major role to play in this as more and more studies and trials are carried out to determine the most effective. It is important that sustainability is considered for the biofuel and where possible is locally sourced from the area airports are located. This will become more apparent with the advance of second generation fuels such as syn gas derived from lignocellulose.

We feel it is important that reducing the environmental impacts of aviation is an integral part of the government’s strategy, in order to (a) meet CO2 reduction objectives and (b) reduce the impact on communities through poor air quality, noise and disturbance and (c) reduce reliance on imported, finite fossil fuels. We understand that the aviation industry is already doing much to safeguard the environment but there is always scope for further improvements while balancing these against sustainable growth in aviation. c. What is the relationship between the Government’s strategy and EU aviation policies?

The incentive regime around aviation policy is just as important as the policy itself and these aspects such as tax, emissions trading, visas and security need to be set at a level that does not make aviation in the UK uncompetitive internationally but still mitigates issues such as noise, emissions, security controls, etc. Therefore a joined up approach to these issues is required within Government to tackle this. Linkages with EU policies are not often clear and the cumulative effect of both EU and UK policies in terms of aviation and its surrounding incentive regime needs to be considered carefully to ensure that it does not make the UK uncompetitive.

4.Do we need a step-change in UK aviation capacity? Why?

International connectivity for all parts of the UK is fundamentally important, and the way to deliver this outcome and achieve better international connectivity for the regions and all parts of the UK is really down to all partners in the aviation industry and the Government working together to properly debate and resolve the issue. a. What should this step-change be? Should there be a new hub airport? Where?

It is important that the role of all airports in the UK in enabling international connectivity is recognised and used to take pressure off the airports in the Greater South East. We believe regional airports have ample capacity to accommodate future growth and absorb some of the future demand from the congested Greater South East. We need to move away from a single hub approach and to a multi-hub approach which will bring benefits across the UK. b. What are the costs and benefits of these different ways to increase UK aviation capacity?

The fundamental factor which is critically important is good connectivity for all parts of the UK to key markets and destinations globally regardless of how it is achieved. It is clear that airports outside the Greater South East have ample capacity to accommodate future growth and absorb some of the future demand from the congested Greater South East. It is really a matter for the Government and aviation industry to debate and come to a decision on how best to achieve this connectivity and what capacity implications this may have in the short, medium and long term.

It is a strategic decision of national importance and will shape the future direction of the UK economy and arguably presents a major opportunity to rebalance the UK economy to benefit all parts of the UK and take pressure off the South East.

19 October 2012

Written evidence from ABTA (AS 48)

Introduction

1. This response is submitted on behalf of the membership of ABTA – The Travel Association. ABTA was founded in 1950 and is the largest travel trade association in the UK, with around 1,300 members and over 5,100 retail outlets and offices. Our Members range from small, specialist tour operators and independent travel agencies specialising in business and leisure travel, through to publicly listed companies and household names.

2. The success of ABTA Members’ businesses is directly reliant on the UK’s aviation infrastructure; many of ABTA’s larger Members are themselves part of groups that own airlines. ABTA Members provide 90% of the package holidays sold in the UK, with Members also selling millions of independent travel arrangements. The provision of quality, efficient and competitively priced passenger air travel is vital to the business interests of Members.

3. ABTA has responded to the Department for Transport’s Draft Aviation Policy Framework. Although there are some welcome commitments within the consultation document, particularly involving improved surface access to airports, the Government fails to address the most fundamental challenge facing the aviation industry, namely the pressing need for increased airport capacity. Capacity constraints are not only hurting the UK’s aviation industry, but are also damaging the many industries reliant upon it, and the whole of the UK economy.

4. ABTA shares the concerns we expect that other sectors of the aviation and tourism industries are likely to have put forward, particularly the significant delay to the adoption of a proper UK aviation policy and the need for a clear cross-party plan on developing additional capacity. This submission also focuses on the importance of leisure aviation within the aviation mix, necessary improvements to airport surface access and the passenger experience, and the impact of Air Passenger Duty.

1. What should be the objectives of Government policy on aviation?

5. Government’s role should be to facilitate the conditions to allow airports and airlines to meet aviation demand in a sustainable way. Within such a framework, UK airports and airlines will then be able to make decisions that best meet demand and provide the greatest benefit for passengers.

6. If the Government is serious about driving growth, it must not delay the publication of a proper aviation policy any further. Our continental competitors have continued to invest in their future aviation infrastructure, and the UK is falling further behind in the absence of an effective policy framework. We are concerned that the Government’s timetable will lead to a policy vacuum which will make business investment decisions challenging, and risk delaying much needed investment.

7. ABTA believes it is essential that any aviation policy framework agreed is robust and has cross party support so that it continues beyond a single Parliament. Aviation policy cuts across Government and any future policy must sit alongside a raft of measures that address other policy concerns such as planning, connectivity and taxation. Further, that UK Government processes, such as planning and regulation, do not create excessive costs for business and, moreover, have cross-Government departmental cooperation. We do not want to see a repeat of the planning process, which took 15 years before finally becoming operational. The UK planning process stands in remarkable contrast to processes in other countries, where it has been demonstrated that new airport infrastructure can be planned, constructed and made operational within a few years, enabling countries to reap the economic benefits of enhanced capacity and infrastructure.

8. As a result we would like to see Government create a method for ensuring cross-party support for a new sustainable aviation strategy with a clear view on future capacity growth. a. How important is international aviation connectivity to the UK aviation industry?

9. It would be wrong to believe that connectivity is a concern for aviation alone. A vibrant and effective aviation industry is a vital pre-condition for broader economic growth within the UK economy and it plays a key part in maximising business, leisure and social opportunities for UK citizens across the country. b. What are the benefits of aviation to the UK economy?

10. ABTA is pleased that the Government acknowledges aviation’s contribution to the economy and that one of the main objectives in developing a policy is to ensure that the UK’s air links continue to make it one of the best connected countries in the world. The aviation sector offers a wide range of benefits to the UK: it facilitates business and leisure travel of British citizens across the world; it brings business and visitors into the UK; and it enables the import and export of goods; all of which contribute to a successful and growing UK economy. ABTA believes that aviation is a key plank of the UK’s growth strategy and that we need an aviation policy from Government that recognises its pivotal role in the UK’s recovery. Aviation contributes £49.6 billion to the UK economy1.

11. If additional capacity is not provided where it is needed, we strongly believe that passengers cannot and should not be cajoled into using airports outside the South East; rather, they will begin to use competitor airports in Europe to hub through to reach their preferred destination. Anecdotal evidence exists showing that this phenomenon is already occurring.

12. The inability to start and grow existing connections to the new and burgeoning economies where demand exists is a direct consequence of the lack of capacity at Heathrow and Gatwick. At a time when direct market access to these economies is essential, having our main airports virtually full and only being able to offer second choice airports is unsustainable.

13. Being an island nation on the periphery of Europe, a strong and comprehensive network of air services is an absolutely vital component of a competitive UK economy. UK plc benefits from the excellent air connections with cities worldwide, which has until now made the UK an easily accessible country in which to set up business. Investors particularly view London as one of the most attractive cities in which to do business in Europe and the quality of its international connections and domestic networks is viewed as key. This historic connectivity advantage cannot be taken for granted. To maintain our leading status in aviation connectivity, the Government must recognise that the necessary growth in capacity, improvements in surface connectivity, and the quality of the passenger experience are vital conditions for a successful economy.

14. One clear economic benefit which aviation underpins is UK tourism. ABTA strongly believes that the aviation and tourism markets (domestic, outbound and inbound) could together help rebalance, strengthen, and stabilise the UK economy in this economically difficult time. There is a vast potential for tourism to generate many jobs within the sector, particularly amongst young people.

15. Outbound travel alone has great potential to generate growth and jobs, however it is being held back by capacity constraints and disproportionately high taxation. Research recently published by ABTA paints a picture of outbound travel’s growth potential. The research finds that outbound travel directly accounts for 1.6% of UK GDP (£22 billion), with a total economic impact through the supply chain of 3.8% of GDP (£55 billion)2. The research also found that the sector underpins more than 1.2 million jobs across the UK economy and brings in over £6 billion in tax revenue to HM Treasury. Crucially, the report underlines the critical mass of other industries across the UK economy that outbound travel touches, and supports, such as retail, financial services and construction. The longstanding myth that outbound travel results in a ‘tourism deficit’ is proven to be without a footing. c. What is the impact of Air Passenger Duty on the aviation industry?

16. Not only is the UK’s competitiveness constrained by lack of runway capacity, it is also constrained by high aviation taxes in the form of Air Passenger Duty (APD), on top of which there is now the added cost of aviation participating in the EU Emissions Trading Scheme (ETS). ABTA believes that aviation should pay its proper environmental cost but feels that this cost is more than reflected in the current APD levels. UK businesses and travellers cannot continue to pay the relentless annual increases in APD rates which are putting us at a competitive disadvantage compared to our European neighbours and damaging the position of the UK as a hub for global air travel. APD is particularly hard on passengers from UK regional airports travelling through London to long-haul destinations who will have to pay twice if they are not flying on a through ticket.

17. ABTA has long supported the inclusion of aviation in the ETS which we feel should be a first step towards a global solution. We feel that ETS revenues should be offset against APD revenue; and submit that Per Plane Duty (PPD) would act as an incentive to airlines to invest in quieter more fuel efficient aircraft.

18. ABTA is a founding member of A Fair Tax on Flying that has called on the Government to undertake a review of APD to assess the damage it does to the UK economy. We believe such a review should inform future aviation policy as taxation levels do directly contribute to the success or failure of routes and aviation’s economic position in general. Nearly 200,000 people have called on their MP via the www.afairtaxonflying.org website for an economic review into the impact

1 Oxford Economics, Economic benefits from air transport in the UK, 2011 2 Driving Growth ‐ The economic value of outbound travel (2012)

of APD. We believe that the Government should not increase APD any further before it has commissioned a review. It seems perverse that the Government is striving for policies to achieve growth and yet is ignoring the reasoned and popular calls to consider whether this tax is having a negative effect on employment and growth. We believe that such a review would show that APD makes UK goods and services more expensive, puts off foreign visitors from flying to the UK, damages the affordability of UK aviation and puts the annual holiday abroad out of reach for an increasing number of hard working families across the UK. A simple economic review by Government would show whether this is correct or not.

19. ABTA strongly believes that there should be a single APD regime across the UK, with the exception of Northern Ireland as a special case given the shared land border with the Republic of Ireland and where legislation to eliminate APD on direct long haul flights from NI is already progressing through the NI Assembly. There should not be different rates charged at airports outside London and the South East; we believe this would generate distortion and competitive disadvantage within the UK economy and air transport industry. d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

20. Improving the passenger experience is of vital importance to ABTA and its Members. This starts with the passenger’s journey from their home/place of business to the airport necessitating a good choice of surface access by public transport. It continues with their journey through the airport. Although the airports and airlines have invested time and money in substantially improving their facilities in recent years and reducing the time spent in queues particularly at check-in and security, there is always room for further improvement. Equally the inbound journey is important with the two pinch-points being the UK Border and . ABTA supports moves to further improve these and will continue to work directly with the airports and airlines and through the Airport Consultative Committees for the good of the passenger.

21. Greater focus by the Government in improving the delivery of the public sector side of the passenger experience, such as queues at the UK borders, would be very welcome. Whilst we all want a safe and secure border, long queues to enter the UK undermine our position as a global trading hub and create a poor welcome to Britain for visitors and returning citizens. Much more needs to be done to smooth the process at the UK Border and ABTA welcomes a renewed focus on this part of the passenger journey. Improvements made for the Olympic and Paralympic Games must not be allowed to fall as political and media attention moves on. A permanent fix in the service quality and resourcing of the Border Force to ensure that passengers are dealt with quickly and efficiently is urgently needed to this problem.

22. ABTA supports moving to risk based immigration controls and using the e-Borders programme, which the airlines have already spent millions of pounds on, to its fullest extent. e. Where does aviation fit in the overall transport strategy?

23. Aviation is an important part of the UK’s transport strategy. Many parts of the UK are dependent upon aviation as a lifeline, not just for communication purposes but economically e.g. the Scottish Highlands and Islands, Northern Ireland. It is important to recognise the value of all parts of aviation on the UK economy. Just as ABTA suggests the Government’s tourism policy should value all parts of the sector: domestic, inbound and outbound, so too must aviation recognise the mix of aviation models that contribute to the UK’s economy: scheduled, charter, no-frills, leisure, business and cargo. A strategy that promotes one type of flying over another or seeks to downgrade the relative importance of leisure aviation, for instance, would not carry our confidence and would, indeed, be a bad move for the UK.

24. We believe that High Speed Rail should complement and not be a substitute for additional airport capacity. Our greatest concern with plans for HS2 is the Government’s stated aim to link Heathrow, the UK’s international hub via a spur and not as an integral point on the London to Birmingham route. We urge the Government to think again.

25. As well as HS2, any scoping exercise must assess how best to improve the integration of the UK’s existing road, rail and light rail infrastructure with airports.

2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

26. ABTA supports passengers being able to fly from the airport of their choice, which will likely be that closest to their home or business. The 2012 ABTA Consumer Survey3 showed that 62% of passengers strongly favoured flying from their local airport, showing the importance of local airports and that the Government should not seek to manipulate

3 ABTA Consumer Trends Survey conducted by Arkenford Ltd (September 2012)

demand to suit their ends. Equally, passengers flying into the UK will wish to use the airport closest to their destination. This, in turn, helps prevent unnecessary road journeys at a cost to the environment.

27. In addition to calling for more capacity, we believe that better use should be made of existing runways. We support the Operational Freedoms trials at Heathrow with runways being used simultaneously for either arrivals or departures in a bid to cut delays and cancellations and get punctuality back on track. We also support moving as soon as possible to full mixed mode utilisation of runways at Heathrow on a permanent basis allowing for more slots to be made available. Mixed mode is implicit in single runway operations at every other airport in the UK.

28. We are deeply concerned that there appears to be inherent thinking within Government that business traffic is more valuable than leisure traffic and that any expansion should be for the benefit of business traffic. It has been suggested that leisure traffic might be moved to Stansted to accommodate more business traffic at Heathrow and Gatwick. But it must be noted that many air routes that clearly cater to business traffic are also dependent on leisure travellers for their financial viability. Most flights departing UK airports are ‘composite’ i.e. aircraft flying with leisure and business passengers.

29. Further, ABTA does not believe that the ‘Heathwick’ proposal, involving the construction of a high-speed rail line between Heathrow and Gatwick in order to create a new ‘virtual hub’ allowing passengers to connect between the two, is a viable solution. Whatever Heathwick’s superficial appeal, we do not believe it will provide the seamless transfers between airports/terminals that are necessary for a successful international hub nor will it create any additional capacity at the UK’s two largest airports. However, additional rail access to Heathrow should be introduced including the proposed western access.

30. UK airports do experience problems with resilience and will continue to suffer unless and until capacity issues are addressed. The UK’s two largest airports are capacity constrained and without increased resilience, what should be a minor disruption as a result of adverse weather or other incidents can result in a severe delay. Spare capacity is not only essential for jobs and growth but also for efficient management of incidents and delays, however they are caused. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

31. In its consultation the Government suggested that fifth freedom policies and bilateral agreements might be extended to other airports. However, it is necessary for there to be sufficient demand in order for a financially viable service to be operated. Lack of demand has led to many services being started up from regional airports then discontinued. Equally, airlines would prefer to operate from a few airports rather than spread their aircraft fleets and crew. We would not support any financial penalties or incentives on aviation in an attempt to create artificial demand. c. How can surface access to airports be improved?

32. ABTA has long supported airports in their aim to increase the number of passengers using public transport and are pleased to see this included in the Government’s consultation. Businesses looking to locate to London closely examine the surface access from London airports before deciding whether to locate in London or a competitor European city. Improving these links is essential to remaining competitive.

33. Coordinated action and investment by the Government is needed so as to encourage a greater number of passengers and airport workers to access airports by public transport. Local residents benefit from these services which also help to manage airports’ overall environmental impact.

3. What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

34. We acknowledge aviation’s impact and accept it is vitally important that aviation plays its part in making every effort to reduce noise and other environmental impacts. However, it is necessary to strike a balance between the economic benefits of meeting demand and the needs of the industry, with the impact this has on local communities and the environment. It is essential that airports work in harmony with the local communities around them.

35. Aviation’s climate change impact, although growing, is relatively small at about 6% of the UK’s total CO₂ emissions4. The aviation sector accounts for 1.6% of global greenhouse gas emissions and this will rise by just 0.5% by 2050.

36. We support the work of Sustainable Aviation5 which is entirely focused on finding collaborative ways of improving the aviation industry’s environmental performance and ensuring sustainable growth. Sustainable Aviation’s recent CO₂ roadmap shows that UK aviation can accommodate significant growth to 2050 without a substantial increase in absolute CO₂ emissions, through a combination of operational efficiencies, new technology and sustainable biofuels.

37. Aviation has a demonstrable and well-documented track record in improving its environmental performance and in delivering quieter planes and continues to invest heavily in the future. Aircraft today are 70% more fuel efficient than 40 years ago and the industry will work hard to ensure that this trend continues. Although the perception is that noise around airports has increased substantially with a growing number of aircraft movements, aircraft have in fact become significantly quieter over the past few decades due to increasingly stringent certification and improvements in technology and the noise footprints have shrunk. For example, the number of people within the 57dBA contour around Heathrow has shrunk from two million in 1980 to 268,000 in 2008 despite an increase in movements. Other airports have reported similar reductions in the number of people affected with a continually shrinking noise footprint. c. What is the relationship between the Government’s strategy and EU aviation policies?

38. ABTA supports the Government accelerating the coordination of environmental policy in the UK, the EU and globally. The inclusion of aviation in the European Union’s Emissions Trading Scheme (ETS) is a first step towards a global deal reducing environmental impact. We feel that the Government should continue to push ICAO to rapidly progress a global cap and trade system for emissions. Whilst we recognise the UK and EU’s desire to show leadership there are economic consequences in doing so. We urge that an early solution is found to the problems besetting ETS with other countries’ airlines refusing to participate.

39. Generally, greater coordination is needed of European Air Traffic Control with central management and active participation of other governments in Europe. We support the work being done through the Single European Sky II package (SESII) and SESAR (the technological project for modernising air traffic management in Europe).

4. Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where?

40. It must be self-evident that constraining capacity in the South-East will increasingly fail to meet the needs of customers. The question of airport capacity in the South East must be addressed urgently and planned for in the medium to long term.

41. ABTA supports a third short runway at Heathrow and a second runway at Gatwick. We also support a runway extension at Birmingham and an additional new runway at either Edinburgh or Glasgow. We support other regional airports seeking to expand but not as a substitute for additional capacity in the South East. We believe that aviation can grow within the agreed carbon limits and support the move towards sustainable aviation.

42. We believe there can be only one international hub airport in the UK with a comprehensive route network serving destinations that other airports cannot, supplementing local demand with domestic and international transfer traffic and cargo, and that hub is currently Heathrow. In the long-term, we believe that the UK’s hub airport needs to be able to grow to reflect market demand and ensure continued international importance. If that additional capacity cannot be realised at Heathrow then it needs to be found elsewhere. b. What are the costs and benefits of these different ways to increase UK aviation capacity?

43. See our response to question 1b.

44. Thank you for taking our comments into consideration. We would welcome the opportunity to discuss any points raised in our response further with the Committee and would urge the Committee to specifically look at the importance of leisure aviation within the aviation mix in order that this is not overlooked or deprioritised without adequate scrutiny of any proposals. We would request the Committee’s support for an economic review into the impact of APD.

19 October 2012

4 UN’s Intergovernmental Panel on Climate Change 5 Sustainable Aviation, Third Progress Report, 2011 www.sustainableaviation.co.uk

Written evidence from GATCOM (AS 49)

GATCOM (Gatwick Airport Consultative Committee) welcomes the opportunity to respond to the Transport Committee’s inquiry into airport capacity in the UK.

GATCOM is the statutory advisory body for Gatwick Airport and comprises representatives from local authorities, the aviation industry, passengers, business, environmental interests and other users of the airport. We provide a forum for informed discussion leading to the provision of advice to the Government, Gatwick Airport Ltd and other organisations on a range of matters concerning the operation and future development of Gatwick.

Given the broad range of interests represented on GATCOM, it is not possible for the Committee to comment on all the questions posed in your call for evidence because there is a diverse mix of views.

Government’s objectives on aviation policy

GATCOM supports the Government’s stated objective that UK aviation should be able to grow, but to do so it must be able to play its part in delivering environmental goals and protecting the quality of life of local communities.

The real issue in considering a long term strategy for aviation is to strike a balance between the economic benefits of meeting demand and the needs of the industry with the impact this has on local communities and the environment. It is essential that airports work in harmony with the local communities around them.

Connectivity

As an island nation, UK airports have a critical role to play in the transport of people and goods. GATCOM recognises the importance of connectivity and its key role in helping the UK economy grow on a sustainable basis. Aviation is one of the UK’s success stories with world leading airlines and airports with the UK being seen as a key destination for existing and new airlines. …cont’d The importance of the UK position in international aviation is recognised and there is a role for government working as a partner with the industry to safeguard national interests in the face of growing competition from Europe. The objective must be to maintain a prominent position in the international market, but not necessarily the dominant one that it has enjoyed in the past. It must be recognised that without good connectivity the UK will become removed from global markets and jobs will be lost. A core objective of the Government should be to make a positive choice for a global hub in the UK complemented by greater interlining between the regional hubs. This would help the UK to compete with other European airports and support economic growth in the UK. The current delay by the Government in agreeing a new policy creates uncertainty for all interests.

GATCOM agrees with the description of connectivity, and the value of connectivity, as presented in paragraph 2.14 of the Draft Aviation Policy Framework. The Government’s objective of making the UK, through its air links, one of the best-connected countries in the world is supported. GATCOM believes this can be achieved by encouraging better utilisation of existing runway capacity in the short to medium term supported by improved surface connections, particularly high speed rail links between regions and dedicated airport express services. In parallel there should be a more stringent night flights regime to encourage the use of the quietest aircraft during the night period.

Flexibility should be incorporated into any future approach to exploit the benefits of technological advances and changes to global resources/government priorities. The industry is committed to reducing aircraft and airport emissions and noise impacts and technological advances are being developed but it will take time for the benefits to be realised. Measures to further incentivise airlines to invest in new fuel efficient, “cleaner” aircraft could be achieved through the implementation of greater differentials in the structure of landing charges at airports but it is acknowledged that this would be controversial particularly in the current economic climate.

Surface Access

Gatwick has a strong performance in surface access provision but there are a number of barriers that need to be overcome. If best use is to be made of existing capacity at airports, co-coordinated action and investment by the Government is needed so as to encourage a greater number of passengers and airport workers to access the airport by public transport.

The rail network will help to meet domestic passengers’ requirements but it is important that rail links to airports are extended and improved through better rolling stock designed for the needs of the airline passenger. The importance of rolling stock design for rail services serving airports should be recognised in the Aviation Policy Framework building on the references made in the Government’s Rail Command Paper issued last year. Air passengers have unique requirements, which differ from commuters and other rail passengers, as they are often carrying baggage in a foreign country on part of a longer journey. GATCOM believes that in order to integrate airports more successfully into the wider transport network, rail services to airports should seek to meet the needs of air passengers by providing step-free access, wide doors, large luggage racks and information displays.

In addition to Local Enterprise Partnerships, airports should be encouraged to engage actively with new Local Transport Bodies to ensure that, where possible, transport investment supports airport growth plans and the integration of investment and services.

As an international gateway with around 33 million passengers annually, Gatwick is London’s best connected airport by rail. The airport rail station has around 900 trains arriving and departing each day and serves over 12 million rail users annually; making it one of the busiest rail stations in the UK. The scale of demand for surface access to and from the airport is growing. Over 10 million journeys are made by people who work on the airport campus every year. There are also a significant number of journeys made by suppliers and service providers. Gatwick is well connected to the motorway network via the M23 and M25 although there is growing concern about the capacity of the motorway network being able to accommodate further growth.

Improving surface access is an integral part of the sustainable growth of the airport. Effective, efficient and resilient surface access to the airport benefits not just passengers but also the local community and helps to manage the airport’s overall environmental impact. Rail is the largest single mode of passenger access to and from Gatwick and there is strong evidence that this demand will continue to grow in the future. However, there is limited capacity on the London to main line which prevents additional services being introduced to support demand on the part of air passengers. This is a major barrier to the effective provision of rail services to a major airport.

Due to limited capacity, the dedicated Gatwick Express service has effectively been removed in peak hours and turned into a commuter service to Brighton. This has obvious implications in terms of the quality of rail provision to and from the airport. Ticket gates have also been introduced at Gatwick this year by the as part of its franchise agreement with the DfT, which has also further diminished the premium Gatwick Express service as the purchase of tickets on board the train and the removal of train staff to assist air passengers have been lost and has exacerbated queuing for tickets on the station’s concourse.

In addition, the level of direct connectivity between Gatwick and both the local and networks has declined substantially in recent years. Locally, rail access to the east and west of Gatwick is a challenge. The loss of a direct link to Kent is of particular concern both to passengers and the local community, as Gatwick Station is a regional rail hub.

The long-awaited upgrade to Gatwick Station, with an additional Platform 7, is underway. However, the station concourse will continue to have limited capacity for passenger growth even after the current enhancement project. If Gatwick’s status as a major international gateway is to be maintained, and the overall passenger experience is to continue to be enhanced, improvement work to the station should be on-going rather than subject to a near thirty-year interval, as was the case until mid-2010.

As regards the Strategic Road Network, Gatwick is located close to very congested parts of the motorway network; the south-west quadrant of the and the M23. Safe, reliable and resilient access to Gatwick, given its significant international gateway status, is economically and operationally critical. There is a need to expedite the introduction of active traffic management and selected hard shoulder running schemes on key sections of motorway to support reliable access to Gatwick.

In terms of encouraging a shift from air to rail, there are three key criteria to help decision making when balancing alternative modes of transport.

Pricing structures need to change due to the fact that environmentally it is not sustainable to continue to fly short distances therefore prices need to reflect this. Rising oil prices are also likely to be a contributing factor; however governmental ‘pressure’ in the form of general taxation and further investment in the rail network will also be required.

Noise and other local environmental impacts

GATCOM supports the establishment of effective noise management regimes and the majority of members believe that the current noise limits are in need of review.

In terms of addressing the issue of aircraft noise and disturbance, on balance GATCOM believes that it is probably preferable to minimise the total number of people affected by aircraft noise through the use of noise preferential routes, as additional design features could be used in these areas to minimise the direct impacts where possible, for example the use of treble glazing in existing and new housing. This approach is likely to make it easier to identify areas affected and adequately plan suitable land uses or incorporate mitigation measures to minimise disturbance.

There are however impacts flowing from the introduction of new technological advances such the use of direct routeing/PRNAV. As navigational accuracy has improved, what was a relatively wide swathe of aircraft trajectories has increasingly narrowed. This has resulted in fewer people being overflown but an increasing number of overflights for a specific number of people, causing disturbance and distress. The increased navigational accuracy through the implementation of PRNAV will exacerbate this situation. The majority of direct routeing flight paths are expected to be at high level for the foreseeable future with little impact on those on the ground. However, longer term developments indicate a possibility that these routes could be lower, and closer to airports, and so result in aircraft overflight of people who have not previously been overflown and who may have purchased their house following research into existing flight paths.

GATCOM would like to see further research into the potential of greater dispersal within existing noise preferential route swathes and arrival paths so as to share more evenly the burden amongst those already suffering disturbance.

Noise disturbance from aircraft arriving at Gatwick, particularly from areas further away from the airport, is an area of growing concern amongst local communities around Gatwick. The main noise abatement measure identified for arrivals is set out in the Code of Practice for Continuous Descent Approach (CDA). In addition to aiding noise reduction, CDA also reduces fuel burn thereby cutting emissions and producing an overall environmental benefit. GATCOM supports the use of CDA because of the overall environmental benefits achieved but in view of the disturbance still suffered by those local communities under the arrivals flight paths further away from the airport, we would like the Government to consider whether the use of steeper approaches could feature in the Code.

It is recognised that implementing steeper approaches at Gatwick could be problematic because it is an international airport and the ICAO international standard is for a 3º approach. Nonetheless GATCOM would welcome studies to determine whether there are possibilities available. Even a slight increase in the steepness of approach would result in aircraft being higher for longer and thus help reduce the noise impact.

Noise Action Plans also have a key role in predicting and demonstrating an actual reduction in noise levels. To give local communities confidence that action is being taken to reduce the noise impact around airports, there is a need to demonstrate hard results, not just be a list of ‘soft undertakings’.

Resilience

Gatwick is the busiest single runway commercial airport in the world. Air traffic control does a skilful job in scheduling take-offs and landings at the shortest possible intervals, allowing for the differing wake vortices created by different types of aircraft. But inevitably this system is not resilient, and the minor disruption as a result of adverse weather or other incidents can result in delays. When delays occur, aircraft are required to fly elongated approach paths or to stack, causing increased noise and climate change damage. One solution could be direct routing as described in the CAA’s Future Airspace Strategy. Another would be to place a limit on the number of flights scheduled to use the runway in any one hour. However this would be highly contentious and could reduce capacity further.

Regulation could have a role in minimising delays and ensuring the airfield and airspace is used as efficiently as possible. The CAA’s congestion delay term at Heathrow and Gatwick does focus the airports’ attention on making best use of the airfield infrastructure and resilience planning is key to ensure that disruption is handled efficiently and delays kept to a minimum.

The experience of resilience planning at Gatwick during the severe winter weather conditions in 2010/11 was that it worked well and lessons learned have been taken forward. Aviation is an integral part of the UK’s transport infrastructure and other transport modes also need to be as resilient.

Improved resilience at airports is also reliant on punctual and efficient surface transport and inter-modal connectivity. The severe winter weather conditions in 2010/11 saw surface access networks around Gatwick recover at a slower pace than the airport resulting in airport staff and passengers not being able to access the airport. This had implications for flight schedules outside the control of airports and airlines.

Improving the Passenger Experience

The Government’s proposals to extend the Fifth Freedoms policy is supported in principle provided there are conditions put in place so as to ensure that competition for UK based airlines is not hampered or distorted, as it will provide greater choice for passengers using the South East airports. Preserving and improving the passenger experience at airports should be one of the key themes of the new aviation policy to complement the new powers being given to the CAA in the Civil Aviation Bill which places the passenger at the heart of airports regulation. It needs to take into account the end to end journey experience for air passengers.

The passenger experience would also be enhanced by the Aviation Policy Framework looking in more depth at the spread of destinations for all the main London Airports to ensure less travelling time and congestion on the M25. If this is not commercially viable, the new policy needs to ensure that public transport links between the main London airports are far more robust for the full range of passengers and not reliant on coaches (which add to the M25 congestion) and London Underground trains (which have had funding plans for wider accessibility withdrawn).

Capacity planning should concentrate more on passengers end to end journeys and alternatives to car travel in spreading capacity loadings. Contingency planning should be written into all plans to include disruptions of all types including weather, traffic and the changing spread of the passenger population between business, leisure, families and PRM’s. More research should be done with passengers about their transport interchange needs with a ‘business case’ attitude on flight delays etc. perhaps involving mystery shopping as well as questionnaires which usually only show a snapshot of experience.

Working together

GATCOM welcomes the Government’s endorsement of the valuable role played by the airport consultative committees (ACCs) in the draft Policy Framework and agrees that there is a need to update the existing guidance for ACCs in view of the fact that the role of ACCs is now far wider than in 2002 when the guidelines were last updated. GATCOM has and will continue to work with the DfT and the CAA in reviewing best practice in the way we work and will fully participate in the review of the DfT’s guidelines for ACCs. GATCOM would however urge the Government to ensure that the guidelines continue to be non-prescriptive and flexible as what works well for one ACC might not be appropriate for another. It is therefore important that there should be sufficient flexibility in the reviewed guidance to reflect the variations between airports and smaller .

19 October 2012

Written evidence from A Fair Tax on Flying Campaign (AS 50)

What is the impact of Air Passenger Duty on the aviation industry?

Although an independent or HM Treasury-funded study into the impact of Air Passenger Duty (APD) on either the aviation industry or the wider economy has yet to be undertaken, many airlines and airports, who have submitted evidence to a recent inquiry by the APPG on Aviation, have cited areas in which APD tax has impacted negatively on their commercial operations and thereby placed the UK at an international competitive disadvantage. Most of the piecemeal evidence we are aware of centres on three aspects of lost business:

• International Airlines cancelling their routes to UK destinations: Two such examples have been given by Manchester Airports Group and Continental Airlines. The former highlighted the claim made by Air Asia X that the over-riding reason for abandoning their flights to UK airports was the increasing levels of APD. The latter publicly announced that they would have abandoned their flights from Belfast to the US if the level of APD hadn’t been reduced in October 2011. • Passengers avoiding long-haul services from/to UK airports: With the UK’s European neighbours either imposing considerably reduced levels of air passenger tax, or no tax at all, separate analyses have shown that passengers have started to switch from UK long-haul flights to two, or possibly three, connecting flights through other European Airports, in order to avoid the tax. Information from research carried out by our Adviser and the CAA has shown that more than 2 million UK-originating passengers transferred onto connecting flights in Amsterdam in 2011. It appears that non-UK originating travellers are also starting to avoid UK airports, as evidence from an Airlines of America report shows that the total US- UK passenger market declined by 9.7% between 2006 and 2009, while the US-EU market rose by 3.4% across the same period. Both of these sets of data can be corroborated by anecdotal evidence from other European nations who impose or have imposed some form of air passenger tax. Despite being considerably lower than that of the UK, a recent German Government-funded study already shows that German residents are flying via Amsterdam to avoid the long-haul German version of APD. • Impact on Point-to-Point UK Airports: regional airports with competitive point-to-point links are vital for a healthy aviation industry. These regional airports themselves thrive on staying internationally connected. Although airport capacity is an important part of this argument, it needs to be recognised that as it is effectively a tax on international connectivity, APD is harming Point-to-Point travel. Using just one example, in the 2011 York Aviation report for BAA Scotland, it was calculated that ‘over the next three years……..Scottish airports will lose around 1.2 million passengers or around 1.8% of total demand’. APD will be a contributing factor to this.

All of these are individual examples of the damage that APD is doing to an aviation sector which supports 921,000 UK jobs and contributes £49 billion to GDP. Our concern, nevertheless, extends beyond the 100,000s of jobs and billions of pounds that aviation supports and contributes, to the wider effect that aviation has on the UK economy. As an island, flying is crucial for all UK business sectors, as a means of attracting and carrying out business in a global market. Any barrier to international connectivity affects business growth opportunities. Below, we set out some of the ways in which we believe APD is damaging the wider UK economy:

• Acts as a deterrent to inbound tourism: Tourism is currently the UK’s sixth largest export earner, bringing in £20.6bn in overseas revenue. As the Government looks to build on the Olympic legacy and, in particular, concentrate on attracting visitors from emerging market economies such as the BRIC nations, we believe APD is and will continue to act as a hindrance in these objectives. In a recent survey carried out by the World Economic Forum, the UK was ranked 134th out of 138th for travel and tourism competitiveness, in terms of “ticket taxes and airport charges”. This can only harm our chances of attracting visitors from the BRIC countries, amongst others, pushing them towards our European rivals. If we look at a family of four flying from China, APD adds another £324 to the total fare. It could be argued that this a fundamental reason for the UK’s share of the Chinese market shrinking by half over the last 10 years. • Discouraging inward investment and general export-led growth: International connectivity is crucial for any UK company looking to expand its consumer market. We estimate that in 2010 alone, the Treasury took at least £600m from businesses in flight taxes, half of this from foreign business travellers. These are costs that many companies simply are not willing to take on. Last year the Glasgow City Marketing Bureau said that the city has lost £22m alone in conference business because of the high levels of Air Passenger Duty (APD), claiming that organisers were opting for cities where flights were cheaper. If we look at the bigger picture, a study by Oxford Economics has shown that a 10% improvement in international connectivity relative to GDP would see a £2.3 billion per annum increase in long-run GDP for the UK economy. At current levels of APD, foreign multinationals are more likely to look to our neighbours as a location for their European bases, and along with UK export-led growth being disincentivised, economic growth will be stymied.

With the negative impact current levels of APD are having on the aviation industry, inbound tourism and inward investment, evidence seems to suggest that the highest aviation tax in the world is damaging to the wider UK economy. The World Travel and Tourism Council estimates that the UK’s APD will cost the economy 91,000 jobs and £4.2 billion in additional revenue in 2012 alone, a much greater cost than the £2.9bn predicted for 2012 APD receipts.

However, notwithstanding the piecemeal evidence outlined above, in order to fully access the impact APD is having, and will continue to have, on the UK economy, we would like HM Treasury to commission a full and comprehensive review into the wider impact of the tax. No such review has taken place since its introduction in 1994, and having brought in over £20 billion across this 18-year period, we believe some hard-proof evidence of its effects is needed.

19 October 2012 Written evidence from NATS (AS 51)

1. Introduction

1.1 NATS is the UK’s leading provider of air traffic management (ATM) services. NATS is licensed by the Civil Aviation Authority (CAA) as the monopoly provider of en-route air traffic services in the UK and the eastern North Atlantic. NATS also provides air traffic services at 15 UK airports through commercial contracts.

1.2 Airspace is a pillar of the UK’s transport infrastructure – airports don’t work without it. NATS seeks the most efficient use of airspace to maximise its use (capacity), minimise delay, minimise environmental impact (noise and CO2 emissions) and maximise flight efficiency (less fuel burn) while maintaining a high standard of safety. More efficient use of airspace and more efficient flights can help reduce the environmental impact to enable sustainable growth.

1.3 In 2011/12 NATS handled more than 2.2 million flights in UK airspace. This equates to around 6,000 flights per day, some 4,000 of them to and from the five main London airports, making the airspace in the south-east the most complex in the world.

1.4 NATS is also responsible for designing and implementing airspace changes, subject to CAA approval.

1.5 Airports have historically expanded without strategic oversight or consideration of the airspace network. NATS has had to design and manage airspace on a reactive and incremental basis. This has had particular impact on the crowded airspace over the London airports.

1.6 The Civil Aviation Authority (CAA), together with the DfT, MOD and NATS has developed the Future Airspace Strategy (FAS) to provide the safest and most efficient airspace possible, aligned with European developments and technological changes, reducing the impact of aviation on the environment and balancing the needs of all airspace users. NATS fully espouses these aims.

1.7 Airspace should, therefore, be at the heart of the Government’s Aviation Policy Framework (APF), currently out in draft form for consultation. Fundamental changes to the UK airspace structure are a cornerstone of the FAS and while we note the Government’s support for the strategy in the draft APF, we would like to see more emphasis to underline its importance in achieving Government aims for the sustainable development of the aviation sector.

1.8 NATS is currently in the early stages of developing the airspace design which will deliver our part of the FAS through two major design programmes in the north and the south of England; clear environmental parameters within the APF are crucial to that work.

1.9 Getting the environmental parameters for the APF right is, in our view, critical to future development through the FAS. Clarity, stability and predictability in the policy framework are clearly vital in underpinning the integrity of any future airspace change proposals.

1.10 With this kind of assurance, NATS can deliver benefits in line with Government ambitions, wherever the Government decides further airport capacity should be provided. Such assurance, though, is necessary because of the level of investment required in a period of uncertain economic strength and within the context of a new regulatory framework for ATM in Europe which has the potential to limit NATS’ ability to deliver tangible benefits in the future.

1.11 NATS has unrivalled environmental credentials in establishing and managing innovative solutions to the environmental impacts of ATM; NATS was the first ATM provider to set targets for reducing CO2 emissions for aircraft under our control. We were also the first ATM provider in the world to devise a metric for measuring our environmental performance; this was introduced as part of our regulatory mechanism at the start of 2012 and we hope will provide a model for the rest of Europe and, potentially, further afield.

1.12 Government consultation on draft Aviation Policy Framework: NATS’ response to this consultation focuses on the importance of clear guidance from Government, particularly with respect to environmental parameters, to enable best practice airspace management and design, and ATM procedures.

1.13 The document specifically acknowledges (Para 1.23) the importance of airspace and the FAS to enable sustainable growth and we very much welcome that.

1.14 The Davies Commission: NATS welcomes the establishment of the independent Davies Commission to investigate options for ensuring appropriate hub capacity to support economic growth and to assure the UK’s position as a leading global trading centre; and the intention that its interim report in 2013 will address interim measures to address the south east airspace capacity pending development of future hub strategy.

1.15 The DfT has made it clear that the Commission will need to wait until the APF is published in its final form before it is able to make its own recommendations on hub capacity. NATS is also keen that while the APF must establish a clear framework and guidelines, it should be sufficiently flexible to accommodate various options for future change that may be recommended by the Davies Commission.

In response to the Committee’s specific questions, NATS offers the following answers:

2. What should be the objectives of Government policy on aviation? a. How important is international aviation connectivity to the UK aviation industry? b. What are the benefits of aviation to the UK economy? c. What is the impact of Air Passenger Duty on the aviation industry? d. How should improving the passenger experience be reflected in the Government’s aviation strategy? e. Where does aviation fit in the overall transport strategy?

2.1 NATS answers: As an island nation and global trade hub, aviation is critical to the economic wellbeing of the UK. It is key to enabling UK economic growth. Acknowledging these benefits also means addressing its negative environmental impacts. NATS therefore supports the Government’s objective of a sustainable framework to enable aviation to grow by reducing its environmental impact.

2.2 Airspace is too often the forgotten factor in considering how aviation can develop; yet it is as important as the ground infrastructure. Airports don’t work without it.

3. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? c. How can surface access to airports be improved?

3.1 NATS answers: NATS fully supports the principle of making better use of existing airport capacity. It is cheaper, quicker and more efficient than seeking brand new solutions and is a basic requirement for an interim solution before any long term solution arising from the Davies Commission can be delivered.

3.2 Airspace changes in the medium term (to 2020) are a cornerstone of the FAS that will both improve performance and enable sustainable growth. NATS has developed a world-leading capability in making maximum use of constrained runway capacity in south-east England, but the full benefits of what could be delivered will only be realised through the infrastructure developments that will be considered by the Davies Commission.

3.3 NATS has fully supported, and committed considerable resource to, the trial of operational freedoms at Heathrow with the view to improving resilience in the short term and to supporting sustainable development in line with the FAS objectives.

4. What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? c. What is the relationship between the Government’s strategy and EU aviation policies?

4.1 NATS answers: An accepted balance of benefits is key to delivering successful airspace development, and achieving this balance means gauging their relative importance to a range of stakeholders.

4.2 For example, avoiding noise over a populated area will often involve lengthening a route to go around it, resulting in higher fuel burn and increased CO2 emissions (much like a ring road around a town will always be longer than a straight road through it).

4.3 Consultation is an important means of assessing the relative importance of different impacts among a variety of stakeholders. It is also expensive and, in order to assure value for money and certainty for those people in the consultation areas, we need to know that our changes can be for the long term. Consultation only happens once there is a design on which to consult, so it is important to have clarity around relative priorities; the Government is currently reviewing its 2002 Environmental Guidance which we hope will provide this.

4.4 NATS supports the overriding principle of promoting emissions reduction internationally through EU ETS and technological developments in aircraft and airspace performance. It is only through international cooperation that we will achieve a global reduction in emissions.

4.5 The draft APF states that the Government will decide later this year whether or not it accepts the Climate Change Committee’s advice that all the UK’s aviation emissions (ie including emissions from international aviation) should be included in the UK’s national carbon budgets. While not expressing a view on this issue, NATS considers that the Government’s decision could impact on the relative importance of the different environmental objectives (ie noise and emissions) for the UK’s airspace. For example, if the Government accepts the CCC’s advice to include international aviation (which accounts for some 90% of the UK’s total aviation emissions) this would mean a significant increase in the relative contribution of aviation compared to other industries in the UK’s national carbon budget. This might therefore increase the emphasis the Government wishes to put on mechanisms to reduce emissions/climate change effects presented in the APF.

4.6 NATS strongly believes that at a national level the Government should set very clear direction in supporting the development of national airspace infrastructure, which has a major role in delivering CO2 reduction (as well as offering potential benefits in terms of safety, capacity and noise).

4.7 The FAS Deployment Plan will realise climate change benefits through major redevelopment of parts of the route network (in particular the South East and Manchester areas). An enabler for this redevelopment is the upgrade of all existing airspace structures to utilise modern RNAV navigation standards.

4.8 Sustainable Aviation (SA) Noise Roadmap: National initiatives still, however, have a place in the drive for CO2 efficiency and they need to be encouraged, incentivised (eg through sponsorship for research) and acknowledged. NATS is a founder member of Sustainable Aviation (SA), a unique cross-sector initiative to identify how ATM, aerospace, airports and airlines can work together to achieve efficiencies.

4.9 SA’s CO2 Roadmap, setting out the long term strategy of the aviation industry to drive down carbon emissions out to 2050, has been well received by stakeholders including Government, recognizing that this is a robust cross-industry approach to producing workable and deliverable solutions. SA has subsequently decided to develop a similar Noise Roadmap to define the industry's view of the future noise environment around airports out to 2050.

4.10 This project began in Spring 2012 led by NATS with support from airports, airlines and aerospace manufacturers, addressing potential improvements in noise across five workstreams - technology, operational improvements, operating restrictions, communication and community engagement and land use planning. The Roadmap is still in development and expected to be published early in 2013 in time to inform the Government’s final APF document.

4.11 With the appropriate enabling measures provided through the APF, the FAS can deliver sustainable improvements in the ATM system that are consistent with both the objectives of the APF, and the need to modernise ATM in line with developments in Europe under the Single European Sky programme, and specifically the technology R&D programme (SESAR) and its subsequent deployment.

5. Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where? b. What are the costs and benefits of these different ways to increase UK aviation capacity?

5.1 NATS answers: We welcome the Government’s decision to appoint an Independent Commission, with cross-party support, to consider how to ensure the UK retains international hub status and connectivity. Airports don’t work without the airspace to support them, so it is crucial that the Davies Commission keeps airspace at the core of its work. We will play a full part in supporting it.

5.2 Runway capacity in the south east is currently insufficient to support demand. Additional runway capacity is required to promote hub connectivity, allow room for growth and improve operational resilience.

5.3 Doing this is feasible, albeit challenging, given the complex airspace interactions between a large number of airports within a small geographical area; and the very dense population in the region.

5.4 Adding another 4-runway airport would have various implications, including impact on other airports in the area; it would also require entirely new flight paths, some of them at low level – not only affecting people in the vicinity of the new airport, but also those living under flight paths to/from other London airports, which would also be likely to have to change. This would obviously require significant consultation with local communities.

5.5 NATS has unrivalled expertise in safe and efficient airspace design and management and wherever the Davies Commission recommends providing additional new runway capacity, NATS can build the supporting airspace infrastructure.

19 October 2012

Written evidence from Liverpool City Region Local Enterprise Partnership (AS 52)

Liverpool City Region Local Enterprise Partnership (LEP) welcomes the opportunity to respond to the Transport Select Committee Inquiry into Aviation Policy Strategy.

We advocate an aviation strategy which addresses the barriers to regional competitiveness and supports the realisation of the recommendation for increased international connectivity in the 2011 report1 by the RT Hon the Lord Heseltine CH and Sir Terry Leahy.

We have set out our response to the issues the Transport Committee aim to address below.

1. The importance of international aviation connectivity to the UK

1.1. We recognise the importance of international aviation connectivity to the UK. Specifically as a regional airport, Liverpool John Lennon Airport is of vital importance to the connectivity of Liverpool City Region and to the international perception of Liverpool City Region as an attractive area in which to invest.

1.2. The Government’s Draft Aviation Policy Framework recognises the “important role in UK connectivity” offered by regional airports in England; yet the consultation paper centres the debate on Heathrow and the south east. Connectivity to the UK’s City Regions is integral to rebalancing the economy which is a consistent theme from the Government.

1.3. Liverpool City Region has the Government’s backing to host an International Festival of Business in 2014 which is an ambitious 61 day programme of national consequence yet we have no hub link from which visitors would easily be able to access such a high profile event. This issue could limit the impact of the effort and investment which will be undertaken to deliver a successful programme of events.

1.4. There is growing demand for regional connectivity. Liverpool is the fifth most visited city in the UK by international visitors. Globalisation is resulting in international visitors who expect to connect to cities such as Liverpool upon arrival at a hub airport. Over the last 5 years its growth in overseas visits has outstripped every UK city but for Glasgow.

1.5. HS2 should not be regarded as an alternative to regional aviation connectivity but rather as a complement to a modern transport network which offers the consumer choice and encourages market competition.

2. The impact of Air Passenger Duty (APD)

2.1. The August 2012 Inquiry into Aviation Policy and Air Passenger Duty from the House of Commons All Party Parliamentary Group for Aviation calls for the Government to implement a study “to quantify the full impact of APD on UK competitiveness” which is a view with which we concur.

2.2. APD requires a joint strategy across industry, the Treasury and Department for Transport to ensure it is not adversely affecting economic growth and employment. The current arrangement has a greater impact on regional airports which is inconsistent with the Government’s policy to rebalance the economy. Regional airports require the opportunity to compete on a national level.

1 Rebalancing Britain: Policy or Slogan?

Company Incorporation Certificate 2753023 Registered in England and Wales VAT Registration Number 618 5781 12

3. Making the best use of existing aviation capacity

3.1. Regional airports can help alleviate capacity constraints in the south east especially as airports within the south east will be more or less full by 2030.

3.2. We suggest London hub slots are ring fenced to promote regional connectivity which will benefit the UK as a whole in terms of distributing foreign investment, regional economic development and easing capacity issues. The current economic model is not viable for enabling regional airports to use Heathrow slots.

3.3. We support the availability of route development funds and suggest that this mechanism is considered to support regional airports in realising their ambition to successfully maximise the potential for new routes.

4. Sustainable aviation strategy

4.1. We support the development of a sustainable aviation strategy but this must be weighed against the imperative for regional growth. In fact there is an argument for the efficient use of regional airports which minimises journey times to and from airports and minimises the carbon impact of surface access.

In summary Liverpool City Region LEP ask that consideration is given to the parity of UK aviation policy to ensure both short term and long term economic growth both nationally and regionally.

19 October 2012

Company Incorporation Certificate 2753023 Registered in England and Wales VAT Registration Number 618 5781 12

Written evidence from the Freight Transport Association (AS 53) Introduction 1. The Freight Transport Association (FTA) is pleased to respond to the Committee’s inquiry into aviation strategy. 2. FTA is one of the UK’s largest trade associations and represents over 14,000 companies relying on or providing the transport of freight both domestically and internationally, to or from the UK. Our members include hauliers, freight forwarders, rail and air freight operators, through to customers – producers, manufacturers, wholesalers and retailers. They cover all modes of transport – road, rail, air and sea. FTA members operate over 200,000 commercial goods vehicles in the UK, approximately half of the UK fleet of goods vehicles, 90 per cent of goods moved by rail and around 70 per cent of goods moved by air and sea. 3. Please find below FTA’s views on the issues raised by the Committee. We will respond to the questions that address issues that affect our members or where we have a view we wish to express.

1. What should be the objectives of Government policy on aviation? a. How important is international aviation connectivity to the UK aviation industry? b. What are the benefits of aviation to the UK economy?

4. Air freight is crucial to the UK economy not because it is a major employer and generator of revenue – though it is those things. But because it provides a service which the rest of UK industry relies upon to be competitive in the global market 5. The volume of freight travelling by air is very small when measured by weight – around 0.5%1 of the total. However, it has a high value – about 40 per cent of the UK’s extra-EU trade2. Air freight has a disproportionate importance as it serves industries which are core to the UK’s economic future as a service economy. These include the major export industries such as electronics, telecoms, financial and business services. Air freight also serves industry where urgency is a key factor – pharmaceuticals and biotech industries as well as food products are heavy users of air freight. UK manufacturing relies on air freight to import and export key components to keep factories working. 6. Amongst other uses, air freight allows the operation of express delivery services connecting businesses globally on a next day basis – the accepted standard to which UK companies high value business operations have to work today. We note that an Oxford Economics report in 20113 found that over 80 per cent of UK businesses surveyed state that their businesses would be badly affected if international next-day delivery services were no longer available. 7. One area where air freight is particularly vital is in facilitating trade with the developing world – especially Africa. Air freight allows areas such as this to trade in fresh produce, such as food or flowers with Europe – a key area of the economy for many African nations. For example, the export of fresh fruit and vegetables to the UK alone contributes almost £35m per year to the economy of Kenya – 95 per cent of these products have to be sent by air. The distances involved usually make it impossible to serve these markets by sea freight due to the extra time that would take. Overall, more than one million African rural livelihoods are supported by UK consumption of their fruit and vegetables.4 Heathrow is the most significant airport for freight in the UK. In fact it carries more freight each year than all other UK airports put together. It competes as a mixed use hub with the major Continental alternatives – Paris, Frankfurt, Amsterdam and Madrid. The two key freight hub transshipment airports in the UK are East Midlands (EMA) and Stansted. These airports have a considerable strategic importance to regional economies as well as UK plc. Manchester and Gatwick are also major freight airports.

1 DfT Focus on Freight, 2006 2 DfT The air freight end-to-end journey 3 Oxford Economics, the Economic Impact of Express Services 4 International Institute for Environment and Development c. What is the impact of Air Passenger Duty on the aviation industry?

8. APD does not directly apply to freight. However, it is indirectly part of the price of doing aviation business in the UK and therefore also affects logistics. As noted, the majority of freight flies in the hold of mixed-use aircraft. The level of APD is factored into the cost of operating those services and therefore some impact is felt by freight services using those flights. To the extent that APD makes any possible services uneconomic, this would have an equal impact on freight in terms of reduction of UK service on offer. Other countries would quickly fill this void, and jobs would move overseas. e. Where does aviation fit in the overall transport strategy?

9. Air freight fits into businesses’ strategies as a complement to deep-sea shipping services for companies with a global supply chain. It is used for perishable, urgent or high value goods. High volume goods will move by sea unless they have a short self life. 10. It is a service required for the UK to maintain our place as a global centre of business – both for services and high end manufacturing.

2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

11. In order to continue to get the most out of the existing London airports the current night-flights restrictions should not be further tightened in the upcoming DfT consultation. 12. Night flight capability for imports and exports is crucial to the competitiveness of UK businesses. These flights allow express delivery companies to offer late customer collections and guaranteed business-to- business, time-definite delivery around the world the next day. The only way to achieve this is by moving the parcels and packages by air at night. 13. A 2006 study5 found that the closure at night of specific UK airports, with a strategic express freight function, including East Midlands and Stansted, could reduce UK GDP by about £6 billion a year by 2024. Over a twenty year period, the cumulative cost in terms of forgone GDP would be over £35 billion. 14. Demand is driven by customers from across the UK economy for example in pharmaceuticals and advanced manufacturing, and these companies need to move their time-critical or high-value goods quickly and efficiently. Again we would note that an Oxford Economics report in 2011 on the Economic Impact of Express Services found that over 80 per cent of UK businesses surveyed state that their businesses would be badly affected if international next-day delivery services were no longer available. 15. To meet the rising demand associated with longer-term economic growth, and to remain competitive in the global marketplace, the UK must retain the capability to expand the number of night flights. 16. Further restrictions would negatively affect utilisation of the airports and damage the quality of the UK international supply chain. Aside from the direct economic impacts if express operators were to relocate more operations outside the UK, UK businesses would face a decrease in available UK services and would be compelled to utilise air freight logistics based out of continental airports. This adds cost and delay as well as reducing the resilience of the supply chain. It also has the potential to increase emissions, as goods will be flown to the Continent and then trucked across. 17. FTA would also welcome a relaxation of the any night time restrictions by just half an hour in certain defined extreme weather conditions eg the Icelandic volcanic ash cloud. This short relaxation would allow the airport to deal with the backlog of flights that can develop during the day in extreme weather, causing those scheduled night flights carrying freight at the latest available time to lose their slots.

5 Oxford Economic Forecasting and Mott MacDonald ‘The Economic Impact of Express Carriers for UK plc’

b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

18. Airport use is driven by customer need – this is true for both passenger and freight services. Where there is an insufficient market demand, increased levels of flights cannot be sustained. 19. The airports outside London have a crucial role to play for freight. East Midlands and Manchester airports each handle substantial volumes of freight. Airports outside London such as these are particularly vital to express delivery services for allowing flexible access to all regions of the UK that facilitate next day deliveries. For this reason, the same arguments that apply to night flights at the London airports also apply to the other UK airports, and should continue to do so. 20. Several of the airports also play a significant role for general air cargo, however this should be understood in context. Heathrow carries more freight than all other UK airports put together. This is, in immediate terms, because it is a global hub with sufficient passenger volumes to justify the range of services around the world that such a facility requires. Stansted and Gatwick are both also in the top five for UK freight airports. The reason for the collective predominance of the London airports fundamentally is the economic weight of the London/south east England region. 21. Freight use of airports outside London is not generally held back by constraints on airport availability through the day – it is primarily driven by the commercial need for such services from the airports’ economic hinterland.

3. What constraints are there on increasing UK aviation capacity?

22. Failure by the EU to agree and implement a single air traffic control area is a constraint. The increased efficiency would enable better utilisation of airspace and airport capacity. It would cut emissions significantly as aircraft would not be spending extra flying time waiting for a . a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

23. In regulating aviation it must be remembered that it is fundamentally a global business. UK decisions alone will not change the kind of planes that are being developed or how airlines plan their operations. If the UK acts alone on aviation issues, all it can do is to push services out of the UK. Regulation that prejudices aviation from the UK Government does not hinder aviation as a whole, it only hinders UK aviation, and UK connectivity. 24. The aviation industry is acting on noise and work will continue to improve performance in the future. According to IATA, today’s aircraft are 50 per cent quieter than 10 years ago and research initiatives target a further reduction of 50 per cent by 2020. Over time as new aircraft are purchased noise impacts will reduce. This shows the efficacy of a global and co-operative approach to changing industry performance. 25. However the UK should not rush to force UK operations to adopt standards that would make them uncompetitive in the European and global context. Natural industry processes will see aircraft replaced in due course. But such timescales are unlikely to be advanced in response to UK-only regulation. A new freight aircraft such as the 300 Freighter costs over £115m – such investments are unlikely to be made before the are operationally required just to service the UK. The effect of local or national regulation would therefore be to see service levels reduce as operations switch to the Continent, to the cost of the UK economy. 26. The aviation industry and Governments have agreed to follow a globally agreed approach to address aircraft noise problems - the ICAO ‘Balanced Approach’. The core principle of the Balanced Approach is that the situation at each airport is different and that there is no one-size-fits-all approach to aircraft noise. It should not be automatically assumed that there is a noise problem at every airport – each case should be considered on its own merits and blanket regulation is not the answer.

27. In its proposal for a Regulation adopted in December 2011, the European Commission underlined its objective to apply the Balanced Approach in the selection of noise mitigation measures. FTA would advocate the Government continue to follow the global community by working within the Balanced Approach framework. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

28. The Government is correct to state in the draft Aviation Policy Framework that emphasis should be on action at a global level as the best means of securing emissions reduction, with action at European level very much a second best option, if it is as a potential step towards wider international agreement. Certainly action by the UK alone would only see services relocating elsewhere – to the economic disbenefit of the UK, whilst achieving nothing for the environment. Aviation is a global industry, and national and regional schemes are not only highly divisive, they have the potential to undermine the achievement of a single global carbon reduction scheme in ICAO. Differing schemes around the world would add complexity, cost and compliance difficulties. 29. Global regulation – potentially through market based measures such as carbon offsetting and trading schemes – is the correct way to go to manage aviation environmental impacts in the least economically disruptive fashion possible. 30. The UK should certainly avoid adopting UK level or aviation specific targets. To enforce such an approach would just subsidise operations in other EU countries without achieving total carbon reduction. The primary positive feature of the EU’s Emission Trading Scheme is that it allows all industries to work together to reduce carbon emissions in the most economically efficient way possible. It makes no sense environmentally to single out one industry for different treatment. 31. Government policy should be to work with the aviation industry to help deliver the necessary environmental improvements. The International Air Transport Association (IATA), have set targets for a 1.5 per cent average annual improvement in fuel efficiency to 2020, to deliver carbon-neutral growth through a cap on ‘net’ emissions from 2020 onwards and to cut net emissions in half by 2050 compared with 2005 levels. We believe this demonstrates what can be achieved by working with industry at a global level, rather than by crudely regulating at the individual airport level. c. What is the relationship between the Government’s strategy and EU aviation policies?

32. The EU has pursued a robust approach to climate change emissions reduction in aviation – incorporating the industry in to its regional carbon trading scheme – the Emission Trading Scheme. As noted, the scheme has the benefit of allowing all industries to work together to reduce carbon emissions in the most economically efficient way possible. Any UK approach of country or industry specific targets would not reduce overall carbon emission but would only bring economic cost onto the UK, and advantage operations in competing continental Member States. 33. The EU approach of going it alone has proved to be divisive internationally. The UK should use its influence within the EU to find a global solution. In regard to maritime transport, the EU is not pursuing an ETS (at this stage) and has proposed a monitoring proposal based on fuel consumption and a commitment work within the International Maritime Organisation to develop an internationally acceptable market based measure.

4. Do we need a step-change in UK aviation capacity? Why?

34. The UK economy would benefit from an improved quality of global hub located in the UK. The greater the range of direct destinations the easier it is to trade with other parts of the world. Less congestion at a hub than we currently face would improve service and reduce costs. Not having to rely on Continental hubs would reduce delay and increase the resilience of the UK supply chain, as well as avoiding handing an advantage to business located in those countries when trading internationally.

35. Hub airports are vital to the freight industry as they allow a necessary concentration of routes and volume in one location, making the development of freight facilities viable. A hub airport allows airlines to offer a comprehensive global network. 36. As noted in the BCC’s 2009 report on hub airports6 (which FTA commends) “because of Heathrow’s transferring passengers, UK businesses have access to more direct destinations, at higher frequencies and lower priced fares.” The point about fares also applies to freight rates. 37. Heathrow is full. It operates at level so close to capacity that it could potentially undermine the quality and resilience of the service. The lack of availability of slots is reducing the range of destinations served. According to previous information from BAA, since 1990 Heathrow has lost nearly 20% of its destinations due to runway capacity constraining the availability of slots. Heathrow’s list of destinations has declined from over 220 to around 180, Paris’s list has increased from around 180 to over 240 – a picture mirrored by Frankfurt and Amsterdam – all of which have more runway capacity than Heathrow. a. What should this step-change be? Should there be a new hub airport? Where?

38. We believe Heathrow is the UK’s only viable option for a hub status in the UK. Its location, close to the UK’s economic centre, London, and its connection to global passenger flight networks means that it is the only UK airport that can fulfil this role. 39. UK regional airports are not able to replicate this as they are too far from London to service that market and their own economic hinterland would not provide enough traffic to sustain a global hub. Europe’s hub airports are currently: Frankfurt Main; Amsterdam Schiphol; Paris Charles de Gaulle; Madrid Barajas; and Heathrow. We would note from this list that markets of the size of Rome and Berlin do not sustain global hubs. In the light of this, the suggestion that non-London areas of the UK could sustain a hub seems unrealistic. 40. Theoretically a new airport located close to London with good enough transport links could replicate the attractions of Heathrow, and FTA is not opposed to the concept. However it is not clear to FTA that the demand levels in London / south-east England could sustain a second global hub. The alternative of Heathrow being purchased and closed down in order to make a new airport viable seems highly unlikely to occur. Further it seems unlikely that either private investors or the Government would pay for the required development and transport links needed to create a facility of the required standard. 41. Therefore, to address the issues raised above we believe that Heathrow should be allowed to expand – specifically via the development of a third runway. b. What are the costs and benefits of these different ways to increase UK aviation capacity?

42. Adding a third runway at Heathrow appears to be the only cost effective option for addressing the UK’s hub capacity problem. As noted above, the economic case for building a new airport as a replacement or alternative to Heathrow does not appear to have been made. No non-London location would be viable as a hub even if all the infrastructure were provided. 43. Increasing capacity in this fashion would, even without increasing the number of flights, aid the resilience and performance of the UK supply chain, to the benefit of UK business. 44. Increased aircraft movements would have environmental implications and could have social impacts. Environmental considerations should be addressed, as noted elsewhere in this submission, via the incorporation of aviation into a global emissions trading scheme, not via restricting any individual airport. Taking this latter approach would just lead to an unnecessarily inefficient system of addressing climate change emissions. For some airports increased flights might have noise impacts. As noted above, this should be judged on a case by cases basis as regards both the airport in question and the suggestion being made, rather than relying on any blanket policy. 19 October 2012

6 Economic Impacts Of Hub Airports, July 2009 Written evidence from Stop HS2 (AS 54)

1. Stop HS2 is the national campaign group against the proposed £33billion High Speed 2 railway. As such general aviation strategy is outside our remit: however there are obvious cross over points between aviation strategy and high speed rail policies.

2. Stop HS2 believes the assumptions behind the HS2 proposal are flawed and it should be cancelled entirely.

3. Our answers below are most relevant to the following inquiry questions:

1 e. Where does aviation fit in the overall transport strategy?

2 c. How can surface access to airports be improved?

3 b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

HS2 is not part of an overall transport strategy

4. One of Stop HS2's concerns is that HS2 has not been developed as part of a wider transport strategy. The proposed spur to Heathrow was not included in the original plans but has been retrofitted, which means the service pattern direct to Heathrow will be very low, due to capacity constraints. The spur will not open until Phase 2 of HS2, due to be completed in the mid 2030s.

5. It is high risk to plan a £33 billion high speed rail line separately to aviation policy, especially as that aviation policy may include plans for a new airport.

6. High speed rail policy should not be considered separately to aviation policy. As one witness told the Transport Select Committee last year, during the High Speed Rail inquiry

Q378 Steven Costello: The argument is that each node should be one of these pearls on a necklace. Therefore, as in Germany and France, an airport is an interchange directly located on the through line, but with high speed through lines so that not every train needs to stop. As soon as you start getting into branch lines or spurs, you start to lose that seamlessness and the ability to generate modal shift.1

HS2 is not an alternative to Heathrow third runway

7. The pressure on the previous Secretary of State for Transport to reopen the discussion of a third runway at Heathrow restarted earlier this year, shortly after she had given the go-ahead for HS2 in January 2012. This shows that many people do not consider HS2 to be an alternative to Heathrow expansion.

1 1185­ii Volume II ‐ Oral and written evidence http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/1185/118502.htm#evide nce

Timing of HS2 planning and the Davis Commission review

8. The Davis Commission on future aviation capacity is not due to report until summer 2015. Meanwhile the Government want to deposit the HS2 hybrid bill in October 2013, with the intention of getting it through Parliament by spring 2015.

9. If the Davis Commission recommends building a new airport, then the HS2 hybrid bill will have legislated for a route without links to this new airport. In these circumstances, it is highly likely that the Government of the day will scrap the HS2 legislation. It would have been a huge waste of Parliamentary time.

Modal Shift

10. In the three economic cases for HS2 (2010, 2011 and 2012), the expected modal shift from air to high speed rail has fallen significantly.

11. The table below shows that HS2 Ltd now expect a significantly smaller modal shift from air: the 2010 case which had 8% modal shift from air in 2033, compared to the most recent 2012 case which has 3% modal shift from air in 2037.

Classic Rail New Trips Air Car 2033 - (2010 economic case) 57% 27% 8% 8%

2043 - (2011 economic case) 65% 22% 6% 7%

2037 - (2012 economic case) 65% 24% 3% 8%

HS2 Ltd data: modal shift when rail usage has doubled.

12. There is in any case, limited potential of HS2 to reduce internal flights. There are currently no scheduled flights between London and Birmingham. Rail's share of the London Manchester market is increasing by about 5% a year. In 2009, 74% of passengers on domestic flights between Heathrow and Manchester were transferring onto a connecting flight2.

Carbon emissions: HS2 is carbon neutral:

13. The limited modal shift explains in part why HS2 Ltd and the Department for Transport say HS2 is expected to be carbon neutral.3

Videoconferencing

2 Air and High Speed Rail Briefing Paper – The Realities of Rail. March 2010 http://www.bata.uk.com/Web/Documents/data/policybriefingnotes/BATA%20Air%20and%20H igh%20Speed%20Rail%20Briefing%20Paper%20March%202010.pdf 3 High speed trains use significantly more energy then conventional fast trains: a recently published report by high speed rail proponents Greenguage 21 showed that the HS2 trains would have to be significantly slower then currently proposed if they were to reduce CO2. This would however cause the business case to worsen.

14. With the growth of digital telecommunications and videoconferencing, people will be increasing using web-based alternatives to face-to-face meetings. This will affect the demand for air travel as well as rail travel.

Aviation Representation on HS2 Challenge Panels

15. When HS2 was originally being developed there were no aviation representatives on the scrutiny panels.4 This may explain why one witness to last year's TSC inquiry on High speed Rail described the HS2 route as "in aviation terms, a thin route"5.

19 October 2012

4 Since then the Director of the Campaign for High Speed Rail has become a director of BAA.) 5 q 377 Steven Costello: .... Certainly, from aviation’s point of view, it is the worst of all possible worlds at the moment, simply because a line from Birmingham, bypassing Heathrow, through central London to HS1 and Europe would be, in aviation terms, a thin route. There would not be enough traffic from point to point to sustain services at a frequency that is going to generate modal shift.

Written evidence from Bristol Airport Limited

Executive summary

1. The UK economy remains in the midst of the worst economic recession since the 1930s. Businesses across the country, particularly in the regions, are struggling with stagnant demand and cost increases. In response, the Coalition Government has announced many initiatives to foster job creation and economic growth. But the aviation industry, a key driver of the economy, has been stalled and left in a policy vacuum.

2. The Government’s Draft Aviation Policy Framework fails to deliver a bold, new vision that will encourage the aviation industry to invest in the UK. Furthermore, an Independent Commission has now been called to consider hub capacity, but will not report until 2015.

3. Meanwhile, Bristol Airport is preparing to invest millions of pounds in enhancing its facilities and improving services to customers, with planning permission in place for development to handle 10 million passengers per annum within the next decade.

4. Government policy should enable airports in the regions to more effectively serve their local markets by making the best use of the significant capacity available outside the South East. Our recommendations for policy actions to support this vital sector in achieving this objective are outlined below:

• The introduction of a lower regional APD rate based on airport congestion. This would have the effect of rationalizing the use of UK airports according to capacity available and help overcome the natural advantages enjoyed by the London airports, and Heathrow in particular, over their counterparts in the regions. • Government and its agencies have a direct effect on the passenger experience at security and at the UK Border. The Government’s aviation strategy should go further and play a greater part in generating improvements in these areas. • Aviation should sit within an integrated transport policy which includes improvements to the rail network. Modal substitution cannot be relied on to replace domestic flights from regional airports. • Aviation policy must provide clear support for specific growth proposals at airports in the regions. By encouraging demand to be served in the region in which it arises a policy framework which supports regional airports will also help deliver benefits to the London airport system. • Government policy should prioritise transport proposals that would deliver short, medium and long-term improvements in surface access to airports outside London in order to drive economic growth in the regions. • A one size fits all approach to approach to environmental management is not appropriate. The approach at regional airports should be resolved at a local level within a framework of national high level policy guidance. • Policy measures to encourage the use of regional airports will ensure that maximum opportunity is taken to deliver operational savings in terms of emissions.

Introduction

5. Bristol Airport Limited welcomes the opportunity to provide written evidence to the Transport Committee’s inquiry into the Government’s aviation strategy.

6. Handling six million passengers per annum Bristol Airport is the ninth largest airport in the UK and the fifth largest outside London. Located just eight miles south of Bristol in rural North Somerset, Bristol Airport serves one of the UK’s premier city-regions with a population of 1.1 million people living within the four council areas that make up the West of England (Bath and North East Somerset, Bristol, North Somerset and South Gloucestershire).

7. Bristol Airport’s catchment area extends far beyond the West of England into the wider South West region and South and West Wales, with a population of around 7.5 million people living within a two-hour drive time of the Airport. Passengers travelling to and from Swansea, Cardiff, Cornwall, Devon, Somerset, Wiltshire, Gloucestershire and pass through the Airport in increasing numbers.

8. The mix of outbound leisure passengers, inbound tourism and business travel supports a route network at Bristol Airport which includes over 100 direct destinations in 30 countries, including 13 capital cities. Ten departures a day connect with the worldwide Star Alliance and SkyTeam airline networks via the European hub airports of Paris Charles de Gaulle, Amsterdam and Brussels, bringing hundreds more destinations worldwide within easy reach.

9. A diversified range of leading airlines in the low cost, full service and charter markets operate from Bristol Airport, including easyJet, Ryanair, KLM, Air France, , bmi regional, Aer Lingus, flybe, , Eastern, , Skybus, TUI and Thomas Cook.

10. Plans for the development of Bristol Airport to handle up to 10 million passengers per annum were approved by North Somerset Council in February 2011. The development commenced in November 2011 and the first of more than 30 separate projects – the construction of three new aircraft stands – was completed in spring 2012.

11. The development plan includes challenging public transport targets which will see public transport use increase threefold. This will be achieved through continued investment in the successful Flyer Airport Express bus service linking the Airport to Bristol city centre, including the main rail and bus stations, and the development of an expanded public transport network serving Weston-super-Mare and Bath.

12. Bristol Airport is a member of the Airport Operators Association (AOA) and supports and endorses their evidence to the Transport Committee’s Inquiry.

Importance of international connectivity

13. In general we agree with the Government’s conclusions on the value of connectivity as set out in the Draft Aviation Policy Framework. We are pleased that Government has recognised the social benefits of leisure travel but we believe that the importance of these benefits has been understated. Leisure travel encompasses a wide range of journey purposes including visiting friends and relatives, educational trips, cultural exchanges and sport. The number of overseas visitors using Bristol Airport has increased threefold since

2003 with international tourists staying twice as long and spending over three times more than their domestic counterparts1. Bristol Airport has also seen a significant increase in travellers visiting friends and relatives with a sevenfold increase between 2000 and 2008, the largest increase seen at any UK airport over the same period.

14. Connectivity is not evenly distributed across the country. An integrated aviation policy is required that not only delivers hub capacity, but also ensures that connectivity in the UK regions is boosted by the provision of additional capacity, promoting economic growth and rebalancing the economy.

15. The AOA has provided evidence concerning the economic importance of international aviation in their submission to the Inquiry. Bristol Airport plays a vital role in the economic success of the South West, with its development projected to create more than 3,500 additional jobs in the region. Development will also deliver additional income to the region estimated at between £1.9 and 2.0 billion over the life of the project.

Air passenger duty

16. The Government has stated its aim to rebalance the economy, pledging to share economic opportunities more evenly between the regions, and the Draft Aviation Policy Framework acknowledges the important role played by regional airports. However, London airports, and Heathrow in particular, enjoy a number of natural advantages over their counterparts in the regions. The City of London sustains a lucrative market for business travel, while London itself is the country’s most popular tourist destination by far, with ten times more visits by overseas tourists than the next ranked city, Edinburgh.

17. Start-up routes from regional airports are much harder to secure and take longer to mature as they cannot rely on the level of inbound and business traffic generated at London airports. As a result, additional costs such as Air Passenger Duty (APD) have a disproportionately damaging impact on regional airports (increases in APD were cited by Continental Airlines as a factor in the withdrawal of its daily service from Bristol to New York in November 2010).

18. At the same time, the price elasticity of demand for air travel is becoming increasingly high, particularly in the low cost leisure market. Consumer behaviour is very sensitive to price differentials, even more so in the regions where disposable income is lower and airlines often operate on thinner margins. The largest carrier at Bristol Airport, easyJet, made an average profit per seat of £3.97 across its network in 2011, compared to the £13 in tax charged on passengers taking shorthaul flights.

19. These factors combine to create a ‘Heathrow effect’ where airlines retrench to what is seen as the safest market in difficult economic conditions. Rebalancing this effect could be achieved through the introduction of a lower regional APD rate based on airport congestion. This would have the effect of rationalizing the use of UK airports according to capacity available, as part of an aviation policy providing clear support for growth in the regions.

Passenger experience

1 The UK Tourist 2010 and Visit Britain inbound visitor statistics.

20. Regional airports, such as Bristol, deliver a simple and efficient passenger-friendly experience which the main London airports find difficult to emulate due to their scale. As a result, Bristol Airport enjoys high customer satisfaction levels, with 84% of passengers indicating in passenger surveys that they are likely or very likely to use the Airport again. 87% of those surveyed said they were likely or very likely to recommend Bristol Airport to others. This level of satisfaction has been achieved through continuous investment in passenger facilities and an emphasis on customer service through our brand promise ‘Amazing journeys start here’.

21. Issues relating to the arrangements for security regularly appear in the top three concerns raised by customers using Bristol Airport. Comments relating to the arrivals process and immigration facilities also feature in passenger feedback. These are two areas where Government and its agencies have a direct effect on the passenger experience and Government’s aviation strategy should go further and play a greater part in generating improvements. The UK’s Border Agency targets of queue times of no longer than 45 minutes for non-EEA nationals, or 25 minutes for EEA nationals are not acceptable and need to be more ambitious. In the area of passenger security, progress towards Outcomes Focused Risk Based Regulation has been slow. Government must put in place a plan and resources to deliver these improvements and also take the opportunity to review security measures in place at UK airports making sure that they are harmonised as far as possible with the rest of Europe.

Aviation within an overall transport strategy

22. Road and rail would be the first choice transport modes for journeys of two to three hour duration. Beyond that aviation provides the most efficient form of transport between major city pairs. For example, there are no air services between Bristol and London, or Manchester. Our domestic route network has now stabilised within the UK mainland with regular daily services to Leeds, Newcastle, Glasgow, Edinburgh, Aberdeen and Inverness, destinations that are not attractive by rail. Whilst the attractiveness of rail for longer distance journeys might increase with further development of the UK’s high speed rail network, this will mainly favour journeys into and out of London. There is no prospect of a high speed rail network reaching the South West and Wales in the foreseeable future and aviation will continue to provide the main means of connecting Bristol with the North of England and Scotland.

23. The rail network plays an important role in connecting airports with their hinterland. An integrated air and network is therefore required. Electrification of the Great Western Mainline will bring much needed improvements to the rail network serving the South West and Wales, including improvements to surface access to Bristol Airport.

Making the best use of existing London airport capacity

24. Despite the growth of Bristol Airport’s route network and much improved facilities many passengers from the South West and Wales still continue to use the London airports. The CAA Passenger Survey indicates that, in 2011, 6.1 million passengers with an origin or destination in the South West or Wales flew from the London airports (primarily Heathrow and Gatwick), over half of whom were travelling to short haul destinations. This constitutes the largest leakage from one UK region to another. Bristol Airport’s objective is to encourage an increasing proportion of these passengers to make use of services from their local airport saving time, cost and carbon emissions. Consistent with the Government’s aim

to make best use of existing capacity by ‘clawing back’ the leakage of millions of these passengers, Bristol Airport can free up capacity for vital new long-haul services from the capital. With planning permission in place for a major development alongside an expanded route network, Bristol is focused on better meeting the needs of passengers across its catchment area. By encouraging demand to be served in the region in which it arises, a policy framework which supports regional airports will also help deliver benefits to the London airport system.

25. Bristol Airport is ideally located to serve international visitors to popular tourist destinations including Stonehenge, the World Heritage City of Bath, the Cotswolds, Devon and Cornwall. The Government’s tourism strategy should encourage international visitors to use airports in the regions as gateways to the UK. The proximity of regional attractions to local airports with access to international connections should be highlighted in marketing materials promoting the UK overseas. Priority should also be given to airports outside London when considering initiatives, such as US pre-clearance, which would increase their appeal to international passengers. Similarly, where this would provide benefits to inbound passengers, Government agencies should consider piloting other innovative technology and processes at airports in the regions.

26. Flying from regional airports remains the most logical, efficient and cost-effective way of dealing with customers and clients for many businesses. Private and public sector organisations should be encouraged to revise travel policies to, where possible, favour the use of airports in the region in which they are located. This would deliver a combination of time, cost and emissions savings, while also relieving congestion at London airports. Government should also address the anomaly whereby passengers on domestic flights linking far-flung regions of the UK pay double the tax of those making return trips to destinations in other European countries.

Making best use of existing capacity

27. In order to deliver the forecast growth in UK air passengers and spread the benefits of connectivity more evenly across the UK, aviation policy must provide clear support for specific growth proposals at airports in the regions. Airport development proposals create wide ranging benefits but planning committees face a difficult task balancing local impacts with national and regional benefits. Without an explicit Government policy directive, critical decisions affecting regional economic growth risk becoming bogged down in local planning disputes. Action is also required to make best use of existing capacity outside London. While it is airlines who decide which routes are operated from which airports, a range of policy levers and fiscal measures (such as regional variations in APD) should be employed to ensure best use is made of existing airport capacity.

Improving surface access to airports

28. Surface access is sometimes identified as a barrier to development at regional airports. To address this, over £10 million has been committed by Bristol Airport to public transport projects, including contributions totalling £5.4m to the South Bristol Link and Bus , two of five major transport schemes in the West of England. These schemes will facilitate a more attractive, reliable, efficient and frequent public transport service between Bristol Airport and Bristol city centre, providing improved services for passengers and widening employment opportunities.

29. Instead of focusing already stretched budgets on a £500m rail link from the South West to Heathrow, which will only serve to increase pressure on the London airport system, transport funding should be focused on further improving access to airports in the regions. As well as contributing to economic growth, schemes such as the Greater Bristol Metro, Great Western Main Line electrification, and the regeneration of Temple Meads station will all have a positive impact on surface access to Bristol Airport, as will the extension of the route to the Airport in 2015/2016.

30. By contrast, a Heathrow link risks poor returns because of the relatively dispersed population in the South West. Such a link could also serve to exacerbate capacity problems in the South East and hamper the ability of regional airports to attract new long-haul routes. This potentially undermines the significant private sector investment made in regional airports such as Bristol, further entrenching a ‘Heathrow-centric’ approach. Priority should be given to improving surface access to airports outside London to extend the catchment areas in which they can compete for passengers, reducing leakage between regions and easing congestion in the South East.

31. Government policy should prioritise transport proposals that would deliver short, medium and long-term improvements in surface access to airports outside London in order to drive economic growth within the regions. Links to nearby airports should be a key consideration when assessing applications for funding of new transport schemes, and integration of rail and air services must be central to the assessment of rail franchise replacement bids. The scope of the Department for Transport’s review of rail access to airports should be extended beyond those airports named in the Draft Aviation Policy Framework and widened to include road transport.

Managing the impact of aviation on the local environment

32. Bristol Airport is one of the most environmentally efficient airports in the UK and is well able to respond to the challenges on noise and other environmental impacts set by Government in its Draft Aviation Policy Framework. Noise mapping exercises show that Bristol Airport has the lowest noise impact of any airport in England and Scotland handling over one million passengers per annum2.

33. It is clear therefore that experiences at the larger airports in relation to noise, for example, cannot be compared with the situation at Bristol. It follows that a ‘one size fits all’ approach to noise management would not be appropriate and in general the approach at regional airports should be resolved at a local level within a framework of national high level policy guidance. Increased regulation is not required.

Aviation’s impacts on climate change

34. Bristol Airport supports the Government’s overall approach. The EU ETS should be seen as a stepping stone on the way to an overall global approach. It is important that the scheme should succeed and Government should work at EU level to ensure that the risk of retaliatory action and non-compliance is properly managed, if necessary by revising the scope of the scheme. The UK should continue to take a leading role to secure progress within ICAO and the EU.

2 Measured by the number of people exposed to noise levels in excess of 55dB Lden.

35. Aircraft operating at regional airports generate lower emissions associated with ground movements and the landing and take-off cycle as a result of short taxi distances, no stacking and efficient operations in uncongested airspace. Policy measures to encourage the use of regional airports will ensure that maximum opportunity is taken to deliver operational savings.

Need for a step change in UK aviation capacity

36. As politicians, Government officials, aviation professionals and other stakeholders debate issues around capacity and new schemes costing billions of pounds, it is critical to remember that significant airport capacity already exists in the UK regions. Government policy should encourage the use of this capacity, and should encourage private sector investment in long- term infrastructure. Not only will this relieve congestion at airports in the South East, but it will help to rebalance the economy at the same time. Like many airports outside London, Bristol Airport is very well placed to create jobs and drive economic growth in its region. What we need is a very clear and very tangible aviation policy which supports growth and investment.

19 October 2012

Further written evidence from Bristol Airport (AS 55A)

1. Bristol Airport is pleased to provide further written evidence relating to the costs of regulation as requested at the oral evidence session on 10 December 2012.

2. Regulatory costs incurred by Bristol Airport are set out in table 1 below. This includes CAA costs and the costs of policing and security, both of which are subject to regulatory control.

2008 2009 2010 2011 2012 CAGR actual actual actual actual forecast Policing costs 0 0 0 £493,276 £710,944 Security costs £2,494,545 £2,580,076 £2,936,783 £3,113,926 £3,446,049 8.4% CAA costs £198,629 £208,260 £212,571 £228,787 £242,695 5.1% Total £2,693,174 £2,788,336 £3,149,354 £3,835,989 £4,399,688 13.1% RPI1 214.8 213.7 223.6 235.2 242.4 3.1% Passengers 6,174,302 5,565,767 5,667,921 5,714,442 -2.5% Revenue £59,406 £55,365 £56,734 £56,411 -1.7% EBITDA £35,904 £32,316 £32,345 £31,529 -3.5% Table 1: Regulatory costs and passenger numbers at Bristol Airport, 2008 to 2012

3. It can be seen from the above that costs applying to the CAA have risen over this period at a rate in excess of the rate of inflation. The effect on Bristol Airport’s operating costs is compounded by additional policing and security costs which together with the CAA costs have added over £1.7m to our cost base compared with 2008, an increase of 63%. Between 2008 and 2011 passenger numbers declined by 7.5%, revenues by 5% and EBITDA by 12%. All costs are nominal.

21 December 2013

1 Source: Office for National Statistics, 1987=100 Written evidence from Mr Paul Pitcher (AS 56)

1.0. This response expounds on the following recommendations to the Transport Select Committee from the Energy, Environment & Sustainability Group (EESG) of The Institution of Mechanical Engineers (IMechE):

A. A full-picture approach should be adopted, seeing Air Transport as a subset of a greater challenge of Sustainable Development. No transport system operates as an isolated unit, but is integrated to almost all other travel modes. See paragraph A. B. The strategy should be developed with the Air Transport Hierarchy as its framework, in keeping with the principles of Sustainable Development. See paragraph B. C. Funding for Research and Development, Thus a platform is provided on which to drive for greater efficiency through advances in technology and understanding of product lifecycle impact. See paragraph C. D. Expansion of UK airport capacity, building the UK aviation industry by providing economic stability. See paragraph D. E. A noise reduction policy which supports new technology development, recognising that an “every aircraft is the same” approach cannot achieve a satisfactory or scientifically sound result. See paragraph E. F. Continual engagement in the Emissions Trading System (ETS), pushing for a global system solution. It must also be implemented at all levels of the aircraft technology supply chain, encouraging greater efficiency and applying fair and equal economic pressure below the first tier of supply. See paragraph F. G. Alteration of Air Passenger Duty to encourage destination-centric passenger routing, moving away from a system which is overly simplistic. Development of the Air Freight Duty framework to reduce so-called food miles and minimise wasteful and unnecessary behaviours. See paragraph G. H. Clear and stable commitment to the roll-out of biofuels in aviation, developing an alternative fuel source in the long term for an industry that is dependent on a portable liquid fuel as an energy source.

A

A.1. First we set the scene: the industry is suffering from massive fuel costs, leading to significant end-of-year losses and the folding of multiple airlines. Aircraft are currently wholly reliant on fossil fuel as an energy source, with a very slow emergence of biofuel aka ‘biojet’ as an alternative. Other energy-hungry methods of transport (such as road vehicles) are on the increase globally, especially in the BRICS countries, and world population is set to increase to 12Bn by 2050. The cold fact is that we will soon see an ‘energy crunch’ like that already experienced South Africa1. All strategies must be seen in the context of the wider subject of sustainability, and tackled using established methodical tools. The Energy, Environment and Sustainability Group (EESG) of the

1 “S.Africa battles to keep blackouts at bay”, Reuters (2012), accessed 13 October 2012 online at http://af.reuters.com/article/energyOilNews/idAFL5E8G8EJZ20120514

Institution of Mechanical Engineers (IMechE) has developed such a tool – The Air Transport Hierarchy: SUSTAINABLE Priority 1: Minimise Demand. Changing wasteful behaviour to reduce demand Priority 2: Energy Efficiency Using technology to reduce demand and eliminate waste Priority 3: Exploitation of renewable, sustainable resources

Priority 4: Mitigation of Impact of aviation transport

UNSUSTAINABLE

1- Adapted from ‘The Transport Hierarchy’, Source: IMechE2 3

B

B.1. This tool essentially provides a framework upon which any transport strategy can be built and assessed:

1 – Minimise Demand: If the demand for air transport is not there in the first place, then the problem is solved. Solutions such as web conferencing are a good example of this concept. Included in this is the enabling of a modal shift to other transport types with less damaging environmental effects. 2 – Energy Efficiency: If air travel cannot be avoided, then we must maximise the efficiency of the vehicle and the system in which the vehicle operates. Technology updates to existing aircraft are one way to work at this level. Note that both the vehicle (aircraft) and the air transport system (the air traffic control etc.) must be considered. 3 – Renewable Energy: Having taken all reasonable steps to minimise energy demand and improve efficiency, this next priority is to supply that demand from clean energy sources that are effectively infinite. As examples we have the use of biofuels in flight or hydrogen cell technology for aircraft-on-ground energy supply. 4 – Mitigation of Impact: Once all other possibilities have been explored, the last step is to try to minimise the consequences of flight. Despite this being the lowest priority, it is often as far as government strategies extend, by for example, imposing “no-fly” restrictions during the early morning to prevent disruption to flight path households. A more effective action at this level would be to divert traffic away from super-hubs to avoid runway taxi times of up to 45mins (Schiphol).

2 “Transport Transitions” IMechE, Energy, Environment & Sustainability Group accessed 13 October 2012 online at http://www.imeche.org/knowledge/industries/energy‐environment‐and‐sustainability/news/Transport‐Transitions Reproduced with permission 3 “The Energy Hierarchy”, The IMechE (2009), available from www.imeche.org/policy C

C.1. On the 11th September this year, Vince Cable MP spoke of the governments’ vision for UK industry4:

“Support for sectors; clear choices and backing for core emerging technologies; continued efforts to boost skills... …It will be backed by…a cast-iron commitment… to identifying and dismantling the barriers to growth…Aerospace demands very long time horizons and there are literally trillions of pounds worth of orders for civil aircraft alone over the next 20 years or so. Britain will not get a decent share of these orders…without sustained investments in R&D.”

We must continue to invest in Research and Development, keeping the UK at the forefront of aviation technology worldwide. This brings future security in terms of equipment supplied, but also in intellectual property and know-how as BRICS countries seek consultancy from UK specialists. This strategy is effectual at the “Priority 2” level of the Air Transport Hierarchy, as R & D work helps us to drive for more efficient platforms and products.

C.2. Product Lifecycle Assessment (PLA) should be prioritised as a field of research. As an engineer in the industry, I can testify that there is no good, reliable information on how to determine the resource footprint of my designs. Lord Kelvin said iconically that “you know nothing of a subject until you can measure it”. PLA is a tool that allows me to determine

how much my product will ‘cost’ from start to finish. Cost meaning how much energy, CO2 and other general resource goes into harvesting and melting the steel I use in my design, then machining of the steel into components, then assembly, test and finally decommissioning. Considering the new Boeing 787 which contains roughly 32 tonnes of carbon fibre – what can be done with all this carbon fibre in 40 year’s time with no satisfactory recycle or de-commissioning strategy? As a designer I need this information, but it is simply un-available.

D

D.1. R & D cannot be adequately supported by the Public sector, and must be driven by commercially-targeted short and long term business investment. To secure such investment, UK aerospace companies must have a positive economic outlook and a full order sheet. This brings us on to UK airport capacity as a way to invest in the future of UK Plc.

D.2. Once we have satisfied ourselves that we are doing everything we can to minimise unsustainable passenger behaviours and reduce demand for air transport, we can think about capacity issues. With this caviat that we have tried to reduce air traffic volume, this response recommends that implementation of additional capacity for flights to and from the UK must be made a priority in the short-to-medium term. As a nation, we lag behind other EU states such as Germany and France in enabling continued growth of air capacity. We need to seek out the correct, well-thought-through strategies for this objective. The South East is already heavily loaded and Heathrow is bulging at the seams. Currently, every

4 “Industrial Strategy – Cable outlines vision for future of British Industry”, Vince Cable, Secretary of State, 11 Sep 2012, Imperial College, London. Accessed 12 Oct 2012 online at http://www.bis.gov.uk/news/speeches/vince‐cable‐industrial‐ strategy‐september‐2012 year, a significant volume of fuel is wasted in aircraft holding patterns as the airports struggle to sequence incoming traffic volumes.

D.3. Opportunity for air capacity increase should be sought outside of the South East, away from built-up areas and preferably in an area which would benefit from infrastructure improvements and additional employment prospects. The interfaces with any new capacity project must be considered at the concept level to implement aims and objectives of the industry. The European Commissions’ objectives are worthy of note5:

“90% of travelers within Europe are able to complete their journey, door-to-door within 4 hours” The aviation freight industry is currently stable and supports key industries throughout the UK, enabling economic growth and connectivity.

New and existing facilities should aim for seamless connectivity and take advantage of contemporary information technology developments such as route planning phone apps.

E

E.1. As regards government action to reduce noise to local residents close to busy flight paths, this subject must be approached from a balaced viewpoint. I am an enthusiast of outdoor mountain sport, so perhaps more than some, I value very highly the peace of the mountains and countryside, escaping the noise of urban life. This said, whilst I believe aerodrome noise reduction is a worthy objective, I feel it should be evenly and fairly applied across all transport sectors. There is much media noise about aviation noise, when automobiles and motorways generating more noise disruption, much more widespread. Overall, the subject of noise reduction should be discussed in close consultancy with the aircraft manufacturers, operators and air traffic management bodies.

E.2. Additionally, there are new technologies on the horizon. The Open Rotor technology developed by Rolls Royce can yield up to a 30% increase in efficiency against an industry standard reference aircraft of the 1990s, but will be significantly more noisy than contemporary designs. Thus a choice must be made between emissions, economy and noise. It must also be remembered that aircraft noise changes throughout the flight cycle and is dependent on the engine type. There are two main types of engine on commercial transport aircraft: turboprop (-type) and turbofan (most common ‘’ type). In the immediate vicinity of an airport, residents will hear most noise from the touchdown phase of a turbofan engine when the thrust reverser is deployed (turboprops do not use thrust reversers). Turboprop engines (Open Rotor technology can be considered in this group) generate most noise during take-off. Thus if noise restrictions are to be made, they must be technology specific and not just dumb blanket requirements. Personally, I grew up in the flight path, and this is partly why I find myself following a career in aviation.

5 “Flightpath 2050 – Europe’s Vision for Aviation” European Commission (2011) Report of the High Level Group on Aviation Research. Accessed 12 October 2012 online at http://ec.europa.eu/transport/modes/air/doc/flightpath2050.pdf F

F.1. Airlines would welcome the ETS as an economic mechanism to supply investment into greener technologies. Airlines are desperate for more efficient aircraft – you just have to look at the unprecedented initial sales roster for the Airbus A320 NEO (New Engine Option), which offers around a 20% fuel burn improvement. However, it is worth noting that ETS

does not consider harmful Nitrous Oxide (NOx) gases, which are a major driver in Aerospace

Propulsion design. One can either design for ideal NOx or ideal CO2.

F.2. In the implementation of ETS, implementation is necessary at the level of the Original Equipment Suppliers (OEMs), who design and manufacture the technology for modern aircraft. As the supply chain becomes further distant from the Airline, the motivation to spend extra money on low-Carbon, super-efficient technology just isn’t there. The supply chain has responded well to the recent REACh restrictions, preventing the use of harmful substances such as Cadmium on new designs. Can a similar set of requirements be set on

high-CO2 materials or technologies?

G

G.1. As regards Air Passenger Duty, the system is flawed and does not achieve its desired result. For example, if my destination is Dubai from London, compared to a single flight, I will pay less duty if I fly via Charles de Gaulle. This is despite the fact that the emissions and overall fuel used will be significantly higher. It is an established truth that aircraft take-off and climb to altitude is the most fuel-hungry stage of a flight. Air Passenger Duty shoul be revised to drive the desired sustainable passenger behaviours.

G.2. It was very interesting to observe the impact of 2010’s Eyjafjallajökull volcanic eruption. From The Guardian6 the 2nd day after the eruption:

“Waitrose has said that the supply of "a handful" of products had been hit, including fresh pineapple chunks from Ghana and baby sweetcorn from Thailand. At Tesco, Thai orchids are likely to be the first item to vanish from stores if the disruption continues”

G.3. My heartfelt reaction to the disruption, although an aviation enthusiast, was one of welcome. I really feel that we can live without Thai orchids and pineapple chunks! I believe an encouragement should be felt to buy locally and only import goods that are absolutely necessary. This will involve changes in UK residents’ lifestyle and habits, but is not insufferable. I think of the reaction of Britain to the WW2 “Dig for Victory” messages. The “World War” of today is that our planet is running out of resources and we are ever the more hungry to consume more and more. I call upon the government to establish what imported goods are not ‘necessary’ and are luxury items, and thereon impose an additional duty.

H

H.1. The aviation industry is dependent on some kind of liquid fuel and cannot exploit the avenues available to the motor industry such as with electric cars. It is therefore critical to air

6 “Flight ban could leave UK short of fruit and veg” The Guardian, Friday 16th April 2010. Accessed 12 October 2012 online at http://www.guardian.co.uk/business/2010/apr/16/flight‐ban‐shortages‐uk‐supermarkets transport to develop alternative, sustainable and safe fuels to fossil kerosene. This must be implemented in part by levelling the playing field with biodiesel, which currently enjoys EU benefits through its RTFC eligibility. Biojet should be treated in the same manner as biodiesel to unlock critical investment.

H.3. The government must set forth a strategy for biofuel usage across the transport community. It is critical to define how biofuels will be allocated in the short, medium and long term. Will the feedstock be diverted away from aviation to energy-intensive industrial processes? More broadly, a stable policy on biofuels allowing investment and decision- making to be de-risked as demand is secured with more certainty.

H.3. Finally, government incentives must be implemented to drive initial development of struggling demonstrator refineries. Bank investment is faltering owing to lack of secure business cases, lack of supply chain integration and lack of assured access to feedstock. In essence, the product and the market are too immature to attract suitable investors to drive to required industry-quantity production levels through injection of capital. This leaves an ‘everyone is waiting for everyone’ scenario which is losing potential investment opportunities. Both incremental and prize-based incentives could be explored. Incremental in terms of short term milestone payments, or prize-based in terms of ‘first company to produce X tonnes of Y will receive £10 million’, in a way similar to the Virgin Galactic prize from space travel/tourism.

19 October 2012

Written evidence from The Birmingham Chamber of Commerce Group (AS 57)

The Birmingham Chamber of Commerce Group (BCCG) consists of the Birmingham Chamber of Commerce, the Solihull Chamber of Commerce, the Lichfield and Tamworth Chamber of Commerce, the Burton and District Chamber of Commerce and the Chase Chamber of Commerce. The BCCG is one of the largest Chambers in the UK with 3,000 members and 20,000 affiliate members. Geographically the Chamber Group covers a large swathe of the West Midlands and closely mirrors the geography of the Greater Birmingham and Solihull Local Enterprise Partnership.

The Chamber Group is a vocal advocate of businesses issues and lobbies both local and national government in the Interest of Greater Birmingham plc.

I would like to thank the Transport Select Committee for giving the Birmingham Chamber of Commerce Group the opportunity to respond to your inquiry into the UK’s aviation strategy. The Chamber is clear that the UK’s aviation strategy must serve the best interests of the entire country and businesses of all shapes and sizes. Unfortunately we believe that the current system fails to do this as it is too heavily focused on the South East. Each year millions of travellers from outside of the South East are forced to travel to Heathrow and Gatwick (which account for 78% of the UK’s of all of the UK’s flights to the world excluding Europe); or fly to European hub airports.

This damages investment into our regional economies (which is inextricably linked with connectivity) causes our business people to spend wasted hours travelling to airports and waiting for connecting flights.

We believe that aviation provision is distorted by Air Passenger Duty and the cap on landing charges at airports in London. The cap on landing charges is, in our view, no longer justified with the break up of BAA’s monopoly on airports in the South East and distorts the market by holding down the prices of a scarce and valuable resource (landing slots at Heathrow). We believe that allowing the market to set prices would encourage airlines to begin to look away from Heathrow and at more sustainable and less congested airports outside of the South East.

Moreover we feel that APD erodes the profit margins routes from regional; airports to such a degree that these routes are no longer viable. We fear that this is damaging the

competitiveness of the UK’s regional airports and is thus acting as a barrier to growth and investment.

What should be the objectives of Government policy on aviation? b. What are the benefits of aviation to the UK economy?

1. Aviation is vital to the success of UK plc. As commerce is becoming ever more international in its outlook – and indeed has begun to look beyond the traditional markets of Europe and the US – it is essential that UK plc has direct access to markets across the Globe.

2. Many members of the Birmingham Chamber of Commerce Group, from small and micro businesses to large multinational businesses, rely on aviation to export their goods and services and meet clients across the globe. With the exponential growth of digital connectivity our aviation sector has fallen behind as businesses of all sizes utilise the internet and other digital communications technology to source customers and suppliers. Unfortunately many businesses are then hampered by the UK’s current aviation connectivity which disproportionately favours London and the South East.

3. Exporters tell the Birmingham Chamber of Commerce Group that aviation connectivity is vital to their business. Businesses tell the Chamber that modern communications have increased export opportunities and indeed the West Midlands has grown both its exports and imports dramatically since 2009. Businesses tell the Chamber that as manufacturers move their manufacturing and logistics strategy to the latest techniques such as KSK (customer specific harnesses) they need to fly ever more products on a daily basis to meet the logistics targets and Birmingham Airport is a key part of this strategy for businesses within the West Midlands. Where routes are not available businesses instead are forced to rely on airports further away: adding significant haulage costs. Indeed the Chamber is aware of one business located within the flight path of Birmingham Airport that is forced to import and export high value components via Heathrow due to a lack of connectivity in the West Midlands.

West Midlands Exports by Country Group 2009 2010 2011 Asia & Oceania 2,014 3,133 3,880 Eastern Europe (excl EU) 347 429 708 European Union 7,012 7,866 9,139 Latin America and Caribbean 225 459 580 Middle East and North Africa (excl EU) 818 1,025 1,056 North America 2,264 3,399 3,282 Sub-Saharan Africa 348 456 566 Western Europe (excl. EU) 545 709 953 Total West Midlands Exports 13,574 17,476 20,163

West Midlands Imports by Country Group Asia & Oceania 3,753 4,793 5,340 Eastern Europe (excl EU) 293 224 288 European Union 10,506 12,096 13,674 Latin America and Caribbean 263 171 246 Middle East and North Africa (excl EU) 331 483 438 North America 1,404 1,517 1,795 Sub-Saharan Africa 201 271 246 Western Europe (excl. EU) 2,094 3,163 7,428 Total West Midlands Imports 18,845 22,717 29,457 c. What is the impact of Air Passenger Duty on the aviation industry?

4. APD is incredibly damaging to the aviation industry. However it is our contention that this question should go beyond the aviation industry. It is important that all industries and sectors are not damaged by unsustainable and uncompetitive tax regime however with regards to the aviation sector this is doubly important.

5. By definition Aviation is highly mobile and can easily choose to leave a market or avoid one completely. This is incredibly bad for our regional economies as the lower levels of demand (compared with airports such as Heathrow and Gatwick) means that APD eats into profit margins and makes otherwise attractive routes unprofitable.

6. So important is air connectivity that a survey in 2006 by the CBI found that 41 per cent of businesses felt that the air transport network of a country was ‘vital’ or ‘very

important’ when considering where to invest.1 This figure is 40 per cent for the cost of labour, 34 per cent for the cost of property and rent, and 38 per cent for business taxation.2 Clearly then an area with poor connectivity is likely to struggle for investment when competing against well connected areas.

7. Virtually all UK airports have lost otherwise profitable routes due to APD. While this is bad for airports and leisure travels it is particularly bad for regions and businesses. A British Chambers of Commerce survey recently found that 92% of investors in emerging markets would not invest in a region with direct flights to their country. As such regions that have poor connectivity due to the additional costs imposed by APD are also loosing out in investment.

8. Moreover a lack of connectivity caused by APD means that passengers must travel to other airports. In practise this means European Hubs or Heathrow. This adds significant costs and time onto journeys for business travellers and distorts our view of aviation demand by channelling customers into the South East due to a lack of local connectivity. Basic logic dictates that all passengers would rather travel from their local airport. d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

9. Government should focus on creating an aviation system that does not damage supply and that accurately reflects demand. That is to say airlines that wish to fly from certain airports should not be faced with a taxation system that creates a commercial barrier to their doing so. Additionally Government should look at how to best serve passengers from their local airports rather than requiring them to travel to a congested and poorly connected airport in the South East. e. Where does aviation fit in the overall transport strategy?

10. Road, rail and air travel cannot be separated. They each contribute to the UK’s connectivity. The Current aviation strategy means that our roads and railways are excessively congested due to 78% of all of the UK’s flights to the world (excluding Europe) being from Heathrow and Gatwick. Passengers, with no choice but to fly from

1 Oxford Economic Forecasting. CBI – The Economic Contribution of the Aviation Industry in the UK, 2006 2 Ibid.,

these regions, clog up our motorways and railways when these passengers could be better served at home.

11. Through ticketing should also be explored. In many cases it is possible to fly to Birmingham and arrive in Central London quicker than it is to fly via Heathrow due to delays at border control and stacking in the air.

How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

12. Resilience – Heathrow and Gatwick dominate the long-haul market, accounting for 87 per cent of direct passenger flights from the UK to North America, 99 per cent to Brazil, Russia, India and China (BRIC countries) and 78 per cent to the rest of the world (outside Europe).

13. To boost resilience the Government must focus on boosting connectivity outside of the South East. Bad weather in this region or transport disruption effectively shuts Britain down to much of the world.

14. Passenger experience – to improve passenger experience the Government should focus on serving passengers via their local airports. Many passengers try to avoid Heathrow at all costs. Indeed a CBI survey in 2006 stated that when asked if access to air services was important to their business, of those who said yes, 49 per cent cited easy access to Heathrow as ‘vital’ (24 per cent) or ‘very important’ (25 percent), while 40 per cent stated that access to an airport with direct links to Heathrow was ‘vital’ (8 per cent) or ‘very important’ (32 per cent). However fully 61 per cent of businesses felt that it was ‘vital’ (16 per cent) or ‘very important’ (45 per cent) to have access to an airport “with direct links to a European hub airport.

15. Making best use of existing London Capacity – the CAA’s 2010 Passenger Survey Report found that of the 65,668,000 passengers who used Heathrow in 2010: 73.0 per cent (31,135,000) of Heathrow’s 42,111,000 arriving/departing scheduled passengers were going to or travelling from London and the South East. 53.5 of its 26,000 chartered passengers were also travelling to or from London and the South East. The remainder

were connecting flights. Excluding connecting flights (whose economic benefit to the UK is debatable) 73.9 per cent of Heathrow’s passengers are from the London and the South East. The Birmingham Chamber of Commerce Group believes that a significant amount of capacity within the South East could be freed up if regional air passengers were better catered for at their local airports. Around 11 million passengers from outside the South East use Heathrow each year (1-5 passengers if transfer passengers are excluded) placing significant burdens on Heathrow and the South East’s infrastructure. A more difuse aviation model, whereby passengers are better served in terms of connectivity by their local airports, would provide a much more cost effective, sustainable and balanced aviation model.

16. Additionally we believe that Heathrow as the UK’s main airport should focus on serving emerging markets and business centres throughout the world. There is little reason for Heathrow to serve destinations such as Malia when it is so poorly connected to China. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

17. Heathrow and Gatwick dominate the long-haul market, accounting for 87 per cent of direct passenger flights from the UK to North America, 99 per cent to Brazil, Russia, India and China (BRIC countries) and 78 per cent to the rest of the world (outside Europe). This statistic alone proves that the UK’s current aviation strategy not only fails to make best use of existing capacity but fails to serve the UK adequately. 18. The Birmingham Chamber of Commerce Group believes that the landing charges cap imposed on London Airports must be ended. A precious resource must be process accordingly and at the moment the current regime is distorting the market.

19. The Birmingham Chamber also believes a regional rate of APD or equivalent taxation should be introduced whereby the Government would have some mechanism to encourage airlines to operate outside of the South East.

20. We must also end our dominant South West viewpoint that prevails across Whitehall and Westminster whereby it is assumed that it is entirely justifiable to expect passengers in Birmingham, Liverpool, Manchester and Leeds etc to travel to Heathrow to access flights to the destinations that they wish to access to but that it would be unconscionable to ask the same of London’s travellers.

Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where?

21. The UK’s aviation policy does indeed need a step-change. However this change should not be to pursue a policy that continues to do the same thing but on an ever larger scale. Instead the Birmingham Chamber of Commerce Group believes that a more fundamental change is required: a change in the way government thinks about aviation supply and demand. Currently a significant proportion of the “demand” for aviation within the South East is being generated by the regions outside of the South East. These regions, despite having airports themselves, are unable to meet the connectivity needs of their passengers as airlines are drawn towards Heathrow by capped landing charges and the perceived prestige associated with it being the UK’s main airport. Moreover Air Passenger Duty destroys the profitability of many routes from airports with lower demand outside of the South East.

22. This approach is clearly unsustainable. The debate around a third runway at Heathrow is as controversial today as it was when then current Secretary of State for Transport was a junior Minister in the 1990s and will continue to rage. Instead supply should be distributed across the UK to match the levels of demand that exist. It is unsustainable (economically, environmentally and politically) to channel an ever increasing number of passengers through one of the most congested parts of the country.

23. The UK needs a sustainable, long term and politically palatable solution to its aviation woes. This will not come about by building more and more runways in the South East. Instead existing capacity should be utilised to best effect. This would share the burden of aviation across the UK but more importantly would also distribute the benefits more evenly: benefits that at the moment are largely accrued within the South East.

19 October 2012

Written evidence from the British Airline Pilots’ Association (AS 58)

Executive Summary

1. The British Airline Pilots’ Association (BALPA) believes a strong, vibrant and successful aviation industry is vital to the UK economy, but that it must be underpinned by strong safety standards and robust regulation. 2. British pilots are proud of their industry and their profession. They want to see it compete globally without having one hand tied behind its back. 3. We are primarily concerned that much of the debate around aviation policy and strategy revolves around infrastructure alone without considering the issue in the round. In particular we would like to be placed at the forefront of the Government’s aviation framework and of aviation policy now and into the future. 4. Our comments in response to the Committee’s questions will centre around the importance of flight safety as well as the importance of aviation in terms of jobs and economic growth.

About BALPA

5. Over 80% of the UK’s commercial pilots are members of BALPA and we are recognised as the main partner in 26 airlines covering all major UK operations. In addition over 1,000 commercial pilots have joined us even though their airline has no partnership agreement with BALPA. 6. BALPA was formed in 1937 when an airline was forcing professional pilots to operate when it was not, in the professional judgement of those pilots, safe to do so. This led to the Cadman report. Those origins remain a key feature of our DNA today and which is why, 75 years later, our vision as an association is still “to make every flight a safe flight”. It is also perhaps why a recent public poll by YouGov found that airline pilots belonged to one of the most trusted professions. It is a responsibility we take seriously.

What are the benefits of aviation to the UK economy? 7. The importance of aviation to the UK economy is not in question. According to Oxford Economics the sector supports 921,000 jobs and contributes 3.6% to GDP or a total of £49.6bn. 1 8. Beyond these raw economic data, aviation is a social good which enables people to contact with friends and family across the UK and globally. It is also a driver of our economic connectivity to new emerging markets across the world. 9. The benefits of aviation are not seen just by business. The Trades Union Congress this year passed a motion proposed by BALPA to support the ‘great Great British aviation industry’.

1 Oxford Economics 2011, ‘Economic Benefits from Air Transport in the UK What is the impact of Air Passenger Duty on the aviation industry? 10. Sadly, the Government’s policy on Air Passenger Duty is harming the UK economy as well as British aviation businesses. 11. APD is a regressive and counterproductive tax, especially at the levels at which it is now set. The UK aviation industry is taxed at a much higher level than anywhere else in Europe. French aviation taxation is around a tenth of that of the UK; in Ireland it is just €3 per ticket; and in the Netherlands the government completely abolished the tax after trialling it. This disparity clearly shows that the UK is at a competitive disadvantage to the rest of Europe. 12. There are impacts on UK airlines and UK jobs as a result. It is increasingly easy, for instance, to buy a cheap, low-cost ticket from the UK to Amsterdam in order to connect to a flight to Australia. In a poll for BALPA, 76% of people said that they would prefer to transfer via Amsterdam if it meant saving £85.2 The saving, however, could be as much as £171 for passengers flying to Singapore or Australia in premium economy or higher, which would be an increased incentive to make this transfer despite the additional effort involved. This means that UK airlines that fly those routes, and British workers who are employed by those carriers, are put at a disadvantage. 13. As well as a counterproductive tax, APD is an unfair one. It is increasingly the case that moderately paid families are finding it harder to afford a traditional family holiday. Note, for instance, that there is no reduction in APD payable for children’s air tickets and that the short-haul economy rate of APD has increased by 260% since 2007. 14. This is a matter of concern to British airline pilots. We do not wish to see UK aviation at a disadvantage not only because of the impact on our own jobs, but because of the overall contribution a strong aviation sector makes to the UK economy

Do we need a step change in UK aviation capacity? Should there be a new hub airport? Where? 15. BALPA has polled its members about views on where additional airport capacity should be. Our members are split on that issue, but there is overwhelming agreement that we need additional capacity somewhere. 16. The UK’s international hub at Heathrow is over 99% full. The result is that UK businesses are losing out to their competition elsewhere in the world, especially in Europe. Amsterdam, Paris Charles de Gaulle and Frankfurt are major European hubs which have had the ability to expand in terms of the number of destinations served. Amsterdam Schiphol has five runways and serves 264 destinations. Paris Charles de Gaulle has four runways and serves 259 destinations. In contrast London Heathrow has just two runways and has seen the number of destinations served reduced to 183. 17. Aviation should be an industry that supports the growth of the UK economy. As the Chancellor said in his budget statement in March 2012, we need strong links to the emerging economies of Brazil, Russia, India and China. In this respect we are already lagging behind many of our European competitors. 18. As well as a strong, competitive, international hub we recognise the importance of high quality regional and point-to-point airports. The vast majority of airlines our members

2 Ipsos‐Mori Online Omnibus poll, conducted 15‐19 May 2009 fly for do not operate into Heathrow at all. We must not forget the contribution, both on a regional and national level, that regional connectivity provides. 19. Decisions about future airport capacity have been delayed for far too long. The industry needs a definite future, not years -- creeping into decades -- of uncertainty. An agreed political settlement would enable long-term planning and give the industry the confidence to invest in the future. 20. BALPA supports the Government’s decision to appoint an independent commission to make recommendations on future airport capacity to be chaired by Sir Howard Davies.3 But we do note that such commissions, committees and studies have come and gone many times. We’ve been here before. 21. We hope the Commission is sensibly constituted with a voice for those who rely on a strong aviation sector for their livelihoods. 22. BALPA was disappointed by the Government’s decision to ask the Commission to report only after the planned 2015 UK General Election. We believe the Commission could and should report before then so as to bring forward the urgently needed final decision about this industry’s future. 23. One potential side-effect of a step-change in aviation capacity could be the increased ability of some of the UK’s competitors to take advantage of that capacity ahead of UK businesses. We would like assurances that there would be defence against other countries’ airlines having a distinct advantage over UK business by using their government subsidies or countries’ petrodollars to undercut British business.

Flight safety 24. BALPA noted with concern the fact that the Department for Transport’s Aviation Framework Scoping consultation made only fleeting mention of the importance of flight safety. We made a recommendation in our consultation response that safety should be woven far more deeply into the framework. We were disappointed that the Government did not take up that suggestion in the subsequent framework document (currently out to consultation). 25. Aviation debates over the past few years (with the notable exception of the important debate around European flight time limitation proposals) have centred entirely around infrastructure and capacity. 26. The UK has a good flight safety record. But with predictions of considerable increases in the number of flights, and with safety having reached a plateau, unless safety continues to increase, we could see the number of incidents rise. This is apposite to discussion around increasing capacity. 27. We believe that an increase in capacity may lead to a disproportionate increase in the number of incidents. We are in a fast-changing industry and past performance is, as the financial small print goes, no indicator of future performance. British pilots fly in some of the most congested skies in the world; skies which are due to become more congested still. We must never allow our attitude towards flight safety to become complacent.

3 http://www.dft.gov.uk/news/statements/mcloughlin‐20120907a/ Inadequate Regulation 28. BALPA has identified inadequate regulation as a key threat to aviation safety. Like in so many other policy areas, deregulation is the order of the day. However, in safety critical industries, and ones in which there is so much commercial pressure, we do not believe this is the appropriate paradigm in which to be operating. On the contrary, strong regulation enforced by an independent and scientifically-driven regulator, is key to ensuring safe operation. Given an organisation’s first duty is to survive, if the choice is between staying in business for one more day or spending money on safety, without regulation, we are not confident the right decision would be made. 29. We are aware that this shift towards ‘operator responsibility’ has already begun. The European Aviation Safety Agency (EASA) has advocated for this approach in its latest version of pilot fatigue proposals and the UK Civil Aviation Authority (CAA) endorsed this approach. We remain sceptical.

Security 30. Pilots find the security screening situation they have to face bizarre and extremely frustrating. Passengers often get frustrated at the long queues and invasive searches they have to endure, but pilots often have to go through the same processes every time they go to work. This is not conducive to flight safety, nor does it recognise the important link in the security chain which pilots form. 31. Pilots’ frustrations are compounded when they have items such as water bottles, glasses cases and nail clippers confiscated by security when they are about to board an aircraft and take responsibility for the safety of hundreds of passengers. Not to put too fine a point on it, but if a pilot ever wished to cause an incident, water and nail clippers would not be required. We background check and then trust pilots to operate safely, yet we do not trust them to walk into a departures lounge to get some lunch in the middle of their duty day. 32. The cost implications of needlessly security checking pilots is worth noting too. The Guardian reported that security costs £4.6bn a year4. A significant saving could be made by following the example set by the Known Crewmember programme in the United States which allows much freer access to trusted professionals following a thorough background and identity check.5

People 33. Again, the ‘people’ side of the aviation industry has been largely ignored by policymakers over recent years. Air transport needs properly qualified, professional flight crew. Currently we see a situation emerging whereby pilots are either in feast or famine. Life for a newly qualified pilot, on a temporary, agency contract is insecure, financially unrewarding and fatiguing. 34. BALPA has grave concerns over the growing use of contract pilots in certain UK airlines. These pilots are not employees of the airlines they fly for. Rather, they are newly qualified pilots, desperate for experience, deep in debt from paying for their own training, and vulnerable to being furloughed or transferred at the whim of either their

4 http://www.guardian.co.uk/world/2011/sep/07/airports‐wasting‐billions‐needless‐security 5 http://www.knowncrewmember.org contract employer or the airline. This situation occurred very recently as easyJet announced that 46 of their ‘Flexicrew’ pilots would be laid off for the winter period. 35. Allied with this and such recent developments as the sad closure of Bmi Baby we are seeing a gradual drift of pilots abroad. A recent event sponsored by BALPA to inform members of the reality of working abroad was heavily over-subscribed. Our question is will the UK have the supply of trained pilots needed to operate in any expanded capacity industry. We would encourage the Committee to consider, if not in this inquiry then in another, issues around training and apprenticeships of pilots.

19 October 2012

Further written evidence from the British Airline Pilots’ Association (BALPA) (AS 58A)

1. The British Airline Pilots’ Association believes that the following supplementary evidence may be of interest and use to the Committee in its current Aviation Strategy inquiry. In particular, this supplementary evidence is in response to the oral evidence given to the Committee by Mr Richard Deakin of NATS on 10 December 2012.

2. The standard angle for glideslopes is universally set at 3 degrees with variations typically between 2.5 and 3.25 degrees to accommodate local circumstances such as airspace restrictions and close in ground obstructions. A 5.5 degree glideslope, as proposed by the NATS Chief Executive, Mr Richard Deakin, is exclusively used at airports where a normally inclined approach path is precluded because of terrain as in mountainous areas or obstacles such as the high rise buildings that surround London City airport. Because of the stringent requirements on aircraft performance and certification, and crew training in special procedures, 5.5 degree glideslopes are not generally considered appropriate as a means for alleviating local area noise disturbance. Where these steeper slope approaches have been adopted they have only been available for smaller aircraft types ranging up to Airbus A318 size and have never been used by bigger commercial air transport (CAT) types let alone the wide bodied long-haul aircraft types that predominantly operate in and out of London Heathrow.

3. For large aircraft the problems of approaching on a steep glidepath can be considered under the headings of operation and organisation:

Operational Issues 4. Speed stability. The inertia of heavy aircraft means that it is very difficult to accurately control approach speeds on a steep approach particularly when the airspeed has increased due to correcting to the glidepath from above. Use of airbrakes with landing flap is prohibited on most large types. Furthermore, the increased use of drag inducing configurations, possibly against thrust to allow higher engine power settings, would introduce issues of aircraft structural fatigue.

5. Engines at idle power. To achieve a steep glidepath heavy aircraft would need to have their engines set at or near approach idle power with the consequence that, in the event of having to go around (GA), with big, high bypass engines taking longer to spool up, the height lost between GA initiation and the aircraft beginning to climb away would be correspondingly greater. This is exacerbated by the fact that the aircraft is already descending faster therefore greater anticipation of having to GA would be needed. For the same reasons approach minimums would have to be set higher to ensure aircraft aborting their approach did not bust obstacle clearance limits with the knock on effect that, in poor weather, many more aircraft would require to GA.

6. “Sink Rate” EGPWS alerts. At a typical heavy aircraft approach speed of 160 IAS the rate of descent on a 5.5 degree glidepath would be around 1600 fpm which normally would be classified as an unstable approach and would be above the threshold for triggering an EGPWS “Sink Rate” aural alert. 7. All Weather Operations. A 5.5 degree glideslope is presently not compatible with an autoland profile and would require a significant certification effort to make it so if, indeed, it was possible to retrofit to current aircraft types. Such an operational restriction would be a major impediment to the all-weather capability of an airport.

8. Engine Out Approaches. All engine out approaches are predicated on a 3 degree or close to 3 degree glidepath. It would be impractical and add complication to introduce different contingency procedures for engine out approaches to accommodate the very few airports where steep approaches were in operation. Such airports could not be planned as alternates.

9. Flare/Roundout Manoeuvre. The transition from a 5.5 degree glidepath through to touchdown on the runway would be an abnormally challenging manoeuvre to fly which would require special training and would involve higher risk when compared to a landing off a normal 3 degree approach. The potential for “heavy” landings would necessitate the imposition of lower maximum landing weights and increased engineering maintenance of landing gears. Other risk mitigating measures might involve the setting of lower crosswind limits further limiting the availability of the airport to operators. Some aircraft types, particularly larger widebody types, would be more susceptible to tail scrapes. The complexity of the roundout manoeuvre combined with the normally acceptable variation in piloting skills would very likely result in a greater variation in touchdown positions and speeds with a contingent increased risk of “floating”, long landings and runway overruns as well as a potentially significant impact on runway occupancy rates and therefore runway capacity.

10. Tailwinds. Whereas on normal approach paths tailwinds of up to 10 to 15kts can be accommodated to allow a certain amount of operational flexibility in the choice of runway direction, with steep approaches no such flexibility could be tolerated.

Organisational Issues 11. Crew Training. Special crew steep approach training would be required for any approach steeper than that currently used.

12. Aircraft Modification/Certification. Significant aircraft modification (, flap/spoiler operation- fly by wire flight control law reprogramming , EGPWS reprogramming) would be required together with an extensive scheme of type certification for steep approaches.

13. Airport Availability. For several reasons (as stated above) an airport serviced by 5.5 degree glideslopes would be much more weather dependant in terms of cloud base, visibility, and wind and therefore would suffer a greater degree of weather closure events than would be the case with a normally inclined approach path.

14. In summary the introduction of 5.5 degree glideslopes would present substantial difficulties for both aircraft and airport operators. The former would be burdened with, initially, aircraft modification and certification costs and then recurring crew training and aircraft maintenance costs. The latter would not be able to boast a year round, 24 hour, all weather operational capability necessary to support scheduled CAT services. The likely upshot would be that aircraft operators would migrate to airports where the approaches were not so weather dependant and not so demanding of resources.

16 January 2013

Written evidence from the Scottish Chambers of Commerce (AS 59)

Introduction

1. Scottish Chambers of Commerce is the umbrella organisation for 22 local Chambers of Commerce across Scotland, which have a membership of around 10,500 businesses. These members are businesses of all sizes, drawn from all sectors of the economy, from sole traders right through to large multinationals and they employ over half of Scotland’s private sector workforce. Scottish Chambers of Commerce and our constituent local Chambers exist to serve the needs of our members and to represent their interests.

2. Scottish Chambers of Commerce welcomes the opportunity to contribute towards the Transport Select Committee’s inquiry on the need for an Aviation Strategy for the UK. We will address each of the questions contained in the call for evidence.

What should be the objectives of Government policy on aviation?

3. The UK Government’s Draft Aviation Policy Framework states that “[t]he Government’s primary objective is to achieve long term economic growth”. Aviation policy should have the same purpose. Scotland relies heavily upon its air links to provide connectivity both domestically and internationally. In an increasingly global economic market, it is essential to connect to compete and Scotland’s geographical location means that air transport is the quickest method of travel to many UK cities and the only practical option for travel to international destinations. Internally, air transport is also a key mode of transport to remote and island communities, requiring special consideration.

4. Excluding oil and gas, Scotland’s international exports in 2010 – the most recent year for which figures are available – were valued at £22 billion and our sales to the rest of the UK totalled £44.9 billion. Throughout the recession Scotland’s manufactured exports have performed strongly despite dipping slightly at the beginning of 2012.

5. The recession and the Eurozone crisis have driven a number of Scottish businesses to look more towards international markets for new opportunities and to raise their horizons above the traditional export markets that have dominated in recent years. Equally Scotland’s tourist industry is targeting new markets, including Brazil, Russia, India China – the so-called BRIC countries – and Sri Lanka, Indonesia, Malaysia, Mexico and Argentina – the SLIMMA countries.

6. Developing Scotland’s international air connectivity both in terms of direct flights and through hub airports will be essential in maximising our economic potential. The Government’s aviation strategy requires to recognise this ambition and provide a framework that ensures that these transport needs can be satisfied. Such a strategy would require to recognise the different challenges that face the UK’s regional airports and the hub capacity, currently centred on Heathrow.

7. The aviation strategy must also reflect the taxation of air travel, notably Air Passenger Duty (APD. The UK has the highest rates of aviation taxation in Europe and this is having a damaging effect on the competitiveness of UK regional airports, including Scottish airports. An independent study conducted by York Aviation found that as a result of the increases in APD announced in 2010, Scotland would lose 1.2 million passengers, 148,000 tourists and £77 million in revenue by 2014, with long haul demand down by 5%.

8. Scottish Chambers of Commerce believe that the UK Government should follow the recommendation of the Commission for Scottish Devolution and devolve APD to the Scottish Parliament, allowing Scotland to set the tax at a rate more appropriate to the Scottish aviation market. There is considerable concern that the current rates may be geared towards the capacity constrained South East of England aviation market more than they are regional airports.

9. The Government’s decision to devolve aspects of APD in respect of Northern Ireland has established a precedent in this regard and if this is right for one part of the UK, then surely it is appropriate for other parts of the country.

How should we make the best use of existing aviation capacity?

10. UK aviation capacity is broadly speaking split between the capacity constrained South East of England market and the rest of the country where capacity constraints are less of an issue. In Scotland our airports have, in general terms, a significant degree of spare capacity and airport operators are actively working to attract new services serving a variety of destinations.

11. Scotland’s economy requires a mix of both direct international air services and domestic routes. Air travel remains by far the quickest way to travel from Scotland to the South and Midlands of England from most parts of Scotland, and is the dominant mode of transport between Scotland and London. In addition to direct Scotland-London connectivity, it is important for Scotland to retain links to the UK’s major hub airport at Heathrow. At the time of writing, these services are being delivered by a single operator linking Heathrow with Glasgow, Edinburgh and Aberdeen Airports, though this remains subject to the allocation of the remedy Heathrow slot pairs made available at the time of IAG’s takeover of bmi.

12. Scotland would benefit from action to reserve slots at capacity constrained airports in the South East of England, particularly Heathrow, in order to guarantee domestic connectivity in the face of pressure to turn over pressured slots to more profitable long haul services.

13. Scotland has had some success in developing direct international air connectivity, spurred on by the Scottish Air Route Development Fund, operated by the Scottish Executive/Government until 2007, which provided valuable year one support to airlines for the development of new routes. We have long argued that the Scottish Government should look again at delivering a revised model of support along these lines in a manner compatible with EU rules. Such support could help drive forward further expansion in Scotland international air connectivity.

14. The UK Government’s Draft Aviation Policy Framework focuses strongly on the issue of noise in the vicinity of airports. This is virtually a non-issue in Scotland and instead our members are more concerned with surface access to airports. This is largely a matter for the Scottish Government and Scottish Local Authorities, but it is worth mentioning that only one of Scotland’s Airports, Prestwick, is directly served by the rail network and all of Scotland’s airports require improved servicing by the motorway network. Recent attempts to link Glasgow and Edinburgh Airports to the Scottish rail network have all been abandoned and greater consideration requires to be given by the Scottish Government to facilitating surface access to Scotland’s airports across the board.

What constraints are there on increasing UK aviation capacity?

15. The main constraint on increasing UK aviation capacity is in terms of hub capacity, which is currently constrained as a result of the Government’s policy of restricting the expansion of the current hub airport at Heathrow. If the UK is to successfully compete in terms of air connectivity with other major European economies, then we must recognise that competitor hubs in Amsterdam, Frankfurt and Paris have more runways and more capacity for expansion. Whilst Scottish airports can and do connect with all of these foreign airports, we can only maximise the benefit for the UK if we provide excellent opportunities for hub connections in this country.

16. Environmental issues are important when considering any mode of transport and it must be recognised that the aviation industry more than pays its way environmentally and that aviation technology is advancing rapidly, with reductions in carbon and noise levels a key facet of developing technology. Indeed, as has already been mentioned, noise is not a significant factor in terms of Scotland’s airports, although we recognise that this is a significant consideration in and around London.

Do we need a step-change in UK aviation capacity? Why?

17. The medium term answer to the UK’s hub capacity issues is to consent to the expansion of Heathrow Airport. Thereafter, detailed consideration must be given to how best the long term needs of the UK’s economy and aviation can be served.

19 October 2012

Writtten evidence from Medway Council (AS 60)

Medway Council’s principal interest in the current aviation debate centres around three proposals to build an airport in the Thames Estuary, proposals which follow a long line of similar proposals over the past sixty years to build an estuarine airport, all of which have been abandoned.

We believe that it is essential that the Government’s aviation strategy must be based on practicality, affordability and common sense. We accept that to remain internationally competitive, the UK needs to increase aviation capacity now. Building an airport in the Thames estuary, however, would be a costly mistake - costly environmentally, costly for West London and costly for UK plc. Plans for an estuary airport have been made to look attractive by a number of well-designed presentations and smart sound bites, but behind the veneer is a proposal that is ill thought out, ill-conceived and unaffordable.

We welcome the opportunity to respond to the Transport Select Committee’s inquiry into the Government’s aviation strategy. There are a number of questions, which we do not feel in a position to contribute to and therefore have limited our response to the areas that we feel able and sensible to answer.

If you would like any further information please feel free to contact me on the contact details provided in our attached letter.

1) What should be the objectives of Government policy on aviation?

1.1 The Government’s objectives for future aviation policy must combine the need for the UK to remain competitive within the global economy with ensuring that air travel remains accessible for general consumers. Above all the Government’s strategy must be based on practicality, affordability and common sense.

1.2 The Government should reject ill-thought out and ill-conceived plans to ‘solve’ Britain’s capacity shortfall by building an airport in the Thames Estuary, a plan without any known financial backing, poor connectivity, a disastrous environmental impact and with little support from airlines.

1.3 The current debate on aviation policy focuses solely on business travel and international connectivity, (especially to the BRIC nations) and whilst the importance of connectivity to existing and emerging markets is essential to the UK economy, it is crucial that this debate is widened to ensure that consumers are not left behind.

1.4 For example, it is essential that regional airports are not ignored by the Davies Commission, owing to the more detailed discussions over hub capacity. Our regional airports have an enormous role to play in providing point to point services and a key objective of the Government’s policy going forward must be to look at ways of supporting regional airports, potentially looking at measures to incentivise a broader spread of air travel, where practical throughout the UK. These measures could be as simple as improving rail and road connectivity and as challenging as reviewing air passenger duty (APD), to potentially introduce differing levels of APD.

1.5 It is also essential that aviation policy becomes a part of a much clearer and more integrated transport system, with an acceptance that rail and road policy is inextricably linked to aviation policy, for example, Gatwick and Stansted Airports are constrained by poor and inefficient rail links, whilst smaller regional airports like Manston in Kent could become an effective, although small point to point airport with some limited investment in rail infrastructure.

2) How should we make the best use of existing aviation capacity?

2.1 The Government must view the UK’s airports as a group rather than a collection of single entities. London, for example, currently has six runways (located at five different airports), three of which are being underutilised. Before constructing any new airports or runways, these resources should be maximised.

2.2 It is impossible to deny that Heathrow, the UK’s sole hub airport is currently approaching capacity and also impossible to deny that this is having a major impact on Heathrow’s ability to accommodate flights to Brazil, India, Russia and in particular China.

2.3 However this is not the case for other airports throughout the UK, or indeed the capital’s airports. Gatwick Airport is currently operating well below its capacity with Stansted operating with space for a further 17 million passenger per annum1. Luton Airport, which can be reached from London in a little over half an hour, has potential to accommodate an extra 11 million passenger per annum .It should also be noted that Gatwick Airport has recently attracted a number of airlines from the emerging nations that will be pivotal to the UK remaining internationally competitive, Hong Kong Airlines, Air China and Korean Air are amongst those major airlines to commit to Gatwick Airport, disproving the view that airlines will not fly into the UK outside of Heathrow.

2.4 However, any new strategy from the Government must view the aviation sector as part of an integrated transport strategy, ensuring that airports such as Gatwick and Stansted are not constrained by poor rail connectivity.

2.5 It is clear that the UK’s existing airports and runways could and should be used more efficiently to meet the challenges we face. Whilst Gatwick and Stansted Airports have significant spare capacity they are constrained by poor rail connectivity. The Government should, as a matter of urgency, review the rail links between London and Stansted and London and Gatwick; for example it currently it takes 53 minutes to get to Stansted Airport from Liverpool Street Station. A more dedicated and high speed service between London and these two airports would dramatically increase their connectivity and passenger numbers. Improving connectivity, especially with Stansted due to be sold by BAA, would greatly increase Gatwick’s and Stansted’s ability to play their role in a thriving UK aviation industry.

2.6 Another area of the current aviation strategy that prevents existing airports from fulfilling their full potential is financial, with Air Passenger Duty a major financial constraint on all airports and regional airports in particular. We noted with interest and agreement the recent report by the All Party Aviation Group that suggested lower rates of air passenger duty for regional airports2. This move would not only allow larger regional airports like Manchester Airport, (currently paying £2 in tax for every £1 that the airport takes in revenue3) but also smaller regional airports like Southend and Manston to play a valuable role in providing point to point services in the South East, potentially freeing up space at Heathrow for flights to emerging nations, thus increasing Heathrow’s hub capacity.

2.7 The Government must also look to work with the larger regional airports outside of the South East, such as Birmingham Airport and Manchester Airport to ensure that they can attract a wider range of flights, especially given the impact the High Speed 2 will have on connection times between Birmingham and London.

2.8 In addition, as outlined above, the consumer is often ignored in the current debate. Instead, the Government should put the consumer at the heart of considering how best to use the UK’s existing airports. All too often the debate has been too London and South East centric, when the Government should consider the whole of the UK. For example, any discussion of hub capacity should consider the role that Heathrow plays in linking regional airports like Newcastle to the rest of the world and the continuing loss of revenue to competitors like Schiphol, Frankfurt and Charles De Gaulle. They must also consider where people live in relation to where they have to fly from. With an alarming number of air passengers travelling by car from the Midlands and North West to fly from Heathrow, the Government must consider the impact that this has on road and rail congestion and crucially the consumer experience.

1 Kent County Council, Bold Steps for Aviation. Discussion Document. May 2012. Available online at: https://shareweb.kent.gov.uk/Documents/News/Bold%20Steps%20for%20Aviation%20May%202012.pdf 2 All Party Parliamentary Aviation report into Aviation Policy and Air Passenger Duty, August 2012 ‐ http://www.epolitix.com/fileadmin/epolitix/APPG_AviationReport.pdf 3 http://menmedia.co.uk/manchestereveningnews/news/business/s/1587542_mag‐hails‐tax‐victory

3) What constraints are there on increasing UK aviation capacity? 3.1 Aside from the constraints listed above, additional but, in our view, necessary, constraints are presented on environmental grounds.

3.2 The Government should consider the impact of aviation on the local environment and our commitment to reduce carbon emissions and continue to work with airport operators and airlines to reduce and mitigate the environmental impact and crucially the noise impacts. They must also work with industry to ensure that they take advantage of technological innovations and design advancements to reduce emissions.

3.3 The environmental impact of aviation must be a key consideration in the Government’s aviation strategy and should be a strong factor when considering the feasibility of proposals to build a new hub airport in the Thames estuary. We are of the view that these proposals are incompatible with the UK’s environmental commitments on both national and international levels.

3.4 The mouth of the Thames estuary is a site listed under a myriad of international and national designations and special protection areas (Globally - The Ramsar Convention, at a European level - The Habitats Directive (Special Areas of Conservation) and Birds Directive) that the Government has committed to. Not only would each of the designations have to be broken in order for an airport in the Thames estuary to go ahead, the airport would also destroy the habitat for over 300,000 migrant birds that rely on the area for feeding and roosting during the winter. Many thousands more use the estuary as a stop-over as they fly south for the winter and before turning north again for the feeding grounds of the arctic.

3.5 Building an airport in the Thames estuary will not only have a negative environmental impact on the prospective site of a new airport, but more widely, would also destroy a significant amount of countryside across Kent. The infrastructure required to build an airport in the estuary would lead to the removal of or significant affect on whole communities (approximately 40,000 people) all of whom would require new homes in the Medway area. On top of this, the airport is likely to employ approximately 70,000 people bringing new families to the region. Birmingham Airport’s Head of Government Relations, John Morris claims “you would need a city the size of Manchester to support it in an area that already requires five new reservoirsi”. Housing required at such a significant level is simply not available in Medway. Currently the average number of houses built per year is approximately 750 and there is no evidence or viable solution that has been put forward to suggest where these people are likely to be housed.

3.6 In addition to substantial new housing requirements, a new transport system including the construction of new road and railway infrastructure to connect the airport to central London and the rest of the UK, will bring further disruption and irreparable damage to the region at a significant additional cost to the estimated £80bn the construction of a new hub airport is likely to be.

3.7 Clearly, this additional infrastructure and an influx of people will place a strain on already scarce natural resources such as water. A recent report published by the Environment Agency ahead of a Kent County Council Water Summit has warned that “water resources in Kent are already finely balanced between meeting the needs of people and the environment4.” The area is already particularly vulnerable to sea level rises and flooding. Therefore, it is important that the impact of an airport in the estuary should be investigated fully and must consider existing management policies.

3.8 The World War II liberty ship, SS Richard Montgomery, which in 1944 sank 1km off the coast of Sheerness, poses a significant hazard in the mouth of the Thames estuary. The ship which is packed with approximately 1,500 tonnes of unexploded ammunitions would require, what was labelled in a report by New Scientist magazine in 2004 “one of the biggest non-nuclear blasts ever and would devastate the port of Sheerness5” .

3.9 Engineers who have examined the ship suggest that if the wreck exploded it would likely create a metre high tidal wave. Furthermore, Government tests on the site as far back as 1970 suggested a blast

4 Environment Agency (2012) ‘The state of water in Kent’ https://shareweb.kent.gov.uk/Documents/environment-and- planning/environment-and-climate-change/water%20summit/state-of-water.pdf 5 New Scientist (2004) ‘The Doomsday Wreck’ http://www.newscientist.com/article/mg18324615.100-the-doomsday-wreck.html would hurl a 1,000ft wide column of water, mud, metal and munitions almost 10,000ft into the air – risking the lives of wildlife and many people.

3.10 The Climate Change Act 2008 committed the Government to a legally binding, long-term framework to tackle carbon emissions. This means a reduction of at least 34 percent in greenhouse gas emissions by 2020 and at least 80 percent by 2050. Any new airport at the suggested size and scale as the Thames estuary proposals is likely to have an affect on the UK’s carbon emissions output. Figures from the Department for Transport (DfT) in their latest UK Aviation Forecast published in August 2011, outline that currently airports and the aviation sector CO2 output is 34 MtCO2 (approximately 5% of the UK’s total carbon emissions) in 2010 and this is expected to rise to 48 MtCO2 by 2030. WWF have suggested that an airport in the Thames estuary is likely to create the single biggest source of CO2 in the UK, even bigger than Drax coal fired power station in Yorkshire.

3.11 The Government must make the environmental impact of aviation a key consideration when formulating any future strategy. Both airlines and airport operators have made significant progress on reducing the impact of environmental and noise considerations on existing airports, progress that should be applauded, progress that would be undone if an airport was constructed in the Thames Estuary.

4) Do we need a step-change in UK aviation capacity? Why? a) What should this step-change be? Should there be a new hub airport? Where?

4.1 We understand that an airport in the Thames Estuary will be discussed as an option,; however we also believe that beneath the veneer of a well-designed proposal and some sharp sound bites, the proposal is simply not a viable solution.

4.2 We believe that there should be a step change in the Government’s strategy, a change that ensures that aviation policy is based on three main conditions:

• Practicality: Any airport whether hub or point to point, must be in a practical location, with good connectivity and links to the UK’s major cities and crucially be in use before the UK falls further behind our competitors. • Affordability: Any airport whether hub or point to point, must not require significant public subsidy, should have clear funding and that regional airports should not be constrained by APD. • Common sense: Any airport whether hub or point to point, must be considered through the realm of possibility rather than fantasy. It is essential that common sense is applied to both environmental concerns and that the reality of the role of airline policy in an airports’ viability is accepted.

4.3 We welcome the Davies Commission and believe that it should look to these three conditions when considering where to locate any new potential hub airport. Above being key to any new airport’s viability, we feel that taking these conditions into account when looking at current proposals, highlights that building an airport in the Thames estuary would not be a sensible solution.

4.4 Practicality

4.5 Britain faces a number of challenges in staying competitive in global aviation, most notably the present threat posed by Schiphol, Frankfurt and Charles De Gaulle Airports.

4.6 In the same period that Schiphol has increased from four to six runways, Frankfurt from three to four and Paris from two to four, no additional runways have been built in London. In this time, UK aviation has suffered from a lost decade in which expansion plans for Stansted and Heathrow were proposed and then dropped.

4.7 Commentators agree that as a result of our competitors’ growth and a decade of inactivity, the threat posed by other European airports is clear, present and very real. It is this threat that is central to the current debate and to why proposals for an airport in the Thames Estuary are not the solution to helping the UK remain competitive.

4.8 To remain competitive, there is acceptance that the UK needs to increase capacity now and within the next five years, to take account of both the growth of our competitors and the “lost decade of inactivity”. Recently Daniel Moylan, former Deputy Chair of TFL and adviser to Boris Johnson has claimed that an Estuary Airport could be built within four years, if there was ‘enough political will.’ These claims are idealistic at best and add little if anything of significance to the pressing debate.

4.9 Best estimates suggest that an Estuary Airport could be built within fifteen to twenty years, stretching a lost decade to thirty. In thirty years it is highly probable that our competitors will have moved ahead of Heathrow as the premier European hub, making the UK not only uncompetitive in aviation, but also with negative knock on affects for UK PLC, in terms of potential loss of revenue and investment and the loss of at least one hundred thousand jobs in West London owing to the likely closure or at least downgrading of Heathrow Airport.

4.10 It is widely accepted that international tourists and businesses alike prefer (hub) airports to be located close to city centres so as to minimise their travel and transit time as far as possible.

4.11 The Mayor of London, in his recent speech on aviation has admitted that “surface access connections to [a new] airport are a fundamental part of its success” and that any new hub should therefore offer a journey time to central London “of ideally half an hour and no more than 45 minutes”.

4.12 Locating a new hub airport on the Hoo Peninsula or the Isle of Grain in the Thames Estuary, as recent research by Tim Leunig shows, would fail to meet any of these requirements as its “wrong location” means it would be “slow and expensive to get to6”.

4.13 As Leunig highlights, an estuary airport would be accessible by public transport only from a relatively limited number of places. Indeed, current proposals of a 30-minute high speed service from St Pancras every 10 minutes, a 50-minute traditional service on existing tracks from other London stations every 30 minutes and tentative suggestions to build a £20bn semi-orbital railway running across the top of London down to Maidenhead do not offer a convincing solution to the core consideration of accessibility of any new hub airport, both in terms of costs and feasibility. In addition to the relative inconvenience of a limited number of (public transport) services, an additional consideration to take into account is the likely cost of rail fares to the new airport, currently estimated at more than £70 per ticket. Private journeys by car or cab, moreover, would also have serious implications for the already congested road network in the estuarine area.

4.14 The mouth of the Thames estuary is important to the UK’s energy supply, the proposed airport’s proximity to Thamesport, one of the UK’s busiest container ports. Adjacent is the important point which unloads one fifth of the UK’s liquid natural gas supplies and poses an inherent risk to a multi-runway airport with low flying aircraft in close proximity. We believe that the risks this presents should be assessed by an independent expert led inquiry before any decision on the construction of a new airport in the area are made.

4.15 The area is also home to the EON grain power station, a major investment that would be forced to close down by the construction of an Estuary Airport. Speaking at the opening of the site, the Energy Secretary Edward Davey MP stated that he believed that “airport strategy needs to take into account gas, so it will.7"

4.16 Affordability

4.17 A number of commentators have repeated figures of an estimated £20bn for the proposed Foster & Partners’ multi-runway on the Isle of Grain and an additional £30bn for the required infrastructure. Financial analysts, however, have questioned the accuracy of these estimates, particularly in light of the projected £9bn cost for only one new runway at Heathrow Airport.

6 Bigger and Quieter: The right answer for aviation ‐ http://www.policyexchange.org.uk/publications/item/bigger‐and‐quieter‐the‐right‐answer‐for‐ aviation?category_id=24 7 http://www.businessgreen.com/bg/news/2214802/stateoftheart‐gas‐plant‐hailed‐as‐key‐to‐government‐ energy‐policy

4.18 A recent research study by Parsons Brinckerhoff Ltd summarises the cost assumptions as ranging between £40bn and £70bn for a Thames estuary airport, associated infrastructure and the building of a “multitude of new railways lines” connecting the airport to London, but warns that “even the £70bn being discussed is a conservative estimate” .

4.19 Parsons Brinckerhoff Ltd point to historical evidence that “large UK infrastructure projects, much less technically complex than this, have suffered considerable cost overruns” - the Channel Tunnel, originally planned at £4.7bn, ultimately costing £9.5bn is only one example of that.

4.20 In addition, it is estimated that the planning for a Thames estuary airport would span a period of at least ten years. From a base figure of the estimated £20bn cost, adding 3 per cent construction cost inflation for that period would result in £600m annually increasing the cost of the airport to £26bn even before construction has started.

4.21 Analysts have further warned that current cost estimates fail to factor in the current amount of BAA’s £12.5bn debt levels which are a result of the expansion at Heathrow Airport. Should Heathrow close, responsibility for that debt will have to be assumed. Mike Redican of Deutsche Bank warns that it is likely that “the Government will have to fork out an awful lot of money to BAA and others as a closure cost of Heathrow”.

4.22 There seems to be widespread consensus that a large part of the required funding would have to be met by public – taxpayer – funding, particularly with a view to the connecting infrastructure investment necessary to support an estuarine airport.

4.23 In addition, while it is assumed that private investors will meet the cost of building a new airport in the Thames estuary, analysts have warned that private bond markets prefer safe and secure risks, guaranteed by public investment. Sovereign wealth funds dislike volatile yields and tend to invest in existing infrastructure and Chinese investment is likely to be forthcoming only if construction contracts can be secured for Chinese companies as a result. In addition, recently proposed, more detailed funding models have been denounced by aviation industry representatives.

4.24 Proposals to raise in excess of £15bn from landing charges at Heathrow between 2018 and 2028 and the redevelopment of the airport thereafter and offering a controlling equity stake to the Ferrovial- led consortium owner of Heathrow were described as “crazy” by International Airlines Group (IAG) Chief Executive, Willie Walsh. BAA Chief Executive, Colin Matthews, moreover, made clear that BAA’s parent had no interest in the idea of relinquishing the airport in exchange for a controlling stake in a new hub, stating that “to take an interest you have to think it is going to happen, and we don’t think it is going to happen”.

4.25 The high capital requirements mean that the financial viability for the project would be threatened if demand proved to be weaker than forecast, or if airlines and passengers simply did not use the airport. Evidence suggests that 90 per cent of airlines that are currently using Heathrow are opposed to an estuary airport and will be reluctant to fly there, arguing in part that they will want to retain their existing investment in Heathrow. This is added to forecasting showing that the financial viability of a new estuarine airport would likely depend on government intervention to try to ensure early take up of new capacity by passengers and airlines.

4.26 Another aspect of this debate, as of yet not given enough consideration is the future of Heathrow, with most agreeing that the construction of a Thames Estuary airport would lead to the closure of Heathrow. Heathrow International provides a total of 114,000 jobs in the local area: one in five people across 29 local authorities in West London rely on the operation of Heathrow for their source of income, either through direct or indirect employment within the Airport boundary

4.27 The closure of Heathrow as a result of the construction of a new Thames estuary hub airport could mean that some boroughs will have more than a fifth of their population suddenly without a job. This must be taken into consideration by the Government.

4.28 Common sense

4.29 The proposals to build an airport in the Thames Estuary are simply not sensible. To remain competitive globally we need an airport that can be built in a timeframe that will allow us to remain competitive with our European rivals, that does not have a disastrous environmental impact, that will not require significant taxpayer subsidy and will attract airlines.

4.30 The proposals to build an Estuary Airport fail on each and every one of these criteria and are not a viable solution to the UK’s future aviation needs.

5.1 Conclusion

5.2 To remain competitive in global aviation, it is essential that action is taken both to increase capacity at UK airports and to ensure that measures are taken to ensure that existing airports operate to their full potential. We can increase capacity by twenty million through improving our rail infrastructure, a move that would free up valuable space at Heathrow for flights to emerging markets.

5.3 Heathrow is an internationally respected and regarded airport, and to potentially close an asset of this kind owing to the creation of Estuary Airport (with the resulting loss of over 100,000 jobs in West London) would likely be viewed negatively by airlines, many of whom may move flights to key emerging markets to our competitors. It is essential that in looking to maintain our competiveness that we ensure that Heathrow retains its hub status, but that we use economic incentives such as varying APD at regional airports to ensure that they can attract point to point flights, freeing up spare capacity at Heathrow as part of a more integrated transport strategy.

5.4 The Government strategy must also place an emphasis on the environmental impact of aviation and should commit to work with all interested parties to ensure that aviation’s impact is minimised.

5.5 Proposals to build an airport in the Thames Estuary are simply not a viable solution, both for reasons of time and cost. An airport in the Thames Estuary would be the wrong airport, in the wrong place and crucially at the wrong time.

19 October 2012

ANNEX

Swale Borough Council

We have read Medway Council’s submission to the House of Commons Transport Select Committee on Aviation. Swale Borough Council shares Medway Council’s concerns, and especially the belief that we should make the most of the existing southeastern network of airports without building an expensive and environmentally damaging new one. However, we find it very difficult to take a formal position on the Estuary airport debate without a coherent proposal, which so far has not been put forward, and we look forward to that being fully explored by the Davies Commission

Written evidence from Kent County Council (AS 61)

1. Summary 1.1 Kent County Council (KCC) welcomes the opportunity to submit written evidence to this enquiry and will focus its submission on addressing Question 2 that relates to airport capacity. KCC is disappointed that the current Government consultation on its draft Aviation Policy Framework does not address the critical issue of how to provide the additional capacity to support aviation growth. Given the existing capacity issues at Heathrow, quick decisions on short, medium and long term interventions are vital if we are to retain hub status in the UK. That means decisions now, not in a few years’ time.

1.2 KCC welcomes that the House of Commons Transport Select Committee is seeking to address this issue and has invited this submission of evidence. It is essential that the independent cross-party commission that will report to Government on the issue of maintaining the UK’s aviation hub status also invites submissions and considers a wide range of evidence in its assessment of the options for airport development.

1.3 In making this response KCC wishes to express its full endorsement of the response made to this Committee by Medway Council and fully supports the case presented therein.

1.4 KCC advocates that the UK can meet its aviation needs through the connection of Gatwick and Heathrow with a high speed rail connection in order to link them operationally into a “virtual hub”. This Heathwick link would provide both an airside and non-airside service. Better use of other London and regional airports, including Stansted, Luton, Southampton, Birmingham, Manston, Southend to a lesser extent London City and Lydd; and improved connections of these airports with London.

1.5 Kent County Council wishes to make the House of Commons Transport Select Committee aware that it recommends to Government in its discussion document Bold Steps for Aviation:

• The construction of Heathwick, a high speed rail link connecting Gatwick and Heathrow providing both airside and non-airside services. • Improved rail connectivity of secondary London and regional airports – Manston (which will have a new railway station and connection into HS1 in the short term), Lydd, Southend, Stansted, Luton, Southampton and Birmingham with London. • Significant development of those other London and regional airports with the most potential for growth such as Stansted, Luton, Southampton, Southend and , and to lesser extent London City and Lydd; and also those outside of the South East with good rail connections to London, i.e. Birmingham. • Capacity growth at Gatwick through the addition of a second runway after 2019. • Any proposals for a new hub airport in the Thames Estuary are not progressed any further for the reasons robustly presented in the response by Medway Council to this Committee.

1.6 Action to address capacity issues must been taken quickly. Better use of our existing hub and regional airports now will ensure that the UK retains its premier position as an aviation hub.

2. Question 2: How should we make the best use of existing aviation capacity?

a. How do we make the best use of existing London airport capacity? 2.1 Although London’s airports are relatively well connected to central London via the strategic road and rail networks, they are poorly connected to each other. This impacts negatively on the extent to which existing airport capacity can be maximised as part of an “airport system” approach. In 2007, around 1.5 million passengers connected between flights at different London airports; of these, the greatest proportion travelled between Heathrow and Gatwick. However, there is no direct rail service between them and, whilst the motorway route is regularly served by express coach services, journey times are unreliable. Without sustained investment in transport infrastructure, there is little scope for London’s airports to act in a more coordinated way.

2.2 A high-speed rail link, with an estimated travel time of 15 minutes, between Gatwick and Heathrow would effectively provide a hub airport with easy access to central London. This would complement the Crossrail connectivity already planned between London and Heathrow and also High Speed Two (HS2) connecting Birmingham Airport with both central London and Heathrow.

2.3 The cost of providing the high speed rail link between the two airports would be approximately £5.5billion, based on the unit costs of the current HS2 programme, and could be completed within five to ten years. This Heathwick service would have an airside connection which will provide a high speed link for interlining passengers and in effect operating as a single hub site currently does at the moment. This offers a more cost effective and time efficient option to that of a building an entirely new hub airport. The success of connecting these two airports would be dependent on refocused use of the airports, increased use of regional airports and a further runway at Gatwick.

2.4 A more strategic approach to managing our airports as a system should be applied, focussing charter, low-cost and short haul point to point flights at currently under-used regional airports; thereby freeing up capacity to allow Heathrow to take more long haul flights. Regional and other secondary London airports considered appropriate for this use include Manston, Lydd, London City, Southend, Stansted, Luton, Southampton and Birmingham. With Gatwick and Heathrow linked by a high speed rail line, Gatwick could exist as a feeder airport, with Heathrow focussing on long haul.

2.5 Airlines would be incentivised to use alternative airports if they had to pay the market value for slots at Heathrow rather than the current system of “grandfather” rights and secondary trading. This would encourage airlines to operate from regional airports whilst freeing up capacity at Heathrow and therefore allowing it to focus on higher value long haul flights; with lower value short haul operating out of the other secondary airports serving London and the South East. In order to facilitate this, regulation of slot allocation is required and although KCC welcomes the Government’s support for the recommendations of the European Commission’s Better Airports Package (2011) to ensure that slots at our congested airports are used in the most economically beneficial way for the UK; KCC urges that the Government explores options for a transparent market based approach to slot allocation to encourage the more efficient use of scarce capacity at Heathrow and dispersal of airline demand to other airports. This requires more than optimisation of the secondary trading market as alluded to in the Government’s draft Aviation Policy Framework, but rather may require direct intervention and regulation to ensure that airlines are financially discouraged to use an airport where capacity is scarce. Airlines would then benefit financially to relocate to where there is available capacity, thus the London airport system would be better utilised collectively to accommodate demand.

2.6 The increased use of regional airports is in line with Government’s draft policy framework and legislation on emissions reduction; while also addressing the need for growth and jobs creation in the South East and other areas across the UK.

2.7 In Kent, Manston Airport has the potential to make a significant contribution, providing excellent connections to European destinations and reduced flight times. Manston has one of the longest runways in the UK (at 2,752 metres) and is therefore able to cater for all modern jet aircraft. The airport operates in uncrowded airspace outside of the London Control Zone, and has sufficient capacity for the 5-6 mppa and 400,000 tonnes of freight anticipated by the Airport Master Plan by 2033. Its local environmental impacts are greatly reduced by its location on the Thanet Peninsula, with much of its uncrowded flight path located over water to the east of Ramsgate. There is a fully- equipped passenger terminal facility with a capacity of around 1 mppa subject to the aircraft used and scheduling arrangements.

2.8 Manston would strongly complement Heathrow and Gatwick as they increasingly focus on accommodating long-haul flights at the expense of domestic and near-European services. Development of Manston as a regional airport would create employment opportunities in one of England’s most disadvantaged areas; the airport’s Master Plan forecast for 2033 would see up to 6,000 additional direct and indirect jobs within the area, development for which is generally supported by the local community. A new rail station serving the airport and providing a HS1 service connection will significantly boost the ability for the airport to provide a leading regional air service. Such a service will in effect mean that Heathrow, Gatwick, Birmingham and Manston will all be connected by high speed rail services offering a highly flexible and resilient UK air function. It is essential that Manston’s future as an airport is secured through new ownership as its current owners have placed the asset on the market.

2.9 Table 1 shows how using the combined collective capacity, together with providing additional runway and/or terminal capacity at some of the existing airports; and relaxing operational restrictions at Heathrow, i.e. allowing mixed mode operations; would provide sufficient capacity to meet passenger demand for aviation in the South East without the need for new hub airport.

2.10 As table 1 shows, there is potentially in excess of 198 mppa available capacity from airports with good connections to London through more efficient use of existing airports and increasing the runway and/or terminal capacities at some of those existing sites. This compares favourably with the Thames Estuary airport proposal, which would be capable of serving 150 mppa. Furthermore, airports such as Liverpool, and Blackpool could collectively accommodate tens of millions of extra passengers a year.

2.11 In addition to meeting capacity needs, better utilisation of our regional airports would result in the creation of much needed employment opportunities. Table 1 shows if we invest in and make better use of our regional airports we could potentially see some further 198,000 job opportunities shared across the region.

Table 1 Airport Curren Curren Availabl Potential Potential Potential t t e additional future addition capacit usage capacity capacity addition al jobs to y (2011) (2011) with new al (spare) be (mppa) (mppa (mppa) runway capacity created

) and/or (mppa) by future terminal addition developme al nt capacity1 (mppa) Heathrow 70 69 1 202 21 21,000 Gatwick 40 34 6 433 49 49,000 Manston 1 - 1 54 6 6,000 Lydd 0.1 - 0.1 25 2 2,000 London City 5 3 2 36 5 5,000 Southend 2 - 2 - 2 2,000 Stansted 35 18 17 - 17 17,000 Luton 10 10 0 217 21 21,000 Southampto 7 2 5 - 5 5,000 n Birmingham 368 9 27 439 70 70,000 TOTAL 206.1 145 61.1 140 198 198,000

2.12 , near Ashford in Kent, is awaiting the decision of a Public Inquiry to permit a runway extension and new terminal that would allow it to accommodate up to half a million passengers per annum with an aspiration to reach 2 mppa. With improved connections to the high speed international station at Ashford, the airport would be within an hour’s travel time of London.

2.13 The Stobart Group has invested significantly in Southend Airport with a new terminal and rail station providing rail connectivity to London in under an hour. The completed runway extension will now allow the airport to grow to accommodate up to 2 mppa and a major low-cost carrier has already relocated services from Stansted to Southend.

2.14 Stansted is also operating under capacity by 17 mppa and could therefore meet some of the demand without any need for further development. With either a relocated or realigned runway, Luton could also increase its capacity to 31 mppa.

2.15 The potential for Gatwick and Heathrow to complement each other as connected airports can only be realised if a second runway is provided at Gatwick when the present moratorium on planning expires in 2019. Capacity growth at Gatwick represents a more acceptable long-term solution than expansion at Heathrow, due to

1 Based on 1mppa creates 1,000 jobs. 2 With 'mixed mode' operations on its two existing runways ‐ DfT (2003) The Future Development of Air Transport in the UK: South East, 2nd Edition 3 With a new wide‐spaced runway in addition to the existing runway ‐ DfT (2003) The Future Development of Air Transport in the UK: South East, 2nd Edition 4 Manston Airport Master Plan (2009) 5 Lydd Airport is currently awaiting the decision of a Public Inquiry to permit runway and terminal extensions to allow 500,000ppa; aspiration for 2mppa 6 London City Airport Master Plan (2006) 7 With either a relocated or realigned runway ‐ DfT (2003) The Future Development of Air Transport in the UK: South East, 2nd Edition 8 Pers com with John Morris, Birmingham Airport 20th July 2012 9 Pers com with John Morris, Birmingham Airport 20th July 2012 ‐ with a new wide‐spaced runway in addition to the existing runway; theoretical capacity, building on DfT (2003) The Future Development of Air Transport in the UK and using the same methodology as the Gatwick proposal, for consistency.

the significantly lower number of people that would be over flown by arriving and departing aircraft, the relatively good rail and road access enjoyed by Gatwick, and the huge economic benefits that this solution would bring to deprived communities in Kent, Sussex and South London. The owners of Gatwick Airport have recently announced their intention to begin work on proposals for a second runway (BBC, 17 October 2012).

3. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? 3.1 KCC welcomes the Government’s intended strategy as described in its draft Aviation Policy Framework to make better use of existing capacity at regional airports outside of the South East; and its intention to align its national strategies for aviation and high speed rail so that these modes can effectively complement each other. We also welcome its stated support for Birmingham Airport, although we urge that this is taken further to consider incorporating Birmingham as an airport that can serve London and the South East through improved rail connectivity.

3.2 Birmingham Airport’s existing runway can take an additional 27 mppa and the current passenger terminal will accommodate another 9 mppa immediately (up to 18 mppa). Journey time from Birmingham Airport to Euston is anticipated to be as little as 59 minutes from 2013, following the introduction of a new rail franchise. Once the initial phase of HS2 between London and the West Midlands has been completed, the airport will be within 31 minutes of the capital’s interchange, making it an increasingly realistic alternative to Heathrow and Gatwick for air passengers travelling to and from the South East. The completion of the HS2 network would also link up with Manchester, whose own airport could handle 50 million passengers a year by 2050.

4. c. How can surface access to airports be improved? 4.1 Good surface access to airports, especially through high speed rail services, is key to facilitating the strategic use of airports across the South East, and beyond, as an integrated airport system. High speed rail connections need to facilitate sustainable surface access from population centres of demand to airports and provide connections between airports to enable them to operate as a “virtual hub”. KCC advocates that the Government needs to urgently commission a study into the feasibility of a direct high speed rail link between Gatwick and Heathrow. Further work into how airports connected by rail could work operationally as a system would also be welcomed.

4.2 In respect of Manston, the airport enjoys good strategic road links to London and the wider South East via the A299 dual carriageway which joins the M2 motorway. There are also three primary rail routes to Ramsgate, just to the east of Manston, which serve the London termini of St Pancras International via domestic high speed services on High Speed One (HS1), and Victoria, therefore offering a total of five trains per hour during off-peak periods. The link into HS2 will significantly enhance this offer and ensure the potential Manston has to become a strong regional airport is realised.

4.3 However, these connections will need to be improved if Manston is to truly succeed as a regional airport. Research commissioned by KCC (through an EU funded project seeking to improve sustainable surface access to regional airports) reveals evidence that with a fixed rail link passenger numbers increase as it enables a wider catchment of people to use the airport. Newcastle Airport’s passenger numbers increased by 27% after the first full operational year of the Metro link to the airport and passenger numbers have continued to grow year on year. A parkway station near to Manston

Airport served by high speed rail services to London will increase the attractiveness of the airport to airlines and passengers.

4.4 Line speed enhancements for phase 1 of this route have been secured through a successful Regional Growth Fund bid and should be operational by 2013, with phase 2 complete by 2017, subject to funding from . Work is also underway to take forward the provision of the proposed Thanet Parkway rail station serving the airport, which subject to funding, could also be operational by the end of 2017. KCC is also pushing for improved rail connection (using existing lines) between Ashford and Gatwick, which would link Manston to Gatwick, and potentially with Heathrow if the high speed rail link suggested is realised.

5. Conclusion

5.1 The primary interest of Kent County Council in the current aviation debate is to ensure that a Thames Estuary airport does not proceed for the many reasons clearly presented in the Medway Council submission to the Transport Select Committee. An estuary airport is not viable economically, socially or environmentally. Kent County Council instead fully supports aviation growth and hub retention via growth of the many London and regional airports that have significant capacity to expand along with significantly improved rail connections between those airports and the Capital.

5.2 A high speed Heathwick airside rail link, a new runway at Gatwick and vastly improved rail access to those regional airports is a far more deliverable solution in terms of financial viability and delivery timescales. This approach will allow airports such as Manston to fulfil their potential of providing a strong regional function while freeing up capacity at Heathrow to ensure the connections to new and emerging economies that will be vital to UK plc can be made. In doing so both national and regional economies will benefit. This approach is the only realistic and deliverable option if Britain is to address its aviation capacity issues now.

19 October 2012

Written evidence from Debbie Bryce (AS 62)

I would like to respond to your avaition consultation, deadline today. My answers to your questions are included within the text below.

I do want to focus on the importance of evidence to prove whatever claims are made. The current Government consultation on its draft aviation policy makes various unsubstantiated claims, especially on the issue of 70% fuel efficiency improvements. There is simply no evidence given or even available to my knowledge to support this claim. It can therefore be supposed that other Government claims are similarly unreliable unless evidenced.

Similarly, there is no evidence that I know of to show that there is a crisis in capacity, especially if existing capacity were fully used. Government forecasts show that passenger demand could be almost entirely met with existing capacity, properly maximised. There is no evidence of need for new runways.

More detail on the forecasts is given at http://www.aef.org.uk/?p=1423

Perceived need for more capacity at Heathrow ignores the fact that there is unused capacity at other South East airports. As Gatwick is currently applying for expansion to 70 mppa, surely this would supply any unmet need as well as give the opportunity to develop additional services.

1. What should be the objectives of Government policy on aviation?

The only sensible answer to this, to meet all constraints, is demand management and the provision of alternatives such as the French and Germans have achieved with rail.

a. How important is international aviation connectivity to the UK aviation industry?

What evidence will you rely on to determine this?

b. What are the benefits of aviation to the UK economy? Take into account the disbenefits. The Government consultation on draft aviation policy framework only shows gross benefits, not nett ones.

c. What is the impact of Air Passenger Duty on the aviation industry?

To manage demand, in the same way as happens in other areas of transport. The major question is why APD was not applied in the first place? Surely the impact is the same as applying duties and taxes to other forms of transport.

d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

By having smaller airports providing more services, thus alleviating the need to travel long distances to airports and wait very long times in transit. e. Where does aviation fit in the overall transport strategy?

· How should we make the best use of existing aviation capacity? By linking London airports with rail, so that, in effect, 'London Airport' could see you arriving at any airport which has capacity for that moment, followed by a rapid journey into central London or to other airports. a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

I think not. There is too much emphasis on bringing people to the South East, whereas everyone likes a local airport. c. How can surface access to airports be improved? More rail · What constraints are there on increasing UK aviation capacity? The European Air Quality Directive. I am concerned that this was ignored when considering Heathrow runway 3. Heathrow already breaches the Directive. It would be illegal to expand it. Why has no one noticed this?

a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

In no one's experience is this true. If so, please provide evidence of satisfied local communities, and balance it against the complaints and problems experienced by many local residents.

b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

Technological innovations need to be in place before expansion, as industry claims relying on them are unfounded. There is no evidence to show that technology demands can be quickly met, or that fleets would be quickly replaced.#

c. What is the relationship between the Government’s strategy and EU aviation policies?

Usually, Govt strategy is environmentally inferior to EU policies. What can the Govt do to redress this?

· Do we need a step-change in UK aviation capacity? Why? Yes, because aviation is the fastest growing transport sector and the fastest growing quality of life and climate change detractor.

a. What should this step-change be? Should there be a new hub airport? Where? It's too expensive. It would be better to maximise existing capacity with better connections and rail.

b. What are the costs and benefits of these different ways to increase UK aviation capacity?

Please provide fully peer-reviewed evidence to support any claims made here. This is absolutely essential because this is a key and critical issue, central to aviation. What are the NET benefits, if any?

19 October 2012

Written evidence from Liverpool Chamber of Commerce (AS 63)

What should be the objectives of Government policy on aviation? How important is international aviation connectivity to the UK aviation industry? What are the benefits of aviation to the UK economy? What is the impact of Air Passenger Duty on the aviation industry? How should improving the passenger experience be reflected in the Government’s aviation strategy? Where does aviation fit in the overall transport strategy?

1. The aviation sector comprises a wide range of sectors and supports a large supply chain for supporting activities. All told it is estimated to account for 234,000 jobs and to contribute £18 Billion in GVA to the UK economy. This represents 1.5% of the UK’s total economic output and 0.85% of employment.i Liverpool Airport serves over 5 million travellers a year and represents a major international gateway for Liverpool City-region and the wider North West. It constitutes a key asset within a wider ‘SuperPort’ development comprising the Port of Liverpool, Manchester Ship Canal, Mersey Gateway (port and bridge) and the Mersey Multi-Modal freight distribution centre. The development will create 21,000 new jobs and contribute £6.1B in GVA to the city-regional economy by 2020.ii

2. We expect air travel by passengers to rise significantly in light of global population and prosperity patterns. According to the Airport Operators Association UK passenger and freight volumes between 1995 and 2008 increased by 81% and 33% respectively.iii Increasing movements of people across borders – not least from and to the BRIC and N11 economiesiv – will lead to an unavoidable rise in the demand for international air travel during the next 30-50 years.v

3. There are also significant prospects for growth and development at the domestic and regional levels within the UK, and particularly in Liverpool and the North West, which will generate increased demand for air travel over the longer term. These include the Irish Sea Offshore Wind programme; the Port of Liverpool Deepwater River Terminal; Liverpool and Wirral Waters (which include plans to construct a International Trade Centre comprising 230,000sq metres of prime office space); SuperPort; Mersey Gateway Crossing and the anticipated growth of the Visitor Economy.vi

4. The role of aviation from the perspective of small and medium sized business is to permit access to new markets by providing efficient links for businesspeople to meet each other face-to-face (thereby building trust and goodwill to secure and service new business); to facilitate the transfer of high-value and time-sensitive goods to and from the UK; to increase visitor-spending by permitting tourists to visit the UK; to facilitate the movement of skilled personnel and students; to contribute to the well-being of the UK’s residents and workers through affordable access to holiday destinations and to enrich the lives of both visitors and UK residents through cultural and knowledge exchange. Aviation is also increasingly important for accessing life-saving health services abroad in instances where these are not readily available through the UK National Health Service.vii

5. In our experience the nexus of domestic and international air transport connections at the local and national levels are essential to business growth. The most innovative

firms are also those which trade internationally.viii This success is founded on the development of fruitful business relationships which in turn is predicated on trust for which person-to-person contact continues to be the most preferred means despite the availability of videoconferencing, social media and other modes of virtual contact.

6. The BRIC and N11 group economies are expected to become extremely attractive as both destinations and sources of new business investment. The UK’s strengths in advanced manufacturing, higher education and arts and cultural industries will also draw increasing numbers of students and other collaborative interests seeking research and development opportunities from these countries.

7. UK aviation is led mainly by the private sector. It is therefore likely to be sufficiently flexible to manage a cost-effective transition to a low-carbon economy. In comparison to the rest of Europe however it is also the most heavily taxed and regulated which impedes the ability of the industry’s players to respond to changes in market demand and patterns of global trade.ix

8. APD represents a taxation regime which seeks to target and reduce passenger demand for air travel. However since the demand for air travel is relatively inelastic at higher income levels, the tax is unlikely to deter a core constituency of frequent travellers while proving regressive for those on lower incomesx. This is a significant consideration for cities such as Liverpool where the average level of employment and wages continues to persist at levels below the national average in spite of recent strides forward and a step-change in the local economy.xi

9. By seeking to dampen demand for air travel, APD also risks damaging the Visitor Economy which has been identified as an essential driver of growth for city-regional development and detracts actively from the Government’s tourism priorities as spelt out in its recent Tourism Policy.xii APD will therefore prove neither effective nor equitable in achieving its original objectives (that is to increase economic growth, reduce emissions, and re-balance the UK economy on a wider economic and geographic basis). Our preferred option would see APD abolished altogether since, viewed in light of compliance requirements arising from the EU-ETS, APD amounts to a double-barrelled taxation regime. Recent evidence demonstrates that this will have a net detrimental effect on regional airports and economies.xiii

10. By subjecting exporters to APD, Government policy seeking to achieve an export-led recovery is also at risk of being nullified, particularly in instances where UKTI, the FCO and BIS are working to prepare more businesses to sell their goods and services in overseas markets.

11. There is little evidence to suggest that the Aviation Policy Framework has taken sufficient account of the needs of airline operators. Airports outside London are finding it increasingly difficult to attract new route providers to business growth destinations as a result of APD in spite of Fifth Freedoms and the air space liberalisations proposed in the draft policy framework.

12. If APD reform is implemented then it should seek to convey corrective signals based on airport size or passenger volumes. This would reflect a more even-handed

solution for smaller regional airports which are likely to be disproportionately affected by the tax, and to the regions more widely which have been more severely affected by the Recession as recent evidence demonstrates.xiv

13. Given the high degree of competition across the aviation sector we believe that the exercise of consumer sovereignty is extremely effective in raising standards of passenger service at airports, on flights and surface links. A robust watchdog function should be exercised by the CAA and the Aviation Consumer Advocacy Panel.

14. Airports and airliners are also committed to ensuring the longer-term sustainability of their operations by reducing both direct and embedded carbon emissions across their supply chainsxv. In order for this development to proceed the aviation sector will require an enabling environment which provides positive incentives to reduce carbon emissions while allowing the growth of freight and passengers at regional airports across the UK.

How should we make the best use of existing aviation capacity? How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? How can surface access to airports be improved?

15. Regional airports should be viewed as key partners in the effort to rebalance the UK economy along wider geographic and economic lines. Extra capacity already exists at regional airports in the North West. These are not only well-placed but also necessary to relieve capacity constraints at airports in the South East.

16. However regional airports are also more vulnerable than their counterparts in London and the SE to movements in operating costs, ticket prices, incomes, consumer tastes and habits are therefore disproportionately affected by a taxation regime that fails to take account of their specific economic circumstances. In order to actively drive a rebalancing of the national economy Government should implement a differential taxation regime that permits regional airports to compete on a more equal footing with the larger airports of the South East by encouraging business passengers, holiday travellers and air freight forwarders to increasingly utilise airports outside London.

17. Information on the comparative cost of flights from regional airports and travel planning advice (e.g. on cost and carbon-optimal surface access connections) should be made available via a central database that allows travellers to make informed choices when planning holidays, business trips or other aviation dependent transfers. Integrated links with social media, smart phone and other stand alone travel planning websites should be provided in order to provide a higher-quality, seamless experience for businesses and tourists.

18. Recent evidence from the United States suggests that a network which is more spatially distributed and densely interconnected would introduce greater resilience

into the national and international freight and passenger transport systems available to the UK.xvi It would also support regional economic development in the North- West while relieving capacity at airports in London and the South-East.

19. Bus operators working with PTE/ITA in Liverpool City-Region are already working together under the Local Transport Plan to improve surface access to Liverpool Airport and to de-carbonise local public transport provision. Renewed momentum through targeted publicity, pilot schemes, rewards and grants should be offered at regular periods in order to ensure long-term commitment to this agenda.

20. The role of the proposed High Speed and Conventional rail networks in improving surface access to non-London airports should be recognised. Direct links between key regional airports and High Speed stations will promote intermodal compatibility between aviation and rail. Liverpool Chamber has made the case for the construction of a high-speed spur to serve Merseyside via Liverpool South Parkway Station (which also serves Liverpool Airport) and the Waterloo and Wapping tunnels to Liverpool City centre.

What constraints are there on increasing UK aviation capacity? Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? What is the relationship between the Government’s strategy and EU aviation policies?

21. Key sources of carbon emissions and wider environmental impacts associated directly with airport and aircraft operations include landside vehicle emissions; airside vehicle emissions; aircraft emissions; aircraft operations; night time operations; total terminal energy consumption; power supply and distribution system losses; aircraft congestion and delay; passenger vehicle traffic; existing airline/airport environmental footprints; trucks and commercial traffic (congestion); loss of wetlands; engine run-up and testing; storm water contamination, and; waste energy from buildings.xvii

22. Since the aviation industry is in fact an amalgam of a range of different sectors led by mostly private businesses (airports, airlines, freight forwarders, aerospace manufacturers, retailers, food and beverage providers etc) which account for a large number of jobs and associated skills, tax revenues and economic output, the DfT should seek to achieve carbon reductions from each sub-sector of the aviation industry within a wider industrial carbon reduction framework by designing positive incentives aimed at assisting a holistic, industry-wide transition to low-carbon operations while ensuring that companies are capable of remaining commercially competitive and viable. For example, innovative schemes designed by DECC to encourage the take-up of renewable energy and other energy efficiency measures (e.g. the RHI, FIT, Green Deal and Energy Company Obligation (ECO)) provide a good example of the kind of approach supported by the Chamber in order to ensure that where long-term and commercially challenging action is required, companies within the aviation sector and its wider supply chains are adequately supported, informed and incentivised to meet the full social cost of their operations.

23. Each city-region is now required to produce a ‘Mini-Stern’ strategy which outlines plans and priorities for achieving a low carbon transition. Policies to assess the practicable scope of local action aimed at reducing aviation-related emissions should be examined.

24. Biofuel offers significant carbon and cost savings for road-based transport and is likely to deliver similar benefits for aviation.xviii However significant barriers exist in the depth and dissemination of research, development and purification processes to jet-fuel standard. Ensuring an uninterrupted supply of biofuel will also become increasingly important vis-à-vis demand from competing users across other transport modes. Information and awareness for airliners and developers will be key to ensuring an early consideration of biofuel in the design and manufacture of future aircraft engines.

25. Airport and Airline Operators could aim to achieve globally-recognised environmental management standards such as the ISO14001. Key players within the industry could also be required to include carbon reduction plans (e.g. alongside airport master plans) to demonstrate how they intend to meet carbon reduction targets.

26. The Chamber believes that the EU-ETS is the correct policy lever for achieving co- ordinated action on climate change at a supra-national level. Its effectiveness in meeting its stated objectives remains to be assessed - however any additional forms of taxation or unilateral measures taken at the domestic level would prove crippling to the industry as laid out in our response to HM Treasury’s consultation on Air Passenger Duty in 2011.

Do we need a step-change in UK aviation capacity? Why? What should this step-change be? Should there be a new hub airport? Where? What are the costs and benefits of these different ways to increase UK aviation capacity?

27. Sufficient aviation capacity currently exists but should be unlocked for both passengers and freight across the UK in the short (0-5 years), medium (5-15 years) and long (15-30 years) terms.

28. In the short-to-medium terms the only additional capacity currently available to the UK lies at regional (non-London) airports. A sustainable policy framework should aim to relieve demand on constrained airports in the South East through active policies to prioritise the utilisation of existing airport capacity outside London in order to meet the Government’s deficit-reduction aims, economic rebalancing objectives and to improve both connectivity and prospects for greater inward investment in sub-national areas.

29. A report on the economic impacts of hub airports commissioned by the British Chambers and Future Heathrow in 2009 suggests that creating a new hub airport in the SE would deliver similar capacity benefits to a third runway at Heathrow. However any new hub – whether envisaged as a sixth airport or an expansion of facilities at ‘second-hub’ alternatives – would be far more costly to construct in terms of time, carbon and associated infrastructure in comparison to a third runway

at Heathrow. In either case there are substantial benefits accruing to regional airports and economies as the report’s findings demonstrate.xix

30. From a city-regional perspective it is preferable for businesses based outside of London to be able to interchange at Heathrow as the country’s main hub airport. Liverpool Airport lost its flight links with London in 2007. While alternative links with hubs in Europe and beyond could be developed our experience suggests that this results in average journey times that are far greater for interlining passengers in comparison to overall journey times otherwise facilitated by a feeder link to Heathrow.xx As such, connectivity with a domestic hub would help to deliver reductions in both cost and carbon of regional travel while improving the convenience and competitiveness of business travel from the Liverpool City-Region and the wider North-West.

19 October 2012

References i Oxera (2009): What is the Contribution of Aviation to the UK Economy? Final report prepared for the Airport Operators Association (AOA). ii The Mersey Partnership (TMP) (2010): SuperPort Action Plan – Delivering Economic Growth 2011‐2020. iii Oxera (2009): What is the Contribution of Aviation to the UK Economy? Final report prepared for the Airport Operators Association (AOA). iv Goldman Sachs (2009): The N‐11: More Than An Acronym. Global Economics Paper No. 153. v ICAO (2008): Global Trends in Air Transport: Traffic, Market Access and Challenges.

vi For further information on these programmes see www.merseyside.org.uk ; www.liverpoolwaters.co.uk ; www.wirralwaters.co.uk. vii NIHR (2010): Implications for the NHS of inward and outward Medical Tourism. Available from http://www.hsr.nihr.ac.uk/ . viii BIS (2010): Internationalisation of Innovative and High Growth SMEs. Economics Paper No. 5. ix IATA (2006): European Aviation Taxes. Economics Briefing available at: http://www.iata.org/whatwedo/Documents/economics/EU_Taxation_June_06.pdf . x IATA (2008): Air Travel Demand – Economics Briefing No. 09. Also see Chakravarty and Tavoni (2009): Air Travel Demand and Income: Empirical Investigations and Future Scenarios. Princeton University. xi Liverpool City Council (2011): Liverpool Economic Briefing: A Monitor of Jobs, Businesses and Economic Growth. xii DCMS (2011): Government Tourism Policy. xiii Frontier Economics (2011): The Impacts of Proposed Changes in Air Passenger Duty. xiv IPPR (2009): The Impact of the Recession on Northern City Regions. xv IATA (2007): Iata Calls for a Zero‐Emissions Future. Press Release. 04 June 2007 and Sustainable Aviation Group (2012): Aviation Industry moves to Cleaner, Quieter Take‐ Off. Press Release. 26 June 2012. xvi Wuellner, Roy and D’Souza (2010): Resilience and rewiring of the passenger airline networks in the United States. Available from the Cornell University Library ArXiv Service. xvii These impacts are usefully listed in briefing document produced by the Green Airports Initiative co‐ordinated by the Clean Airports Partnership: Colorado, USA. See www.cleanairports.com . xviii Monaghan, A. (2010): Sustainable Biofuels in Transport. Presentation at BIONIC National Seminar on Sustainable Biofuels in the Community. Blackburne House, Liverpool: 28 April 2010. xix BCC (2009): The Economic Impact of Hub Airports. xx BCC (2009): The Economic Impact of Hub Airports.

Written evidence from Unite (AS 64)

1 Introduction

1.1 This response is submitted by Unite the Union, the UK’s largest trade union with 1.5 million members across the private and public sectors. The union’s members work in a range of industries including manufacturing, financial services, print, media, construction, transport, local government, education, health and not for profit sectors. The Civil Air Transport (CAT) membership of Unite comprises of over 62,000 members working across the aviation sector making it the largest single organisation in the aviation industry.

1.2 In this response Unite intends to stress the importance of aviation growth and the urgent need for a comprehensive transport policy encompassing all transport modes to cope with future demand.

2 Enquiry questions

1. What should be the objectives of Government policy on aviation? a. How important is international aviation connectivity to the UK aviation industry?

2.1 A regional or point-to-point airport only serves the local community it resides in either providing low frequency direct flights or feeding connections to hubs. Point-to-point airports can only offer direct flights to destinations if they can be sustained by local demand. Consequently, the frequency of these flights will be low, limiting access to that destination. A point to point like Manchester is large enough for more frequent services which has attracted a limited demand for transferring passengers, making some additional flights possible on popular routes. A hub, on the other hand, survives by offering multiple daily flights to a variety of destinations, as the customer base is derived not just from the locality but also the global aviation industry1.

2.2 In terms of what benefits international aviation brings to the UK industry it is simply access to this wider customer base. The same would be true regardless of nation. One has also got to remember that the UK aviation industry is becoming increasingly multinational with bases in several countries.

b. What are the benefits of aviation to the UK economy?

2.3 It has been estimated by Frontier Economics that direct aviation connectivity produces twenty times more business than a connection that requires a stop over at a hub2. Oxford Economics highlighted in their report which came out in March3 that, by volume, 65 per cent of international air freight going through UK airports in 2010 went via Heathrow. This freight is primarily carried in the hold of passenger aircraft, making the cost of a ticket that much more affordable. Oxford Economics also estimated that the manufacture of goods for export by air contributed £28 billion to UK GDP. They suggest that rather than just supporting the 100,000 or so staff employed at Heathrow, the airport was responsible for supporting 1.3 million jobs in throughout the UK.

2.4 The aviation industry opens up markets to the global economies, especially those in the BRIC4 developing nations, for UK goods and services. This in turn creates the potential for investment into the UK. Having good onward transport connectivity also attracts multinational businesses, keen to base their regional head offices in the area around hubs. If this connectivity becomes unreliable or cannot provide the range of services needed, then these businesses will relocate to somewhere that can cope, taking their inward investment with them.

1 At Heathrow around a third of the passengers catching flights, arrived at the airport by air. These numbers should not be confused with the very limited number transiting through Heathrow, who arrive and depart on the same aircraft. 2 http://www.frontier-economics.com/_library/publications/Connecting%20for%20growth.pdf 3 http://mediacentre.heathrowairport.com/imagelibrary/downloadmedia.ashx?MediaDetailsID=887&SizeId=-1 4 Brazil. Russia, India and China

c. What is the impact of Air Passenger Duty on the aviation industry?

2.5 The principal effect of Air Passenger Duty has been the evaluation of the viability of services to the UK. This combined with the additional cost of carbon credits needed to fly to any European nation under the European Emissions Trading Scheme (ETS) has already resulted in the break up of the deal between Qantas and BA. Qantas has now entered an agreement with Emirates and moved operations from Heathrow to Dubai. Another example of this is the threat by Continental to stop calling at Belfast due to the £3.2 million in additional costs per annum between calling at Belfast compared to Dublin.

2.6 Passengers are catching ferries out of the country so that they can fly from Amsterdam to India5, and who can blame them when it costs £286 for a car and eight passengers return via Harwich and the Hook of Holland when the APD alone would be a minimum of £664. For those in the west of the country it costs £578 for the same part to go from Holyhead to Dublin from where air passengers would only have to find €3 ahead.

2.7 Unite believes that by increasing APD, the ability to fly out of the UK is becoming the preserve of the rich. It also moves the holiday in the sun out of reach for hard pressed workers who have been suffering from below inflation increases or wage freezes. Whilst Unite believes this will result in more holidays taken at home, it reduces the number of tourists entering the country. A study by Malaysia Airlines into price sensitivity of airline tickets highlighted that a difference of just $2.50 was enough for a customer to choose one flight over another. Such price sensitivity means that by adding APD, the UK is actively discouraging passengers to visit the UK and trade with us.

d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

2.8 Unite agrees that a lick of paint can make an airport far more welcoming than allowing facilities to fall into a state of disrepair. Real improvements in passengers experience can only be effective, however, if the airport can provide a safe reliable flight which departs and arrives on time. This cannot be guaranteed currently at Heathrow, due to the lack of spare capacity in the system. Unite believes ‘Heathrow hassle’ as it has become known, has lost the UK untold amounts of business. Consequently, if the policy is one of improving capacity and reliability, the passenger experience will follow. Unite also believes a hassle free journey to and from the airport is also critical to ensuring that the best passenger experiences.

e. Where does aviation fit in the overall transport strategy?

2.9 Aviation fits into an overall transport strategy by providing rapid long distance travel opportunities to places out of reach of surface transport options. Over medium haul distances aviation can provide connectivity to destinations within hours which would take days to reach by rail or road. In relation to short haul the role may be in competition with high speed rail, but can on occasion provide a solution which produces fewer emissions6. Where terrain dictates a longer journey like between Manchester and Copenhagen, it may be the case that the journey by high-speed rail would take far longer7 and produce far more emissions than flying. On domestic trips, aviation has a critical role to play which would have difficulty via any other option, especially in Scotland

5 http://www.stenaline.co.uk/ferry/media/news/increase-in-indian-tourists/ amounts stated are based on a return journey over Christmas 2012. 6 A turboprop airline can reduce the total emissions from a flight by 40% over that of a jet aircraft. When comparisons are made between high speed rail and aviation the rail industry claims that high speed rail creates zero emissions. What they fail to consider is the footprint of the carbon produced at the power stations which generates the electricity and the losses in transmission. If you therefore compare a 400kmh high speed train with a turbo prop aircraft flight on routes between London and Glasgow (or any comparable journey) the flight would produce less emissions. http://www.euravia.aero/about-euravia/environmental-case-study/

7 a passenger to travel through France, to Brussels change for a train to Cologne and change again to Copenhagen.

where it provides the lifeline to the island communities. Consequently, aviation should be viewed as an integral part of the public transport network.

2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

2.10 Given the nature of hub activities in needing to provide a seamless transition of passengers from one flight to the next, it is difficult to see how this can be improved by connecting London airports together by high speed rail connections. The delays caused by passengers transiting from Terminal 3 to Terminal 5 at Heathrow already affect scheduling and this is no more than 15 minutes. Equally, assigning an airport to a particular sector in terms of the industry would not work either given the need for passengers from domestic flights to connect with others flying short, medium or long distances; short haul passengers also desiring a connection to domestic, medium and long haul etc.

2.11 Dictating that short haul and domestic flights should not call at the hub will cause serious problems for regional communities. Lack of connectivity to a hub, or other major London airport, limits demand for onward connectivity. Key examples are the closure of Plymouth following the loss of the Gatwick service and the threatened closure of Durham Tees which followed the decline in passenger numbers from 940,000 in the year to July 2006 to 167,000 in the twelve months to July this year8 due to the loss of a connection to Heathrow. This has caused the airport to loose £2 million in their last reported financial year putting its future at risk.

2.12 Non connecting point-to-point services flying out of Heathrow only benefit from being able to capture market share on routes for domestic customers and those who decide to self connect. These point-to-point flights could be accommodated at an alternative London airport. Such a move would require governmental control of slot allocation given the value of these slots on the open market9.

2.13 Providing internal flights to a domestic hub is controversial as there are much less polluting ways to travel domestically. If these regions were offered a low carbon alternative to aviation, which allowed near flight level travel times, comfort and connectivity, then there would not be the need to provide the connection by air. This can clearly be illustrated by looking at the successful replacement of flights between Madrid to Barcelona10. The same could occur between Manchester11 or Leeds and Heathrow once the HS2 line is completed, if the line connects to the hub in the first stage.

2.14 Where the distance or terrain dictates and a flight is necessary, why does this connection have to be provided by a jet powered aircraft? A turboprop engine is more fuel-efficient than a jet. For flights of less than 500 nautical miles the use of turboprop powered aircraft becomes the most cost- effective and environmental way to fly as they use less fuel. In fact, some turboprops can use up to 40 per cent less fuel with an equal reduction in emissions12.

2.15 In the short term the use of Mixed Mode could provide some growth if the infrastructure was developed to allow departures towards the East from the northern runway at Heathrow. Whilst this would provide some additional capacity and resilience in the very short term it would cause the removal of respite from over flights and noise for local residents.

8 CAA statistics 9 Value of Heathrow slots – the value of £25-30 million is based on analysis of slot purchases in the last six months, such as Continental Airline who paid US$209m for four pairs of take-off and landing slots to GB Airways, Air France and . 10 Until 2009, the Madrid to Barcelona route was one of the busiest air travel corridors on Earth. When the AVE high speed rail line between the two cities opened, air passenger rates declined by 46 percent within months causing several airlines to pull the service from their schedules. 11 Over 75% of passengers on the Manchester to Heathrow services did so in order to catch a connecting flight. 12http://web.mit.edu/aeroastro/people/waitz/publications/Babikian.pdf

b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

2.16 Unite would argue that there is currently no workable Government aviation strategy other than one which suggests you can fit a pint into a quart pot. Current capacity outside the south east is sufficient to cope with current demands and those placed upon it in the short term. In the longer term there will be the need to expand Manchester, Birmingham, and either Glasgow or Edinburgh to cope with regional demand.

c. How can surface access to airports be improved?

2.17 Diversion of the HS2 route via Heathrow in the initial phase could provide some additional connectivity as highlighted earlier by offering an alternative to aviation. By doing so some of the connecting flights to Manchester could be replaced as could flights to Brussels, Paris and Lyon. This can clearly be illustrated by looking at the successful replacement of flights between Madrid to Barcelona13. The same could occur between Manchester14 or Leeds and Heathrow once the HS2 line is completed, if the line connects to the hub in the first stage. Moving the route to the west would also have the added benefit of going through a far narrower part of the Chilton’s.

2.18 Unite supports the Airtrack Lite15 proposals to build a link between Heathrow Terminal 5 and Staines which would enable passengers to better access the hub from the South avoiding the need to pass through central London. Such a connection would also enable passengers from Wales and the West Country to access Gatwick if the connection is built from the Great Western line.

3. What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

2.19 On point to point services the main constraint is the ability of an airline to attract customers for the service in the locality of the two airports between which the service will operate. In terms of hub operations the constraint should be environmental in terms of limiting the growth of emissions to what is sustainable.

2.20 Unite believes that noise management is a double edged sword in that by combating noise it will often result in more greenhouse gas emissions. There are measures such as the use of continuous descent that can reduce both but in the main the decision has to be made whether the industry concentrates on reducing fuel burn and emissions or noise.

2.21 Current proposals to maximise the use of existing facilities removes the respite currently enjoyed by residents from over flights by using runway alternation and require flights to arrive over a longer period during the day should there be an incident which disrupts normal operations. If the capacity provided by a third runway or a new hub was constructed, such respite provision could return and as long as this capacity is not fully utilised disruptions could be resolved far sooner. Consequently, Unite believes that whilst a larger area would be affected by noise pollution the effect on the individual would be a reduction in noise.

b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

13 Until 2009, the Madrid to Barcelona route was one of the busiest air travel corridors on Earth. When the AVE high speed rail line between the two cities opened, air passenger rates declined by 46 percent within months causing several airlines to pull the service from their schedules. 14 Over 75% of passengers on the Manchester to Heathrow services did so in order to catch a connecting flight. 15 http://www.wandsworth.gov.uk/news/article/11195/support_builds_for_new_heathrow_rail_route

2.22 Unite believes that the reverse is true. Providing additional capacity reduces unnecessary fuel burn while queuing both on the ground and in the air if it is not fully utilised. Figures from Boeing on fuel burn per minute highlights that for every minute a jet aircraft is on the ground it is burning the same amount of fuel as it does during up to ten minutes at cruise altitude. Attempting to squeeze even more flights out of the existing infrastructure will only result in more emissions. There are a number of measures that can make aviation more sustainable but the simplest in terms of government policy is to provide enough capacity to allow aircraft to land immediately on arrival at an airport and depart directly after leaving the gate. Electrically powered tugs to stop jet engines being used during taxiing would also reduce emissions and pollutants, making the working environment for employees better. Limits on flight numbers based on total emissions would limit increasing the carbon footprint and drive the industry toward being even more sustainable.

c. What is the relationship between the Government’s strategy and EU aviation policies?

2.23 The EU promotes a 40 per cent replacement of Jet A1 aviation fuels with sustainable alternatives. The Committee on Climate Change based their findings on a 10 per cent figure. Europe also appears to support its aviation industry, recognising the benefits it brings, whilst successive government policies suggest we do all we can to prevent the industry being successful.

4. Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where?

2.24 As outlined previously the idea that you can get a better aviation industry without expansion is farcical. As commercial enterprises the industry is already trying to work within government limitations to maximise passenger load factors and increase profit. Unite believes that the government needs to get behind airport expansion now and needs to fast track the planning process for these facilities to make up for the years of debate over this subject if we want UK plc to be competitive.

2.25 Fears that having spare capacity would encourage the industry to fill this capacity to the limit again can be overcome by limiting air traffic movements by imposing limits. Legislation which ties together flight numbers with emissions would promote the use of more fuel efficient aircraft, which in turn would reduce global aviation emissions on flights destined to travel via Heathrow and other UK airports.

2.26 Given the limitations of the Heathrow area in the longer term a new centralised hub is needed to cope with demand from 2050 on with the space to expand further. NATS has identified that the problem with the airspace over London and the South East is the complexity due to the number of existing airports and aerodromes. If a new hub is created it will need to consolidate the flows through at least two airports as well as provide additional capacity. Unite believes the ideal location would lie to the West of London along the M4 corridor no more than 48km from Central London to minimise the disruption to the workforce demands needed to staff such a facility and service the business communities of the region. Unite would, however, support any workable proposal at this stage given the plight of the industry.

b. What are the costs and benefits of these different ways to increase UK aviation capacity?

2.27 Unite does not have the resources to provide such an analysis but believes that a three stage approach beginning with the adoption of full mixed mode operations, while a third runway is constructed culminating in the opening of replacement new hub. Both of these initial stages would not cost the tax payer one penny as the costs have been already allocated by the private sector. The major expense will come with the construction of a new hub airport which would need a minimum of four parallel runways to be viable but Unite believes it should ideally have six.

2.28 Whilst it may be possible to utilise the land around RAF Northolt as an alternative, this would need to be combined with a high speed connection to the existing terminals at Heathrow from airside to airside. This may be possible if the proposal by Heathrow Hub Ltd is extended to forge a link between it and Northolt. Such a proposal would require the creation of a new runway on land adjacent to the current footprint of the airport to align it with those of Heathrow. Such a proposal would require extensive tunnelling to make this work which would be far more expensive than the third runway idea. Additionally, such a solution would increase connection time between terminals which in turn would heavily effect scheduling.

2.29 It is clear that the long term future of Heathrow post 2030 is in doubt unless government intervention finds a legal way of preventing aircraft using the airport as a hub post the creation of its replacement.

3 Conclusion

3.1 Unite hopes that whatever proposal is finally decided upon, that such a proposal is constructed as soon as possible and not delayed by government and legal red tape. Unite believes that if it takes a further 20 years to get a new hub open and running, it will probably be too late to save the future of the UK aviation hub.

3.2 Istanbul is now building a five runway hub airport which will exploit its geographic location to maximise flows from Russia, China, the Middle East, India and Europe which will be open in just four years. As Turkey is outside the European Union, flights to Turkey do not face the burden of having to pay for carbon credits for every tonne of carbon produced and is close enough to the East Coast of America to enable direct narrow body high frequency flights. In short, if the UK does not invest in new capacity it runs the risk of being left on the sidelines by Turkey and others inside Europe.

3.3 The lessons learnt from the construction of Montreal Mirabel airport should not be ignored and whatever is built needs to have enough supporting seamless intermodal surface connection options to make the journey from home to destination as stress and hassle free as possible.

19 October 2012

Written evidence from NECTAR (AS 65)

NECTAR - the North-East Combined Transport Activists' Round Table - is pleased to send the following response to the Inquiry on Aviation Strategy.

NECTAR is an open, voluntary, umbrella body, established to provide a forum in which the many organisations with an interest in sustainable transport in all its forms can develop a co-ordinated view on contemporary transport issues.

NECTAR is one of a national network of Transport Activists' Roundtables, each of which provides opportunity for the exchange of news, studies, and information.

The main points in our response to this Inquiry are:

(a) that global warming and carbon emissions are essential factors that must always be taken into account in forming any transport policy:

(b) that aviation fuel exhaust is among the world's most polluting items, and is in any case a finite (and hence declining) resource: and

(c) that the need to travel by air has been grossly exaggerated, with future predictions of 'demand' becoming increasingly impossible to make, especially as official figures for air travel in the UK have either remained at the same level, or declined, during the past 4 or 5 years.

We recognise that the committee has set up its Inquiry largely to elicit views about airport provision in London and the South East, but, with respect, we remind the committee that no attempt to work out an aviation strategy for any nation can be successful if it confines its attention to one rather busy region, at (by implication, at least) the expense of just about everywhere else.

Our detailed response answers, as far as possible, each of the Transport Committee's questions in turn.

1. What should be the objectives of Government policy on aviation?

(i) Basically, to reduce, as far as is possible, the need for flying at all. This is in the interests of a cleaner environment, now especially threatened by the forecasts of the 50 months left in which to avoid a global 2 degrees Centigrade increase in world temperatures, if these forecasts are reliable. Other factors are, first, the continuing depletion of world resources in general, and of fuel oil in particular, and, second, the poorer air quality around airports, resulting from, among other things, the considerable volume of surface traffic attracted by every airport, as well as from the air fuel exhausts themselves,

(ii) We recognise that air traffic levels cannot be reduced overnight: so our three specific objectives would be:

[a] to concentrate on provision of long-distance air services, mainly transcontinental and transatlantic: [b] to develop high-quality rail links within the UK to larger regional airports, rather than short-haul internal flights: [c] to reduce the number of short-haul flights to and from Europe, on a basis of their redundancy for journeys that a rail link can cover in 4 hours or fewer. Increasingly-lengthy check-in and security times, plus the sheer vastness of so many airport terminal buildings, can easily triple or even quadruple the nominal flight time, seriously reducing any time advantage over a parallel rail journey.

(a) How important is international aviation connectivity to the UK aviation industry?

(iii) This is really a question for the industry, not for us: we comment on 'connectivity', briefly, below, at 1e and 2c in particular.

(b) What are the benefits of aviation to the UK economy?

(iv) Not very noticeable, frankly - figures that we have seen show that much more money is taken out of the country as a result of British holidaymakers using low-cost flights than is brought into it by non-UK citizens visiting the country and spending time and money here. Business travellers are numerically only a small proportion of those who go by air, even if their per capita air fares are above the airline average.

(c) What is the impact of Air Passenger Duty on the aviation industry?

(v) Probably far less than some n the industry claim. As long as this duty is charged fairly, on all who travel by air - including those on charter flights - the impact will affect all carriers in the same way, neutralising any legitimate feeling of unfair competition between or among airlines.

(vi) Insofar as the charges levied by alternative modes of transport become lower than those by air, this probably reflects more truly the indirect cost to the world as a whole of air travel with its concomitant (and still untaxed) fuel consumption, and its production of chemically-undesirable exhaust fumes. Brendon Sewill's "Fly Now, Grieve Later" shows in great detail how much CO2 pollution per passenger results from air travel. His figures, given in 2005, of 300 kg per head may now have been reduced thanks to improved technology, but they are more than double the figure for a single-occupancy car driven along a motorway over the same distance.

(vii) We would add that these polluting agents remain with the planet, regardless of how ingeniously some countries devise, and then put into effect, carbon offset trading and other 'credit' systems.

(d) How should improving the passenger experience be reflected in the Government's aviation strategy?

(viii) Directly, not at all, unless the Government runs the airline. Indirectly, this may be an invitation to comment on the different modes of payment that a passenger faces when using some 'budget' airlines - is it acceptable to quote a basic fare for a flight from A to (nearly) B, when nobody can actually travel for that fare because of compulsory supplements? We would say not. And we would add that (if international law allows it) there should be a clearly- stated and enforced limit to the distance between an airport and the centre of the town or city after which it is named - say 15 km. If this did arise, of course, neither Heathrow nor Gatwick could advertise itself as "London", leaving far more scope, for good or ill, at London City Airport about which we hear far less than it perhaps deserves.

(e) Where does aviation fit in the overall transport strategy?

(ix) Ideally, we might say, not at all, but first, may we ask exactly what the "overall transport strategy" is at the moment? From some viewpoints, it looks to be "cars first, second and last, with pedestrians, cyclists and bus users nowhere". There is a continuing and welcome increase in the importance given to rail. But even so, the remote position of many UK airports demands far greater car use to reach them, for passengers, crew, and airport workers alike, than it need do.

(x) Gatwick, Stansted, Birmingham International, Manchester and Southampton airports are better than average, with rail stations on their premises, sometimes astride main railway lines. Newcastle's case is not far short, serve as it is by the Tyneside Metro. In contrast, Luton Airport Parkway's name is dangerously misleading, given the need for a lengthy bus journey between station and airport.

(xi) If comparisons between transport modes are taken a bit further, we note again that aviation fuel is not taxed at all, whereas that for every land mode - apart, that is from pedestrians and cyclists (!) - is.

See also our answers to 2b and 2c below.

2. How should we make the best use of existing aviation capacity?

(xii) We question at the outset the implication that all existing capacity must be used at all. Environmental consequences far greater than those even from diesel-powered surface transport come from flights of every type, even when filters and other refinements have been added to every example of every kind of aircraft. [Cf. Sewill, op.cit., especially pp. 6 - 11.]

(a) How do we make the best use of existing London airport capacity?

(xiii) It depends on who "we" are. Nobody in NECTAR is qualified to run an airline. If you are asking for suggestions on what kind of flight should be replaced by another means of transport - rail, for instance, at whatever speed - we would strongly advocate much greater effort to add North of London cross-channel rail services (mainly, but not exclusively, run by Eurostar) to those already running from London. We add that, on the face of it, the scope for reducing air traffic originating in the London area is much greater than it is anywhere else in these islands, as so many high-quality rail lines link London to much of the UK and to continental Europe.

Are the Government's current measures sufficient?

(xiv) Again, it depends on what 'measures' are meant here. For the moment, we exclude the intermittent sabre-rattling about a third runway for Heathrow, because it has still not been made an official feature of policy - and we hope that it never will.

(xv) On the other hand, the threat of more night flights across the London area (or, indeed, anywhere else) seems to us sufficiently real and damaging, to all under their flight paths world-wide, to prompt once again more effective steps to encourage current and future air travellers on to alternative, more carbon-friendly modes. In practice, this most often will imply high-speed rail to and from Europe, and medium-speed rail within the UK (for now). We know that, without any government effort, rail's share of the market has increased very noticeably, at the expense of that by air, on some busy internal routes such as London - Manchester and London - Newcastle.

What more could be done to improve passenger experience and airport resilience?

(xvi) What on earth (or elsewhere) is the resilience of an airport? And why is it so closely linked here with "passenger experience"? If it is a covert synonym for check-in and security procedures, waiting times, and distances between departure lounge and gates, any or all of which test the nervous energy of most passengers, we would reply "quite a lot".

(xvii) Specifying the form this would take is probably not within our powers, though we do find the UK's exclusion from the Schengen area a vexing handicap, which at present weighs more heavily on Eurostar rail passengers, with their compulsory customs examination, security vettings and check-in processes, than we think they deserve.

(b) Does the Government's current strategy make the best use of existing capacity at airports outside the South-East?

(xviii) Once again, it depents on what is defined as "current strategy", and exactly how any Government can help or hinder airports in using capacity otherwise than they do. As we understand it, the allocation of flight paths to airlines at any airport is carried out, in the last analysis, by those in charge of each airport. We know of no Government directives that could affect this, though we are of course aware of Government pressure on some airport authorities not to bid for ownership of more than a certain total number of airports, and/or to sell off one or other of those that they do own. How far this connects with use of capacity as such eludes us, so we say no more.

How could this be improved?

(xix) Not knowing what "this" is in this context, we can offer no suggestions.

(c) How can surface access to airports be improved?

(xx) By retaining and/or expanding rail links, and improving the quality and frequency of services along them. Failing a rail link - e.g. to Leeds/Bradford airport - by somehow ensuring that a bus-link, with vehicles specifically designed to take heavy luggage, (un)loaded easily and quickly, runs during the full length of the airport's operating day between the airport terminal and a central and well-connected town or city centre terminus. This would normally be a main rail station and/or a large bus station, both with adequate passenger facilities in them. The present régime at Luton Airport (cf. 1e above), though far from ideal as a genuine rail link, illustrates what we mean here.

(xxi) Bus and coach access should also be improved as and where possible: in short, the aim should be to reduce significantly the number of journeys to and from every airport that are made by car, no matter how fully-occupied each car is. Newcastle Airport, for instance, has good access by public transport, particularly its Metro line: but we would advocate a far greater effort by local and national government to publicise this access more widely. At present, the only airports whose rail access is nationally known are Gatwick and Manchester, since each has main-line rail services: but even in these cases it could be argued that the publicity is for most people confined to the pages of the local and national rail timetables.

(xxii) A Heathrow Airport spokesperson is reported in the Guardian (October 13 2012, p.18) as saying that the airport subsidises local public transport so that people can travel free of charge, avoiding the need for a car. If so, it is the first that we have heard about it, and in the absence of better publicity nation-wide, and more specific details, it is of little practical use to most air travellers, praiseworthy though the airport's initiative may be. The common perception of non- car access to Heathrow is the premium-fare "Heathrow Express" rail service to and from Paddington, with a slow and crowded Piccadilly tube line as a cheaper substitute.

(xxiii) If, in fact, provision of free public transport access to an airport (for, presumably, air ticket holders, as part of the overall price) is something that Heathrow is now pioneering, we encourage it warmly and hope that other airports around the country follow Heathrow's example as soon as possible.

3. What constraints are there on increasing UK aviation capacity?

(xxiv) I n our view, the repeated reports of melt-down at one or both poles, plus the unusual weather-patterns and changes that result, are sufficient to conclude that expansion of air travel of any sort at any level is unacceptably risky. (The problem is by no means unique to aviation: motoring and other activities using fossil fuel - buses and trains - also cause pollution and climate change, of course.) There is also the associated problem of excessive "growth"; the earth's resources are finite, and this alone poses many problems about population growth and average consumption levels. Just because there is room for more aeroplanes to roam the skies without bumping into each other, this does not mean that such roaming is of benefit to world well-being, now or in the future.

(xxv) So, if anything, the planet's inherent limitations impose a need to reduce, not to increase, anything that uses fossil fuels. Difficult though many will find it to perceive the dangers now, they are there, and will increase as long as human unsustainable activity continues.

(a) Are the Government's proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

(xxvi) A gain, it depends on what form these proposals take. Much as we would applaud all help, financial and material, to double or triple glaze more and more homes across the country, such measures do not reduce the impact of aviation, or any other noise, on those not in such houses, never mind those working or exercising outdoors, or simply travelling from place to place.

(xxvii) A forthcoming report, mentioned in the Guardian article of October 13 (cf.§xxii above), is expected to show that a clear increase in the number of deaths from air pollution occurs in areas nearest to all airports, most notably around Heathrow. Possible reasons for this are the exhausts from so many cars and other road vehicles going to and from the airport, which have an even greater adverse impact on air quality than do the planes themselves! We repeat, in the light of these findings (by the Massachusetts Institute of Technology laboratory), the urgent need to reduce the amount of traffic around all airports as part of any policy to reduce the impact of aviation.

(b) Will the Government's proposals help to reduce carbon emissions and manage the impact of aviation on climate change?

(xxviii) A proposal, as such, can neither reduce nor increase anything: presumably the question means to say "implementation of its proposals", or similar. Even so, we do not think that a Government wish-list can do much about either carbon emissions or climate change, neither of which are limited by national boundaries, nor do they seem to be as predictable in their extent as even the specialist scientists have hoped they would be.

[Compelling arguments that aviation can never be climate-friendly may be found at .]

How can aviation be made more sustainable?

(xxix) In three words, it cannot be. "More sustainable" is almost a contradiction in terms - the essence of sustainability is that no additional resources of any sort are used.

(c) What is the relationship between the Government's strategy and EU aviation policies?

(xxx) We are not qualified to answer this question.

4. Do we need a step-change in UK aviation capacity?

(xxxi) Yes - but downwards, not upwards.

Why?

(xxxii) We have already explained this in earlier answers.

(a) What should this step change be?

(xxxiii) As already stated, downwards.

Should there be a new hub airport?

(xxxiv) Dogged again by an ambiguous wording, we say that there should be no new airports of any kind, hub or otherwise. If, however, the intention is to ask about an upgrading to 'hub' status of an airport already existing, our answer is different. We know, for instance, that Heathrow is regarded as a hub, and also that some in aviation deplore the fact that many air users prefer to go to Amsterdam, for instance, for connecting long-distance services.

(xxxv) We respectfully remind such people that, if they check with their atlases, they will find that large areas of northern England (and all of Scotland) are about as near to Amsterdam as they are to Heathrow, and anyway the combined cost of flights to, and connections via, Amsterdam (and, indeed, elsewhere in western Europe) is often significantly lower than it would be via Heathrow. Depending on the ultimate destination, of course, it is arguable that going to Amsterdam from the north-east and from Scotland reduces the overall air mileage quite significantly, regardless of whether one route is more stress-free than the other.

Where?

(xxxvi) If at all, preferably in the north of England, at Newcastle, with several provisos:

(a) that it would totally replace several others in the region, so would need (or already have) first-class surface communications, including high-speed rail, with the areas they had served: (b) that its aim would be to reduce overall the number of flights available, mainly by providing high-capacity and high-occupancy services: and (c) tha t it would reflect current aviation practice, in that - despite appearances - Newcastle's position is as near to that of Canada and the border areas of the United States as anywhere in southern England, or indeed in Scotland. Many current international flight-paths, e.g. from Frankfurt or Amsterdam to north American destinations, reflect this by flying along the east coast of England before veering westwards from south Tyneside towards Glasgow, and then crossing the Atlantic ocean.

(b) What are the costs and benefits of these different ways to increase UK aviation capacity?

(xxxvii) As we deny that aviation levels should be increased at all, we have logically to answer that there are none of either.

(xxxviii) It is not irrelevant to mention here that quoted statistics* for current airport usage, as hinted at above, show that passenger levels are either the same as in previous years or, here and there, tapering off. Few examples of increased usage exist. So why seek to increase a 'capacity', when even the official figures do not show a need for it?

*2011 passenger numbers for London airports show a 4% drop from their 2007 level. Those for all airports were 8% down over that same period. During it, rail passengers numbers increased by no less than 25%.

19 October 2012

Written evidence from London Biggin Hill Airport (AS 66)

Introduction

1. This evidence is presented on behalf of London Biggin Hill Airport and its principal shareholder Regional Airports Ltd and concerns itself with those aspects of the Committee’s terms of reference that are relevant to the Business Aviation industry in the UK. Our key concern is that that the UK Government appears neither to fully appreciate the importance of, nor to be willing to make appropriate provision for, this growing and economically important sector of the aviation industry in its Aviation Policy Framework, which it published in draft for consultation earlier this year1, and proposes to issue in final form in early 2013.

2. We would like to draw this important omission to the attention of the Committee, highlight new evidence on the key role the sector plays - particularly in serving the needs of London as a leading World City, and explain our concern about the potential implications its absence from the Framework document could have on the future development of the industry, especially within the congested airport system in the South East of England.

Objectives of Government Aviation Policy: Connectivity, Strategic Competitiveness and Economic Benefits

3. The first part of the Committee’s Terms of Reference asks:

What should be the objectives of Government policy on aviation? a. How important is international aviation connectivity to the UK aviation industry? b. What are the benefits of aviation to the UK economy? c. …..”

4. We support the Government’s aim of making aviation as sustainable as possible, but ‘sustainable’ here must be recognised in its wider definition encompassing economic and social objectives rather than simply a narrow didactic ‘environmental’ focus. The inclusion of aviation (including business aviation) within European Emissions Trading System (ETS) the Government has tackled the climate change impact issue within the terms of its wider legislative commitments and obligations. The draft Appraisal Framework attempts to tackle the other major environmental issue associated with airports – notably noise. What is missing then from a sustainable or ‘balanced’ aviation policy is a commitment to ensuring there is sufficient capacity, with appropriate resilience margins, in the right locations to meet the UK’s future economic and social need for air travel. In terms of airport capacity the debate is currently framed solely around scheduled air services; but we would contend that it should be widened to take in other forms of aviation, most notably ‘business aviation’, because of its overall scale and its value to UK plc.

5. In 2011 there were some 164,000 air taxi and business aviation flights recorded in CAA statistics across the UK’s airports, although this figure is probably an under-estimate as some flights recorded as being ‘private’ were probably also for business purposes. Of this figure some 32.5% were made from London Airports; if airports in the wider South East are included this rises to over 50%.

1 Department for Transport: Draft Aviation Policy Framework (July 2012) Taking into account some flights inappropriately allocated to other categories of General Aviation, that means that there are currently around 100,000 business aviation flights each year from London and the South East, up materially on the equivalent figure in 2001. The growth of the sector is confirmed in Eurocontrol reports, which indicate that business aviation already accounts for almost 8% of all flights in European airspace and is expected to grow faster than scheduled airline services as the economy recovers.

6. The demand for business jet travel has increased because of a range of factors:

a. The increase in the value of business people’s time and the benefits to them of the speed and flexibility business aviation offers. b. The rise in the average seating capacity of scheduled airline passenger flights and the consequent limitations on the range and frequency of services that can support 150 seat aircraft. c. Congestion at scheduled airline airports and the increasing delays and risk of delays before and after flights. d. The globalisation of trade and search for new areas of development and economic opportunity, few of which are served, or served frequently enough to be convenient by scheduled airlines. e. Innovation and development of new commercial options for ownership, sharing, chartering and generally making better use of these modern aircraft with a seating capacity of between four and 55 seats.

7. But what is also clear from a wide range of in-depth studies, in the USA by Anderson2 and NEXA3 and Europe by Price Waterhouse Coopers4 and most recently by the Oxford Economics5, is that that the users of business jets are generally those companies, staff and individuals who are the innovators, investors and deal-makers which drive economic activity, stimulate trade and generate associated employment. Indeed Oxford Economics report for EBAA indicates that a business aviation user has a ‘value of time’ nine times higher than a business class customer on a scheduled service (http://www.ebaa.org/content/dsp_page/pagec/PwC-EBAA-StudyBusAv).

8. Critical to this kind of high value passenger is that his/her time is used optimally with flexible departure times and access to airports close to where their ultimate destination is, rather than being forced to rely on the city pairs and timings on offer from scheduled services.

9. Table 1, which shows the number of destinations served by each of the major business aviation airports in London in 2011, illustrates the much greater point to point connectivity offered by business jets.

Table 1: Connectivity Ranking of Main London Business Airports

2 Andersen LLP: Business Aviation in Today’s Economy – A Shareholder Value Perspective (20 01) 3 NEXA Advisors LLC: Business Aviation – An Enterprise Value Perspective; S&P500, 2003‐09 4 Price Waterhouse Coopers: The Economic Impact of Business Aviation in Europe (2008) 5 Oxford Economics: The Role of Business Aviation in the European Economy (2012) No of Destinations Served by London Airports 800 700 600 500 400 300 Series1 200 100 0

10. Table 2 overleaf then examines the destinations by country served by the five airports in Table 1 combined and Biggin Hill’s share of each of those markets. Major trading partners in Europe, in North America and outside these two core zones (eg Russia and Turkey) are prominent. And as Appendices A-C illustrate, Biggin Hill serves a particularly important role in terms of business connectivity between London and Europe and London and business aviation markets elsewhere in the UK, providing time critical links as it does not just to major regional cities but also to much more remote and inaccessible locations such as the Western Isles, Shetland, and far South West.

Table 2: Business Aviation Connectivity by Country from London Airports

7000 Top 20 countries (non UK) 40%

6000 Flights34% Biggin Hill % share 35% 30% 5000 28% 26% 27% 25% 25% 4000 22% 20% 21% 20% 18% 3000 17% 17% 15% 15% 2000 13% 10% 10% 8% 8% 7% 1000 5% 2% 2% 0 1% 0% USA UAE Italy Spain Israel Russia France Greece Turkey Ireland Austria Canada Sweden Belgium Portugal Germany Denmark Switzerland Netherlands Saudi Arabia.

Making Best Use of Existing Capacity

11. The second part of the Terms of Reference ask:

“How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? …..”

12. Such connectivity is particularly important for the functioning of a World City such as London where the types of companies and entrepreneurs who make good use of the efficiencies that business aviation offers typically cluster. In the UK, and in London in particular, the focus of Government aviation policy has been on meeting the capacity requirements of scheduled airlines and enhancing the passenger experience, leaving the business jet sector to “fit in where it can”. Going forward, this approach will materially disadvantage London, especially as any South East hub or other solution is at least 10 years away (probably more), unless specialist provision is made for business aviation. This is because, as the scheduled airline traffic recovers after the economic downturn, business jets will be squeezed out of the major commercial airports serving London, whose principal business is scheduled traffic and the more traditional package holiday charter airlines.

13. With this in mind, as Mayor of London and the Government engage in an in- depth review of the future runway capacity required to support the UK’s capital city, now is also the right time to focus on the growing demand for business jet access, which has nearly doubled in the last 10 years, and helped to improve international connectivity, in part by filling the gaps left by scheduled airline services. Helpfully, this does not require new runways. Indeed it may help relieve runway capacity constraints at some commercial airports in the short and medium term. Rather it requires a firm policy to make better use of capacity available at smaller dedicated business aviation airports that have particular value in serving London, such as Biggin Hill and Farnborough.

Step Change in Capacity?

14. The final part of the Terms of Reference ask:

Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where?

15. In answer to the first question about a ‘step-change’ in capacity and supplementary question (a), we believe the answer is yes but would frame the question somewhat differently, notably:

“Should UK Government policy seek to ensure that sufficient infrastructure capacity is available to meet the country’s long term aviation requirements in a carefully planned and co-ordinated way that facilitates competition, builds in resilience and takes account of the future needs of all sectors of the industry? How is that best achieved?”

16. As foreshadowed in our introduction, and above, this slightly different perspective shifts the debate away from (a) an over-dominant focus on scheduled traffic and (b) a new hub airport to find solutions to the current capacity problem, and towards the effective functioning of the airport system as a whole as being the key objective, particularly in the case of London. It also means that consideration of carefully planned, incremental, and system-based approaches (in which some airports are accorded specialist niche roles which they are ideally suited to and have spare capacity for, allowing other airports to operate at maximum efficiency in meeting the needs of mainstream sectors where capacity constraints are more significant), are not precluded from consideration in favour of an over pre-occupation with a “big-bang” approach which seeks to mix traffic that is better kept separate.

17. Applying this logic to planning for the business aviation sector in London over the medium to long term, we believe that over the next ten years, as pressures to maximise the use of the capacity at the major London Airports (ie Heathrow, Gatwick, Stansted, Luton and London City) for commercial traffic (ie scheduled airlines) intensifies, business aviation will find itself being severely squeezed at these airports as a result of a combination of factors:

− congested runway capacity and the disparity between full slot co-ordination status and the flexibility of operation that is integral to business aviation’s value proposition; − limitations on apron, and aircraft parking availability; − maximising the commercial returns being sought from expensive and scarce infrastructure assets; − airspace conflicts and constraints within the London TMA; and − Transport and access constraints.

18. Indeed, there is a strong argument for Government intervention to facilitate clarity, resilience and co-ordinated planning for the sector (a precedent set during the Olympics which worked well), whilst freeing up as many slots as possible for scheduled services at these predominantly commercial passenger airports by: − imposing traffic distribution rules banning business aviation flights to heavily congested airports such as Heathrow and Gatwick; − prescribing on a seasonal basis, time periods or slots available to business aviation at airports such as Stansted and Luton that are slot co-ordinated; and − designating two smaller airports with plenty of capacity and potential to develop as specialist, possibly dedicated, business aviation airports to serve the needs of London.

19. This approach has been adopted in major World Cities with congested aviation systems such as: New York where Teterboro (New ) and White Plains (Westchester County in New York State) serve this role; Paris which has Le Bourget (the busiest business aviation airport in Europe); Singapore (for which Seletar acts as the business aviation hub with only VIP’s being allowed into Chiangi); Los Angeles (where Van Nuys the busiest business aviation airport in the world); and Chicago (for which Chicago Executive and DuPage act as relievers to O’Hare).

20. Given that London is currently the number one ranked global city, and has the most congested airport system of any major city in the world, we believe a similar solution commends itself and that two specialist business aviation airports should be identified now, allowing their operators to plan and invest in high quality facilities to meet future demand as increasing congestion and eventually traffic distribution rules push traffic their way in the short to medium term. We believe one of those airports should be Biggin Hill because of its proximity to Central London and the other Farnborough, which is well located to meet demand from south and west of London.

Concluding Comments

21. Civil Aviation the world over is divided into just two components – scheduled airline services and General Aviation which is comprised of Business Aviation and the many other specialist niches such as emergency services, casualty and medical flights, small group travel and charter. It is vital the UK Government now recognises the economic and employment benefits that the flexibility, innovation and capacity this non-scheduled airline sector can provide, that scheduled airlines cannot, as highlighted in a report by Oxford Economics, published this September for EBAA.

22. It is in this context that Regional Airports Ltd are proposing that Biggin Hill should be designated in forthcoming aviation policy documents as London’s Business Aviation Airport (or General Aviation reliever airport as with Teterboro Airport in New York), thus fulfilling the niche provision that New York and other World Cities have already recognised is required as an important component of their overall global connectivity and transport strategy. This then facilitates quick and convenient access to the literally thousands of places around the world that are either not served by scheduled airline services, or are only served infrequently.

23. Biggin Hill is the ideal business jet Gateway for London and now is the right time to ensure the forthcoming Airport Strategy recognises the potential of the asset and creates the policy framework in which its support role for London as a World City can be fully realised.

19 October 2012

APPENDICES

A: Biggin Hill Connectivity Quotient by Global Region

Global Region Biggin Hill London Airport’s Destination Scheduled Destination Links Links 2011 UK 101 16 W Europe 310 192 E Europe 70 39 N America 50 34 Caribbean & Central America 5 24 S America 0 3 Near and Middle East 19 14 Far East / India / Australia 4 28 Africa 22 34 Sources Biggin Hill ATC data and CAA

B: Biggin Hill Share of Business Aviation Access to London UK Regions ­ Access to London Biggin Hill All others

47.7% 52.3%

C: National Connectivity Quotients for Biggin Hill

London Biggin Increased Scheduled Hill Connectivity links Links Quotient

UK 28 101 3.6 France 49 82 1.7 2.0 Switzerland 6 12 Germany 25 50 2.0 Spain 34 28 0.8 Italy 33 36 1.1 Netherlands 4 12 3.0 Ireland 8 10 1.3 Belgium 3 6 2.0 Austria 5 7 1.4 Sweden 17 16 0.9 Portugal 8 4 0.5 Denmark 7 8 1.1 Norway 14 10 0.7 Greece 20 11 0.6 Finland 10 5 0.5 Sources Biggin Hill ATC data and CAA

Note: All countries with ratios above 1:1 and highlighted in red have a higher level of connectivity (ie have a greater range of destinations served) from Biggin Hill, than by scheduled airlines. The connectivity quotient is a measure o that relative difference. Further written evidence from London Biggin Hill Airport (AS 66A)

May I express my thanks once more to you and the Transport Select Committee team for your assistance to us through the Aviation Strategy Inquiry.

As you know the committee requested some further material from us at the evidence session and we are very happy to provide this below and attached.

1. There was a request for further information about connectivity from Biggin Hill and Farnborough. In 2011 flights from Biggin Hill and flights from Farnborough connected to and from respectively 747 and 835 different places around the world. This is more than 3 times the number of destinations served by scheduled airlines from other London airports.

2. In response to Q 520 (Karen Lumley MP) about the comparison for landing and handling costs at Farnborough compared with Heathrow: To land a Learjet with 1 passenger and park for 1 hour at Heathrow is £5,253. The comparable charge at Farnborough is £470.

3. Please find attached a brief explanation and selected extracts from United States airports policy and its application in New York. The system designates general aviation airports in metropolitan areas to be Reliever airports and says that they should be an attractive alternative for operators to use instead of the busy core airports and that they should also meet their local demand. Please also find in the same document (section 5) directions to the websites for the 3 documents referred to and from which the brief information on US policy and New York has been drawn*.

4. Finally we are including (attached) the Biggin Hill\Farnborough Q&A document we prepared in advance of the 14.1.13 committee evidence the session as it contains most of what we want to say on the key questions. We thought this might be useful*.

23 January 2013

*Not printed with this document.

Written evidence from the Thomas Cook Group (AS 67)

Overview of Thomas Cook Group This response is submitted on behalf of the Thomas Cook Group (TCG), the second largest vertically integrated leisure travel group in the UK. TCG is a tour operator, selling primarily air holidays through its Thomas Cook Tour Operations Ltd, Thomas Cook Retail Ltd, Thomas Cook Scheduled Tour Operations Ltd, Gold Medal Travel Ltd, and Elegant Resorts Ltd businesses, and is licensed in total for 5.5 million ATOL protected seats.

Furthermore, the Thomas Cook Group owns and operates Thomas Cook Airlines Ltd, which currently has a fleet of 35 aircraft on the UK register. That airline is a charter, or leisure airline, selling the majority of its seats to tour operators, particularly those in the Thomas Cook Group, to create packages. It does however sell approximately 1 million round trip seats to passengers directly. Virtually all those sales are used as the basis of holidays for UK citizens.

TCG operates a wide variety of business models, which includes a bedbank, trading as Hotels4U and Medhotels, selling accommodation both direct to the public and through third party retailers. More notably, Thomas Cook is one of the largest travel retailers in the UK, with approximately 1100 shop premises through its Thomas Cook and Co-Op Travel brands, a large call centre business and an online ; all of whom sell significant numbers of air based holidays and other flights.

The Thomas Cook Group, whilst based in the UK, is one of Europe’s largest travel businesses, and also brings holidaymakers to the UK from other markets across Europe, as well as from Canada.

As a result of all the above issues, UK aviation strategy is of fundamental importance to the Thomas Cook group, and we feel it appropriate to answer the questions posed by the Committee.

We would also comment that the Thomas Cook Group is a member of ABTA, and we have had the benefit of reviewing the ABTA response to the Committee. We would support the submissions made by ABTA, and do not propose repeating their points directly within this submission.

1. What should be the objectives of Government policy on aviation? We believe that there are a number of key principles which stand behind aviation policy. As our interest is primarily in tourism, these principles include points specific to our sector. • The UK is an island nation. As such, the population will want and need to travel, both to trade and for leisure purposes. • Economic growth will lead to increased demand for travel. As a corollary, increased air travel can be a contributor to economic growth. • Furthermore, the predicted population growth will lead to increased demand for travel. It is noted that ONS predict that the UK population will grow from 61.4 million in 2010 to 70.6 million in 2030. • The population is increasingly cash rich and time poor. As a result, rail is only an appropriate substitute for air for the majority of travellers if there are reasonably similar timescales involved. As an example, air can easily be replaced by rail between Madrid and Barcelona, with a city to city journey time of 3 hours. However, it is unlikely to be substituted by rail for a journey from Madrid to Paris, a city to city journey time of 12 hours. • Tourism is regarded by most countries (including the UK) as a driver for growth. Domestic tourism in the UK will always be constrained by the weather, and as such, there will continue to be a desire to travel to warmer destinations. • Tourism, whether outbound or inbound, has a significant dependence on direct aviation links, and a reduction in those links is likely to damage tourism arrivals at both ends of the route. • We believe that it is impossible to predict with any degree of certainty any major cultural or socio-demographic shifts which may occur over the next 15 years. We would also suggest that it is unlikely that any government will be unable to predict major changes in this timeframe. Assumptions should therefore be made that travellers will continue to behave in similar fashions to how they behave currently, subject to our earlier assumptions regarding broad economic growth. • We agree and accept the need for trade offs between aviation, the environment and the localism agenda. We would argue that there should be a genuine balance between these 3 issues. Within that trade off, we agree that aviation should address its environmental impacts. We would suggest that the primary factors impacting on aviation’s ability to address those impacts are: ° Airlines’ own fuel burn: processes, weight and load factor ° Type of fuel burnt: move towards more sustainable fuels - biofuels etc ° Air traffic control: routings etc: local and international ° Aircraft design and construction • We believe that it is essential that there is political consensus on future aviation strategy. At present, aviation has become a political football. Due to the length of time and level of investment required to address infrastructure issues in the UK, an agreed framework needs to exist and to be supported by all parties.

1a. How important is international aviation connectivity to the UK aviation industry? As we have commented, the UK is an island nation. Connectivity with the rest of the world is an essential pre condition for trade generally. Connectivity should not be seen simply as important to the aviation industry, but essential to the whole economy.

Furthermore, leisure time has a significant social benefit in motivating individuals to work more efficiently. Travel is a key component of leisure, and cannot be underestimated in creating a sense of economic wellbeing.

1b. What are the benefits of aviation to the UK economy? We believe that this question has been comprehensively answered by ABTA in their response. As our business is primarily in the tourism sector, we would wish to comment on the contribution made by the outbound tourism sector to the UK economy; as many of these points are often overlooked. • Employment. Outbound tourism is a substantial employer of UK citizens. Our own Group employs more than 15,000 UK staff within our airline, tour operating and retail businesses. Tourism employees, by using their spending power also directly support numerous other sectors, and that there is therefore a multiplier effect of those jobs. Furthermore, employees in the aviation sector frequently have above average salaries, as well as very specialized skill sets, bringing additional financial and other benefits to the UK economy. • Tax revenues. We, as well as other outbound tourism businesses make a very substantial contribution to the tax revenues of the UK. As this response will be in the public domain, we would not wish to specify the amounts in detail, but would be very happy to outline in more detail our fiscal contribution to the UK.. • Social and cultural benefits of tourism. It has been demonstrated by numerous studies that tourism contributes to the well-being of the tourist, as well as making a contribution (generally positive) in the destinations to which tourists travel. Tourism by air enables tourists to travel to more distant destinations, and therefore provides additional social and cultural benefits. • Contributions to destination markets. It is clear that tourism provides a significant benefit to destination markets. Many countries are highly dependent upon international inbound tourism. The UK outbound tourism market has historically been one of the largest in the world, and as such, has driven significant wealth into what would otherwise often be poor nations, dependent upon aid from the UK and other developed nations to support their economies. We believe that the income brought by tourism is preferable for many reasons to under-developed economies to aid, and as such, as well as providing a benefit to the UK, in potentially reducing its international aid bill, the benefits to the destinations themselves are significant. We would highlight in particular the massive economic impact of tourism on the economies of the Caribbean, ranging from 24% of the total economy in Jamaica to 74% in Antigua and Barbuda

1c. What is the impact of Air Passenger Duty on the aviation industry? APD has an impact on the UK economy generally, not purely on the aviation industry. The UK has the highest levels of aviation taxes in Europe. We do not object to the principle that aviation should meet its externalities, and aviation taxation, such as APD is a means of doing this. However, we believe that APD significantly over-recovers the external costs and impacts of aviation, and there is little or no investment by government in addressing the external costs. It appears current government policy is somehow to treat APD as a simple revenue raiser without recognising its purpose and effect.

In our business, we have noted that the current high levels of APD do impact on consumer behaviours. Holidaymakers are presently encouraged to travel to wealthier economies like the USA in preference to, for example, the Caribbean due to the price differential created by APD levels. As a charter airline, the levels of APD have undoubtedly impacted on our long haul flying programme, which has been significantly reduced due to falling demand created by increased costs in the past 5 years.

1d. How should improving the passenger experience be reflected in the Government’s aviation strategy? Improving the passenger experience should be an essential function of all parts of the aviation sector, including government, which intervenes at numerous points in the operation of aviation – border control and security, as well as general regulation of airports, aviation and airspace being the key ones. We do not believe that this is a strategic response, but simply part of the normal functioning of the market. “Better not bigger” is a political slogan, not a strategy towards aviation.

It should be noted that when an airport is operating at or near full capacity, there is minimal resilience available in the event of problems. As a result, bad weather or other problems can have a disproportionately adverse impact on overcrowded airports, to the point where the passenger experience becomes intolerable. We would therefore suggest that the expansion of airport capacity will in itself improve the overall passenger experience.

1e. Where does aviation fit in the overall transport strategy? Aviation is a key part of the transport mix in the UK – both as a means of international travel, and in appropriate cases, within the UK. We do not, for example, see HS2 as any form of substitute for aviation. It will be built primarily to improve inter-connectivity within the UK, and will not act as a substitute for passengers travelling from, say, the North of England to Spain. We do however believe that governments need to do more to ensure that there is effective inter-connectivity between different modes of transport.

2. How do we make best use of existing aviation capacity? Our experience of travel, which goes back over 170 years, is that customers generally look for convenience and ease of travel. Given the choice, most of our customers would prefer to fly from their local airport to their destination, whether that be for leisure or business purposes. However, there will never be sufficient demand from all parts of the country to all destinations to sustain operations on that basis. As such, whilst direct routes from regional airports to many short haul destinations, both for business and for leisure may be appropriate, inter-continental flights may only be sustainable from a limited number of departure points, and potentially a single hub airport in the UK. Logically, any hub airport would need to be located in close proximity to London, which is the trading centre of the UK, as well as having a significant proportion of the population, and being the major destination of choice for most overseas tourists. 1

We have already made reference to our business being primarily leisure travel. We have noted with increasing concern suggestions emerging from governments and other commentators that leisure is somehow secondary in importance to business travel. We have highlighted in paragraph 1a the contribution which outbound tourism makes to the economy, and we do not believe that there should be any discrimination between air travel for different purposes, and in particular, we would emphasise that leisure air travel should be given the same importance as business travel.

2a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? We believe that government is failing to address this issue at present. South Eastern airports cannot be seen as readily inter-changeable. Each airport does serve distinct markets, albeit with some overlap. As we have indicated above, we do believe that there needs to be a focus on a single hub for inter-continental travel, to deliver economies of scale. Previous attempts by both the UK and other governments to manage demand by directing traffic to certain airports have failed – whether that be by restricting US traffic, and forcing US carriers to operate to Stansted or Gatwick, or by forcing US traffic in Scotland to operate through Prestwick. As soon as restrictions are lifted, traffic naturally migrates to the most relevant airport, whether that be Heathrow or Glasgow. Similarly, the massive costs involved in constructing some form of link between Heathrow and Gatwick seem inappropriate, since they are simply linking 2 already full airports. The best means of improving passenger experience and airport resilience is to have sufficient airport capacity available to ensure that airports are not operating at more than 90% occupancy. As we have indicated earlier, if aviation can meet its environmental costs, it should be allowed to expand, even if that means constructing new runways or indeed new airports.

2b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? In general, there is not currently an excess of demand over supply for airports outside the South East. With the growth in population and gradual change in demographics, this may not be the case in 20 to 30 years time. We believe that the same principles to growth should be applied to other airports in the UK, namely that growth should be allowed in order to meet demand, provided that the environmental impacts of that growth can be met. It should be borne in mind that if there is unsatisfied demand for air travel from regional airports, this will generally be met by the affected customers using overland transport to get to an alternative airport where the demand can be met.

The major change required in this area is that the UK planning system needs to recognise that major infrastructure projects need to be addressed through the planning process in a more effective way than is currently the case. The planning process for Heathrow Terminal 5 took almost 15 years to complete. Whilst the planning process for the second runway at Manchester

1 ONS data 2010 shows that there were 227,846k overseas visitor bednights in the UK, of which 90,318k (40%) were in London. Airport was considerably shorter, it still took 8 years from the start of the process to the completion of the second runway.

As part of the overall planning process, we would urge that authorities recognise the importance of safeguarding land in relevant areas, so that airport expansion is not prevented due to residential or other buildings being erected in key areas for expansion.

2c. How can surface access to airports be improved? We support the current practice of encouraging air travellers to reach their departure airport using public transport. However, the quality and availability of public transport to different UK airports varies enormously. We would suggest that there needs to be far better integration of public transport generally within the UK. All airports should, as a minimum have a direct rail connection to the main city or cities which they serve. Even then, we would highlight that families travelling on holiday frequently do not find it easy to use public transport to get to their departure airport – attempting to take a family with young children and luggage on a train can be challenging! Improvements to train rolling stock would probably be needed to provide sufficient space for passenger baggage. We are not convinced that there is political will to invest to this extent in rail and other surface access infrastructure.

3. What constraints are there on increasing UK aviation capacity? We believe that the most significant constraint to increasing aviation capacity is a political one. As we have indicated in our opening section, we understand and agree with the need to balance the needs of aviation and travellers with both the environmental and the localism agendas, particularly around the issue of noise. However, we believe that due to the long lead times involved, as well as significant investment decisions required, simply putting off making difficult and potentially politically damaging decisions does not constitute a strategy. If governments genuinely believe that air travel needs to be constrained, then there is a need for this to be explained clearly to the electorate. We do believe that there needs to be political consensus around aviation strategy.

As a related issue, available space in the UK acts as a very significant constraint on aviation capacity expansion. It is difficult to locate or expand an airport facility anywhere in the south east without affecting a significant number of people, which would presumably explain the attractiveness of proposals for Thames Estuary airports, as the local disruption would be smaller.

3a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? 3b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? We are unclear whether government has genuinely made any proposals in relation to either noise or the environmental impacts. We acknowledge the concept of “noise envelopes” and agree that this concept may be used to address the impacts of noise.

Government has worked with the aviation industry for a number of years in the Sustainable Aviation initiative2. Thomas Cook is an active participant in that initiative, which is a long term strategy which sets out the collective approach of UK aviation to tackling the challenge of ensuring a sustainable future for the aviation industry. Both within that initiative, and within the aviation industry more widely, significant steps are being taken to address the environmental and noise impacts of aviation. We believe that those steps are having an impact, and will continue to do so. It should however be acknowledged that as an international industry which

2 http://www.sustainableaviation.co.uk/ is subject to international, inter-regional, national and local regulation, there are inevitably differing standards and approaches, and there is not always consistency of delivery. Changes also require significant investment which can take time to come to fruition. We would however commend the Sustainable Aviation initiative as an outstanding example of attempting to address these concerns – and would urge the Committee to invite a representative of that initiative to address the Committee in their evidence sessions.

3c. What is the relationship between the Government’s strategy and EU aviation policies? We recognise that despite political concerns as to the extent of EU influence, the UK has generally been very supportive of EU initiatives, and has enthusiastically embraced legislative and other requirements from Brussels. Aviation is an international industry, and as such, international solutions do have to be found to the challenges created. We strongly support the proposals to create a Single European Sky, and believe that if adopted, this should allow for far greater co-ordination of Air Traffic management across Europe. We welcome the UK strategy in supporting this initiative.

We have also consistently supported the concept of including aviation within the EU Emissions Trading Scheme. We are concerned at the current political impasse apparently reached between the EU and other nations, and believe that political solutions need to be found to this issue. The UK, as one of the major air hubs of the world, is well placed to encourage appropriate solutions.

19 October 2012

4. Do we need a step change in UK Aviation capacity? Why? 4a. What should this step-change be? Should there be a new hub airport? Where? 4b. What are the costs and benefits of these different ways to increase UK aviation capacity? As we have commented in our opening remarks, economic growth and population growth will lead to increased demand for aviation. Provided that growth can be met within the constraints of the environmental and other concerns, then we believe that there is a need for a step change in UK aviation capacity. The alternative would appear to be to impose some form of rationing on travel, and this runs the risk of either creating counter-intuitive behaviours for British citizens – such as forcing citizens of the South East to travel overland to airports elsewhere in the UK, creating a different, but still significant environmental impact, or of driving economic activity out of the UK altogether.

It is our belief that additional capacity is needed in the UK to meet actual current, as well as future demand. We question whether the UK can genuinely sustain more than one hub airport, and as such, if the step change involves constructing a new hub airport, whether in the Thames Estuary or elsewhere, then it is inevitable that the status and purpose of Heathrow would need to change. We would be surprised if Heathrow were to remain open if another airport were constructed. It should be borne in mind that this would impact on employment in the immediate vicinity of Heathrow, and more widely. We have noted data contained in a report produced by Optimal Economics for Heathrow Airport3, which shows that in addition to the 76,600 staff employed directly at Heathrow on airport, and further 7,700 employed off airport, there is further indirect and induced employment in the London area of more than 52,000 other employees. Furthermore, it may be noted that a significant number of businesses have chosen to locate themselves in West London or in the Thames Valley corridor due to good transport links. An airport constructed in another area, such as the Thames Estuary would therefore involve a very significant shift in the working population, the consequences of which should not be underestimated.

We have no further data to add on potential costs and benefits of these options, but would simply reiterate our earlier point that aviation generally drives economic activity, and failure to meet demand would undoubtedly suppress some of that economic activity.

Submitted on behalf of the Thomas Cook Group plc By Andrew V Cooper Director of Government and External Affairs

19th October 2012

3 http://www.heathrowairport.com/static/Heathrow/Downloads/PDF/Heathrow-Related-Employment- Report.pdf Written Evidence from Gatwick Airport (AS 68)

Summary

• London and the UK is one of the world’s leading aviation markets. The UK is exceptionally well connected and has direct flights to some 360 destinations which is more than any other country except for China and the USA. It is critical that London and the UK retains and builds on this superior air connectivity.

• Gatwick is beginning work on evaluating options for a new runway against the criteria which it anticipates will be used by the Independent to make recommendations to the Government. There is clearly much work to be done. However, Gatwick anticipates that the case for a new runway at the airport is likely to be stronger than other options when assessed against relevant criteria.

• Today, London is served by several airports rather than a single ‘hub’. This has worked well in terms of convenience of access. The population of London and the South East is spread over a large area with congested road and rail systems. A new runway at Gatwick would enable the airport to grow to a similar size as Heathrow’s ultimate capacity as a two runway operation. London’s airport system could continue to evolve in a similar way to other world cities, including New York, which is served by multiple airports that support multiple airline business models providing a wide choice of destinations, frequencies and service offerings.

• The environmental impact of a new Gatwick runway in terms of noise and emissions would be far less than at Heathrow. The passenger experience is likely to be better than at a ‘mega hub’, especially given no original design ever envisaged such an expansion. Gatwick is also conveniently located for a large population and is well served by road and rail links. A new runway at Gatwick would also not suffer from the physical capacity constraints of the relatively short third runway option at Heathrow.

• Gatwick will adhere to its legal agreement not to begin construction of an additional runway before 2019. However, given lead times in the policy and planning process, the preclusion of construction of a new runway before 2019 is no longer of practical relevance. Following a public consultation process in 2011, Gatwick published a Master Plan in July 2012 that outlined how a new runway could be developed. In partnership with the Local Authorities, Gatwick continues to safeguard land that would be required for one.

• Gatwick believes that there is significant spare capacity at London’s airports today. There is sufficient time for a considered review of longer term options for new runway capacity. Gatwick estimates that capacity at London airports will be some 190 million passengers per annum by 2020 which is over 40% more than the 132 million passengers per annum handled in 2011.

• Gatwick also believes that there is much that airport operators, airlines and the Government can do to make better use of and expand capacity at London’s airports before adding a new runway. Airport operators can, for example, encourage larger aircraft and higher load factors; incentivise the use of existing “off-peak” runway capacity; and increase hourly runway throughput through more efficient management. Gatwick is actively pursuing all these strategies and is currently mid-way through implementing a plan to boost runway capacity at times of peak demand.

• The CAA should, with the support of the Government, remove economic regulation from both Gatwick and Stansted. The Government should also support the EU slot reform to encourage better and fuller use of available slots. The Government should also take action to improve surface access through, for example, its approach to letting rail franchises.

1) What should be the objectives of Government Policy on Aviation? a) How important is international aviation connectivity to the UK aviation industry?

1. London and the UK is one of the world’s leading aviation markets. There is huge demand from both businesses and leisure traffic. This has shaped the UK aviation industry and how it has grown.

2. The UK has a broader network of direct air connections than any other country apart from China and the USA1. There are currently direct flights from the UK to some 360 destinations. This success has been achieved through multiple airports located conveniently around London and the UK.

3. Passengers prefer direct flights. A new generation aircraft with low operating costs is being phased into the world’s fleet, the current trend away from hub airports which serve connecting passengers towards direct point-to-point services will continue and accelerate. This trend has been highlighted by, amongst others, Boeing2. b) What are the benefits of aviation to the UK economy?

4. Aviation provides crucial access to global markets. It also enhances communications and interactions between and within business and provides access to a large labour pool. These supply side or “catalytic” effects are permanent and raise the long term productivity of the UK economy as a whole3.

5. Studies have quantified the overall economic value of these benefits, either in sum or separately, to the UK. The most recent study showed that the aviation sector contributes £53 billion a year to the UK economy, or 3.4% of UK GDP as a whole, and that the activities of the sector support 963,000 jobs4.

6. Other studies have used different definitions of the aviation sector. They have, for example, not included the aerospace supply chain, instead focusing solely on airlines, airports and the activities of their services providers and excluded ‘catalytic’ spending, such as that by inbound tourists. Even with this narrower definition, aviation has been estimated to generate £8.8 billion of Gross Value Add (GVA) every year, and 141,000 jobs5. Today, Gatwick itself adds £2 billion of GVA to the and the South East alone6.

7. Aviation’s broader ‘enabling effects’, such as trade and inward investment, are also a major source of growth for the UK economy. It has been estimated that a 10% increase in the UK’s international connectivity would add £890 million a year to UK7. Clearly

1 Department for Transport, Draft Aviation Policy (July 2012) 2 Boeing, Point to Point: Financial Trends in Commercial Aviation, (December 2005) cited in Birmingham Airport, Don’t’ put all your eggs in one basket: a challenge to aviation orthodoxy (June 2012) 3 FTI Consulting, “The Importance of Aviation Infrastructure to Sustainable Economic Growth” (October 2011) 4 Oxford Economics, Economic Impacts of Air Transport in the UK (March 2011) 5 Oxera Consulting, The Importance of Aviation to the UK Economy (October 2009) 6 Gatwick Airport Master Plan (2012) 7 Oxford Economics, Economic Impacts of Air Transport in the UK (March 2011)

aviation plays a critical role not just in underpinning productivity of the economy, but also in terms of potential sources of growth. c) What is the impact of APD on the UK aviation sector?

8. High and growing rates of APD are damaging the UK aviation sector. Gatwick provided oral evidence to a recent report published by the All Party Group on Aviation on this issue. A recent example of the direct impact of APD was the cancellation by Air Asia X of its services from Gatwick to Malaysia8, which it attributed to the high, and escalating, rates of APD in the UK. d) How should improving the passenger experience be reflected in the Government’s aviation strategy?

9. Research commissioned by Gatwick from YouGov helps to demonstrate that passengers prefer direct flights; airports that are convenient and easy to access; punctual airline services; and a friendly, efficient, pleasant airport experience. Passengers like their travel experience to be as stress free as possible. They also appreciate airports with shorter walking times and quick, predictable processing with minimum queuing.

10. These preferences should be reflected in the Government’s aviation policy. First, the Government should consider convenience and adequacy of surface access when planning how and where capacity should be expanded throughout the system. London’s distribution of population over a very wide area means that accessibility is maximised through a multi-airport system. Second, the Government should consider the negative consequences for passenger experience of the creation of a ‘mega-hub’ airport. Finally, the Government should continue to develop a policy and regulatory framework that both encourages and allows the airports freedom to compete with each other.

11. The current system of economic regulation was designed around BAA’s historic near monopoly of London’s airport system. Gatwick came under separate ownership in December 2009, since when it has been competing vigorously with other airports. There is no longer a need for it to be subject to economic regulation. Gatwick’s freedom to compete is constrained by the same economic regulation which, although under review, has not yet changed. For example, Gatwick is highly constrained in being able to offer different service and price packages for different types of air services. Gatwick would like more freedom to make quicker investment decisions to meet the needs of its individual airline customers and compete more effectively with Heathrow and the other London airports.

12. Gatwick is making progress with its transformation. Its investment programme is designed to create a real alternative to Heathrow and the other London airports. Gatwick will complete its current £1.2 billion investment programme in 2014. Gatwick has proposed a further £1.1 billion programme to run from 2014-2020. Its investment has focused on the passenger experience. New security areas, terminal forecourts, transparent performance indicators, as well as innovative approaches to baggage reclaim, check-in and working with UK Border Force have all been features of a programme that has seen passenger complaints fall by 48% between 2009 and 2011 and compliments more than double over the same period9. Gatwick meets all its service targets set by the CAA. A truly liberalised Gatwick, free from economic regulation, would be able to go further and faster in these efforts.

8 http://www.telegraph.co.uk/travel/travelnews/air-passenger-duty/9010288/AirAsia-X-scraps-Gatwick-flights-due-to- APD.html 9 Gatwick Airport Records

e) Where does aviation fit in the overall transport strategy?

13. The UK’s overall transport strategy must recognise and ensure that the aviation sector’s significant economic and social benefits are fully brought to bear for the UK as a whole. Air transport’s unique role in maintaining the UK’s global connectivity must be maintained and enhanced.

14. Aviation must be at the core of the UK’s transport strategy. Much greater emphasis should be given to integrating the development of road and rail infrastructure with the expansion of airports. Air traffic control planning and services also need to be co- ordinated with airport growth.

2) How should we make the best use of existing aviation capacity? a) How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient?

15. There is substantial actual and latent spare capacity at London’s airports. There are measures that the Government, airport operators and airlines can take to improve utilisation of the existing system and services.

16. Capacity can be looked at in several ways – movements, passengers as well as overall and peak capacities10. There is extensive capacity available in the South East market, which could today support 30% extra air traffic movements (ATMs) and over 40% more passengers to and from the region11. There is unused peak period capacity at Stansted and Luton. More capacity can be provided through better use of infrastructure at all airports, including by increasing the number of ATMs, using larger aircraft and achieving higher load factors.

17. Gatwick has identified ways to expand capacity from its single runway. First, Gatwick has boosted the efficiency of its operations and expanded its peak capacity. Second, Gatwick has been restructuring airport charges to encourage the use of larger aircraft with higher load factors. Third, Gatwick has been restructuring charges to encourage off-peak utilization. Gatwick has supported these initiatives through a targeted investment programme to ensure that capacity bottlenecks do not emerge elsewhere in the system as its traffic grows.

18. Under its previous ownership, Gatwick’s declared peak time runway throughput was 50 ATMs per hour. Under new ownership and the application of collaborative management, peak hour declared capacity has increased to 53 ATMs per hour and Gatwick is targeting to achieve 55 per hour within 2 to 3 years. Gatwick is easily the busiest single runway operation in the world.

19. Gatwick believes that similar initiatives at other airports could expand the capacity of the London system considerably. Greater diversity in the ownership of London’s major airports will encourage still more focus by airport operators in this area.

20. Gatwick also believes that free and open competition between airports must be facilitated if existing capacity in London’s airport system is to be effectively used. The current structure of economic regulation impedes this. A deregulated Gatwick could set the price of the service it offers to airlines through negotiation with them, rather than via a regulator.

10 The ‘peak capacity’’ refers to the maximum amount of take-off’s and landing’s that can be accommodated in given hour. 11 Gatwick Airport, Airport Competition: Competing to grow and become London’s airport of choice (November 2011)

21. Gatwick would be able to attract long haul airlines away from Heathrow, and develop the airport to meet the future needs of airlines and passengers. Gatwick has made progress in attracting new, high value, intercontinental long haul routes to China, Vietnam and South Korea. These new routes demonstrate that Gatwick can offer a credible alternative to Heathrow in providing long haul links to key growth economies. Deregulation would promote i anticipation of, and response to, changes in what is a dynamic and competitive industry. Freed from regulation, Gatwick could enhance its commercial proposition for new carriers.

22. The Government’s draft aviation policy makes a range of welcome proposals to facilitate new services. Allowing ‘fifth freedoms’ or the ability for an airline to land at Gatwick, take on passengers, and fly elsewhere is a very positive development and will help to improve the utilisation of London’s airports.

23. The regulations governing the allocation of airport capacity are derived from European Law12. The European Commission has proposed a series of modest reforms which, if implemented in the UK, would lead to significant efficiencies in the way Gatwick’s runway is used at times of peak demand. The Government should press for these measures to be enacted at EU level and introduced in the UK as soon as possible.

24. If these reforms had been in force during Gatwick’s busiest week in Summer 2011, more than 10% of the ‘slots’ currently allocated to airlines but not fully used would have been released for other airlines to use in Summer 2012. This translates to 371 more flights that could have taken off or landed from Gatwick in a single week or 55,000 more passengers in single week13.

25. By releasing capacity at times of peak demand, these reforms would assist Gatwick’s growth. Most new airlines want to establish full, year round, consistent schedules. Only 60% of Gatwick’s capacity is used in some months, whereas up to 88% is used in August14. Implementing the European Commission’s proposals would improve the scope for new long haul routes to be established from Gatwick by releasing some peak slots in the congested summer months. b) Does the Government’s current strategy make the best use of existing capacity at airports outside the South East? How could this be improved?

26. There is currently substantial excess airport capacity outside the London area. Traffic demand has been flat or negative in most of the UK’s regions since 2008 caused primarily by weak consumer demand and escalating APD. The key issue will continue to be capacity in the South East of England, not the regions. This problem can be solved by making better use of existing facilities in the short to medium term and making the right decisions on where to add capacity in the South East in the longer term.

27. Clearly, the regions have an important role to play. However, they will not be able to relieve the need for capacity in the South East of England. Approximately 12 million people live within one hour’s travel of Gatwick15. People who live in London and the Greater London area have a 40% greater propensity to fly than those who do not16. Both the UK’s broader population density and the demands of that population dictate that the South East is where demand to fly is concentrated.

12 Council Regulation (EEC) No 95/93 of 18 January 1993 and subsequent amending regulations 13 Analysis from Airport Co-ordination Limited (ACL) 14 ACL analysis of Gatwick Capacity in 2011 15 ONS 2004 Population Statistics 16 CAA, UK Airports Market- General Context, (September 2011)

c) How can surface access to airports be improved?

28. 54% of business passengers cite the cost and convenience of reaching their departure airport as the most important factor in their decision17. Good road and rail links are critical for airports. The quality of the Gatwick Express rail service has been deteriorating and is under further threat depending on how the next rail franchise is specified. Of 75 rail services recently surveyed nationwide, the Gatwick Express was one of only five that saw a distinct drop in passenger satisfaction18.

29. Improving rail access is critical to attracting new traffic to Gatwick. This could be delivered through a set of clear specifications around the quality and nature of service that Gatwick requires in the forthcoming Thameslink franchise, which may operate nearly all rail links in and out of the airport from 2015 onwards, depending on the recently announced review of the franchising system. The tender should require a non- stop express service, which is dedicated to running solely between Gatwick and London Victoria with high quality accessible rolling stock that is appropriate for air passengers. The tender should require the franchise to provide increases in capacity and frequency as demand grows.

30. More broadly, in designing tender documents for new rail franchises which will serve major international airports, the Government should specify clear requirements on any operator to deliver high-quality air-rail services and lay down the specific characteristics of service that airports need. They should also ensure that bids are appropriately weighted to the quality and suitability of services that franchisees provide, and not predominantly on the overall direct contribution that they propose to contribute to the exchequer over the life of the franchise.

31. In the medium to long term, rail timetables and infrastructure have to be designed to cater for growth in air passengers and commuters. Gatwick’s recent report, Supporting UK growth and global market access: The case for high quality rail services to Gatwick airport outlines this concept in more detail. It includes a full timetable plan for the new Thameslink franchise from 2018.

3) What constraints are there on increasing UK capacity? a) Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

32. Gatwick is wholly supportive of the ambition outlined in the draft aviation policy of limiting, and where possible reducing, the number of UK residents significantly impacted by aircraft noise. Existing arrangements are proving effective in moving towards this objective. Gatwick has been making progress in mitigating its noise impacts. The number of individuals contacting Gatwick on noise issues fell by 40% in the period 2006-2010, as did the total number of actual complaints19. Heathrow saw, respectively, a 29% rise and 8% rise of complainers and individual complaints between 2009 and 2011.

33. In addition, a comparison between the first three months of 2011 and first three months of 2012 at Heathrow shows rises of 54% and 55% in individuals complaining and total

17 Research for the CAA, 2011 18 Passenger Focus Annual Rail Passenger Survey (2012) 19 Gatwick Flight Performance Team Report (2011)

complaints respectively20. The Phase one ‘operational freedoms’ trial, whose characteristics are similar to ‘mixed mode’ operations for limited periods was ongoing during the first two months of 2012. b) Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

34. The Government is focused on taking action at a global level to address aviation’s contribution to climate change. Gatwick shares that objective, and will continue to play a key role in ensuring the UK aviation sector makes a significant and cost-effective contribution to global emissions. There is a great deal of potential in timely implementation of the EU Emissions Trading Scheme (EU ETS). UK Aviation can already maintain 2005 levels of net carbon emissions to 2050, even with the Government’s projected levels of growth in air travel in the UK taken into account. EU ETS has potential to cut this level further21 delivering a net reduction.

35. In the long term, there is potential for sustainable biofuels to reduce carbon emissions from UK aviation. There is a role for Government in supporting the production of a sufficient amount of sustainable base material for biofuels to make their widespread introduction economic for airlines. c) What is the relationship between the Government’s strategy and EU aviation policies?

36. Current EU aviation policy is focused on the ‘EU Airports Package’. This should deliver a range of reforms to regulations governing handling of baggage, noise impact mitigation, and airport ‘slot’ or capacity allocation (see paragraphs 23-25). Moves at EU level to develop union-wide air service agreements with non-Member States have an impact on efforts to ensure that London’s existing airport capacity is efficiently used. The Government should approach any negotiating strategy on these initiatives with this consideration in mind. It is important that air service agreements do not contain specific airport limitations in the UK.

4) Do we need a step-change in UK aviation capacity? Why? a) What should this step-change be? Should there be a new hub airport? Where?

37. There is no short-to-medium term aviation capacity crisis today in the South East. Gatwick estimates that the capacity of the London system will be some 190 million passengers per annum by 2020 compared with actual throughput of 132 million passengers in 2011. This estimate largely excludes the impact of greater operational efficiency and new technology on airport capacity. There is now much greater uncertainty about the likely rate of traffic growth given low economic growth and increasing aviation costs including taxes.

38. In the longer-term, a step-change in UK aviation capacity will be necessary. It will need to be in the South East of England. The most economic and environmentally acceptable approach will be to add an additional runway at an existing London airport. On this basis there are only three credible options: Heathrow, Gatwick and Stansted. Heathrow faces major challenges on noise and air quality impacts on a very large population. The incremental capacity provided by an additional runway at Heathrow would also be relatively limited. Stansted’s main challenges relate to its business case and poor surface

20 BAA, Heathrow Flight Evaluation Data Report Q1 2012 21 Sustainable Aviation, Carbon Roadmap (December 2011)

access.

39. An expanded Gatwick has the potential to address the long term connectivity problems that the UK faces. There are a range of precedents around the world where multiple large airports support the needs of the same large conurbation and for these airports to deliver a mixture of short haul and long traffic that helps to meet the connectivity needs of the city or country they serve22. Gatwick is aware of no independent evidence that suggests this could not happen in the UK or that it would be necessary to link the airports concerned by high speed rail to achieve it.

40. The core demand for this model is clear. The London aviation market is larger than New York’s, where JFK/Newark/LaGuardia fulfill such a role for that city23. In our view, it is therefore London that is the ‘hub’ for UK aviation not Heathrow. Heathrow is already a blended ‘hub/’point to point’ airport, given that 65% of its traffic is currently ‘point to point’ 24. With a larger market size than New York, there is sufficient demand in London to support a range of airports that cater for a blend of airline business models should the appropriate infrastructure be developed.

41. Adding a new runway to Gatwick could enable it to grow to a similar size as Heathrow’s ultimate capacity as a two runway operation and potentially develop in the same way providing greater competition in the process. Stansted, Luton, London City and Southend could continue to provide a supporting role in the system. More broadly, London could develop its multi-airport system further to meet London’s and the UK’s connectivity needs in a similar way as New York’s.

42. Finally, a new runway at Gatwick would also provide travellers with a choice of airports on more routes enabling them to choose airports which are most convenient. The passenger experience at Gatwick and the other London airports is likely to be more pleasant than would be the case with the development of a ‘mega hub’. b) What are the costs and benefits of these different ways to increase UK aviation capacity?

43. In partnership with the Local Authorities, land next to Gatwick is currently safeguarded to ensure that additional runway capacity could be constructed easily and efficiently. In July 2011, the Government reaffirmed this requirement in its Draft Aviation Policy25. In July 2012, after 12 weeks of public consultation in 2011, Gatwick published a Master Plan that outlined how a new runway could be developed when the existing runway reaches capacity. Gatwick projects that this will not occur until the mid-2020s at the earliest and maybe beyond that.

44. A new runway at Gatwick was not the principal option proposed by the previous Government principally because of the binding 1979 legal agreement precluding construction of a new runway before 2019. Gatwick remains committed to this agreement. However, Gatwick is now beginning detailed work on the options for a new runway, which will be submitted to the independent airports commission to be chaired by Sir Howard Davies.

45. Gatwick’s work programme will look in detail at the implications, costs and benefits of a new runway and will cover all the issues which it anticipates will be relevant to the commission and the eventual policy decision by Government on airport expansion. While

22 The Mayor of London, A new airport for London: the case for new capacity (November 2011). Appendix C lists these examples. 23 Ibid 24 CAA, Connecting Passengers at UK airports (November , 2008). 25 See paragraph 6.7

detailed studies are currently being initiated, Gatwick believes that the additional capacity, flexibility and resilience that could be provided by a new runway at the airport would help to ensure that London’s airports provide the South East and the UK with the long term connectivity solutions they need.

46. At this stage, Gatwick would point to a range of studies that outline that the number of people affected by noise from a third runway at Heathrow is significantly larger than would be affected by a new runway at Gatwick. At Heathrow at least 304,000 people will be affected within the 57 dBA contour compared with only 13,200 at Gatwick26. The area within which people would be affected by a third runway at Heathrow is 60 Km² greater than it would be at Gatwick with a new runway. This is the same size as Manhattan and corresponds to 120,000 more homes than would be the case at Gatwick, a ratio of 25:1.

47. If stricter measures are used27 the total number of people affected by noise from a three runway Heathrow would be 710,600. Under the same measure, Gatwick with a new runway would affect 29,600. The number of households affected at Heathrow would be 308,800, compared with11,900 at Gatwick. The size of the area concerned would be 254 Km² at Heathrow and 138.6 Km² at Gatwick. The difference in area size is equivalent to one the size of Dublin.

48. Heathrow already regularly breaches the European limit for NO² emissions28 at three monitoring sites around the airport. It is very close to breaching it at several others. Another runway is predicted to expose an extra 35,000 people to levels above this limit. Gatwick has never breached this limit at its monitoring sites and it is not expected to with a new runway. In total, Heathrow emitted just short of 7,500 tonnes of NO² in 2010 and 340 tonnes of particulate matter. In the same period Gatwick emitted just over 2,000 tonnes of NO² and 82 tonnes of particulate matter29.

49. Stansted’s geographical position makes it much less attractive to airlines and their passengers than other London airports. It is losing traffic, with a 25% decline since 2007. In our view, current rail infrastructure is insufficient to support the high quality express link that is of key importance to promoting passenger demand. Today, Stansted airport ‘express’ trains cannot pass slower trains, particularly at peak time, meaning the journey time is delayed. There are also 19 level crossings on the route. Improving the Stansted ‘proposition’ could involve widening the entire 35 mile track line length from London, which would also entail track bed widening, a particularly expensive process30.

19 October 2012

26 All comparative data listed in paragraphs 46-48 is drawn from a comparison of data from the Gatwick Airport Master Plan (2012) & Heathrow Airport Interim Master plan (2005) 27 This refers to a comparison of the area that would be affected by a noise level of 54 Db averaged out over a 16 Hour day, as opposed to 57Db. 28A noxious compound produced by engines that can cause respiratory diseases if humans are heavily exposed to it. 29 Particulate matter consists of very small liquid and solid particles floating in the air. Of greatest concern to public health are the particles small enough to be inhaled into the deepest parts of the lung. 30 Policy Exchange, Bigger and Quieter: The Right Answer for Aviation, (September 2012)

Further written evidence from Gatwick Airport (AS 68A)

I hope you are well. Thank you again for the opportunity to appear before your committee to provide Gatwick’s perspective on current and future aviation strategy.

During my oral evidence, I made reference to the fact that today overall demand at London’s six major airports1 to ‘transfer’2 is significantly lower than many believe. In the evidence session that followed my own, another witness also made reference to independent research obtained -but not yet published- by Gatwick which highlights that the actual number of ‘transfer passengers’ using Heathrow is consistently lower than reported by many publications, industry organisations and commercial stakeholders, and in some cases Heathrow themselves.

I was sorry not to be in a position to submit this research as written evidence to your inquiry. Unfortunately, we did not obtain it in time to meet the deadline for written evidence to be submitted. However, I understand that the committee is interested to learn more about its basis and origins. As such, I am pleased to provide some clarification and further information. We are of course happy for your committee, should it wish to do so, to take it this information into account in producing its final recommendations, and for this letter to be published alongside any such report.

Implications for your inquiry

I believe it is particularly important that your committee assesses any requirement there may be for future new capacity in the South East on the basis of demand that we know exists today. Analysis of various independent data sources shows that the vast majority of this demand is for travel to and from London’s airports; not for the use of London as a transfer point. London is the largest aviation market in the world and the vast majority of passengers want to travel to or from it. London is the hub for aviation. Not one single airport.

Whilst the South East and the UK does need ‘hub capacity’ in order to support some direct services to a number of destinations, the degree of demand that there is to ‘transfer’ at a London airport is far less than many reports suggest. As a result, the demand that exists for more ‘hub capacity’ in London – whether that is through an expanded Heathrow or a new airport elsewhere- is consistently exaggerated.

Overall demand to use London’s airports today

The research obtained by Gatwick assesses the overall number of ‘passenger journeys’ through London’s airports on an annual basis. This information is collected by the International Air Transport Association (IATA) and available for analysis by subscribers. Further information on the nature of this data, how it is collected, and IATA’s full definition of a ‘passenger journey’ is included in Appendix One to this letter. The IATA data that I referred to outlines that approximately 125 million passenger journeys were supported by London’s six major airports in 20113. I have outlined this information graphically, by airport, in Appendix Two to this letter.

IATA’s analysis indicates that of these 125 million passenger journeys through London’s airports in 2011, approximately 116 million (or 93%) either began or ended their air trip in London. Only 9 million passenger journeys (or 7%) were purely taken to ‘transfer’ from one flight to another at one of London’s airports. 8 million of these were through Heathrow, and one million through

1 The CAA define the following as ‘London Airports’: Heathrow, Gatwick, Stansted, Luton, London City and Southend. 2 Transferring passengers are generally understood as those who arrive at an airport on one flight, deplane and then depart on another to their onward destination. They normally do not leave the airport concerned to do so. The CAA often refer to these as ‘connecting’ passengers. 3 As already indicated, and will be referenced below, the difference in the total number of journeys (125 million) and the number of reported airport passengers (134 million) is due to transfer passengers being counted as two airport passengers in airport statistics. GATWICK AIRPORT LIMITED, DESTINATIONS PLACE, GATWICK AIRPORT, WEST SUSSEX, RH6 0NP www.gatwickairport.com Registered in England 1991018. Registered Office Destinations Place, Gatwick Airport, West Sussex, RH6 0NP Gatwick. I have also outlined this information graphically in Appendix Two to this letter. This was the basis for my statement to your committee that:

“If you look at the way in which London and the south-east operates today, of all the passenger journeys in that region 93% involve passengers who either originate in London or have London as their destination; they either start or finish their journeys in London. Of the passenger journeys, the number of those who transfer through London and the south-east is about 7%, so the vast majority of passengers are either starting or finishing their journeys in London”

Since each transfer passenger fills a seat on both one arriving flight inbound to London and one departing flight outbound from London, the overall percentage of total London airport passengers (enplaned plus deplaned) accounted for by ‘transfers’ passengers is approximately 13%, or approximately twice the transfer percentage of passenger journeys involving London.

As such, The overall demand by passengers to use London’s airports purely to travel to and from London is far higher than many are aware, at approximately 93% of total passenger journeys, and 87% of total enplaned and deplaned passengers at the London airports. The overwhelming presence of passengers for whom London is either the trip origin or trip destination—commonly termed “London origin-destination (or O&D) passengers”—should not be surprising in that London is by far the largest market in the world for these kinds of passengers.

Proportion of transfer ‘journeys’ at Heathrow airport

IATA’s data indicates that in 2011, 8 million passenger journeys were transfers at Heathrow Airport. Heathrow Airport also confirm this in their report Connecting for growth: the role of Britain’s hub airport in economic recovery4. In his oral evidence to your committee, a fellow witness stated:

“The CAA figures show that about one third of Heathrow’s passengers are transfers. There is a dispute about that. The IATA figures suggest that the proportion is perhaps only half of that”.

IATA in fact outline that there are “16 million passengers who transfer at Heathrow every year”. This is because, as described above and outlined in Appendix One, a single ‘transfer’ passenger will be onboard two flights at the transfer airport—the arriving flight into the airport and the subsequent departing flight from the transfer airport. As a result, a single transfer passenger is normally counted as two passengers in an airport’s reported passenger traffic statistics. Heathrow confirms that this as their normal practice in a footnote to their above mentioned published report5.

On this basis approximately 23% of Heathrow’s total 2011 passenger traffic was comprised of transfer passengers, with the remaining 77% of total Heathrow passengers accounted for by London O&D passengers.

Other sources of information around ‘transfer passengers’

I believe it is important that the committee considers the various sources of information that are available on airport passengers and airport passenger demand, as well as the manner in which they are compiled. Many stakeholders refer to the annual survey conducted by the Civil Aviation Authority (CAA) when outlining the proportion of transfer passengers using Heathrow airport every year. Heathrow Airport does the same in information that they make publicly available6. Indeed, in giving oral evidence to your inquiry, Heathrow again stated that “of the total [traffic at Heathrow], on average, about one third is transfer traffic”.

4 See Page 15 of that report for further details. 5 Footnote 6, Page 15 of Frontier Economics: Connecting for growth: the role of Britain’s hub airport in economic recovery (September 2011) 6 See http://www.heathrowairport.com/about-us/facts-and-figures

The 2011 CAA annual passenger survey, and the Heathrow Airport website, state that 35% of passengers using Heathrow in 2011 (or 24 million) were ‘transfer passengers’. We have concerns that this figure overstates the percentage of Heathrow’s passenger traffic represented by transfer passengers. Indeed, Heathrow have themselves publicly acknowledged that “there is some dispute about how many passengers transfer at different airports”7.

This is because the CAA does not assess any actual data relating to air tickets actually bought by passengers. Instead, a sample of passengers is interviewed, and that sample is used to project what the overall number of transfer passengers at an airport could be8. In contrast, the information gathered by IATA is comprised of data concerning the actual tickets bought by air passengers. In our view, IATA’s database provides a better and more accurate estimate of the actual percentage of passengers who are transferring at Heathrow and the other London airports. In Appendix Three to this letter, I have outlined how the assessments of the number of passengers ‘transferring’ at London’s airports differ depending on whether the IATA or CAA data is used.

Why this matters for future aviation policy

These points have real implications for how policy towards airport infrastructure should evolve in the UK in future. Our view continues to be that, in the long term, the Government should be working towards the establishment of a true airports system for London, which comprises three competing airports, each with two runways. It is in this context that I believe that Gatwick should be the next airport where new runway capacity is added. The majority of passenger demand to and from the Southeast region today is geographically dispersed, and not best served through a single hub airport. We hope in the near future to provide you and your committee with further information on this vision, the precedents for it, and the manner in which it might best be enabled.

18 December 2012

APPENDIX ONE

ORIGIN AND NATURE OF GATWICK ANALYSIS

Gatwick’s recent research originates from the International Air Transport Association (IATA) Passenger Intelligence Service (PaxIS). IATA refers to this as “the most comprehensive airline passenger market intelligence database available today”9. The data within it is gathered through the use of the IATA Billing and Settlement Plan (BSP), which IATA describe as a “system designed to facilitate and simplify the selling, reporting and remitting procedures of IATA Accredited Passenger Sales Agents”. Information gathered as part of the PaxIS system is available on subscription from IATA.

IATA’s PaxIS service is commonly used to measure current demand to use airports, and individual routes operated by airlines, all over the world and is a commonly accepted planning tool within the aviation industry. IATA name a range of airlines and airports that currently make use of this

7 Footnote 4, Page 15 of Frontier Economics: Connecting for growth: the role of Britain’s hub airport in economic recovery (September 2011) 8 For example, in the 2011 CAA survey around 140,000 surveys were carried out at Heathrow, Gatwick, Manchester, Stansted and Luton, airports with a total of around 150 million passengers. Thus the sample ratio is just under one percent. In contrast, the IATA data is based on actual bookings data from a much greater relative sample (over 30% at Heathrow) 9 http://www.iata.org/services/statistics/intelligence/paxis/Pages/index.aspx information including: Airbus, , Air China, Jet Airways, Malaysia Airlines, Southwest Airlines & . A full list is available on request from IATA.

Frontier Economics’ report for Heathrow10, and numerous other market studies also make use of this data source.

Key Terms

Journey: IATA define a ‘journey’ as “travel between an airport/city where travel commences and an airport/city where travel ultimately terminates. A journey may be comprised of one or more segments”11. In essence, a ‘journey’ reflects a ticket bought by a passenger from an IATA accredited agent to fly from one location to another. This would include a passenger who may have travelled via another airport to reach their final destination. For example, a passenger that travels from London to Dehli via Dubai would be counted by IATA as having taken one ‘journey’. The number of journeys will generally reflect the overall demand there is to use a particular airport or fly on a particular route.

Passenger: Simply put, this is the overall number of journeys through the airport on an annual basis, normally on an annual basis. The overall level of demand to use an airport is not necessarily the same as the overall number of journeys recorded as using it. This may appear counter-intuitive, but it is generally because a ‘transfer’ passenger is effectively ‘double counted’ in terms of ‘journeys’ in many assessments. Whereas a passenger starting or ending their journey at an airport would count as one ‘journey’, a ‘transfer’ passenger at that airport (who does neither) will often be counted as two. One journey on their outward bound leg, and another one on their return. This can lead to an inflated understanding of demand that may exist on the part of passengers to use an airport to ‘hub’- or transfer from one plane to another.

Origin & Destination Passenger: Also known as ‘O&D’ or as a passenger who either starts or ends their journey at a given airport, and classed by IATA as an ‘Origin and Destination’ passenger. It is important to distinguish between this term and another that is often used- “Point to Point”. As outlined above, an Origin & Destination passenger could have travelled ‘via’ another airport to get to where they want to go, or return to where they came from. A ‘Point to Point’ passenger would not have done. In our view, any debate about the nature of demand to use London’s airports should focus on the terms and definition of passengers that are respectively ‘Origin & Destination’ and ‘Transfer’ and not ‘Point-to-Point’ and Transfer’.

10 See, for example Figure 8, Table 6, Figure 9 and Figure 10 of Connecting for growth: the role of Britain’s hub airport in economic recovery. Although Frontier refer to it as IATA AirportIS, this is the same data based on bookings 11IATA Glossary of Terms APPENDIX TWO

THE NATURE OF DEMAND TO USE LONDON’S AIRPORTS

Source: IATA PaxIS data analysis

APPENDIX THREE

VARIABLE ASSESMENTS OF TRANSFER PASSENGERS AT LONDON AIRPORTS

134 million 134 million 125 million

LHR Transfer % 13% 23% 34% LGW Transfer % 2% 4% 9% LON Transfer % 7% 13% 20%

Written evidence from the WWF-UK (AS 69)

Summary

• WWF believes that it is possible for the UK to maintain its premiere hub status and connectivity without major airport expansion. This will require better use of existing capacity, reforming slot allocation, renegotiating bilateral agreements, and moving flights of lower economic value to less congested airports.

• WWF is not opposed to flying. However, we believe aviation must operate within environmental limits, as recommended by the Committee on Climate Change (CCC), and do its fair share to tackle climate change.

• The CCC makes it clear that unconstrained expansion of airports is not consistent with the Climate Change Act and our legally binding climate target to reduce UK greenhouse gases by 80% by 2050, in comparison to 2005 levels.

• A strategy for aviation capacity should be based on the CCC’s recommended limits to aviation growth; these allow for a 60% increase in passenger demand and 55% increase in Air Traffic Movements to 2050, compared to 2005 levels.i

• WWF/AEF analysis of UK airport capacityii shows that there is ample capacity, even in the South East, to accommodate aviation growth to 2050 within these recommended limits.

• WWF believes that the Coalition Government is right to reject new runways at Heathrow, Stansted and Gatwick. WWF also believes that a Thames Estuary airport or other new hub would endanger UK climate targets and is not needed to meet future demand.

Government policy objectives on aviation (answering questions a, b, c and e) a. How important is international aviation connectivity to the UK aviation industry?

1. International aviation connectivity is important to the UK aviation industry because more routes can provide greater revenue and profitability for those companies. A better question to ask is whether the UK has sufficient international connectivity to serve the interests of UK business and leisure travellers, now and in future, while accepting the need for capacity constraint within environmental limits and economic needs. Research by AirportWatchiii (commissioned by WWF) shows that Heathrow holds the position as the top European hub and it is not at any risk of losing its competitiveness. Heathrow offers more flights to key business destinations than any other airport in Europe, more than the combined total of its two nearest rivals, Charles de Gaulle and Frankfurt. Heathrow offers greater connectivity to 20 out of 27 key business destinations in North America, the Middle East and Asia. It also has more flights to Hong Kong (Asia’s leading hub with its excellent links to second-tier Chinese cities) and the emerging economies of India and South Africa than other Continental airports. There is clear evidence that it is possible to increase flights to emerging markets using spare airport capacity. This is already happening at Gatwick and Birmingham airports where more routes to China, Korea and Vietnam are being added.iv Most recent passenger figures at Heathrow and Gatwick also show a significant increase in flights to emerging marketsv, without any increase in airport capacity.

b. What are the benefits of aviation to the UK economy?

2. WWF accepts the economic importance of UK airports. However, this is routinely overstated in terms of net financial contribution to the economy taking into account the tourism deficit (which was £11.2 billion in 2011vi), jobs created by the sector (120,000 according to ONS figuresvii rather than the “200,000” often stated) and the assumption that business needs aviation growth in order to be profitable and competitive. WWF’s Moving On researchviii surveying FTSE-500 companies shows that the UK’s leading businesses are flying less, not more and have discovered significant benefits from doing so. This is also confirmed by WWF’s own programme, the One in Five Challenge which encourages lower carbon alternatives to flying. These companies have, on average, cut 41% of flights over two years saving £2.4 million and 3,600 tonnes CO2 per companyix. WWF rejects the simplistic argument that airport expansion will somehow lift the UK out of recession. The earliest any proposed expansion option could be ready is at least 10 years away, so not in the timeframe to provide immediate help to the economy. There is also no clear link between airport expansion and GDP growth. A recent study by Prime Economics shows similar rates of GDP growth in France, the Netherlands and UK, despite the former two countries having invested far more in airport expansion over the last decade.x c. What is the impact of Air Passenger Duty on the aviation industry?

3. The UK aviation industry is relatively under-taxed compared to others sectors. It does not pay either fuel duty or VAT, which together are estimated to be worth around £10 billion per yearxi. APD provides a tax take of only £2.7 billion in 2011/12xii. WWF questions whether this is a fair contribution towards the public purse. It is unlikely that APD has a significant impact on the demand for UK flights because it only represents a small percentage of total holiday cost. APD does not appear to have affected bookings to high APD destinations such as the Caribbean.xiii e. Where does aviation fit in the overall transport strategy?

4. Aviation emissions are the fastest growing source of UK greenhouse gas emissions and have more than doubled since 1990, at the same time that road transport emissions have only grown by 2% and emissions in other sectors have fallenxiv. Therefore it is only right that aviation is included in UK carbon budgets and contributes its fair share to reducing emissions consistent with UK climate targets. WWF would like to see aviation and rail strategies more closely aligned to meet our connectivity needs, focusing particularly on modal shift. Rail travel has a much lower carbon footprint, approximately 25% that of air travelxv. The Government should promote greater modal shift from air to rail for domestic and short haul travel where practical. In fact, this trend is already happening. WWF researchxvi found that 61% of FTSE-500 companies expect to travel more by train in future. In future, the UK needs to be planning greater ‘intermodality’, with airports and High Speed Rail (HSR) links being planned together to provide international connectivity.

Making the best use of existing aviation capacity (answering questions a and b) a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient?

5. Existing airport capacity is sufficient for the needs of London, the South East and the UK as a whole. However, there are measures the Government should take to make better use of existing capacity to ensure the greatest economic benefit to the UK economy, even when this might not favour the profitability of the aviation industry itself.

6. Evidence shows that there is not a ‘capacity crunch’ in the South East which would support any major airport expansion. WWF/AEF analysis of UK airport capacityxvii shows that there is ample capacity, even in the South East, to accommodate aviation growth to 2050 within the environmental limits consistent with achieving UK climate targets, as recommended by the CCC, without needing to build new runways or terminals. This analysis shows that there will be less than a 1% shortfall in South East runway capacity, based on larger planes and increased plane loading at Heathrow. Even the Government’s own forecastsxviii - which are based on highly optimistic, even naïve, assumptions - suggest that there is sufficient UK airport capacity to 2030. These forecasts would be brought down substantially by various factors including lower rates of economic growth, higher oil prices or greater aviation taxation.xix These trends would make it even less likely that the UK will run out of airport capacity.

7. There is sufficient capacity at Heathrow, which although ‘full’ in terms of runway capacity under present usage, can still accommodate an extra 20 million passengersxx in its terminals and increase passenger loading on departing flights, which are currently only 75% full.xxi The trend towards larger planes such as the A380, which according to BAA forecasts will increase average loading at Heathrow from 143 to 198 passengers per aircraftxxii, is also welcome and will help boost passenger numbers without more flights. The Government’s stated policy of no new runways at Heathrow, Gatwick and Stansted should therefore be upheld, as existing airports should be used better rather than requiring expansion. Other major London airports have considerable amounts of spare capacity: 25% at Gatwick, 45% at Stansted and 15% at Luton.xxiii This capacity should be filled in preference to building new airports or runways.

8. There are several measures the Government could take to facilitate better use of existing capacity, including: reforming slot allocation; renegotiating bilateral treaties with key destinations such as China; and moving flights with lower economic benefit and fewer transfer passengers to less congested airports. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the South East? How could this be improved?

9. WWF believes that Heathrow should remain the UK’s biggest hub airport. It should therefore prioritise long-haul business flights and those with a high percentage of transfer passengers. Regional airports, in contrast, should primarily provide point-to-point flights to leisure markets which have lower economic value, making use of their far greater levels of spare capacity than in the South East. Of all regional airports, Birmingham Airport has the most potential to function as a secondary (overflow) hub to Heathrow, especially once the HSR link is built. WWF believes there is much of merit in Birmingham Airport’s proposal to balance UK aviation away from a single mega-hubxxiv, although we would prefer to see Birmingham Airport better linked to key hubs in emerging markets rather than offering more point-to-point flights to secondary destinations.

Constraints on increasing UK aviation capacity (answering questions b and c) b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

10. The Government is not taking sufficient account of aviation’s climate change impacts in setting UK aviation policy. Given that aviation is the fastest growing source of UK greenhouse gas emissions and there is an extra warming effect at high altitude, roughly double the warming impact

xxv of CO2 alone , any Government policy on aviation must have climate change impacts at its heart and should explicitly refer to the advice of its statutory advisor, the CCC.

11. WWF believes that the best way to reduce aviation emissions is to include them in the UK Climate Change Act and supporting carbon budgets, as recommended by the CCC in April 2012.xxvi The CCC noted that the inclusion of international aviation and shipping emissions would have no additional costs, given that these reflect commitments that have already been made to currently legislated budgets, to inclusion of aviation in the EU ETS, and to the International Maritime Organisation’s policy for reducing shipping emissions.

12. The Government should follow the advice of the CCC in ensuring aviation growth remains fully consistent with UK climate targetsxxvii. The CCC analysis rules out an ‘unconstrained expansion’ scenario, and WWF believes its ‘likely scenario’ provides the best basis for UK aviation policy going forward. This scenario allows a 60% increase in passengers and 55% increase in ATMs to 2050.

13. Although WWF welcomes efforts by parts of the aviation industry, such as the Sustainable Aviation coalition, to reduce emissions through technology and operational improvements, the fact remains that aviation growth outstrips efficiency improvements. The CCC states that a fleet fuel efficiency improvement of 0.8% annually to 2050 is likely given current technological trends and investment intentions.xxviii This is in contrast to global passenger growth of 4-5% per year.xxix WWF believes that sustainable biofuels could have a significant role in reducing residual aviation emissions, having first sought to reduce demand through capacity constraint, modal shift, greater use of alternatives, taxation and other policy levers. However, there will be limited availability of sustainable biofuels for the foreseeable future, and many competitive uses outside the aviation sector, which will limit its ability to fuel aviation growth while at the same time reducing emissions. c. What is the relationship between the Government’s strategy and EU aviation policies?

14. WWF welcomes Government support for the inclusion of aviation in EU Emissions Trading Scheme, which we view as an important first step towards achieving a global agreement through the International Civil Aviation Organisation (ICAO) for addressing international aviation emissions. As an ICAO agreement is still probably years away, it is important for the UK and EU Member State governments to continue to uphold aviation in ETS. WWF also supports the CCC’s recommendation to include international aviation emissions in the UK Climate Change Act and carbon budgets, using the UK’s share of the ETS cap as the basis for inclusion.xxx We believe that the relationship between the Government’s climate and aviation policy and EU aviation policies are closely interlinked and provide a multilateral basis for including aviation emissions in UK carbon budgets.

15. Based on the UK’s share of its ETS cap, UK aviation emissions should not exceed xxxi xxxii 31MtCO2e/year . Current UK international aviation emissions are 31.8MTCO2e with domestic xxxiii aviation providing another 2.0MTCO2e so the UK is already exceeding its EU cap. A third runway xxxiv at Heathrow would exceed this cap by approximately 5 MtCO2/year and a Thames Estuary airport more than twice the size of Heathrow could be expected to emit more than xxxv 34MtCO2/year , excluding the carbon footprint of construction and new infrastructure. Such expansion would therefore greatly exceed the cap consistent with meeting our UK climate targets. It would also pass on a high level of environmental debt to other sectors, expecting them to decarbonise in order to allow aviation to continue to grow, which will become increasingly difficult and expensive over timexxxvi.

A step-change in connectivity, not additional capacity (answering questions a and b) a. What should this step-change be? Should there be a new hub airport? Where?

16. WWF believes that we need a step-change in how we ensure future UK air connectivity. This requires new thinking about how to maintain the UK’s importance as an international hub based on a complementary rather than competitive approach. If every major hub airport were to try to offer more routes and destinations than its competitors, the result would be a global oversupply which would be a highly unsustainable way of increasing connectivity. The world is facing a carbon-constrained future and global economic shifts are likely to favour Asian hubs. The UK should therefore move away from a protectionist approach to hubs and seek instead to function more as an interchange to those hubs offering the best links to emerging markets, such as Dubai and China (including Hong Kong). Maximising such hub-to-hub links will increase UK connectivity to secondary destinations while reducing the need for point-to-point flights that are unlikely to be economically viable. At the same time, a UK hub should be seeking to increase routes and frequency to major business centres in key emerging markets, such as Brazil and mainland China, which are currently underserved by UK airports but where there is already significant UK trade and interest. The UK should also continue to exploit its current strengths (both geographically and historically) as the European gateway to North America, as well as offering the best connectivity to ex-colonies such as India, Hong Kong and South Africa. As explained above, WWF does not believe that there is any need for a new hub airport as there is already more than ample existing capacity, even in the South East to allow for aviation growth to 2050 as recommended by the CCC. Not only is a new hub not needed nor likely to be economically viable, it would also endanger UK carbon targets by vastly increasing aviation emissions. b. What are the costs and benefits of these different ways to increase UK aviation capacity?

17. Any cost:benefit appraisal of airport expansion needs to consider environmental and social costs and be based on realistic future carbon prices. WWF, together with RSPB and HACAN, have recently commissioned CE Delft to prepare a new economic framework for aviation which will consider these issues and evaluate other cost:benefit appraisals on South East airport expansion. This work will be published in March 2013 and will be submitted as evidence to the Commission chaired by Sir Howard Davies. Previous work by WWF to appraise the cost:benefit of a third runway at Heathrowxxxvii showed a £5 billion loss, based on a higher future cost of carbon than the Government’s assessment. WWF still stands by our assessment and can see no reason why these results would have changed. A third runway at Heathrow remains economically unviable.

19 October 2012

i http://downloads.theccc.org.uk/Aviation%20Report%2009/21667B%20CCC%20Exec%20Summary %20AW%20v2.pdf

ii http://assets.wwf.org.uk/downloads/airport_capacity_report_july_2011.pdf iii http://www.aef.org.uk/downloads/Business_Connectivity_Report_August2011.pdf iv http://www.gatwickairport.com/business/media-centre/press-releases/air-china-to-launch- gatwick-beijing-services-in-2012/ ; http://www.abtn.co.uk/news/2717289-birmingham-sets-sights- china-flights v http://www.abtn.co.uk/news/1117950-asian-routes-boost-heathrow-and-gatwick vi http://www.ons.gov.uk/ons/dcp171776_274235.pdf vii http://www.ons.gov.uk/ons/rel/abs/annual-business-survey/2010-revised-results/index.html viii wwf.org.uk/movingon ix http://assets.wwf.org.uk/downloads/second_one_in_five_challenge_annual_report_2010_11_1.pdf x http://www.primeeconomics.org/wp-content/uploads/2012/09/Heathrow-3rd-runway-03092012.pdf xi http://fullfact.org/factchecks/airline_industry_subsidies_green_taxes-3256 xii http://cdn.hm-treasury.gov.uk/budget2012_complete.pdf xiii http://www.e-tid.com/apd-ae%cb%9cshows-little-impact-on-salesae-for-long-haul/27293/ xiv http://assets.dft.gov.uk/statistics/series/energy-and-environment/climatechangefactsheets.pdf xv http://www.greengauge21.net/wp-content/uploads/HSR-CarbonEmissions.pdf xvi wwf.org.uk/movingon xvii http://assets.wwf.org.uk/downloads/airport_capacity_report_july_2011.pdf xviii http://assets.dft.gov.uk/publications/uk-aviation-forecasts-2011/uk-aviation-forecasts.pdf xix http://www.aef.org.uk/uploads/AEF_Passenger_Forecasts_SUMMARY_1.pdf xx Civil Aviation Authority data (2009) compared to total Heathrow capacity including Terminal 5 xxi BAA monthly data (2010-2012) xxii http://www.lbhf.gov.uk/Images/ERSP_Interim_Master_Plan_Report_tcm21-39448.pdf xxiii Gatwick, Stansted and Luton airport passenger and ATM traffic data (2011) xxiv http://www.westbournecoms.com/wp- content/uploads/2012/06/WES1684_westbourne_aviation_report_06.12_web.pdf xxv http://www.tiaca.org/images/tiaca/PDF/IndustryAffairs/2009%20IPCC%20authors%20update.pdf xxvi http://www.theccc.org.uk/reports/international-aviation-a-shipping xxvii http://downloads.theccc.org.uk/Aviation%20Report%2009/21667B%20CCC%20Aviation%20AW%2 0COMP%20v8.pdf xxviii http://downloads.theccc.org.uk/Aviation%20Report%2009/21667B%20CCC%20Aviation%20AW%2 0COMP%20v8.pdf xxix http://www.iata.org/pressroom/facts_figures/fact_sheets/Documents/industry-facts.pdf xxx http://www.theccc.org.uk/reports/international-aviation-a-shipping xxxi http://hmccc.s3.amazonaws.com/IA&S/CCC_IAS_Core_ScopeOfBudgets_April2012.pdf xxxii http://www.decc.gov.uk/assets/decc/11/stats/climate-change/4282-statistical-release-2010-uk- greenhouse-gas-emissi.pdf xxxiii http://www.dft.gov.uk/statistics/tables/env0201/ xxxiv http://www.greenpeace.org.uk/files/pdfs/climate/case-against-heathrow-expansion.pdf xxxv http://www.heathrowairport.com/static/Heathrow/Downloads/PDF/LHR_Climate_brochure.pdf xxxvi xxxvii http://www.wwf.org.uk/filelibrary/pdf/alchemy_economics.pdf

Written evidence from the Royal Town Planning Institute (AS 70)

Introduction

The Royal Town Planning Institute (RTPI) is pleased to respond to the call for written evidence to the Transport Committee to examine the Government's aviation strategy, focusing on aviation capacity in the UK.

The RTPI is the largest professional institute for planners in Europe, representing some 23,000 spatial planners. The Institute seeks to advance the science and art of spatial planning for the benefit of the public. As well as promoting spatial planning, the RTPI develops and shapes policy affecting the built environment, works to raise professional standards and supports members through continuous education, training and development.

The views in this submission follow consultation with the members of the RTPI, and specifically the members of the joint RTPI and Transport Planning Society (TPS) Transport Planning Network. This Network has a wide and varied membership with experts in the full range of transport modes represented.

Submission

1. What should be the objectives of Government policy on aviation? a. How important is international aviation connectivity to the UK aviation industry? b. What are the benefits of aviation to the UK economy?

1.1 International connectivity is clearly of great importance to the UK aviation industry, but to turn the question around, international connectivity for the UK economy and UK Plc is the most important benefit from the UK airline industry. Connectivity has been crucial to UK business for centuries because of the UK’s geographic position and the need as an island nation to export, in order to achieve continued growth.

1.2 The location of airports needs to be considered as part of a much wider set of considerations so that their links to housing and jobs and their considerable impact on surface transport and the shape of a whole region can be properly assessed. Airports are hugely important to the areas in which they are located, for example Heathrow Airport is a major employment generator in outer west London and is integral to the local economy. Similarly smaller regional airports can also be vital to local economies. c. What is the impact of Air Passenger Duty on the aviation industry?

1.3 No comment. d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

1.4 Passengers are likely to be concerned with door-to-door travel, so the location of airports and the quality of the surface links to them from a variety of departure points within a region are critical questions. For far too long (until the early 1990s) Government was content to allow airports to expand with little interest in the impact on surface transport. Only recently for example has the issue of the connectivity of Heathrow Airport to anywhere other than central London received serious interest.

1.5 Airport location can also be an opportunity to invest in surface transport as a means of not only meeting air passengers’ needs but also in solving regional transport challenges. The same investment may achieve a variety of functions, but only if wider considerations are taken into account. e. Where does aviation fit in the overall transport strategy?

1.6 It is questionable whether an overall transport strategy exists, and this is a deficiency which should be addressed by Government. In the absence of an overall policy however, the combination of current strategies for various modes might be considered as a proxy for an overall transport strategy. An aviation strategy should be aligned with these other modal strategies. It is for example difficult to gauge the overall business case for high speed rail or the question of runway capacity in South East England in a situation where the Government’s intentions regarding modal split for short haul journeys are not clear.

1.7 It should be stressed however that even with a ‘transport strategy’ embracing all modes; great care should be taken to ensure that transport investment performs a variety of purposes. It is not enough simply to plan to meet air and other capacity deficiencies; it is also necessary to use transport investment in order to achieve wider goals such as the provision of additional homes and jobs in the right places. Aviation investment and the necessary surface transport improvements it requires are an excellent way of doing this.

2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

2.1 No comment: as a professional Institute it would be inappropriate for us to make comments on specific projects and cities. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

2.2 No comment. c. How can surface access to airports be improved?

2.3 See response to earlier question (para 1.4&1.5). The impact of airports on regional connectivity is far too important an issue for surface access to be regarded in solely

aviation terms. Improvement to surface access should form part of a transport plan which has a number of other aims, such as increasing the amount of housing land which has good transport access, and meeting the needs for sustainable freight transport especially by rail.

2.4 In terms of housing, the difficulties faced by housing developers in meeting the costs of transport infrastructure, the absence of much public funding of access to housing land and the seriousness of the housing crisis nationally mean that transport infrastructure for airports is a key potential element in meeting the country’s needs for homes and jobs.

3. What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

3.1 No comment. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

3.2 Emissions data relating to international aviation could be made more transparent and be included as part the UK Emissions Statistics published by the Department of Energy and Climate Change. c. What is the relationship between the Government’s strategy and EU aviation policies?

3.3 The relevant EU policies include those relating to airspace, emissions trading, noise mapping, slot regulation, competition, bilateral agreements and passenger rights. In most cases, UK Government policy is aligned with these although there are examples where other EU countries do not appear to have the same enthusiasm for full implementation as the UK (e.g. noise mapping). There are also examples where the EU seeks to resolve issues in some countries, which are not a problem in the UK where competition is generally stronger (e.g. ground handling).

4. Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where? b. What are the costs and benefits of these different ways to increase UK aviation capacity?

4.1 Given the importance of airports to their local regions, it is felt that wider social and economic factors need to be considered when making decision relating to aviation capacity. An integrated approach to aviation growth is supported, including coordinating aviation with infrastructure and new housing.

4.2 Decisions on airport capacity need to be taken in connection with the following considerations:

• Policy on modal split for short haul journeys to neighbouring countries in the UK, Ireland and Europe • The contribution airports can make to regional economies • The contribution investment in surface access can make to unlocking land for homes and jobs and to solving other transport challenges.

19 October 2012

Written evidence from the British Air Transport Association (AS 71)

The British Air Transport Association (BATA) welcomes the opportunity to submit evidence to the inquiry conducted by the Transport Select Committee into aviation strategy.

BATA is the trade body for UK registered airlines. Our ten members cover all sectors of the airline industry – including freight, charter, low fare, regional operations and full service. In 2011, BATA members employed 73,000 people, operated four-fifths of the UK commercial aircraft fleet and were responsible for some 96% of UK airline output, carrying 129 million passengers and 1.1 million tonnes of cargo. The ten BATA member airlines are: British Airways, DHL, easyJet, Flybe, Jet2.com, Monarch, Thomas Cook, Thomson Airways, Titan Airways and Virgin Atlantic.

Given the short period allowed for responding to this wide ranging and broad inquiry, we will initially only be able to provide to the Committee the evidence we submitted in October 2011 to the Department for Transport consultation exercise ‘Developing a sustainable framework for UK aviation: scoping document’. It is our belief that this will address most of the issues raised by the Committee’s new inquiry.

We are able to confirm that our position regarding aviation policy and capacity is that it is vital for the UK’s economic prosperity that we have a policy that addresses the needs of all the UK, without continuing delay.

As the Coalition Government recognises, the UK’s economy needs to compete in both established and emerging markets. This requires excellent aviation connectivity right across the country, ensuring the UK has both vibrant point to point airports and sufficient world class hub capacity. This means prioritising a favourable planning and regulatory regime and developing a bold aviation policy, where new airport capacity is required. To ensure there is no further erosion of the UK’s competitive position, the Government must set a clear timetable for these measures to be put in place and this requires cross-party support in order to prevent the continuation of the ‘see-saw’ of aviation policy the UK has experienced over recent decades.

We also endorse the submission to the Committee from ‘A Fair Tax on Flying’ campaign, of which BATA is a member.

BATA will of course also be happy to appear before the Committee during the oral evidence sessions if required.

19 October 2012

Written Evidence from the British Chambers of Commerce (AS 72)

ABOUT THE BCC 1. The British Chambers of Commerce (BCC) is an influential network of 52 Accredited Chambers across the UK. No other business organisation has the geographic spread or multi‐size, multi‐sector membership that characterises the Chamber Network. Every Chamber sits at the heart of its local business community, providing representation, services, information and guidance to member businesses and the wider local business community. OVERVIEW 2. The BCC welcomes the opportunity to respond to the Transport Select Committee’s inquiry into the government’s aviation strategy. We would also welcome the opportunity to give oral evidence on this issue, representing 104,000 companies with 5 million employees, amongst which are a huge number of companies dependent on a strong aviation strategy. 3. Tough decisions are required if the UK is to have an aviation strategy that will allow companies to grow their exports with the rest of the world. Unfortunately, the government has continually failed to take those tough decisions since it came to power. 4. Businesses have been left dismayed at the way aviation strategy has become a political plaything. It is wrong that key decisions on capacity and on maintaining the UK’s hub status have been delayed for purely political purposes. 5. It is possible to increase capacity in the South East, strengthen our regional airports, and support the development of more connections to emerging markets. All it takes is courage. Otherwise, the UK will lose both investment and jobs, due to political indecision, which weakens the resolve of private-sector investors who ready to construct new capacity, as well as the business investment and airline industry investment that would follow. 6. The BCC’s response to some of the specific questions posed in the consultation document can be found below. RESPONSES TO SPECIFIC QUESTIONS Q1. What should be the objectives of Government policy on aviation? 7. There is a need to create a strong, rebalanced economy, powered by a growth in the exports of goods and services. If exports are to grow then businesses require access to a world-class transport network. And no form of transport is as vital for exporting businesses as aviation.

8. Britain’s lack of a clear, long-term aviation strategy is an impediment to economic growth and an indictment of political short-termism. Tough decisions have been put off for decades, leaving the UK’s global connectivity in a perilous position. An open, free-trade economy like ours requires an aviation strategy that is not a political plaything. British businesses want action, not talk, aimed at 1) increasing capacity in the South East of England, 2) strengthening our regional airports, and 3) supporting the development of more connections to emerging markets. 9. In recent decades, the ability of the UK major airports to provide a world-class service has been undermined by lack of capacity. The primary objective of government policy should be to address these capacity issues. This will require taking the tough decision to increase airport capacity in the South East. And this is a decision should not be subject to any more delays. 10. Government aviation policy should also focus on strengthening regional airports’ international connections and improving the surface access to all airports. Well connected regional airports are vital for local economic growth, to provide short haul business and holiday travel, and to help relieve capacity shortages in the South East during extreme weather or other critical events. Q1a. How important is international aviation connectivity to the UK aviation industry? 11. The importance of aviation connectivity to the future success of UK airports has been demonstrated by numerous studies. As links to South East Asia and the fast-growing economies of Brazil, Russia, India and China (BRIC) become increasingly important, there is danger that UK airports will become uncompetitive unless connections to these countries increase. 12. Other European countries are currently winning the race for connectivity. Recent analysis by Frontier Economics shows that a lack of connectivity with emerging markets will push Heathrow into third place in Europe within the next ten years.1 Q1b. What are the benefits of aviation to the UK economy? 13. As an island and trading nation, the UK’s air connectivity with the rest of the world is of vital importance. And no other form of transport can match aviation in its speed, efficiency and global reach. The link between aviation connectivity and economic growth has long been recognised.2

1Frontier Economics, ‘Connecting for growth: the role of Britain’s hub airport in economic recovery: A REPORT PREPARED FOR HEATHROW’. September 2011

2 See The Eddington Transport Study for the Chancellor of the Exchequer and the Department of Transport (2005).

14. Countries that are well connected are more attractive to multinational organisations when they are searching for locations to establish overseas operations. National inward investment agencies always promote their international connectivity, particularly air connectivity, as a means to attract foreign direct investment. For UK businesses, air transport provides access to international customers, suppliers as well as an international labour force. 15. Aviation connectivity is particularly important for those sectors characterised by internationalised, high-value products and services, dependent on mobile workforces and face- to-face relations. These include high-tech sectors, pharmaceuticals and financial and business services, all critical areas where the UK has a competitive advantage. 16. The statistics show how dependent the UK economy is on aviation. Some 40% (by value) of the UK’s exports go by air according to the Department for Transport. Similarly, over 30% of our imports by value, including the raw materials and parts that UK manufacturers process and finish, arrive as air freight.3 Over 2.3 million tonnes a year of traded products are now shipped by air in the UK.4 17. The consequences of a constrained air freight industry were brought into sharp relief by the eruption of the Icelandic volcano (Eyjafjallajökull) in April 2010. The eruption severely affected international airspace and air transport for close to a week. The estimated cost to global GDP was $4.7 billion and UK businesses, especially those dependent on air freight were badly disrupted.5 Exports of IT hardware were damaged and pharmaceutical companies feared their products would perish, as exports failed to ship. The disruption affected imports too, with manufacturers running short of raw materials and parts to turn into finished products. 18. Research conducted by the British Chambers of Commerce in January 2012 highlights how business leaders in high growth or emerging economies see direct air links as vital to maintaining UK prospects in global markets. In conjunction with Heathrow Airport we surveyed 350 business travellers who are directors of companies in Brazil, India, China, Mexico and South Korea.

3 Oxera, ‘What is the contribution of aviation to the UK economy?’. 2009

4 Civil Aviation Authority, ‘UK Airport Statistics: 2010’. 2010

5 Oxford Economics, ‘The Economic Impact of Air Travel’. 2010

19. The survey found that nine out of ten (92%) of these business leaders say direct flights influence their inward investment decisions, while eight in ten (80%) say they would trade more with the UK if flight connections were improved to their home markets. 20. In a worrying development, while 82% of the overseas business respondents see Heathrow, the UK’s hub airport, as being a major contributor to the UK economy, 64% believe the UK will miss out on economic growth because of London’s declining flight connections to growth markets. A similar proportion (67%) feel that better air connections with France, Germany and Holland mean they are more likely to do more business with those countries rather than the UK, 62% will only consider trading with the UK in future if flight connections to their home markets are strengthened. Q1c. What is the impact of Air Passenger Duty on the aviation industry? 21. In a report we commissioned in October 2011 on aviation we focused on the impact of Air Passenger Duty. In the report, we called on the government not to raise levels of APD further. We also recommend the government considers offsetting its overall tax take from APD, by the same amount the Treasury will receive from the aviation sector in new auction revenues, following aviation’s entry into the EU Emissions Trading Scheme in 2012. This will ensure that businesses and travellers are not subject to double taxation. 22. APD has increased by 140% to EU countries, and for long-haul routes by up to 325% since 2007, and its top rate is some 8.5 times the average of other countries in Europe that still levy a charge. Many European countries – including Belgium, Holland and Denmark – have abandoned their aviation taxes, due to the negative effects on their economies. 23. Many businesses believe that rises in APD have contributed to a number of key routes being lost at UK airports. Peel Airports (which operates Liverpool John Lennon, Doncaster and Durham Tees Valley airports) provided analysis of lost routes in 2008.6 Following APD’s doubling in 2007 and its subsequent rises, Liverpool John Lennon lost six domestic, five European and two long haul (North America) services; and Robin Hood Doncaster Sheffield lost one domestic service, six European and three long-haul services. Q1d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

6 England Northern Way, ‘Aviation Duty Consultation: A Summary of Northern Airports’. 2008

24. Capacity constraints at the UK major airports are having negative affects on the passenger experience – with many of those passengers being businesspeople. An aviation strategy that will lead to greater capacity at UK airports will greatly enhance the overall passenger experience. 25. Not only will greater capacity result in a more pleasant experience at an airport it will also result in a higher level of flight frequencies. As demand for services grows, a constrained airport is unable to add new destinations or higher frequencies on existing routes without dropping other services. To be attractive for business travellers, services on these latter routes need to be frequent. 26. There is much that can be done now by government agencies to improve the passenger experience and make the UK a more attractive place to come to visit or to do business in. The recent problems experienced by UK Border Agency that led to long queues at Heathrow and other points of entry during the summer must be avoided in the future. Q1e. Where does aviation fit in the overall transport strategy? 27. The results of a survey we conducted in January 2012 in which over 8,000 businesses responded found that nearly a quarter of UK businesses (23%) said that domestic transport links are a concern and that one in five businesses (20%) say that poor transport connections are a barrier to trading internationally. 28. The survey highlights the need for a long-term strategy that is prepared to take action to improve and upgrade the UK’s ageing transport networks. Alongside delivering a clear aviation strategy, the UK needs to improve road, rail and ports infrastructure that will help tackle some of the major transport issues businesses face when trying to move their goods around the UK and globally. Q2c. How can surface access to airports be improved? 29. If the UK is to have a world-class aviation network this requires not just the up-grade and enhancement of existing airports but also the improvement of the passenger full journey from their home to the boarding gate. Investment is required in all forms of transportation to and from airports, with rail links and appropriate road capacity at the top of the list. All airports in the UK would benefit from better integration into the wider transport network. 30. The government must commit to the full implementation of the 2011 National Infrastructure Plan to improve integration between different modes of transport to the UK’s international gateways to help maximise the efficiency and competitiveness of the whole transport network.

31. The infrastructure plan identifies a number surface access schemes to airports. The government should commit to supporting further schemes in any future plan. One project could be the Stansted Express. For Stansted to be a strong part of the solution to capacity constraints in the South East it is critical to reduce the length of time it takes to get between London and the airport. The Stansted Express competes with commuter traffic on a line that is already at 100% capacity. The service takes 48 minutes end-to-end – well over the maximum 30-minute journey time thought to be consistent with demand for long-haul flight connections to the capital. To provide a reliable and fast route for traffic between Stansted and London would require the line to be four-tracked. 32. Considerations around high speed rail are relevant as well, as high speed rail would provide a good complement to airport access at Birmingham, Heathrow and elsewhere. Q4a. Should there be a new hub airport? Where? 33. Private-sector investors stand ready to invest in London’s existing major airports to increase capacity and maintain the UK’s ability to connect to key markets. While expansion at Heathrow, Gatwick and Stansted may represent a sub-optimal solution when compared to a brand-new hub airport, an improved London ‘airport system’ is both achievable and pragmatic. Consider: • Heathrow’s owners stand ready to pay the £9bn cost of a third runway, which the BCC has long supported. • Gatwick’s owners are conducting a preparatory study on the case for a second runway, to ensure that it could be built following the expiration of the existing planning restrictions in 2019. We would support any bid by Gatwick to expand after 2019. • Stansted has already spent £200m planning a second runway, and could put that plan into operation as connectivity to the capital is improved and its existing spare capacity used up. 34. The British Chambers of Commerce believes that pragmatic expansion at all three major London airports may offer a solution that gets lost amid talk of new hubs either in the Thames Estuary or to the west of London. 35. While we are not against the construction of a new hub airport, we believe that the commitment of public resources required to make such a project happen may not be achievable in the medium-term – by which point our competitiveness could be irrevocably damaged. Pragmatic plans for expansion of existing South East airports must be pursued, even if a new hub airport is seen as a priority for the long term. 19 October 2012 Written evidence from Friends of the Earth (AS 73)

1. Friends of the Earth has made submissions into the aviation policy process throughout the recent period from 1998 onwards. We provided a major response to the process before the 2003 White Paper – ‘Sustainable Aviation = Demand Management’; commissioned the early and pioneering work by Professor Kevin Anderson, Tyndall Centre for Climate Change Research on aviation’s growing contribution to the future UK carbon budget; successfully advocated the inclusion of aviation emissions clause within the Climate Change Act 2008; advocated also the inclusion of aviation within the ETS; and made submissions in 2011 to the Coalition Government’s ‘Developing a sustainable framework for UK aviation’ scoping document (SAFSD) and associated analyses, and on Air Passenger Duty. In parallel we have made a submission to the Committee's inquiry into HS2.

2. We therefore welcome the timing of the Committee's inquiry, just before the closing date for the DfT’s final consultation phase before it prepares its ‘Aviation Policy Framework’ (DAPF) for intended publication in March 2013, and after recent months when the policy process has been repeatedly changed and disrupted. Consequently, and because we believe there are parallels between the course of this policy process and that which resulted in the 2003 White Paper, we are not just addressing the questions posed by the committee, but also commenting on the integrity of the policy process itself. Our views are supported by information provided at the DfT’s environmental sector consultation meeting on Tuesday 9th October.

3. The process that produced the 2003 Air Transport White Paper was a troubled one, with in retrospect at least two major flaws: a failure to interact the development aspirations of the aviation industry to increase airport capacity with a requirement to reduce aviation's climate change emissions; and secondly a failure to underpin the White Paper with an analysis that impartially balanced ‘economy’ and ‘environment’, and within each sector balanced benefits with the disbenefits of expansion – all in a way that served the public interest rather than the aviation industry's interest narrowly. These and other flaws resulted in the entire aviation policy framework being withdrawn within 10 years, a situation which can be of benefit to no stakeholder and which has generated huge uncertainty. Consequently Friends of the Earth believes that two critical tests of the aviation policy framework process - which the Committee should be scrutinising for - must be: certainty and clarity as to how and when in the policy sequence the ‘additional capacity envelope’ and the ‘aviation emissions envelope’ are to be interacted; and whether the DfT in its policy proposals has moved beyond acting as apparent ‘sponsor’ of the aviation industry and its demands.

4. The process begun by the Coalition Government in 2010 - following the commitment in the coalition agreement ruling out new runways at Heathrow, Stansted and Gatwick - pointed to an improvement in these fundamental flaws, exemplified in the Foreword by the then Secretary of State to the March 2011 Scoping Document: “There is an urgent need for a genuinely sustainable framework to guide the aviation industry in planning its investment and technological development in the short, medium and long term. The previous government's 2003 White Paper, The Future of Air Transport, is fundamentally out of date, because it fails to give sufficient weight to the challenge of climate change. In maintaining its support for new runways – in particular at Heathrow – in the face of the local environmental impacts and mounting evidence of aviation’s growing contribution towards climate change, the previous government got the balance wrong.”

5. That scoping document - to which Friends of the Earth made a comprehensive response (appended to this submission) – contained nearly 50 questions encompassing capacity and connectivity (Qs 5.9-29) and climate change (5.30-39) as well as important issues such as regional rebalancing, planning and local governance. The questions themselves were stated reasonably neutral, thus not excluding by their design those views that challenged the industry perspective. It also set out a clear timetable providing certainty to all stakeholders that the final policy framework would be available within two years; that is much less than a protracted period required to produce the 2003 White Paper SAFSD 1.17

6. This was followed in July 2011 by the publication an initial DfT response to the Committee on Climate Change (CCC) aviation report of December 2009, combined with an encouraging analysis of the cost benefit opportunities for emissions reductions, and new capacity and emission forecasts. In April 2012 CCC produced their Scope of Carbon Budgets - Statutory advice on inclusion of international aviation and shipping; the DAPF itself was subject to a series of publication delays before appearing in July 2012.

7. We submit that all stakeholders responding to the 2011 SAFSD had a right and reasonable expectation that its structure and topic coverage would flow through sequentially into the next and penultimate stage in the policy process, the preparation for consultation of the DAPF itself; and that that latter document would set out the developing government position particularly on issues around capacity and emissions - to which all stakeholders could then respond prior to the government's final determination of the framework; as well as its critical factual analysis of the scope or requirement for additional capacity provision. For example at an environmental sector consultation meeting on 7th September 2011 DfT indicated that they would be ‘signalling’ in March 2012 what would be the government’s likely response to the CCC recommendation that aviation emissions should be included within the UK carbon budget, pursuant to clause 35 of the Climate Change Act 2008. This requires a response by 20th December 2012.

8. In its December 2009 report the CCC provided its own substantive analysis of the interaction between the climate change, passenger demand and airport capacity ‘envelopes’. Whilst Friends of the Earth does not accept the starting point of the CCC analysis – that aviation emissions could be the same in 2050 as 2005, which forgets and forgives the 1990 baseline applied to all other sectors – at least their report does focus on the critical capacity v. emissions interaction. The DfT have therefore had nearly 3 years to indicate whether the Government is in broad agreement with this overall CCC analysis or alternatively whether they wish to challenge it. A clear statement of the government position about the ‘capacity change v. emissions’ interaction is, we submit, the critical component underpinning the effectiveness of the current policy process. If such critical components of the policy process are withheld until after the DAPF October closing date or indefinitely, then how can any stakeholder respond to the whole range of aviation issues at the final draft APF stage (July-October 2012) and before formal publication?

9. As these consultation stages have proceeded and over the last year, the DfT policy process has been the subject of relentless public relations and lobbying pressure by industry and party political interests - complaining about ‘delay and dither’, and focusing on capacity expansion alone - resulting in substantial changes to the process even after the draft APF was published in July 2012; the principal of these being the announcement of the Davies Commission on 7th September. Ironically the consequence of this disruption to the process has been to hugely extend the period of uncertainty, not just about longer term capacity provision but everything related to it, until 2015 (since the 2013 interim report will address short-term issues associated with existing capacity). Taking an overview on both the 2003 and 2010-onwards processes, the Friends of the Earth interpretation is that the comprehensive ‘policy capture’ of the DfT that the industry achieved in the earlier process was unexpectedly overturned when both Conservative and Liberal Democrat parties chose to oppose new SE runways, and that all the subsequent brouhaha has been an attempt by the industry to pressurise the restoration of that policy capture.

10. The consequences of this disruption of the policy process can be seen by contrasting the structure and content of the March 2011 SAFSD and its questions, with the reduced content of the July 2012 APF draft, as then subsequently revised still further. The DAPF is claimed to be ‘a high-level strategy that sets out our overall objectives for aviation and the policies we will use to achieve those objectives’ para.1.5 - with stakeholders being encouraged ‘to consider the ‘big picture’ before putting forward any proposals for new capacity’ former Secretary of State foreword - but in reality it is no such thing. Instead the APF has effectively been emptied of most of its essential substantive content. Thus:

(a) Before the announcement of the Davies Commission, issues of airport capacity had already been withdrawn from the current APF process: “We will also need to identify deliverable solutions to the very difficult capacity challenge at our biggest South East airports, which is set to get progressively worse in the medium and longer term without effective action. This will be the subject of the separate Call for Evidence which we intend to issue later this year, once stakeholders have had a chance to consider this draft framework.” DAPF para. 2.27 DAPF contains no substantive information or analysis about future capacity forecasts, requirements or constraints. Although the Davies announcement did not include the Commission’s membership and modus operandi, or specific reference to climate change – and we are also advised that the full remit once announced will not be the subject of consultation – we welcome the commitment that it should be “part of a process that is fair and open and that takes account of the views of … residents as well as … local and devolved government and environmental groups” i.e those stakeholder wishing to challenge an expansionist argument.

(b) Issues relating to aviation emissions had also been effectively withdrawn from the DAPF consultation: “Given the practical complexities, the Government is carefully analysing the evidence and options presented. The Government intends to make clear its position later this year.” DAPF 3.21 This position is inadequate and contradictory. Although DAPF states that the CCC advice was only provided in April 2012 it was clearly signalled in 2009 and in the 4th Carbon Budget report. Then DAPF para 3.25 - which states that “The CCC's advice on whether international aviation (and shipping) emissions should be brought within the Climate Change Act …” our emphasis is a misleading formulation given that the CCC's advice has already been provided. At the 9th October 2012 meeting DfT officials could not state when the government response would be available despite the fact that there are only 9 weeks to go before it has to be provided. Only two, limited questions about climate change have been asked in DAPF; none of the July 2011 MAC report analysis is referred to or advanced upon; and the proposed emissions objective – “to ensure that the aviation sector makes a significant and cost effective contribution towards reducing global emissions” our emphasis - which is a new formulation, attempts to introduce without transparent disclosure a major shift in policy emphasis (towards the global, rather than national/UK responsibility).

(c) In another parallel with the 2003 process, the issue of ‘demand management’ has been removed from the DAPF – and therefore from the toolbox of measures available for consultees to debate and recommend - even though it did feature albeit marginally in SAFSD (see question 5.22). In 2003 the concept of demand management was airbrushed out of the entire policy debate; in 2011 the pretext that ‘fiscal measures … are a matter for HM Treasury’ was used to keep taxation and associated mechanisms out of the basket of initiatives tested by the DfT consultants to reduce aviation emissions Government Response to the Committee on Climate Change Report on Reducing CO2 Emissions from UK Aviation to 2050 Aug 2011 para 1.13, and the application of slot auctioning to ATMs was similarly not tested. Stakeholders who want to advocate demand management as a way of squaring the circle between pressures on capacity and emissions obligations are therefore disadvantaged compared to those arguing simply for physical expansion at this or that airport location.

(d) The imbalance between the treatment of the claimed ‘benefits’ of aviation – where the DfT analysis does not include disbenefits alongside benefits – and between the three ‘pillars’ of sustainable development – where economic and social benefits are accorded disproportionate weight compared to economic, environmental and social disbenefits - has been a constant feature across the 2003 and 2010-onwards processes. At the 9th October meeting officials were asked why Chapter 2 of DAPF was titled ‘The benefits of aviation’ rather than some more neutral wording, because this gave the appearance that the framework was there to serve the interests of just one industry, and a relatively limited number of companies, rather than the public interest. In our 2011 SAF response we identified, as a part of a set of three Principles, that ‘the air transport industry should be treated with equality, ‘neither privileged or demonised’.

(e) It has been known for some time that, in a major change from the 2003 framework, the DfT intended that its successor would not be ‘locationally specific’; whereas the 2003 White Paper had, airport by airport, identified the scale of expanded capacity that would be supported at that location, which then fed across to the planning framework, where the content of the WP was used by individual airport operators in support of planning applications. This major shift in approach obviously prompts a very important question: in the absence of locationally specific guidance how will expansion proposals at individual airports be prepared and then taken through the planning process? SAFSD did canvass views on this (“… we welcome responses [on the NPPF] from aviation stakeholders with an interest in planning”) and Friends of the Earth set out at some length some initial thoughts on the complexities and difficulties created by the changed approach (FOE SAF response p.11-12).

The approach of DAPF to this issue - which followed the publication in March 2012 of the National Planning Policy Framework - is wholly inadequate. DAPF paras 6.3-6.5 and NPPF para.33 are not just excessively brief but almost contentless in terms of substantive guidance to Local Planning Authorities, airports and the communities around them. The meeting on 9th October also confirmed that the final APF would not constitute a National Planning Statement, which appears to contradict the position advanced in SAF SD (“The final aviation framework document will fulfil the role of a national planning policy for aviation.” 2.17)

When asked a series of points about how LPAs etc would be able to assess and determine airport applications - how would an LPA deal with impacts beyond its boundaries; or cumulative impacts e.g at a national level including emissions; or pre-emptive ‘first come, first served’ applications by airports seeking to secure for themselves a portion of a limited and diminishing national capacity allowance? – DfT officials had no answers whatsoever to offer except that in general planning issues were the responsibility of another department (DCLG). It seemed apparent that the DfT has given no thought to how the previous locationally specific planning framework should be replaced, or the consequences to all stakeholders of leaving a framework vacuum. When NGOs suggested that there might be a need for LPA guidance this was noted as a new thought; at the same time the discredited Airport Masterplan and Surface Access Guidances are proposed in DAPF to be continued.

11. Friends of the Earth comment: From the above analysis we maintain that the DfT have in this final stage of the APF process/sequence and in the last few months, recreated exactly the same set of circumstances that led to the failure of the 2003 framework. Then ‘airport capacity’ and ‘climate change’ analyses were available within the policy framework being consulted upon (although the latter had substantial deficiencies) but were kept separated from each other throughout the consultation and not interacted; now in 2012 they have actually been removed from the framework under consultation At the 9th October meeting in answer to question from friends of the Earth, officials were unable to indicate how and when the two critical envelopes - of future airport capacity and aviation emissions - were going to be interacted within a formal policy framework open to stakeholder engagement. Apparently the government position on what the envelope of aviation emissions might be - not available before the consultation closes, and with uncertainty surrounding whether the subsequent announcement will be open to consultation or not - will be handed to the Davies Commission who will be required to work within it. But what form will it take; will there be provided the actuality or components of an emissions reduction trajectory in absolute tonnages to which capacity limits can be fitted?

12. In 2010-12 as in 2003 there is the same lack of evenhandedness in the presentation of the issues – which should allow all stakeholders to put forward views important for a subsequent DfT ‘balancing’ in the public interest; a failure to carry forward information and issues from the previous consultation stage into the final Draft; and astonishing gaps in what is almost the final version of the Framework.

13. We submit that the Transport Committee in addition to answering its own questions around capacity should also consider the integrity of the policy framework itself and the process producing it. And bear in mind the words of the new Secretary of State in his Davies announcement: “Successive Governments have sought to develop a credible long term aviation policy to meet the international connectivity needs of the UK. In each case the policy has failed for want of trust in the process, consensus on the evidence upon which the policy was based and the difficulty of sustaining a challenging long term policy through a change of Government. The country cannot afford for this failure to continue.”

Responses to the Transport Committee questions

Q1 - What should be the objectives of Government policy on aviation? The ‘objectives’ set out on DAPF pages 7-9 of do not constitute properly framed objectives that can be used to drive and direct a long-term aviation policy; for example, they are not SMART and are without appropriate quantification, and they are poorly worded. Above all they do not engage with the principal longterm issue for UK aviation: to reconcile capacity requirements with emissions reductions. We refer the Committee also to the three ‘principles’ of our SAF response (page 3). a. How important is international aviation connectivity to the UK aviation industry? b. What are the benefits of aviation to the UK economy? c. What is the impact of Air Passenger Duty on the aviation industry?

14. All three of these questions are too ‘leading’ in their nature, inviting different segments of stakeholders to put forward a partial view which in the case of industry responses – quite likely to be the majority - will be commercially self-interested. ‘International aviation connectivity’ will be relatively important to the UK aviation industry; and the benefits of aviation to the UK economy will also be relative, to be set alongside some disbenefits. What the public interest requires - at this late stage of the aviation policy process – is a dispassionate and balanced analysis and presentation by the Department for Transport of its answers to all the Committee’s questions, to which stakeholders could then challenge, and the Committee scrutinise; and this the DAPF does not provide. The recent increases to APD, initiated before Coalition Government’s abandoned exercise to replace it with a different regime are at least relatively restraining on longer distance journeys with their higher emissions; have little impact on shorthaul journeys where the vast majority of UK leisure travel is undertaken; and in its total revenue makes up for undertaxation of the industry. e. Where does aviation fit in the overall transport strategy? We repeat our response to Q1 of the Committee’s HS2 inquiry: ”Set against the DfT policy backdrop of the last 30 years - with its pattern of repeated failures [including ‘aviation expansion’] - the proposed commitment to expansion of the rail network represents a refreshing change of strategic direction. If this represents a fundamental shift in favour of ‘strategic Rail’, as against ‘strategic Road’ and ‘strategic Aviation’ then FOE strongly supports this, but it must be embedded within both a long-term national transport policy which gives certainty to this new direction, and a comprehensive expenditure programmes through to 2030, organised around carbon reduction and also contributing to overall sustainability.“

Q2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

15. We believe that capacity questions must only be addressed in the context of the available emissions ‘envelope’. Since it has not been challenged we suggest the Committee should follow the analysis of the CCC 2009 report, from which we select two findings: “Together these [fleet efficiency improvements, biofuels use] would allow meeting the target with demand growth of around 60% in the period to 2050 (e.g. compared to unconstrained demand growth of over 200%).” CCC 2009 136; and “The key implication from our analysis is that future airport policy should be designed to be in line with the assumption that total ATMs should not increase by more than about 55% between 2005 and 2050, i.e. from today’s level of 2.2m to no more than around 3.4m in 2050” CCC p.149, in the situation where maximum runway capacity in 2005 was already at 5.58m ATMs Table 7.1a. Converting this limit to passenger numbers, “an increase in passengers of around 60% on 2005 levels by 2050 would be possible, taking total annual passenger numbers from 230 million to around 370 million” CCC 145.

16. The Committee should also consider the analysis of Available UK airport capacity under a 2050 CO2 target for the aviation sector AEF for WWF June 2011, that current runway capacity is at 42.2% (ATMs) and terminal capacity 65.8% (passengers) table page 5; and note how the DfT demand forecasts have been substantially and progressively reduced between the 2003 White Paper (Annex A), the 2009 and finally the 2011 forecasts. Notwithstanding these downward revisions the current DfT 2050 unconstrained central passenger forecast is 520mppa 2011 table 2.7 and constrained forecast 470mppa table 2.11, whereas the CCC ceiling is set at 370mppa.

17. The two conclusions about the overall approach to capacity policy we draw from the CCC analysis is that the emphasis need to be on (i) quite the opposite of ‘expansion’; instead it should be ‘constraint’ - of both capacity and demand; and (ii) on tackling the lack of fit between the location/distribution of available capacity and of demand.

18. So contrary to the hysterical and largely evidence-free clamourings emanating from the industry over recent months it cannot seriously be claimed that in general the UK is experiencing a shortage of airport capacity, requiring an immediate and expansionist response. This would amount to policy making ‘in a panic’, and in quite the wrong longterm direction. The DfT’s positive overview of capacity and connectivity in DAPF paras 2.17-25 is therefore credible, as is its stated objective: “to around 2020, a key priority for us is to … make much better use of existing runways at all UK airports.” 2.28 Of course there are greater pressures on the SE airports – generated by longrun regional imbalance across the UK economy, which should be countered, not reinforced – but in terms of connectivity with BRICS market we support the DfT analysis in 2.23-25. Those asserting that the Heathrow Hub is disconnected from Chinese growth centres should read Table 9 (p.48) of BAA’s own Connecting for growth: the role of Britain’s hub airport in economic recovery (Frontier Economics Sept 2011) with greater care, in view of the huge dominance of the Heathrow hub connecting to the Hongkong hub. In any case if there is a case for a changed or extended business route network that should be a market response by airlines (not airports) responding to customer wishes.

19. The way to make the best use of existing aviation capacity, in the SE or regional, is to develop and implement an effective demand management framework – which will also serve the parallel purpose of bearing down on emissions. As in 2003, this has been comprehensively excluded from DAPF. We suggest that, by way of working methodology in its examination of capacity, the Committee should first understand the Climate Change Act-consistent emissions envelope applicable to any time period (e.g using carbon budget periods, to 2050); then identify any capacity shortfall/surplus consistent with that emissions trajectory; then examine all mechanisms that will incentivise better/best use of existing capacity, and restrain demand; and only then consider the possibility of additional capacity. c. How can surface access to airports be improved? By airports agreeing to meet the infrastructure costs of so doing, which are very considerable (the cost for a new Estuary airport has been identified by the London Mayor at £30 billion). One of the claimed advantages of expanding airport infrastructure is that the cost will largely be met by the private, and not the public, sector. However this advantage is immediately forgotten by airport operators (with the exception of the three major SE airports) when they bring forward particular proposals for improved surface access which they then request that public funding should substantially pay for. The proper requirements of 2003 ATWP 4.56-58 that airports should bear their own surface access improvement costs were never respected by private and public decision makers alike, nor have they been carried forward into DAPF; indeed they appear to have been set aside DAPF 2.81

Q3. What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? Q4. Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where?

20. The constraints are twofold: the first, already well established, are the type of constraints identified in questions (a-b): essentially environmental constraints, local (such as noise and air pollution, for example around Heathrow) and national/global (climate change emissions). The way that the proponents of expansion generally deal with these is simply to ignore them. But the second constraint is new to the 2010-onwards process, which is that now there is a genuine and public disagreement amongst the proponents of expansion as to its preferred location: should it be at Heathrow, Gatwick/Stansted, an Estuary airport, distributed across other SE airports, or further afield and principally Birmingham?

21. We submit that it is the responsibility of government alone - and not an array of airport and developer interests; other stakeholders including Friends of the Earth; even the Transport Committee itself! - to create the transparent, impartial and consultative policy framework and process within which these complex and deeply controversial issues can be properly explored and then resolved – in the public interest. This the DfT has failed to do with DAPF as it fragmented under industry and political pressure. The Government’s inability to confront the growing local environmental problems around Heathrow contributed to the withdrawal of the 3rd Runway proposal; as noted, the government had still not responded substantively to the CCC 2009 report, its emissions envelope, and recommendation for UK carbon budget inclusion; and the decision to outsource the investigation of capacity issues to the Davies Commission is a further admission of policy collapse.

22. And it is also the responsibility of government alone to demonstrate conclusively - in view of the very long life of new airport infrastructure, their huge local impacts and emissions uplifts - that there is indeed a need for a ‘step change’ in the UK aviation capacity, because the consequences for the communities in the way of that ‘step change’ will be devastating, even annihilating. The Government has not done this in a measured and analytic way that commands confidence, as the current process has been overwhelmed by sectional interests.

23. Q3b) talks about the ‘Government’s proposals’ to manage the impact of aviation on climate change but, as noted, at the moment there aren’t any contained within DAPF despite the fact that the detailed DfT report accompanying their CCC response in August 2011 demonstrated the considerable opportunity to “… reduce the estimate of total UK aviation emissions in 2050 (in the absence of further government intervention) under our central baseline forecast to about 30 MtCO2 in 2050” DfT CCC 3.12 - that is considerably below the 37.5 MtCO2 2050 indicative ceiling identified in the CCC 2009 report. The accompanying MAC Technical report set out outputs for ‘estimated 2050 UK aviation emissions after all levers implemented’ for nine demand baseline/policy cases ranging between 15.9 and 37.9MtCO2, again almost all below the CCC ceiling MAC report table (i). Individual airlines are now prepared to sign up for 50% emissions reductions by 2050 against at 2005 baseline BA Corporate Responsibility report 2012 p.24, although it should be borne in mind that this gives aviation an enhanced baseline of 1990 plus 122% whereas all other economic sectors are having to work towards 1990 minus 80%.

24. The Committee are requested to review in detail the evidence session into carbon budget inclusion conducted by the Energy & Climate Committee on 16th October. David Kennedy for the CCC stated that the inclusion of IAS (international aviation & shipping emissions) is assumed in the overall UK 2050 80% reduction target, in the four carbon budgets to 2028, and DECC 2011 Carbon Plan assumptions. It involves no additional commitments or costs. Since the CCC assumption is that IAS emissions in 2050 will be 25% of the UK total, it’s better to have a comprehensive accounting framework in place now. Thus, for the CCC, IAS inclusion is essential in order to maintain the integrity of the Climate Change Act; the EU ETS and its cap is the mechanism delivering the emissions reduction, for which the ‘country allocation’ mechanism is now judged to be acceptable. He concluded that there is not an evidence- based case for the lowering of the UK’s emissions reduction ambition that the non-inclusion of IAS would represent. The representatives of Sustainable Aviation (the industry initiative) and UK Chamber of Shipping both supported inclusion. The DfT for their part accepted that any costs associated with inclusion was already allowed for up to 2028, and that their concerns about costs thereafter were in relation to those which would fall on all other sectors.

25. The privileged treatment of the aviation industry is being achieved at the expense of all other UK economic and social sectors which is why – to ensure a level playing field, to provide the constraining framework for aviation policy, and to avoid undermining the Climate Change Act - Friends of the Earth strongly urges the Committee to support the recommendation of the Committee on Climate Change that aviation emissions are included in the UK Carbon Budget.

19th October 2012

Written evidence from ADS (AS 74)

About ADS

ADS is the trade organisation advancing the UK Aerospace, Defence, and Security industries with Farnborough International Limited as a wholly-owned subsidiary. ADS encompasses the British Aviation Group (BAG) and jointly sponsors, with Intellect, UKspace. ADS is also a member of the Sustainable Aviation coalition of airports, airlines and aerospace manufacturers.

ADS was formed on 1 October 2009 from the merger of the Society of British Aerospace Companies (SBAC), the Defence Manufacturers Association (DMA) and the Association of Police and Public Security Suppliers (APPSS). ADS comprises around 900 member companies within the industries it represents. Together with its regional partners, ADS represents over 2,600 companies across the UK supply chain.

ADS welcomes the opportunity to respond to the consultation by the House of Commons Transport Select Committee. Representing the aerospace supply chain, the ADS submission focuses on the many technological improvements that manufacturers have made, thus reducing the environmental footprint of aviation.

4.1 The Aviation sector is vital to the UK economy bringing financial benefits to the UK and providing high skilled employment and connections to growing markets.

1.1 Aerospace, including both fixed wing and rotary wing aircraft, is one of the UK’s big success stories and a significant contributor to the UK economy. The UK aerospace manufacturing sector is the second largest in the world (17% market share), and one of the UK’s few world- class manufacturing industries, worth over £24bn to the UK, of which 75% is exported world- wide. The sector is high value and highly skilled, employing nearly 100,000 directly and supporting a workforce of around 360,000, plus another 46,000 overseas.

1.2 An important contribution from the industry is in the regionalisation of commercial aviation, generating employment in many regional areas – a good example is Bombardier in Belfast, who provide employment to around 5,000 employees, generating almost 10% of Northern Ireland’s manufacturing exports.

1.3 Connectivity to emerging markets and those with growth levels greater than the UK, such as Brazil, the Russian Federation, India and China (the BRIC countries) are vital for the future prosperity and welfare of UK plc. UK Aerospace has a crucial role and is, as the Prime Minister has noted “a powerhouse in the UK economy”. In this respect, the UK is already losing out to its European neighbours who have latched on to the vital role that aviation plays. A recent report by Frontier Economics prepared for Heathrow,1 noted that companies do 20 times the amount of business with countries connected by air, than those that are not.

4.2 The Aviation sector takes its environmental responsibilities seriously, and has consistently demonstrated this in the past and present, projecting that continuous improvement is the norm for this industry in for the future.

2.1 Technology improvements and advances in operations have improved the fuel efficiency of aircraft significantly – the Airbus A380 burns about 17% less fuel per seat and the new Bombardier CSeries aircraft will travel 100 passenger km on 2.3 litres of fuel. A Toyota Prius

1 Frontier Economics “Connecting for growth: the role of Britain’s hub airport in economic recovery”, http://www.frontier-economics.com/_library/pdfs/Connecting%20for%20growth.pdf, Frontier Economics, September 2011, last accessed 16/10/12 travels the same distance on 4.3 litres. Operationally, the ‘Perfect Flight’ operating from Heathrow to Edinburgh, as part of the Sustainable Aviation initiative, demonstrated that around 12% of fuel burn/CO2 emissions could be saved if inefficiencies in airspace design and management could be improved.

2.2 Passenger numbers are expected to more than double by 2050 and air freight activity, vital to the UK's trade with emerging markets, is expected to increase more than seven fold. However, the industry, under the Sustainable Aviation banner, has produced a ‘CO2 Roadmap’ showing how UK aviation could accommodate significant growth to 2050 without a substantial increase in absolute CO2 emissions and support the reduction of net CO2 emissions to 50% of 2005 levels through internationally agreed carbon trading.2

2.3 Local air quality impact at airports is mainly caused by surface traffic, as the Government’s Project for the Sustainable Development of Heathrow (PSDH) study demonstrated and where advances in aircraft engine technology are reducing aero-engine NOx emissions even further. It should be noted that although EU nitrogen dioxide limits are breached at a few areas around this major hub airport, they must not be allowed to deflect the Government away from the real issues that exist in major conurbations, such as central London where the levels are substantially higher and still rising.

2.4 Noise contours around major UK airports have reduced substantially and aircraft today are significantly quieter than they were in the past. For example, the noise performance of aircraft such as the new 550 seat Airbus A380 are setting new paradigms for noise performance – it’s Quota Count (QC) 0.5 classification on arrival being equal to that of the 150 seat Boeing 737, and a quarter of that of the Boeing 747-400 it replaces.

2.5 Despite the huge technological innovations that have already been made, the industry is not resting on its laurels and is investing heavily in the future. R&D expenditure by the UK aerospace manufacturing sector was maintained at £1.77bn per year in 2010, and new concepts such as those highlighted in ‘The future by Airbus’ demonstrates that the industry is not frightened of forward thinking.3 Government support through the Aerospace Growth Partnership (AGP) is crucial for the industry to retain world leadership in this area. ADS looks for cross-party support for the AGP so that UK Aerospace is able to continue to deliver for the UK economy.

4.3 Aviation does need Government to step up to its responsibilities regarding this sector, providing the right political framework to allow the Aviation sector to grow in a sustainable way, integrated with other transport modes and industries.

3.1 It must be understood that more than any other industry, Aviation operates in a global market and, as such, needs global solutions to avoid market distortions that would prejudice against the UK industry.

3.2 ADS supports emissions trading on a global basis where the most cost-effective CO2 mitigation opportunities may be identified and pursued, irrespective of sector or geography. In this respect, the integrity of the international aviation system is based on the establishment of limits on the ability of any one country to impact the flying rights of another country. Regrettably the EU Emissions Trading Scheme (ETS) does not currently appear to meet these requirements and the challenge now is for the European Commission to implement ETS in a way that does not distort competition. In the form ETS currently stands, UK Industry is being put at a serious disadvantage

2 Sustainable Aviation “CO2 Roadmap”, http://www.sustainableaviation.co.uk/wp-content/uploads/SA-CO2-Road-Map-full- report-280212.pdf, Sustainable Aviation, March 2012, last accessed 16/10/12 3 Future by Airbus, http://www.airbus.com/innovation/future-by-airbus/, last access 16/10/12 by other state’s retaliatory trade measures. This is already impacting the UK’s ability to deliver billions of pounds of its products to certain countries and putting future work and jobs in serious jeopardy. Airbus currently has 45 long range aircraft on hold, equating to a value of $15bn – their order suspended by the Chinese authorities. We strongly urge the Government to press EU authorities on this issue to further prevent the indirect negative effects of ETS on UK exports continuing.

3.3 Local actions have had much less impact on aircraft and aero-engine design. In this respect, design standards set at international level have been significantly more effective in ensuring that the pace of improvement, in environmental and other performance (e.g. safety) areas, has been maintained. The UK Government’s role in the negotiation and development of these at the International Civil Aviation Organisation (ICAO) is fundamental in ensuring that this pace is maintained and that UK industry is not disadvantaged by other nation’s interests.

3.4 An important part to maintaining the UK’s position as a centre of excellence in this high technology sector is the continuing support for technology research and development. This is vital to keeping this important area within the UK, and to avoid it leaking out to other competing countries, where it could then be exploited to the detriment of the UK. It should be recognised that spin-offs from the aerospace industry have been essential in the design, development and manufacture of emerging ‘green’ technologies that hold some of the solutions to the future decarbonisation of human activities. An obvious example is in wind turbine design.

3.5 At a time where there is increasing investment by AgustaWestland in UK Civil Helicopter engineering, matched by a strategic focus from Government, it is important that the Government consider sponsoring an inter-modal transport study to outline the economic and structural benefits of integrating rotary wing aviation into the UK transport system, and determining how these aircraft can play their part in the sustainable growth of aviation.

3.6 SESAR (the Single European Sky Air Traffic Management Research Programme) is an important part of the future of the air traffic management system and a study by McKinsey & Co has shown that delays will hurt European, and in particular UK economies dear. The study anticipates SESAR would benefit the European economy by €419bn (the UK’s share would be €84bn) from 2013 to 2030, creating 328,000 jobs and saving 50 million tonnes of CO2. A 5 year delay would cost Europe €117bn, and a 10 year delay €268bn and 189,000 jobs. UK Government support for this project is therefore vital in ensuring that these benefits are captured and not lost due to a lack of action.

4. Conclusion

4.4 The UK Aerospace sector is a successful, vibrant, high value, high technology engineering, manufacturing and service industry that generates significant returns to all its stakeholders. UK Aerospace is investing in new technologies to reduce its environmental impact whilst working with Government to secure the future of the industry. ADS looks to Government to support industry lead Sustainable Aviation initiatives and press to ensure international emissions standards do not negatively affect UK trade.

19 October 2012

Written evidence from the CAA (AS 75) 1. Introduction 1.1 The CAA welcomes the Transport Select Committee’s enquiry as a way of helping to inform the development of the UK’s future aviation strategy. Given the timelines involved in delivering such a strategy, the need to develop a stable, long-term political consensus on the way forward is a crucial condition of success. 1.2 The UK has the benefit of addressing its aviation strategy from a strong position, having as it does one of the most developed and advanced aviation systems in the world. For example, the range of destinations available from London’s airports make it the most globally connected city in the world, while over 70% of the UK population live within less than an hour’s journey from an airport that offers connections to international destinations. The last two decades have seen sharp reductions in prices, particularly for short-haul flights, prompted by liberalisation which has driven competition and enabled the development of a successful “no-frills” sector that now accounts for four out of every ten passengers flying to or from the UK1. The choice and value available to consumers have, in some ways, made recent years a golden age for UK passengers and for UK businesses that rely on aviation. 1.3 However, the aviation sector is already showing signs of stress and the UK faces significant challenges if it is to continue to ensure aviation meets the needs of its consumers and wider economy. In addition to the exposure to the weak world economy, it faces looming constraints from aviation infrastructure in the UK that, in some parts of the country, is operating at or close to capacity, as well as environmental constraints at the local and national level. In addition, there is evidence that the sector may not be meeting the needs of its consumers as effectively as it could. A successful aviation strategy needs to confront all of these challenges. 1.4 Government has a vitally important role to play in shaping the future of UK aviation by providing a robust framework that sends credible signals about the long-term direction of policy. However, Government’s role is a supporting one, not as the main actor: the aviation sector is an overwhelmingly commercial industry, driven by private investment. Consumers benefit from the choice and value that have resulted from competition and innovation in the sector over recent decades. A successful strategy will need to provide a sufficiently stable regulatory environment to encourage investments that continue to deliver benefits for passengers and the wider economy, whilst targeting any interventions in ways that improve outcomes and minimise unintended consequences. Given the long lead times involved in delivering aviation infrastructure and in developing new technologies, policy stability is crucial. Consequently, an effective strategy will need to secure the support of successive Governments if it is to deliver successful change. 1.5 This submission summarises the views of the CAA, the UK’s specialist aviation regulator, on the questions that have been posed by the Committee. The Submission has been kept short to comply as far as practical with the guidance

1 Source: CAA airport statistics, 2011 figures

on submissions to Select Committees. Further information on a number of these issues can be found in the CAA’s input to the Goverment’s aviation policy framework, which informs much of this submission and is available from the CAA website2.

2 www.caa.co.uk/SustainableAviationFramework

2. What should be the objectives of Government policy on aviation? 2.1 In our response to the Government’s scoping consultation paper published in October 20113, the CAA set out its view that the Government’s primary policy objectives should be clearly established from the outset. We suggested that there should be three primary objectives for the policy framework: • Safe and secure. Aviation policy should be designed to ensure that flying remains amongst the safest ways to travel, with policy backed up by a focus on continuous improvement by those best placed to deliver. Safety underpins all other aspirations the sector might have. • Geared to delivering choice and value to consumers. The benefits from aviation are a function of the sector’s ability to transport business and leisure consumers, or their goods, from A to B, and to do so affordably, conveniently and comfortably. The more destinations that are accessible using aviation services, the greater the potential opportunities for both business and leisure activity. This concept is frequently referred to as ’connectivity’ and we believe is a good measure of aviation’s ability to serve the wider needs of the UK economy (see below). • Environmentally sustainable. It is increasingly clear that the UK’s broader environmental objectives will be threatened - and the sector’s development will be blocked - unless environmental sustainability can be demonstrated. Achieving such sustainability is not optional – the choices arise in the domain of ’how‘, not ’whether‘. 2.2 In recommending these objectives, the CAA was and remains driven by our statutory duties and the Government’s letter of objectives, which we have brought together in our medium-term Strategic Plan4. The CAA’s Strategic Plan focuses on the needs of consumers as the end user. It seeks to promote choice and value amongst passengers and shippers by encouraging the development of choice and competition that meet the needs of passengers, shippers and the many businesses in the UK that rely on aviation. 2.3 The CAA recognises that the Government’s own considerations will be broader than ours and may wish to incorporate broader public interest considerations, such as the contribution of the aviation sector to direct and indirect employment in the UK, and the value generated by UK businesses which use aviation services. In many instances the interest of consumers and of the sector that serves them are aligned, but such an alignment is not inevitable. In cases of conflict, we would encourage the Government to give prime consideration to the consumer interest. 2.4 There are two main reasons for this.

3 CAA (2011) CAA response to the Government’s consultation on a Sustainable Aviation Framework. http://www.caa.co.uk/docs/589/UK_CAA_Response_To_Sustainable_Aviation_Framework.pd f 4 CAA (2011), CAA Strategic Plan 2011-2016, http://www.caa.co.uk/docs/1743/CAA%20Strategic%20Plan%202011-16%20v2.pdf

• First, the economic benefit to the UK relating to consumer welfare (broadly, the value that consumers derive from aviation) is larger and more important to the UK economy than the economic benefits that would be maximised by focusing more narrowly on the producer interest in terms of profits, wages and taxes; • Second, there is long experience in the UK and around the world of policy frameworks organised around helping the sector or particular players within it. These tend to be aimed at maximising the well-being or competitiveness of industry players, but the results have tended to be the exact opposite: weak and inefficient airlines and expensive airports, which have failed to thrive in the face of competition. In contrast, industries which focus on the interests of consumers tend to be more successful and competitive. 2.5 We believe that the present aviation strategy debate creates an opportunity to address this issue and develop a policy framework that puts the consumer, not airlines or airports, at the heart of policy. How important is international aviation connectivity to the UK aviation industry? 2.6 It is our belief that connectivity is the single most important factor in measuring the economic benefit derived from aviation. Consistent with our belief that the consumer should be key to policy and that it is the consumer that benefits most directly from connectivity, we would suggest that the majority of the benefit of aviation can be measured by assessing the importance of connectivity to the consumer. 2.7 Connectivity is a term that is often used but rarely defined. At its simplest, connectivity combines a number of aspects of the choice and value available to consumers such as the range of airports they can access and the range of destinations available, the frequency with which these destinations are served, whether destinations can be reached directly or only through intermediate stops, and the price paid for the services offered. It is these factors that determine how effectively aviation is able to facilitate economic activity through the transportation of goods and services. What are the benefits of aviation to the UK economy? 2.8 As mentioned earlier, there is significant evidence to suggest that aviation connectivity facilitates greater economic performance, particularly in high-value manufacturing and service sectors where access to people, knowledge, and high-value or time-critical products is vital. According to figures published by the World Economic Forum, despite the UK’s relatively small size, its aviation network, measured in Available Seat Kilometres, is the third largest in the world behind only the USA and China5. Foreign businesses investing in the UK regularly cite the ease of access to international markets provided by the UK’s aviation connectivity as a key factor in their location decision. In addition to facilitating leisure travel by UK residents, aviation is a key enabler of inbound

5 World Economic Forum (2011) Global Competitiveness Report

tourism into the UK, with over 65% of overseas visitors to the UK arriving by air6. What is the impact of Air Passenger Duty on the aviation industry? 2.9 Taxation is a matter for government and we have not sought to quantify the impact of Air Passenger Duty (APD) on consumer demand in the UK. To the extent that airlines pass on the tax to passengers, we would expect APD to have some effect on demand. Similarly, some of the tax may be absorbed by the airlines by way of lower profits. Either effect is likely to have some impact on either supply or demand and so impact on connectivity. However, we note that analysis of aviation demand history suggests that general economic growth is a stronger determinant of passenger demand than lower prices. How should improving the passenger experience be reflected in the Government’s aviation strategy? 2.10 Whilst the UK has good aviation connectivity when compared to other advanced economies, we believe that there is more that can be done to improve the passenger experience through focusing on the end-to-end journey of the passenger. During an average journey to or from the UK, a passenger’s experience will be dependent on a number of services, including those provided by the surface access provider (train, bus, rail, etc), customs and immigration control, air traffic service provision, ground-handling providers, the airport, and the airline itself. Thus, actual outcomes in aviation are the product of a myriad of decisions by a network of actors from across the sector and beyond. 2.11 In part, the highly competitive and diverse nature of the sector makes coordination more difficult than would otherwise be the case. However, that does not fully explain or indeed excuse the reasons for the sometimes unsatisfactory levels of punctuality and resilience performance that are a common experience for many passengers and shippers. Looking past these intrinsic characteristics of the sector, the lack of proper coordination can also be attributed at least in part to issues relating to: the way that information on performance is generated, shared and responded to; fragmented governance structures that lead to those that are subject to the consequences of delay (the passenger, the airport, etc) often not being best placed to alter behaviour; and the absence of the right incentives. All of this is the result of fragmented structures and practices that have grown up piecemeal over time and which blur the line of accountability between Regulators, ANSPs, airports, airlines, slot coordinators, ground handlers and other actors. Each actor (an airline, airport, investor, technologist, etc.) has the best information about their own part of the network, but limited information about the network as a whole. Establishing if and how current structures and behaviours could be improved will not be quick nor will it be easy, but the process set up for the Davies Commission provides an opportunity to review this question in order to better optimize the operation of the overall network to the benefit of consumers. 2.12 The CAA has a key responsibility in acting to improve the overall passenger experience. In recent years, we have stepped up our work to improve sector

6 Source: International Passenger Survey

Where does aviation fit in the overall transport strategy? 2.13 As one of a number of transport modes, aviation needs to be considered in the context of the Government’s overall transport strategy. Aviation’s characteristics mean that it is well placed to deliver transport services over long distances in quick time, but is relatively poorly suited to providing mass transport over shorter distances due to the inconvenience of transiting to and through the airport, navigating check-in, etc. Aviation is also an intensive consumer of fossil fuels meaning that it faces a significant challenge in addressing climate change. Furthermore, access to many destinations is often possible only via larger “hub” airports meaning that noise and air quality effects will typically be concentrated around the vicinity of the airport. Until there is a step change in technology in the sector, these inherent characteristics of aviation will determine its place in overall transport strategy. This suggests that the Government’s transport policy should promote alternative transport modes for shorter journeys where economic, including through better integration between aviation and other modes of travel and airports so as to promote connectivity and consumer amenity, and limit environmental effects.

3. How should we make the best use of existing aviation capacity? 3.1 As already mentioned, the UK is fortunate in having a well-developed aviation sector that delivers high levels of connectivity and choice for the consumer. A large part of this benefit has been generated by a conscious policy of liberalising markets that has been sustained across successive Governments, backed by a consensus view that market participants are best able to direct change and produce innovative outcomes that would not have been forecast or delivered through state planning. The corollary of this position is that intervention is only justified where it is to take account of issues such as externalities, market power, information asymmetries (or consistent failures of market players to interpret information correctly), time-inconsistency problems, or other factors that can lead to market failure. These principles naturally place constraints on Government intervention. Further limitations arise as a consequence of international law, private ownership of assets and the present constraints on public finances. 3.2 To some extent, the success of this approach to UK economic policy means that the ability to improve on the existing utilisation of capacity is limited. However, whilst it is difficult to recommend particular forms of intervention or reforms to market processes, we would make a number of observations: • Outcomes should be set in a way that is targeted at the root cause of the market failure that the intervention is intended to address; • The range of policy levers available to Government may also influence the way outcomes are specified; • Less prescriptive approaches such as market-based policy measures will by their nature be more flexible and resilient to change as well as creating incentives for innovation. However, market-based approaches will not always be appropriate. Once again, the Government will need to satisfy itself that it has control of policy levers to ensure delivery of a prescriptive solution. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? 3.3 We believe that the approach set out above, which targets intervention only at clear cases of market failure, is as applicable to London and the South East as it is to other parts of the UK. The difference between the South East and other parts of the UK is that certain airports, namely Heathrow and Gatwick, face near-term capacity constraints that threaten consumer outcomes, including resilience and delay performance. The Government’s South-East Airports Taskforce is perhaps the most high-profile recent examination of these impacts7, and the CAA has been responsible for facilitating implementation of some its recommendations8. As already noted, the CAA believes that there is more that can be done to improve the customer experience for passengers

7 http://www.dft.gov.uk/publications/south-east-airports-taskforce 8 http://www.caa.co.uk/apfg

across the UK, focused largely on better signalling to the various actors in the sector involved in service delivery. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? 3.4 It should be noted that, in contrast to the supply challenges at Heathrow and Gatwick, airports outside the South East are more likely to face problems that arise from a lack of demand for aviation services that threatens the viability of commercial services needed to provide connectivity. The relative lack of demand for services from these regions can create problems such as poor connections to major business centres such as London. Our work on the dynamics of airport competition suggests that although there are limits to the travel times that consumers will tolerate in considering airports alternatives, a significant proportion of the market is prepared to travel reasonable distances to access an airport with a direct connection to their end destination9. Thus, part of the answer to the imbalance of supply between the regions lies in the promotion of an integrated transport infrastructure that facilitates greater intra- and inter- regional access to airports by consumers. This has the potential of promoting consumer choice and value through greater competition, enabling the geographical location of the airport to become less dominant in determining passengers’ choice of airport10. How can surface access to airports be improved? 3.5 Good surface access connections need to be frequent, reliable and good value if it is to help improve transport connectivity and offer an attractive proposition for passengers. Better surface access also facilitates greater spatial separation between centres of population and airports thereby potentially playing an important role in minimising the impacts on humans of noise and air quality emissions. 3.6 We note that relatively poor surface access for airports outside of the South East is an explanatory factor in the lower proportion of passengers accessing those airports by public transport11 as well as the higher proportion of passengers for whom geographical proximity inevitably becomes a key determinant of the airport they use.

9 CAA (2011) Airport Competition Assessment: Catchment Analysis Working Paper http://www.caa.co.uk/docs/5/Catchment%20area%20analysis%20working%20paper%20-%20FINAL.pdf

10 Results from the CAA’s passenger survey showed that 40% of passengers using London airports rated airport location and surface access as the most important factor in choice compared to 65% for non-London airports, suggesting that airport choice was more constrained by location outside of London. CAA (2011) Passengers airport preferences: Results from the CAA Passenger Survey, November 2011. http://www.caa.co.uk/docs/5/Passenger%20survey%20results%20-%20FINAL.pdf

11 CAA (2011) CAA Passenger Survey Report 2011, http://www.caa.co.uk/docs/81/2011CAAPaxSurveyReport.pdf

4. What constraints are there on increasing UK aviation capacity? 4.1 Addressing the aviation sector’s growing share of CO2 emissions and mitigating the impact of aircraft noise nuisance and the detrimental effect on air quality that affect local communities is central to the sector’s future success. The challenge of addressing climate change is genuinely global in nature. In contrast, the impact of aircraft noise and local air pollution are highly localised and demand local solutions. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? 4.2 Although there are significant local impacts from aviation elsewhere in the UK, Heathrow accounts for more than one quarter of people affected by aviation noise in Europe, based on the European standard measure of 55LDen. Additionally, in terms of people affected, Heathrow has the greatest impact on air quality of any UK airport. Both these issues relate to the size and scale of the airport's operations and to its geographical location with approach and departure routes that cross the UK’s principal population centre. 4.3 The CAA’s second insight note, Aviation Policy for the Environment12, noted that the development of the aviation policy framework presents an opportunity to develop a new, twin-track approach to noise policy focused on two high- level outcomes: • seeking continued reductions in the number of people affected by noise; and • encouraging better engagement with communities in order to achieve greater consensus 4.4 The Government’s draft proposals echoes much of that thinking and, if implemented, would result in positive improvements in terms of the number of people affected by noise. There are few options that have not been seriously considered, and it is worth noting that step change improvements in noise performance at Heathrow, for example, would require a more radical rethink of the operational conditions at the airport or an alternative hub, something that would need to be considered in the context of the longer term question of capacity provision (see below). Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? 4.5 There are a large number of initiatives at the industry level to improve on the emissions performance of the sector and these promise to make a considerable difference to the sectors' carbon footprint. One of the most important from a CAA perspective is the Future Airspace Strategy (FAS)13, which is aimed at modernising the use of airspace in the UK in order to improve on the efficient use of capacity.

12 www.caa.co.uk/SustainableAviationFramework 13 www.caa.co.uk/FAS

4.6 The CAA supports the UK Government's long-standing view that an essential part of any policy on aviation and climate change is to make the sector - in common with other energy-intensive sectors of the economy - meet the costs of its carbon emissions. 4.7 The ideal approach would be to secure a global agreement to this end. However, to date this has not been forthcoming and, in the absence of a global alternative, we believe that inclusion of aviation in the EU's Emissions Trading Scheme is the best way forward. However, we find encouraging the news from the International Civil Aviation Organisation (ICAO) that they are progressing discussions amongst member states, including the UK, on a number of market based measures to tackle aviation's impact on global warming. Though the outcome of these discussions is as yet unclear, we are hopeful that this work might lead to a global scheme to tackle aviation's climate change impacts. What is the relationship between the Government’s strategy and EU aviation policies? 4.8 As the question suggests, many regulatory aspects are governed by European and international law. European involvement in aviation has delivered significant benefits to the consumer as the internal market has been opened up. However, the flip-side to this is that some policy options are no longer possible. Laws set at the European level has a significant bearing on policy in many areas of aviation, including safety, consumer protection legislation and the approach to the economic regulation of airports and airlines. This, combined with the overwhelmingly commercial nature of the sector, means that the parameters within which policy is established at the national level are tightly set. 4.9 The UK has exerted considerable influence in the development of aviation policy at the European level, reflecting the relative size and importance of the UK aviation sector and a pro-competitive approach that has sat well with the move to develop the single market in aviation services. With the single market now bedded in, the European legislative process in the future may focus more on a fine-tuning of the now well-established regulatory framework with the aim of generating performance improvements through the better coordination of infrastructure and service providers at the national and European level, for example in the areas of the airspace management (e.g. Single European Sky) and airport infrastructure (e.g. the Airports Package recently proposed by the European Commission). The UK Government will wish to look at ways to work with the grain of these changes to further its national aviation objectives over the duration of its aviation strategy.

5. Do we need a step-change in UK aviation capacity? Why? 5.1 Current evidence suggests that the distribution of current capacity is poorly suited to meet the demands of the future. The latest demand forecasts, published by the Department for Transport in August 2011, show demand growth becoming restricted by capacity constraints at all airports in London and the South-East before 203014. In addition, some of the larger regional airports are also forecast to become capacity constrained by 2030. 5.2 Long-term demand forecasts are, by their nature, always subject to considerable uncertainty. This is especially true in the current economic climate. However, we recognise that the Government is looking to put in place a sustainable framework for aviation that takes a long-term view of the challenges facing UK aviation. A number of these challenges are forecast to have a considerable effect on the ability for aviation to serve the consumer, and by extension the wider UK economy. 5.3 In terms of consumer choice, constraints on capacity are likely to limit this. For example, at Heathrow, which has been operating at or close to capacity for approximately 10 years, experience has shown that airlines have tended to enhance ‘slot productivity’ by allocating scarce capacity to the most profitable routes. These routes tend to be operated at a higher frequency than at other airports, but with the total number of destinations served from Heathrow declining over time. The opportunity cost of scarce slots mean that airlines at Heathrow are less able than those at other European airports to try out new routes to emerging markets. Furthermore, there is evidence that the lack of available capacity at Heathrow is already beginning to affect the UK’s ability to negotiate more liberal air services agreements with foreign states, including a number of key emerging markets. 5.4 A further trend at Heathrow is the reduction in the number of domestic airports with connections to Heathrow. For example, the figures show that that between 2000 and 2010 the number of domestic airports served from Heathrow fell from ten to seven (though this has to some extent been reversed following the recent merger of British Airways and bmi). 5.5 A further effect is the likely increase in fares. The Department for Transport’s forecasting model generates a ‘premium’ on fares to simulate the additional costs to passengers where capacity constraints become binding. The level of demand growth predicted by the 2011 forecasts suggests that the value of fare premiums resulting from capacity constraints at UK airports is predicted to total £1.7bn in 2030. Spreading this equally across the 330m terminal passengers predicted to use UK airports in 2030, this equates to £5 per terminal passenger or £10 per return journey. There is much variation in how this impact is distributed with significant increases at some airports and very little impact at others. The implied ‘premium‘ per one-way trip at Heathrow would be £12 with the maximum predicted increase being £17 per terminal passenger at London City.

14 DfT, UK Aviation Forecasts 2011

5.6 Lastly, there are clear implications for the passenger experience. Analysis carried out for the CAA in 200815, and updated in 2011 for the South-East Airports Taskforce, demonstrated the trade-off between throughput and delay as airport utilisation approaches capacity. This relationship becomes increasingly severe as congestion grows. The analysis suggested that the optimal level of capacity utilisation, beyond which the congestion cost of adding additional services outweighs the consumer benefits of the additional flights, is likely to be significantly less than an airport’s technical capacity. What should this step-change be? Should there be a new hub airport? Where? What are the costs and benefits of these different ways to increase UK aviation capacity? 5.7 The implications of inaction in this area are significant in terms of the impact on the consumer and - following on from that - the wider economy. The Government has recently announced the establishment of the Davies Commission to look into the question of whether new airport capacity is required and what kind of capacity would be most beneficial. This is a mid-term project and further detailed work is needed to establish the evidence base for these decisions, the nature of which will be driven partly by the Government's view of the objectives for aviation policy. 5.8 History suggests that any decisions in this area have the potential to be politically divisive, underlining the need for both a consensual, objective framework for guiding decisions and, perhaps more importantly, mechanisms for ensuring cross-party support. 5.9 To contribute to this end, the CAA is recommending four key decision criteria, that the Commission should have regard to when considering options and potential solutions. • Demand-focused: to ensure that any capacity solution is consistent with trends in demand and geared to deliver connectivity, choice and value for consumers. • Financeable: to ensure that any solution can be funded on the basis of airport charges at a level consistent with ensuring value for consumers; • Safe: to ensure that any solution is designed to further improve the safety of the UK aviation system and is consistent with effective airspace management; • Sustainable: to ensure that any growth in capacity is consistent with environmental objectives, including balancing the needs of consumers with those of local communities. 5.10 Though the CAA recognises that these criteria may not be exhaustive and there may be other considerations that the Davies commission, or Government, feels are valid, they are considerations that are central to the debate and where the CAA is well placed to offer its view. Looking ahead, the CAA intends to shape much of its advice around these key criteria.

15 Both reports can be accessed at www.caa.co.uk/apfg

Further written evidence from the Civil Aviation Authority (AS 75A)

When I appeared before the Transport Select Committee at the evidence session on aviation policy on 10 December 2012, I was asked a number of questions about the CAA's proposed charges for non-designated airports. I thought it might be helpful to set out in more detail the proposals on which we are currently consulting.

I understand the difficult economic environment in which airports are operating at the present time. As part of this, it is an important principle that our charges are representative of the work carried out in connection with each area of regulation so that no one part of the aviation industry subsidises the regulation of another. This is consistent with our charging principles, which were formally agreed with industry.

Overall, the main charges we are proposing for 2013/14 are held at current levels, which represents a reduction in real terms. However, some specific charges are being lowered whilst others are being raised. The increase in non-designated airport charges that was referred to has been proposed to reduce the cross-subsidy that this area of the industry has benefited from over a number of years. To this end, we also anticipate a further increase in 2014/15 to fully eliminate the cross- subsidy. Historically, the cross-subsidy has been paid by airlines, which also operate in a competitive market. Whilst I understand that any increase in charges will not be welcomed, CAA economic regulation charges represent a tiny proportion of non-designated airports' turnover. Airports subject to economic regulation of airports charges are those with more than 500,000 arriving passengers in the previous financial year. There are currently 17 non-designated airports subject to these charges. We are proposing to increase the charge by 0.23p per arriving passenger, to 1.49p per arriving passenger.

This is expected to generate total income of £716,000 (an increase of £110,000). By way of context, the most recent accounts we have seen for the 17 non-designated airports record an aggregate annual income of some £1.1 billion. Our charging proposals are currently subject to consultation and we will consider carefully representations from the non-designated airports on this matter.

I was also asked why the CAA is forecasting a profit of £1.7 million. We are required by the Treasury to set our charges at levels sufficient to achieve either a rate of return of 6% before interest on the average level of capital employed, expressed in current cost terms, or to break even after interest and tax, whichever is the greater. This is not so much about making a profit, as ensuring the CAA uses capital in a disciplined way. Achieving a rate of return is also necessary if we are to invest in more modern systems to generate future efficiencies.

As I explained when I appeared before the Public Bill Committee on the Civil Aviation Bill earlier in the year, the CAA is committed to being as efficient as possible. Over the last 10 years (2002/03 to 2011/12), despite significant growth in and changes to the aviation industry, the CAA has reduced its operating costs in real terms by more than 26%. However, we recognise that further efficiencies are required and are currently undertaking a significant modernisation programme to achieve this. As a result, we remain on track to employ fewer people after April 2014 than currently, even allowing for the transfer into the CAA of approximately 80 people from the Department for Transport at that time, as part of our new responsibilities for regulating aviation security.

21 December 2012

Written evidence from the Richmond Heathrow Campaign (AS 76)

This submission is made in response to the call for evidence for the inquiry by the House of Commons Select Committee on Transport into the Government’s strategy for aviation.

The Richmond Heathrow Campaign represents three amenity groups in the London Borough of Richmond upon Thames: The Richmond Society, The Friends of Richmond Green and The Kew Society, which together have over 2,000 members.

Our members are affected adversely by noise from Heathrow’s flight paths, particularly in the night period. We nevertheless recognise the importance of air transport and we seek to make a positive contribution to the inquiry.

The main points in our response, following the order of the questions to which they respond, are that: (i) aviation appears to be under-taxed for general revenue purposes; (ii) carrying more passengers per aircraft movement (as envisaged at the Terminal Five Public Inquiry) would increase the number of passengers that can be handled at Heathrow (and at other airports) without additional runway capacity; (iii) carrying more passengers per aircraft would enable night flights to be phased out at Heathrow and noise mitigation measures to be maintained for daytime air traffic; (iv) surface access to and air quality around Heathrow will continue to be major problems, particularly with additional passenger numbers; (v) if the hub model is applied to Heathrow it would require not just a third runway but a fourth as well; (vi) the hub model should be abandoned in favour of more direct services from more airports, with a reduction in the number of passengers who have to transfer.

We have confined our response to answering those of the questions that the Transport Committee is considering that are most pertinent to our areas of our general experience and specific research. We would be happy to provide additional information and would welcome the opportunity to give oral evidence. We are content for our response to be published.

QUESTION 1: WHAT SHOULD BE THE OBJECTIVES OF GOVERNMENT POLICY ON AVIATION?

1 (c). What is the impact of Air Passenger Duty on the aviation industry?

1.1 Air Passenger Duty (APD) was introduced as a specific tax on the aviation sector in order to broaden the general revenue base and in recognition of the fact that the sector was under-taxed due to zero rating for VAT and exemption from fuel tax 1. The Coalition Agreement includes a commitment that aviation should contribute additional tax in order to fund in part an increase to £10k in the income tax personal allowance. We regard the general revenue need as a sufficient reason for retaining an aviation- specific tax. Those who call for the repeal or reduction of APD should explain how the resulting shortfall in the tax yield would be financed.

1.2 Other forms of public transport are not charged the equivalent of APD, but there are sound policy reasons for not doing so: the majority of passengers by bus or train are

1 Next, I propose to broaden the tax base ... First, air travel is under-taxed compared to other sectors of the economy. It benefits not only from a zero rate of VAT; in addition, the fuel used in international air travel, and nearly all domestic flights, is entirely free of tax. Kenneth Clark MP, Chancellor of the Exchequer (Hansard, 30 November 1993, Column 934).

travelling much shorter distances than the typical air journey, with competition from the car, not the air fleet. For longer journeys, wherever train is a viable alternative to air (i.e. short haul flights), tax discrimination to encourage the use of train can be justified on transport and environmental management grounds.

1.3 The previous Administration re-branded APD as a green tax on aviation but the revenue continues to be used for general expenditure and is not hypothecated for the mitigation and/or remediation of aviation’s environmental damage. We agree that aviation should meet its environmental costs, but through specifically designed mechanisms (e.g. emissions trading for climate change impacts and airport surcharges for more local impacts such as air quality, road congestion and air traffic noise) rather than through APD.

1.4 APD raises approximately £2.5 billion per year, but there is no criteria against which to assess whether that amount is fair or unfair to the aviation sector. Since the original rationale for APD was in effect as a surrogate tax in view of aviation’s exemptions from fuel duty and VAT, an objective assessment of fairness could be based on a comparison between the amount collected in APD and the amount lost in fuel duty and VAT. Unfortunately the Treasury does not publish these data. But a report published in 2003 by the Aviation Environment Federation estimated that the exemptions were worth £9.7 billion 1. The wide gap between the amount paid in APD and the apparent value of the exemptions highlights the need for a validated annual estimate of the amount that aviation does not pay in fuel duty and VAT.

1.5 It is difficult to square the apparently favourable tax treatment of aviation with the sector’s image as a dynamo of the UK economy. But two direct consequences follow: (a) the burden on other taxpayers is higher than it would be; and (b) and the prices for air passengers are lower than they would be. Given that price considerations are likely to influence leisure passengers 2 and that leisure passengers account for more than two thirds of all passengers at UK airports 3, aviation’s apparently favourable tax treatment may have contributed to increased passenger numbers and congestion at UK airports.

1.6 The main direct beneficiaries from the low level of APD are the airlines, with air passengers as the main indirect beneficiaries (i.e. air fares are lower than they would be with higher levels of APD). It is claimed that account must also be taken of the benefits from inward investment and UK-bound tourists that aviation facilitates. But the UK has exported more investment and tourist spending than it has imported over many years and these deficits may also have been facilitated by aviation 4. 1.7 The main direct loser from the low level of APD is the Treasury, which must either increase the burden on other taxpayers or cut back on public expenditure. The main indirect losers are the general taxpayer or people and projects that depend on State funding (e.g. pensioners, a new hospital). Although many taxpayers are also air passengers, the evidence indicates that those on higher incomes account for

1 Brendon Sewill, The Hidden Cost of Flying (2003). The report included an additional £0.4 billion on duty free goods, less £0.9 billion for APD, giving a net balance of £9.2 billion. The amount collected in APD has increased since 2003 as have VAT and fuel duty.

2 Business passengers are less price sensitive because a business air journey is a small component of a much larger financial package.

3 Civil Aviation Authority, UK Airport Statistics

4 The tourist deficit also has adverse revenue implications in that tourist spending often attracts VAT. The most recent tourist deficit is £20 billion, implying a VAT deficit of £3.4 billion.

significantly more leisure flying than those on lower incomes 1. That is to say, to the extent that the general taxpayer is subsidising leisure flying, it is disproportionately for the benefit of the better off.

1.8 It should be recalled finally that transfer passengers are exempt from APD, the original rationale being to protect airlines at UK hub airports 2. More recently, the Government has argued that it would be unfair to charge the airlines twice for transfer passengers (i.e. for the flight to the hub and for the connecting flight from the hub). But, regardless of the rationale for the exemption, its effect is to discriminate in favour of airlines and airports that maximise traffic at a particular hub and may inhibit the development of services direct to ultimate destinations (i.e. without transferring at a hub). It is likely to be the case that the majority of passengers would prefer to fly direct rather than transferring (see our response to Questions 4 (a) and 4 (b) for more detailed comments on transfer passengers).

QUESTION 2: HOW SHOULD WE MAKE THE BEST USE OF EXISTING AVIATION CAPACITY?

2 (a). How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

Heathrow Airport 2.1 We consider that better use could be made of Heathrow’s capacity to improve resilience in the short term and to increase passenger numbers in the medium term, while continuing to operate in unbroken segregated mode and within the existing limit of 480 000 air transport movements per year. We consider that the efficient use of this capacity would also enable movements to be phased out in the night period (2300- 0700).

2.2 Airport capacity is determined by three related parameters: runway capacity for the number of aircraft movements; terminal capacity for the number of passengers; and (within the two preceding parameters) passenger capacity per movement 3. The Terminal Five Public Inquiry found that Heathrow - operating in unbroken segregated mode and with Terminal Five in full use - would have the capacity to handle 480 000 air transport movements (ATMs) per year carrying 90 million passengers, with a corresponding increase in the capacity and number of passengers per movement compared the situation at the time of the Inquiry 4.

2.3 The number of ATMs at Heathrow in 2011 (476 000) virtually reached the forecast maximum number of ATMs per year (480 000) with unbroken segregated mode, while the number of passengers (69 million) was 21 million short of the forecast maximum number of passengers per year (90 million).

1 From data on the Civil Aviation Authority website.

2 To protect the position of the United Kingdom’s international hub airports, there will be an exemption for transfer and transit passengers Sir John Cope MP, Paymaster General, (Hansard, 1 December 1993, Column 1132-1133) 3 Surface access to and from the airport is also a consideration, which we address in response to Question 2 (c).

4 See report from the Terminal Five Public Inquiry to the Secretary of State for Transport.

2.4 The lack of spare runway capacity at Heathrow with which to manage promptly periodic disruptions to flight schedules (particularly for arriving aircraft) is therefore due to over-scheduling the number of ATMs in particular hours of the day rather than to the number of ATMs exceeding the forecast ATM capacity over the day as a whole.

2.5 Similarly, the passenger capacity bottlenecks at Heathrow have arisen because of the shortfall between the forecast number of passengers per ATM and the actual number of passengers per ATM; not because the actual numbers of ATMs or passengers have exceeded their forecast capacity.

2.6 As regards spare capacity for managing disruption, we consider that the airlines should be given incentives to spread their slots more evenly across the day in order to avoid spikes in the number of slots in particular hours that are vulnerable to disruption. The simultaneous use of both runways for arrivals should be reserved only for the most extreme cases of disruption and not for routine disruption.

2.7 As regards passenger numbers, we estimate that Heathrow’s 90 million passenger capacity would not be fully utilised until 2027 if the airlines increase the number of passengers per ATM to the level envisaged at the Terminal Five Public Inquiry and assuming a similar rate of increase to the annual average since 1991 1. We set out our analysis in more detail in Annex 1 to this response.

2.8 Increased passenger numbers per ATM in the short term could be delivered if the airlines aimed at a higher ratio of passenger numbers to passenger capacity in their existing fleet. The number of seats per ATM at Heathrow averaged at about 200 over each of the last five years, with the number of passengers per ATM in 2011 averaging at 146, a seat capacity use of about 73 per cent 2. There is therefore scope to increase the average number of passengers per ATM, particularly on the most popular routes that are served by many flights per day 3.

2.9 Increased passenger numbers per ATM in the medium term could be delivered if the airlines replace much of their existing fleet at Heathrow with aircraft with larger passenger capacities. This would not mean switching every aircraft to Jumbo size; but it would mean more aircraft with seats for more than 200 passengers and fewer aircraft with seats for less than 200 passengers 4. This could be done incrementally in line with routine fleet replacement, with the option of code-sharing between airlines to further defray the costs of switching to larger capacity aircraft.

2.10 More passengers per ATM would enable the same number of passengers to be carried in fewer daily movements, particularly on the most popular routes, which in turn would free up slots for new destinations.

1 Assuming also the continued disproportionate growth in transfer passengers at Heathrow and no loss of terminating passengers from Heathrow to other London airports or to airports in other UK regions. We consider transfer passengers in response to Question 4 (a).

2 Data from the Civil Aviation Authority and Airports Co-ordination Limited websites.

3 Our analysis - incomplete at the time of preparing this response - suggests that the ratio of passenger numbers to passenger capacity is lower on the most popular routes from Heathrow than the aggregated ratio on all routes from Heathrow.

4 At present about 65 per cent of ATMs at Heathrow have a passenger capacity of less than 200 seats (data from Airports Co-ordination Limited website).

2.11 It is not clear why market forces and the rules of supply and demand - congestion pressures at Heathrow and competition between the airlines - have not resulted in larger passenger numbers per ATM. But carrying more passengers per ATM would create unused slots that would have to be surrendered without compensation under the European Union “use it or lose it” rule. The airlines may wish to retain the slots that they currently hold in order to open new routes in the future; or in order to keep competing airlines out; or in order to sell slots at their most lucrative value 1.

Other London Airports 2.12 We consider that better co-ordinated use could be made of London’s five main airports (Heathrow, Gatwick, Stansted, Luton and London City). In particular consideration should be given to the reintroduction of air traffic distribution rules for the most popular destinations in order to reduce the number of ATMs to those destinations (by increasing the number of passengers per ATM). This rationalisation would free up slots for new destinations.

2 (b). Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

2.13 Congestion at Heathrow and at London’s other main airports is due in part to the continued dependence of the other regions of the United Kingdom on South East England for international aviation connections. We welcome any initiatives to increase the number of direct international services at airports in the other regions in order to reduce the number of domestic terminating and transferring passengers at Heathrow. For example, the development of improved surface access to airports within each region should not lag behind the development of improved surface access from other regions to airports in South East England.

2.14 It might be helpful to commission a comparative study of the UK regions: to what extent can regional economic differences be attributed to the abundance or scarcity of aviation in each region? How does the international connectivity of major airports outside the South East (e.g. Manchester and Glasgow/Edinburgh) compare with airports in some of the smaller EU countries with similar population sizes to the UK regions?

2 (c). How can surface access to airports be improved?

2.15 Heathrow has spare capacity to handle an additional 21 million passengers per year (see paragraph above). Assuming a continuation of the ratio of two terminating passengers to one transferring passenger (a ratio that has been roughly constant at Heathrow since the mid 1990s) then there would be an additional 14 million terminating passengers per year at Heathrow by the time that its passenger capacity is fully utilised. How would those additional 14 million passengers get surface access to Heathrow?

2.16 The table in Annex 2 to this response sets out the different modes of transport that have been used by terminating passengers for surface access to Heathrow between 1972 and 2010. In 2010 (the most recent year for which the detailed data was available

1 The sale value would presumably by higher from a gradual release of spare slots rather than a sudden flooding of the market with all the available spare slots.

at the time of drafting this response) 30.8 million passengers accessed by road (private car, hire car, taxi/minicab, bus/coach) and 10.8 million passengers accessed by rail (including underground), a ratio of three road accesses to one rail access that has been roughly constant at Heathrow since the opening of the Paddington connection in 2000 (prior to 2000 the ratio was 4:1). Assuming the future continuation of the 3:1 ratio, 10.5 million of the additional terminating passengers would use road access, an increase in the total number of road access to 41.3 million per year. Increased passenger numbers would in turn increase the quantity of consumer goods and other supplies that are delivered to Heathrow primarily by road.

2.17 The road network around Heathrow already experiences significant levels of road traffic congestion, in part because of the high volume of road traffic to and from Heathrow. In many of these areas the air quality is already poor, with road traffic emissions identified as the main pollutant source. Reducing these related adverse impacts is proving difficult even with the present level of Heathrow access road traffic. If increased terminating passenger numbers stimulate increased Heathrow access road traffic there will be a corresponding increase in the magnitude of the adverse impacts on local road traffic congestion and air quality.

QUESTION 3: WHAT CONSTRAINTS ARE THERE ON INCREASING UK AVIATION CAPACITY?

3 (a). Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

Air Quality 3.1 The Terminal Five Public Inquiry found that the air quality in areas around Heathrow exceeded what were at the time voluntary World Health Organisation (WHO) limit values for exposure to nitrogen dioxide; and that the exceedences would continue in future with or without Terminal Five. By the time the Secretary of State authorised the development of Terminal Five the WHO limit values had been made mandatory within the European Community, with a deadline for compliance by the end of 2010.

3.2 In paragraphs 77 and 78 of the letter dated 21 November 2001 authorising the development of Terminal Five the Secretary of State took issue with what he regarded as an unduly relaxed attitude towards the prospect of continued nitrogen dioxide exceedences around Heathrow:

He [ the Secretary of State ] considers that the Inspector placed too little weight on the European Community law aspects of the air quality issues and he recognises the obligations that Community law imposes on the UK Government … The Secretary of State reaffirms his recognition of the UK Government’s obligations under the EU Directive. It remains the Government’s intention to meet the requirements of the Directive .

3.3 But compliance was not achieved by the end of 2010 and the Government had to apply to the European Commission for an extension for compliance until the end of 2015. With the extended deadline due to expire in just over two years’ time, compliance has still not been achieved.

3.4 Although road traffic in the Heathrow area is considered to be the main source of nitrogen dioxide (and of particulates, another cause of local pollution for which limit values have been set), much of that road traffic is Heathrow bound; and aviation emissions (particularly take offs) make an additional contribution to the overall nitrogen dioxide and particulate levels. Any significant increase in passenger numbers using road access in future would make compliance with the limit values even more difficult.

3.5 Quite apart from the legal obligations on the Government to comply with the EU Directive, the nitrogen dioxide and particulate levels pose a health threat to adults living and working near Heathrow and to children living and attending schools near Heathrow. Recent research by the Massachusetts Institute of Technology has confirmed the health risks from air pollution in areas around Heathrow.

Air Traffic Noise 3.6 The high nitrogen dioxide levels are restricted to certain areas within the immediate vicinity of Heathrow. Noise from air traffic extends over a much wider area, several miles to the east and west of the airport to those communities over which Heathrow’s arrival and departure flight paths are routed.

3.7 The harmonised mapping of air traffic noise around major EU airports - undertaken in compliance with Directive 2002/49/EC on the assessment and management of environmental noise - demonstrates that noise from Heathrow air traffic affects more people in the day-evening and night periods than at any other major EU airport.

3.8 Although the noisiest classes of aircraft have been phased out at Heathrow the recent noise trends are not encouraging:

• Day and evening period (0700-2300) The size of the air traffic noise contour shrank by 50 per cent between 1991 and 2001 but the rate of shrinkage has been much slower since 2001. The number of aircraft movements (i.e. the number of individual noise events) increased by 26 per cent in 2011 compared with 1991 (see Annex 3 to this response for fuller details).

• Night noise quota period (2330-0600) The number of aircraft movements increased between winter 1993/4 and summer 2011 but by a much lower percentage than the day and evening period. The noise per movement has not reduced to the same extent as in the day and evening period, as judged by the total number of night noise quota points used and the number of quota points per movement (see Annex 4 to this response for fuller detail).

• Night shoulder periods (2300-2330 and 0600-0700) The number of aircraft movements has increased compared with the situation in the early 1990s, with an average 40 arrivals and 17 departures per night in 2010 (figures for 2011 not yet available).

3.9 Turning to Heathrow’s noise climate in the future, the Department of Transport is proposing to introduce a “noise envelope” at any new hub airport or at any other airport development which is a nationally significant infrastructure project. It is not clear whether a noise envelope would apply at Heathrow if Heathrow was selected for hub expansion (i.e. not a new hub airport) or if hub expansion is to take place elsewhere. But in either event we are deeply suspicious of a noise envelope.

3.10 The basis of our suspicion is that the noise envelope would apparently be based on limiting the size of the 57 decibel air traffic noise contour over 16 hours (0700- 2300). A similar restriction already applies at Heathrow as a planning condition for Terminal Five, but the size of the permitted contour is so large that it has not provided any incentive to introduce quieter aircraft. The Planning Inspector at the Terminal Five Public Inquiry had severe reservations about the Department’s preferred method of assessing the impact of noise levels, which would form the basis for assessing compliance with the contour limit. For those reasons he recommended the setting of a 480 000 limit on the number of air transport movements per year at Heathrow. The Secretary of State accepted the Inspector’s reservations about noise assessment and imposed the 480 000 limit as a planning condition for Terminal Five.

3.11 We also have concerns about how the noise envelope would apply to the night period. Again, the precedents are not good. The original restrictions on night flights at Heathrow excluded the noisiest classes of aircraft and imposed a limit on the number of movements by other aircraft. But the last Administration attempted to abolish the limit on the number of movements in favour of sole reliance on a noise quota allowance (in effect a sort of noise envelope) which would have enabled the number of movements in the night period to increase provided that their individual and collective noise levels did not exceed the quota allowance. Again, the noise quotas have been too lax to produce any significant reduction in night noise at Heathrow.

3.12 In our view the only way to reduce the noise from air traffic in the day and evening periods is to set ever-tightening noise standards with which aircraft must comply within a reasonable deadline. That is how the dramatic reductions in the noise contour in the 1990s at Heathrow were delivered. The ultimate objective must be to ensure that the noise levels at Heathrow and other airports do not exceed the guideline values recommended by the World Health Organisation. As regards air traffic arriving or departing in the night period, we consider that the only solution is a blanket prohibition 2300-0700 which could be delivered by increasing the number of passengers per aircraft movement: see our response to Question 2 (a) above.

QUESTION 4: DO WE NEED A STEP-CHANGE IN UK AVIATION CAPACITY? WHY?

4 (a). What should this step-change be? Should there be a new hub airport? Where?

4.1 Air passenger numbers are forecast to increase by a factor of two or three over the next fifty years. Many argue that in order to handle the passenger growth new runways need to be built in South East England, with at least one of the new runways dedicated to maintaining a hub capacity in the South East. But there are widely diverging views as to where the new runways should be built; or to what the best option is for maintaining a hub capacity.

4.2 We accept that passenger numbers are likely to increase significantly. But we consider that the additional capacity could be delivered through primarily through larger passenger numbers per aircraft movement and with better co-ordination of services at London’s five main airports (Heathrow, Gatwick, Stansted, Luton and London City) without the need for additional runways and the implied significant increase in the number of aircraft movements. We also consider that the sheer increase in passenger numbers in future should result in more demand for point to point services, with less demand for transfer services and a reduced role for hubs.

4.3 We commented in paragraph 2.2 above that airport passenger capacity is determined by three parameters: runway capacity, terminal capacity and aircraft capacity. We are surprised that the debate about future capacity needs in South East England has got bogged down in acrimony about the need for additional runways, to the exclusion of any debate about aircraft capacity. In our view enhancing and utilising aircraft capacity is inherently less divisive and less costly than building additional runways.

4.4 We argued in paragraphs 2.5 and 2.7 above that the apparent bottleneck in passenger capacity at Heathrow is due to the shortfall between the forecast and the actual number of passengers per aircraft movement; and that the capacity could be fully utilised within the existing limit on the number of aircraft movements and in unbroken segregated mode by increasing the number of passengers per movement. Delivering that increase at Heathrow would become easier if the same objective was adopted for London’s other main airports (Gatwick, Stansted, Luton and London City), with the additional benefit that additional passenger capacity would become available at all the airports, not just at Heathrow.

4.5 Between 1977 and 1991 traffic distribution rules were in operation at Heathrow and Gatwick in order to ease congestion at Heathrow and to assist the development of Gatwick. None of London’s five main airports needs assistance in their development now, but the consequence of past development has been that many of the most popular destinations are now served by three or more of the airports. There may be a case for introducing new traffic distribution rules across the region in order to promote larger passenger numbers per movement but with an overall reduction in the number of movements to the most popular destinations, thereby freeing up capacity across London for additional routes. Again, this option is likely to be less contentious than building new runways.

4.6 Turning from capacity across London to hub capacity, the term “hub” was first applied to airports in the United States, where numerous hub airports are graded according to their share of overall air traffic at all US airports. A key feature of the US hub model is the use of four runways, two central long runways with a short runway either side. There is no UK definition of a hub airport, but the designation is reserved for Heathrow with its two runways. Those who argue for a short third runway at Heathrow to the north of the existing two long runways in order to maintain its hub status need to explain for how long a third runway would maintain hub status before a fourth runway would be needed (and where it would be located) bearing in mind not just the US four runway hub model but also the presence of four runways at Paris and Frankfurt and five runways at Amsterdam, with all of whom Heathrow is said to be in competition for transfer passengers.

4.7 The value of transfer passengers is said to be that they enable hub airports to serve a wider range of destinations with a greater frequency of service than would be economically viable if the hub handled only terminating passengers. But that win-win argument has broken down at Heathrow. In the period since 1991 the number of transfers at Heathrow has increased in absolute numbers and at a faster rate than the number of terminating passengers but Heathrow served fewer destinations in 2011 than it did in 1991 1. Over the same period of time the number of aircraft movements at Heathrow increased from 362 000 in 1991 to 476 000 in 2011. It would seem that the only impact of the disproportionate growth in transfers at Heathrow over the last

1 See Annexes 5 and 6 to this response for fuller details of destinations and transfer passengers at Heathrow.

twenty years has been to increase the number of movements to destinations for which there was already a high demand from terminating passengers. As a result Heathrow is now more congested and serves fewer destinations than Gatwick 1 even though Gatwick handles half the total number of passengers at Heathrow with far fewer transfers proportionately and in absolute numbers than Heathrow.

4.8 In the early days of civil aviation there were relatively few passengers and transferring at hubs would have been the only economically viable option between low demand destinations. But passengers are likely to prefer to fly direct to their ultimate destination if given the choice, because direct flights should be quicker and cheaper than transferring at a hub. It might therefore have been expected that the growth in passenger numbers over the last fifty years would have resulted in a decline in the number of transfers and a corresponding increase in the number of terminating passengers; and that the projected growth in passenger numbers in future should further increase the demand for direct flights and reduce the demand for transfers and the need for ever-larger hub airports.

4 (b). What are the costs and benefits of these different ways to increase UK aviation capacity?

4.9 New runways in South East England would be controversial and would take several years to build even assuming that political support could be guaranteed. The building costs would be significant and would be “up front” for the airport owners, with the return on investment deferred for many years.

4.10 Larger passenger numbers per aircraft would not be controversial and could begin immediately at little cost. The airlines would have to switch larger aircraft over the medium term. But this could be done incrementally and in line with the routine fleet replacement. Costs could be further defrayed by increased code-sharing between airlines.

4.11 Surface access to airports is likely to become a more significant problem than it already is, regardless of which capacity-enhancing option is adopted, due to the sheer number of passengers accessing major airports in future.

4.12 Larger passenger numbers per aircraft is likely to be significantly less damaging to the environment than new runways, which would involve a large increase in the number of aircraft movements.

4.13 Making better co-ordinated use of London’s main airports would reduce the risk that over-development at any one airport would worsen what are already adverse environmental hot spots.

19 October 2012

1 According to their respective websites.

ANNEX 1

Heathrow: Number of passengers per movement 1991 - 2011

Years Passengers Movements Average per movement (millions) % (thousands) %%

1991 40.3 100.0 362 100.0 111.3 100.0 1992 45.0 111.7 388 107.2 116.0 104.2 1993 47.6 118.1 396 109.4 120.2 108.0 1994 51.4 127.5 412 113.8 124.8 112.1 1995 54.1 134.2 421 116.3 128.5 115.5

1996 55.7 138.2 428 118.2 130.1 116.9 1997 57.9 143.7 431 119.1 134.3 120.7 1998 60.4 149.9 442 122.1 136.7 122.8 1999 62.0 153.8 451 124.6 137.5 123.5 2000 64.3 159.6 460 127.1 139.8 125.6

2001 60.5 150.1 458 126.5 132.1 118.7 2002 63.0 156.3 460 127.1 137.0 123.1 2003 63.2 156.8 457 126.2 138.3 124.3 2004 67.1 166.5 470 129.8 142.8 128.3 2005 67.7 168.0 472 130.4 143.4 128.8

2006 67.3 167.0 471 130.1 142.9 128.4 2007 67.9 168.5 476 131.5 142.6 128.1 2008 66.9 166.0 473 130.7 141.4 127.0 2009 65.9 163.5 460 127.1 143.3 128.8 2010 65.8 163.3 449 124.0 146.6 131.5

2011 69.4 172.2 476 131.5 145.8 131.0

Source: Civil Aviation Authority, UK Airport Statistics

Notes: The source gives the number of passengers and air transport movements, from which the number of passengers per movement have been calculated. The percentage columns are calculated from 1991 as the base year.

There are minor discrepancies in the passenger numbers given in UK Airport Statistics compared with the Civil Aviation Authority’s Air Passenger Surveys. The Air Passenger Surveys are published later in the year than UK Airport Statistics and presumably contain the more accurate data. But the Air Passenger Surveys have been published annually for Heathrow only since 1996, so UK Airport Statistics have been used to compile this table.

Comment: The report to the Secretary of State on the Heathrow Terminal Five Public Inquiry advised that Heathrow would have an annual runway capacity of 480 000 air transport movements operating in unbroken segregated mode and would be able to handle 90 million passengers per year with Terminal Five fully operational. 480 000 movements carrying 90 million passengers is equivalent to an annual average of 187.5 passengers per movement.

The number of air transport movements (ATMs) per year increased from 362 000 in 1991 to 476 000 in 2011, an increase over twenty years of 114 000 ATMs (31.5 per cent). At the end of 2011 there was spare capacity to handle a further 4 000 ATMs per year (i.e. 480 000 less 476 000). The rate of increase in the number of ATMs between 1991 and 2011 was equivalent to an average annual increase of approximately 5 700. If the same rate of increase continues, the 4 000 spare capacity would be fully utilised by late 2012.

The number of passengers per year increased from 40.3 million in 1991 to 69.4 million in 2011, an increase over twenty years of 29.1 million (72.2 per cent). At the end of 2011 there was spare capacity to handle a further 20.6 million passengers per year (i.e. 90 million less 69.4 million). The rate of increase in the number of passengers between 1991 and 2011 was equivalent to an average annual increase of approximately 1.45 million. If the same rate of increase continues, the 20.6 million spare capacity would be fully utilised by early 2027.

The average number of passengers per movement increased from 111.3 in 1991 to 145.8 in 2011, an increase over twenty years of 34.5 passengers per movement (31.0 per cent). At the end of 2011 there was spare capacity - as implied by the findings of the Terminal Five Public Inquiry - to handle a further 41.7 passengers per movement (i.e. 187.5 less 145.8). The rate of increase in the number of passengers per movement between 1991 and 2011 was equivalent to an average annual increase of approximately 1.7 passengers. If the same rate of increase continues, the 41.7 spare capacity would be fully utilised by early 2036.

In view of the legal limit of 480 000 on the permitted number of ATMs per year and the impending arrival at that number of ATMs, the only way that Heathrow can make full use of its 90 million annual passenger-handling capacity is to increase significantly the number of passengers per ATM.

ANNEX 2

Heathrow: passenger numbers per transport mode for surface access 1972 - 2010

Year Car/taxi Bus/coach Tube/rail Other Total millions % millions % millions % millions % millions %

1972 - 59 - 32 - 0 - 2 14.3 93 1978 - 63 - 14 - 20 - 1 20.8 98

1984 14.9 66 3.3 14 4.5 20 0.2 1 22.6 101 1987 17.2 64 4.0 15 5.4 20 0.2 1 26.8 100

1991 19.7 66 3.9 13 6.0 20 0.2 1 29.8 100

1996 25.0 67 6.0 16 6.0 16 0.3 1 37.3 100 1997 25.3 66 6.2 16 6.6 17 0.4 1 38.5 1998 27.2 67 5.7 14 6.3 18 0.4 1 40.6 1999 2000 28.4 63.7 6.2 13.9 9.8 22.1 0.3 0.4 44.6

2001 26.6 64.7 5.4 13.1 8.9 21.5 0.3 0.7 41.2 100 2002 25.9 65.3 4.9 12.3 8.8 22.1 0.1 0.3 39.7 2003 25.9 64.3 5.1 12.6 9.2 22.9 0.2 0.3 40.2 2004 27.8 63.7 5.4 12.4 10.2 23.5 0.3 0.3 43.6 2005 27.3 62.7 5.7 13.0 10.4 23.9 0.2 0.4 43.6

2006 28.5 64.4 5.8 13.1 9.9 22.9 0.0 0.0 44.2 100 2007 27.2 61.5 5.8 13.2 11.0 24.9 0.1 0.3 44.1 2008 25.7 59.8 6.1 14.1 11.1 25.7 0.1 0.3 43.0 2009 24.5 59.6 5.7 14.0 10.6 26.0 0.2 0.5 40.9 2010 25.2 60.5 5.6 13.4 10.8 25.9 0.1 0.3 41.7

Source: Civil Aviation Authority Passenger Survey Reports. The surveys have been undertaken annually from 1996 at Heathrow; at less frequent intervals before 1996. The report for 1999 had not been consulted at the time of preparing the table.

Notes: The reports indicate the use of each mode of transport shown in the table 1 as a percentage 2 of the total number of terminating passengers 3. The reports from 2007 onwards indicate the percentage use of private, public and other surface modes of transport. The number of passengers using each mode has been calculated by applying the individual percentages to the total number of terminating passengers in each year from 1984 onwards 4

The column car/taxi includes private hire cars and minicabs. ANNEX 3

Heathrow: Aircraft movements and 16-hour (0700-2300) noise exposure contours: 1991-2011

Years Number of aircraft movements Size of 57 dBA contour calendar year 24-hours 16-hours km² % 000s %

1991 382 (362) 100.0 1 046.6 - 234.9 100.0 1992 406 (388) 106.3 1 109.2 - 204.0 86.8 1993 411 (396) 107.6 1 126.0 - 182.3 77.6 1994 425 (412) 111.3 1 164.4 - 175.5 74.7 1995 435 (421) 113.9 1 191.8 - 169.2 72.0

1996 440 (428) 115.2 1 202.2 1 178.4 164.7 70.1 1997 441 (431) 115.4 1 208.2 1 167.0 158.3 67.4 1998 451 (442) 118.1 1 235.6 1 206.1 163.7 69.7

1 The reports since 2007 indicate the percentage use of public, private and other surface modes of transport, but not the percentages for the individual modes of transport published in the reports prior to 2007. The percentages for the individual modes since 2007 have been supplied by BAA Heathrow to the local authorities.

2 Rounded percentages prior to 2000, percentages to one decimal point since 2000. The individual percentages for 1972, 1978 and 1984 sum to 93 per cent, 98 per cent and 101 per cent respectively. For the subsequent years, the individual percentages sum to 100 per cent (or to one decimal point for 2000, 2003 and 2004).

3 Transfer passengers are excluded because they do not arrive at or depart from Heathrow by surface transport.

4 1972 and 1978 are excluded because the data are evidently incomplete for those years - see footnote 2.

1999 458 (451) 119.9 1 254.8 1 215.5 155.6 66.2 2000 467 (460) 122.3 1 276.0 1 236.3 135.6 57.7

2001 464 (458) 121.5 1 271.2 1 237.7 117.4 50.0 2002 467 (460) 122.3 1 279.4 1 243.2 126.9 54.0 2003 464 (457) 121.5 1 271.2 1 232.2 126.9 54.0 2004 476 (470) 124.6 1 300.5 1 263.0 117.4 50.0 2005 478 (472) 125.1 1 309.7 1 248.7 117.2 49.9

2006 477 (471) 124.9 1 306.8 1 248.0 117.4 50.0 2007 481 (476) 125.9 1 317.8 1 258.2 119.6 50.9 2008 479 (473) 125.4 1 308.7 1 264.8 123.1 52.4 2009 466 (460) 122.0 1 276.7 1 230.5 112.5 47.9 2010 455 (449) 119.1 1 246.6 1 263.8 108.3 46.1

2011 481 (476) 125.9 1 317.8 1 268.6 108.8 46.3

Sources: Civil Aviation Authority: UK Airport - Movement, Passenger and Cargo Statistics for the number of aircraft movements per year. The number of aircraft movements per 24-hour day (Jan to Dec) have been calculated from the number of movements per year. Civil Aviation Authority: Noise Exposure Contours for Heathrow Airport for the size of the noise contour and the number of aircraft movements per 16- hour day (mid-June to mid-Sept). At the time of compiling the table the number of movements had not been identified for the years 1991 - 1995.

Notes: The percentage columns for the number of aircraft movements per year and for the size of the air traffic noise exposure contour take 1991 as the base year for observing the extent of subsequent changes. The numbers marked in bold indicate the years in which there was a reversal in the prevailing trend compared with the preceding year (an increase in the number of aircraft movements and a decrease in the size of the air traffic noise exposure contour - see comments below). The numbers in brackets in the column for the number of aircraft movements per year are the numbers of air transport movements (i.e. engaged in the transport of passengers, cargo or mail).

Comment: The general trends (0700-2300 hours) have been for an increase in the number of aircraft movements in parallel with a decrease in size in the air traffic noise exposure contour. These trends were most pronounced and were continuous in virtually every year 1991 - 2001. The trends have been flatter since 2001, with several years showing a reversal in the trend for the number of movements or for the contour size; or for both.

ANNEX 4

Heathrow: Aircraft movements and noise quota points in the night quota period (2330 - 0600)

Winter seasons 1993/4 - 2010/11

Seasons Number of aircraft Number of noise quota points used movements total points used points per movement % % %

1993/4 2 352 100.0 4 384 100.0 1.86 100.0 1994/5 2 668 113.4 5 020 114.5 1.88 101.1

1995/6 2 751 117.0 4 760 108.6 1.73 93.0 1996/7 2 525 107.4 3 901 89.0 1.54 82.8 1997/8 2 446 104.0 3 858 88.0 1.58 85.0 1998/9 2 688 114.3 4 423 100.9 1.65 88.7 1999/00 2 529 107.5 3 972 90.6 1.57 84.4

2000/1 2 615 111.2 4 118 93.9 1.57 84.4 2001/2 2 684 114.1 4 257 97.1 1.59 85.5 2002/3 2 620 111.4 4 316 98.5 1.65 88.7 2003/4 2 683 114.1 4 425 100.9 1.65 88.7 2004/5 2 591 110.2 4 361 99.5 1.68 90.3

2005/6 2 669 113.5 4 355 99.3 1.63 87.6 2006/7 2 659 113.1 4 266 97.3 1.60 86.0 2007/8 2 710 115.2 4 100.25 93.5 1.52 81.7 2008/9 2 715 115.4 3 947.50 90.0 1.45 78.0 2009/10 2 686 114.2 3 863.25 88.1 1.44 77.4

2010/11 2 577 109.6 3 735.25 85.2 1.45 78.0

Summer seasons 1994 - 2011

Seasons Number of aircraft Number of noise quota points used movements total points used points per movement % % %

1994 2 905 100.0 5 109 100.0 1.76 100.0 1995 2 968 102.2 5 159 101.0 1.74 98.9

1996 2 566 88.3 4 340 85.0 1.69 96.0 1997 2 757 94.9 4 276 83.7 1.55 88.1 1998 2 828 97.4 4 668 91.4 1.65 93.8 1999 3 138 108.0 5 342 104.6 1.70 96.6 2000 3 028 104.2 4 967 97.2 1.64 93.2

2001 2 939 101.2 4 694 91.9 1.60 90.9 2002 2 937 101.1 5 051 98.9 1.72 97.7 2003 2 899 99.8 5 165 101.1 1.78 101.1 2004 2 993 103.0 5 218 102.1 1.74 98.9 2005 2 956 101.8 5 225 102.3 1.77 100.6

2006 3 059 105.3 5 232 102.4 1.71 97.2 2007 3 053 105.1 5 235 102.5 1.72 97.7 2008 2 922 100.6 4 634 90.7 1.59 90.3 2009 2 848 98.0 4 429.25 86.7 1.56 88.6 2010 3 033 104.4 4 504.75 86.2 1.49 84.7

2011 2 958 101.8 4 491 87.9 1.52 86.4

Sources: Department of Transport and BAA Heathrow for the number of aircraft movements and noise quota points used, from which the number of quota points per movement has been calculated.

Notes: The percentage columns take winter 1993/4 and summer 1994 as the base seasons for observing the extent of subsequent changes. The numbers marked in bold indicate an increase compared with the previous season.

ANNEX 5

Heathrow: Number of destinations in 1990, 2001 and 2011

Region 1990 2001 2011

United 24 (18) (6) 14 (10) (4) 11 (7) (4) Kingdom

Western 54 (40) (14) 33 (32) (1) 35 (29) (6) Europe

Central 53 (41) (12) 33 (31) (2) 35 (32) (3) Europe

Eastern 16 (13) (3) 26 (23) (3) 21 (21) (-) Europe

Near East 20 (17) (3) 18 (17) (1) 15 (14) (1)

Africa 29 (24) (5) 24 (21) (3) 23 (23) (-)

Far East 25 (25) (-) 29 (28) (1) 30 (30) (-)

Americas 43 (33) (10) 35 (34) (1) 41 (36) (5)

Totals 264 (211) (53) 212 (196) (16) 211 (192) (19)

Source: Civil Aviation Authority, Aviation Statistics, Table 12.1 (International Air Passenger Traffic to and from Reporting Airports) and Table 12.2 (Domestic Air Passenger Traffic to and from Reporting Airports)

Notes: The table sets out the number of destinations per listed region served by air transport movements from Heathrow in the years 1990, 2001 and 2011. The first column of numbers is the total number of destinations. The second column of numbers is the number of destinations to which 2 000 or more passengers (arrivals and departures) were transported. The third column of numbers is the number of destinations to which less than 2 000 passengers (arrivals and departures) were transported.

The number of passengers at Heathrow increased from 45.6 million in 1990 to 60.4 million in 2001 (an increase by 32 per cent compared with 1990), and to 69.4 million in

2011 (an increase by 52 per cent compared with 1990). The number of air transport movements (ATMs) increased from 368 000 in 1990 to 458 000 in 2001 and to 476 000 in 2011.

Comment: The table shows that the total number of destinations served by Heathrow decreased by approximately 20 per cent in 2001 compared with 1990, with a further decrease of less than one per cent in 2011 compared with 2001, despite the increase in the number of ATMs in 2001 and 2011.

The number of destinations that carried less than 2 000 passengers in 1990 decreased by approximately 65 per cent. The number of destinations that carried 2 000 or more passengers in 1990 decreased by approximately 5 per cent.

The table shows that changes in the number of services to destinations carrying more than 2 000 passengers in 1990 varied between regions, with five regions experiencing net decreases and three regions experiencing net increases.

The largest decreases in destinations served affected the United Kingdom (down from eighteen destinations to seven), Western Europe (down from forty destinations to twenty nine) and Central Europe (down from forty one destinations to thirty two), with smaller decreases in the Near East (down from seventeen destinations to fourteen) and Africa (down from twenty four destinations to twenty three).

There were increased services to Eastern Europe (up from thirteen destinations to twenty one), the Far East (up from twenty five destinations to thirty) and the Americas (up from thirty three destinations to thirty six).

Analysis of the individual destinations within the regions served by Heathrow shows variation between regions and within countries, with some destinations closed and others newly opened. The data upon which the table is based indicate that the majority of destinations that are no longer served by Heathrow (e.g. Antwerp, Corfu, Las Palmas) are now served by one or more of London’s other major airports (Gatwick, Stansted, Luton, London City).

ANNEX 6

Heathrow: Terminating and transfer passengers 1972 - 2011

Years Terminating Transfer passengers Total passengers passengers (millions) % (millions) % (millions) %

1972 14.3 76.4 4.4 23.6 18.7 100.0 1978 20.8 77.2 6.1 22.9 26.9 1984 22.6 76.6 6.9 23.4 29.5 1987 27.0 76.9 8.1 23.1 35.1 1991 29.8 73.8 10.6 26.2 40.4

1996 37.3 66.8 18.5 33.2 55.8 100.0 1997 38.6 66.6 19.1 33.0 57.9 1998 40.6 67.4 19.6 32.5 60.3 1999 ? ? ? ? ? 2000 44.7 70.2 19.0 29.8 63.7

2001 41.1 68.6 18.8 31.4 59.9 100.0 2002 39.6 64.0 22.3 36.0 61.9 2003 40.1 63.7 22.8 36.3 62.9 2004 43.6 65.2 23.3 34.8 66.9 2005 43.6 65.3 23.2 34.7 66.8

2006 44.2 65.9 22.9 34.1 67.1 100.0 2007 44.0 65.8 22.9 34.2 66.9 2008 43.2 64.6 23.6 35.3 66.8 2009 40.9 62.1 24.9 37.9 65.8 2010 42.2 64.2 23.5 35.8 65.7

2011 45.9 66.4 23.3 33.6 69.2 100.0

Source: Civil Aviation Authority Passenger Surveys Reports 1. Where the totals do not sum this is due to rounding. At the time of preparing the table the Report for 1999 had not been consulted.

The Reports for the years 1972 to 1998 give the number of terminating and transfer passengers only as percentages of the annual total number of passengers. The numbers in the table for the years to 1998 have therefore been calculated from the percentages and the total number.

Comment: The table shows consistent growth in the total number of passengers at Heathrow between 1972 and 2004, with stabilisation between 2004 and 2010 and renewed growth in 2011. Within this overall growth there were increases in the absolute number of terminating and transferring passengers throughout the period. But since 1991 the rate of growth has been faster among transfers, who have accounted for one or more passengers in three since 2002 compared with less than one passenger in four prior to 1991. The number of air transport movements (ATMs) at Heathrow increased from 362 000 in 1991 to 476 000 in 2011.

The large number of transfer passengers increase the present levels of congestion at Heathrow. It is argued that transfers enable the airlines at Heathrow to serve a wider range of destinations than would be economically viable with only terminating passengers. But the period of exponential growth in transfers since 1991 coincided with a fall - rather than an implied increase - in the number of destinations served by Heathrow (see separate table for details). The impact of the additional transfer passengers since 1991 may therefore have been limited to inflating the number of ATMs to destinations for which there was already a high demand from terminating passengers.

1 The surveys have been undertaken annually at Heathrow since 1996, and at less frequent intervals prior to 1996. At the time this table was prepared the report for 2011 had not been published.

Written evidence from NetJets Europe (AS 77)

1. Summary

1.1 NetJets Europe was founded in 1996 and today is the leading business aviation company in Europe.

1.2 With over 130 aircraft, NetJets Europe operates four times as many aircraft as the next largest business aviation company and flies to hundreds of airports around the world.

1.3 Business clients make up around 80% of our customer base, with NetJets Europe customers including CEOs of FTSE 100 companies.

1.4 NetJets Europe welcomes the Transport Select Committee’s inquiry into the Government’s aviation strategy. We are pleased to set out in this submission our responses to the topics where we believe we can offer the most helpful view to the Committee, rather than addressing each question one by one. We would be happy to provide further details.

1.5 Key points include:

- Primary objective of aviation strategy is to achieve sustainable, long-term economic growth. - Maintaining and growing connectivity is essential for the UK to be able to access key markets. - Business aviation plays a vital role in complementing the scheduled network. - Destinations must be connected by air transport links in a way that is convenient for the user. - Any steps to limit access to smaller aircraft at the busiest airports must take account of the crucial economic role of business aviation in supporting connectivity.

2. Introduction 2.1 We welcome the Government’s commitment to the development of a long-term aviation strategy, which will help to underpin long-term, sustainable economic growth.

2.2 The Government’s aviation strategy should consider the unique role of business aviation, which is not widely understood by policymakers. Indeed, it is frequently grouped together with ‘general aviation’, which represents more than 90% of the civil aircraft registered in the country1, including in the draft aviation framework.2

2.3 As the name implies, and as published by in a recent report by Oxford Economics,3 “business aviation is devoted to the needs of commerce” and is predominately used by business leaders who are helping to drive economic growth. We call on the Government to clearly delineate between business and general aviation.

2.4 Business aviation plays a unique and complementary role in servicing demand and connecting the UK to destinations that are not commercially viable for scheduled carriers. As such, its attributes and features must not be overlooked by policymakers.

1 According to the British Business and General Aviation Association (BBGA) 2 Section 2.6 of the draft aviation framework 3 Oxford Economics: The Role of Business Aviation in the European Economy (October 2012) 3. What should be the objectives of Government policy on aviation (question one)?

3.1 NetJets Europe agrees with the Government’s draft aviation framework that “a primary objective is to achieve long term economic growth”.4 We support the Committee’s focus on connectivity; as the draft aviation framework notes: “the UK must be able to able to connect with the countries and locations that are of most benefit to our economy”.5

3.2 While we are pleased to see connectivity referenced in the inquiry’s terms of reference (1a), we urge the Committee to consider the vital link between connectivity and flexibility. Destinations must be connected by links that are convenient for the user.

3.3 For business aviation users, flexibility and responsiveness are vital, and in many instances a business necessity. As a 2012 report by Mergermarket found, approximately two-thirds of executives believe that face-to-face meetings are crucial in completing M&A deals6. Business aviation plays a crucial role in maintaining and enhancing UK business connectivity, by complementing the scheduled network. As Oxford Economics noted, users are able to fly multi-legged journeys that are either not covered by the scheduled network or would require significant delays between trips.7

3.4 This degree of flexibility makes business aviation very different from the scheduled network. As Oxford Economics found8, the scheduled network provides “thick connectivity”, based on economies of scale and concentrated at major cities, while business aviation offers “thin connectivity”, carrying a low volume of passengers between a much larger number of destinations.

3.5 The importance of this “thin connectivity” is highlighted by the fact that, in 2011, business aviation connected 88,800 European city pairs. Of these 88,800 city pairs, 96% do not have a daily scheduled connection.9 This contrasts with the 360 international destinations served from the UK by scheduled airlines as noted in the framework.10

Economic benefits of aviation

3.6 The economic impact of aviation is increasingly understood - as the draft aviation framework recognises, the sector contributes £17billion of economic output and employs 220,000 people directly.11 However, the significant economic contribution of business aviation is often less understood by policymakers. A PricewaterhouseCoopers study12 into the direct contribution of business aviation to the European economy found that, in the UK, business aviation generates €4.2bn of Gross Value Added (GVA), and supports almost 50,000 full-time jobs.

3.7 As the draft aviation framework has found, economic growth is increasingly dependent on links to emerging markets and business aviation does and can continue to help in achieving enhanced access to markets and new business opportunities across the globe. In 2011 there

4 Section 1.1 of the draft aviation framework 5 Section 2.2 of the draft aviation framework 6 Mergermarket: Doing the Deal (2012) 7 Oxford Economics: The Role of Business Aviation in the European Economy (October 2012) 8 Oxford Economics: The Role of Business Aviation in the European Economy (October 2012) 9 Oxford Economics: The Role of Business Aviation in the European Economy (October 2012) 10 Section 2.17 of the draft aviation framework 11 Section 1.8 of the draft aviation framework 12 PricewaterhouseCoopers: The Economic Impact of Business Aviation in Europe (2008) were almost 49,000 business aviation flights between Europe and emerging economies outside Europe.13

4. How should we make the best use of existing aviation capacity (question two)?

4.1 As the draft aviation framework acknowledges,14 we face a medium to long term capacity challenge, particularly in the South East. Consequently opportunities to introduce new direct routes to growing markets will be severely limited. While such destinations could be accessed indirectly through other hubs, this would involve time and flexibility penalties; as a result, the complementary service offered to the scheduled routes by business aviation is likely to be even more crucial if the UK is to maintain the business connectivity it needs. The recent growth in flights to emerging markets demonstrates the potential for business aviation to facilitate both inward and outward investment as well as the export opportunities that the rebalancing of the UK economy demands.15

4.2 NetJets Europe is concerned by proposals within the draft aviation framework that the Government will in principle support non-discriminatory steps that aircraft operators may wish to take to limit access to smaller aircraft at the busiest airports.16

4.3 Central to this should be a consideration of the unique role played by business aviation. Any consideration about limiting access to business aviation must recognise its crucial role in supporting connectivity, its ability to fill in the gaps of the scheduled network and its essential economic role. This is especially important given the shortage of capacity in the South East, which is not likely to be alleviated in the short to medium term.

4.4 Business aviation passengers travelling from the regions use companies like NetJets because of the ability to avoid congested airports, either locally or in the south east with flights times to serve their business needs. This is an excellent example of where business aviation differs significantly in its business model from commercial aviation, which serves a distinct market based on scheduled flights. Equally, business aviation clients need to access larger airports, including busy hubs, meaning continued access to such airports is vital.

4.5 Within the South East, NetJets Europe makes significant use of smaller airports where possible. These include Farnborough and Biggin Hill. However, for business aviation users working in London, who are likely to be key decision-makers on high value-added trips, access to London City and Luton remain crucial (see 4.6 and 4.7 below).

4.6 As the draft aviation framework recognises,17 access to congested airports in the UK is regulated through the European Commission and a revision of the existing regulation is currently taking place.

4.7 Historically, business aviation has been the first to be excluded from airports when capacity becomes tight. Given the importance of the UK as a leading market for business aviation within the EU, NetJets Europe believes that the Government must work with other Member States to ensure fair access for business aviation to congested airports.

13 Oxford Economics: The Role of Business Aviation in the European Economy (October 2012) 14 Section 1.12 of the draft aviation framework 15 Oxford Economics: The Role of Business Aviation in the European Economy (October 2012) 16 Section 2.36 of the draft aviation framework 17 Section 2.49-2.52 of the draft aviation framework 4.8 Regarding RAF Northolt this is an important airport for business aviation access to London, currently accounting for some 10% of business aviation movements into and out of London. Furthermore prospects for business aviation growth at other London airports are likely to be limited as London City and Luton are coordinated airports and Farnborough is subject to a movements cap. We are therefore concerned about suggestions that RAF Northolt could be closed to business aviation and used as a satellite airport for Heathrow. As well as reducing already limited business aviation access to London, we believe this proposal faces insurmountable operational and logistical challenges.

5. What constraints are there on increasing UK aviation capacity (question three)?

5.1 Within this section, the committee has asked how aviation can be made more sustainable (3b). As a leader in the field, NetJets Europe feels a profound responsibility to minimise the environmental impact of air travel and we are on course to be entirely carbon neutral by 2012 through a carbon offsetting scheme for our passengers. Additionally, NetJets Europe is developing in-house expertise and operational capabilities to be able to use lower carbon fuels as the market matures.

19 October 2012 Written evidence from SPAA (AS 78)

Introduction

Established in 1921. the Scottish Passenger Agents Association (SPAA) is the world’s oldest travel trade association. Today the SPAA is Scotland’s largest travel trade association and represents the interests of Scotland’s major corporate & leisure travel agents, working alongside our Associate Members, which include many of the world’s leading airlines, tour operators and cruise lines together with Edinburgh & Glasgow Airport. Each of these sectors within the industry has an interest in aviation issues which are relevant to their customers who in turn become customers of the airlines and airports, plus ground arrangers, within the UK.

1 What should be the objectives of Government policy on aviation?

The SPAA feels that the single largest constraint inhibiting growth within the aviation sector is the absence of a coherent, cross party aviation policy framework. The Government needs to agree a cross party policy which facilitates the conditions for airlines and airports to meet aviation demands in a sustainable manner. This continued lack of a coherent policy is damaging the UK, and needs to be rectified in a timely manner, otherwise much needed inward investment may be delayed if not lost completely to the UK economy.

The UK is lagging in comparison to the progress made in aviation development by our European competitors and the creation of a coherent cross party policy is absolutely essential for the creation of long term projects, route development, world connectivity, passenger choice, if the UK wants to maintain and improve its position on the world stage.

1.1 How important is international aviation connectivity to the UK aviation industry?

The aviation sector is of a vital strategic importance for the future competitiveness & economic prosperity of this country combining opportunities for inward investment, employment, tourism and much more.

1.2 What are the benefits of aviation to the UK economy?

The economic benefits that a healthy aviation sector brings are enormous, affecting a wide range of sectors generating growth of employment, growth of inbound tourism, bringing benefits for inward investment as well as creating opportunities to do business with the rest of the world and particularly with the emerging BRIC markets/

In the budget in April, the Government recognised the need to expand air capacity in the South East but has now again ruled out further expansion at Heathrow and produced no real viable alternative. There is an extremely urgent need for immediate expansion to maintain London as a global hub as our neighbours in Amsterdam, Frankfurt and Paris continue to grow. Through investment in additional runway capacity and infrastructure they are able to attract more flights and investment from emerging markets.

It is vital to the future of UK trade links from both existing and emerging BRIC markets that the need for increased capacity must be addressed and quickly. We are already losing out in the UK with 6 Chinese cities who are connected to Frankfurt and 5 of these are also connected to Paris but none of them are connected to the UK. We can also see the growing hubs in the Middle East.

The SPAA believes that the aviation and tourism markets could help the economy to be strengthened and stabilised but the current suppression on necessary airport expansion and ongoing tax increases will ultimately risk the future of international and regional airport routes and without this connectivity, the UK will become an unattractive destination for investment and for inbound tourism

The Government must address the capacity constraints without delay alongside investment in strategic infrastructure projects to allow future growth and long term economic recovery planning together with creating additional employment.

After the great success of the Olympics in London, Scotland is already making plans for the Commonwealth Games in Glasgow in 2014 which is a fantastic opportunity to showcase Scotland. A strong range of connections via a London hub is imperative as well as the inward direct routes from Europe, USA and Dubai and there will be a great reliance on the availability of good Domestic Services

1.3 What is the impact of Air Passenger Duty on the aviation industry?

The level of APD in the UK is the highest level of any other country in Europe and as part of the ‘ Fair Tax on Flying’ campaign, we would endorse their message that the level of APD is far too high and say that the UK has been placed in a situation where although the Government are looking to expand our export business and attract inward investment (especially to the emerging markets), it has created a barrier to this growth preventing the UK being able to be competitive in the world arena.

The benefits of inbound tourism are being seriously damaged by a combination of the high cost and time taken to obtain a UK visas vs. the Schengen visa where a tourist can travel through 25 countries in Europe on a single visa for less than the cost of a UK visa. We have also heard from our members of many instances when overseas visitors travelling from both the Far East and also USA both as individuals and in groups are now travelling round Europe but missing out the UK due to the high cost of taxes and visas.

UK Customers and businesses cannot continue to pay these ongoing increasingly high levels of APD without the corresponding outcome relating to the affordability and competitiveness of British business and the UK economy. Tourism contributed over £110 billion to the UK economy in 2010 and is fundamental to the rebuilding of our economy but current and proposed increases in the levels of APD are threatening the ability for the projected sustainability and growth.

In the York Aviation report commissioned by Edinburgh, Glasgow & Aberdeen Airport in 2011 it stated that Scottish Airports would lose up to £77 million in lost tourism spend and 1.2million passengers over the next three years due to the increases in APD. It also went on to say that Domestic routes would be hit the hardest losing almost 500,000 passengers and threatening the viability of some routes. (6 weeks later bmi withdrew flights from Glasgow to Heathrow)

As Amanda MacMillan, MD of Glasgow Airport commented that Scotland needs a thriving airline industry if it is to compete in Europe, attract more jobs, increase tourism and also investment as well as attracting new routes and maintaining its lifeline services to the Scottish Islands. The current increasing levels of APD are already proving a significant barrier to attracting new routes. There is no question that the ability of Scots to travel for business or leisure will suffer unless there is a fundamental review of APD.”

APD is now having an impact on businesses in the UK’s major cities. For example, last year the Glasgow City Marketing Bureau said that the city has lost £22m alone in conference business because of the high levels of Air Passenger Duty (APD), claiming that organisers were opting for cities where flights were cheaper.

APD has been branded as a very unpopular stealth tax which also affects families who are now paying the highest levels of aviation tax anywhere in the world whether they are travelling on a well earned holiday within Europe with no reduction for children as there are with the air fares or at an even higher level if they are visiting friends and relatives in places such as Australia.

The UK is struggling to compete in the European arena and is at a competitive disadvantage due to its disproportionate levels of taxation which in turn is strangling growth within the aviation sector, investment in the UK and tourism. Other countries in the EU have already realised and acted upon similar taxes after realising the competitive disadvantage this was bringing to their economy by either abolishing this tax as in the Netherlands, where it was recognised that although it raised the equivalent to £266m in one year, the Dutch calculated the loss to the wider economy from the tax was over £950m. In Belgium they decided not to implement this tax and In Germany, they reduced it to a much lower level whilst offsetting ETS revenues against it

It should also be noted that passengers travelling from Scotland are further penalised by a double APD hit on their flights via London and we would therefore support the possibility of a reduction in regional APD

1.4 How should improving the passenger experience be reflected in the Government’s aviation strategy?

The SPAA believe that the Government should produce at the earliest possible time, their framework on sustainable aviation which should then be set up as a cross party aviation group which will be able to consider and implement planning on a short, mid and long term basis. It will only be at this point that projects can be truly planned and executed and delivered on time and consideration can be given to the co-ordination of infrastructure at airports relating to terminals, security , immigration, road & rail connections and car parking which if taken into account would hopefully greatly benefit passengers.

1.5 Where does aviation fit in the overall transport strategy?

The SPAA feel that currently a great deal of investment and time has been spent on rail and road improvement and planning but that although there has been a great deal of discussion on aviation, there has been little agreement on the way forward. With changes in Government and subsequent changes in policies & delays in decisions, aviation has suffered and with so many changes in direction the many issues that it is facing have failed to be adequately addressed. It is therefore the opinion of the SPAA that it is essential that a Cross Party Aviation Group be established to create a long term strategy for this sector to allow sustainable planned growth in the short, medium and long term.

Aviation is an important part of the UK’s transport strategy, with many parts of the UK are dependent upon aviation as a lifeline, not just for communication purposes but economically e.g. the Scottish Highlands and Islands, Northern Ireland. It is important to recognise the value of all parts of aviation on the UK economy. The Government’s tourism policy should value all parts of the sector: domestic, inbound and outbound, as should it recognise the mix of aviation models that contribute to the UK’s economy: scheduled, charter, no-frills, leisure, business and cargo. A strategy that promotes one type of flying over another or seeks to downgrade the relative importance of leisure aviation, for instance, should not be considered by the Government as this would fail the UK as a whole.

2. How should we make the best use of existing aviation capacity?

2.1 How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

There has been a great deal of recent discussion and argument relating to constraints on capacity in the South East and a number of recommendations and reviews being commissioned. The SPAA acknowledges that this is a positive move but are extremely concerned over the timescales as we feel that we cannot wait for the results of the commissions and that more immediate intermediary action is required and in particular at Heathrow.

In the recent APPG Inquiry into Aviation Policy recommendation published in August there was a suggestion of increasing the use of mixed mode landing and taking off at Heathrow, which has been previously trialled and used this year. This would allow an immediate increase in capacity and alleviate further and increasing levels of passenger delays. The latest figures produced in September from both airlines and Heathrow Airport indicates that punctuality levels are slipping which is as a direct result of the lack of capacity.

Whilst the SPAA also agrees with the APPG Report that the transference of the 7000 annual business movement to Farnborough may be helpful, allowing the use of these slots to be used as an opportunity to open up services to BRIC and other emergent countries not currently served from Heathrow, it is far from ideal, and should only be considered as a short term solution.

Passenger delays and their airport experience are very important and the SPAA believe that the current level of investment at Heathrow and also Gatwick have benefited the passenger experience, with improved security areas , improvement in loss of baggage, on line check in and a much better terminal experience. The two problem areas that need to be addressed relate to delays in departures/arrivals (often related to capacity problems) but also accessibility to the airport via the existing transport infrastructure. Gatwick is well served with its rail connection but Heathrow is lacking in a strong cohesive offering other than the Heathrow Express which is only for passengers travelling from Central London but does not address the wider catchment area. The potential transference of 7000 annual business movements to Farnborough would also create connectivity issues for passengers.

2.3 Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

As an organisation based In Scotland, we have a limited number of international direct services connecting us beyond the UK and many of these are connections over Amsterdam, Paris, Frankfurt and Dubai and so we rely very heavily upon the essential connectivity over a London hub airport to a wide range of additional destinations. British Airways carried 2.6 million passengers to and from Scotland in 2011 with 430 flights per week to and from Heathrow and Gatwick and two thirds of these passengers travelling onwards to other destinations. The final third of these flights is generally for Domestic point to point travel but this is equally essential for corporate travellers.

It is only with this enhanced connectivity that the Scottish economy will be able to welcome inward investment, opening up foreign markets to Scottish businesses, raising productivity in the Scottish economy through lower transport costs and by encouraging local businesses to specialise in areas that play to the economy’s strengths.

We welcome the introduction of new direct services (such as the recent increase of a double daily service from Glasgow to Dubai in June of this year by Emirates), but we fully acknowledge that there is only a finite number of flights that are economically viable and can be maintained from the population throughout Scotland and that regional connectivity over a strong and consistent London hub will always be an essential part of travelling by air.

2.4 How can surface access to airports be improved?

In an ideal world, the best way for surface access to airports to be improved would be with the creation of fully integrated rail connections to airports as we see at Gatwick. This has been achieved at many airports in Europe and makes the entire travelling experience so much better. In Scotland, we have already seen both Edinburgh & Glasgow abandon the option of this concept and in Edinburgh the council opted for the . (It could be good if they are ever completed)

In reviewing Heathrow, there have already been proposals on an integrated rail network which we are in agreement with but would also highlight the need for further Connectivity from Scotland.

3. What constraints are there on increasing UK aviation capacity?

3.1 Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

The SPAA believes that great progress has been made in reducing the impact of aviation around airports with the development and investment in new aircraft which are both more fuel efficient and also a great deal quieter. A great effort has been made to review and adjust operational procedures to improve a reduction in noise levels and it has been noted that some airports have even managed to achieve carbon neutrality.

Although there is a great deal of comment from residents living close to airports, many of these people have bought/rented their properties in full knowledge of the fact that they are on a recognised flight path to an airport

3.2 Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

Whilst the SPAA fully supports the reduction of carbon emissions we would point out that currently, CO2 emissions from the UK aviation industry account for 5% of emissions which in turn reduces to 2% globally. The predictions are that this will only increase by 0.5% by 2050.

Noise pollution has been an emotive subject for many years for residents affected by living close to an airport but the introduction of newer, quieter and more fuel efficient aircraft has helped to reduce noise levels combined with better air traffic control procedures. We agree with the government continuing to explore the option of creating noise envelopes

The SPAA feels that the European ETS scheme is not the final answer and could prove harmful to the aviation sector. We feel that more should be done to achieve a global cap. The UK should also be concentrating on working with airline manufacturers regarding research into more fuel efficient aircraft and airline fleet renewal and alternative fuel solutions

3.3 What is the relationship between the Government’s strategy and EU aviation policies?

The SPAA acknowledges that the UK Government works with EU aviation policies with regard to air traffic control and the ETS carbon scheme.

4. Do we need a step-change in UK aviation capacity? Why?

The SPAA believe that there should indeed be a step-change in UK aviation capacity, failure to do so would be severely damaging to the long term UK economy.

4.1 What should this step-change be? Should there be a new hub airport? Where?

In the budget in April, the Government recognised the need to expand air capacity in the South East and has now commissioned reports to review this but they will not deliver their findings before 2014 and as the capacity squeeze on Heathrow continues there is currently no real viable interim alternative options under consideration to address the capacity issue

There is an extremely urgent need for immediate expansion to maintain London as a global hub as our neighbours in Amsterdam, Frankfurt and Paris continue to grow with the help and investment in additional runway capacity and infrastructure and are able to attract more flights and investment from emerging markets

It is vital to the future of UK trade links from both existing and emerging BRIC markets that the need for increased capacity must be addressed and quickly. We are already losing out in the UK with 6 Chinese cities who are connected to Frankfurt and 5 of these are also connected to Paris but none of them are connected to the UK. We can also see the growing hubs in the Middle East.

The SPAA firmly believe in and would support a third runway at Heathrow on the basis of the connectivity of flights from the regions to enable passengers to connect to a full range of destinations. To offer full connectivity to Scottish passengers from Aberdeen, Edinburgh and Glasgow there is really no other current solution which would offer any viable alternative extensive onward connections.

It would also be potentially feasible for a second runway at Gatwick to serve the Highland and Islands airports which currently are served via Gatwick

The SPAA believes that the aviation and tourism markets could help the economy to be strengthened and stabilised but the current suppression on necessary airport expansion and ongoing tax increases will ultimately risk the future of international and regional airport routes and without this connectivity, the UK will become an unattractive destination for investment and for inbound tourism

The Government must address the capacity constraints without delay alongside investment in strategic infrastructure projects to allow future growth and long term economic recovery planning together with creating additional employment.

4.2 What are the costs and benefits of these different ways to increase UK aviation capacity?

The SPAA view the third runway option as the most economical and viable solution to the capacity ceiling currently hovering over the UK. Heathrow is the established UK hub airport, and if allowed the third runway would provide the solution to the capacity constraints within the shortest timescale and one would expect at the lowest overall cost.

Conclusion

The SPAA will be making full submission on the Sustainable Aviation document later this month where we will expand on our thoughts relating to aviation matters. We would however be very happy to discuss any items relating to the enclosed document and we would urge the Committee’s support for an economic review into the impact of APD.

19 October 2012

Written evidence from London First (AS 79)

1. London First is a business membership organisation with a mission to make London the best city in the world in which to do business. We do this by mobilising the experience, expertise and enthusiasm of the private sector to develop practical solutions to the challenges facing London. London First delivers its activities with the support of the capital’s major businesses in key sectors such as finance, professional services, property, transport and infrastructure, ICT, creative industries, hospitality and retail.

2. We welcome the chance to address some of the questions posed by the inquiry. Our submission is based on the conclusions of the Commission London First established to examine – in the round – the capacity and quality of London’s transport infrastructure links with the rest of the UK and the wider world. Its report London, Britain and the world: Transport links for economic growth, published in February 2012, made recommendations for the short, medium and longer term to Government and others. It can be found at www.londonfirst.co.uk.

What should be the objectives of Government policy on aviation?

3. The Government acknowledges that securing Britain's international connectivity is fundamental to expanding trade, attracting investment and generating economic activity that will create jobs. London is Britain’s principal gateway to talent and capital from across the world and the most economically vigorous region of the UK. Its unique concentration of economic activity is at the heart of the country’s economy. London is a major trader with the world, home to the European headquarters of one-third of the Fortune Global 500 companies and a leading European destination for foreign direct investment (FDI),1 attracting a fifth of all European FDI. London’s trade and commerce are driven by international business and are dominated by the export of services. The UK is the world’s second-largest exporter of services after the US.2 London accounts for over a third of these exports and in financial services it is a global leader.

4. The UK’s ability to remain a leading centre for world trade and commerce will increasingly depend on securing new links with emerging markets while maintaining traditionally strong links with domestic, European and US markets. These links will be critical to London’s ability to support and spearhead the UK’s economic growth. The IMF predicts that over the next decade approximately half of all the economic growth in the world will be in the eight largest emerging market countries (including China, Indonesia, Korea, Russia and Brazil).3 Emerging market economies are forecast to overtake the advanced economies’ share of global GDP by around 2024.4 With much of Europe facing a prolonged period of low growth, business is increasingly looking to these new markets for opportunities to expand.

5. The UK is already at a competitive disadvantage. London has fewer weekly flights than its European rivals5 to half of the emerging market economies, and seven of the eight growth economies identified by the IMF. It has no direct air links to the emerging economies of Chile, Colombia, Peru, Venezuela, Indonesia and the Philippines – links that other European cities possess. And while Heathrow – the UK’s only international hub airport – supports frequent services to established US and European markets, the absence of spare capacity constrains its ability to offer the range of international long-haul destinations to the fastest growing economies that its hub rivals offer.

6. Demand for flights in the UK is forecast to double by 2050, while demand for business flights is forecast to grow 80 per cent by 2030.6 All of London’s airports7 are forecast by Government to be full by 2030. And of course, Heathrow’s runways are operating at permitted capacity limits now. We believe that without new runway capacity in London and the South East – and above all new hub capacity – London’s ability to compete for trade, talent and investment, and to support the UK’s growth, will erode over the next decade and beyond. We believe therefore that one of the principal objectives of Government aviation policy must be to neutralise this threat in the short, medium and long term. All options to do so should be rigorously examined, with the best available evidence of costs and benefits transparently evaluated.

7. We welcome the fact the Government has begun to prioritise transport infrastructure most likely to underpin economic growth by incorporating analysis of wider economic benefits. A new aviation policy should be informed by a similar understanding of which new air transport infrastructure is most likely to yield the greatest contribution to sustainable economic growth. There are of course other objectives for transport policy beyond maximising economic growth. They include carbon reduction, which will be spurred by consistently pricing carbon across all investment decisions, and reducing the local environmental impact of flights (and the surface transport which services them). Whether monetised or not, these should be inputs to a credible, transparent and consistently applied aviation policy.

How should we make the best use of existing aviation capacity?

8. In principle there are a number of ways in which Government could intervene to redistribute the use of existing airport capacity. The scope for such action is limited by a mix of international treaties and EU-wide slot regulations and property rights, but in principle the Government has some policy levers to change the incentives at Heathrow, most obviously the regulatory regime (which sets landing charges at Heathrow), and the tax regime on air journeys. Either or both of these could in principle be used to encourage flights to certain destinations at the expense of others. However, we are sceptical that such an approach would deliver acceptable and efficient outcomes.

9. Greater intervention of this sort is fraught with practical difficulties, and any attempt to direct the utilisation of scarce capacity requires the Government to interpose its own views on the relative value of alternative slot usages in place of the current market-based approach. The current mismatch between supply and demand is already creating distortions. Intervention will create further, unanticipated distortions and gaming will result. And as demand grows, these distortions will increase. Critically, such an approach would serve as a diversion from the real need: more runway capacity to provide greater connectivity.

10. Absent such an approach, we think there are three principal means of making best use of existing capacity. The first is the only measure capable of bringing an increase in hub capacity in the short to medium term, and is based on enabling Heathrow to use its existing runways more efficiently by allowing planes to land and take-off concurrently on both runways more frequently than is currently permitted. Freedom to operate in this way – under certain circumstances – is currently in place at certain times of day and could be applied more broadly to increase runway capacity by up to 15 per cent.8 We believe this capacity should be used to cut flight delays, delivering greater resilience so the airport is able to recover more quickly from any delays. The option thereafter to provide new services should be assessed once the results of trials now running at Heathrow are appraised.

11. The principal objection to this operating flexibility – whether for resilience or further services – is that it would change and increase the distribution of noise for surrounding communities. Its introduction must, therefore, be accompanied by credible, deliverable and independently enforced measures to set noise limits and compensate for the local impact of breaches to them. This may require in parallel sharper penalties and incentives on the operator and airlines to deliver sustainable reductions in noise from aircraft using Heathrow.

12. The second means of making best use of existing capacity is based on the Government’s support for “competition as an effective way to meet the interests of air passengers”.9 We believe that deregulation of London’s two largest point-to-point airports (Gatwick and Stansted) would give these airports the flexibility required to compete more effectively with each other, Heathrow and other international airports, so as to be able to attract the widest range of airlines and flights, as well as more flights to growth markets. The rationale for continued economic regulation clearly rests on the three tests set out in the Civil Aviation Bill currently before parliament. We look forward to the conclusion of the this work, and in particular the results of the Civil Aviation Authority’s market power review, as the prima facie case for removing Gatwick and Stansted from price regulation in the short term appears to us to be strong. Economic regulation should have the flexibility to respond to changes in the market as investment decisions evolve; and should increasingly rely on competitive pressures to restrain prices.

13. Finally, we believe a coherent and sustained strategy to improve rail access to our major airports is required. The Government acknowledges that improving rail access is an important means of encouraging airlines to airports with spare capacity; and we believe better access would lower one of the barriers to greater competition. In 2006 the Eddington Study highlighted, amongst other things, the urgent need to improve the UK’s key international gateways with better road and rail access10. It is hard to avoid the conclusion that transport policy has paid insufficient attention to the need for better integration between modes. The Government should enshrine the opportunities for Gatwick presented both by Thameslink’s upgrade and the new combined Thameslink franchise.

What constraints are there on increasing UK aviation capacity?

14. All options for new capacity present substantial challenges in terms of their financing, funding and environmental impact, and all will require political will. We welcome the Davies Commission, and the opportunity it presents to establish sustainable, cross-party consensus on its recommendations.

15. In global environmental terms, all options have the potential to lead to an increase in carbon emissions. While unconstrained demand for flights in the UK is forecast to double by 2050, in reality this will be constrained. The independent Committee on Climate Change has concluded that a 55 per cent growth in flights by 2050 is compatible with achieving overall national carbon reduction targets. This means a maximum of 3.4 million flights11 a year, up from 2.1 million today. In crude terms, if demand for these extra flights were evenly distributed across all airports in the UK, London’s five airports could cater for around 1.5 million Air Traffic Movements (ATMs) by 2050 within national carbon limits. This would require a third runway at Heathrow and one new runway at a point to point airport – but no more. We believe that a new runway at the hub and another runway at a point-to-point airport in the London area could enable London to increase its connectivity at least until 2050, to the most stretching forecasts of demand, and consistent with our climate change obligations.

16. As mentioned above, the principal objective to further flights is at a local environmental level and above all, as a result of noise. We believe that permission for more flights should be accompanied by limits on noise levels. The precise levels are a matter for detailed analysis and public policy, but if local communities are to have confidence that the limits will be maintained, we believe they need to be subject to independent enforcement. Technological advances offer scope for improvements, but a credible, independent and transparent mechanism must be put in place for limiting and monitoring noise and air pollution. We believe this requires a truly independent noise regulator with enforcement powers – vital to give public confidence.

19 October 2012

1 Ernst & Young European Investment Monitor 2009. 2 UK Trade Performance Over the Past Years – Trade and Investment Analytical Papers, BIS/DFID, 2011. 3 Brazil, Russia, India, China, Mexico, Korea, Turkey, Indonesia. World Economic Outlook – Slowing Growth, Rising Risks, IMF, September 2011. 4 Oxford Economics research, 2011 5 Paris, Frankfurt, Amsterdam, Madrid and Munich 6 UK Aviation Forecasts, DfT, August 2011 7 Heathrow, Gatwick, Stansted, Luton, London City 8 With sufficient associated infrastructure, such as parking stands 9 Draft Aviation Policy Framework, Department for Transport, July 2012 10 The Eddington Transport Study, HM Treasury/DfT, December 2006. 11 Air Traffic Movements. Written evidence from Heathrow Hub Ltd (AS 80)

Introduction

1. Heathrow Hub Ltd is pleased to have the opportunity of responding to the Committee’s Inquiry. To briefly describe our interest in the Government’s Aviation Strategy, the company is the promoter and developer of Heathrow Hub, a proposed multimodal integrated transport interchange, located on a site approx. 3.5km north of Heathrow’s Terminal 5 – about the same distance as that between the existing T5 and T2 (currently under construction). The interchange, including an airport processor, would be located on the existing UK rail and motorway network, allowing passengers to seamlessly transfer between road, rail and the airport, check-in for their flight, pass through security and board a fast transit system taking them, (and, on a separate system, their baggage), directly to new and existing aircraft satellites located within Heathrow’s existing site.

2. By providing new terminal capacity outside the existing constrained airport site, (one of the smallest of any major international airport),1 more space is created for aircraft – the one activity that cannot move. It also enables the existing T5 (and proposed T2) “toastrack” satellite layout to be extended across the airfield, allowing more efficient airport operations, reducing environmental impacts and creating a better passenger experience.

3. London First concluded that Heathrow’s congestion and consequent lack of resilience is a result of its inefficient layout and constrained site, not just runway capacity.2 BAA similarly confirms that runways are only one element affecting capacity. 3

4. By creating space within the airfield to allow pre-sorting of departing aircraft by weight, and removing runway crossings, it may also be possible to achieve additional runway capacity and/or resilience. Research by NATS and the Smith Institute concluded a more efficient layout could allow increases in the runway service rate, reducing delays and potentially increasing capacity. 4

5. Rerouting HS2 via Heathrow Hub would additionally increase Heathrow’s capacity by allowing high-speed rail to replace short haul flights. This follows the success of European airport interchanges such as Schiphol, Frankfurt and Charles de Gaulle.

1 Heathrow site area 1227ha compared to Charles de Gaulle’s 3309ha and Schiphol’s 2147ha - Heathrow Airport Interim Masterplan, BAA June 2005 http://www.baa.com/assets/B2CPortal/Static%20Files/LHRInterimMasterPlan.pdf 2 “Delays caused by airport operations, (lack of gates etc), accounted in 2006/07 for eight percentage points of the 33% of flights which were delayed. Even when controlling for congestion in air traffic with respect to runways (ATM’s per runway), the proportion of delays at Heathrow is relatively high” – p. 20/21, Imagine a World Class Heathrow, London First, June 2008 http://www.london- first.co.uk/documents/Imagine_a_world_class_Heathrow_FULL_REPORT.pdf 3 “We’re getting to the point where we can’t maintain the movement rate, not because we can’t use the runway but because we don’t have the taxiways” - Richard Smith, BAA, Air & Space Magazine, January 01, 2007 http://www.airspacemag.com/flight-today/heathrow.html?c=y&page=3) 4 “The lack of space for taxiways due to the restricted size of Heathrow means that it is usually impossible to re- order aircraft before they reach the runway holding points. The physical holding point structure is an important constraint on the departure system at Heathrow as it determines both how much reordering is possible in the holding point and the cost of achieving the reordering in terms of pilot and controller time and effort. By better control, a decrease in the delay of between 10% and 25% is possible” - Departure runway scheduling at Heathrow airport, Atkin, Burke, Greenwood and Reeson 2004 http://www.smithinst.ac.uk/Projects/PG2003/CASE- NATS/FurtherReading/Workshop2004/Jason%20Atkin%20-%20Workshop%20abstract.pdf 6. We were pleased to be invited to provide oral evidence at the Committee’s 2011 Inquiry into the Strategic Case for High Speed Rail. The Committee concluded, “The Government needs to make clear how HS2 fits into its wider aviation strategy” and recommended that “Government set out more clearly for comparison the costs and benefits of routing HS2 via Heathrow (and of making it the principal interchange to the west of London) so that there can be a better understanding of the pros and cons of different options.” 5

7. We believe that Heathrow Hub is relevant to the current Inquiry as it shows the benefits of the integrated, intermodal approach that has contributed to the success of continental airports and which is also mandated by EC policy. 6 This stands in stark contrast to the UK Government’s separate, silo planning of air and rail networks, highlighted by the decision to proceed with HS2 being taken before the Davies Commission on aviation capacity has even started its work.

8. The first phase of HS2 does not serve Heathrow directly, with airport passengers required to change trains to Crossrail at a remote interchange at Old Oak Common. In a possible second phase, perhaps by 2033, HS2 would connect to Heathrow via a spur (branch line). However, European experience clearly shows that, for modal shift and air/rail substitution to be effective, airports must be served by interchanges located directly on the through high speed line, allowing much higher service frequencies (essential for time-sensitive airport passengers). This is also a more efficient way of serving airports, since even major traffic generators like Heathrow would struggle to fill trains with airport traffic alone, at the frequencies required to be attractive to passengers and in numbers sufficient to generate adequate revenues to offset operating costs.

9. Oxford University’s Transport Studies Unit, 7 Jim Steer, 8 Greengauge 21 9 and indeed DfT 10 all agree on this issue.

5 High Speed Rail, Tenth report of session 2010 -12, House of Commons Transport Committee, November 2011 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/1185/1185.pdf 6 “Better choices will result from greater integration of the modal networks: airports, railway, metro and bus stations should increasingly be linked and transformed into multimodal connection platforms for passengers. Airport Capacity Initiatives – develop an approach to deal with future capacity problems including better integration with the railway network” – White Paper, Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system, European Commission 2011 http://ec.europa.eu/transport/strategies/2011_white_paper_en.htm 7 “For rail to be a viable alternative to the aircraft, and an alternative to the car to get to/from the airport, airports, certainly the main one, must have a station on the line, not a spur from it. Viewed from a rail planning perspective, with currently over 40 million non-transfer passengers a year needing to travel to/from it, it is hard to understand how a ‘city’ like Heathrow might be bypassed” – Dr Moshe Givoni, Oxford University Transport Studies Unit, The House, Parliament’s Weekly Magazine, 31st January 2011 8 “The key really, as far as we could see from what has happened in France, is to make the airport station a station call en route” - Q147, evidence by Jim Steer, Director, Greengauge 21 to Commons Transport Select Committee, 11th November 2009 http://www.publications.parliament.uk/pa/cm200910/cmselect/cmtran/38/38ii.pdf 9 (Through) “services will have high load factors because they are connecting a number of different markets. Their usage is not dependent on the single market at Heathrow, and their load factors and overall economics will be attractive. They will justify their place on the highly valuable capacity offered by the national HSR network in a way that far fewer services would do if they were just to serve Heathrow on a spur” – The Heathrow Opportunity, Greengauge 21 2010 http://www.greengauge21.net/publications/the-heathrow-opportunity-2/ 10 “The interchange with Heathrow should be considered as through services will not be able to run from all points, both because demand would not be sufficient and because every Heathrow train would take a path on the new line which could be used for London bound trains” - DfT New Line Capacity Study – Cost Estimate July 2007 10. It therefore appears perverse that HS2 deliberately bypasses the world’s busiest international airport, (and perhaps the one most in need of capacity and environmental improvements).

11. By the time HS2 propose to develop a Heathrow spur, in 2033, Heathrow is forecast to be handling perhaps as many as 95 million terminal passengers per annum, a significant increase on current numbers of ca. 70m. Yet air quality around Heathrow already exceeds legal limits, whilst airline’s use of increasingly larger aircraft, (responsible for the forecast passenger increase), increases pressure on both the local road network and the airport’s operational efficiency.

12. As an example of the effect of this increase in Heathrow’s traffic, (whilst still restricted to two runways and a cap of 480,000 ATM’s (Air Transport Movements) per annum), an increase to 95 million passengers would result in a 41% increase in private road vehicles accessing Heathrow. This assumes public transport’s modal share would increase to 41.5%, following completion of Crossrail, (although the London Assembly’s report suggests that withdrawal of the existing Heathrow Express service, as proposed by Network Rail and following demolition of the Heathrow Express depot to allow construction of HS2), could reduce rail’s mode share of Heathrow passengers by 3%. 11

13. The estimated increase in road traffic may also understate the real impacts of passenger growth since each return passenger journey by taxi or minicab actually generates double the number of road trips. 12

14. We therefore believe that Government’s current approach to aviation strategy both ignores the challenges presented by Heathrow’s short-term growth, and fails to adopt the necessary intermodal, integrated strategy necessary to ensure optimum long term planning.

Responses to the Committee’s questions

Q1 - What should be the objectives of Government policy on aviation?

(a) How important is international aviation connectivity to the UK aviation industry?

15. International connectivity is clearly vital to the UK aviation industry. In particular, Heathrow provides the UK with a unique asset, one of the world’s most important hub airports. We believe that it is essential that Government policy recognize the particular characteristics that have been responsible for Heathrow’s success, and the risks inherent in suggesting that these might easily be transplanted, replaced or duplicated elsewhere. Policy should therefore carefully consider issues such as airport catchment, connectivity, competitiveness, efficiency, environmental impacts and passenger experience, as well as the runway capacity issue that, to date, appears to have dominated the aviation debate.

(b) What are the benefits of aviation to the UK economy?

11 “It is currently unclear what level of modal shift a completed Crossrail is likely to provide, although a one per cent increase in mode share has been suggested. HAL has estimated that withdrawal of the Heathrow Express service would reduce the rail mode share by three per cent” - Plane Speaking: Air and Noise Pollution around a growing Heathrow Airport, March 2012 http://www.london.gov.uk/sites/default/files/Heathrow%20airport%20- %20Final%20version_0.pdf 12 “61% of passenger travel emissions are generated by kiss & fly, taxi and minicab journeys which all generate four trips per return flight” – Heathrow Carbon Footprint & Surface Access Strategy, BAA 2009

16. The connectivity that aviation provides is of vital, and growing importance to the UK economy in an increasingly competitive and connected global market. Whilst airlines have the benefit of the most mobile of assets, the UK, occupying a relatively peripheral location off the coast of North West Europe, is almost entirely reliant on aviation for its connectivity.

17. HS1 and the Channel Tunnel provide only limited access by rail from London and the South East to near-Europe, whilst the UK’s regions currently lack any current direct link to HS1. HS2 does include a link between HS2 and HS1. However, whilst providing a physical connection, it is intended to provide only a single track, shared over part of its length with existing freight and passenger services. Hence, it will provide only very limited capacity, effectively relegating the vast majority of the UK to a location at the end of a single track branch line from Europe.

18. The European airspace closure that followed the Eyjafjallajökull volcanic eruption in 2010 highlighted the need for resilience in the UK’s transport networks, and might reasonably be thought to influence a decision to ensure adequate rail capacity between the UK and Europe. There is speculation that another Icelandic volcano might erupt soon, potentially with far greater impacts. 13

19. Within the UK’s aviation system, Heathrow occupies a unique position. It is the country’s single largest traffic generator, 14 world’s busiest international airport,15 and UK’s only hub, directly contributing around 1% of GDP. 16 Despite capacity constraints and recent route consolidation, it retains the highest business connectivity score amongst major European hubs, 17 with Heathrow located on seven out of the top 10 business routes in the world. 18 Together with the English language, legal system and time zone, it provides the UK with a significant competitive advantage.

20. Research consistently shows that access to Heathrow is one of the most important issues for UK regional economic competiveness,19 and a major factor in business location decisions. 20 This was recognized by the Coalition Government’s first Secretary of State for Transport who emphasized the need to “think about the UK through the prism of Heathrow.” 21

13 “Katla’s eruption in 1918 produced five times as much ash as the 2010 Eyjafjallajökull one” - http://www.telegraph.co.uk/science/9195178/Iceland-volcano-and-you-thought-the-last-eruption-was-bad....html 14 “London Borough of Hillingdon UDP Adopted September 1998 http://www.hillingdon.gov.uk/media/pdf/7/5/udp.pdf 15 http://www.flightmapping.com/news/Coventry-Airport/Biggest-busiest-airports.asp 16 “Heathrow contributes 0.9% of the UK’s GDP – significantly more than any other single site in the UK”- Heathrow Expansion, London Assembly 2005 http://legacy.london.gov.uk/assembly/reports/plansd/heathrow_expansion.pdf 17 Aviation Services and the City, 2011 Update, York Aviation for the City of London Corporation - http://217.154.230.218/NR/rdonlyres/63094787-5540-47BA-B2BC- 2278674218D7/0/BC_RS_Aviation2011update.pdf 18 The Future of Aviation – First report of Session 2009-10, House of Commons Transport Committee - http://www.publications.parliament.uk/pa/cm200910/cmselect/cmtran/125/125i.pdf 19 “The UK regions are at a major disadvantage in terms of access from major world markets. This hampers the ability to attract inward investment and regional economic growth” - Economic Impacts of Hub Airports, British Chambers of Commerce 2009 www.britishchambers.org.uk/.../BCC_Economic_Impacts_of_Hub_Airports.pdf 20 Heathrow “is vital to the UK’s competiveness: easy access to Heathrow is often a major factor for businesses in deciding where to locate” – DfT Factsheet Connecting to Heathrow, 2011 http://hs2ltd.files.wordpress.com/2011/05/connecting‐to‐heathrow_0.pdf 21 “It is clear to me that faster and simpler connectivity to a location is vital, particularly for inward investors. In places like Manchester and Leeds it may not be the way you like to think about it, but the reality is that for most

21. It therefore seems perverse that Government’s plans for HS2 will result in a passenger landing at Heathrow having a very different experience to one landing at Frankfurt, Schiphol or Charles de Gaulle airports. At these airports, the integrated railway station would show very frequent departures to a large number of domestic and international destinations. In contrast, Heathrow would require passengers to travel by Crossrail to Old Oak Common, where a change of trains would be required for destinations other than central London.

22. We do not believe that this provides a competitive and attractive offer today, when compared to the connectivity offered by Heathrow’s competitors, but the difference will be even greater in 2026 when HS2 is due to be completed.

23. By pursuing separate and disconnected strategies for air and rail, Government ignores the synergistic benefits to the UK economy of an integrated approach. The latest Secretary of State does appear to recognize the inherent flaws in pursuing air and rail strategies to entirely different timescales, stating that HS2 may need to be “adapted” once the recommendations of the Davies Commission were known.22 However, by the time the Commission reports, in late 2015, £0.75bn of public monies will have been spent (by May 2015) on developing plans for HS2. 23 There is therefore a real risk of abortive cost if HS2 does indeed require adaption to suit aviation policy.

24. For example, if growth is to take place at Heathrow, it would seem perverse to continue to propose to serve the airport by a remote interchange or spur, (branch line), off the main HS2 route. Alternatively, if Heathrow were to be replaced by a new hub airport to the east of London, then the proposed single track cross-London link between HS2 and HS1 would be clearly inadequate in terms of the surface access that would be required between the UK regions and a Thames Estuary airport.

(c) What is the impact of Air Passenger Duty on the aviation industry?

25. Whilst not claiming to be expert in the field of taxation, we suggest that it is important that Government consider this as part of the integrated policy framework that we believe is required to guide and assess transport strategy, and which should also include environmental, economic and spatial planning considerations. Clearly, as transport investment involves long term decision-making, spanning many Parliaments, there are significant benefits in achieving a cross-party consensus on these policy issues.

(d) How should improving the passenger experience be reflected in the Government’s aviation strategy?

26. Government’s silo planning approach ignores the need for a “whole-journey” approach to the passenger experience in an increasingly competitive global aviation market. Amadeus’s recent research 24 highlighted passengers’ sensitivity to friction at each point people outside the UK they think about the UK through the prism of Heathrow. That is how they arrive. The question is not, "Where is it?" The question is, "How long does it take for me to get there from Heathrow?” - Philip Hammond, Oral Evidence to Transport Select Committee, 13th September 2011 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/uc1185-v/uc118501 .htm 22 Evening Standard 27th September 2012 http://www.standard.co.uk/news/politics/i-wasnt-made-transport- secretary-to-push-through-third-runway-at-heathrowall-o ptions-are-on-the-table-8181588.html 23 John Redwood 24th January 2012 http://johnredwoodsdiary.com/2012/01/24/the-transport-secretary- confesses-hs2-will-be-more-expensive-this-parliament/ 24 Reinventing the airport ecosystem, Amadeus May 2012 http://www.amadeus.com/blog/24/05/download-our- new-industry-report-–-reinventing-the-airport-ecosystem-2/ in their journey, from home or work, via the airport access journey, through the airport and onto the aircraft. The optimum passenger experience can only be achieved by an integrated intermodal approach to transport planning, and the technologies used in, for example, ticketing, security and baggage handling.

27. Instead, projects appear to be brought forward by Government without proper consideration of the passenger experience. For example, Government’s proposed western rail access to Heathrow claims to allow access to Heathrow from South Wales, 25 and the West and South West of England. However, this is unlikely to allow through trains from points beyond Reading, requiring passengers from further afield to change trains to reach the airport. It is therefore important to recognize the impact of interchange (and service frequency) penalties which BAA, 26 Star Alliance 27 and others 28 recognise act as severe deterrents to passengers choosing rail for time sensitive, luggage laden airport access journeys. HS2 Ltd’s own research similarly confirms the particular sensitivity of airport passengers making international journeys. 29

28. British Airways have also expressed concern that HS2’s apparent disregard of the impact of interchange penalties adversely affects the passenger experience 30 whilst the Coalition’s first Secretary of State for Transport concluded that an interchange at Old Oak Common was “not an option.” 31

25 “The UK Government’s focus goes beyond single nations; hence our decision to build the Western Extension to Heathrow, which will for the first time connect South Wales to the UK’s main air hub and ensure faster journey times between Cardiff and Heathrow” – Wales Office press release, 12th July 2012 http://www.walesoffice.gov.uk/2012/07/12/welsh-secretary-welcomes-uk-government-500m-wales- heathrow-link-plans/ 26 “BA understands the difference between a time penalty versus an interchange penalty. As a network airline, our passengers are generally prepared to pay more to travel on a direct flight rather than a connecting flight. This applied to rail as well as air” - Para 5.3, Second Response to the Heathrow Airport High Speed Rail Access Review, British Airways June 2010 http://www.scribd.com/doc/39878497/British-Airways-plc-–-Second-response- to-the-Heathrow-Airport-High-Speed-Rail-Access-Review 27 “Research, and our experience, clearly shows that even one interchange in an airport access journey acts as a significant disincentive to choosing rail” – Star Alliance submission to Commons Transport Select Committee Inquiry on HS2, May 2011 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/writev/rail/rail3.pdf 28 “Previous studies have demonstrated that an interchange in a rail access journey to the airport suppressed demand by approximately 50%” - High Speed Rail Development Programme 2008/09, Strategic Choices, MVA/Systra for Greengauge 21 29 “Passengers travelling to or from airports, particularly for international journeys, have particular characteristics that set them aside from other rail users. For example, they are likely to place greater value upon the reliability of the service, especially when accessing the airport. They may be particularly deterred by interchange, partly because of the added risk of delay, but also due to difficulties associated with changing trains while carrying baggage” – Model Development Report, A Report for HS2 Ltd, Atkins February 2010 http://webarchive.nationalarchives.gov.uk/20110131042819/http://www.dft.gov.uk/pgr/rail/pi/highspeedrail/h s2ltd/appraisalmaterial/pdf/modelreport.pdf 30 “It is not clear to BA whether HS2 have applied standard rail industry time penalties for interchanges at Old Oak Common for Heathrow passengers. It appears HS2 have underestimated the negative impact of routing airport passengers via Old Oak Common in their analysis” - Second Response to the Heathrow Airport High Speed Rail Access Review, British Airways, June 2010 http://webarchive.nationalarchives.gov.uk/20110131042819/http://www.dft.gov.uk/pgr/rail/pi/highspeedrail/lo rdmawhinneyreport/pdf/appendix3_6.pdf 31 “What is clear is this: there has to be a form of connection to Heathrow that makes sense to air travellers, that feels like a proper rail to air connection of the type that many major European airports have. Frankfurt, Paris, to a lesser extent Schipol, have excellent rail to air connections. It is about the passenger experience.. There has to be a connection which feels right to airline travellers, which will encourage as it were interlining between air and train. That cannot be lug your heavy bags down a couple of , along 600 metres of corridor and then change trains at a wet, suburban station somewhere in north west London. That is not an option. It is also clear that there could be options that involved a transfer point that was remote from the airport itself, provided the seamlessness of the service was of a type that airline passengers would find acceptable.” – Q48, Philip

29. The proposed connections between HS2 and Heathrow, whether via Old Oak Common or the proposed spur, clearly provide a sub-optimum passenger experience. It is surprising that this is seen as acceptable, particularly as HS2, (even using Government’s estimates), represents the UK’s largest ever investment of public monies in a single project, 32 and one presumably designed to equip the UK to compete on a world stage well into the next century.

(e) Where does aviation fit in the overall transport strategy?

30. It is difficult to answer this question due to the lack of any overall transport strategy for the UK, as the Select Committee has repeatedly noted, for example, in its various Inquiries into Transport and the Economy, 33 High Speed Rail 34 and DfT. 35

31. The documents accompanying Government’s January 2012 decision to proceed with HS2 suggest that DfT’s Business Plan provides the necessary strategic context within which to examine transport projects. 36 However, this simply contains a list of projects, with a brief summary of the Coalition Governments priorities. 37

Hammond, Secretary of State, Evidence to House of Commons Transport Select Committee on the Secretary of State’s Priorities for Transport, 26th July 2010 http://www.publications.parliament.uk/pa/cm201011/cmselect/cmtran/359/10072602.htm 32 “The £32bn price tag of HS2 will be the largest UK public investment made in a single project. The proposed replacement of Trident the government estimates as costing between £15bn and £20bn; although groups such as Greenpeace have estimated the cost as being nearer £34bn, which would therefore make that the largest single project” – Nick Hayns, Institute of Economic Affairs, email correspondence 29th February 2012 33 “We recommend that a White Paper be published, clarifying the Government’s objectives for all transport spending and the criteria it will use for deciding between different claims on the available resources” – Recommendation 5, Transport and the Economy, Third Report of Session 2010-12, House of Commons Transport Committee http://www.publications.parliament.uk/pa/cm201011/cmselect/cmtran/473/473.pdf 34 “The absence of a transport strategy makes it hard to assess how HS2 relates to other major transport infrastructure schemes, regional planning and wider objectives, such as bridging the north-south divide. The biggest single transport investment proposed in this Parliament should be grounded in a well thought- through strategic framework and we are disappointed that the Government has not developed a strategy for transport, particularly after it rejected our earlier recommendation to publish a White Paper on transport and the economy” – Recommendation 1, High Speed Rail, Tenth Report of Session 2010- 12 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/1185/1185.pdf 35 “In our report on Transport and the economy we called for the DfT to publish a strategy to explain what the Government aims to achieve by spending money on transport and how its policies support these aims. The department dismissed our recommendation, pointing us to the lists of actions in the business plan. The business plan is a useful and informative document but it does little more than list transport policies and target dates for implementation. It sits in a strategic vacuum and can easily be overtaken by events. Our scrutiny of the DfT’s annual report and the financial information it publishes reinforces our view that an overall strategy for transport is needed. We were pleased to see that the new Secretary of State saw the force in our argument and is considering the benefits of drawing up an overall strategy. We recommend that the DfT publish an overall strategy for transport, preferably in or alongside the next departmental annual report.” - “Counting the cost: financial scrutiny of the Department for Transport 2011–12, Fifteenth Report of Session 2010-12, House of Commons Transport Committee http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/1560/1560.pdf 36 “We have set out in our Business Plan a clear vision for a transport system .. and we have explained how we plan to achieve this. This provides a clear context in which the Government’s high speed rail plans are being developed. However, in the light of points raised in consultation, as the HS2 project is developed, the Government will seek to provide further information over the role that high speed rail will play in its wider objectives and strategies” – Para. 3.7, High Speed Rail: Investing in Britains Future – Decisions and Next Steps Jan 2012 http://assets.dft.gov.uk/publications/hs2-decisions-and-next-steps/hs2-decisions-and-next-steps.pdf 37 Business Plan 2012-2015, DfT, 31 May 2012 http://assets.dft.gov.uk/publications/business-plan-2011- 2015/dft-2012-business-plan.pdf 32. The HS2 decision documents also refer to the need for “co-ordination of the National Infrastructure Plan, the Growth Review and National Policy Statements – the national networks statement in particular relates to HS2.” 38 This is consistent with HS2 Ltd’s assumptions, at an early stage in their developing proposals for high speed rail, that a national strategy would be necessary to provide a context within which HS2 could be properly considered - the expectation being that this would take the form of a National Policy Statement on national networks. 39 However, at the time of writing, the National Networks National Policy Statement does not appear to have been published, even in draft for consultation. 40

33. We suggest that there continues to be an urgent need for a national transport strategy, and that this should be subject to proper democratic scrutiny, leading to a cross-party consensus on both strategy and funding before aviation and rail proposals are then assessed. This appears better aligned with the recommendations of the Eddington study than the current approach. 41

34. It is also increasingly critical when HS2 Ltd. is progressing against a background of considerable scepticism, absent of any aviation strategy and where increasingly large sums of public money are being spent.

35. Significant investment is also proposed for other transport projects, despite the lack of any overall strategy or apparent scrutiny. For example the proposed western rail access to Heathrow, included in the 2012 HLOS, requires £0.5bn of public money, 42 when its benefits are unclear, and there is the possibility of a requirement for ongoing revenue support. In addition the project is only required as HS2 Ltd. admitted ignoring their specific remit 43 to consider access to Heathrow from the west in developing HS2. 44

38 Para. 3.7, High Speed Rail: Investing in Britains Future – Decisions and Next Steps Jan 2012 http://assets.dft.gov.uk/publications/hs2-decisions-and-next-steps/hs2-decisions-and-next-steps.pdf 39 “The National Policy Statement on national networks … will set the context in which HS2 will be considered” – para. 1.2.10, High Speed Rail, London to the West Midlands and Beyond, A Report to Government by High Speed Two Ltd. December 2009 40 “The Transport Networks and Aviation National Policy Statements have not yet been published in draft for consultation” – National Infrastructure Planning website accessed 18th October 2012 http://infrastructure.planningportal.gov.uk/legislation-and-advice/national-policy-statements/ 41 “It is critical that the government enforces a strong, strategic approach to option generation, so that it can avoid momentum building up behind particular solutions and the UK can avoid costly mistakes which will not be the most effective way of delivering on its strategic priorities. The risk is that transport policy can become the pursuit of icons. Almost invariably such projects – ‘grands projets’ – develop real momentum, driven by strong lobbying. The momentum can make such projects difficult – and unpopular – to stop, even when the benefit/cost equation does not stack up, or the environmental and landscape impacts are unacceptable. The approach taken to the development of some very high-speed rail line options has been the opposite of the approach advocated in this study. That is, the challenge to be tackled has not been fully understood before a solution has been generated. Alternative options do not, therefore, appear to have been fully explored so it is not clear what the highest return solution to a problem would be; nor indeed is the challenge clear.” – Paras. 1.140 - 1.142 The Eddington Transport Study, DfT December 2006 http://webarchive.nationalarchives.gov.uk/20071104143501/http:// www.dft.gov.uk/162259/187604/206711/e xecutivesummary 42 “£500m towards a western rail link to Heathrow – DfT Press Release, 12th July 2012 http://www.dft.gov.uk/news/press-releases/dft-press-20120712b/ 43 Para 1.1.10, High Speed Rail – London to the West Midlands and Beyond - Report to Government, HS2 Ltd, December 2009 44 “The key car modal shift gain is likely to be in respect of access to Heathrow from London, the west and Thames Valley, facilitated by the Heathrow interchange (and local rail enhancements)” - Letter from Sir David Rowlands to Lord Adonis, 13th February 2009

36. We suggest that a UK transport strategy should adopt the principles of EC intermodal policies, as set out in the European Commission’s 2011 White Paper. 45 The benefits of this approach are made clear in various non-technical documents published by the Commission, 46 and illustrating in particular the benefits arising from integration of high- speed railways and major airports at, for example, Frankfurt, Schiphol and Charles de Gaulle.

Q2 – How should we make the best use of existing aviation capacity?

(a) How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

37. London airport capacity is only an issue in terms of Heathrow, which requires a long- term strategic and deliverable approach to ensure the UK’s future hub capability. A hub requires a dominant base carrier, with a critical mass of slots, feeding long haul flights with an extensive short haul network, offering competitive frequencies and connection times through co-ordinated “waves” of arriving and departing flights. In the UK, only Heathrow provides such capacity and functionality.

38. We do not believe that Government’s current measures are sufficient to ensure that Heathrow can continue to provide this capability. The lack of an integrated approach to air and rail strategy exacerbates the challenge, preventing HS2 from delivering the very significant potential capacity benefits that air/rail substitution could deliver in the short- medium term, replacing short haul domestic and near-Europe flights and releasing capacity for long haul services to support economic competitiveness and enhance the UK’s global connectivity.

39. Air/rail substitution has been claimed as a benefit of HS2. 47 However, an optimum solution is unlikely because of the way in which HS2 has been planned, without representation from the UK aviation industry 48 or acceptance of the industry’s clear

45 “Better modal choices will result from greater integration of the modal networks: airports, railway, metro and bus stations should increasingly be linked and transformed into multimodal connection platforms for passengers. Airport Capacity Initiatives – develop an approach to deal with future capacity problems including better integration with the railway network” – White Paper, Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system, European Commission 28th March 2011 http://ec.europa.eu/transport/strategies/2011_white_paper_en.htm 46 “There are some particularly remarkable examples of HS stations operating along intermodal lines with airports. Frankfurt International Airport is a pioneer in this. Opened in 1972, traffic increased considerably following the introduction of the Frankfurt– Cologne HSL in 2002. According to Deutsche Bahn, two thirds of train passengers are either leaving or have arrived by plane. In France, the station at Paris Charles-de-Gaulle Airport is located at the interconnection between the North HSL and the South-East HSL. It is served by 52 HSTs a day, linking the main towns in France, and by five HSTs serving northern Europe (Brussels and Amsterdam). In Belgium, Brussels National Airport will be linked to all the main Belgian cities and to several European cities, such as Paris, Amsterdam, Cologne and Frankfurt, by 2012” - European Commission High-speed Europe, a sustainable link between citizens, 2010 http://ec.europa.eu/transport/infrastructure/studies/doc/2010_high_speed_rail_en.pdf) 47 “High speed rail services to Heathrow from Scotland and the North would provide an alternative to domestic and other short-haul aviation” – Para 4.38, High Speed Rail: Investing in Britain’s Future – Decisions and Next Steps, DfT January 2012 http://assets.dft.gov.uk/publications/hs2-decisions-and-next-steps/hs2-decisions-and- next-steps.pdf 48 HS2 Ltd’s external Challenge Groups failed to include any representation from the aviation industry - High Speed Rail: London to the West Midlands and Beyond. A report to Government by HS2 Ltd, 2009 http://webarchive.nationalarchives.gov.uk/20110131042819/http://www.dft.gov.uk/pgr/rail/pi/highspeedrail/h s2ltd/hs2report/ recommendations 49 (perhaps in part because the response of Heathrow’s airline representatives to Government’s HS2 consultation was one of those found to have been mislaid and not therefore considered prior to the Secretary of State’s decision). 50

40. Government appears to acknowledge the benefits of air/rail substitution. For example, last year’s aviation consultation stated that “in the longer term, much of the demand for domestic aviation and for near-European short-haul aviation could be met by high speed rail.” 51

41. However, the proposed spur serving Heathrow as a branch off the main HS2 line is, we believe, unlikely to ever be built, due to its high cost, and lack of any conceivable business case (with viability dependent on airport traffic alone generating load factors sufficient to justify the high service frequency necessary to attract time-sensitive airport passengers). In addition, Heathrow’s competitiveness may well be severely weakened long before 2033, making the cost of a spur, and the loss of HS2 capacity, difficult to justify.

42. Even if built, a spur would not be completed until 2033, when Heathrow requires urgent, short-term measures to increase capacity and resilience. And even if the spur was brought forward to phase 1 of HS2, this would provide only a north facing junction with the main HS2 line, allowing trains to only serve Birmingham and the north. It would not therefore be possible to replace short haul European flights with rail until and unless the spur was extended to form the loop that HS2 propose (at an even later date than 2033).

43. Government estimates the cost of a spur at between £2.5bn - £3.9bn, 52 with an expectation that at least part of the cost of a spur would be met by users 53 54 (presumably referring to airlines through Heathrow’s user charges). Any significant contribution appears unlikely, however, in view of Heathrow already having the 4th highest user charges in the world, 55 and the concerns already expressed by the airport

49 “The current HS2 proposal is to connect Heathrow to HS2 via a spur to the north of the airport. We believe that a spur would not maximise all the benefits that an en-route station would do” - London (Heathrow) Airline Consultative Committee (LACC) airlines and the Heathrow Airline Operators Committee (AOC) submission to the HS2 consultation, July 2011 http://highspeedrailresponses.dft.gov.uk/s2css/viewusercomments.asp?usr=55669 50 Secretary of State for Transport written statement, 17th July 2012 http://www.dft.gov.uk/news/statements/greening-20120717a/ 51 Developing a sustainable framework for UK aviation: Scoping document, DfT March 2011 http://www.dft.gov.uk/consultations/open/2011-09/consultationdocument.pdf 52 Investing in Britain’s Future, Consultation, DfT February 2011 http://highspeedrail.dft.gov.uk/sites/highspeedrail.dft.gov.uk/files/hsr-consultation.pdf 53 “A link (from Heathrow) to the high speed network would be of significant value to the airport operator and airlines, and a private sector contribution to the costs would reduce the cost to Government” - HS2 options for connecting to Heathrow, HS2 Ltd, September 2009 http://webarchive.nationalarchives.gov.uk/20110131042819/http://www.dft.gov.uk/pgr/rail/pi/highspeedrail/pr oposedroute/heathrow/ 54 “Significant numbers of individuals and organisations would stand to benefit from the construction of new high speed rail lines. This could include airport operators, businesses close to high speed rail stations and local authorities. The Government expects that such parties would therefore make a contribution to the cost of those links”.- High Speed Rail: Investing in Britain’s Future, Consultation, DfT February 2011 http://highspeedrail.dft.gov.uk/sites/highspeedrail.dft.gov.uk/files/hsr-consultation.pdf 55 “Heathrow has recently moved from being the world's 20th most expensive airport in the world to the 4th, following user charges increasing 46% in 2007-08. Whilst this may represent legitimate pricing of scarce demand, and might be argued as necessary to fund much needed airport improvements, it is important that this, and any future private and public decisions on charging and taxation, are considered in the wider context of the UK economy and inward investment decisions. Heathrow was one of only two airports in the top 30 busiest airports worldwide to report a decline in traffic in 2010, (the other being Las Vegas/McCarren International in 22nd place). 56 and airlines. 57 If a spur is, in due course, indeed found not to be fundable, viable or otherwise deliverable, Heathrow would be condemned to reliance solely on a remote interchange at Old Oak Common.

44. Even if airlines did agree to the necessary funding contributions, (potentially including revenue support for train services over the spur), this would significantly increase the RAB, 58 which, together with HS2’s phasing, could place Heathrow at a significant competitive disadvantage. 59 In contrast, locating a Heathrow interchange on the through high speed line, in the first phase of HS2 as proposed by Heathrow Hub, allows very significant benefits, enabling the earliest possible modal shift from both air and road to rail.60

(b) Does the Governments current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

45. Regional airports, and indeed many South East airports, have very significant spare capacity. Making better use of such capacity appears is clearly a commendable objective. This could, for example, reduce the pressure on capacity constrained airports, improve regional connectivity and increase customer choice.

46. However, it is less clear how this could be achieved. Historic data shows that regional – and some South East - airports have suffered a steady decline in traffic. Whilst Heathrow grew 3.9% between 2001 and 2011, (from 458,000 to 476,000 ATM’s), Manchester declined 15.2% (182,000 – 158,000 ATM’s), Stansted declined 9.2% (151,000 to 137,000) and Birmingham declined 24.3% (111,000 – 84,000 ATM’s). 61

Heathrow's continued pre-eminence amongst its European competitors cannot be taken for granted” – Submission to Transport Select Committee Inquiry into the Strategic Case for High Speed Rail, Bow Group May 2011 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/1185/1185vw89.htm 56 “It is important to note that while we recognise the potential national strategic value of connecting Heathrow directly into the high speed rail network – i.e. to deliver Government objectives on mode shift and carbon savings - our commercial evaluation of the various options showed a limited investment case from a Heathrow perspective” – Heathrow Airport Limited submission to Commons Transport Select Committee HS2 Inquiry, May 2011 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/writev/rail/rail3.pdf 57 “Over the likely HSR construction period, airlines will continue to fund a significant capital expenditure programme at Heathrow designed to renew and develop the UK’s hub airport. In this context the airline community will not be able to support funding for HSR as their primary focus and responsibility is to the airport itself” – British Airways submission to Commons Transport Select Committee HS2 Inquiry, May 2011 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/writev/rail/rail3.pdf 58 “Already the UK Government places more costs on the airport owner than is the case internationally - e.g. surface access projects” – DfT Review of Regulatory Framework for UK Airports, submission from the Chartered Institute of Logistics & Transport, 2008 http://www.ciltuk.org.uk/download/Review_of_Regulatory_Framework_- _CILT_final.pdf 59 “A link from HS2 to HS1 should not be progressed before Heathrow is directly linked to the HS2 network and is able to connect to HS1 services. Connecting HS1 to HS2 will enable through running rail services between the UK regions and continental Europe. This will give major European airports direct access to UK air passengers, without a reciprocal benefit for Heathrow. The airport must be able to compete for air passengers in the UK and in Europe too, which requires equivalent access to both HS2 and HS1 services” – British Airways submission to Transport Select Committee Inquiry into HS2, May 2011 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/writev/rail/rail3.pdf 60 “Overall, by 2030 the presently untapped market from which the interchange could induce traffic to shift to rail contains up to 36m road journeys and 10m air journeys per year” - Improving Rail Connectivity to Heathrow - Implications for the Development of the Heathrow International Interchange, BAA/Arup October 2009 61 Air transport Movements 2001 – 2011, CAA http://www.caa.co.uk/docs/80/airport_data/2011Annual/Table_04_2_Air_Transport_Movements_2001_2011 .pdf 47. The result is that the UK’s regional airports have very substantial spare capacity. However, this is a result of airlines, operating in a free and highly competitive market and with the benefit of the most mobile of assets, choosing to use these assets in other markets, whether elsewhere in the UK or overseas. This reflects network airlines increasingly focusing on major hub airports, leaving regional airports served mainly by point to point or interline services.

48. European hubs also follow this pattern, and explain major airport’s growing focus on maximizing the size of their catchment, and reaching markets with the highest propensity of people to fly, in order to fill increasingly large aircraft on long haul services at commercially attractive yields.

49. It may be that airline economics change as a result of the long range and fuel efficiency of the new generation of mid-size aircraft, for example the B787 “Dreamliner.” However, it would be a significant risk to the UK’s future hub capability if attempts were made to distort market forces, and actively seek to weaken Heathrow by diverting growth to other airports. Reducing Heathrow’s competitiveness may not strengthen other UK airports.

50. Government in any case has only a very limited ability to influence airline’s commercial decisions, perhaps through differential taxation or financial subsidy as means of seeding otherwise uneconomic services to meet wider policy objectives.

51. Historically, the UK has only been willing to consider very limited interventions, through imposing a PSO (Public Service Obligation) on carriers to operate specific services in remote areas and in return for financial compensation (subsidy). Other European countries appear to have taken a very different approach, with extensive use of PSO- type subsidies on domestic scheduled air services.62 It is however difficult to see that such an approach is either practical or beneficial. Instead, effort should be directed to improving access to, and the efficiency and capacity of successful international gateways.

(c) How can surface access to airports be improved?

52. Airport surface access should be considered as part of an integrated intermodal strategy, with particular attention to the overall passenger experience, rather than as separate road and rail projects in isolation. It is also important to consider surface access, not only in terms of modal shift from road to rail, but also in terms of its potential to increase UK regional competitiveness through improved access to global markets, and to enable air/rail substitution.

53. Improving surface access to Heathrow would particularly enhance hub operations. 63 This is also increasingly important as the combination of fewer domestic air routes and the legacy of poor or non-existent rail surface access isolate Heathrow from markets 64 -

62 A comparative analysis of the application and use of public service obligations in air transport within the EU George Williams, Romano Pagliari, Centre for Air Transport in Remoter Regions, Cranfield University, 2004 https://dspace.lib.cranfield.ac.uk/bitstream/1826/930/4/public_service_obligations_in_air_transport-2004.pdf 63 “Improved surface access to Heathrow would … help to maintain the necessary economies of scale to provide a viable hub route network” - Review of the Impact of Aviation within the Greater London Area, SKM for London Sustainable Development Commission, December 2003 http://www.londonsdc.org/documents/research/lsdc_airtransportskm.pdf 64 “It may be more financially beneficial for BAA to see bigger, fuller , but the airlines maintain that to support this operation, they still need the connections to group people together and fill up the big planes" - David Stewart, IATA 28th March 2008 http://www.airport-technology.com/features/feature1783/ adversely affecting the UK’s regions connectivity with global markets, 65 regional competiveness 66 and inward investment.67

54. One significant benefit of the UK coming late to decisions on airport capacity and high speed rail is the ability to learn from European examples and transport policy. These lessons do not appear to be reflected in current Government plans for HS2, western access to Heathrow and other projects.

Q3 - What constraints are there on increasing UK aviation capacity?

(a) Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

(b) Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

55. As discussed earlier, we suggest that an intermodal strategy, specifically designed to enable modal shift in airport access journeys from road, is essential, not only to provide a platform for forecast growth but to enable current operations within legally binding air quality limits. In addition, measures should be taken, particularly at constrained airports such as Heathrow, to reduce environmental impacts by improving operational efficiency, for example, removing runway crossings, reducing taxiing distances, minimizing holding time for aircraft on the ground 68 and increasing the number of pier served stands.

(c) What is the relationship between the Government’s strategy and EU aviation policies?

56. Whilst Government’s strategy appears to be broadly aligned with EU transport aviation policies generally, we do not believe that it provides the intermodal approach that is specifically required by European transport policy.

Q4 – Do we need a step-change in UK aviation capacity? Why?

(a) What should this step-change be? Should there be a new hub airport? Where?

57. Advocates of a step-change increase in capacity appear to focus largely on an unfavourable comparison of Heathrow’s two runways with Frankfurt and Charles de Gaulle’s four runways, and Schiphol’s six. We believe this is highly misleading and only partly relevant to the real issues of capacity and demand.

65 “Organisations outside London were concerned about the impacts on international investment in the regions as a result of the limited and reducing number of services to Heathrow from airports within the UK” – Transport and the Economy, , Transport Select Committee 2011 http://www.publications.parliament.uk/pa/cm201011/cmselect/cmtran/473/473.pdf 66 “The UK regions are at a major disadvantage in terms of access from major world markets. This hampers the ability to attract inward investment and regional economic growth” - Economic Impacts of Hub Airports, British Chambers of Commerce 2009 www.britishchambers.org.uk/.../BCC_Economic_Impacts_of_Hub_Airports.pdf 67 Heathrow “is vital to the UK’s competiveness: easy access to Heathrow is often a major factor for businesses in deciding where to locate” – DfT Factsheet Connecting to Heathrow, 2011 68 “An A320 aeroplane would waste about 14kg of fuel (equivalent to 44kg CO2) and produce about 70g NOx for every minute it had to wait. For a B767, the corresponding values would be 22kg fuel (68kg CO2) and 105g NOx” – Response to Consultation on Adding Capacity at Heathrow Airport, February 2008 http://www.britishairways.com/cms/global/pdfs/environment/BA_Heathrow_Consultation_Response.pdf

58. By comparison, there has been relatively little debate on a proper assessment of the extent to which Heathrow’s capacity constraints suppress demand. Frontier Economics 2011 “Connecting for Growth” report for BAA 69 is therefore helpful in comparing Heathrow’s capacity and demand with its European competitors;

“Another way to think about Heathrow’s potential is to consider what it would look like if it was not capacity constrained at all. Paris Charles de Gaulle provides a useful benchmark for this thought exercise, since Paris and London are comparable as global centres (albeit of different economic scale) and have similar geographical locations. The difference is that Heathrow is capacity constrained whereas Charles de Gaulle is not. If Heathrow could fulfil its potential it might operate on a similar scale relative to the London economy as Charles de Gaulle does relative to Paris. We have assessed this by comparing the ratio of long-haul seats flown relative to GDP of the city. Charles de Gaulle flies 81 long haul seats per million EUR of Paris GDP. Heathrow flies only 68 long haul seats per million EUR of London GDP. If Heathrow could achieve a similar seat to GDP ratio, this would imply 31 million long haul seats out of Heathrow each year instead of 26 million; an uplift of 18%.”

59. BAA suggest that air/rail substitution could release between 45,000 – 91,000 ATM’s. 70 The higher of this range is equivalent to a ca. 18% increase in Heathrow’s capacity, exactly the shortfall suggested above. This would increase passenger numbers from ca. 70 million pa currently to ca. 113 million passengers pa (assuming BAA’s forecast of 198 passengers per ATM (Air Transport Movement) by 2030. 71 This is equivalent to 87% of the additional capacity that a third runway was forecast to provide (ca. 130 million passengers pa).

60. In addition, there is evidence that growth, particularly in business travel, is slowing, with a 25% decline in business flights since 2000 72 - perhaps reflecting cost cutting, increasing availability of teleconferencing but also initiatives such as WWF’s One in Five campaign that seeks to reduce businesses carbon emissions. 73 This suggests that there may not be a case for the drastic step-change in airport capacity that is suggested by the Mayor.

61. Clearly, there must be a direct relationship between demand, a function of an airport’s catchment, and the capacity required to meet that demand. This is illustrated by actual numbers of ATM’s, (Air Transport Movements), at Heathrow’s European competitors, which are within a much narrower range than runway capacity alone might suggest. For example, in 2011, Heathrow handled 476,197 ATM’s, 74 Schiphol 420,249, 75 Frankfurt 487,162 76 and Charles de Gaulle 514,059. 77

69 Connecting for growth: the role of Britain’s hub airport in economic recovery, Frontier Economics September 2011 http://www.frontier-economics.com/_library/publications/Connecting%20for%20growth.pdf 70 Heathrow Airport Limited evidence to the Transport Committee’s Inquiry into the Strategic Case for High Speed Rail, June 2011 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtran/writev/rail/m131.htm 71 Southeast Airport Expansion, Airportwatch June 2012 http://www.rbwm.gov.uk/minsys3.nsf/d9c360870262e3708025765d004cf06a/20c1d110a2e39fba802579dc0 04ad696/$FILE/meetings_120821_localauthorities26June2012.pdf 72 Global and UK travel trends 2010, Travel and Migrant Health Section Health Protection Services, Colindale, Health Protection Agency February 2012 http://www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1317132797054 73 http://www.wwf.org.uk/how_you_can_help/get_your_business_involved/one_in_five_challenge/ 74 Heathrow Facts and Figures http://www.heathrowairport.com/about-us/facts-and-figures 75 Traffic Review Schiphol http://www.schiphol.nl/web/file?uuid=e29561f0-1066-4a13 76 Air Traffic Statistics http://www.fraport.com/content/fraport- ag/en/misc/binaer/investor_relations/other_publications/air-traffic-statistics- 2011/jcr:content.file/Air%20Traffic%20Statistics%202011.pdf

62. Whilst Heathrow is constrained by number of runways, its competitors also have their own constraints whether as a result of local noise controls (as at Schiphol) 78 or configuration of runways (eg; Schiphol 79 or Charles de Gaulle) 80.

63. The importance of a large catchment, with a high propensity to fly, is seen in the importance attached, and investment in, surface transport infrastructure at Heathrow’s competitors. These have led to integrated air/rail interchanges, located on through high speed and classic rail routes rather than branches or spurs, allowing high frequency services to a wide range of destinations. Schiphol (33m people accessible by rail within 200km) 81 Frankfurt, (35m within 200km) 82, Charles de Gaulle and Brussels, see a commercial imperative in expanding their markets by direct connection to both classic and high speed rail services serving a cross-border hinterland. 83 In Belgium, Infrabel’s Project Diabolo has converted the former spur serving Brussels airport into a new through high speed line between France, Germany and the Netherlands, solely in order to improve connectivity. 84

64. Meanwhile, in the UK, 11.5% of Heathrow’s UK origin and destination passengers come from the local area of Berkshire and , whereas only 2.8% come from the major conurbations of Birmingham, Manchester, Liverpool, Leeds, Sheffield, Newcastle, Edinburgh, Glasgow, Cardiff and Bristol combined. 85 Bristol, only 90 miles west and in what should be Heathrow’s core market, instead sees 10,000 passengers a week interline through competing European hubs. 86

65. European experience is clear 87 and demonstrates the benefits of airport interchanges directly located on high speed rail lines. 88 Direct interchanges assist in expanding airport

77 Union des Aeroports Francais http://www.aeroport.fr/les-aeroports-de-l-uaf/stats-paris-charles-de-gaulle.php 78 From 2003, controlled by total noise volume and maximum noise levels in Lden - http://ec.europa.eu/transport/modes/air/studies/doc/environment/2004_10_aspects_noise_limits.pdf 79 3 active runways in use at any one time, Zwanenburgbaan and Polderbaan runways can’t be used simultaneously, and restrictions on runway crossings - eg: to reach 18R/36L 80 Close parallel runways require dependent operations, runway crossings degrade outer runway pair capacity 81 “For Schiphol, landside accessibility is of essential importance. The construction of the HSL South line will place Schiphol on the European HSL high-speed rail network. The HSL will extend Schiphol’s catchment area towards Antwerp and Brussels” -Long term vision for Schiphol Group 2009 82 “A catchment area within a radius of 200 kilometres with 35 million consumers (43% of Germany's population) optimally connected by air, rail and road” - http://www.frankfurt- airport.com/content/frankfurt_airport/en/business_location/cargo_hub.html 83 “In addition to deregulation of the air transportation markets, one reason for the growing competition among the hubs is that their catchment areas increasingly overlap. The impetus here comes from the high-speed rail systems (ICE, TGV) permitting a fast journey to the airport” – Fraport http://www.fraport.com/cms/capacity_growth/rubrik/2/2840.intermodality.htm 84 “Conversion of the existing underground terminus station to a through station is crucial for the development of Brussels airport. The Diabolo project creates a more accessible airport with direct connection to the international axes to Paris, Amsterdam, Cologne, Frankfurt and other European cities” - Infrabel Mobility Projects 2009 85 CAA 2007 UK O&D passenger survey data 86 “More than ten thousand passengers a week are turning their backs on direct flights from London airports and instead travelling between Bristol International and hubs such as Amsterdam-Schiphol, Frankfurt, Paris Charles de Gaulle, Brussels and Oslo, from where they can access connections to hundreds of destinations worldwide” - Bristol Airport press release 13th June 2008 , http://www.bristolairport.co.uk/news-and-press/press- releases/2008/6/ten-thousand-join-hub-club-at-bristol-international.aspx 87 “There are some particularly remarkable examples of HS stations operating along intermodal lines with airports. Frankfurt International Airport is a pioneer in this. Opened in 1972, traffic increased considerably following the introduction of the Frankfurt– Cologne HSL in 2002. According to Deutsche Bahn, two thirds of train passengers are either leaving or have arrived by plane. In France, the station at Paris Charles-de-Gaulle Airport is located at the interconnection between the North HSL and the South-East HSL. It is served by 52 HSTs a day, linking the main towns in France, and by five HSTs serving northern Europe (Brussels and Amsterdam). In catchments 89 and encourage modal shift to rail. 90 Interchanges in an airport access journey act as a very significant deterrent to rail use 91 and appear contrary to the intent of European transport policy. 92

66. We suggest that a detailed analysis of the impact of improved surface access to Heathrow, and the effect on both capacity (modal shift from air to rail) and demand, (increasing the airport’s catchment), is a necessary first step in accurately assessing the UK’s hub airport capacity.

67. Expanding Heathrow’s market catchment by better surface access would also maintain the feeder and transfer traffic that is essential to sustain high frequencies of flights serving a wide range of destinations. 93 This would also protect the viability of hub operations in a competitive market by providing economies of scale 94 and supporting higher yields. 95 Frankfurt’s experience demonstrates how such intermodality strengthens an airport’s hub function, 96 and which could be replicated at Heathrow. 97

Belgium, Brussels National Airport will be linked to all the main Belgian cities and to several European cities, such as Paris, Amsterdam, Cologne and Frankfurt, by 2012” - European Commission High-speed Europe, a sustainable link between citizens, 2010 http://ec.europa.eu/transport/infrastructure/studies/doc/2010_high_speed_rail_en.pdf) 88 “International evidence illustrates that airports can successfully be served by high speed rail services and other long distance trains in order to increase airlines’ passenger catchment areas. Examples include Paris CDG, Amsterdam Schiphol and Copenhagen” - High Speed Rail Development Programme 2008/09, Strategic Choices, MVA/Systra for Greengauge 21 http://www.scribd.com/doc/39964950/High-Speed-Rail-Development-Programme 89 “Some 16% of all Frankfurt airport passengers now come to and from the airport by ICE from destinations across Germany. This experience needs to be studied carefully as High Speed Two assesses options for serving Heathrow.” - Lord Adonis http://www.dft.gov.uk/press/speechesstatements/speeches/spchintertransrev 90 “Long distance trains doubled (surface access) market share between 1998 and 2000, and since 2004 high speed long distance services have carried more passengers than local services. 19% of originating passengers used high speed services in 2009, and this is projected to increase to 30% by 2015” - Frankfurt Intraplan 2010 91 “Evidence for the Committee for Climate Change found that 38% of existing interlining passengers would transfer from air to HSR for the domestic leg of their journey if there was a direct HSR service to the airport, but only 1% would do so if there was a need to make an interchange en route. The Transport Select Committee has recently made its views known: it is essential, in their view that Heathrow is directly connected to the high-speed rail network” - The Heathrow Opportunity, Greengauge 21 2010 http://www.greengauge21.net/publications/the- heathrow-opportunity-2/ 92 “Better modal choices will result from greater integration of the modal networks: airports, ports, railway, metro and bus stations should increasingly be linked and transformed into multimodal connection platforms for passengers” – White Paper, Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system COM(2011) March 2011 http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0144:FIN:EN:PDF 93 “It may be more financially beneficial for BAA to see bigger, fuller airplanes, but the airlines maintain that to support this operation, they still need the connections to group people together and fill up the big planes" - David Stewart, IATA 28th March 2008 http://www.airport-technology.com/features/feature1783/ 94 “Improved surface access to Heathrow would … help to maintain the necessary economies of scale to provide a viable hub route network” - Review of the Impact of Aviation within the Greater London Area, SKM for London Sustainable Development Commission, December 2003 http://www.londonsdc.org/documents/research/lsdc_airtransportskm.pdf 95 “Strong local demand is beneficial to help underpin a wide range of services and frequencies. Because there is generally less competition for non-stop flights, this helps support higher yields” – The Future of Hubbing in London, Rigas Doganis & Associates http://www.baa.com/assets/B2CPortal/Static%20Files/HubbinginLondon.pdf 96 “Airports with intermodal capabilities have an edge on their competitors because intermodality generates additional traffic: Integration of Frankfurt Airport in Deutsche Bahn's high-speed rail network has expanded the airport's catchment area compared to airports without Long-distance Train Stations. It strengthened the hub function, raised passenger figures, and given us important competitive edges. At the same time, moving air traffic to the rail eases some of the strain on flight capacity. For example, landing and departure slots that are freed-up by shifting short-haul flights to the rail can be used for the urgently needed expansion of intercontinental flight services” - http://www.fraport.com/cms/capacity_growth/rubrik/2/2840.intermodality.htm

68. It would additionally assist the UK’s competitiveness, 98 increasingly important as the combination of a declining number of domestic air routes serving Heathrow, and the legacy of poor or non-existent rail surface access to the country’s hub, increase the peripherality of UK regions.

69. A separate exercise is required to model catchment and demand for any new hub airport locations. This should also consider the potential impact on the UK economy, where economic success is a result, at least in part, of proximity to Heathrow. For example, the Thames Valley ranks 7th in Europe for Gross Domestic Product (GDP) per capita, 99 contains the European HQ of 11 of the top 30 global brands, has the UK’s highest density of IT professionals and generates £30 billion annual output (19% of the South East). 100

70. It seems likely that at least some businesses would re-consider their future in the Thames Valley if the UK’s hub airport was no longer readily accessible. An Isle of Grain site for a new airport, for example, would be ca. 160km from Reading, (measured as a straight line distance). In reality, access would either require circumnavigation of the M25 motorway, adding time and uncertainty, or by the new orbital rail link proposed by the Foster scheme. 101 Even assuming that, as the scheme report suggests, “up to 60% of airport passengers will arrive using fast, frequent services from across the country,” the remaining 40% of the 150 million passengers envisaged as using the airport would presumably rely on road access. It is difficult to see how the South East’s road network could accommodate this amount of additional traffic.

71. Some businesses may choose to relocate to be closer to any new airport – but some may relocate elsewhere in Europe, particularly as the Thames Estuary does not offer the skilled labour pool, easy access to UK regional markets or attractive living environment that the Thames Valley and surrounding areas offer.

72. There is evidence of real damage already being inflicted on the UK economy as a result of the way in which transport strategies are being developed. Merely the suggestion that Heathrow might be closed or downgraded is already proving to have a severely detrimental effect on potential inward investment in the Thames Valley. 102

97 “An HSR network serving Heathrow would encourage those who currently interline at Paris CDG, Amsterdam or Frankfurt to use Heathrow, thus strengthening Heathrow’s competitiveness compared to other European airports for long haul flights” – High Speed Rail Development Programme 2008/09, Strategic Choices, MVA/Systra for Greengauge 21 98 “Organisations outside London were concerned about the impacts on international investment in the regions as a result of the limited and reducing number of services to Heathrow from airports within the UK” – Transport and the Economy, Transport Select Committee 2011 http://www.publications.parliament.uk/pa/cm201011/cmselect/cmtran/473/473.pdf 99 European Cities and Regions of the Future 2010-11 http://www.sgroup.be/data/File/European-Cities-and- Region s- of-the-Future-2010-11.pdf 100 Thames Valley Chamber of Commerce http://www.thamesvalleychamber.co.uk/uploads/Policy/InwardInvest/CCPITPBrittonTVIntroduction071 210.pdf 101 “A four-track, high-speed passenger and freight Orbital Rail route around London, which links London’s radial lines, a future high-speed rail line to the Midlands and the North, the Thames Estuary ports, High Speed 1 (Channel Tunnel to London), and European networks” – Thames Hub, An Integrated Vision for Britain http://www.halcrow.com/thames-hub/PDF/Thames_Hub_vision.pdf 102 “Thames Valley Chamber of Commerce have already experienced a reluctance to invest in the Thames Valley by foreign businesses owing to the uncertainty which exists around future aviation provision in the region” – Report to Cabinet, Borough Council 16th July 2012 73. Equally important, but more difficult to quantify, are the impacts on long term investment decisions by businesses currently located in the UK and dependent on Heathrow’s unique connectivity, and by airlines, who are of course able to make global decision on employment of scarce and valuable assets.

74. The Mayor appears now to suggest that Heathrow could remain open following development of a new hub airport, abeit downgraded to a “single runway, premium leisure” airport. 103 Setting aside the question of the Mayor’s powers to specify the layout, capacity and market segment of Heathrow, this raises the question of which airlines would therefore choose to leave Heathrow.

(b) What are the costs and benefits of these different ways to increase UK aviation capacity?

75. Government’s current planning approach makes it almost impossible to compare alternative ways of increasing capacity. Without an integrated intermodal approach, it is, for example, impossible to properly assess the benefits of an HS2 route directly via Heathrow, in terms of enabling air/rail substitution, releasing airport capacity, or expanding the airport’s catchment

76. There are many factors that fall to be considered in assessing the costs and benefits of proposals for new airport capacity.

77. If Heathrow, with its excellent location and established market, can only support ca. 18% additional capacity, it is extremely doubtful that a new airport to the east of London, with a much poorer location relative to UK markets, and a much smaller catchment area, (effectively halved as a result of its coastal location), could be economically viable, (even if Heathrow were to be closed or downgraded).

78. Instead, Heathrow Hub provides the necessary capacity increase to maintain Heathrow’s competitiveness and the UK’s global connectivity. The direct connection which we propose between Heathrow and the high speed rail network allows rail to replace short haul domestic and European flights, releasing ca. 18% of Heathrow’s capacity for new long haul routes.

79. In addition, BA’s recent acquisition of Bmi also effectively increases Heathrow’s capacity, providing BA with 46 additional daily slot pairs, some of which, serving formerly duplicated routes, allow new destinations to be served.

80. It is clear that an entirely new airport east of London, as promoted by the Mayor, would suffer from a number of major disadvantages. Its catchment area would be inevitably reduced by perhaps 50%, simply as a result of its coastal location resulting in half its hinterland being in the sea. Its remaining catchment would be far less attractive to airlines, since it lacks the range and density of business that has, over time, been attracted to areas around Heathrow.

81. In addition, the cost of a new airport would be so great, even assuming the public purse meets the £30 billion cost of road and rail access identified by the Mayor, that airline user charges would be likely to be far higher than Heathrow’s. The airport’s Regulated

103 “Mr Moylan outlined a scenario that saw Heathrow becoming "a smaller point-to-point airport serving the West London and Home Counties premium leisure market". Relocation of major airlines, including BA, to the new hub would see Heathrow passenger volumes fall from 70 million to 20 million a year” - Daily Telegraph 6th October 2012 http://www.telegraph.co.uk/finance/newsbysector/transport/9591734/Heathrow-could-shrink-to-one- runway-to-fund-new-hub-airport.html Asset Base of £13.8bn at December 2011 generates the 4th highest user charges of any airport in the world. A new airport costing ca. £20bn would be likely to be the most expensive airport in the world for airlines to use, inevitably needing to be reflected in fare increases which, together with the relative inaccessibility of the airport, would lower demand.

82. If Heathrow were to be closed or downgraded, in order to improve the viability of a new airport, the UK could suffer a catastrophic decline in GDP if businesses dependent on ease of access to global markets choose to relocate overseas, rather than to a new Thames estuary location. The impact could be particularly severe on South Wales and regions such as the South West, which are already remote from Heathrow, but whose peripherality would be further increased if Heathrow were to close.

83. The likely result of Heathrow’s closure would be passengers choosing, for reasons of cost and convenience, to fly from regional airports to interline at mainland Europe hub airports. Far from the UK gaining new hub airport capacity, the result could be the loss of a UK hub airport altogether.

84. Alternatively, if Heathrow remained open, as the Mayor now suggests, then it is impossible to envisage a scenario where Heathrow’s existing airlines would choose to relocate to a new airport, remote from markets and with very high user charges. It is also difficult to see new airline entrants to UK markets establishing a scale of operations adequate to justify the cost of a new airport, as well as its surface access and associated infrastructure.

85. This is particularly the case where new entrants are more likely to have a low cost, point to point business model, rather than that of a legacy network carrier. Only the latter require a very high capacity – and high cost - hub model, able to support the waves of incoming and departing aircraft at peak periods.

86. A Thames Estuary airport therefore faces severe challenges, even before issues of, for example, airspace design, environmental impact and birdstrike are considered.

87. It is also, we believe, highly unlikely that any alternative proposal for a totally new airport on an inland site, requiring less new infrastructure and located closer to markets, is deliverable in the context of increasingly onerous statutory designations to protect landscape and habitats and a growing public awareness of, and sensitivity to, environmental issues. It is also relevant that attempts to create dual hubs in the UK have not been successful, as seen in BA’s attempt to integrate operations between Heathrow and Gatwick.

88. Yet another proposal has been made for “Heathwick”, connecting Heathrow and Gatwick by a dedicated high speed railway paralleling the M25, to allow both airports to operate together as a single unified hub.104 In addition to the vast capital and operating cost of a railway serving airport passengers alone, and its environmental impact, it is difficult to see how linking two capacity constrained airports, some 45 miles apart, could offer additional capacity or compete with, for example, the attractive 30 minute airside connections offered between flights at competing European hubs.

89. We do not therefore believe that there are credible alternative proposals to retaining Heathrow as the UK’s hub airport.

104 http://glaconservatives.co.uk/campaigns/virtualhub/ 90. Proposals for additional capacity in the form of a “third runway” outside the existing airport, whether at Sipson, as promoted by BAA, or Northolt, 105 as now suggested, also face very serious challenges, particularly in exposing entirely new areas to aircraft noise as described earlier. We believe that the political sensitivity of this issue, as well as the seriousness of the environmental impacts, makes such proposals effectively undeliverable and, to a significant extent, is responsible for recent support for a new airport to the east of London.

19 October 2012

105 Daily Telegraph, 7th April 2012 http://www.telegraph.co.uk/finance/newsbysector/transport/9192426/Setback- for-RAF-Northolt-runway-plan.html Written evidence from the Aviation Environment Federation (AS 81)

The Aviation Environment Federation (AEF) is the principal UK NGO concerned exclusively with the environmental impacts of aviation. Supported by individuals and community groups affected by the UK’s airports and airfields or concerned about aviation and climate change, we promote a sustainable future for aviation which fully recognises and takes account of all its environmental and amenity affects. As well as supporting our members with local issues, we have regular input into international, EU and UK policy discussions. Last year we acted as the sole environmental and community representative on the South East Airports Taskforce. At the UN we are the lead representative of the environmental umbrella organisation ICSA which is actively engaged in the current talks aimed at agreeing global climate measures for aviation.

1. What should be the objectives of Government policy on aviation? Aviation should, like all other sectors of the economy, play its part in meeting society’s collective demands for clean air, a pleasant living and working environment without intrusive noise, and the achievement of emissions goals to limit the risk of dangerous climate change. AEF believes that the Government has an essential role to play in setting the environmental limits within which the aviation industry can compete. Government policy should, within this environmental framework, seek to maximise the benefits available to the UK as a result of aviation’s role in supporting business connectivity, and in allowing people both to visit friends and family and to go on holiday. a) How important is international aviation connectivity to the UK aviation industry? The question focuses oddly on the aviation industry as a beneficiary of aviation connectivity. Government policy should instead look at the extent to which aviation can help support connectivity in the economy as a whole. The debate on airport capacity often fails to consider what “connectivity” actually means. While in the current debate, lobbyists take a very narrow, often misleading, definition, implying that it is only related to direct flights between two destinations, in its broadest context, it is about how well-connected the UK is to other parts of the world, and the ease with which businesses can access foreign markets and vice versa. Connectivity can take many forms, including other transport modes such as rail, or transport replacement such as videoconferencing, in addition to air travel. For example, Eurostar and the Channel Tunnel connect the UK to many western European cities. The connectivity debate extends well beyond considerations about hub airports. AEF has attempted to unpack some of the issues in relation to aviation, connectivity and hub airports in a 2-page briefing, which is attached to this submission. b) What are the benefits of aviation to the UK economy? It is unfortunate that this consultation asks specifically about economic benefits, with no account taken of the fact that the sector may generate economic disbenefits. Much of the evidence on aviation’s economic impacts has been either written or funded by the aviation industry, so there is an inevitable tendency to select data such as to increase the industry’s apparent benefit. A literature review by academic economists in 2009 identified a series of inconsistencies and gaps in such studies, critiquing work by OEF, ACI, BAA and others.1 While it is undoubtedly the case that aviation has a role to play in the UK’s economy (as does provision of electricity or of water, for example), it does not follow that increasing numbers of passengers, aircraft or runways will yield increasing economic benefit. The Committee should not assume that new airport infrastructure automatically yields economic advantage. And when all aviation’s impacts are accounted for, expansion may actually represent a cost to the UK. NEF’s 2010 report, Grounded: a new approach to evaluating Runway 32, predicted, for example, a £5 billion loss to the UK economy from expanding Heathrow, in contrast to the then government’s £5 billion predicted benefit. c) What is the impact of Air Passenger Duty on the aviation industry? We are aware that, despite continuing to benefit from exemptions from fuel tax or VAT, the aviation industry has recently been lobbying hard against Air Passenger Duty, the only significant tax on UK aviation apart from universal company and payroll taxes. This inquiry concerns the Government’s aviation strategy, and we hope that any consideration of Air Passenger Duty and its impacts by the Government will look more widely at its impacts on society than a question focused only on impacts on the aviation industry. The great majority of flying is by higher earners, with much of the increase in air travel in the UK over recent decades resulting from increasingly frequent flying by a small and wealthy proportion of the UK population3.The tax advantages currently enjoyed by aviation therefore benefit mainly higher earners. Low aviation tax is regressive. Research suggests that APD at its current level is unlikely to impact people’s holiday choices as it is such a small proportion of the cost of a holiday itself. It came as no surprise, therefore, that Sir Brian Donohue, chair of the All Party Parliamentary Group on Aviation, which earlier this year published an attempt to attack Air Passenger Duty, admitted during an oral evidence session “ I’ve not had a single person tell me they are not going on holiday because of APD.”4 d) How should improving the passenger experience be reflected in the Government’s aviation strategy? AEF took part in the South East Airports Taskforce, set up explicitly to address possible improvements to the passenger experience at London’s airports, and we endorse the recommendations of that report, noting that any long-term agreement to grant operational flexibilities must state clearly the limited circumstances in which they can be deployed, and must be based upon the community’s reaction to noise issues associated with the trials. Many of the recommendations of the task force could have wider applicability elsewhere in the UK.

1 D Gillingwater et al, January 2009, Omega study 40 – Economic benefits of aviation technical report, University, http://www.omega.mmu.ac.uk/economic‐benefits‐of‐aviation.htm 2 http://www.neweconomics.org/publications/grounded 3 See for example Civil Aviation Authority, January 2008, Recent trends in growth of UK air passenger demand, page 55 4 Travel Weekly 17th May 2012 “'Give us solid data' on APD and Heathrow, MPs tell industry” http://m.travelweekly.co.uk/Article.aspx?cat=news&id=40512 e) Where does aviation fit in the overall transport strategy? We understand that the Department for Transport will publish a transport strategy by the end of this year (that will not be subject to consultation), under which the Aviation Policy Framework is to sit.

2. How should we make the best use of existing aviation capacity? We have not provided detailed comments on this section. We would like to make two comments however: (i) ‘Best use’ of existing capacity may not mean ‘maximum use’; in particular, segregated mode operations at Heathrow and the night noise protections at the London airports provide a combination of predictability and respite that are hugely valued by local communities. (ii) While some recent industry research indicates a link between direct air links and the volume of trade between two cities, it has been unable to show the direction of causality in this relationship. Expanding capacity or encouraging more flying at any given airport cannot by itself generate economic activity in the surrounding region.

3. What constraints are there on increasing UK aviation capacity? AEF believes that increases in aviation capacity should be considered only within a framework of appropriate environmental limits, as indicated below. a) Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? No. While the Draft Aviation Policy Framework considers noise problems in some detail, it proposes few policy solutions to these problems. In particular: (i) Although a growing body of evidence, including the Government’s own study into Attitudes to Noise from Aircraft Sources in England in 2007, indicates that noise annoyance occurs at a lower level than was the case in the past, the Government persists without justification in referring to 57 Leq as marking the onset of significant annoyance. (ii) While the Framework acknowledges that Leq is not sufficient as a means of expressing how people are impacted by noise, not least as it obscures actual numbers of noisy aircraft, no programme is set out for resolving this problem by developing or advising on complementary noise metrics. (iii) Similarly, while the Framework acknowledges that noise can have significant health impacts, including stress and heart attacks, it sets out no timetable for achieving the World Health Organisation’s recommended noise limits. (iv) No commitments are made as to how and where noise should be reduced from current levels and there is no clarity over what noise ‘tests’ should be applied to proposals for new airport capacity. The concept of ‘noise envelopes’ is introduced, but is characterised as being applicable only in cases where significant expansion has already been approved. (v) No environmental criteria are set out for the basis on which airports are designated – or not – for by the Government. Currently the Government imposes noise limits on Heathrow, Gatwick and Stansted, but other airports may experience noise problems that are equally bad if not worse in some cases. There is a particular problem with night noise at East Midlands Airport, for example; and evidence from Belfast City Airport Watch suggests that far larger populations are exposed to noise above 57 Leq as a result of Belfast City’s operation than at either Gatwick or Stansted, but without comparable Government protections. (vi) The alternative to Government regulation, namely local resolution, is inadequate in a large number of cases. Either airports are being expected to police their own impacts, including, potentially, voluntarily imposing restrictions on their own operations, or local planning authorities, with very little government guidance, are expected to develop an unreasonable level of expertise in understanding noise impacts when considering planning applications at airports. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? Despite the scoping consultation singling out the lack of weight given to climate change in the Air Transport White Paper as a reason why it was no longer fit for purpose, the Framework sets out no new proposals in relation to aviation’s climate change impact. Under the last Government, agreement was reached to ‘take account of’ aviation emissions in the UK’s world- leading 2008 Climate Act and to formally include them by 2012, unless the Government of the day could explain to Parliament why this was not possible. In addition, a climate cap was introduced for aviation, namely that gross aviation emissions in 2050 (aside from any purchase of credits under the EU ETS) should be no higher than in 2005. The current Government, however, notwithstanding its clear and commendable stance on expansion at Heathrow, has not committed to maintaining the aviation emissions cap and has yet to come to a decision over whether or not aviation will be included in the UK’s carbon targets. The Framework commits only to ongoing support for EU and international measures, both of which are under significant pressure. AEF supports aviation’s inclusion in the EU Emissions Trading System as one step towards bringing the sector into line with wider strategy on climate change. We very actively support efforts to agree on global measures for aviation emissions, and we are participating in the current series of talks with this aim at ICAO. Nevertheless, we consider that European and international policy should be supported with appropriately ambitious domestic action, and believe that the UK’s credibility in these fora would be significantly bolstered if we could confidently show that we were walking the talk. The Climate Act was designed to deliver an economy-wide reduction in emissions of 80% of 1990 levels by 2050, in order for the UK to play its fair part in limiting the risk of global warming exceeding 2 degrees to no more than 50%. For this climate objective to be achieved, total UK emissions in 2050 should be no higher than 160 million tonnes of CO2, according to the Committee on Climate Change. If aviation and shipping were to be excluded from this figure, however, and the 80% cut applied only to other sectors of the economy, our national emissions would be likely to hit 200 million tonnes of CO2, and would thus fail to deliver the original climate objective that convinced Parliament to draw up the Act. AEF considers it essential that aviation continues to be accounted for in the 2050 target, as required by the Climate Act, and believes that there is no good reason for not formally accounting for the sector’s emissions in forthcoming carbon budgets, as recommended by the Committee on Climate Change. c) What is the relationship between the Government’s strategy and EU aviation policies?

See section b) above.

4. Do we need a step-change in UK aviation capacity? Why?

No. The concept that the UK is currently facing an airports capacity crisis is a myth.

(i) The official forecasts, last updated in August 2011, indicate that even if all demand was to be catered for there would be no shortfall, even in the South East, until nearly 2030. These forecasts have gone down each time they have been updated since 2003 and it is very likely that the latest figures will again be revised downwards as the predicted economic recovery has not materialised. AEF has produced a detailed analysis indicating a number of reasons why we consider the current forecasts up to 2030 will probably prove too high5. (ii) In fact, however, ‘predict and provide’ was abandoned by Government many years ago as an inappropriate approach to planning airport capacity, given the need for environmental protections. In April this year the Committee on Climate Change advised the Government to plan on the assumption that gross emissions from aviation in 2050 will be no higher than they were in 2005. The advice indicates the ongoing relevance of their 2009 study which concluded that for UK emissions to be no higher in 2050 than in 2005, passenger numbers could grow by not more than 60%. AEF has conducted analysis for WWF-UK that concludes that sufficient airport capacity already exists in the UK to accommodate all this permitted growth without building a single new runway6. (iii) In addition to the climate impacts, the noise impacts of airport expansion anywhere in the UK will be significant, and will inevitably play an important part in framing the debate about new capacity. The recent study by MIT and Cambridge University on air pollution arising from airport operations highlights the significant number of annual deaths likely to occur even from an airport built in the Thames Estuary, much further away from densely populated areas than existing South East airports. Rushing to approve new airport capacity in this context would be worse than foolhardy.

19 October 2012

5 See http://www.aef.org.uk/?p=1423 6 See http://www.aef.org.uk/uploads/WWF_AEF_airport_capacity_report_FINAL_July_2011_1.pdf

Written evidence from the Chiltern Countryside Group (AS 82)

The Chiltern Countryside Group (CCG) welcomes this opportunity to contribute to the Transport Select Committee's Inquiry into Government strategy for aviation and aviation capacity in the UK. Within this paper, we outline the Group's considered views on these important issues and request that the Committee take these fully into account in preparing their report from this Inquiry.

The Group believes that whilst aviation remains firmly part of people's lives in the 21st century, the world's population holds collective responsibility for reducing their need to travel and that when we do so, we should aim to choose the most environmentally-sustainable transport mode available. With this qualification, therefore, we respond to the questions posed by the Committee's Inquiry.

The CCG's mission statement is 'Preserving the peace of the Chilterns'. However, the operation, impact and benefits of aviation are not restricted to this area of SE England. Indeed the questions raised by the Committee consider the whole of the UK. We, therefore, respond to this Inquiry from a national perspective which has been informed by our experience of aviation in the Chilterns.

Since its foundation in 2008, the CCG has made several submissions to Government, the Department of Transport, the Civil Aviation Authority and the National Air Traffic Service's different aviation Inquiries and Consultations. The Group has also made submissions to the most recent Noise Action Plan Consultations conducted by Heathrow Airport and London Luton Airport. We find that much of the contents of these submissions remains relevant to present strategy and challenges; therefore, we have drawn upon these earlier papers in the preparation of this document. Where relevant, we have given original source references.

Acknowledgements:

The CCG Steering Group wish to give particular appreciation to their colleagues in the Steering Group, Capt. Gwyn Williams, Dr. Marilyn Fletcher and Prof. Colin Waters for their invaluable professional knowledge and expert contributions in the compilation of this paper and its Appendices.

EXECUTIVE SUMMARY

1. THE NEED FOR A NATIONAL TRANSPORT STRATEGY

• Since CCG was founded in 2008, the Group has been calling on Government for a properly researched and designed overall national Transport Strategy, so that major proposals as outlined below are appropriately integrated within a wider strategy which aims to (a) meet the UK's genuine needs and (b) give an optimum environmental balance. Only then can Government ensure that available funds are deployed in the wisest, most efficient and effective manner. We remain doubtful that any programme for any transport mode can achieve its optimum aims if planned and delivered in isolation. • The CCG share the Transport Select Committee's concerns expressed in that Committee's Report following their May 2011 Inquiry into High Speed Rail that, despite their earlier recommendations for a proper Transport Strategy on a national level, this has yet to be achieved by the Department for Transport (DfT). The CCG finds this unacceptable for public accountability and use of taxpayers' money, as it fails to provide an adequate base or structure on which to base any decisions on policy or the future of major projects such as airport expansion or the current proposals for the High Speed 2 railway. • An appropriate balance must be achieved between the economic, social and environmental costs and benefits of aviation. Within this balance, unconstrained growth of aviation is not an option. Nor is it likely to be required in the future with increased take-up of electronic communications, pressure on disposable incomes, increased public awareness of environmental implications and operational costs, including fuel. The priority should be to make UK's airports better, but not bigger, for all, not just for users.

2. REDUCING ENVIRONMENTAL IMPACT

• Aviation plays a key role in helping deliver Government's carbon reduction goals. However, Government should not abdicate its own responsibilities towards supporting and facilitating the contribution which the aviation industry is challenged to make. • Noise pollution reduction should be a key element of Government and aviation's environmental targets. • Improved operational procedures and new technology can and should facilitate better use of existing capacity, reduce or eliminate stacking and make a positive contribution to minimising local environmental impacts, particularly noise over densely populated and sensitive areas. • The CCG welcomes the Government's recognition that poor air quality has a negative effect upon individual health & is taking steps to reduce aviation's impact. However, we remain concerned that achieving compliance with legally binding European standards on pollutants is yet to happen. • Should the Government's proposed new high-speed railway line (HS2) go ahead and the predicted small modal shift does occur from domestic flights to high speed rail, the aviation industry must take an environmentally responsible position by not re-allocating any vacated short-haul flight slots. If it does re-allocate these slots, particularly to long-haul, then any environmental benefits from HS2 will be negated.

3. VALUING THE IMPORTANCE OF AREAS OF OUTSTANDING NATURAL BEAUTY AND NATIONAL PARKS AND REDUCING AVIATION'S IMPACT

• Relatively tranquil landscapes such as Areas of Outstanding Natural Beauty (AONB) and National Parks, together with other locally sensitive 'green spaces', are scarce and important resources which should be protected now and in the future. Impact and intrusion of aviation noise can be significant but is not adequately addressed by either Government or aviation policies. In its recent Scoping Document on Developing a Sustainable Framework for UK Aviation, the Department for Transport continued to ignore the important issue of aviation impact on AONBs and National Parks. Impact and intrusion of aviation noise can be significant reducing the environmental and economic value of such land. • Government should be in on-going dialogue on national and regional transport planning infrastructure with relevant bodies, including those such as AONB Conservation Boards, so that 'joined-up' measures are put in place to reduce adverse environmental impact on sensitive areas from all modes of transport.

4. CAPACITY AND CONNECTIVITY

• Proper analysis and impartial modelling based on scientifically proven methodology needs to be carried out to underpin any concept of lack of aviation capacity in not just the SE, but the whole of the UK. Only then can accurate assessment be made of where needs are and from that, what constraints apply and how these might be overcome. • International aviation capacity and connectivity needs to be considered in a more environmentally-sustainable way, not just simply from a UK perspective, but from a world view. • International aviation connectivity is important but it should be driven by need and demand, based upon accurate and scientifically substantiated modelling evidence. • Some elements of the business community comment on lack of international connectivity. The CCG suggests this more accurately refers to lack of regional international connectivity and frustration with the time-consuming and costly need to travel to the SE to travel overseas. • It is essential that 'removing barriers in sectors where there are clear opportunities for growth and where the Government can make a difference' (ref. DfT) is not at the expense or disadvantage of the well-being of the UK's residents, including existing communities, or of the natural and irreplaceable resources of our nation, such as protected or locally strategic landscapes. • Maximising capacity at any airport in the UK must be balanced against the environmental impact, particularly that of noise, of its operations upon the communities and landscapes under its flight paths. It should be recognised that in practice such impact can still be experienced over 20 miles distant. • Regional connectivity throughout the UK and internationally by air is a key issue for overall transport strategy. This does not necessarily need to be London or SE-centred. • The CCG believes that a different non-London or South East centred approach could make a significant contribution. This would not move the noise or emissions impact elsewhere, but provide opportunities to reduce individual carbon footprints, enabling travellers to fly to/from an airport closer to their journey's destination/origin. Transporting people around the UK to London airports (or indeed other airports) for them then to fly overseas increases their carbon footprint, time and use of resources.

5. AVIATION AND NOISE POLLUTION ON COMMUNITIES

• The CCG does not accept that when technological advances, modern equipment, quieter aircraft and efficient operational procedures including airspace management are all brought together intelligently, they cannot, in the 21st century, simultaneously fulfil the twin aims of local and global environmental impact reduction. We do not accept that one has necessarily to be at the expense of the other. • Night noise is a significant issue which is not as yet addressed nationally or adequately by Government or the aviation industry. • Government does recognise night noise from aviation has major impact on overflown residents. However, this recognition is too narrow as controls are not national and vary from the strict regulations in place for Heathrow, Gatwick and Stansted with full 24/7 operations permitted at others. London Luton is the only London airport which is not regulated on night flights. This is an unacceptable anomaly. • The CCG believes the number of people affected by significant levels of aircraft noise has increased over the past 30 years. The aviation industry has grown during that time, as has the UK's population, particularly around cities, near to or where most of the UK's airports are sited. • The concept of an airport noise envelope may lead to airport growth if, due to improved technology or operational procedures, noise output of individual aircraft or the overall airport performance fell. This would not allow for a reduction in airport noise but rather provide for opportunity to expand.

6. CHANGES TO OPERATIONAL PROCEDURES CAN MAKE A REAL AND POSITIVE DIFFERENCE

• Airspace management nationally and internationally should be a key component of Government aviation strategy. • Technological changes are not local, regional or even national considerations. Aviation is a global concern and technological changes need agreement and support at this level. • Changes to operational procedures on take-off and arrival, together with removal or repositioning of restrictive stacking holds, have significant potential to improve the noise environment. • Improved operational procedures and new technology should contribute to better use of existing capacity, but equally of importance, should make a positive contribution to reduction of local environmental impacts, particularly over densely populated areas and those which are sensitive, such as Areas of Outstanding Natural Beauty and National Parks.

Question 1: What should be the objectives of Government policy on aviation?

1. The CCG is challenged to perceive a definitive objective in current Government thinking on aviation. The Group is unable to discern a clear policy which is based upon realistic and sustainable objectives which the nation can afford and which are truly in the whole nation's best interests.

2. To achieve realistic and sustainable objectives, an appropriate balance must be set and implemented between the socio-economic and environmental costs and benefits of aviation. Within this balance, unconstrained growth of aviation is not an option. Nor is it likely to be required in the future with increased take-up of electronic communications, pressure on disposable incomes, increased public awareness of environmental implications and operational costs, including fuel. The priority should be to make UK's airports better, but not bigger, for all, not just for users.

3. A key Government objective should be to facilitate ways of making the UK's airports better for all: users; surrounding and overflown communities; more efficient use of airspace with integrated management and communication internationally; reduction in energy demand from aviation and thus environmental impact/cost; policies, schemes and targets for reducing air, visual and aural pollution on communities and sensitive areas.

4. Technological changes are not simply local, regional or even national considerations. Aviation is a global concern and technological changes need agreement and support at this level.

5. Aviation plays a key role in helping deliver Government's carbon reduction goals. However, Government should not abdicate its own responsibilities towards supporting and facilitating the contribution which the aviation industry is challenged to make.

6. This responsibility should not be restricted to carbon pollution, but extended to reducing aural pollution from aviation. Society has become noisier and busier; rural landscapes are becoming more valuable places where people can experience essential peaceful respite and relaxation. Noise pollution reduction should be a key element of Government and aviation's strategy and environmental targets.

7. Relatively tranquil landscapes such as Areas of Outstanding Natural Beauty (AONB) and National Parks, together with other locally sensitive 'green spaces', are scarce and important resources which should be protected now and in the future. Impact and intrusion of aviation noise can be significant but is not adequately addressed by either Government or aviation policies. The Government continues to ignore the important issue of aviation impact on AONBs and National Parks. Impact and intrusion of aviation noise can be significant with detrimental effect upon communities, visitors and in reducing the environmental and economic value of such land. Tranquillity is a finite resource in our small island.

8. The CCG's considered view is that Government and the aviation industry should work in partnership to identify, address and facilitate reduction of impacts on local environments by aviation, without compromising safety. This is of prime importance in areas such as the Chilterns which are impacted by flights from more than 1 airport.

9. International and regional connectivity throughout the UK by air is a key issue for overall transport strategy. This does not need to be London or SE-centred.

(b) How important is international aviation connectivity to the UK aviation industry? (e) Where does aviation fit in with an overall transport strategy? 1. The focus of question (b) should not be on the importance of such international connectivity to the UK aviation industry but to the UK, its wider business community and residents.

2. Government needs to develop a rigorously researched and planned overall transport strategy of which aviation is part. International aviation connectivity can then be considered more effectively and in a more environmentally-sustainable way not just simply from a UK perspective but from a world view.

3. International aviation connectivity is important but it should be driven by need and demand, based upon accurate and scientifically substantiated modelling evidence. A key issue which CCG considers later in this paper is the weighting of connectivity towards the SE.

4. If the UK's aviation industry becomes largely dependent upon international connectivity, then it becomes even more imperative that a national approach is taken. Government and airlines need to move away from a SE-based approach and think more widely about the passenger base.

5. Transferring passengers using a UK hub do not mind where this is in the UK, providing the flight and transfer time, cost and actual transfer experience is positive. It is the direct, easiest and most cost-effective connection which is the motivator for the passenger and the shortest distance flown which should be the motivator for the air operator. For eg, the USA has many airports where it is possible to transfer onto national or international on-going flights; the UK should be evaluating more broadly and not perceive only one congested airport in the SE as the only option.

6. Relatively tranquil landscapes such as the Chilterns Area of Outstanding Natural Beauty (AONB) are scarce and important resources which should be protected. Intrusion of aviation noise onto relatively tranquil areas can be significant but is not adequately addressed by Government or the Civil Aviation Authority (CAA). This issue is discussed further later.

7. It is a complete nonsense that as one form of transport works to reduce its noise impact upon a community, another different, but noise intrusive, mode is introduced.

8. We give an example of how this anomaly currently manifests: In a consultation (January 2012) on their Environmental Programme, 'Improving Aviation's Sustainability Now and for the Future', the Civil Aviation Authority (CAA) sought to reduce aviation's environmental impact, recognising the value of our AONBs and National Parks. As the TSC has identified, a notional monetary value should be placed on natural capital of this kind. Simultaneously, in another arm of the DfT, plans are under way for a new railway route (HS2) which will adversely and irreversibly impact on the Chilterns AONB, thus increasing the environmental damage and long-term pollution.

9. Therefore, the Government should be in on-going dialogue on national and regional transport planning infrastructure with relevant bodies, including those such as AONB Conservation Boards, so that 'joined-up' measures are put in place to reduce adverse environmental impact on sensitive areas from all modes of transport.

10. Airspace management nationally and internationally should be a key component of Government aviation strategy. This is discussed further in Q2. 6 Question 2: How to make best use of existing airport capacity?

2(a), (b)

1. It is essential that 'removing barriers in sectors where there are clear opportunities for growth and where the Government can make a difference' (ref. DfT) is not at the expense or disadvantage of the well-being of the UK's residents, including existing communities, or of the natural and irreplaceable resources of our nation, such as protected or locally strategic landscapes.

2. Improved operational procedures and new technology should contribute to better use of existing capacity, but equally of importance, should make a positive contribution to reduction of local environmental impacts, particularly over densely populated areas and those which are sensitive, such as Areas of Outstanding Natural Beauty and National Parks.

3. The aviation industry's future strategic policy has a vital role in the nation's infrastructure development. The Government's National Planning Policy Framework (NPPF) appears to indicate a presumption in favour of sustainable development, based on the predicate that expansion equals better and greater progress nationally. The CCG questions whether economic growth and development are mutually exclusive; investing finite resources to improve what is already present may, in these uncertain times, be the wisest and more widely advantageous option, both for the short and longer-term.

4. If London and/or the South-East are not the ultimate destination of long-haul travellers into the 3 main SE airports (i.e. Heathrow, Gatwick, Stansted), why do we need to encourage/facilitate flights into this already congested airspace? A more creative – and potentially environmentally advantageous – approach could be investigation into a shift towards regional long-haul flights so that both leisure and business travellers travel the shortest distance between their destinations.

5. Heathrow and Gatwick Airports' trans-Atlantic long-haul flights overfly a considerable portion of the UK's landmass at the end/start of their journeys, using fuel & adding to the burden of pollution in the air and on overflown land. Many of their passengers may not have London or the SE as their ultimate destination but they have no option but to fly in/out of a SE airport.

6. The CCG believes that a different non-London or South East centred approach could make a significant contribution. This would not move the noise or emissions impact elsewhere, but provide opportunities to reduce individual carbon footprints, enabling travellers to fly from an airport closer to their journey's origin. Transporting people around the UK to London airports (or indeed other airports) for them then to fly overseas increases their carbon footprint, time and use of resources.

7. Regional connectivity by air throughout the UK is a key issue for overall transport strategy. Government identifies that 'UK's connectivity needs will change...in response to global economic and social trends...wants to ensure ..those..needs can be met in an environmentally responsible way'. (ref. DfT Consultation Developing a Sustainable Framework for UK Aviation: Scoping Document 2011).

7 8. The Sustainability Commission (2011) has recommended to Government on transport that: 'policy-makers [should] prioritise reducing demand for transport; encouraging more sustainable modes of transport and improving the efficiency of existing modes of transport over increasing the capacity of the transport system'. (ref: http://www.sd- commission.org.uk/pages/fairness-in-a-car-dependent-society.htm). The Commission further states: [what is needed is] 'more distributed development and local jobs rather than encouraging people to travel longer and longer distances'.

9. The CCG endorses these recommendations. Maximising capacity at any airport in the UK must be balanced against the environmental impact, particularly that of noise, of its operations upon the communities and landscapes under its flight paths. It should be recognised that in practice such impact can still be experienced over 20 miles distant.

10. The question is posed: 'How to improve the passenger experience?' Passenger experience and choice is in practice restricted by the aviation industry itself. Presently, there is a financial incentive for passengers to choose flights at anti-social & night time hours. We suggest that passengers would not choose to travel at these hours unless there was the compelling reason of a cheaper seat. Until this is regulated, airlines will continue marketing in this way, ignoring the greater aural and pollutive impact of flights outside conventional daytime hours (EC. 6.00am-23.00pm).

2(c) How to improve surface access?

1. Improvement of surface access to airports should be planned and delivered within the context of an overall national transport strategy as outlined above. A more creative approach is needed than currently demonstrated where surface routes, regardless of transport mode, frequently run North-South, or for public transport, use London as an interchange, when it is not the passenger's ultimate destination.

Question 3: What are the constraints on increasing the UK's aviation capacity?

1. Before the subject of constraints can be properly evaluated, Government requires scientifically proven and researched evidence that aviation capacity in the UK needs to increase. A diverse range of views exists currently with a premise of the need for increased capacity being driven by the aviation industry itself, hardly an unbiased assessment.

2. Some elements of the business community comment on lack of international connectivity. The CCG suggests this more accurately refers to lack of regional international connectivity and frustration with the time-consuming and costly need to travel to the SE to travel overseas.

3. Proper analysis and impartial modelling based on scientifically proven methodology needs to be carried out to underpin any concept of lack of aviation capacity in not just the SE, but the whole of the UK. Only then can accurate assessment be made of where needs are and from that, what constraints apply and how these might be overcome.

8 (a) Are proposals to manage the impact of aviation on the local environment sufficient particularly in reducing the impact of noise for local residents?

1. No, they are not.

2. Aural pollution is probably the most immediate source of adverse impact on local communities and individuals; airports' Noise Action Plans (NAP) more often concentrate on monitoring rather than pro-active response and implementation of noise-reduction measures.

3. The House of Commons Transport Select Committee's findings from its earlier Inquiry on the Use of Airspace (ref: Findings from House of Commons Transport Select Committee in the Inquiry into the Use of Airspace (July 2009) http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtran/163/163/pdf.3) reported that: 'tranquillity is a key factor in sensitive areas such as National Parks and Areas of Outstanding Natural Beauty. Current guidance appears to allow unchecked increases in aviation activity over these areas. Without some level of constraint, the noise environment in these areas might degrade progressively as traffic increases.'

4. And further that: 'The DfT and the CAA should examine the case for adopting maximum limits on noise levels and the number of aircraft permitted per hour over sensitive areas such as National Parks and Areas of Outstanding Natural Beauty. The DfT should fund exploratory research on evidence-based limits.' The CCG is unaware of any such measures or actions being implemented.

5. Negative impacts on a community will be manifested in diminished health for some residents and their families. This will place a burden upon health and social agencies, funded by Government. It is therefore in the Government's own interests to ensure such negative impact is minimal; their response should facilitate, support and may indeed, drive the aviation industry's own efforts.

6. The CCG's considered view is that Government and the aviation industry should work in partnership to identify, address and facilitate reduction of impacts on local environments by aviation, without compromising safety. This is of prime importance in areas such as the Chilterns which are impacted by flights from more than 1 airport. For example, Government can legislate against night flights; urgently put in place operational procedures which reduce/eliminate stacking; and additionally, those which reduce noise on landing approach or take-off; restrict or prevent low level flights over sensitive areas, including AONBs and National Parks; restrict number of overflown flights during a given time period; place restrictions or legislate against flights operating at anti-social hours at all airports.

7. So far as we are aware, only 3 UK airports (Heathrow, Gatwick, Stansted) have noise regulations controlled by the CAA; this is a matter of some concern. As other airports seek to expand and airspace is managed differently, the CCG would expect the CAA to be pro-active in establishing a regulatory noise role over all the UK's airports. It is unrealistic to expect individual commercial airports to make the same independent value judgements of their environmental impact upon overflown communities. The CAA is, and should be, best placed to fulfil this obligation.

8. The CCG accepts that aircraft generally have become mostly quieter as assessed by manufacturers and operators, but this does not always translate into a quieter experience for those being overflown. More work is needed. 9 9. Without any other change, greater uptake of the quietest aircraft should reduce local noise on take-off/landing including at approach. Operational procedures should reduce this further and fuel saved will not only improve air quality locally, but should contribute to overall global improvement.

10. Intelligent planning of strategic air space around airports so that air traffic controllers (ATC) can, and do, implement the best environmental balance for both aircraft and overflown community should be a priority for both Government and the aviation industry.

11. Certainly the experience of residents in the Chilterns is that they are impacted more often and by more noise in recent years from Heathrow operations than in the past. In the 1970s we would estimate that very few residents in the Chilterns even saw a Heathrow aircraft, let alone heard one. Now it is a daily experience with frequent heavily laden, low-flying aircraft flying directly over the hilly terrain and peaceful market towns of the . Stacking presents an additional problem over the Chilterns and as flights have increased, so has the need for stacking. There is no cause here for complacency – quite simply, the expansion of Heathrow has had a truly negative impact on the Chilterns.

12. Additionally, this pollution has been increased hugely by the expansion of operations at LLA which compound the complexity and challenge of managing this already congested airspace safely. The CCG offers suggestions on operational changes which would help reduce pollution without compromising safety in Appendix B of this paper.

13. In particular, whilst Government identifies the impact of night noise on overflown communities as a significant issue, it is not as yet addressed nationally or adequately by Government or the aviation industry. Night is recognised by the EC as between 23.00pm and 6.00am.

14. When the World Health Organisation (WHO) has for years identified sleep disturbance caused by noise as a significant contributory negative element affecting the individual's health, it is unacceptable that some airports, such as London Luton Airport (LLA), still have no night time flight restrictions. This is even more unacceptable for overflown communities when an airport is pro-actively seeking to expand, as LLA currently are. (ref. http://www.london- luton.co.uk/en/content/8/1171/Masterplan.html)

15. Government recognises the major impact of night noise from aviation on overflown residents. However, this recognition is too narrow as controls are not national and vary from the strict regulations in place for Heathrow, Gatwick and Stansted with full 24/7 operations permitted at for e.g. London Luton. This is unacceptable.

16. Night operations at all UK's airports should have similar restrictions and parameters. The CCG therefore recommends that in addition to consultation on night noise for the 3 major London airports, that an integrated or parallel public consultation also be conducted for all airports in the SE, and in particular for those which have no controls in place currently.

17. The DfT, the aviation industry and NATS should recognise the detrimental impact on silent communities of intermittently scheduled flights throughout the night time period and take pro-active and positive steps to reduce such pollution.

18. Averaging of noise intrusion events gives a monitoring reading which is quite different from that experienced by the overflown resident. 10 19. Quotas are a very poor means of regulating night noise as an airline operator which has performed well and not used its noise quota is able to pass the surplus to another operator, which may well be failing in achieving noise reduction.

20. Currently, for example, residents within a c20 mile radius of LLA suffer from the night time operations (EC hours) of budget and charter flights throughout the year but particularly during the main April-October holiday period. These flights are scheduled by operators throughout the night, together with regular freight aircraft. Such scheduling is not driven by customer demand who, we suggest, would not choose to travel in the middle of the night without a cost incentive to do so.

21. The CCG believes this to be an unfair social balance. A far greater burden is imposed 24/7 upon local residents whose sleep is disturbed intermittently, but significantly, throughout the night, which they cannot choose to avoid, whilst the individual traveller incurs short-term inconvenience at their own choice. As there are currently plans in progress to expand passenger numbers and operations at LLA, the anomaly that this London airport has no night flight restrictions unlike its London counterparts, including London City, should be urgently addressed. A ban over core night hours, or at minimum, a cap to bring LLA in line with other London airports, should be given highest priority by NATS and the CAA.

22. The CCG makes further and detailed comments on noise impact and how this might be reduced in Appendix A of this paper.

23. Light pollution from night time operations is ignored by the aviation industry, its regulators and Government. It is significant and should be included in targets to reduce environmental impact.

24. The CCG believes it is imperative that the CAA and NATS establish an on-going dialogue, not just with the aviation industry, but with environmental bodies and community groups, such as AONB Conservation Boards, to achieve the optimum balance between the UK's aviation operations and their consequent pollution on communities and landscapes.

25. For eg, it has been encouraging that over past months, in response to dialogue with communities in the Chilterns, trials to operational procedures for certain arrivals into LLA have been carried out by NATS, which are intended to reduce local noise impact. The CCG suggests that more opportunities which have potentially positive outcomes for both operator and community should be facilitated soonest.

26. The CCG makes further comments and suggestions relating to the impact of aviation over designated land (AONBs and National Parks) in Appendix C.

(b) How to reduce carbon emissions and manage impact of aviation on climate change? How can aviation be more sustainable?

1. The CCG's responses to Q2 are also relevant.

2. Government has expectations that 'in the longer term, demand for domestic aviation and ...near-European short-haul aviation could be met by high-speed rail'.

11 3. Should the Government's proposed new high-speed railway line (HS2) go ahead and the predicted small modal shift does occur from domestic flights to high speed rail, the aviation industry must take an environmentally responsible position by not re-allocating any vacated short-haul flight slots to long-haul. If it does re-allocate these slots, then if there are any environmental benefits from HS2, these will be negated.

4. The CCG notes that Government recognises the significant effects on health of poor air quality and is taking some steps in working with relevant other parties to monitor and improve this. Achieving compliance with legally binding European standards for ambient levels of pollutants thought to be harmful to human health and the natural environment must be an absolute priority.

5. During the period in April 2010, when UK airspace closed due to volcanic ash from Iceland entering the atmosphere, researchers gathered data on pollutants around Heathrow. They reported that: 'This period of unprecedented closure during unexceptional weather conditions has allowed us to demonstrate that the airports do have a clear measurable effect on NO2 concentrations and that this effect dropped almost to zero during the period of closure, leading to a temporary but significant fall in pollutant concentrations adjacent to the airport perimeters.' These findings should not be ignored in targeting emission reduction. (ref: Preliminary analysis of the impact of airport closures due to the 2010 Eyjafallajokull volcanic eruptions on local air quality: Barratt, B. and Fuller, G.W. 01/05/2010 London Air Quality Network.)

6. There is extensive scope to influence people and industry to make choices aimed at reducing climate change impact from aviation. The CCG suggests, as a start, wider consumer education on the increased environmental impact of night flights and the minimisation of price incentives to choose these over daytime flights – these are industry, not consumer led.

7. Research in 2006 (ref: http://www.leeds.ac.uk/news/artile/517/cutting_night) showed that whilst only 1 in 4 flights over the UK were at night, they accounted for at least 60% of the climate warming associated with aircraft condensation trails (contrails). As not all UK airports are restricted on night flights, this figure could have risen in the 5 years since the data was originally published. Consequently, greater incentives for air operators to reduce or eliminate night flights could lead not only to less noise pollution for overflown communities, but a wider environmental benefit also.

8. It is encouraging that in 2010, British Airways, NATS and BAA collaborated successfully to operate the UK's 'first perfect flight between Heathrow and Edinburgh.' This was 'the most fuel efficient through efficient ground taxiing, aircraft climb and descent and optimal flight profile ...saving 350kg of fuel and a tonne of CO2 [total of 10%] compared to a normal flight on the same route'. (ref: http://anil-padhra.suite101.com/air-traffic-control-)

9. Aviation professionals identify that better flight management as above which involve air traffic controllers has potential to reduce aviation emissions by 5-8%. Having demonstrated it can be done, these improvements can now be integrated targets in airports' Master Action Plans for carbon emission reduction. Government could help to progress this more rapidly.

10. Stacking wastes fuel and increases carbon emissions. he location of stacking 'holds' such as the Bovingdon Hold for Heathrow arrivals places restrictions, which would otherwise be unnecessary, upon operations of neighbouring airports, such as LLA. These cause greater noise/air pollution on communities which, without the Hold's requirements, might not occur. The CCG discusses the question of stacking holds further in Appendix B. 12

Question 4: Do we need a step-change in UK aviation capacity?

1. The Group's responses to earlier questions are relevant to Q4.

2. The CCG believes that taking a whole UK approach has potentially greater benefits, than concentrating simply on the SE.

3. The CCG remains firmly opposed to any expansion of operations at Heathrow airport. We give some of our reasons earlier in this paper.

4. Neither do we find that Heathrow currently makes an appropriate level of response to minimise its present operational impact, especially in tranquil areas as the Chilterns and other significant green spaces, such as Kew Gardens. (ref. CCG response to Heathrow Noise Action Plan Consultation 2009)

5. Therefore we have no reason to be confident that any expansion will bring anything less than greater pollution and adverse environmental impact on overflown communities and landscapes.

19 October 2012

APPENDICES A, B and C

The CCG includes the following Appendices which formed part of the Group's response to the CAA Consultation on 'CAA and the Environment: Improving Aviation's Sustainability now and for the future' April 2012 and the DfT's Consultation on 'Developing a Sustainable Framework for UK aviation Scoping Document' October 2011. We find they are relevant to the aims and outcomes of this Inquiry and ask that they be considered fully in its analysis and eventual outcomes.

APPENDIX A: NOISE Response to specific issues on noise

The Scoping Document concentrates its considerations to the areas around airports and directs the Government’s response to the problem to the requirements of the Environment Noise Directive. These are limited to the major airports (greater than 50K annual movements) and the requirement for the production of noise action plans. (1) Great emphasis is put throughout this section on the need for local participation on the setting up and agreement to these noise action plans. The concept of setting a ‘Noise Envelope’ around the major airports is mooted with a view to defining an area within a limiting noise area. Aviation growth up to this limit would be permitted. This sounds very similar to the limit on Heathrow noise set by the various Public Inquiries that the area within the 57 dB(A) Leq,daytime not be increased. Further detailed questions need to be answered before such a concept can be properly considered. • What metric or methodology would be used to define the envelope • Would the bounds of the envelope exceed the present noise limits (e.g. the 57 dB contour at Heathrow) • What constraints would be placed upon the airport to maintain the envelope. • What sanctions would be available to prevent breaking of the envelope (2) One aspect of the airport envelope concept would be that as technology or operational procedure improved the noise output of the individual aircraft or the overall airport performance then airport growth would be permitted. Such a concept would not allow for a reduction in airport noise but would seem to be designed to consign an area to continued noise pollution without any intention to provide overall mitigation. (3) Night noise is accepted as being a major environmental issue and one that causes significant environmental problems. A respite period is suggested during the night but warning is given that this would probably mean an increase in movements either side of this period. This has no real difference from the current night flying restrictions that are currently in place. (4) The Government has issued air navigation guidance to NATS to seek to concentrate routes so as to avoid overflying populated areas as much as possible. This approach completely misses the point that such routes will thus fly over the quietest areas and thus have the most impact over the low ambient levels. Noise from down the route operations and from stacking procedures will continue to have significant impact and this problem is not addressed in the document. (5) The document places some weight upon improved technology reducing the problem of aircraft noise. However, noise reducing technology may be at odds with other environmental concerns. One example is the open rotor technology that offers significant fuel advantage will increase the down the line noise of overflying aircraft. Technological changes are not a local, regional or even national consideration. Aviation is a global concern and technological change needs agreement and support at this level. 14

Changes are very slow in being implemented. The planned reduction in aircraft noise set out by ICAO by 2020 has shown that technological changes cannot reach the targets. It is operational change that must be implemented. Low energy approach, continuous descent, total route planning from ‘Gate to Gate’ are some of the changes that must be made. (6) As environmental expectations increase the extent of ‘local impacts’ increase. Noise is not confined to the areas immediately around and airport but is being considered as a regional issue. In this regard much more control must be taken over noise emissions with strong government representations at international level for the early implementation of lower noise aircraft and operational procedures. Local planning control over development close to airports and a system of measurement and assessment of noise that includes night time noise levels should be activated. (7) Noise contour maps may give an inaccurate indication of the level of noise actually experienced on the ground. (8) Such airport master plans are useful in concentrating the minds of airport operators. They could be made more effective by giving local communities additional powers of control over the content of these plans. This would give scope for further discussion; certain actions should be vetoed if not considered to be effective or extensive enough. (9) This concept appears to be very similar to the current Heathrow restrictions. The removal of Concorde from the airport fleet allowed the increase of movements that arose through growth while still maintaining the area of the 57 dB contour. Some control on the extent of noise exposure at airports is obviously needed. However the establishment of a noise ghetto without an inbuilt plan to reduce its extent over time is not a good idea. (10) It is better to minimise the number of people affected by noise by reducing the level of noise exposure of the overflown population. This is a huge question and not one capable of a simple answer. Route planning for overall noise adverse effect reduction must include consideration of background level, stability of the route plan, etc. not merely a simple population count. (11) NPR place heavy burden of impact on overflown population and if/as routes change, this impacts on different communities who may previously have been unaffected. It is an unfair socio-economic balance to impose maximum noise impacts on the same few communities, whilst many from different communities use the facility causing the problem. (12) However, whilst spreading the noise may give welcome relief for some, the impact is simply transferred, not lessened or withdrawn. Government and the aviation industry should be seeking to reduce or eliminate total noise impact not simply move it around. (13) Over-flying relatively tranquil areas at low levels will cause greater impact than over already noisy areas, but that does not justify increasing those noise levels, which may then become intolerable. This would be particularly true for areas of high daytime noise, which then also became affected by noise from night flights. (14) No flying at night, arrival or departure, should be allowed for any aircraft not fitted with the latest noise control technology. There should be no movement of freight aircraft at night. Aircraft which fall into either or both of these categories should not fly between the hours of 23:00 to 07:00. Additionally no aircraft should be held in any stacking area between the hours of 22:30 and 06:30. These measures would ensure that only the quietest aircraft operated at unsocial hours and delays on arrival at the airport area are prevented by proper on-route planning.

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APPENDIX B: Proposals for changes in aviation operational procedures to reduce environmental impact

(1) For most people the greatest environmental impact of aviation is noise from aircraft departing and arriving at airports particularly within approximately 20 miles of an airport. Some alleviation can be achieved by the use of ‘optimum’ routes in and out of airports called ‘noise preferential routes’; these can help but do not solve the problem because the noise is merely moved laterally elsewhere. (2) Significant improvements in the noise environment can however, be gained by adjusting the vertical profiles of departing and arriving aircraft. The perceived noise at ground level reduces markedly as aircraft altitude ( height above mean sea level ) increases so that in most circumstances aircraft flying above about seven thousand feet are barely heard at ground level. The sooner departing aircraft can reach this altitude and the longer arriving aircraft can maintain at or above this altitude then the better is the noise environment at ground level. How can this be achieved? (3) It is common practice for commercial aircraft to use less than full engine power for take- off and to employ a technique called a ‘reduced power take-off’ so that, depending on ambient conditions, only sufficient power is applied to achieve a required, safe climb gradient. This is a safe and perfectly legal procedure and there are commercial advantages for operators in the use of less than full power but it does mean that aircraft do not achieve the best rate of climb of which they are capable. (4) A compromise power setting, at say, somewhere between the ‘reduced power’ setting and full power would enable aircraft to achieve a steeper initial climb gradient than at present. Reaching seven thousand feet sooner would significantly reduce the noise footprint. Such procedures, if adopted, would not be popular with the airlines because they would incur higher operating costs as a result, but they could be very beneficial in relation to noise footprints. They would almost certainly need to be mandated by the aviation regulatory authorities. (5) Steep and continuous aircraft climb profiles are sometimes currently impeded by the local air traffic control (ATC) environment when for instance, crossing tracks or holding patterns require departing aircraft to stop their climb early to achieve safe separation with other traffic. A review of the ATC procedures and airspace organisation at specific locations where such conflicts currently exist could greatly improve the noise footprint by allowing aircraft to climb quickly without hindrance. (6) A good example of this situation has been highlighted by CCG in a previous consultation (TCN 2008) in relation to aircraft departing westwards from Luton Airport and routing over the Chiltern Hills and below the Bovingdon (BNN) holding stack. (7) The minimum altitude in the BNN holding pattern is seven thousand feet. Northbound departures from Heathrow (LHR) and Northolt also route underneath the BNN hold but because ATC require a minimum vertical separation of one thousand feet between conflicting aircraft their climb is restricted to six thousand feet altitude. In practice heavy, trans-Atlantic departures from LHR, which may also have used reduced power for take- off, can often only climb to five thousand feet by the time they reach BNN. Westerly departures from Luton are thus required to stay even lower at four thousand feet until they are some twenty miles from the airport and have crossed the Chiltern Hills which rise to nearly one thousand feet altitude. (8) In this instance removal or repositioning of the BNN hold and slight re-routing of LHR/Northolt departures would facilitate unimpeded climbs by Luton westerly departures.

16

(9) For arriving aircraft, the optimum type of final approach is a constant descent approach from about four to five thousand feet and approximately 10 to 15 miles out from the runway; this results in low engine power settings, reduced fuel consumption and reduced noise. Although it is the flight crew who actually fly such approaches they can only be achieved with the active involvement of ATC controllers who vector aircraft from the airway system towards the airport and decide on its vertical profile. (10) However, in the modern ATC organisation such ‘area’ controllers are usually located at a remote central control centre rather than at or near a particular airport and thus may have little knowledge of local topography and noise sensitive areas. Moreover, when there is little ATC activity, controllers often give arriving aircraft early descent and direct routings to the final approach point because this can save time and fuel. (11) While this may suit airline operators the downside of these procedures is that populated areas can be subjected to higher than normal noise levels by overflying aircraft. Some visual indication on their radar scopes of the location of centres of population near particular airports would enable controllers to prevent this happening by vectoring aircraft away from them prior to final approach and descent. If implemented such procedures could significantly reduce the noise footprint in the vicinity of airports, particularly at night.

17 APPENDIX C: Impact of aviation on designated land (Areas of Outstanding Natural Beauty and National Parks

Low Over-flight of Designated land

i. Sustainable aviation is one of the Department for Transport’s (DfT) Business Plan priorities, not only in terms of carbon but also in terms of local environmental impacts, particularly noise (ref. Sustainable Framework for Aviation Scoping Document Oct. 2011, 1.10). The Aviation Scoping document told us that the previous government gave insufficient weight to the local impact of aviation in The Future of Air Transport White Paper, 2003 (ref. Ibid 1.14). In contrast the Coalition government’s Scoping document stated that reducing global and local environmental impacts is “The key challenge for the aviation sector now” (ref. Ibid 2.1). ii. The CCG welcomes the rightful concerns of the DfT for the impact of aircraft noise on the environment. This is necessary and commendable and reducing aviation impact should be a priority. However, the CCG remains concerned that the current plans by the DfT/HS2 Ltd to build a new high-speed railway line (HS2) through the heart of the Chilterns gives insufficient weight to the special and protected status of the Chilterns AONB. HS2 may well minimise any positive effect which air operators may try to achieve. iii. It is not acceptable to take a position that if noise is present, a little more will not matter. In today's society, we all have a responsibility to preserve environments which are national assets from which many may benefit.

Over flight of Areas of Outstanding Natural Beauty and National Parks

i. The CCG was set up four years ago when low over-flight for many miles was planned over the Chilterns AONB - threatening the AONB’s tranquillity. ii. The CCG recognises the importance of the aviation sector to the UK economy. However, it also welcomes the Coalition government’s stance on the need to place sufficient weight on local impacts. Conserving the tranquillity of AONBs and National Parks should be considered among those impacts. iii. The CCG notes that nationally designated land does not appear to be mentioned in either the Consultation document: CAA and the Environment Improving Aviation’s Sustainability Now and For the Future, or in the CAA’s Insight Note 2: Aviation Policy for the Environment. This is surprising considering: AONBs and National Parks are nationally-important designated lands; the government’s stance on reducing the local impacts of aviation as a priority; the government’s indication of its renewed commitment to protecting AONBs and National Parks in included in the National Planning Policy Framework.

The Civil Aviation Authority’s Duty towards AONBs

i. The Countryside and Rights of Ways Act 2000 s85 is concerned with conserving and enhancing AONB landscape. Section 85 of the act states “in exercising or performing any functions in relation to, or so as to affect, land in an area of outstanding natural beauty, a relevant authority shall have regard to the purpose of conserving and enhancing the natural beauty of the area of outstanding natural beauty.” The Civil Aviation Authority (CAA) – and thus NATS – are amongst those specifically listed as relevant authorities (Schedule 1 Part II Section 14e).

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Statutory Designation Criteria of AONBs and National Parks

i. In considering the local impact of aviation on designated land it is important to consider the method used for assessing land for designation as AONBs and National Parks: the land must meet the Statutory Designation Criteria set out in Appendix 1 of Natural England’s Guidance for Assessing Landscapes for Designation as National Park or AONB in England. (ref. http://www.naturalengland.org.uk/Images/B1DesignationGuidanceMar11_tcm6-26242.pdf ) This is embedded in the following laws: National Parks and Access to the Countryside Act (1949 s5) (for National Parks) and the Countryside and Rights (2000 s82) (for AONBs). ii. Of the Statutory Designation Criteria, a sense of relative wildness is given as an important factor in assessing land for designation as AONBs and National Parks where a sense of remoteness and a sense of a relative lack of human influence are given as important sub- factors. iii. Relative tranquillity is also given as an important factor in assessing land for designation as AONBs and National Parks where presence and/or perceptions of birdsong, peace and quiet, and natural sounds are given amongst the contributors to tranquillity, and low-flying aircraft is given amongst the detractors from tranquillity. Given this, low over-flight over an AONB or National Park diminishes the value of the relative wildness and relative tranquillity factors of affected land. Put simply, the reason for the affected land’s original designation is greatly reduced. iv. Please note that National Park and AONB landscapes are of equal value but are designated as a result of differences in size, scale and aims (National Association of AONBs) (ref. http://www.aonb.org.uk/wba/NAAONB/naaonbpreview.nsf/Web%20Default%20Frameset?Op enFrameSet&Frame=Main&Src=%2F__80256cd200319c8e.nsf%2FPublishedContent%2F823f 5de80ad3429580256cc2007292cc!OpenDocument%26AutoFramed )

Purposes of an AONB and Tourism

i. AONB status protects the finest examples that remain of small-scale landscapes in England and Wales (National Association of AONBs) (ref. http://www.aonb.org.uk/wba/NAAONB/naaonbpreview.nsf/Web%20Default%20Frameset?Op enFrameSet&Frame=Main&Src=%2F__80256cd200319c8e.nsf%2FPublishedContent%2F823f 5de80ad3429580256cc2007292cc!OpenDocument%26AutoFramed ) ii. The purposes of AONBs are laid down in the Countryside and Rights of Way Act (2000 s87). The primary purpose of an AONB is to conserve and enhance the natural beauty of the landscape. The secondary purpose of an AONB is to meet the need for quiet enjoyment of the countryside. These purposes jointly foster tourism as a function of AONBs. iii. A further secondary purpose is to have regard for those who live and work in the AONB.

Low Over-flight of Designated Land Impacts on Tourism

i. Low over-flight reduces the amenity value of designated land in terms of tourism. Tranquillity and wildness are reasons why tourists should seek out AONBs and National Parks for daytrips and holidays. Clearly, low over-flight strongly detracts from the attraction of designated lands. ii. The Countryside and Rights of Way Act (2000 s87) charges Conservation Boards with promoting the understanding and enjoyment of AONBs. The Boards’ Management Plans are embedded in the Countryside and Rights of Way Act (2000 s89). The Chilterns Conservation Board Management Plan, for example, contains many references to providing land where quiet leisure pursuits can be enjoyed or peace and quiet can be sought as an interlude or temporary respite from urban life (ref. http://www.chilternsaonb.org/downloads/management_plan/Understanding_and_enjoyment.p df ) 19 Designing Flight Paths over Designated Land

i. In preparing guidance to those who design flight paths it is important to recognise that the economic and environmental value of designated land is gained through maintaining its tranquillity. ii. Development is restricted in designated land: AONBs and National Parks are designated as such because of their landscape qualities - these would not exist if there were many houses on such lands; PPS 7 paragraphs 21 and 22 prevent major development in designated land other than in exceptional circumstances; Green Belt and AONBs are often contiguous around London and other major cities - development is restricted in Green Belt. iii. Those designing flight paths should not interpret the sparse population of AONBs and National Parks to mean that such land is therefore a good place to put low flying aircraft. As noted, this would considerably reduce the ability of designated land to serve the purpose for which it has been set up – a nationally-important facility offering relative wildness and relative tranquillity. Such air-traffic design decisions affect the proper functioning of AONBs and National Parks.

Guidance to the Civil Aviation Authority on Environmental Objectives Relating to the Exercise of its Air Navigation Functions

i. The Guidance to the CAA on Environmental Objectives is embedded in s 70(2) (d) of the Transport Act 2000. The CCG values paragraphs 45 and 46 of the Guidance to the Civil Aviation Authority on Environmental Objectives Relating to the Exercise of its Air Navigation Functions – but see below. (ref: http://www.caa.co.uk/docs/7/DTLREnvironmentalGuidance.pdf ii. The CCG recognises that airspace can be very congested. However, it would like to see greater observance of the recommended altitude for over flight of AONBs that is given in the Guidance on Environmental Objectives: minimising flying below 7,000 feet where possible (paragraph 45).

Guidance on Low Over-flying of High Terrain

i. The Guidance to the Civil Aviation Authority on Environmental Objectives Relating to the Exercise of its Air Navigation Functions does not appear to give any guidance to those designing flight paths that the height of terrain should be taken into account. ii. In 2008 a flight path was designed from London Luton Airport so that aircraft could fly SE at 2,300-2,400 feet agl for many miles over half the length of the Chilterns Hills. This experience shows that consideration should be given to amending the Guidance on Environmental Objectives to include the suggestion that the height of the terrain should be taken into account. In this context it is worth noting that nearly all AONBs and National Parks are formed from raised terrain – hills, plateaux and mountains. iii. The CCG therefore suggest that serious consideration should be made to incorporating taking the height of terrain into account for environmental reasons when designing low-altitude flight-paths in the Guidance to the CAA on Environmental Objectives Relating to the Exercise of its Air Navigation Functions.

20

Clarification Required

i. Paragraph 45 of the Guidance to the Civil Aviation Authority on Environmental Objectives Relating to the Exercise of its Air Navigation Functions states "Government policy will continue to focus on minimising over-flight of more densely populated areas below 7,000 feet. However, where it is possible to avoid over-flight of National Parks and AONBs below this altitude without adding to the environmental burdens on more densely populated areas, it clearly makes sense to do so." ii. Experience has shown that this wording is not clear (ref: http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtran/163/163we11.htm Transport Select Committee Inquiry – Use of Airspace July 2009 Memorandum from Marilyn Fletcher B.Sc. Ph.D. AIR 10 Part 4) “More densely populated” can be interpreted to mean either: “congested” – the word used in the next paragraph (paragraph 46); or in the comparative sense of "more densely populated" to mean that flight paths should be sited so aircraft over-fly wherever fewer people live - as occurred when airspace over the Chilterns was being designed in 2008. iii. The inevitable result of pursuing the policy of over-flying less densely populated areas interpreted in the comparative sense is that as airspace is increasingly utilised, flight paths would eventually become clustered over National Parks and AONBs. This is clearly not what the government intends. iv. The CCG suggests that clarification of paragraph 45 of the Guidance to the CAA on Environmental Objectives Relating to the Exercise of its Air Navigation Functions is made by replacing the words “more densely populated” with “congested” (as is used in paragraph 46).

CAP 725 - The CAA’s guidance on the Application of the Airspace Change Process

i. The CCG does not believe that CAP 725 (Appendix B Section 8 page 27) (ref http://www.caa.co.uk/docs/33/CAP725.PDF) is an adequate reflection of paragraphs 45 and 46 of the Guidance to the Civil Aviation Authority on Environmental Objectives Relating to the Exercise of its Air Navigation Functions. ii. CAP 725 does not state that Government policy includes minimising flight below 7,000 feet over AONBs and National Parks (without adding to the burdens on more densely populated areas). This is despite the DfT’s Guidance on Environmental Objectives clearly stating this is Government policy (paragraph 45). iii. The only instance when CAP 725 discusses AONBs and National Parks – as far as we are aware - is to say that over-flight of such land is not precluded (CAP 725 Appendix B paragraph 120). This is by no means an adequate or full representation of the DfT’s Guidance on Environmental Objectives of over-flight over designated land. iv. In the context of tranquillity CAP725 says it is difficult to measure, apparently complicated and insufficiently researched (Appendix B paragraph 120). It concludes that no formal guidance on tranquillity can be issued to those designing flight paths. Why? With regard to low flying aircraft the subject of tranquillity would appear to be fairly simple: noise from aircraft can be measured; low-flying aircraft are visual detractors from tranquillity in the statutory document: Guidance for Assessing Landscapes for Designation as National Park or AONB in England (Appendix 1).

21

References: Guidance for Assessing Landscapes for Designation as National Park or AONB in England – Appendix 1 http://www.naturalengland.org.uk/Images/B1DesignationGuidanceMar11_tcm6-26242.pdf

National Association of AONBs http://www.aonb.org.uk/wba/NAAONB/naaonbpreview.nsf/Web%20Default%20Frameset?OpenFram eSet&Frame=Main&Src=%2F__80256cd200319c8e.nsf%2FPublishedContent%2F823f5de80ad34295 80256cc2007292cc!OpenDocument%26AutoFramed

The Chilterns Conservation Board Management Plan – Understanding and Enjoyment http://www.chilternsaonb.org/downloads/management_plan/Understanding_and_enjoyment.pdf

Guidance to the Civil Aviation Authority on Environmental Objectives Relating to the Exercise of its Air Navigation Functions http://www.caa.co.uk/docs/7/DTLREnvironmentalGuidance.pdf

Transport Select Committee Inquiry – Use of Airspace July 2009 Memorandum from Marilyn Fletcher B.Sc. Ph.D. AIR 10 Part 3) http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtran/163/163we11.htm

CAP 725 (Appendix B Section 8 page 27) http://www.caa.co.uk/docs/33/CAP725.PDF

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Professional background information:

Dr. Marilyn M. Fletcher B.Sc. Ph.D. Dr Fletcher is a Biology researcher and a graduate of the University of Sheffield. After qualifying for her Ph.D. at the University of London, Dr Fletcher lectured to under-graduates at the university for 15 years. She also supervised post-graduate students for Ph.D. and has published papers in biology and histology. She is now an independent researcher specialising in the environment and sustainability.

Prof. Colin Waters B.Sc(Eng) MSc C Eng MRAeS FIOA Prof. Waters is Principal of Colin Waters Acoustics and has professional consulting experience in this field for over 40 years. He has been a Director of Ove Arup and Partners Ltd with responsibility for environmental acoustics of that firm. He has carried out and directed major infrastructure environmental acoustics projects in both the national and international field. Prof. Waters has advised the Chinese Civil Aviation Authority on associated airport noise problems and their assessment. He is Visiting Professor of Airport Environmental Acoustics at Manchester Metropolitan University.

Captain Gwyn Williams Capt. Gwyn Williams has 40 years experience in aviation both as a military and civil pilot. A graduate of the RAF College, Cranwell, he trained as a fast-jet pilot and saw active service in the Middle East and an operational exchange tour in North America in the air defence roll. He qualified as a flying instructor and subsequently commanded the Advanced Flying Squadron of the RAF Central Flying School training instructors. His final posting was to the MoD Inspectorate of Flight Safety. After gaining a civilian Airline Pilot Licence, Capt. Williams acted as a pilot instructor and examiner, flew business jets and then schedule and charter flights with several airlines operating B757, B777 aircraft and Concorde for its last 10 years in service. As a Flight Operations and Training Inspector for the Civil Aviation Authority he was responsible for the monitoring of a number of major UK airlines; for the testing and approval of flight simulators and for the training of the airlines' own training captains.

23

Written evidence from The Authorities' Aircraft Noise Council (LAANC) (AS 83)

LAANC is an umbrella local authority organisation which represents the interests of two dozen Local Councils comprising Boroughs, Unitary Boroughs, , County and Parish Councils serving a wide area around Heathrow Airport.

The Constitution of LAANC covers environmental issues as well as aircraft noise and represents a very large community many of whom have direct contacts with Heathrow.

The main points that LAANC wishes to make to the committee are summarised below. Detailed responses to the committee’s questions are attached as appendices.

Main Points: It should be acknowledged that the provision of capacity cannot (within the current UK aviation regulatory framework) be guaranteed to produce increased connectivity for UK plc. This is especially the case at Heathrow. In LAANC’s view the Government need to identify if further regulatory powers need to be taken (for example, reintroducing some form of Traffic Distribution Rules) to ensure that government can play a part in maintaining connectivity. The choice of where planes fly to currently is made by neither the airport owner nor the Government. It is made by the airlines who naturally prioritise the more profitable routes.

LAANC believes that the key issues for the Government in developing future policy are the requirements for runway capacity and the case for connectivity. In respect of Heathrow it has suited the Heathrow owner to conflate the two issues. It suits Heathrow’s business model to claim that additional capacity is best located at their airport – as opposed to those of rival owners – for example Gatwick or Birmingham. It also suits the operator to claim that the UK economy requires additional hub capacity and that that too can be located at Heathrow. Yet as the Mayor of London has shown there are other potential sites for a hub airport in the South East which would not be constrained in the same way as Heathrow which is set in the most densely populated part of the country.

The current DfT Aviation Framework consultation document confirms that London is already one of the best connected cities in the world and has adequate supply of airport and runway capacity for the short to medium term (up to 2030). The capital has five airports (Heathrow, Gatwick, Stansted, Luton and London City) which together serve more routes than any other European city. There are other “near London” airports, currently under used (e.g Ashford and Manston) which have adequate runway length to contribute to the London airport system. Overall the

United Kingdom position is very strong the UK being directly connected to more than 360 international destinations. Using available airline seat kilometres as a connectivity metric, only the Chinese and US aviation networks are more extensive than the UK.

LAANC urges the government to take action to ensure that aviation forms part of an overall UK strategic national integrated transport infrastructure framework that encompasses airports, roads and rail, including any potential high speed rail. It is difficult to see how the decision already taken for a preferred high speed rail route with a spur to Heathrow can be taken forward at this stage when the decision on where any future aviation hub might be will not be taken before 2015 at the earliest.

Airports cannot be allowed to have increased capacity at any cost. There must be sufficient weight given to complying with relevant European environmental legislation on issues such as local air quality and ensuring the avoidance of significant adverse noise impacts in order to protect the health and well being of local communities. UK policy on aircraft noise is currently to ‘limit and, where possible, reduce the number of people in the UK significantly affected by aircraft noise.’ Successive governments have used the 57LAeq decibel contour as a benchmark for identifying onset of significant community annoyance. This covers an area of 106 square kilometres and a population of 224,500 where people live. The Government now admits that community response to aircraft noise has changed over the last 30 years and that this 57LAeq contour is out of calibration. It also concedes that the failure to update social surveys and community response data since the 1985 ANIS and in particular the failure of the ANASE study has led to a breakdown of trust with communities affected by aircraft noise – particularly when the headline results of the ANASE study have been shown to be in line with other independent studies in Europe..

UK aircraft noise policy needs to acknowledge the impact of aircraft noise on people’s health and wellbeing. The noise climate around Heathrow is simply too noisy already for too many people, the Aviation Framework Consultation document admits that Heathrow has a significantly greater noise impact per flight than any other major European airport. However even this admission does not adequately describe the disruption to sleep from being awakened by the first arrival of the day at 4.30am for example or the constant passage of flights overhead during the day at 90 second intervals. The current noise metrics also are unable to recognise the value of predictable periods of respite during the day

A more accurate measure of community exposure to aircraft noise must be adopted as soon as possible, including recognition that the frequency of flights is an important aspect rather than just the noise of an individual flight.

LAANC supports the government’s s proposals to extend fifth freedoms, review the current runway slots mechanism and access to other UK airports. LAANC believes all of theses measures will be helpful in incentivising the best use of regional airports, which in turn provide the opportunity for relieving the pressure at congested south east airports.

LAANC supports the Mayor of London’s proposal that runway utilisation at any of the London airports should be at no more than 75% in order to avoid congestion on the ground, congestion in the air and to improve the passenger experience in terms of the airport’s ability to recover from disruption.

Currently it seems there is no overall agreement within the airlines about how much or where extra runway capacity is needed. Before any decisions are made on the provision of extra capacity or whether the hub model is the correct operating model for increasing capacity and maintaining connectivity, the impacts of various changes should be appropriately taken into account including new technologies such as video-conferencing; substitution of short haul for rail trips; increasing oil prices; constraints in terms of reducing climate change emissions; and the impact of new generation aircraft, such as the Boeing 787 which will have the ability to fly longer distances.

An international hub needs to be situated where there is sufficient land to facilitate its function as a hub. LAANC believes that on environmental grounds alone Heathrow should be excluded from the review of airport capacity which is to be undertaken by the Davies Commission. There are equally strong operational reasons why a new expanded hub airport could not be sited at Heathrow. The Mayor of London has estimated that based on forecast growth a third runway would be full by 2030. The hub airport model has an insatiable demand for additional runway and terminal capacity. The many connecting flights which feed the long haul routes all need to arrive within a narrow time frame if passengers are not to be left waiting for hours for their transfer flight. Successful hub airports make sure they have additional runway capacity to cope with these ‘waves’ of arrivals. It is why three runways will never be enough at Heathrow.

Comparisons with key competitors are always made to support Heathrow’s case for expansion – but the nearest, Charles de Gaulle, has four runways (and is located away from the capital), Frankfurt has four runways and Schiphol has six. There are simply no circumstances in which a four-runway Heathrow would ever be acceptable. It would give rise to a host of new flight paths over residential areas on all sides of the airport and in so doing unreasonably impact upon new communities not currently affected by aircraft noise.

Key recommendation LAANC would ask the Committee to recognise that a third short runway at Heathrow is not likely to be sufficient in the long term and there will inevitably be pressure for a 4th runway. There is insufficient land for Heathrow Airport to expand to meet the long term requirements of a hub airport. To attempt to propose airport expansion in such an already congested location, with the devastating impacts arising from the demolition of homes and the loss of communities and the unacceptable levels of noise and air pollution that this would be bring to large areas of London, is not rational in any future aviation policy.

20 October 2012

Appendix 1 - Aircraft Noise Dose Response Data

Introduction

This paper presents evidence that there is a useful correlation between the aircraft noise annoyance studies reported in a recent European Environment Agency (EEA) report and the UK Government's ANASE study. Both sets of studies have found a significant shift in that aircraft noise now causes annoyance at lower levels than it did previously. The significance of this, in relation to the current framework scoping consultation, is that it provides some support for the use of the ANASE findings in the development of future aviation policy. This is important, as without this support, the ANASE findings have been set aside. However, until the ANASE issue can be resolved, the conclusion is that the EEA findings should be accepted for the development of future aviation policy, in relation to annoyance. There remains an important caveat to this, in that the EEA evidence itself needs to be improved by including the significance of flight numbers in any noise annoyance assessment. Only once this is resolved can the question of acceptable aviation capacity be addressed fully. So, in spite of the various study deficiencies, the message remains clear, that aircraft noise now causes annoyance at lower levels than it did previously, and this issue must be addressed in any future aviation policy.

EU and UK models for aircraft annoyance

The recent European Environment Agency report [1] is a good practice guide intended to assist policy makers and competent authorities in understanding and fulfilling the requirements of Directive 2002/49/EC [2], commonly referred to as the Environmental Noise Directive, relating to the assessment and management of environmental noise. It summarises the latest European view on issues such as exposure-response relationships and thresholds for health endpoints (annoyance, sleep disturbance, cardiovascular effects and cognitive impairment). Individual annoyance relationships with the noise metric Lden are given for road, rail and aircraft noise.

The EEA report gives a previously used European aircraft noise annoyance relationship based on studies carried out prior to 1990. This is the same relationship as given in the 2002 EU Position Paper [3]. The relationship gives an estimate of the percentage of persons highly annoyed at a given Lden noise exposure.

The EEA report mentions studies showing a trend change in annoyance around 1990, and gives an updated European annoyance relationship based on aircraft noise studies carried out after 1990. These were all European studies (Switzerland, Germany, Netherlands) regarded as more appropriate for the EU than the pre-1990 studies, which were mainly carried out in the USA and Australia.

Figure 1 gives the results for the pre-1990 and post-1990 studies in terms of percentage highly annoyed in relation to Lden. It can be seen that levels of annoyance at a given noise level are much higher for the post-1990 studies than for the pre-1990 studies. The analysis given in Figure 1 is confined to the range of noise levels in the ANASE study (40.9 to 64.2 dB LAeq,16h).

Figure 1: Comparison of EU and UK aircraft noise annoyance models

80

70

60

50

40 %HA

30

20

10

0 43 48 53 Lden (dB) 58 63 %HA EEA post-1990 %HA EEA pre-1990 %HA ANASE-derived trend points %HA ANASE-derived %HA CAP725 HA = “Highly annoyed”

At 59 dB Lden, for example, the relationship adopted for the pre-1990 studies in Figure 1 gives 16% highly annoyed. In the case of the post-1990 studies, the relationship adopted gives the same percentage highly annoyed at around 49 dB Lden.

Thus, the EEA report suggests that levels of annoyance (expressed as percentage highly annoyed) that occurred at 59 dB Lden in the pre-1990 studies occurred at around 49 dB Lden in the post-1990 studies, a reduction of around 10 dB Lden.

The Government’s aviation policy uses 57 dB LAeq,16h as the level of daytime noise marking the approximate onset of significant community annoyance. This level is based on the Aircraft Noise Index Study (ANIS) [4] carried out in the UK in the 1980s.

The CAP725 document [5] produced by the Civil Aviation Authority in 2007 outlines methodologies for environmental assessment of an airspace change proposal. It gives an aircraft noise annoyance response relationship for calculating percentage of people highly annoyed using LAeq,16h noise levels. The relationship is based on the Schultz curve produced in 1978 [6]. The document states that the ANIS results exhibit the same general trend as the aircraft studies in the Schultz analysis. The EU annoyance relationships use the Lden noise metric rather than the LAeq,16h noise metric used in the UK.

Analysis of data [7,8] relating to Heathrow airport in 2006 shows that Lden is typically around 1.7 dB higher than LAeq,16h. This 1.7 dB adjustment has been used to convert LAeq,16h to Lden to give the CAP725 annoyance relationship shown in Figure 1.

The Attitudes to Noise from Aviation Sources in England (ANASE) study [9] reported in 2007 that annoyance with a given level of aircraft noise is much higher than when the ANIS study was carried out. The ANASE study made a direct comparison with the ANIS study in terms of “mean annoyance” with aircraft noise. This showed that the level of mean annoyance found at 57 dB LAeq,16h in the ANIS study was found in the ANASE study at a level of just over 50 dB LAeq,16h, a reduction of just less than 7 dB LAeq,16h.

The Government accepted that the ANASE study demonstrated that annoyance with a given level of aircraft noise is higher than found in the ANIS study. However, on advice contained in an independent peer review report [10], the Government decided that the detailed findings of the ANASE study should not be relied on.

Most of the analysis in the ANASE report related to “mean annoyance”, and trend lines were fitted to graphs of mean annoyance versus LAeq,16h. Figure 7.2 of the ANASE report gave a graph of percentage “at least very annoyed” versus LAeq,16h, but no trend line was fitted to the plotted data points. In the ANASE study, responses from respondents were recorded using an annoyance scale of (i) “Extremely annoyed”, (ii) “Very annoyed”, (iii) “Moderately annoyed”, (iv) “Slightly annoyed” and (iv) “Not at all annoyed”. The annoyance scale did not include a response of “Highly annoyed” as used in the EEA and CAP725 reports so comparison of the results of the different studies is not straightforward.

However, section 6 of the ANASE peer review report [10] assumes that the ANASE term “at least very annoyed” is equivalent to the term “highly annoyed” used in other studies. This assumption allowed the peer reviewers to deduce (apparently by eye) two trend points for the plotted ANASE data points. The two ANASE trend points given in the peer review report are 8.5% highly annoyed at 47/48 dB LAeq,16h, and around 40% highly annoyed at 57 dB LAeq,16h. These trend points relate to the corrected version of ANASE report Figure 7.2 given in the Erratum dated 1st November 2007 contained in the ANASE final report dated October 2007. This paper therefore tentatively plots the ANASE data, but makes plain that the ANASE values for “highly annoyed” have been derived.

The two ANASE derived trend points are plotted in Figure 1, after converting LAeq,16h to Lden by adding 1.7 dB, derived from Heathrow data for 2006. Using the same assumptions that (i) the ANASE term “at least very annoyed” is equivalent to “highly annoyed” in other studies, and (ii) Lden can be estimated from LAeq,16h by adding 1.7 dB, the results derived for all ANASE sites have been plotted in Figure 1. That figure also shows a third order polynomial trend line fitted to the ANASE derived results. The relatively poor agreement between the plotted data points and the fitted trend line (R2 = 0.667) reflects the spread of the data points, but this is not unusual in social surveys of this kind.

It is important to note that Figure 1 shows that the annoyance levels at a given noise level are much higher for the EEA post-1990 studies than for the EEA pre-1990 studies. For example, percentage highly annoyed at 57 LAeq,16h (approximately equivalent to 58.7 dB Lden) is more than doubled from around 15% for the pre-1990 studies to around 37% for the post-1990 studies.

It can be seen from Figure 1 that the annoyance levels for the UK’s CAP725 relationship are generally lower than given by the EEA pre-1990 studies relationship, and much lower than given by the EEA post-1990 studies. This implies that continued use in the UK of the CAP725 annoyance relationship will seriously underestimate levels of aircraft annoyance. The ANASE trend line is generally similar to the EEA post-1990 studies relationship, and certainly in much better agreement with the EEA post-1990 studies relationship than is the CAP725 relationship.

The Government rejected the detailed findings of the ANASE study and continues to rely on the ANIS, Schultz and CAP725 aircraft noise annoyance relationships, even though these relationships are based on social surveys carried out more than 25 years ago. It seems doubtful that these relationships remain in calibration for current public attitudes, flight numbers, aircraft fleet mixes and aircraft noise characteristics. The EEA report supports this doubt on the continued validity of these relationships. This is because the EEA report suggests that levels of annoyance at a given noise level are much higher than suggested by previous European guidance. Furthermore, these EEA findings of much higher levels of annoyance seem to be replicated by the results of the recent ANASE study.

Objectives and findings of the ANASE study

The ANASE study was commissioned by the Government in 2001 in order to update the ANIS study of 1982 which led to LAeq,16h noise index being adopted by the Government for measuring aircraft noise. The ANASE report recognises that the amount of air traffic has increased significantly since 1982 whilst the sound levels generated by individual aircraft events have been significantly reduced as older, noisier aircraft have been replaced by more modern aircraft types with quieter engines and much improved climb performance. It is also recognised that attitudes to aircraft noise may have been changed due for example to the general growth in personal income, higher expectations of a peaceful living environment and less tolerance of environmental intrusion.

The main findings of the ANASE study are reviewed below against the study objectives.

Objective 1: Re-assess attitudes to aircraft noise in England The study found that the annoyance level of respondents increased as the noise indicator LAeq,16h increased, and that a large proportion of measured variation in annoyance can be accounted for by LAeq,16h.

However, for a given LAeq,16h, there is a range of reported annoyance indicating that annoyance is not determined solely by the amount of aircraft noise as measured by LAeq,16h. The main additional influences on the level of annoyance were found to be respondent’s household income and socio-economic group.

The study found that for the same amount of aircraft noise, measured by LAeq,16h, people were more annoyed in 2005 than they were in 1982.

The study showed that people are much more sensitive to aircraft noise at night (particularly around midnight and the early hours thereafter). In contrast, people are least sensitive to aircraft noise in the morning and early afternoon. Ideally, therefore, a noise indicator for aircraft noise should reflect these times of day sensitivities. In contrast, LAeq,16h does not reflect weighting for sensitivities by time of day.

Objective 2: Re-assess their correlation with the LAeq,16h noise index The study considered whether LAeq,16h is the appropriate measure of aircraft noise for predicting annoyance.

The study found that while LAeq,16h continues to be a good proxy for measuring community annoyance at a given point in time, the relationship between LAeq,16h and annoyance is not stable over time.

Because of this, use of LAeq,16h to predict future levels of annoyance may be misleading. In particular, where numbers of aircraft are increasing significantly, the ANASE results suggested that under-prediction of annoyance is likely.

The study recognised that the LAeq,16h noise index incorporates a mathematical trade-off of 10 between event noise level and number of noise events1, which means that each doubling or halving of the numbers of aircraft noise events counts as equivalent to a 3 dB increase or decrease in average noise levels2. The results from the study suggested that the LAeq,16h noise indicator gives insufficient weight to aircraft numbers, and a relative weight of 20 appears more supportable from the evidence than the relative weight of 10 inherent in LAeq,16h.

Objective 3: Examine willingness to pay to remove aircraft noise The study was required to examine (hypothetical) willingness to pay in respect of nuisance from aircraft noise, and whether attitudes might be affected if cash transfers or, for example, noise insulation grants were made available. The study found that aircraft event noise level, aircraft type, time of day and personal characteristics (in particular household income) influence annoyance and willingness to pay.

Aircraft noise action plans The EEA report [1] provides the dose-effect relationships intended to be used to assess the effects of noise on populations as required by the Directive [2]. Section 6 of the EEA report suggests that the lower noise thresholds for mapping are intended to delimit the

1 LAeq,T = SEL + 10LogN – 10LogT, where SEL is event noise level (dB) for N events in T seconds 2 10Log(2/1) = +3dB and 10Log(1/2) = -3dB area where noise is “considered to be a problem”. These thresholds are noise levels above which health effects start to occur.

The EEA report accepts that use of the current threshold levels for noise mapping of 55 dB Lden and 50 dB Lnight is understandable as a first step because of the large scale noise mapping required. However, the report points out that Member States are free to choose their own noise thresholds from where to start action planning, and the Lden threshold for noise mapping of 55 dB Lden does not take into account differences that exist between different noise sources. These differences are illustrated in Table 6.1 of the EEA report giving respective percentages highly annoyed at 45, 50 and 55 dB Lden for road, rail and aircraft noise. Table 6.1 of the EEA report is reproduced here (in part) as Table 1.

Table 1: Transportation noise annoyance (reproduced from EEA report) Percentages of highly annoyed Lden Road Rail Aircraft 55 dB 6% 4% 27% 50 dB 4% 2% 18% 45 dB 1% 0% 12%

The EEA report states that while 55 dB Lden is a “fair” threshold for rail noise, use of 55 dB Lden for other noise sources leads to an underestimate of the actual burden.

Table 1 gives the percentage highly annoyed at 55 dB Lden for rail noise as 4%, while the percentage highly annoyed at 45 dB Lden for aircraft noise is given as 12%. This means that to achieve annoyance levels approaching that regarded as “fair” for rail noise, the threshold for aircraft noise may have to be lower than 45 dB Lden. In fact, Section 2 of the EEA report gives 42 dB Lden as a general noise threshold above which annoyance effects start to occur or rise above background.

It would therefore appear that the EEA report implies that the threshold for noise mapping where aircraft noise is considered to be a problem should be significantly lower than 55 dB Lden as currently used.

Conclusions

The EEA report recognises that levels of annoyance with aircraft noise are much higher for post-1990 studies than for pre-1990 studies.

This paper compares the results for different annoyance models over the range of noise levels in the ANASE study (40.9 to 64.2 dB LAeq,16h). Analysis in this paper shows that annoyance levels redicted by the UK’s CAP725 relationship are generally lower than given by the EEA pre-1990 relationship, and much lower than given by the EEA post- 1990 relationship.

In contrast, the analysis shows that the much higher annoyance levels in the EEA post- 1990 studies seem to be replicated by the ANASE study. Despite this, the Government continues to rely on the ANIS, Schultz and CAP725 aircraft noise relationships derived from social surveys carried out more than 25 years ago.

Until the issues of the ANASE study are addressed, it is suggested that Government policy should be based on guidance in the EEA report, including the specified relationship between annoyance and aircraft noise level.

Although the EEA report gives increased levels of aircraft noise annoyance, it does not address all the objectives of the ANASE study. These objectives include the suitability of LAeq,16h as an indicator of community annoyance, the importance of numbers of aircraft flights, the relative importance of different times of day, and determining willingness to pay to reduce annoyance from aircraft noise. Further work is necessary to address these objectives.

It is concluded that there is an urgent need for updated guidance from the Government on the annoyance relationship for aircraft noise, and the threshold level at which aircraft noise is considered to be a problem.

References

[1] Good practice guide on noise exposure and potential health effects. EEA Technical Report No. 11/2010. European Environment Agency, 2010. [2] Directive 2002/49/EC. Directive of the European Parliament relating to the assessment and management of environmental noise, 2002. Official Journal of the European Communities, L 189, 12-25. [3] Position paper on dose response relationships between transportation noise and annoyance. European Commission Working Group, 2002. [4] United Kingdom Aircraft Noise Index Study. DR report 8402, Civil Aviation Authority, 1985. [5] CAP725, CAA Guidance on the application of the airspace change process. Civil Aviation Authority, 2007. [6] Synthesis of social surveys on noise annoyance. Schultz, Theodore J. Journal of the Acoustical Society of America, 64(2), 1978. [7] London Heathrow Airport Strategic Noise Maps 2006. ERCD Report 0706. Civil Aviation Authority, 2007. [8] Noise exposure contours for Heathrow Airport 2006. ERCD Report 0701. Civil Aviation Authority, 2007. [9] ANASE: Attitudes to Noise from Aviation Sources in England. Final Report prepared for Department for Transport by MVA Consultancy, October 2007. [10] Attitudes to Noise from Aviation Sources in England. Non SP Peer Review. Civil Aviation Authority and Bureau Veritas, draft July 2007, final October 2007. File: Aircraft noise annoyance_3

Written evidence from Heathrow Airport (AS 84)

Introduction

1. Heathrow Airport welcomes the Committee’s inquiry into the Government’s aviation strategy and we are pleased to submit our comments for the Committee’s consideration. We would welcome the opportunity to present oral evidence to the inquiry should the Committee wish to invite us to do so.

2. This submission is focussed on aviation capacity and the importance of a hub airport to international connectivity. We would of course be happy to provide additional information on any other issues if this would be helpful to the Committee’s inquiry.

Aviation’s role in the UK economy

3. Flying is of real value to the UK, for the economy, for society and for consumers. Aviation is Britain’s link into the global marketplace. It supports billions of pounds of British exports and thousands of jobs by giving British businesses direct access to markets, customers and expertise worldwide. The UK aviation industry is a British success story. For the last fifty years, the UK has been at the heart of global aviation and today aerospace is the UK’s second largest export.

4. More than 326,000 people in Britain are directly employed in the aviation sector; 76,500 people work at Heathrow alone, with 22% of jobs in local boroughs based at the airport. A further 100,000 jobs are indirectly supported by the airport. The new Terminal 2 will create 32,000 construction jobs over the lifetime of the project.

5. Furthermore, over 345,000 people across the UK rely on the supply chain from aviation for their jobs. The supply chain for Heathrow’s new Terminal 2 stretches across the UK, with multimillion pound contracts awarded in every region of Britain, including steel from Lancashire, a roof from Merseyside, electrics from and concrete from Yorkshire.

6. Aviation plays a central role in international trade. There is a direct relationship between frequent air connections and improved volumes of trade and investment. UK businesses trade 20 times as much with emerging market countries that have a daily direct flight to the UK as they do with those countries that do not1.

7. According to HMRC, the value of goods shipped by air freight between the UK and non-EU countries is around £116 billion, or 35% of the UK’s extra-EU trade by value. In recent times the UK’s manufacturing sector has evolved to concentrate on high skill, high value-added goods which are increasingly transported by air. 62% (by value) of all UK air freight passes through Heathrow, equivalent to goods worth around £35 billion a year. 55% of the UK’s exports of manufactured goods to countries outside the EU are transported by air.

8. The UK has the sixth largest tourism industry in the world and the Government has made growing inbound tourism a priority for this parliament. In 2008, overseas visitors to the UK arriving by air contributed £14 billion (86%) of the total of £16.3 billion spent by all overseas visitors. Of these approximately 75% entered the country through one of the airports in the London area. VisitBritain’s recent consultation on Britain’s tourism strategy argues that “new airport capacity in the south east is essential to accommodate tourism growth and ensure that Britain remains a competitive destination for airlines and their passengers”2.

1 Frontier Economics, Connecting for Growth, September 2011 2 Delivering a Golden Legacy - A growth strategy for inbound tourism to Britain from 2012 to 2020

9. Heathrow welcomes over four million long-haul visitors a year who spend £4.4bn per year in the UK. A further 2.5m transfer passengers chose to stopover in London, spending on average more than £500 each per visit.

10. The aviation sector is also a significant contributor to the public purse, as well a significant source of private funding for national infrastructure. A report published last year by Oxford Economics found that the UK aviation industry pays over £8.6bn in tax each year - £6.7bn through aviation firms and employees, and a further £1.9bn through Air Passenger Duty.

The importance of international connectivity and hub airports

11. It is encouraging to see that the Government recognises the importance of a hub airport and the unique role that Heathrow plays in terms of the UK’s international connectivity. As the UK’s only hub airport, Heathrow provides Britain with a global route network of direct, fast and frequent connections to cities around the world. It has 75% of the UK’s long-haul flights, including its only connections to key business centres like Shanghai, Tokyo and Mumbai, and emerging cities like Sao Paolo, Bangalore and Mexico City. Seven out of the top ten business routes in the world currently have Heathrow at one end.

12. This scale of international connectivity cannot be provided by point-to-point airports. Hub airports are not simply larger versions of an ordinary airport; they operate in a different way. There is not enough demand in a local market (even in London), nor is the demand sufficiently constant day by day and month by month, to sustain a daily flight to economically important destinations such as Bangalore or Chennai. Airlines overcome this by pooling demand from a number of local destinations at a hub airport. Edinburgh’s, Belfast’s and Newcastle’s businesses alone might not be able to sustain demand for a daily flight to Mexico City or Sao Paulo but by pooling that demand from around the UK and Europe at Heathrow, airlines can keep direct flights to these destinations viable throughout the year and on off-peak days.

13. As an example, outside of Heathrow, only one airport in the UK had a direct scheduled flight to India. Birmingham Airport used to operate one flight a day to Delhi (it was withdrawn by Air India in 2009). This was driven by a particular local demand and was a typical point-to-point service. In contrast, Heathrow operates 123 flights a week to six cities across India.

14. Heathrow offers at least one daily flight to 82 long-haul destinations. 60 of those routes have between 15% and 50%+ transfer passengers. If airlines lost the revenue from those passengers, frequent flights to those destinations would not be sustainable. Some of the destinations most at risk would be Hyderabad (80% transfer traffic), Chennai (73% transfer traffic) and Mexico City (61% transfer traffic).

15. As the Government’s Draft Framework notes, the future of the UK will continue to be shaped by the effectiveness of its international transport networks. 16. Britain’s connectivity needs are changing and links to the BRIC economies are becoming increasingly important. The eight largest Emerging Markets will account for more than half of worldwide GDP growth over the next ten years. We are faced with choices about how best to structure Britain’s economy for this future.

17. The UK is currently lagging behind European competitors in terms of BRIC connectivity. Paris and Frankfurt already boast 1,000 more annual flights to the three largest cities in China than Heathrow. Passengers wanting to fly between London and Chengdu, Nanjing, Hangzhou, Xiamen or Guangzhou, have to fly via a European hub airport. In total, there are 21 emerging market destinations with daily flights from other European hubs that are not served from Heathrow; including destinations such as Manila, Guangzhou, and Jakarta3. The lack of direct flights to Emerging Markets could be costing the UK £1.2bn a year in missed trade opportunities.

18. We support the Government’s objective to protect and enhance the UK’s connectivity and welcome the principle of aviation growth within a sustainable framework. We support the proposal to encourage growth at point-to-point airports around the UK but it is important to recognise that expansion at these airports cannot substitute Heathrow’s role as the UK’s hub, nor the range of long-haul connectivity that the hub function provides.

19. In setting up its Independent Commission on Aviation Connectivity, chaired by Sir Howard Davies, the Government has recognised that maintaining Britain’s aviation hub status is critical to the UK’s future economic success.

20. There are no easy options when it comes to hub airport capacity but there are plenty of solutions being proposed. Rather than advocate a particular solution at this stage, we believe that diagnosis is more important. Does it matter to the UK if we have a hub airport? And if so, what do we require from a hub? Until the UK can agree what it needs from its hub, it is impossible to assess which option is best placed to meet those needs. It is more important to make a considered decision than to make a quick decision.

21. The qualities that make hub airports successful can be defined and assessed. Heathrow will shortly be publishing a document which sets out the criteria against which all the different options for UK hub capacity could be assessed.

Making better use of existing capacity

22. We support the Government’s objective to make best use of existing runway capacity at all UK airports.

23. At Heathrow we have taken, and continue to take, a number of important steps to make best use of capacity at the airport, including working with our airlines to improve punctuality and trialling operational freedoms to improve performance and resilience.

24. However, it is important to realise that these are limited tactical measures that will not slow the decline of Heathrow’s hub status, and in turn the UK’s relative connectivity, in the long-term.

25. It has been suggested that the Government should encourage greater use of regional airports instead of Heathrow. As the operator of several airports around the UK, we fully recognise the important role that point-to-point airports play in their local economy and we support Government efforts to enhance connectivity from airports across the country.

26. However, point-to-point airports cannot replicate hub airport functions. There is already spare runway capacity at other London airports, as well as airports like Birmingham and Manchester, yet airlines choose not to use them unless there is sufficient local demand to sustain a route. This is because without the feed of transfer passengers to top up the peaks and troughs of local demand, airlines find it hard to keep a route profitable.

27. Existing capacity at point-to-point airports across the UK is complementary to, rather than a substitute for, hub airport capacity at Heathrow

3 Ibid 28. Experience has shown that if network airlines cannot fly from Heathrow, they tend not move to other London or regional airports, they move to Amsterdam, Paris, Frankfurt, Madrid or Dubai instead. Our European and Middle-Eastern competitors have already taken steps to capitalise on the changing locus of the world economy. We should not take the UK’s position as a successful hub for aviation for granted.

29. The role of airspace should not be forgotten in making best use of existing capacity. More efficient use of airspace, including full implementation of the CAA’s Future Airspace Strategy and the EU Single European Skies (SES) initiative, is an important step in making best use of existing runway capacity.

Environmental impacts

30. The challenges of aviation growth are being tackled with determination by the industry and aircraft are getting quieter and cleaner. However, we recognise that people living around airports continue to be affected by noise and pollution and we are committed to further improving our performance.

31. We believe that aviation, like all sectors of industry, has a role to play in avoiding dangerous climate change and meeting the UK’s 2050 target of cutting greenhouse gas emissions by 80% below 1990 levels. Through Sustainable Aviation, the coalition of airlines, manufacturers, airports and NATS, the aviation industry has set out a robust long-term strategy to play its role. More information is available at www.sustainableaviation.co.uk.

32. Aircraft are getting cleaner. Aircraft today are around 70% more fuel efficient than forty years ago. Emissions trading will deliver net reductions in carbon, while technology, improved operational procedures and alternative fuels develop to deliver absolute reductions. The Committee on Climate Change has said that aviation in this country can grow by up to 60% without risking UK climate change targets. Government should focus efforts on ensuring successful implementation of the EU Emissions Trading Scheme (ETS) and achieving a global sectoral deal.

33. We are committed to playing our role in reducing local air pollution and helping to meet EU limits in the vicinity of the airport. We recently published our 2011 – 2020 strategy for air quality at Heathrow which sets out the actions we plan to take to achieve this. This focuses on continuing to incentivise the use of cleaner planes and operating practices, promoting cleaner airside vehicles, and changing travel behaviour for staff and passengers.

34. Activities outside the airport also contribute to air quality concerns. The contribution to pollution of activities within the airport boundary falls rapidly with distance from the airport. Traffic on the road network in the surrounding area plays a significant role. Heathrow is close to two major motorways and a major motorway junction. Some of the traffic on that network is airport-related but much is not - on the M4 near Heathrow, only one in five vehicles are ‘airport-related’. Improvements in vehicle technology will therefore play a critical role in meeting pollution limits around the airport, as indeed they will in other urban areas in the UK (particularly in central London).

35. Noise is the main local impact of Heathrow. The airport’s location close to London, combined with its status as the world’s busiest international airport, mean that we have been at the forefront of UK and global approaches to tackling noise. We have a strong record of performance improvement. Equally, Heathrow’s location means that the bar is set high and we are committed to exploring what more we can do.

36. The aviation industry has delivered quieter aircraft and we are confident that technology improvements will continue to reduce noise. In 1970s, around 2 million people living around Heathrow fell within the 57dBA contour; by 2011, that number had shrunk to 243,350. New technologies, improved operations, more effective community engagement and enhanced mitigation measures will all have a role to play in reducing noise impacts in coming years.

37. Our strategic approach to noise is based on the ‘Balanced Approach’ agreed by the International Civil Aviation Organisation’s (ICAO). The ‘Balanced Approach’ has four elements:

• The development and use of quieter aircraft (‘reduction at source’)

• The development and use of quieter operating procedures

• Land-use planning around an airport and mitigation schemes to reduce exposure to noise

• Operating restrictions

We have actively sought to limit the impact of noise around Heathrow over many years, based on the approach above.

38. Noise is a complex issue. Traditionally, airport operators, including Heathrow, have not been successful in communicating effectively on noise issues to the local affected communities. Our challenge, working with community groups, is to find ways to improve our communications about noise so that they are understandable to non-experts and reflect local concerns. We are currently undertaking an extensive programme of research to further improve our understanding of community attitudes to noise. This is critical if we are to focus our efforts on the issues of most concern to residents.

39. We support the Government’s aims of improved transparency and more effective collaboration between industry and community groups to help address and mitigate the challenges of noise. At Heathrow we have made particular efforts in recent months to improve our engagement with the local community and look forward to sharing best practice and lessons learned in due course.

Conclusion

40. Aviation plays a vital role in the UK’s economy. We welcome the Government’s recognition of the economic benefits of aviation, particularly the importance of a hub airport and the unique role that Heathrow plays in terms of the UK’s connectivity.

41. The future of the UK will continue to be shaped by the effectiveness of its international transport networks. Britain’s connectivity needs are changing and links to the BRIC economies are becoming increasingly important. We are faced with choices about how best to structure Britain’s economy for this future.

42. Until the UK can agree what it needs from its hub, it is impossible to assess which option is best placed to meet those needs. It is more important to make a considered decision than to make a quick decision.

43. The Davies Commission should ensure that all options for maintaining the UK’s position as an international hub for aviation are objectively assessed against the criteria that make a hub airport successful.

44. Making best use of existing runway capacity is important but the scale of international connectivity offered by Heathrow cannot be provided by point-to-point airports. Hub airports are not simply larger versions of an ordinary airport; they operate in a different way. Existing capacity at point-to-point airports across the UK is complementary to, rather than a substitute for, hub airport capacity at Heathrow.

45. The challenges of aviation growth are being tackled with determination by the industry and aircraft are getting quieter and cleaner. However, we recognise that people living around airports continue to be affected by noise and pollution and we are committed to further improving our performance.

46. The Government is right to place renewed emphasis on transparency and collaboration between industry and local communities. At Heathrow, we have been working with community groups to build on the measures we have taken in the past and explore what more we can do. We look forward to sharing lessons learned in due course.

22 October 2012 Written evidence from the UK Airport Consultative Committees Liaison Group (AS 85)

The Liaison Group for UK Airport Consultative Committees (UKACCs) welcomes the opportunity to respond to the Transport Select Committee’s current inquiry which seeks to examine the Government's aviation strategy and in particular airport capacity in the UK.

UKACCs brings together 23 airport consultative committees (ACCs), ranging from major international gateways to smaller regional airports across the UK (member committees listed at the bottom of this letter), fulfilling the statutory role required by government that airports should provide consultative facilities. The 2010 CAA airport statistics record that these 23 airports had a total annual throughput of over 203 million passengers accounting for about 96% of total UK passenger movements of 211 million. UKACCs provides a valuable forum as its membership covers a wide range of airports each with different local operational circumstances. As such UKACCs can play an important role in helping inform government in policy development.

As the Committee will be aware, there are a number of key aviation related Government consultations either under way or planned. These include the Government’s consultation on its draft aviation policy framework, the Independent Commission chaired by Sir Howard Davies and proposals for a new night noise consultation at Heathrow, Gatwick and Stansted. UKACCs, as well as individual consultative committees, will be responding to these consultations reflecting particular local circumstances and issues.

UKACCs supports the Government’s stated objective that UK aviation should be able to grow, but to do so it must be able to play its part in delivering environmental goals and protecting the quality of life of local communities. The Group also endorses the three proposed key themes that should underpin a future high-level framework - Aviation and the Economy; Aviation and Climate Change and Aviation and the Local Environment.

UKACCs fully recognises the importance of connectivity and its key role in helping the UK economy grow on a sustainable basis. Airports outside the South East have a vital role in providing international and domestic connections across the UK, and contributing to local economies. The Group has welcomed the Government’s stated wish to explore how to create the right conditions for such airports to flourish.

UKACCs has long lobbied the Government to address the issue of protecting domestic services from the far regions of the UK into the London airports. The Group has regularly highlighted that there is an urgent need to review the worsening situation. In addition to this, there has been growing concern about the increase in landing charges at Heathrow and Gatwick airports which has resulted in some regional carriers withdrawing services between the regions and the London airports because a viable operation can no longer be sustained.

UKACCs - particularly its regional airport member committees - continues to have real concerns about the negative impact of capacity constraints. In particular the major London airports have seen a steady reduction in point to point regional services. The crowding out of regional services from the capacity constrained London airports is continuing to have an adverse impact on the economic performance of the far regions of the UK and so affect their contribution to the national economy.

Faced with capacity constraints, the major airports appear to be prioritising long haul international services over regional services. Whilst it is clearly open to airports to use their commercial judgement in the best interests of the airport company and its shareholders, such action clearly has wider national and regional implications. Passengers using regional airports faced with limited services to Heathrow will look to interline over European hubs such as Schiphol, Frankfurt and Paris etc. This leads to dilution and loss of revenue to the UK economy.

UKACCs has been keeping a watching brief on the CAA’s consultation investigating the complaint made by Flybe against Gatwick Airport (GAL) about the change in the structure of landing charges. Flybe have maintained the new structure of charges discriminates against operators of small aircraft. It also believes that the new charges will have a detrimental impact on point-to-point regional services to London because airlines using small aircraft are less able to absorb higher costs. The CAA has reached a provisional decision that GAL has not unreasonably discriminated against any particular user of the airport or class of users (whether airline or passenger). This case has raised important issues and UKACCs therefore suggests that the Committee might wish to consider the implications for capacity constraints at the London airports on services to the far regions of the UK.

The Group notes that the Government has suggested that demand for domestic aviation and much of that for near-European short-haul aviation could be met by high-speed rail although it also acknowledges that air transport will continue to provide essential links to more remote parts of the UK and areas not served by high speed rail. UKACCs welcome the development of high- speed rail initiatives and the important contribution that these can make to the future UK transport network. However it must be accepted that high speed rail connectivity will not be delivered for many years and that domestic air travel is a reality. The Government therefore needs to preserve domestic air travel as an essential part of the UK’s strategic transport infrastructure for many years to come.

It needs to be recognised that whilst new high-speed rail connections will provide an opportunity to replace existing domestic air services for some regions especially the Midlands and the North, it will not provide a total solution across the UK. There will be a time threshold where rail does not provide a viable option especially for the Scottish airports, and never can to Northern Ireland, the Channel Islands or the . There will still be a requirement for domestic services from these areas if the Government’s wish that there should continue to be essential air links to the more remote parts of the UK is met. It must also be recognised that neither Gatwick nor Stansted airports will have a direct connection to the high speed rail network and a connection at Heathrow will only be realised in around 20 years time.

UKACCs will continue to urge Government to review its policy towards domestic air services to ensure the future viability of an effective network. UKACCs accept that the preservation of an effective domestic network is subject to a number of considerations including commercial interests and EU obligations. UKACCs has been encouraged to note that the current airport slots regulations are now being reviewed in the EU. The Group hopes that this will lead to a mechanism that might protect domestic access to the London airports. UKACCs will also be asking the Government to consider the appropriateness of the current PSO legislation and decide whether it remains fit for purpose. If the UK is to have a sustainable domestic network of air services, it would seem essential that slot allocation must be looked at in a different way.

22 October 2012 Written evidence from Birmingham Airport (AS 86)

Summary of response

1.1 Aviation provides the UK economy with the connectivity it needs to compete in the global marketplace. 1.2 Birmingham Airport believes that making the best use of the UK’s existing aviation capacity should be the Government’s number one short-term policy priority. 1.3 Birmingham Airport welcomes the decision to establish the independent Howard Davies Commission but recognises that capacity, noise and air emissions management issues prevent the Government from committing to a third runway at Heathrow. 1.4 Given the supply-side capacity constraints in the South East, Birmingham Airport believes that the Midlands has the export potential and latent passenger demand to make long-haul services from the airport viable. 1.5 Existing policy uncertainty and capacity constraints could be mitigated and airlines attracted to airports outside the South East if the Government used four short-term demand management policy levers. These policy levers are proportionate to the level of supply-side intervention that currently exists within the market, would incentivise airlines to keep using UK airports and ensure that UK Plc. remains the net benefactor. 1.6 Greater international connectivity to emerging markets from Birmingham Airport would improve the competitiveness of UK exports, boost employment in the productive sector and help rebalance the economy. 1.7 Investing in integrated surface access improvements, both rail and road, will increase the catchment area of airports and the ability of airports to compete with each other for new services. 1.8 There are two charges levelled at the suggestion that major airports outside the South East cannot sustain long haul connectivity – (i) with most Headquarters in London, there is limited scope to absorb demand from the South East because these airports have smaller catchment areas and passengers currently use airports in the South East, (ii) South East passengers will not use these airports, especially high-value business passengers which help route viability. 1.9 Birmingham Airport hopes that this response goes some way to ameliorating this perception. For additional case studies, an explanation of our policy suggestions and evidence that there is an untapped, latent business demand from the region, please refer to the attached reports: (i) Don’t put all your eggs in one basket: A challenge to aviation orthodoxy, (ii) Stimulating revival: the role of Birmingham Airport in rebalancing economic growth.

Chapter 2 – What should be the objectives of Government policy on aviation?

2.1 The UK’s aviation connectivity is concentrated in the South East where the level of population density generates large negative externalities. Short-term Government policy prevents expansion at Heathrow, Gatwick and Stansted and reflects the need to address these issues. In the long-term, the UK will need a sustainable and internationally competitive aviation policy and we look forward to contributing to the Howard Davies Commission on this issue.

2.2 Opponents of this policy attempted to reframe the debate to suggest policy-makers cannot meet the future needs of UK customers and businesses without increasing capacity in the South East.

2.3 Birmingham Airport believes that UK aviation policy should support the whole of the UK. In the short to medium-term, the Government should pursue a set of policies that acknowledge the supply-side and timing constraints in the South East and use demand management levers to fully utilise spare capacity at existing airports. In the long-term, Government policy should support the creation of a network of national airports capable of unlocking the growth potential of each regional economy, based on a particular region’s competitive economic advantage – see chapter 3. a. How important is international aviation connectivity to the UK aviation industry? b. What are the benefits of aviation to the UK economy? c. What is the impact of Air Passenger Duty on the aviation industry?

2.4 Aviation benefits the UK through the connectivity it delivers for businesses and passengers. It provides businesses with quick and easy access to international markets and allows them to compete within the global marketplace. An open and well-connected trading nation also allows UK customers to have a choice of goods and services, lowering the price of consumer durables and improving standards of living. Aviation also enables passengers to enjoy the socio-cultural experiences associated with travel.

2.5 Aviation is of tremendous importance to the UK economy. Depending on the type of economic analysis cited, aviation is estimated to contribute up to £21 billion to UK Gross Domestic Product (GDP) and directly employs 326,000 workers across the travel and manufacturing sectors. One third of traded UK goods are transported by air freight and 65% of overseas visitors arrive in the UK by air. The tourism industry attracts £115.4 billion of direct and indirect benefits to the UK.

2.6 APD places UK aviation at a competitive disadvantage. The high costs associated with the unilateral tax act as a barrier to inward investment and discourage tourists from entering and spending money in the UK. HMRC forecast that the level of APD imposed 2009-2011 would result in 11,000 fewer flights from UK airports. Oxera Consulting calculated that this would cost the economy £750 million in Gross Domestic Product and c. 18,000 jobs.

2.7 Birmingham Airport has suffered first-hand from the detrimental effects of APD. Negotiations with Air Asia X over a new route to the Far East broke down because of the cost burden associated with operating services from UK airports. When questioned, Air Asia X cited APD as the main barrier. The new service would have created 250 new jobs and acted as a spur for the wider economy.

2.8 Birmingham Airport would like to see APD reduced across the industry. However, if this is not achievable, we would like the Transport Select Committee to hold an inquiry into the use of a variable APD rate – see chapter 3.

Chapter 3 - How should we make the best use of existing aviation capacity?

3.1 Over the last 20 years, the Government’s management of the aviation sector, and its ability to unilaterally influence choice, value and sustainability, has been in retreat. The decision by the Coalition Government to prevent the construction of a new runway in the South East, especially at Heathrow, demonstrates a shift back towards a more interventionist policy.

3.2 The current aviation policy environment is characterised by rigid capacity constraints on the South East coupled with uncertainty over future policy. Yet, with the exception of some environmental groups, industry stakeholders agree that the UK economy is suffering from a lack of international connectivity to emerging markets.

3.3 Birmingham Airport calls on the Transport Select Committee to launch a further inquiry into how short-term demand management policy levers could be used to balance the level of supply-side intervention that already exists, and promote the growth of high-value services to emerging markets from major UK airports with spare capacity. a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

3.4 Heathrow is operating at 99% capacity during peak times and is the busiest two-runway airport in the world. Gatwick operates at 96% capacity during peak times and is the busiest single runway airport in the world. This indicates that strong incentives already exist to ensure that London airports maximise the utilisation of existing infrastructure. The intensity of their operations is a testament to world-class demand management mechanisms implemented at these airports by NATS.

3.5 However, this process has come at a cost. The Civil Aviation Authority (CAA) found that the structure of demand management at regulated airports in the South East incentivises those airports to maximise through-put at the expense of punctuality and resilience. This trade-off encourages individual airlines to benefit from a marginal additional flight, because it generates revenue from operating this service. This results in sub-optimal capacity usage leading to negative externalities and disbenefits.

3.6 Evidence for this can be found in the average delay time experienced by passengers at these airports including taxiing times, the quantity of CO2 emitted over London due to stacking, the reduced performance of pre-existing services and the poor standing in which these airports are held internationally.

3.7 Birmingham Airport believes this question should be recast to ask how we should make optimal use of airport capacity in the South East, taking into account market failures such as environmental externalities, airspace constraint, a lack of resilience and congested surface access for transport infrastructure.

3.8 Delivering an airport which is at optimal capacity could be achieved via market-based mechanisms that internalise the stated externalities. A tax-based policy lever, such as a congestion charge, would discourage airlines and airports from rent-seeking by making them pay the full marginal cost of their actions. A complementary set of demand side measures, as

outlined below, would prevent this traffic from moving to foreign hubs and ensure that UK Plc. remains the net benefactor. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

3.9 Birmingham Airport believes that the current Government strategy does not adequately support airports outside the South East. Making the best use of the UK’s existing aviation capacity should be the Government’s number one short-term policy priority.

3.10 The enclosed report, Stimulating revival: the role of Birmingham Airport in rebalancing economic growth, shows that, with the right support, Birmingham Airport’s catchment area has the competitive advantage in terms of manufacturing exports to become the international gateway for the UK’s productive sector. This would lead to a revival in the UK’s overall output performance and facilitate the Government’s ambition to rebalance the UK economy.

3.11 The report shows that despite the lack of connectivity and accompanying lack of access to working capital enjoyed by the South East, Birmingham Airport has a vibrant economy with the potential to unlock sustainable long-term economic growth.

3.12 The economy in the catchment area generates £263 billion GVA per annum, 21% of UK GDP and its 14 million inhabitants account for 22% of national Gross Domestic Income.

3.13 The “catchment economy” has 12,296 companies involved in international trade. These companies consist of small-scale precision-based component manufacturers coupled with traditional craft-industries feeding into globally ranked prestige producers including Martin, Jaguar Land Rover, Rolls Royce, Toyota, MG Motors and JCB.

3.14 Within the “catchment economy”, 92% of exports are value added finished or semi- finished manufactured goods. The “catchment economy” generated a trade surplus of £5.4 billion in 2011, with imports representing 42% of the value of manufactured exports.

3.15 This export success has been achieved despite the “catchment economy” having an export profile heavily skewed to the European Union. The lack of long-haul international connectivity represents a barrier to further export success.

3.16 Short-term demand management policy levers could help unlock the latent demand from the catchment area and attract the spill-over traffic currently met by foreign hubs because of capacity constraints in the South East. They would provide commercial incentives to airlines to expand services from Birmingham Airport and support the sustained growth of the UK’s manufacturing economy.

3.17 Birmingham Airport would like the Government to investigate the viability of implementing four policy levers to make better use of existing capacity at airports outside the South East.

3.18 The outcomes and implementation measures needed to help correct existing demand deficiencies at airports outside the South East require the use of available implementation

measures that incentive the desired outcome. Birmingham Airport considers that there are four available measures to affect this change:-

(i) Implement a differential tax regime at airports with spare capacity – a variable rate of APD would encourage airlines to establish long-haul services to emerging markets from airports outside of the congested South East. This would reduce the financial risk associated with establishing new routes from airports outside of the South East and ensure businesses have competitive connectivity to high-value customers in high-growth markets. [HMT is set to publish a report on this issue in November and we hope the Committee launches an inquiry into the feasibility of this policy]. (ii) Implement a congestion charge at congested airports - the value of this charge should reflect the margin cost of the negative externalities generated by squeezing more capacity into already crowded airports. [This approach is used in the energy industry, see peak hour pricing]. (iii) Create a network of national airports – this would help these airports to market themselves abroad and challenge the international perception that the only destination worth flying to in the UK is Heathrow. [Refer to Chapter 5 of Birmingham Airport’s Eggs in Basket report]. (iv) Unilaterally liberalise air service arrangements from this network of national airports and work with Governments in highly regulated emerging markets to develop new links – this would still allow major UK airports with spare capacity to compete for new services between themselves. Industry research shows that liberalisation stimulates competition and route creation. [Refer to p. 6 of the Eggs in Basket report]. c. How can surface access to airports be improved?

3.19 CAA research suggests location and surface access are primary influences on a consumer’s decision about which airport to make a booking from. Integrating airport surface access and publicising an Airport’s connectivity via several modes of transport provides more information and choice to the passenger or business. This helps the market perform more efficiently and enables consumers to make a more informed decision. It would also precipitate a more efficient distribution of demand between airports at the margin.

3.20 Improved surface access to airports increases an airport’s catchment area, facilitating the provision of additional routes from these airports. An additional benefit of overlapping catchment areas is that it would stimulate competition between airports, lowering prices and increasing choice for the consumers while improving route viability for airlines.

3.21 Birmingham Airport is an industry leader for rail-air connectivity. However, improvements to the West Coast Main Line (WCML) and the introduction of High Speed 2 (HS2) would enable the Airport, and wider aviation sector, to accrue the benefits outlined above.

3.22 Existing connectivity between Birmingham Airport and the WCML could be improved in four ways:-

a) Rename Birmingham International station “Birmingham Airport” – the station is only two minutes from the Airport on a free air-rail link, but this is not indicated on

www.nationalrail.co.uk, leading to confusion by passengers of the location of the Airport and ease of access by rail. Renaming the station would provide more accurate information to the consumer. b) Provision of rail services from 04:00 – current service restrictions mean that passengers cannot access the Airport via the WCML during the airport’s busiest time, “slot 1” for flights leaving 06:00 – 08:00. c) Provision of a 59 minute service between Birmingham Airport and London Euston station – the DfT has indicated that this is technically possible. A direct, less than an hour, service would improve customer experience accessing the Airport from stations to the South, enhance the perception of Birmingham Airport and enhance the Airport’s ability to compete for traffic with the congested South East airports. This would make the service only 12 minutes longer than the Stansted Express, which has a 47 minute journey time. d) Consultation on through-ticketing and code-sharing – the provision of tickets enabling customers to buy one ticket that integrates their journey across rail and air services is a major consumer innovation enjoyed by passengers travelling from rival European destinations. Offering this service would improve the UK’s reputation and ensure the industry is working in the customer’s interest.

3.23 Birmingham Airport is a major supporter of HS2. It will deliver commensurate benefits to the UK economy and enable the Airport to compete for additional feeder traffic from London. The 31 minute service from London to would support the development of some additional long-haul routes from UK airports and help correct the often cited opinion that airports outside the South East cannot attract sufficient demand to make new routes viable.

3.24 Birmingham Airport works in close partnership with the Highways Agency on the Strategic Road Network and Solihull MBC on the local road network to improve road surface access to the Airport. The recent decision to invest £7 million in surface access road improvements demonstrates this commitment.

3.25 Birmingham Airport welcomes the recent announcement of the works on Junction 6 of the M42 as part of the Government’s ‘pinch point’ investment strategy. This will improve access to the airport and reduce traffic delays. Faster journey times will improve the attractiveness of Birmingham Airport as a destination point and improve connectivity between the region’s most significant industries, including the Airport, the NEC, Jaguar Land Rover and the Blythe Valley Business Park.

Chapter 4 - What constraints are there on increasing UK aviation capacity?

4.1 Birmingham Airport supports the target established by UK Climate Change Commission (UK CCC) to restrict aviation emissions to 50% of their 2005 levels by 2050. The Sustainable Aviation road map for tackling emissions demonstrates that the industry is serious about achieving this objective.

4.2 The UK CCC estimates that the UK could cater for an additional 60% increase in Air Traffic

Movements (ATMs) without surpassing the its CO2 emissions target. This does not represent a passenger number, which would depend on issues such as the load factor on each ATM. The next generation of aircraft, the Airbus 380 and Boeing Dreamliner 787, demonstrate that technological advances are advancing sufficiently quickly to suggest that a 60% increase would allow the UK to remain internationally competitive.

4.3 A trading scheme is the preferred market-based mechanism to help address environmental challenges because it internalises the social and economic costs created by aviation and translates these into a monetised value. Rising costs send a clear signal to the market that it will need to innovate and reduce emissions if it wants to remain profitable.

4.4 Whilst we support the European Union Emissions Trading Scheme (EU ETS) as a fair measure to tackle the industry’s carbon emissions, only a global trading scheme will result in meaningful, long-term behavioural and environmental change. We oppose any unilateral action because the marginal social benefit of reduced emissions would be outweighed by the economic cost associated with the reduced competitiveness for the UK aviation sector.

4.5 Birmingham Airport’s objectives for noise management is to work with our stakeholders, including the local community and industry partners, to adopt the best practicable means to access, manage and minimise the impact of aircraft noise both now and in the future. The implementation of policies such as the increased use of Continuous Decent Approaches and a £200,000 annual sound insulation scheme are having a measurable impact – see the graph below. In 2011, of the 387 noise complaints received by the Airport, only 154 people formally complained. That represents a ratio of 0.016 complaints for every person within the 57db range.

No. of Noise Complaints 1000 800 600 400 200 0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 4.6 Birmingham Airport acknowledges that airports situated in areas of very high population density, notably in the South East, may require an independent noise management authority to ensure the interests of the local community are adequately represented by airport policy.

Chapter 5 - Do we need a step-change in UK aviation capacity? Why?

5.1 Birmingham Airport welcomes the Government’s decision to establish the independent Howard Davies Commission to review all long-term options for UK aviation, including a new hub. We look forward to contributing to this process.

5.2 Analysis of the DfT’s passenger forecasts demonstrates that handling the growth of the UK aviation sector is a critical issue. Based on conservative projections of an annual growth rate of 2%, UK airports will have to cater for an average of 345 million passengers per annum (mppa) in 2030 and 520 mppa in 2050.

5.3 These projections reveal that there will need to be a structural shift in the management of the UK’s aviation resources if we are to maximise the growth potential that aviation can deliver for the UK economy.

a. What should this step-change be? Should there be a new hub airport? Where? b. What are the costs and benefits of these different ways to increase UK aviation capacity?

5.4 Analysis of existing capacity at UK airports indicates that fuller utilisation of spare capacity could satisfy much of the DfT’s long-term passenger growth projections. It also challenges the assumption that a third runway at Heathrow would deliver enough capacity to represent a viable step-change for UK aviation.

5.5 Table 1 shows the DfT’s future terminal passenger forecasts. The red segment shows what a third runway at Heathrow could deliver by 2050. In 2030, Heathrow is expected to handle 85 million passengers. By 2050 this figure could increase to 90 million. It reveals that a third runway at Heathrow will only satisfy 16% of additional capacity requirements by 2030, falling to 7% by 2050. Heathrow’s relative contribution to UK aviation capacity will drop from 33% in 2010 to 17% in 2050.

Not enough

5.6 The case for a third runway at Heathrow has three additional caveats.

(i) Capacity - the fact that Heathrow is situated on a cramped site in the West London suburbs means that it could never expand into a four or five runway airport like a Schiphol or a Frankfurt. Spatial restrictions mean that even if a third runway were built, Heathrow would have to start buying up whole sections of residential areas if it wanted to expand. This would be politically toxic. (ii) Timing - if a third runway was given the go-ahead, it would take 10-12 years to be operational and it would not solve the existing aviation capacity gap.

(iii) Noise and air emissions - existing restrictions would prevent the airport from operating at its full potential. A recent study by the Massachusetts Institute of Technology found that a third runway at Heathrow would mean deaths resulting from airport emission at the Airport would increase from 50 deaths per year in 2012 to 150 in 2030.

5.10 A third runway at Heathrow is not a national aviation strategy and would leave policy- makers stuck in the middle.

5.11 Table 1 also reveals that with the right backing and clear leadership, the six largest airports outside the South East could add 116 million of passenger capacity to the network by 2050 (without any additional runways, but including Birmingham Airport’s extended runway). That amounts to nearly 50% of future demand.

5.12 Birmingham Airport believes the UK’s response to global aviation trends should be two- fold.

(i) In the short to medium-term - the Government should consider implementing the policies outlined in previous sections. This would enable airports outside the South East to attract enough passenger demand to make new high-value services economic for airlines and fully utilise airports’ spare capacity. (ii) In the long-term - the Government should support and help market a network of national airports. Each major economic region should have at least one airport large enough to connect to very long-haul markets. Its function should be to maximise a particular regions competitive economic advantage. In the case of the Midlands, Birmingham Airport should be developed into the major international gateway for the UK’s productive sectors and export industries.

22 October 2012

Written evidence from the Department for Transport (AS 87)

Background 1 The Department for Transport published in July a draft Aviation Policy Framework (APF), setting out the importance of aviation to the UK economy and the Government's proposals on how aviation can grow and deliver for the economy while meeting its noise, climate change and habitat obligations. The Government aims to adopt the final APF next spring. As such, this response reiterates the position in the draft APF document. The draft APF is currently subject to consultation. As such this memorandum where it draws upon the APF represents the Government’s current thinking but it should not be taken as a definitive statement of policy.

2 Alongside publishing the draft APF in July, The Government announced a package of short term measures to make the best use of existing capacity, encourage investment in our airports and improve surface access provision to our airports to the benefit of passengers and the wider economy. Relevant measures are outlined in response to the questions below.

3 Additionally, on 7 September, a Written Ministerial Statement confirmed that the Government had appointed Sir Howard Davies to chair an independent commission tasked with identifying and recommending to Government options for maintaining this country's status as an international hub for aviation. The Commission will provide an interim report by the end of 2013 and a final report by summer 2015. Further details on the full membership of the Airports Commission and its Terms of Reference will be published shortly.

1. What should be the objectives of Government policy on aviation? a. How important is international aviation connectivity to the UK aviation industry and b. What are the benefits of aviation to the UK economy? 4 Aviation benefits the UK economy through its direct contribution to Gross Domestic Product (GDP) and employment, and by facilitating trade and investment, manufacturing supply chains, skills development and tourism. The whole UK aviation sector's turnover in 2010 was around £50 billion and it generated around £16 billion of economic output. The sector employs over 220,000 workers directly and supports many more indirectly1. Aviation also brings many wider benefits to society and individuals, including travel for leisure and visiting family and friends.

1 Turnover, economic output (GVA) and employment figures are from ONS Annual Business Survey 2010, Section H: Transport and Storage, adding SIC 51 (Air Transport) and SIC 52.23 (service activities incidental to air transportation), and Section C: Manufacturing, adding SIC 30.3 (Manufacture of Aircraft) and SIC 33.16 (Maintenance of Aircraft) found at http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-264370 The whole aviation sector covers a wide range of activities including passenger scheduled, charter, taxi, helicopter, pleasure and sightseeing flights and freight transport. ‘Service activities incidental to air transportation’ includes airport, airfield and ground services, air traffic control activities and the manufacture, repair and maintenance of aircraft. These estimates do not cover a variety of other sectors related to aviation including, the construction of airports and runways, cargo handling and warehousing. This is because data is not disaggregated to a level that is usable when referring to aviation. Secondly, these estimates do not include the activity of firms that constitute the air transport supply-chain where those activities are captured in other SIC codes (i.e. the indirect contribution of the aviation industry).

5 Aviation plays a crucial role in supporting the UK's trade in services worth over £310 bn in 2011 - £194 bn of which were service exports2. Furthermore air freight accounted for £116 bn of trade in goods in 2011 - 35% by value of all trade with non-EU countries3.

6 Aviation connects UK industry and consumers with the global market place:

• The UK is one of the best connected countries in the world, our air links directly connect us with over 360 international destinations4; • Our aviation network ranks as the third largest in the world behind only the USA and China (available seat kilometres)5; • In 2011 UK airports catered for 219 million passengers (over 50 million of whom were on business) and over 2 million flights6. c. What is the impact of Air Passenger Duty on the aviation industry? 7 It is important to recognise that international aviation is generally not subject to tax on fuel and, in contrast to many other countries that apply VAT on domestic flights, there is no such VAT in the UK. The Government has acknowledged that recent economic conditions have been difficult for both consumers and the aviation sector. The rise in APD has been limited to inflation over the period 2010-2012 and, recognising the need for airlines to plan ahead, has sought to provide airlines and passengers with clarity on future rates.

8 In terms of the impact on demand, in general competitive industries like the UK aviation industry tend to pass on costs such as APD to passengers. As set out in the Department for Transport’s UK Aviation Forecasts (August 2011), overall passenger demand for air travel is relatively unresponsive to changes in price although this can vary by sector with business passengers being much less responsive than leisure travellers. So overall, APD is likely to have a limited effect on aviation demand. d. How should improving the passenger experience be reflected in the Government’s aviation strategy? 9 The Government thinks it is important that it works closely with airports and airlines to deliver good passenger aviation experience. Airports are often a visitor’s first impression of Britain. Long delays either at security, immigration or for operational reasons have a negative impact and potential economic costs. As such the Government is pursuing a suite of measures with the industry to improve the passenger experience in the short term. For example, we are among other things:

• Improving efficiency at the border. The Home Secretary is working to improve efficiency at the border, including reviewing the UK’s visa regime, to ensure that our border policy supports our prosperity agenda whilst maintaining effective security. Any changes to the UK’s visa regime will be implemented during the course of 2013. The Home Office has also brought forward the recruitment of 70 additional staff at Heathrow to provide additional flexibility to secure the border while dealing with increased passenger numbers. And it is looking at how we can improve the role of automation in the expedited clearance of passengers, linked to the development of a

2 UK Balance of Payments, Pink Book, Table 3.1, 2012, http://www.ons.gov.uk/ons/rel/bop/united- kingdom-balance-of-payments/2012/index.html 3 HMRC Overseas Trade Statistics (CHIEF Non-EU data), HMRC, 2011 provisional https://www.uktradeinfo.com/index.cfm?&hasFlashPlayer=true 4 CAA statistics 5 Global Competitiveness Report 2011-2012, World Economic Forum, September 2011, http://www3.weforum.org/docs/WEF_GCR_Report_2011-12.pdf 6 CAA statistics

registered traveller scheme to replace the current IRIS scheme which has been extended. • Improving reliability and reducing delay at Heathrow through the current trial of operational freedoms to improve resilience and reduce delay and by taking forward other recommendations of the South East Airports Taskforce, such as airport performance charters which will set out the level of service that airlines and their passengers should expect. Further details on this are provided at 2a. • Reforming the economic regulation of airports to promote passenger interests through the Aviation Regulation Bill currently in Parliament • Delivering better surface access to airports. In total over this spending review period the Government is supporting investment of £1.4 billion on rail and road schemes which will directly or indirectly benefit airports across the UK. The Government is also inviting train companies to explore the potential of ‘code-sharing’ between flights and long-distance train services, to enhance competition between trains and domestic flights. • Exploring with the US authorities and others, the feasibility of US pre- clearance facilities being made available in the UK, which could improve the competitive offer airports operating such a scheme would be able to make.

10 Airports across the UK are improving the passenger experience by responding to local demands. Below are a few such examples:

• At Heathrow Airport, a £5 bn capital investment programme will redevelop all its terminals. • Gatwick Airport is taking forward a £1 bn capital investment programme to improve its terminals and airfield. • Birmingham Airport has recently completed a terminal development project that allows the airport to better meet increasing passenger demand while also making the airport more attractive and efficient for users. • Southend Airport has completed a programme of investment that has transformed the airport. A new terminal has been constructed, a runway extension that allows the operation of newer generation, high-efficiency, medium capacity aircraft has been completed, and an airport railway station that offers direct rail links to London opened in September 2011. e. Where does aviation fit in the overall transport strategy? 11 The Department’s vision is for a transport system that is an engine for economic growth but one that is also greener and safer and improves quality of life in our communities. By improving the links that help to move goods and people around, and by targeting investment in new projects that promote green growth, we can help to build the balanced, dynamic and low-carbon economy that is essential for our future prosperity.

12 One of the Department’s Business Plan priorities is to promote sustainable aviation; to create a sustainable framework for aviation in the UK, improve passenger experience at airports and maintain high standards of safety and security for passengers and freight.

13 The Department is producing a new transport strategy which will set out more clearly how our policies across different transport modes work as a whole to deliver our priorities. As well as a vision for transport, it will outline how the Department’s activities fit together to deliver the Government’s transport priorities. The strategy does not replace or duplicate our work on aviation, but will set it in a wider context.

2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? 14 The Government is working with industry to improve reliability and reduce delay at Heathrow, our biggest and busiest airport, through a trial of measures introducing greater operational flexibility. If operational freedoms show clear benefits in terms of resilience, reducing delays and allowing planes to land more effectively, thereby reducing the impact of noise for residents under the flight path, then we will consult on making these benefits permanent.

15 We are also taking forward the other recommendations of the South East Airports Taskforce, such as airport performance charters which will set out the level of service that airlines and their passengers should expect, as well as new guidelines developed in a Civil Aviation Authority (CAA) chaired industry group which will aim to make the best use of existing capacity.

16 In addition, Government is in the APF consulting on:

• Further liberalising the UK aviation market to encourage new routes by extending to Gatwick and Stansted the ability for foreign airlines to pick up passengers when flying to other destinations. • Looking to identify options, within the EU legislative framework, aimed at ensuring that slots at our congested airports are used in the most economically beneficial way for the UK. The focus of this work is on seeking to optimise the functioning of the secondary trading market for airport slots. • Considering the potential for new rules by airport operators to improve the use of existing capacity at our busiest airports – for example, by limiting access to smaller planes.

17 We expect to engage with key stakeholders later in the summer and publish a progress report in the Autumn. We are also working with the EU, in the context of the Commission’s proposals on reform of the rules on landing slots to secure measures to support UK regional connectivity, such as protecting the provision of air services between Northern Ireland and Heathrow. b. What more could be done to improve passenger experience and airport resilience? 18 The Governments proposals to improve the passenger experience were covered in 1d, this section will therefore focus on resilience.

19 The UK’s aviation industry has significantly improved air passengers’ experience in the light of disruption to air services during the winters of 2009 and 2010 through measures to increase resilience. The busiest UK airports, Heathrow and Gatwick, have substantially increased their snow and ice clearance vehicle fleets and revised operational command and control procedures alongside airlines. Other UK airports have similarly revised and updated their operational response procedures. Airlines, airport operators and aircraft de-icing companies have reviewed and improved de-icer supply/contract arrangements.

20 Airport operators and airlines also maintain detailed contingency plans to deal with weather and non-weather related factors that might disrupt air services. These plans are continually updated and tested through simulation exercises with other local and statutory agencies.

21 The Civil Aviation Authority monitors the aviation industry’s performance in dealing with weather disruptions, including recovery of normal operations and compliance with

European legislation on assisting passengers whose flights are delayed or cancelled. The Civil Aviation Bill proposes giving the Civil Aviation Authority powers to regulate airports more effectively , including measures to ensure airports maximise operational resilience. c. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? 22 The question of the UK’s airport capacity is crucial to the country’s long-term competitiveness, but is also highly contentious. History demonstrates that without an agreed evidence base and a high degree of political consensus, it will not be possible to deliver a lasting solution that is right for the UK.

23 The Government is clear that airports outside London and the South East have an important role in helping maintain the UK’s air connectivity, and potential to relieve some of the pressure from constrained South East airports. Operators of some airports outside the South East have made robust representations setting out how they might use their spare capacity to do this, and the Government welcomes their input to the debate. The process we are taking forward, based on our Aviation Policy Framework and the independent Commission, will examine options for how this might be best achieved.

24 The Government is working to remove bilateral restrictions on air services on a case-by-case basis. This will mean open access to airports outside the South East for new air services, in order to facilitate inward investment in new routes and extra choice for business and passengers without necessarily having to secure reciprocal access for UK airlines to the airports of the other country.

25 The Government is working with BIS, UKTI, and others to market the benefits of flying to a range of UK airports and to target new carriers, particularly carriers in emerging markets such as Latin America, India and South East Asia. Government is using the Olympics and GREAT brand to deliver a new and strengthened marketing campaign. d. How can surface access to airports be improved? 26 We are improving surface access to airports with significant new investment. In total over this spending review period the Government is supporting investment of £1.4 billion on rail and road schemes which will directly or indirectly benefit airports across the UK.

27 This includes a fleet of thirty new electric trains on the Stansted Express to London which entered service last year and a £53m upgrade of Gatwick Airport station with improved passenger facilities, an extra platform and more track and signalling by 2013 and a Regional Growth Fund contribution of £19.5 million for junction enhancements to be completed by 2014 which will improve access from the M1 to Luton Airport.

28 Elsewhere the Metrolink extension to Manchester Airport is due to open in 2016 which will provide a every 12 minutes between Manchester Airport and Manchester City Centre, while Birmingham Airport will benefit from improvements to the A45 corridor.

29 In the future, Luton and Gatwick will receive improved rail services through the and we expect Heathrow passengers to benefit from Crossrail.

30 Funding has been committed of up to £500m towards a western rail link to Heathrow, subject to a business case and conclusion of agreements with the aviation industry. This recognises the continued importance of Heathrow as our major international hub. Businesses west of the airport have been calling for this vital investment for many years. It will cut typically 30 minutes off the journey to Heathrow from the west of England and south Wales, with significant benefits for growing cities like Swindon, Bristol and Cardiff. The service could come into operation as early as 2021.

3. What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents? 31 The Government’s overall policy on noise is set out in the Noise Policy Statement for England. This contains a long term vision of promoting good health and good quality of life through the effective management of noise in the context of Government policy on sustainable development.

32 In terms of reducing the impact of aviation noise on local residents, noise continues to be a real source of tension between a number of airports and local communities. If airport capacity is allowed to grow, it is essential that the aviation industry continues to tackle its noise impact in order that the benefits are shared between airports and local communities.

33 The Government’s aim is to establish a framework which more strongly incentivises noise reduction and mitigation and also encourages better engagement between airports and local communities and greater transparency to facilitate an informed debate. The draft APF document proposes to retain the existing high level objective to limit, and where possible reduce, the number of people significantly affected by aircraft noise. It discusses a number of ways of reducing and mitigating noise, covering areas such as noise abatement operational measures, the use of noise envelopes, different noise metrics, noise limits, monitoring and penalties, landing fees, compensation schemes and air quality.

34 The Government also sets the noise controls at Heathrow, Gatwick and Stansted and as part of the draft APF consultation we have asked if the Government should continue to do this.

35 At other airports, consistent with the Government’s localism policy, we take the view that noise controls should continue to be agreed locally rather than being imposed by central Government. Noise controls at these airports are based on local authority powers to impose planning conditions on new developments, EU requirements for airports to develop and implement Noise Action Plans following consultation, voluntary arrangements through the influence of Airport Consultative Committees or a combination of these measures. Most airports of significant size have measures in place which are similar to those set by the Government at Heathrow, Stansted and Gatwick.

36 Noise Abatement measures at Heathrow Gatwick and Stansted airports, at which the Government sets noise controls, include departure noise limits and height limits, noise preferential routes and the use of continuous descent approach. The Aircraft Noise Management Advisory Committee (ANMAC) which advises the Department for Transport on technical and policy aspects on noise mitigation at Heathrow, Gatwick and Stansted, has been tasked to review these measures. In addition, in the night period at these airports there is a restriction on the number of movements and a ban on the noisiest aircraft. The Government announced on 26 March 2012 an extension of the existing night flying restrictions at these airports until October 2014. On steps to replace the current regime we will launch a first stage consultation towards the end of this year seeking detailed evidence, followed by a second consultation next year which will enable us to take account of adopted policy when developing specific measures for the new regime. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? 37 Government’s objective is to ensure that the aviation sector makes a significant and cost effective contribution towards reducing global emissions. The Government believes that delivering this reduction is best delivered through global action, with action at European level a second best option that provides a potentially valuable step towards wider

international agreement. We will take action at a national level where that is appropriate and justified.

38 The Government is working at an international level to secure agreement within ICAO for a global aviation climate change agreement. ICAO has already committed to agreeing an international CO2 standard for aircraft by 2013. In addition an agreement to global aspirational goals of carbon neutral growth from 2020 and annual fuel efficiency improvements of two per cent per year out to 2050 has been reached. The Government fully supports these developments and will continue to press for more progress to be made.

39 In the absence of a comprehensive global deal the Government remains committed and focused to action at a European Level. The EU has agreed a comprehensive strategy to tackle climate change emissions based upon four pillars: reduction of emissions at source; research and development; modernisation of air traffic management and market-based measures. Two of the key components of the strategy are implementing the EU Emissions Trading System (EU ETS) and improving EU airspace design through the Single European Sky programme.

40 At a national level there are a number of actions that the Government is considering or already taking to help reduce aviation’s emissions and make it more sustainable. The Government is determined to strengthen the CAA’s environmental role both though its air navigation role but also proposing new information powers to enable greater transparency.

41 A number of additional Government Programmes are working towards making aviation more sustainable. The Government’s High Speed Rail proposals combined with its actions to create “super-connected” cities through broadband improvement will help provide alternatives to air travel in some circumstances and to physical travel in others. Meanwhile new technologies are continually delivering improvements in aviation’s environmental performance. The Government believes the UK is well placed to lead these efforts and provides tax relief to these research and development activities.

42 All of the above, along with other actions will help secure a more sustainable future for aviation, which is vital to ensure the long term success of UK‘s aviation industry and its contribution to supporting economic growth and competitiveness. c. What is the relationship between the Government’s strategy and EU aviation policies? 43 Except for the previously mentioned environmental initiatives the Government’s belief is that its role should be largely confined to facilitating the existing competitive aviation market within a proportionate international and domestic regulatory framework to ensure a level playing field, and the maintenance of high standards of safety and security. In this regard we will continue to work with EU agencies on regulatory proposals to promote and protect UK interests – including in the areas of safety and operational regulations; airport slot allocation, aviation security, consumer protection and passenger rights.

4. Do we need a step-change in UK aviation capacity? Why?

What should this step-change be? Should there be a new hub airport? Where?

What are the costs and benefits of these different ways to increase UK aviation capacity? 44 The Government believes that maintaining the UK’s status as a leading global aviation hub is fundamental to our long term international competitiveness. But the Government is also mindful of the need to take full account of the social, environmental and other impacts of any expansions in airport capacity.

45 Therefore the Government has asked Sir Howard Davies to chair an independent commission tasked with identifying and recommending to Government options for maintaining this country’s status as an international hub for aviation. The commission will provide an interim report to the Government no later than the end of 2013 and will then publish by the summer of 2015 a final report, for consideration by the Government and opposition parties.

22 October 2012

Written evidence from Friends of the North Kent Marshes (AS 88)

Friends of the North Kent Marshes is a voluntary group, formed in 2004 out of the No Airport at Cliffe Campaign Liaison Group, following the successful fight against the proposals for an airport at Cliffe. Our aim is to promote the Marshes and the ways in which everyone can enjoy them. We work both with the local communities that live on and around the Marshes, and with groups such as the RSPB as they develop flagship visitor sites here. The area faces many threats as pressure for land and development in the southeast continues.

We welcome the opportunity to make our voices heard in this important debate by taking part in the Transport Committee inquiry examining the Government’s aviation strategy.

Summary

We are wholly opposed to the construction of an airport anywhere in the Thames Estuary because of the immense damage it would cause to the area’s internationally important wildlife and the wider environment. The whole issue was exhaustively investigated in the run up to the publication of the previous Government’s Aviation White Paper (2003). All the key players, including the aviation industry, contributed, and the idea of an airport in the Thames Estuary was ruled out. In addition to the unprecedented environmental damage and the resulting legal implications, the investigation found that an estuary airport did not make economic sense, would not meet the requirements of the aviation industry and presented a significantly higher (up to 12 times greater) risk of ‘bird strike’ than at any other major airport in the UK. It would potentially be the single biggest piece of environmental vandalism ever perpetrated in the UK. The Government would have to recreate any lost or damaged habitat elsewhere BEFORE work on the airport could start and even then only if they could prove there is no alternative site for the expansion and it is in the overriding public interest. They would face a legal battle, which could last for years. Recent statements and proposals by London Mayor Boris Johnson, Norman Foster and others in favour of an estuary airport, do nothing to alter these findings. The threats and risks remain the same. An airport in the Thames Estuary is unrealistic due to the ecological, environmental and economic impacts it would cause. An estuary airport would destroy whole communities and adversely impact many others on both sides of the Thames estuary.

Detailed comments

1. Aviation expansion

1.1 We do not support aviation expansion be it anywhere in the Thames Estuary, Lydd or elsewhere. We believe that the demand for flights should be managed and the current Government policy on airports should be revised away from the 'predict and provide' expansionist approach of the last decade that threatens the climate and important wildlife sites. There must be a moratorium on air travel expansion until it can be demonstrated that significant increases in emissions from air-travel can be accommodated within a UK cut of 80% in emissions by 2050, as enshrined in law by the Climate Change Act (2008). Without this, the scale of the cuts required in the rest of the UK economy to offset a continuing rise in aviation emissions would be potentially crippling. Instead, demand for flights should be managed by encouraging the use of lower carbon modes of transport and the removal of the substantial subsidies that the industry currently enjoys including tax-free fuel, and the absence of VAT on all aspects of aviation.

1.2 We do not believe that the case for extra capacity/new runways has been made and even if the Government ever came to the conclusion that it had, a Thames estuary airport should not be included as a viable option in any new Government strategy. Economically, environmentally and ecologically it would be a complete disaster plus it would be the most dangerous major airport in the UK due to the risk of bird-strike.

2. Economic issues

2.1 An airport in the Thames Estuary would be massively expensive and the necessary additional transport infrastructure would further add to the cost. The overall cost (with current estimates around £95billion in total and taxpayers would have to fund around £65billion of that sum, more if the full £30 billion airport costs cannot be met by private investment) combined with its apparent unpopularity with the aviation industry would mean that the airport could struggle to survive economically.

Furthermore:

2.2 There is no evidence of support from the City and thus nobody to pay for it.

2.3 The cost could negate the chance of any significant return on investment.

2.4 The volume of air traffic could mean that other London airports might need to close or have travel from them severely restricted. Indeed if Heathrow were to close it could cause huge unemployment around Heathrow, which employs 72,000 direct staff, and the collapse of the economy of the Thames Valley, west London, the M4 corridor and beyond even damaging the welsh economy. Indeed if Heathrow closed would major airlines and global companies then relocate to the new airport or simply move to an existing hub abroad like Frankfurt or Dubai with no risks attached? This scenario could potentially mean 100,000’s total job losses in the UK.

3. Damage to wildlife sites

3.1 An airport sited in the Thames Estuary would, damage or destroy huge areas of legally protected habitat.

3.2 The Thames estuary has extensive areas of internationally protected wildlife habitats (called Special Protection Areas). These protected areas stretch along both sides of the estuary from Gravesend to Harwich and across to Margate and include the newly designated Outer Thames SPA which covers the entire wider Thames Estuary, east of Sheerness.

3.3 The Government would have to recreate any lost or damaged habitat elsewhere before work on the airport could start – and even then only if it could prove there is no alternative site for the expansion and it is in the overriding public interest. It could face a long and protracted legal battle.

3.4 Any damage must be compensated for and there is nowhere in the Estuary or arguably in Europe where such large-scale damage could be compensated for adequately

3.5 Every year, the wider estuarine complex is a hub for 300,000 migrant birds that rely on the area for feeding and roosting.

3.6 The full impacts on the important fish spawning and nursery grounds in the estuary and the subsequent effect on established fishing operations are as yet un-quantifiable.

4. Wider environmental impacts

4.1 Climate change remains the greatest threat to mankind and biodiversity and we believe that there should be no further airport expansion. The construction of a massive new airport in the Thames Estuary will have impacts that extend far outside the immediate area. Emissions from aircraft are one of the fastest increasing sources of greenhouse gases. Unchecked, climate change may see up to a third of land-based species committed to extinction by regional climate change effects by 2050. The impacts of climate change on wildlife in the UK and abroad are already being felt. A report by DARA Climate Vulnerability Monitor 2nd Edition ( http://daraint.org/climate-vulnerability-monitor/climate-vulnerability-monitor-2012/ ) estimates that climate change causes deaths on average each year today, of 400,000 people per annum and that together the carbon economy and climate change related losses cost the global economy $1.2 trillion every year.

4.2 Emissions need to be slashed across all sectors if the 80 percent target is to be achieved, but emissions from aviation are rising rapidly – doubling between 1990 and 2000. Further airport expansion should be prevented until it can be demonstrated that significant increases in emissions from air-travel can be accommodated within a UK cut of 80% in emissions by 2050.

4.3 The demand for flights should be managed by encouraging the use of lower carbon modes of transport and the removal of the substantial subsidies that the industry currently enjoys including tax-free fuel, and the absence of VAT on all aspects of aviation.

4.4 In a low-lying area like the Thames Estuary, the threat of climate change is particularly significant and it is foolhardy to consider building an airport that would only contribute to the underlying problem.

4.5 Successive governments have stressed the importance of sustainable development, particularly in the Thames Estuary. The recent announcement of the Greater Thames Marshes Nature Improvement Area suggests that the estuary is still seen as very important in environmental terms. Such importance would be disastrously undermined if the airport became a reality.

4.6 Development of the scale proposed would alter tidal flows, changing erosion patterns; with potential negative outcomes for the estuary’s busy shipping lanes.

5. Bird strike.

5.1 An airport in the Thames Estuary would be unsafe. To land planes in a foggy, bird-rich estuary makes it one of the most unsafe locations in the world unless draconian clearance of the flocks that make the Thames their home is undertaken, year after year. Even with an aggressive bird hazard management programme (i.e. shooting or scaring the birds away), the bird strike hazard could be up to 12 times higher than at any other major UK airport. A 2002 study (Study on safety risks from birds and safety measures around Cliffe Marshes by Central Science Laboratory/British Trust for Ornithology for the Department for Transport, 2002) commissioned by the Department for Transport on the bird strike issue found that “the environment around the Cliffe airport option contains substantial numbers of birds hazardous to aircraft. Without a comprehensive and aggressive bird management programme in place, incorporating careful and considered airport design, appropriate habitat management and active bird control, an airport could not operate safely in this location. Even with such world class management and mitigation measures in place as identified in this report, it is not considered possible to reduce the risk to a level similar to that experienced at other UK airports.” We believe it would be irresponsible for any government to ignore such evidence.

6. Hazards

6.1 A hazardous shipwreck packed with explosives lies in the estuary. The SS RICHARD MONTGOMERY was a US Liberty Ship of 7146 gross tons. She was built in 1943 by the St John’s River Shipbuilding Company of Jacksonville, Florida and was one of over 2700 of these mass-produced vessels built to carry vital supplies for the war effort. In August 1944 the ship was loaded with a cargo of some 7000 tons of munitions and joined convoy HX-301 bound for the UK and then on to Cherbourg. On arrival in the Thames Estuary, the vessel was directed to anchor in the Great Nore anchorage off Sheerness. The ship was to await the formation of a convoy to continue the journey across the Channel. However, on the 20th August 1944, she dragged her anchor in the shallow water and grounded on a sandbank running east from the Isle of Grain approximately 250m north of the Medway Approach Channel. The vessel grounded amidships on the crest of the sandbank and intensive efforts began to unload her in order to lighten the vessel so that she could be refloated and also to save the cargo of munitions that were vital for the Allies post-D-Day advancement. Unfortunately, by the next day, a crack appeared in the hull and the forward end began to flood. The salvage effort continued until the 25th September, by which time approximately half the cargo had been successfully removed. The salvage effort had to be abandoned when the vessel finally flooded completely. The wreck of the SS RICHARD MONTGOMERY remains on the sandbank where she sank. The wreck lies across the tide close to the Medway Approach Channel and her masts are clearly visible above the water at all states of the tide. There are still approximately 1,400 tons of explosives contained within the forward holds. The Department for Transport is responsible for the safety of the wreck.

6.2 National Grid’s £1bn gas import terminal on the Isle of Grain is the largest in Britain with suggestions to Mark Reckless MP that it would cost £3billion to remove it to make way for an airport

6.3 Fog A report commissioned by Medway Council showed that the Thames estuary region was three times more susceptible to foggy conditions in comparison to Heathrow Airport.

9. Impacts on Communities

9.1 Last, but by no means least, we come to the destruction of whole communities either under the footprint of a new estuary airport or due to noise, danger zones, pollution and the colossal amount of infrastructure that would be needed to service such gargantuan airport ideas. It has been suggested by Foster Partners that people have no comprehension of the size and scale of a new 21st century hub airport. Well, as communities who were last threatened with annihilation by an estuary airport only a decade ago, we most certainly do. It is so much more than just an airport and runways!

9.2 Medway: The myth that this area of North Kent is an unoccupied wasteland awaiting development is most definitely not the reality. As of February 2012, Medway had 6,508 unemployed. A Thames Estuary airport - which would see twice as many passengers use it a year as Heathrow (150million against 70million) - would employ 70,000 directly and at least another 50,000 in related industries such as warehousing, hotels, depots etc. Medway does not need that many jobs - as there are not anywhere near that many jobless - and is already doing much to bring about investment without concreting the whole area. For instance, Peel Holdings has just had a plan approved to build Chatham Waters a huge £650m development of flats, hotels and a media centre at Chatham Docks. This will provide 3,500 jobs. Elsewhere, 6,000 jobs are set to be provided at the National Grid Site in Grain while the largest single distribution centre in the south east (1.2million sq ft) has gained planning consent at Kingsnorth. There is now also a fast train to London making commuting easier and faster and four universities providing an education for more than 10,000 students. In fact, Medway has worked closely with councils and businesses to bring regeneration across North Kent and the whole area is on target to see an extra 52,000 homes and 58,000 jobs in the years between now and 2026.

9.3 In contrast, a new Thames Estuary airport would be tied up in legal and planning issues for decades (BAA have already indicated they will take legal action against as they say it means Heathrow would be forced to close) and would not be built for decades. Many of the jobs at an airport will be low paid. As an airport will provide 20 times more jobs than needed for the local area, there will undoubtedly be a large influx of people to take these. Estimates show that a new airport would need a new city the size of Manchester built to accommodate all these new people, or around 170,000 new homes in or within the immediate vicinity of Medway. In addition, at least 20,000 people – and probably more as we are talking about two decades away – would also need re-housing following compulsory moves from the Hoo Peninsula to make way for any new airport.

9.4 Over 22,000 people live on the Hoo Peninsula, many whose families have lived and worked here for generations and whose children have left home but stayed on the Hoo Peninsula to raise families of their own in this unique area. Nine villages, Grain, Allhallows, Lower Stoke, Middle Stoke, Upper Stoke, St Mary Hoo, High Halstow, Cooling, and Cliffe & Cliffe Woods would either be destroyed by the airport footprint, danger zones, the massive amount of new road, rail and infrastructure or become uninhabitable due to the sheer volume of huge jets flying low overhead 24 hours a day, 365 days a year with no respite. Where would we all go where our close-knit communities and extended families, of which there are many on the Hoo Peninsula, could remain together?

Communities in Southeast London, Kent and Essex would be subjected to noise and pollution on a scale never experienced before. On both sides of the Thames estuary, for a radius of around 25 miles, vast swathes of countryside, more homes, businesses and the highest grade agricultural land, a national resource, would be lost due to the immense amount of infrastructure ‘strengthening’ that would be needed to service a new hub airport.

9.5 We have a rich cultural heritage, the Magna Carta is believed to have been drafted here, there are distinctive Napoleonic military defences, 20th century pillboxes and the remains of the Hoo Stop Line which served as a defence to protect London in WW11. This is Dickens country; St James Church in Cooling was the setting for the opening scene of his novel ‘Great Expectations’. “Ours was the marsh country, down by the river, within, as the river wound, twenty miles of the sea. My first most vivid and broad impression of the identity of things, seems to me to have been gained on a memorable raw afternoon towards evening. At such a time I found out for certain, that this bleak place overgrown with nettles was the churchyard; and that Philip Pirrip, late of this parish, and also Georgiana wife of the above, were dead and buried; and that Alexander, Bartholomew, Abraham, Tobias, and Roger, infant children of the aforesaid, were also dead and buried; and that the dark flat wilderness beyond the churchyard, intersected with dykes and mounds and gates, with scattered cattle feeding on it, was the marshes; and that the low leaden line beyond, was the river; and that the distant savage lair from which the wind was rushing was the sea; and that the small bundle of shivers growing afraid of it all and beginning to cry, was Pip.” People come from all over the world come to visit this beautiful area, a hidden gem, with its ruined castles, Norman churches, ancient monuments and fine listed buildings, where Charles Dickens lived, wrote and walked for miles. Indeed he took his house-guests out for walks across the marshes from his home nearby at ‘Gads Hill’ in Higham.

9.6 Communities in North Kent have been here before and stood shoulder to shoulder with RSPB and many others as it fought its largest ever campaign against a proposal to site a new airport on Cliffe Marshes. The successful ‘No Airport at Cliffe campaign’ brought a greater awareness of the Thames Estuary & its marshes, why they are so special and why they are protected under local, national & international law. These proposals, which were part of a Government review of airport capacity in the South East, were eventually rejected. The review also considered the option of siting an airport in the Thames Estuary. These proposals were also rejected A new hub airport anywhere in or around the Thames Estuary would potentially be the single biggest piece of environmental vandalism ever perpetrated in the UK.

9.7 There is a strong sense of community among those that live alongside the marshes. We share the vision of the RSPB Greater Thames Futurescapes project and look forward to a sustainable future and a healthy environment where development happens to benefit wildlife and people.

We strongly urge the Transport Committee to ask the government not to include a new Thames estuary airport as a viable option in any new Government strategy and to rule out building a new hub airport anywhere in or around the Thames Estuary at the earliest opportunity.

22 October 2012 Written evidence from Virgin Atlantic Airways (AS 89)

Introduction

1. Virgin Atlantic is pleased to submit evidence to this inquiry. Over 28 years we have grown from a start-up airline to the UK’s second largest global airline. We carried 5.28 million passengers and 210,000 tonnes of cargo in 2011.1 We employ 9,000 people and operate 40 wide-bodied aircraft, serving 30 destinations across four continents from four UK airports.

2. Aviation is a remarkable UK success story. We are home to the world’s busiest airport for international passengers, the world’s busiest single runway airport, and world-leading airlines, engineers and manufacturers. However, success can breed complacency. There is no guarantee that UK aviation will continue to thrive in the decades ahead. Other countries treat aviation as integral to their economic success and are fast catching up and overtaking. As a country we need to decide – and quickly - if we want to remain a leading aviation nation. Given the UK is an island trading nation with an existing competitive advantage in aviation and aerospace, we suggest the answer should be an unambiguous yes.

3. The Committee has posed a large number of questions. We have tried to keep our response brief while answering those questions. We would be pleased to provide additional oral evidence to inform the Committee’s work.

1) What should be the objectives of Government policy on aviation?

4. The Government’s main objective should be to create a legislative, regulatory and taxation framework that facilitates free and fair competition within the UK and allows British companies to compete with their international competitors on a level playing field. The Government will set the environmental parameters within which the industry can operate, but having done that it should let the market operate to meet the needs of passengers. A successful aviation policy would result in:

• the British public being able to fly to more places more easily; • more overseas visitors travelling to the UK for business and leisure; • more exports being flown to overseas markets; • fewer British people being prevented from flying by cost; • more jobs in the aviation sector and the industries it supports; and • more passengers using British airlines and British airports. a. How important is international aviation connectivity to the UK aviation industry?

5. Vital. The UK aviation industry would not have reached the size and importance it has today without it. We believe international connectivity is best achieved through a world class hub airport (currently Heathrow airport) and world-class point-to- point airports (e.g. Gatwick, Manchester, Glasgow). The UK needs both. b. What are the benefits of aviation to the UK economy?

1 www.caa.co.uk/docs/80/airline_data/2010Annual/Table_0_1_6_All_Services_2010.pdf

6. There are direct and indirect benefits to the UK economy. The most recent analysis of the contribution to the UK economy found that UK aviation:2

• contributes £49.6 billion (3.6%) to GDP; • supports 921,000 UK jobs; and • pays over £7.9 billion in tax.

7. Aviation drives wider economic growth by:

• connecting British businesses to new customers, investment and opportunities and opening up foreign markets to UK exports; • encouraging inward investment from foreign firms which require strong international transport links; • lowering transport times and costs, helping to increase competition because suppliers can service a wider area; and • supporting the adoption of new business practices, such as just-in-time- inventory management, that rely on quick and reliable delivery of essential supplies.

8. Many businesses depend on international air travel. British residents made 6.85 million overseas business visits by air in 2011.3 In the same year overseas residents made 5.4 million business visits by air to the UK. Those visitors spent £3.92 billion pounds in Britain.4

9. Air freight represents less than 1% of UK trade products by tonnage, but 30% of exports by value.5 A BIS study looking at sources of future economic growth found that specialised and knowledge-intensive service and manufacturing sectors are likely to contribute strongly, building on the UK’s relative specialisation in finance, business services, communications, and computer and information services.6 These are all sectors that rely on air freight services, so we expect air freight to grow in importance.

10. Aviation is also vital to meet the Prime Minister’s inbound tourism objectives of generating four million additional overseas visitors over the next four years and making the UK one of the top five visitor destinations in the world.7 73% of all inbound visitors to the UK arrived by air in 2011 and their share of inbound visitor spend was 84%.8 That is 7.95 million holiday visits to the UK, contributing £5.5 billion spend in the economy.9 c. What is the impact of Air Passenger Duty on the aviation industry?

11. Air Passenger Duty has a significant impact on passengers and therefore the aviation industry. The UK has the highest air passenger tax in the world. Taking air ticket taxes and airport charges together, the World Economic Forum ranks the UK 134th out of 138 countries.10 Only six European countries tax passengers for

2 Oxford Economics, Economic benefits from air transport in the UK, 2011, p.4 3 ONS, Travel Trends 2011, 26 July 2012, Table 3.03 4 ONS, Travel Trends 2011, 26 July 2012, Table 4.01 5 www.fta.co.uk/policy_and_compliance/air/air_freight.html 6 Department for Business, Innovation and Skills, Sources of Economic Growth, Trade and Investment Analytical Papers, February 2011 7 www.number10.gov.uk/news/pms-speech-on-tourism/ 8 http://www.visitbritain.org/insightsandstatistics/inboundtourismfacts/index.aspx 9 ONS, Travel Trends 2010, July 2011, p.45 10 http://www3.weforum.org/docs/WEF_TravelTourismCompetitiveness_Report_2011.pdf, p.454

international air travel and UK rates are twice the level of the next most expensive tax (levied in Germany).

12. APD was introduced at relatively affordable levels in the mid-1990s. The duty has been increased significantly since 2007, particularly on long-haul flights.

Band Example 2007 Economy rate 2012 Economy rate % increase (£) (£) A EU 10 13 30 B USA 40 65 62.5 C China, India 40 81 102.5 D Australia 40 92 130

13. The impact on families and business travellers has been considerable.

Who’s travelling Class of travel 2007 (£) 2012 £ increase (£) Family of 4 to Spain Economy 40 52 +12 Family of 4 to Florida Economy 160 260 +100 Business party of 4 to Premium Economy 320 648 +328 China

14. The impact on airlines has been significant. The following table shows that between 2008 and 2011, the number of passengers Virgin Atlantic carried decreased by 7.7%, but the amount of APD paid by our passengers increased by 45.6%.

Year No. of % APD paid by Virgin % passengers change Atlantic passengers change (m)11 (yr-on-yr) (£m)12 (yr-on- yr) 2006 4.89 - 55.7 - 2007 5.64 +15.4 122.9 +120.1 2008 5.72 +1.4 134.3 +9.3 2009 5.42 -5.3 129.3 -3.7 2010 5.29 -2.3 149.5 +15.6 2011 5.28 -0.3 195.6 +30.8

15. Setting more internationally competitive rates would benefit the UK economy because APD is much more than a tax on aviation; it’s a tax on exports, business, inbound tourism and families. There is a lack of hard data quantifying the impact of high APD rates. It is surprising that the Treasury has not undertaken such an analysis given it has increased rates significantly over the last six years. With other members of the Fair Tax on Flying Coalition, we are calling on the Government to commission a comprehensive study into the full economic effects of aviation taxation in the UK, including its impact on employment, reporting in advance of the 2013 Budget. APD rates should be frozen until this study has reported. d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

11 http://www.caa.co.uk/default.aspx?catid=80&pagetype=88&pageid=1&sglid=1 12 Virgin Atlantic internal data

16. The Government should focus on the two important parts of the passenger experience where it has direct responsibility: visa applications and entry into the UK. Improving the experience of foreign nationals applying for a visa and the experience of all passengers arriving at our border should be a priority. This will require cross- departmental co-operation and agreement between the DfT, Home Office, FCO, DCMS and BIS.

17. Progress has been made in speeding up, simplifying and making more convenient the visa application process in many countries. Nevertheless, further improvements are required if the UK is to maximise its attractiveness as a destination for business and leisure. VisitBritain issued a consultation document this month on a growth strategy for inbound tourism to Britain from 2012 to 2020. They find that:13

‘The UK visitor visa regime is one of the factors inhibiting Britain’s competitiveness as a destination for international tourism. European competitors such as France and Germany are performing better than Britain in attracting visitors from growth markets such as India and China. Britain is not part of Schengen, so visitors intending to travel to the UK and Europe require two visas rather than one; a British visa requires biometrics and the documentation required is onerous. And whilst UK visas are often issued at comparable speeds to the US or European visit visas, the way service standards are set out creates confusion for potential visitors. This results in poor performance in attracting visitors relative to key competitors in Western Europe, and reduces desire to visit Britain in the longer term, as it perpetuates the idea that Britain is an unwelcoming destination.’

18. The Home Office plans to conduct a global border security assessment in 2013.This is an opportunity to think creatively about practical improvements to the visa application experience without weakening the system. We would like the following ideas to be considered.

• Applicants lose only an admin fee, rather than the entire visa cost, if their application is unsuccessful. • Reduced rates for group or family applications. • Reduced rate if an applicant has previously had a UK visa (UKBA should already have the applicant’s details/biometrics on file). • Reduced rate visas for those who hold a biometric passport. • Reduced rate for spouse/children of British Citizens who are resident overseas. • Reduced rate if an applicant already has a Schengen visa (could be limited to Schengen visas issued by trusted states). • More pragmatic enforcement of interview process, for example children under a pre-agreed age not required to attend a personal interview if parents are also applying for visas at that time (in countries such as China and South Africa, the cost of flights to a city with a Visa Application Centre can be prohibitive). • UKBA should engage the Travel Trade by making ‘Express fees’ and the visa services commissionable.

19. The Government and the industry agree that robust controls at the border and a positive passenger experience are not mutually exclusive. The experience at Heathrow during the Olympics and Paralympics is testament to that. Progress has been made since the spring when queues were unacceptably long on a number of

13 http://www.visitbritain.org/Images/9752%20VisitBritain%20Strategy%20Consultation%20Final_tcm29-35127.pdf

occasions. We want passengers to receive an ‘Olympic welcome’ at every airport on every day of the year. e. Where does aviation fit in the overall transport strategy?

20. Aviation should be an essential element in a multi-model transport strategy. Our passengers need excellent connectivity between our services and other transport modes. Passengers want to be able to travel and from airports and their final destination easily by a variety of transport modes: bus, coach, rail, taxi and car. The same applies to people who work at airports. If your shift starts at 6am, the only option is often private car. Whether it’s deciding on rail franchises (Gatwick) or access to HS2 (Heathrow), the ability to transfer quickly and easily between transport modes should be carefully considered.

2) How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

21. Airlines respond to passenger demand and operate services accordingly. Heathrow is operating at full capacity and Gatwick is full at peak times because passengers want to fly from those airports. Stansted, Birmingham and other airports with excess capacity can attract more passengers and airlines by reducing their charges, improving their passenger experience and marketing their services. We do not believe the Government should intervene in a well-functioning market by somehow forcing airlines and passengers to fly from airports they do not want to fly from or by distorting the aviation taxation system. We need more capacity at airports people want to use. Avoiding this difficult issue by trying to force more people to fly from airports they don’t want to use is not a realistic or long-term solution.

22. Recent experience has shown that a few inches of snow can cause significant disruption for our passengers. While airport resilience depends on effective airport management and communication between the airport, airlines and other bodies, capacity also plays an important role. Spare capacity creates flexibility during every day operations and specific events. Spare capacity also enables an airport to recover and return to normal operations quickly after an event. Airports operating at full capacity will be less resilient than airports with spare capacity. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

23. We operate services to our key leisure routes from Manchester and Glasgow airports. We have responded to passenger demand and operate flights that are viable based on the passenger demand profile of these airports. However, our regional airports are not able support viable services to the broader range of long- haul destinations that are viable from Heathrow. The best way to increase the use of regional airport capacity is to stimulate economic growth in those regions. Airlines will respond as passenger demand grows.

24. The Government already encourages foreign airlines to use regional airports. Since 1998, unconstrained third/fourth freedom access to regional airports has been offered (subject to UK airlines being able to operate without restriction on the same routes) and since 2005, applications from foreign airlines to operate new fifth

25. When we attend bilateral talks between the UK Government and other countries, UK officials always promote the other London airports and regional airports, but the response is usually the same: foreign governments are generally only interested in Heathrow. When foreign governments are unable to access or increase their own airlines’ access to Heathrow, they are understandably reluctant to open up or increase UK carriers’ access to their airports. Insufficient capacity at our hub airport is restricting the further liberalisation of air service agreements and therefore holding back new services to new markets. c. How can surface access to airports be improved?

26. We are particularly keen to improve rail access between London and Gatwick airport. We have four priorities for the new combined franchise.

• Returning to a dedicated airport service and maintaining a truly express service between London and Gatwick airport. Since 2008 the Gatwick Express has not been a dedicated airport service, with trains running through to Brighton and back at peak times. It is in our view that this extension to Brighton should be discontinued. Air passengers have different needs from the rolling stock (e.g. luggage space) and at peak times the train is already full when it reaches Gatwick from Brighton. We would not support the introduction of additional stops on this service (e.g. at East Croydon or Clapham Junction) that would result in a slower service.

• Ensuring appropriate rolling stock. The rolling stock operating on the Gatwick Express service should meet the needs of air passengers. The current Class 442 trains are sub-optimal with limited luggage space, narrow internal doorways and a large step from carriage to platform at Gatwick. The previous Class 460 trains had wider doors and more luggage rack space; although there were issues with comfort and noisy air conditioning. Given passengers are paying a premium price to use the Gatwick Express rather than local services, they deserve rolling stock that meets their needs.

• Maintaining/improving the frequency of services. Our passengers value the regular four trains per hour service, especially when travelling from London to Gatwick before their flight. The status quo should be the minimum standard.

• Removal of ticket barriers at Gatwick Airport. The recently installed barriers at Gatwick continue to cause annoyance, queues and sometimes fines for our passengers. Previously, the Gatwick Express used to carry out 100% on board ticket inspections to avoid revenue loss. The introduction of the gates has not improved the revenue collection for this service, but it has created an additional burden for passengers.

3) What constraints are there on increasing UK aviation capacity?

a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

27. The aviation industry has a strong track record of reducing the impact of noise on local residents. For example, around 2 million people lived within the Heathrow 57dBA contour in the 1970s, but by 2011 that number was down to less than 250,000, despite a significant increase in the number of flights flown per year over the same period. Sustainable Aviation is currently developing a Noise Road Map that will show how noise impacts are predicted to change over the next few decades.

28. Noise understandably remains a key concern of local communities and the industry is committed to working with them to find constructive solutions. We support the internationally agreed, ICAO ‘Balanced Approach’ principle to aircraft noise management which has four elements:

• reduction at source (quieter aircraft); • land-use planning and management; • noise abatement operation procedures (optimising how aircraft are flown and the routes they use to minimise noise impacts); and • operating restrictions.

29. The Government has proposed the concept of ‘noise envelopes’. The broad principle of providing greater clarity and certainty for communities and the industry is welcome, but much more detail about how they would work in practice is still required to comment in any depth.

30. The Government is right to recognise the interdependencies between noise and carbon emissions. The Government proposes the general rule that airports and air traffic service providers should give particular weight to the management and mitigation of noise in the immediate vicinity of airports, compared with CO2 emissions. We do not oppose this in principle, but great care will have to be taken to strike an appropriate balance.

31. Overall, the Government position on noise appears to be still developing. The draft Aviation Framework asks more questions than it answers. We await further detail to provide a full evaluation of its effects. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

32. The previous Government set a target that gross aviation emissions (emissions before an adjustment is made for trade in carbon credits) should return to 2005 levels by 2050. The Committee on Climate Change believes this is feasible, compatible with significant demand growth and broadly cost-effective, with different scenarios for demand growth and technology deployment reaching a similar emissions outcome:14

‘Our review of aviation emissions in 2009 showed that there are various options for meeting this target, including fuel efficiency improvement, operational

14 http://www.theccc.org.uk/sectors/aviation/uk-aviation-emissions-to-2050

efficiency improvement, use of biofuels, modal shift and constraints on demand growth. We presented scenarios with baseline demand growth of 150% from 2005 to 2050, falling to 115% when exposed to a carbon price that reaches £200/tCO2 in 2050; in our ‘Likely’ scenario, emissions reductions were delivered through a 0.8% annual improvement in fuel efficiency, by meeting 10% of fuel demand with biofuels and by constraining demand growth to 60% from 2005 (a 75% increase from 2010 given that demand fell during the recession).’

33. Virgin Atlantic individually, and the industry collectively through Sustainable Aviation15, is working hard to address the environmental impact of flying. For example, we are currently taking delivery of ten new -300s that are 15% more efficient on a per seat basis than the aircraft they replace. From 2014 we will start receiving 15 Boeing 787s that are approximately 25% more fuel efficient and produce a 60% smaller noise footprint than the A340-300s they will replace.18

34. The Government is right to focus on action at a global level, with action at European level a second best option. We do not support unilateral actions at the national level that create competitive distortions in the international market. The proposed approach broadly echoes the Committee on Climate Change who argue that the appropriate approaches are at the global, or possibly EU level, but warns that ‘a UK unilateral approach would have limited impact reducing emissions and could result in perverse outcomes or leakage.’16

35. When negative externalities occur such as CO2 emissions and noise, we support market-based measure, such as emissions trading, to address them. We support aviation’s inclusion into the EU Emissions Trading Scheme as a first step to a global mechanism for the reduction of aviation emissions. As a market-based cap and trade scheme, EU ETS will be more effective than APD which is a blunt tax that does not cap emissions. Nevertheless, the risk of retaliatory action from foreign governments remains high and should not be ignored. ETS revenues should be off- set against APD revenues to prevent the overall tax burden on industry increasing. The Government should continue to work in ICAO for a global agreement.

36. The Government should support further improvements by fostering an economic and regulatory environment that allows aviation businesses to generate the profits needed to make technological, fleet and operational improvement investments. The Government should also work with industry to tackle barriers that will be difficult to overcome through the market alone, such as the development of advanced biofuels and more efficient airframes.

37. Virgin Atlantic is disappointed not to see development of any further initiatives to support sustainable aviation fuels. Drop-in sustainable fuels are a practical solution to reducing aviation emissions as they need no new infrastructure or handling costs. The Climate Change Committee’s recent Bioenergy report set out the role of biofuels in meeting emissions reductions targets.17 It demonstrated two scenarios (with and without carbon capture and storage (CCS) technology). In both scenarios the use of biofuels in aviation is highlighted as an important part of the policy solutions needed, with this role even more critical in a world without CCS.

15 See the Sustainable Aviation CO2 Road-map at http://www.sustainableaviation.co.uk/wp-content/uploads/SA-CO2- Road-Map-full-report-280212.pdf 16 http://hmccc.s3.amazonaws.com/IA&S/CCC_IAS_Tech-Rep_2050Target_April2012.pdf 17 http://www.theccc.org.uk/reports/bioenergy-review

38. In the short-term, many sustainable aviation fuel pathways are not economic in their own right and carry with them material first-of-a-kind technological risk for investors and lenders. Moreover, despite strong interest and support for a more sustainable alternative to kerosene, there are also a number of practical barriers to the development of this emerging new market and the widespread adoption of sustainable aviation fuels. Since these fuels will not be derived from a single technology but a portfolio of technologies at different stages of development, a range of policy measures will be necessary. The appropriate types of policy incentive vary depending upon the proximity of a technology to market. We believe there is a role for the Government in developing policy measures to ensure these vital technologies can be developed.

39. Ultimately, the most effective instrument to achieve this objective is a global carbon trading regime, creating a carbon price linked to economy-wide marginal abatement costs. In the short term however, there is an urgent need to ensure aviation is not disadvantaged compared with other transport modes and sectors. For example, under the EU Renewable Energy Directive, 10% of all energy in the road transport sector must be from renewable sources in 2020. This creates a bias in favour of biomass being directed to biodiesel rather than aviation biofuels. This bias does not make sense because unlike ground transportation where practical alternatives to combustion already exist, it is clear that aviation will be dependent on liquid fuels for the foreseeable future. Finally it is also important that biojet can make the most of existing incentives. This means the ETS needs to be amended to allow aviation to use a purchase-based (or “book and claim”) accounting methodology instead of a consumption-based methodology, similar to that used for the energy industry.

4) Do we need a step-change in UK aviation capacity? Why?

40. The case for increasing hub airport capacity is overwhelming. The number of passengers using UK airports is forecast to rise from 211 million in 2010, to 335 million in 2030 and to 470 million in 2050.18 As noted above, significant growth is compatible with the nation’s climate change targets. The Committee on Climate Change argues that an increase in flights (Air Transport Movements (ATMs)) from 2.05 million in 2011 to a maximum of 3.4 million in 2050 is compatible with the 19 target to reduce UK aviation CO2 emissions back to 2005 levels by 2050.

41. The following table shows that there is excess airport capacity across the country as a whole, but an acute shortage of capacity at our hub airport Heathrow. Heathrow operated at 99.2% capacity last year, whereas Birmingham, for example, operated at 44.4% capacity.

Airport Maximum runway Actual use in Capacity capacity (ATMs, 201121 utilisation (%) ‘000s)20 Heathrow 480 476 99.2 Gatwick 260 245 94.2 Stansted 259 137 52.9 Luton 104 72 69.2 London City 120 61 50.8

18 http://assets.dft.gov.uk/publications/uk-aviation-forecasts-2011/uk-aviation-forecasts.pdf 19 http://www.theccc.org.uk/sectors/aviation 20 http://assets.dft.gov.uk/publications/uk-aviation-forecasts-2011/uk-aviation-forecasts.pdf 21 Frontier Economics, Connecting for growth: the role of Britain’s hub airport in economic recovery, September 2011

Manchester 321 158 49.2 Birmingham 189 84 44.4 East Midlands 200 54 27 Bristol 200 53 26.5 Liverpool 200 46 23 Newcastle 200 45 22.5 All UK airports 5,790 2,046 35.3

42. Heathrow now serves fewer destinations than its three main EU competitors (Paris Charles de Gaulle, Frankfurt and Amsterdam Schiphol).22

No. of Heathro Amsterdam Frankfu Paris Madrid routes w rt Short-haul 46 67 74 78 63 Long-haul 82 64 75 77 32 TOTAL 128 131 149 155 95

43. Heathrow is also poorly connected to some of the world’s fastest growing economies. There are no daily flights between Heathrow and Mexico, Indonesia, Venezuela, Colombia, Chile, Philippines, Pakistan, Peru, Ukraine and Vietnam.

44. Constrained hub capacity has resulted in long-haul services squeezing out some short-haul services. This is not sustainable because most long-haul routes depend on the transfer passengers provided by short-haul services. As the figures for Amsterdam, Frankfurt and Paris show, successful hub airports have a mix of short- haul and long-haul services. The capacity crisis will not be solved by forcing airlines to move short-haul flights out of Heathrow to other London airports.

45. Constrained hub capacity restricts competition between airlines. Following its acquisition of bmi, British Airways now owns 50% of slots at Heathrow. The next biggest operator owns approx. 5% and Virgin Atlantic, the third biggest slot holder, owns just 3% of slots. The lack of slots makes it difficult for Virgin Atlantic to launch new services to offer much needed competition on key routes.

46. Constrained hub capacity limits the UK Government’s ability to negotiate liberal bilateral air traffic agreements with other countries. Other countries are understandably reluctant to open up or extend access to their main airports for UK carriers, when the UK Government is unable to offer the same level of access to Heathrow. Pointing to spare capacity at Gatwick, Stansted or the regions has so far proven unpersuasive.

47. Some people argue that we don’t need more hub capacity because regional airports have spare capacity. If we are to maintain and increase long-haul services, particularly to the BRIC and emerging economies, we need a hub airport with more capacity because most long-haul services are not viable from our regional airports.

48. Hub airports combine larger point-to-point demand with domestic and international connecting traffic to make many more routes viable. This is particularly important for long-haul routes where airlines have higher fixed costs and larger aircraft to fill. The CAA has estimated that two thirds of Heathrow destinations are supported by more than 20% of transfer passengers.

22 Ibid

49. Our regional airports perform an important but different role. With relatively smaller catchment areas and limited connecting services, no frills, charter and scheduled airlines operate direct point-to-point short-haul services from regional airports. The biggest regional airports do support a limited number of long-haul leisure routes operated by UK airlines and business routes operated by overseas airlines feeding their home hub airport, but far fewer than Heathrow.

50. The following table demonstrates the scale of the difference between Heathrow and our top regional airports.23

Total passengers connecting Airport Total passengers (m) Number Share of all (m) passengers Heathrow 66.9 23.5 35% Gatwick 34.5 4.5 13% Stansted 23.6 2.2 9% Manchester 21.6 0.6 3% Birmingham 9 0.2 2%

51. Gatwick has attracted a handful of direct long-haul services to Vietnam, Korea and China in recent months. It remains to be seen if they can be made viable. Delta has recently dropped its Gatwick-Atlanta route, the carrier’s last route from the airport, and started an additional Heathrow-Atlanta frequency.24 a. What should this step-change be? Should there be a new hub airport? Where?

52. We believe the UK needs one internationally competitive hub airport located where people where to fly to and from. We supported the proposal for a third runway at Heathrow because it delivered significant extra capacity at an affordable cost, in a convenient location for passengers, within a relatively short timeframe. We are not, however, wedded to one solution. If a superior alternative solution comes forward during the Davies Commission process we will give it full consideration. Airport infrastructure is privately funded in the UK, so any solution must command the confidence of the industry. The Davies Commission should analyse every solution to the hub capacity crisis objectively on its merits. b. What are the costs and benefits of these different ways to increase UK aviation capacity?

53. Until existing airports or new developers present detailed proposals during the Davies Commission process, it’s impossible to answer this question.

54. We are extremely sceptical of the concept of a ‘virtual’ hub airport. Successful hub airports have low minimum connection times (the time it takes to leave one aircraft and board the next as part of an indirect journey). Even with a dedicated High Speed link between two UK airports, we cannot see how a ‘virtual’ hub could

23www.caa.co.uk/docs/5/Connecting_Passengers_at_UK_Airports.pdf 24 http://www.businesstraveller.com/news/delta-drops-heathrow-miami-route

deliver either. Without a competitive transfer proposition, passengers will choose to connect at other competing hub airports, rather than in the UK.

55. The following table shows minimum connecting times at the main European hub airports:25

Minimum connecting time in Minutes Europe Vienna 25-30 Munich 30-35 Copenhagen 45 Frankfurt 45 Amsterdam 50 Brussels 50 Paris 60-90 Heathrow 60-90

56. Heathrow, as a single hub airport on one site (albeit with five terminals) where many transfer passengers remain airside in transit, is only capable of delivering minimum connection times of between 60-90 minutes. We cannot envisage how a Heathrow-Birmingham or Heathrow-Gatwick ‘virtual’ hub airport on two sites, with the existing challenges of Heathrow, with passengers having to collect their bags, clear immigration, catch a train, check-in at the other airport, go through security, then get to the departure gate, could deliver anyway near the same connection times. For immigration and security reasons, it’s difficult to envisage how passengers could remain airside for the whole transfer process.

57. We are not aware of a comparable successful ‘virtual hub’ airport operating anywhere else in the world. In countries such as France, Germany and Holland, each of their hub airports have been given the opportunity to grow on one site. A ‘virtual’ hub airport is no replacement for one hub airport that has sufficient capacity to meet future demand.

58. With regards to another airport taking on a limited hub role while Heathrow is at maximum capacity, we believe the UK is only able to support one internationally competitive hub airport. This is consistent with other comparable countries. We note that British Airways sought to run a second hub operation at Gatwick in the 1990s that was unsuccessful. The airline ended up consolidating its hub operations at Heathrow.

22 October 2012

25 OAG Flight Guide, August 2010

Written evidence from Peel Airports Limited (PAL) (AS 90)

Peel Airports Limited (PAL) operates two regional airports: Robin Hood Doncaster Sheffield Airport (RHADS) and Liverpool John Lennon Airport (LJLA).

Introduction

PAL welcomes this call for evidence and supports the TRANSEC inquiry looking at the proposed Aviation Policy Framework published by the Government in July 2012.

PAL strongly agrees with TRANSEC in believing that a strategy for aviation policy (including aviation capacity) must not be delayed until 2015 and it should remain high on the political agenda during the current Government’s term.

This response document comprises PAL’s position on the five main areas:

1. Aviation Policy Framework (APF) proposal 2. Air Connectivity and the benefits of aviation to the UK economy 3. Existing and future aviation capacity requirements 4. Aviation taxation 5. Aviation and environment

We have provided our comments and views on the above areas and highlighted specific issues which are of most importance to our regional airports and the regions they serve.

We have also attached two documents which provide further details on our position on UK aviation’s competitiveness, the impact of APD on our regional airports and lack of a coherent national aviation policy.

1. PAL formal response to the All Party Parliamentary Group on Aviation (APPG) – Inquiry into “Maintaining the Competitiveness of the UK in Global Aviation”, May, 2012; 2. All Party Parliamentary Group for Aviation – Final Report, August 2012 Inquiry into “Aviation Policy and Air Passenger Duty”, House of Commons;

1. Aviation Policy Framework (APF) Proposal

Before we comment on the proposed aviation policy framework, we would like to re- visit the key message set out in the current AWP2003 policy produced by the previous Government. The policy document sets out a clear 30 year strategy by stating:

“…It is essential that we plan ahead now; our future prosperity depends on it!”

This is a powerful statement that reflected the vision of the previous Government and provided the industry with a clear direction and support for growth and economic prosperity the industry was empowered to deliver.

This visionary strategy has enabled a successful revival of regional airports across the UK and delivered a boost to regional economies, improved regional connectivity, supported inward investment and grown the tourism economy.

We have provided more details on the positive effects of this aviation strategy on the regions served by LJLA and RHADS in section 2 of this document.

APF Proposal

Following a lengthy delay in formulating its aviation policy proposal the Government published its APF proposal and commenced consulting on it in July 2012.

We believe that this delay is an indication of the Government’s continued lack of vision and clear strategy with regard to UK aviation policy, combined with a lack of commitment to the sector to ensure long term support to the sector.

The current proposal does not provide a coherent long term strategy nor does it place the industry at the heart of the Government’s drive for economic recovery and rebalancing of the economy.

Improved international connectivity, regional connectivity in particular, enables our economy to compete more successfully in the international markets. It delivers inward investment and grows the tourism economy.

The proposal skirts around the two key issues: aviation capacity and the declining competitiveness of our regional airports. Our competitiveness is of critical importance for the connectivity, economic performance of the regions served by our airports and rebalancing of the economy - the concept the government has frequently highlighted as the key priority.

Therefore, we believe that the proposal fails to place sufficient weighting on the importance of connectivity to the UK economy and especially to the UK’s regions’ connectivity which is declining fast due to excessive aviation taxation and its suppression of demand. This is even more evident in the North of the country, served by our airports, which is a price sensitive market.

The policy proposal is silent in respect of the two major aviation policy matters which continue to burden the sector:

• Rapid rise in external cost to our airports and continued subsidy of other transport modes such as rail and public transport (direct result of recent Government policies);

• Continued rise in aviation taxation - APD (direct result of the Treasury’s continued short sighted approach toward the sector);

We continue hearing the same excuse from the DfT with regard to the APD issue – “…This is the matter for the Treasury to consider etc…”. This is not the right way forward especially now when the Government is dealing with rebalancing the economy and working on developing the UK’s national aviation policy.

There is a significant body of evidence1 which indicates that APD does have an effect on the industry and the economy. APD is of national importance and should be treated as such.

1 All Party Parliamentary Group for Aviation – Final Report, August 2012 Inquiry into “Aviation Policy and Air Passenger Duty”, House of Commons;

We believe that there is an urgent need for a joined up – cross departmental approach, where the Treasury, the DfT and the industry would work together on a quantitative study looking at the impact of aviation taxation on the growth of the industry, its ability to deliver international connectivity and its ability to drive the economic recovery.

The policy proposal does not explore nor make any references to such an approach.

We feel that the main thrust of the proposed policy focuses on mitigating aviation environmental and noise impacts, which are important elements in their own right but not the most critical factors that determine the direction and the shape of national aviation policy.

PAL shares the industry’s position - the industry is unanimous and confident that the future growth can be delivered in a sustainable and environmentally responsible manner as set out in the Sustainable Aviation’s “CO2 Road Map”.

There are well established and clear EU Regulations and Directives which provide guidance on what is required from the industry in respect of mitigating its impact on the environment (the EU ETS and EU Noise Directive).

The sector’s environmental and noise impacts are global issues and not solely UK specific issues.

There is no need for unilateral implementation of even more stringent measures in the UK – the existing EU measures, which the UK industry is compliant with, are sufficient in tackling the sector’s future environmental and noise impact on environment.

Otherwise, new unilateral measures would only further erode the already compromised competitiveness of our regional airports and the UK industry as a whole.

In respect of future growth - we do not support the proposed policy which places too much importance and emphasis on the growth of UK’s major airports only. UK regional airports have demonstrated over the last decade or so that they are essential for regional connectivity and regional growth.

Our airports are at the heart of the rebalancing of the UK’s economy concept. We would like to see this approach incorporated into the UK’s national aviation policy. We have significant potential to deliver much more if the right environment is created by the Government.

The High Speed (HS2) rail plan has been given much attention and support by the Government. The future high speed rail system could deliver public benefits in the long- term; however it is not a panacea for all of the UK’s future transport problems.

The high speed concept alone should not be presented as a direct substitute for all domestic and short haul air travel in the UK – we believe that it should serve as a complement to air travel; both transport modes could serve as building blocks of the national integrated transport system in the UK. Favouring one at the expense of the other is not the right way forward – consumers need the benefits delivered by competition and more travel choice.

We believe that the Government should improve overall UK connectivity and work hard on integrating both air transport and rail network into a modern system which delivers benefits to the public in terms of time savings and ease of transfer from one transport mode to another.

Many European countries have already successfully integrated their air, rail and bus transport modes delivering benefit for consumers.

2. Air Connectivity and the Benefits of Aviation to the UK Economy

In 2011, a study by Oxford Economics, found that the aviation sector itself contributes almost £50 billion to the UK economy.

This represents almost 4% of the UK’s GDP value. The total value is made up of direct flying activity, aviation’s supply chain, spending by aviation sector employees and aviation’s boosting of inbound tourism.

The study also indicated that the sector is a major employer supporting almost one million jobs.

Legend:

• “Direct” = In Aviation Sector

• “Indirect” = In Aviation’s Supply Chain

• “Induced” = Supported by Aviation Employees’ Spending

In terms of economic contribution to public finances the industry contributes in excess of £9bn to the Treasury in tax (£6bn in general tax and £3bn in APD tax).

Since the recession began in 2008, UK connectivity has declined by 5%, whereas Germany’s has increased by 4.3% and France’s by 3.4%.

These figures suggest that the UK is losing ground in comparison with its direct competitors for international connectivity.

Oxford Economics2 found that in proportion to the size of its economy, the UK does not rank as highly as it potentially could on air connectivity.

2 Oxford Economics Report,

Direct international connectivity has a two-fold importance:

1. It increases the degree of connectivity; 2. It improves passenger convenience and ease of travel;

The results of the study prepared by the Frontier Economics (2011) indicate that UK businesses trade 20 times as much with emerging markets that have a direct daily flight to the UK as they do with those countries that do not.

The lack of direct flights from the UK regions (including the regions served by RHADS and LJLA) to these markets may already be costing the economy over £1.2bn per annum - because trade goes to better connected countries.

The value of this missed opportunity to the UK economy over the next ten years could be as much as £14bn.

Tourism economy is important for regional economic performance. Overseas visitors arriving by air contribute more to the UK economy.

Source: ONS

As previously mentioned, regional connectivity is the key to unlocking regional economies’ potential for growth, inward investment and tourism economy.

LJLA – Liverpool City Region

Liverpool City Region’s cultural and tourism offer is the strongest outside London, boosted significantly in recent years through major public and private sector investment3.

The value of the visitor economy4 to the region in terms of output figures is more than impressive:

• Value of the City Region visitor economy = £3.1billion • Jobs already supported by the visitor economy = 43,000 jobs • Annual visits to the Liverpool City Region = 55 million visits • Liverpool is in the top 10 of all UK towns or cities visited by overseas visitors and is now placed 5th.

LJLA plays an important role in developing the regions international connectivity, inward investment and tourism economy.

There is a correlation between the growth of traffic at the airport, growth in the number of overseas visitors and the regions GVA growth.

3 Liverpool City Region LEP, Business Plan 2012/13 4 Digest of Tourism Statistics, The Liverpool LEP, September 2012.

We would like to draw your attention to the findings and recommendations of the recently published independent study5 lead by Sir Terry Leahy and the RT Hon the Lord Heseltine. The study concludes:

“…Liverpool is not the source of despair it once was; since 2000, Liverpool’s economy has grown faster than that of the UK…this gives us the confidence to look for ways to build on existing achievements…LJLA needs to further develop its global connectivity…Liverpool needs better direct links to international hubs…it should continue to seek direct New York flights…”.

A wrong aviation policy which places most emphasis on London Airports and several major UK airports whilst failing to support regional airports growth could have a negative knock on effect on the UK regions – resulting in reduced regional connectivity; leading to a decline in regional economic output, lack of inward investment and decline in the number of overseas visitors.

5 “Rebalancing Britain: Policy or Slogan – Liverpool City Region – Building on its strengths”, October 2011

RHADS - Doncaster Sheffield City Region

On 28th April 2005, the first ever commercial services commenced on the site of the former Royal Air Force Finningley aerodrome. The annual passenger throughput has reached one million passengers per annum. The jewel in RHADS crown is its runway – one of the longest runways in the UK. The airport is truly an international gateway into and from the UK through the Yorkshire and Humber Region and whilst the Region is proud of having such an airport at its doorstep , RHADS should be regarded as a UK national asset delivering regional connectivity, employment, inward investment, tourism economy etc.

In January 2012, RHADS was crowned the best in the country by “Which?” members following a new survey carried out by “Which? Travel”. The airport received the highest customer score of 80% in the survey, which asked 8,012 members to rate their satisfaction with and likelihood to recommend a UK airport they had used in the previous 12 months. RHADS picked up an impressive “5 Stars” award for the airport environment. The airport topped the group of smaller airports with fewer than 4 million passengers per year.

The airport has both the terminal capacity and one of the longest runways in the UK capable of accommodating largest passenger and cargo aircraft in the world. The airport has significant potential to improve better serve the region and boost the economy. Upon the completion of the FARRRS project in 2014 – the project which will connect motorway users directly with the airport via a dual carriageway, will deliver further benefits to the region and the community served by the airport.

However, RHADS shares a similar barrier to future growth as many other regional airports – its growth is affected by the effect of APD which places the airport at a competitive disadvantage. The North of England is a price sensitive market – adding APD on top of airline fares makes air travel unaffordable for many in the region. Business located in the regions are also affected as they prefer to use their local airport to fly from however as APD continues to act as a barrier to growth thus undermines our potential to attract airlines to deliver the right choice of scheduled services from RHADS to international business markets.

Moreover, both LJLA and RHADS are privately owned airports as the majority of the UK airports are, and as such receive no public funding aimed at developing airports’ infrastructure or operational costs unlike other transport sectors in the UK which receive government subsidy.

We touch upon negative effects of government subsidies on competition amongst the transport modes in the UK in more detail in the section 4 of this response document.

3. Existing and future aviation capacity requirements

We believe that a portion of any future new hub capacity (whether this is provided at London Heathrow, a new UK Hub airport or elsewhere) must be ring-fenced for regional services thus ensuring UK regions access to international markets.

Furthermore, until additional hub airport capacity in the UK becomes available, our regional airports have ample capacity in terms of runway and terminal capacity to accommodate future growth in travel demand and develop regional connectivity and thus stimulate and open up the regions they serve for much needed economic growth. Our airports have untapped potential to kick-start the recovery.

We believe that a set of measures outlined in the APF (fifth freedom rights, PSO services, ADF, further liberalisation of air service rights etc.,) are tools aimed at opening up the UK market and assisting UK airports in developing new services - however in reality we cannot see much benefit from the proposed measures - these measures are nothing new; they have been around for over two decades and have failed to deliver any significant benefits to our regional airports.

We have found it very difficult to apply these measures in general due to the existence of very restrictive EU/UK legislation on competition, state aid etc.

We believe that the key to opening up the UK market and improving the competitiveness of our regional airports revolves around the issue of APD.

APD continues to hinder the growth and introduction of new international services from our airports. This in turn has a negative knock-on effect on regional connectivity and regional economies.

Ample capacity is available at our airports – this is a valuable asset of national importance - we alone are unable to exploit our own potential to the full.

The key to unlocking this extremely valuable capacity locked in our regional airports will remain out of our reach for as long as there is the lack of cross departmental approach in tackling APD.

We strongly believe that the Treasury, the DfT and the industry must work together on assessing the impact of aviation taxation on the growth of the industry, its ability to deliver international connectivity and its ability to drive the economic recovery especially from regional airports’ perspective.

4. Aviation Taxation – Air Passenger Duty (APD)

The APD tax was introduced in 1994 and has been increased significantly over the recent years to the stage where the UK levies the highest aviation tax of any country in the world.

Since, 2007 when the APD was doubled, the duty has seen a rise of a staggering 160% (economy ) and 360% (non-economy travel class) whilst the cumulative rise in inflation over the same period was only 17%.

According to the Government’s budget projection, the rate of APD is forecast to rise even further and generate over £4bn in revenues to the Treasury.

The level of APD has reached a level that is detrimental to the UK economy, regional economy and UK’s international connectivity – APD acts as a brake on the sector’s ability to drive connectivity, stimulate growth and create new employment.

APD and UK Aviation Policy are under the jurisdiction of different Ministers which greatly impairs the development of a cohesive policy for the sector.

PAL believes that the UK regions have been placed at a significant competitive disadvantage to other European and global markets since the absence of an equivalent tax makes these markets more attractive for airlines to grow their business. It presents a major barrier to inward business and leisure travel to the UK.

The Treasury believes that the industry has an advantage over other transport modes in the UK since it pays no VAT on aviation fuel – however we should point out that International agreements (the IATA Convention from 1944) prevent any country from imposing any fuel duty on aviation.

However, this real benefit of no VAT on aviation fuel should be assessed alongside the benefits that other passenger transport sectors receive from the Government in order to provide an accurate assessment as to whether the UK aviation sector has any competitive advantage over other transport modes.

For example, the ferry industry does not pay any fuel duty whilst until recently 80% of the fuel tax paid by bus operators was refunded through the Fuel Duty Rebate mechanism (replaced by the Bus Service Operator Grant).

In addition there is no passenger duty payable by UK cruise passengers departing from UK ports which is even more interesting since shipping generates more CO2 emissions than aviation.

Moreover, other forms of mass public transport are subsidised by the taxpayer, when the aviation sector receives no such subsidies (excluding a small number of PSO air services in the Highlands and Islands in Scotland).

For instance, in 2010/11 alone, the rail sector received almost £4bn of taxpayers’ money/annum6 whilst bus and coach company subsidies in England were granted circa £2.4bn7.

Therefore, the airport infrastructure in the UK is paid for exclusively by the aviation sector alone without receiving any taxpayers’ money.

It is evident that the sector is at a considerable disadvantage to other transport modes in the UK which do not pay a departure tax per passenger journey whether it is a domestic or international journey.

Any further rise in the level of APD tax will have a lesser effect on the airports in the South East of the country but will affect most our regional airports which serve the North England market, a price sensitive market, and where the economic viability of routes is lower due to smaller markets, lower purchase power, and fewer feeder routes.

The Government states that much effort is being paced in measures to rebalance the UK economy and spread aviation demand away from the congested South East – further rise in APD will counteract this policy.

Based on our discussions and feedback from airlines, we strongly believe that APD tax is acting as a disincentive for airlines to grow services from regional airports.

Passenger traffic at UK regional airports such as LPL and DSA is mostly generated by low cost carriers such as Ryanair, , and . APD can account for over 30% of their average short haul fare; for example Ryanair’s average fare8 is £44.00 inclusive of £13.00 APD per departing passenger. Therefore carriers look at continental Europe for growth opportunities.

6 House of Commons Library Standard Note SN/SG/617 Public spending and investment on the railways. 7 Department for Transport, Annual Bus Statistics 2010/11. 8 Ryanair Results – Q3 FY2012, 31st December 2011

APD negatively impacts regional economies, reduces regions’ connectivity, affects the inward tourism economy and weakens the UK economy.

Many European countries, including Belgium, The Netherlands, Spain, Portugal, Belgium, Denmark etc., have abandoned their aviation taxes, due to the negative effect it had on their economies and especially their visitor economy.

As a result of this, UK and foreign passengers travelling from UK airports are taxed twice, i.e. firstly for APD and secondly for ETS. No other country in Europe has implemented such a tax burden on its aviation industry.

Further evidence indicates that APD damages the UK’s connectivity and airlines’ ability to operate business and leisure routes competitively. The doubling of the APD rates in 2007 and subsequent rises in APD have significantly contributed to a number of key routes being lost at UK airports. The most recent example of this can be seen at LPL and Edinburgh Airports where Ryanair decided to significantly reduce their flying programmes in 2012 due to the rise in APD. The loss of KLM’s services at LPL can be attributed to a combined effect of APD and a weak economy on connecting long haul travel demand.

As mentioned a number of European countries have already abolished or are in the process of abolishing their own aviation tax due to the damaging impact the tax has on traffic, inward investment, tourist economy and national economy as a whole.

One of the most striking examples is the case of the aviation tax in the Netherlands.

In 2008, The Dutch government introduced its own air passenger tax for all departing passengers travelling from the Dutch airports. Initially, the Dutch Government was hoping to generate approximately €350 million per annum in tax take from the industry. However, following the introduction of the tax, the Dutch airports, especially Amsterdam Schiphol Airport, saw a significant fall in passenger numbers. In addition the number of Dutch nationals using the airports across the border in Germany and Belgium rose dramatically.

The tax was abolished in January 2010. It is estimated that the Dutch Government had cost the national economy in the region of €1.3 billion in lost revenue9.

There are many reports10, produced recently, which focused on the economic impact of the UK aviation sector on the national economy, UK international connectivity, the impact of APD on the UK aviation sector and the UK economy. They independently arrive at the same conclusion: APD has a direct negative effect on the industry and the economy.

If Government continues to increase APD by 5% annually, according to the British Chamber of Commerce, the loss to the national economy could be as much as £3 billion by 2020 and a staggering £100 billion by 2030.

The Oxford Economics Report (March 2012), commissioned by the World Travel & Tourism Council, provided strong evidence that removing APD would result in an immediate increase of up to £4.2 billion in GDP and the creation of up to 91,000 new jobs.

9 Effects of the Air Passenger Tax: Behavioural responses of passengers, airlines and airports”, KiM Netherlands Institute for Transport Policy Analysis, February 2011 10 British Chamber of Commerce Report, October 2011; World Travel Tourism Council Report, March 2012, Northern Way Report 2008; Oxera Report 2009.

In August 2012, the All Party Parliamentary Group (APPG) for Aviation released the findings11 of its inquiry into Aviation Policy and Air passenger Duty. In its report to the Government, the APPG concluded:

“…Air Passenger duty and Aviation policy are under the jurisdiction of different Ministers. This inevitably impairs the development of a cohesive policy for the sector…evidence from experience in other European countries and indications of changing patterns of traffic, particularly from UK regions, appears to confirm the adverse impact of imposing Air Passenger Duty (APD), particularly at higher rates in the UK. The Government should initiate studies to quantify the full impact of APD on UK competitiveness and its taxation policy…”

Therefore, we fully support the APPG findings and support the calls for an independent analysis of the economic impact of APD on the industry and the economy. We are confident that this report would re-confirm the results presented in the mentioned studies and put the Government on the spot to re-think its position on APD in the interest of regional economies and the UK plc.

5. Aviation and environment

As mentioned under the point 1 – PAL shares the industry’s position on this matter - we are confident that the future growth can be delivered in a sustainable and environmentally responsible manner as set out in the Sustainable Aviation’s “CO2 Road Map”.

Despite popular misconceptions, aviation is not the most significant contributor to climate change; in fact it is relatively small. However due to its high public profile (air travel is highly visual transport mode) there is a widespread public perception that the emissions generated by the sector are much greater than they actually are.

For example, according to the International Transport Forum 2010 report, the global aviation industry contributes around 2% of the total man-made global carbon emissions.

According to the same study, other sectors’ carbon emissions contributions are as follows:

• Energy Supply sector 28.4%, • Industry 19.5%, • Fires and forest clearing 14.3%, • Agriculture 12%, • Road Transport 11%, • Residential 8.1%, • Global Aviation 2% • International shipping 1.2% etc.

Similarly, according to the National Atmospheric Emissions Inventory Document 2009, aviation emissions in the UK account for 6% of Greenhouse Gas emissions. This is much lower than the emissions generated by other sectors:

11 All Party Parliamentary Group for Aviation – Inquiry into “Aviation Policy and Air Passenger Duty”, Final report, House of Commons, August 2012.

• Energy Supply 32% • Road Transport 19% • Business 14% • Residential 13% • Agriculture 8% • Aviation 6%

In 2008 the Department for Transport stated that the impact of the UK aviation sector’s emissions, including noise, was £1.8bn.

In 2012-13, Air Passenger Duty (APD) is set to generate approximately £3bn revenue to the Government. If we take into account a slight increase in the industry’s environmental impact (emissions and noise combined), than a simple calculation based on the above figures indicates that the industry more than covers its costs.

Aviation’s entry into the EU ETS took effect from January 2012. This means that all flights arriving and departing the EU airports have to comply with the ETS scheme.

The ETS mechanism sets a cap on the total aviation emissions and gives each carrier an emissions “allowance”. It is a carrier’s responsibility to remain within its allowance. Therefore, the carrier has several options at its disposal to ensure its compliance:

• Reduce emissions to meet its allowance • Trade allowances (i.e., buy allowances from those who have surplus) • Invest into Certified Emission Reductions or Emission Reduction Units

The ETS mechanism is enforced by Member States and the UK has brought the industry within the ETS regime.

Since both ETS and APD are applied and levied onto departing passengers in the UK, our passengers are taxed twice compared to only once (ETS duty) in the rest of the EU.

The current double taxation approach applied by the UK Government further disadvantages our regional airports and makes our job in attracting new airlines to open up new services from PAL airports even harder.

It is not a surprise to see airlines moving their aircraft from UK regional airports across to the mainland EU where they can operate free of this unfair double tax.

The environmental impact of aviation is a global issue which requires a global resolution.

Any unilateral measures brought by the UK Government alone will further damage UK aviation industry, put the viability of regional airports at risk and affect recovery of the national economy.

Summary

We believe that the current APF proposal fails to deliver a coherent national aviation policy – it is a reflection of the Government’s unwillingness to deal with the airport capacity issue until after the general elections in 2015.

Therefore, we support your initiative for an urgent review of the proposed APF policy. This review should also look at both UK airport capacity and aviation taxation. These factors are the most important factors that will impact, define and shape of our future national aviation strategy.

PAL believes that there should be no further delays in adopting a joined up approach from the DfT, the HM Treasury and the industry on working together on a formal qualitative/quantitative assessment of the APD impact the industry and national economy.

The importance of the outcome of such analysis is significant and could determine the direction of the future aviation policy in the UK. It could determine the prospects of the industry to either grow sustainably delivering international connectivity, jobs and prosperity to our regions and the UK as a whole or not.

The UK’s regional connectivity is in decline – if we fail to act now, we could potentially see detrimental long lasting effects on our regions and airports such as PAL airports - the Government must avoid building its future aviation policy solely around the South East and the future of London Airports.

PAL would like to see a National Aviation Policy – a coherent long term strategy which would address the future of the sector for the entire UK; there must be a shift in focus from London Heathrow/Hub airport issue to UK regions - regional economies hold the key to a successful rebalancing of the national economy and future prosperity of the UK as a whole.

PAL will continue working with the AOA and the industry on ensuring the above issues remain high on the political agenda during the current Government’s term and its successor.

22 October 2012

AIRPORT OPERATORS ASSOCIATION SUBMISSION TO:

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INTRODUCTION

The Airport Operators Association (AOA) is the national voice of UK airports. We are a trade association representing the interests of UK airports, and the principal such body engaging with the UK Government and regulatory authorities on airport matters. The AOA welcomes the opportunity to respond to the Transport Select Committee’s enquiry into Aviation Strategy.

WHAT SHOULD BE THE OBJECTIVES OF GOVERNMENT POLICY ON AVIATION?

1. The AOA believes that the Government should develop an integrated approach to aviation policy. Some key policy levers, like tax ‐ which has major effects on the sector’s performance ‐ are within the remits of other Government departments. 2. The AOA presents its ideas and 25 deliverable recommendations for an integrated framework in its document: “An Integrated Policy Framework for UK Aviation: Connecting the Economy for Jobs and Growth”1. The Executive Summary and a full copy of this document have been provided alongside this submission. The content of this submission is drawn mostly from the content of this document, with some additional material from the AOA’s submission to the Government’s consultation on the draft Aviation Policy Framework (APF). 3. The AOA also believes that the Government’s draft Aviation Policy Framework (APF) should place more weighting on the importance of connectivity to the UK economy. The APF places emphasis on important policy ideas and questions, relate to mitigating aviation’s effects; but there should be much stronger emphasis on measures to further unlock the performance of the sector. What is required is a clear and supportive aviation policy that will allow the sector to thrive, boosting the UK’s connectivity to its key trading partners, providing choice for passengers, and enabling the wider economy to benefit from better business links to the UK.

a. How important is international aviation connectivity to the UK aviation industry?

4. Policy‐makers know intuitively that connectivity is vital to the UK. The UK’s ability to trade, in order to maintain prosperity, will increasingly be the touchstone of its economic health. The APF does consider connectivity. It states that “The UK is currently one of the best connected countries in the world”. However, the evidence that supports this is based on available ‘Airline Seat Kilometres’ (ASKs) – only one measure of connectivity.

5. Wider analysis of UK connectivity suggests that the UK is losing ground relative to its competitors. The UK currently has a strong position, but there is mounting evidence that it will struggle to maintain it. Even using ASKs as the measure, since the recession began in 2008, UK connectivity has declined by 4.9%, whereas

1 Airport Operators Association (2012), “An Integrated Policy Framework for UK Aviation” Page 1 of 13

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Germany’s has increased by 4.3% and France’s by 3.4%2. Oxford Economics (see Figure 1 in the Annex to this submission) has found that, in proportion to the size of its economy, the UK does not rank as highly as it could on air connectivity.

6. Also, while we still maintain a strong position in the transatlantic aviation market and to countries like India, the UK does not rank as highly on connectivity other BRIC (Brazil, Russia, India and China) economies. This is illustrated in Table 1 in the Annex to this submission, which sets out the annual number of flights from the UK and other countries in Europe to the rapidly developing BRIC economies. b. What are the benefits of aviation to the UK economy?

7. A 2011 study by economic consultants Oxford Economics3 found that the aviation sector itself contributes £49.6 billion to the economy (3.6% of UK GDP) and close to one million jobs. This total is made up of directly flying activity, aviation’s supply chain, spending by aviation sector employees, and aviation’s boosting of inbound tourism.

8. The Business and General Aviation (BGA) Sector is also important, adding about £1.5 billion a year to the economy4.

9. Some 40% (by value) of the UK’s exports go by air5 and air‐freighted shipments between Europe and Asia have increased by an average of 10% a year since 19916, reflecting businesses’ reliance on aviation to trade with high‐growth economies like China and India. Vital express freight services often take place during the night, allowing, for example, “Just in Time” (JIT) delivery ‐ delivering over £6 billion a year in efficiencies through reduced stockholding7 . Work by the Civil Aviation Authority (CAA) 8 has found a strong correlation between the countries businesspeople travel to or from, and the UK’s success in trading with them (see Figure 2 in the Annex to this submission). In work by Oxford Economics9, some 80% of firms reported that air services were important for the efficiency of their production – with higher scores in China and the USA.

10. Aviation also drives growth in tourism, the UK’s sixth largest industry. A study by Deloitte10 concluded that tourism boosted the UK economy by £115 billion in 2009, about 8% of UK GDP. While other modes of transport can have a significant role for European tourists, aviation is the critical enabler for UK tourism businesses. Some 72% of inbound visitors arrive in the UK by air and account for 83% of all inbound

2 World Economic Forum (2008‐2012), ‘Global Competitiveness Report’ 3 Oxford Economics (2011), ‘Economic Benefits from Air Transport in the UK’ 4 CAA (2006), ‘Strategic Review of General Aviation in the UK’ 5 Department for Transport (2009), ‘The Air Freight End‐to‐End Journey’ 6 Boeing (2010), ‘World Air Cargo Forecast 2010‐11’ 7 Sir Rod Eddington (2006), ‘The Eddington Transport Study’ 8 CAA (2010), ‘Flying on Business: A Study of the UK Business Travel Market’ 9 IATA (2006), ‘Economic Briefing No 3 – Airline Network Benefits’ 10 Deloitte (2010), ‘Economic Contribution of the Visitor Economy: UK and the Nations’ Page 2 of 13

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visitors’ spending11. In the coming years, aviation will be critical to the UK’s ability to capitalise on the success of the Diamond Jubilee and London Olympics. c. What is the impact of Air Passenger Duty on the aviation industry?

11. Air Passenger Duty (APD) has increased between 160% and 360% since 200712. In economy, long haul APD rates are some six times the average of other countries in Europe, and, in economy, for short haul, the figure is three times (Figures 3 and 4 in the Annex to this submission illustrate this clearly).

12. The UK’s excessive levels of APD also mean that the aviation sector pays a disproportionate amount of tax to the Exchequer compared with other sectors. Work for the AOA by economic consultants Oxera13 found that: excluding Air Passenger Duty (APD), the amount of tax the sector pays to the Exchequer, compared with economic value aviation creates14 is about 33%, broadly in line with the wider economy. However with APD included, this ratio rises to 55%, significantly higher than a typical sector.

13. There is mounting evidence that APD is acting as a drag on both the aviation sector’s performance and that of the wider economy15. The Government’s own figures16 projected 7,000 fewer flights in 2011– 2012 as a result of a string of APD increases in previous years and a 2011 report for Scottish airports17 estimated that that APD would result in Scotland losing 1.2m passengers, 148,000 tourists and £77m in revenue to 2014.

14. There is also growing evidence that APD has resulted in key routes being lost to UK airports. Air Asia X, a low cost provider of routes to Asia ceased operations in the UK at the beginning of 2012, citing the UK’s high levels of APD as a cause. Continental Airlines would have ended its Belfast – New York service, had the Chancellor not intervened in 2011 to permit special low APD rates for long haul services from Northern Ireland. Continental has now merged with United Airlines and would like to start other long haul services from other UK airports. It has been clear though that APD is a major barrier to it doing so.

15. In work for the British Chambers of Commerce (BCC) in 201118, economic consultants Oxera estimated that: were APD to be increased by 5% in real terms every year ‐ a similar increase to that in 2012 ‐ there would be serious consequences for the UK economy. While the Government would raise more revenue, the increase in ticket prices would have a knock‐on effect on jobs and growth. Growth could be curtailed by over

11 ONS (2010), ‘International Passenger Survey’ 12 HMRC (April 2012), ‘Air Passenger Duty (APD) Bulletin’ 13 Oxera (2009), ‘What is the Contribution of Aviation to the UK Economy?’ 14 This is measured by the ratio of total tax paid to the Exchequer to the Gross Value Added (GVA) created by the sector. 15 British Chambers of Commerce (2011), ‘Flying in the Face of Jobs and Growth: How Aviation Policy Needs to Change to Support UK Business and House of Commons All Party Parliamentary Group for Aviation (2012), ‘Inquiry into Aviation Policy and Air Passenger Duty’ 16 HMRC (2009), Regulatory Impact Assessment on changes to Air Passenger Duty, http://www.hmrc.gov.uk/ria/apd‐reform‐ ia.pdf (online) 17 York Aviation (2011), ‘The Impact of the 2010 APD Increases in Scotland’ 18 British Chambers of Commerce (2011), ‘Flying in the Face of Jobs and Growth: How Aviation Policy Needs to Change to Support UK Business Page 3 of 13

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£1 billion as soon as 2015, with a possibility that the loss to the economy could treble to £3 billion by 2020. This effect could reach a staggering £10 billion by 2030. Similarly, up to 25,000 jobs could already be affected by 2015.

16. The Government was right to avoid repeating the high percentage increases in APD made by the previous administration in 2007, 2009 and 2010. The current policy of annual inflationary rises stems the negative effects of real terms rises in aviation tax. However, it still leaves APD at high and damaging levels, the effects of which have not been analysed by any Government. The Government should consider a macro‐modelling approach to analyse the effect of an APD cut on overall performance of the UK economy. Also the Treasury should refrain from any further increases in APD, with immediate effect. d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

17. Improving the passenger experience is a constant focus for airport operators. Despite the economic backdrop, airports across the country continue to invest in improving their facilities. Assuring an excellent passenger experience needs both investment in facilities and a focus on customer service from airport staff. Many examples of the investments UK airports are making in these areas can be found on page 30 of the AOA’s “An Integrated Policy Framework for UK Aviation: Connecting the Economy for Jobs and Growth”.

18. While airports work to drive improvements, the Government and its agencies also have a key role. Though less obvious, some areas of policy have major effects on passengers’ experience of airports. For outbound passengers, the detailed rules the Department for Transport sets on security bear directly on the quality of passengers’ journeys. At arrivals, it is the Home Office’s Border Agency that creates first impressions. Without a strong customer focus in these areas too, the effectiveness of airports’ own efforts are undermined. There is more the Government can do.

19. There is an overriding need for the UK Border Agency (UKBA) to develop a clear vision, and have the strategy and resources to deliver it. This will require the Home Office to make a step change in its ambitions for the Agency and the quality of the UK’s welcome. For example, the Agency’s target queue times of no longer than 45 minutes for non‐EEA nationals, or 25 minutes for EEA nationals are not acceptable in the context of a good passenger experience and need to be more ambitious.

20. Passengers’ experience of airport security is equally critical. In 2010, the then Transport Secretary announced the Government was moving towards a new form of airport security. Outcomes Focused Risk Based Regulation (OFRB) would move away from prescribing exactly – in detail – how airports should carry out security checks. Instead the Government would set general “outcomes”, leaving airports more say in how to achieve them. Progress towards this regime has been slow. What has been done has focused on the airport quality management systems needed to underpin a new regime ‐ but the new regime itself is yet to be developed. It is clear that the government will face a challenge in grounding its idea in real changes, and must not underestimate the task of persuading other EU member states of the need for reform. OFRB remains a good concept, which airports support. However, the Government must put in place the plan and

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resources to deliver OFRB security. As it influences other European countries to adopt the OFRB concept, the Government should also take the opportunity to review thoroughly the regime of UK‐only measures and harmonise them as far as possible with the rest of Europe.

HOW SHOULD WE MAKE THE BEST USE OF EXISTING AVIATION CAPACITY?

c. How can surface access to airports be improved?

21. Good connections to airports are vital to moving passengers and goods quickly. This maximises the economic value of aviation and makes flying convenient both for business and leisure. Surface access to airports is not just the responsibility of airport operators: Central and Local Government and transport agencies must play a full role too. The Government should continue to prioritise the type of investment in the rail and road networks set out in its 2011 National Infrastructure Plan.

22. The AOA welcomes the initiative, set out in the APF, to review rail access to major UK airports. However, we believe that the scope of this work should be extended beyond the six named airports. The work should also be fully integrated into Network Rail’s long‐term planning process and its recent studies on key future priorities. It is important to focus on infrastructure, but there are other ways to improve integration too. Better information to passengers, options to improve integrated rail and air ticketing, and ensuring that the benchmarks used in rail franchise rounds deliver the right services for airport access, can all help to make better use of airport capacity.

WHAT CONSTRAINTS ARE THERE ON INCREASING UK AVIATION CAPACITY? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

23. The AOA believes that noise is a difficult and multi‐faceted problem, requiring understanding of, and agreement with, local communities.

24. The Government’s main aim in this area should be to facilitate airports’ work with their local communities and airlines, in order to improve noise performance.

25. AOA member airports of all sizes focus on noise as a key issue, but noise objectives should not be considered in isolation and need to be balanced with the benefits that aviation’s growth brings, both in terms of economic value of the sector itself and also benefits to the wider economy.

26. There is a balance to be struck, but the aviation sector has made good progress in recent years in either reducing, or containing aircraft noise, while still meeting significantly increased demand for flights. This

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progress is illustrated clearly in Table 2 of the Annex to this submission, which shows the reducing areas of the 57dB(A)19 noise contours at six major UK airports.

27. The AOA continues to support the idea and exploration of noise envelopes.

28. The AOA also shares the Government’s desire to reduce the number of people affected by noise. However, it points out that the number of people affected by noise depends heavily on Local Authorities’ land use planning policies. Progress in reducing aircraft noise has not been matched by rigour in the applications of land‐use‐planning policy across the country. As noise levels reduce, the improved environment can encourage developers to propose schemes closer to airports. Also, there is pressure on Local Planning Authorities to approve new housing developments. Together, these can lead to residential developments very close to airports, undermining the positive effect of reduced noise contours. Local Authorities should put in place long term policy and development control regimes that minimise the effects of noise around airports.

29. The majority of AOA members believe that the 57dB (A) contour should be retained. However, the AOA supports further work being done on the factors that drive community annoyance.

30. Airports, airlines, aircraft engine manufacturers, and air traffic management providers, work together through the Sustainable Aviation (SA) Initiative, a long term strategy aimed at ensuring a sustainable future for the aviation sector20.

31. SA is developing a Noise Road‐Map, the first edition of which will be submitted to the Government in response to the draft APF. The AOA supports the analysis in this, and urges the Government to do the same. The SA Road‐Map will contain a number of recommendations on incentives to deal with noise. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? and c. What is the relationship between the Government’s strategy and EU aviation policies?

32. Aviation’s climate change impact is relatively small, but has grown. It is responsible for about 1.6% of

global greenhouse emissions and some 6% of the UK’s total CO2 emissions. As emerging economies like

China and India grow, the best way for the UK to influence CO2 emissions from aviation is through internationally‐focussed efforts, not restrictions on aviation at home.

19 The 57 dB(A) contour is used by the Government to represent the average level of daytime aircraft noise marking the approximate onset of significant community annoyance 20 Sustainable Aviation, http://www.sustainableaviation.co.uk/ Page 6 of 13

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21 33. In its recently updated CO2 Road‐Map , SA projected that UK aviation sector can grow between now and

2050 without a substantial increase in the CO2 it emits. The SA Road‐Map is shown in Figure 5 in the Annex to this submission.

34. The AOA continues to support the European Emissions Trading Scheme (EU ETS) as a demonstrable first step in international emissions trading. The problems the EU ETS has precipitated with non‐EU countries however cannot be ignored. The EU must be flexible on this and seek a resolution to this problem, either through an ICAO agreed scheme, or by reconsidering the design of the EU ETS.

35. However, a scheme encompassing the EU can only be a second best solution. The EU ETS must be seen only as a first step towards a global scheme. A global scheme would remove the distortions and problems currently associated with the EU ETS.

36. The AOA does not support the principle of a UK unilateral carbon target. The Government’s own analysis has demonstrated the disproportionate cost of this type of solution22. We are pleased that since the Government’s 2011 consultation, the Committee on Climate Change (CCC) 23 has also warned of the counter‐productive effect of a unilateral target in its recent advice to the Government on including international aviation emissions in UK carbon budgets. We accept, though, the CCC’s recommendation that emissions from international aviation should be included in UK carbon budgets.

37. The AOA believes that the Government should support the development of more efficient aircraft and engine technologies and the development and large‐scale deployment of sustainable aviation fuels.

DO WE NEED A STEP‐CHANGE IN UK AVIATION CAPACITY? WHY?

38. Maintaining the UK’s aviation advantage requires excellent aviation connectivity right across the country, ensuring the UK has both vibrant point‐to‐point airports and sufficient world class hub capacity. There are encouraging signs that the Treasury understands what is at stake. In its 2011 National Infrastructure Plan airports were mentioned for the first time, recognising their importance to the economy and the country’s connectivity, and placing them in the context of the overall stock of national infrastructure. Yet the DfT’s draft APF offers few signals that overall the Government wants to see its approach of boosting publicly‐ funded infrastructure, mirrored in the world of privately‐funded airports. The Government must modify the content of the APF to signal in no uncertain terms that aviation is important to the UK and that airport development, within sustainable limits, is supported by the Government. It should go further still by placing an expectation on Local Authorities to plan for airport development. Where an airport has prepared an up‐

21 Sustainable Aviation (2012), ‘Sustainable Aviation CO2 Road‐Map’ 22 DfT (Aug 2011), ‘Government Response to the Committee on Climate Change Report on Reducing CO2 Emissions from UK Aviation to 2050’ 23 Committee on Climate Change (Apr 2012), ‘Scope of carbon budgets: Statutory advice on inclusion of international aviation and shipping’ Page 7 of 13

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to‐date Master Plan – a formal document which the APF already gives guidance on – there should be an expectation that its content will be mirrored in the relevant Authorities’ Local Plan(s).

39. Central Government must also ensure that the strategic nature of airports is recognised by Local Government. Airports across the UK are economic gateways to wide geographic areas, bringing benefits well beyond the areas of single Local Authorities and their plans. The 2012 National Planning Policy Framework (NPPF) places a duty on Local Authorities to work together on strategic matters, but to do this well for airports they need to draw on common, high‐quality evidence. The Government’s new Local Enterprise Partnerships (LEPs) can help here. Representing both business and community needs, LEPs could perform a key role in analysing the future aviation needs of broad geographic areas. The Government could incentivise LEPs to perform this role. It should offer additional funding, project‐by‐project, to LEPs that can carry out high quality analysis on future needs for airport infrastructure.

40. In the summer of 2012, the new Transport Secretary Patrick McLoughlin announced that the question of maintaining the UK’s status as an aviation hub would be addressed by an Independent Commission chaired by Sir Howard Davies. If the Commission is to deliver properly on its remit, it must consider all options as thoroughly and quickly as possible, to prevent the UK losing further routes, business and jobs; take wide advice from experts throughout the country in industry, business and academia; and provide meaningful interim and final reports, which the Government must commit to acting on.

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ANNEX ‐ AIRPORT OPERATORS ASSOCIATION SUBMISSION TO:

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FIGURE 1: OVERALL UK CONNECTIVITY COULD BE BETTER

FIGURE 2: UK TRADE WITH FOREIGN COUNTRIES IN 2009, CORRELATED WITH NO. BUSINESS TRIPS TO/FROM SAME COUNTRIES

Note: Statisicians use the coefficient known as R2 to measure how well one measure can be predicted by another. Its value varies between 0 (no correlation) and 1 (perfect correlation).

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FIGURE 3: UK AVIATION TAX IS THREE TIMES HIGHER FOR SHORT HAUL FLIGHTS THAN THE REST OF EUROPE (IN ECONOMY CLASS)

FIGURE 4: UK AVIATION TAX IS SIX TIMES HIGHER FOR LONG HAUL FLIGHTS THAN THE REST OF EUROPE (IN ECONOMY CLASS)

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FIGURE 5: THE SA CO2 ROAD‐MAP

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TABLE 1: DIRECT UK CONNECTIVITY TO BRIC (BRAZIL, RUSSIA, INDIA, CHINA) ECONOMIES IN 2011

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TABLE 2: THE AVIATION SECTOR HAS MADE GOOD PROGRESS IN REDUCING NOISE AROUND AIRPORTS

For more details , please contact:

Rob Siddall, AOA Policy Director Airport Operators Association 3 Birdcage Walk London SW 1H 9JJ

T 020 7799 3171 F 020 7340 0999

[email protected] www.aoa.org.uk

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Written evidence from Stansted Airport Limited (AS 92)

London Stansted Airport (“Stansted”) is the third largest airport in London handling around 17.4 million passengers a year. Firmly positioned as the market leader for short-haul travel, with over 150 destinations across 30 countries, Stansted provides London and the East of England with excellent connectivity to Europe.

With planning permissions and environmental controls already in place to enable the airport to serve 35 million passengers per annum (mppa), Stansted has the space and permission to grow substantially. Stansted has a strong range of transport links, and with half of all passengers travelling to and from the airport by public transport, it is the UK’s leading public transport airport.

Stansted Airport will shortly be in new ownership, following BAA’s announcement on 20 August 2012 that it would not to appeal to the Supreme Court over the Competition Commission’s 2009 report requiring BAA to sell the airport. The separation and sale process in now underway and will conclude in 2013.

1. What should be the objectives of Government policy on aviation? a. How important is international aviation connectivity to the UK aviation industry? Stansted supports the Government’s objective outlined in the Draft Aviation Framework (“Framework”) to ensure the UK’s air links continue to make it one of the best connected countries in the world. International connectivity is a vital component of a flourishing and successful economy. As noted in the Frontier Economics report, UK businesses trade 20 times as much with emerging market countries that have a daily direct flight to the UK as they do with those countries that do not.1

Stansted is well placed to serve point-to-point demand for travel. The airport already serves over 150 European destinations, more than any other airport in the world, and provides an excellent level of connectivity to and from London and the East of England. European connections are particularly important for passengers travelling on business, who comprise nearly 20 per cent of Stansted’s overall traffic. The importance of Europe to the UK generally, and the importance of connections for small and medium sized enterprises to the European market is something Stansted is well placed to provide.

We want to build on this success and attract more airlines serving more destinations, helping to drive inward investment, productivity and exports. Stansted already has the capacity, infrastructure and planning permissions in place to handle 35 mppa, and can handle more of London’s demand with limited noise and other environmental impacts. Against the backdrop of constraints at other airports, Stansted has a critical role to play in providing capacity to meet the UK’s need for air travel over the next decade.

It is vital that future policy continues to recognise the contribution aviation brings to UK plc and places a much stronger emphasis on measures to further unlock the performance of the sector. We believe that if the Government is to meet its objectives, any future policy must make the best use of existing airport capacity now and in the medium - long term. Further delay is damaging the industry and this needs to be addressed with urgency so that the industry and potential investors have confidence to invest in the UK.

b. What are the benefits of aviation to the UK economy?

1 Connecting for Growth: the role of Britain’s hub airport in economic recovery, Frontier Economics, September 2012

Stansted wants to play its part in growing the UK economy and we are encouraged by the Government’s renewed focus on growth. We are a key catalyst for growth and productivity in the East of England, and provide important connectivity to Europe for some of the UK’s most innovative and dynamic industries located in the East of England. It is critical for the success of these companies that they continue to have strong and cost-effective access to foreign markets and customers. Stansted is also the largest single-site employer in the region employing over 10,000 people across 200 on-airport companies. With significant spare runway capacity we are in an ideal position to support and sustain economic growth.

In addition Stansted is a key hub for express freight services, General and Business Aviation and tourism. The airport’s express freight market, anchored by key logistical companies such as FedEx and UPS, is the third biggest in the UK. In 2011, 204,000 tonnes of cargo were transported through Stansted, helping to connect the economy of London and the region with the global marketplace. The cargo hub at Stansted, and the ability to operate around the clock provides businesses with access to multiple overseas markets including the US and Far East, adds significantly to the desirability of the UK as a place to locate and invest.

Stansted is a key gateway for the UK and is the second busiest point of entry for non-UK residents arriving by air. In 2011, 18 million passengers used the airport with 47 per cent of these visiting friends and family either in the UK or overseas. Tourism makes an enormous contribution to the UK’s economic well-being and is an essential component of a healthy and dynamic economy. We support the objectives in the Government’s Tourism Policy and refute any suggestion by certain groups of a ‘tourism deficit’ in the UK. As recent research by ABTA shows outbound travel directly contributes over £22 billion to the economy, representing 1.6 per cent of UK GDP. In addition the outbound sector makes a significant contribution to UK jobs, accounting for 620,000 people in full time employment. 2

c. What is the impact of Air Passenger Duty (APD) on the aviation industry? The UK has the highest rates of aviation tax in Europe. APD is hugely disproportionate and fails to take proper account of the economic contribution of the industry and the impact it has on airlines and consumers. Analysis commissioned by The British Chambers of Commerce found that APD could cost the economy £10 billion in lost growth and up to 250,000 fewer jobs over the next 20 years.3 This impact would be felt particularly at Stansted, where there are a very high proportion of price-sensitive passengers and low-cost airlines. Consequently, we are concerned about the impact that future increases to APD could have on passenger volumes.

Additionally, the introduction of any form of regional differential of APD within the UK would create further competitive distortions and lead to further pressure on airlines operating from Stansted. Stansted already has significant spare capacity and any change to APD which placed additional costs on flying from the South East would only further impact our ability to fill that spare capacity.

It is clear that the Government’s current approach to taxing the aviation industry represents a significant barrier to growth and connectivity, and is damaging the competitiveness of the industry and the UK’s economic performance. Other European Governments have recognised the strength of the case for reducing taxation on aviation to help drive economic growth. As a member of the Fair Tax on Flying coalition, we feel that it is necessary that HM Treasury commissions an independent analysis of the economic impacts of APD before it does lasting damage to the UK economy and our international connectivity.

d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

2 Driving Growth – the economic value of outbound tourism, ABTA, May 2012 3 Flying in the face of jobs and growth, British Chamber of Commerce, October 2011

We believe the passenger experience should be at the heart of the Government’s aviation strategy and should be aimed at encouraging not just excellent customer service, but also a choice of routes, airlines and other initiatives.

At Stansted, we have recently published a Passenger Charter which is supported by our business partners - including airlines, transport operators, ground handlers, local authorities, unions and the Stansted Airport Consultative Committee. The charter highlights the airport community’s commitment to helping our customers at every stage of their journey. We believe the whole airport community needs to play their part in helping our passengers reach their destination on time.

Delivering good passenger experience also requires airports to invest in new facilities and infrastructure. The Government’s aviation strategy can support and encourage this investment by providing a clear and stable policy framework for the industry, which provides investors with the confidence to commit substantial sums of money to delivering a better experience for passengers.

e. Where does aviation fit in the overall transport strategy? Aviation is important to the UK, both as an industry in its own right and in supporting growth, productivity and international connectivity across the economy. It is an integral component of the overall transport strategy and we encourage Government to work closely with other transport sectors, particularly rail, to ensure a holistic approach to future transport and infrastructure.

For example, there is a clear opportunity for Government to bring stakeholders from different transport modes together to improve the rail connections to Stansted and at the same time enhance rail services to the East of England. Achieving a 30 minute journey time from central London to Stansted would help make best use of Stansted current capacity and drive up public transport usage to the airport to minimise the airport’s impacts. At the same time rail fares from air passengers using the rail service would provide a significant contribution to funding the redevelopment of the rail line which would benefit rail commuters and leisure passengers.

2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience? Stansted is currently operating at less than half its full capacity. We have planning permissions in place to handle 35 mppa and 264,000 air transport movements (ATMs) on our existing single runway and can handle more of London’s demand with limited noise and environmental impacts. Stansted’s existing facilities already have the capacity to handle significant peaks in demand. Growth to 35 mppa will largely be achieved through more intensive use of current facilities, and will require only modest further investment. Making best use of Stansted’s existing capacity would have significant economic benefits and would be delivered within approved environmental limits.

The Department for Transport latest forecasts show that unconstrained demand for air travel is expected to grow by 2.5 per cent a year over the period to 2030, and then by 2.1 per cent a year over the period to 2050. Against the backdrop of environmental and capacity constraints at other airports, this highlights that Stansted will have a critical role to play in providing capacity to meet the UK’s growing appetite for air travel over the next decade and beyond.

A primary objective of Government policy should be to make the best use of existing capacity, where this would be consistent with its sustainable aviation policy. This objective, combined with a presumption in favour of sustainable development, would provide strong support to airports by making clear to a wide range of stakeholders the importance of making full use of existing capacity.

Demand management measures would be an ineffective way of allocating scarce airport capacity and we believe priority should be given to reforming the existing slot allocation system. This approach would be most likely to result in the allocation of scarce capacity to those services that are most highly valued by consumers.

b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved? No comment.

c. How can surface access to airports be improved? We support the Government’s statement in the Framework that high quality, efficient and reliable rail and road access to airports contributes greatly to the experience of passengers, freight operators and airport employees. Rail, in particular offers opportunities for efficient and environmentally friendly connections to airports. At Stansted 25 per cent of our passengers choose rail, and overall 49 per cent of passengers use public transport to travel to and from the airport – the highest percentage of any major UK airport.4

To build on this record and help meet the Government’s vision for dynamic, sustainable transport that delivers economic growth and competiveness, Stansted needs faster and more reliable rail connections to London, Cambridge and beyond. Linking Stansted to Crossrail would also further improve connectivity with the Capital.

As part of our ‘Stansted in 30’ campaign, we are asking stakeholders to commit to working with us to identify how journey times between London and the airport could be reduced to 30 minutes. Passengers tell us journey times and reliability are amongst their highest priorities, while airlines cite it as a key factor into whether they decide to operate from Stansted. The current journey time of between 47 - 59 minutes is simply too long, and reliability on the line to Stansted (West Anglia Mainline) has also become a significant concern for our passengers with around 1 in 6 trains delayed by at least 10 minutes.

To make the most effective use of Stansted’s spare capacity, it is vital that stakeholders commit to identifying the steps towards delivering a 30 minute journey time, to put Stansted on a level competitive footing with other London airports. ‘Stansted in 30’ has already received considerable support from business leaders and politicians, and we are eager to take forward our discussions with Government and the rail industry to identify what investment is required.

Investing in the rail links to Stansted, either by improving existing infrastructure or developing new infrastructure, will allow Stansted to contribute most effectively to meeting the growing demand for air travel in a responsible and sustainable way. It would also be an integrated approach to meeting the aviation capacity gap in London and the South East, and have the potential to stimulate the long term economic growth that Government and businesses are targeting.

3. What constraints are there on increasing UK aviation capacity? a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

4 CAA Quarterly Report, Quarter 1 2012

Aviation noise has long been recognised by the industry as the biggest concern to the local community and a constraint on sustainable growth. Stansted has worked hard with airline partners to reduce the noise impacts associated with its operations. This includes increased focus on noise and track keeping; the introduction of a fining regime for aircraft flying off track and improving continuous descent approach (CDA) performance. We strongly believe that airports and airlines should limit, and where possible work to reduce, the impact of noise on local communities.

The aviation industry has made significant progress in recent years in either reducing, or containing aviation noise, while still meeting significantly increased demand for flights. Analysis of the CAA data shows that the collective size of the area covered by the 57dB noise contour at Heathrow, Gatwick and Stansted fell by 70 per cent from 595km2 in 1988 to 170 km2 in 2011, while over the same period aircraft movements increased by almost 50 per cent. Over the same period, the overall number of people living within the area covered by 57dB noise contour at Heathrow, Gatwick and Stansted fell by 60 per cent.5 The focus of Government policy and local initiatives should be on minimising the noise experienced by local communities. This can be delivered, in part, by encouraging a more collaborative working relationship with Local Authorities in the development of Local Plans and planning policies. Stansted supports the idea of a ‘noise exposure greenbelt’, whereby planning permission is only granted to new developments or homes that are outside existing noise contours.

b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable? c. What is the relationship between the Government’s strategy and EU aviation policies? Stansted understands the importance of managing aviation’s climate change impacts and support the Government’s view that this requires a global solution. We want to see a solution that replaces local and national targets, ensuring aviation emissions are accounted for only once.

The inclusion of aviation within an effective global ‘cap and trade’ deal provides the best way to address the industry’s climate change impacts. A cap and trade system will create powerful financial incentives for airlines to invest in carbon reduction technology, without necessarily limiting the strong economic and social benefits associated with aviation. We are working with a coalition of airlines to push for aviation to be included in a global emissions trading scheme as soon as possible, although we recognise that securing a global deal is likely to prove a difficult and lengthy process.

In the interim, the inclusion of aviation in the European Union Emissions Trading Scheme (ETS) is the appropriate way to tackle the industry’s carbon emissions and we welcome the Government’s commitment to achieving this. ETS should be used as the primary tool to incentivise the aviation industry to reduce carbon emissions. We agree that the EU ETS will create powerful signals for airlines and airports to tackle emissions through investment in new technology and research. It will also ensure that aviation is treated on equal terms with other sources of carbon emissions, and potentially create the scope for the industry to grow.

Stansted is a member of Sustainable Aviation (SA) and we support its CO2 Road-Map and its conclusion that UK aviation is able to accommodate significant growth to 2050 without a substantial increase in CO2 emissions. To achieve this we urge Government to continue working with SA and the industry and support the following:

• Investment in research and development for more efficient aircraft and engine technologies; • Encourage the introduction of sustainable biofuels; • Deliver on infrastructure projects such as the Single European Sky initiative.

5 Source: CAA Annual Noise Exposure Contour reports

4. Do we need a step-change in UK aviation capacity? Why? a. What should this step-change be? Should there be a new hub airport? Where? b. What are the costs and benefits of these different ways to increase UK aviation capacity?

Only Government can strike the right balance between the economic, environmental and social impacts of aviation. However, in striking this balance Government should take full account of the critical role aviation has to play in supporting the growth of the UK economy, For this reason, it is important that the UK’s future air travel needs are fully understood so that the benefits of meeting demand can be properly considered by Government when setting policy.

We believe there is a strong case for additional airport capacity in the South East, particularly where environmental impacts can be addressed appropriately. In this respect, we are encouraged by the Government’s decision to establish an Independent Airports Commission chaired by Sir Howard Davies. We will be asking the Commission to look carefully at all existing and new capacity options to help deliver a lasting solution for aviation.

However, the Government should not wait until 2015 before taking action in this area. There are initiatives that can be taken forward in the intervening period that have the potential to deliver significant benefit to UK economy and passengers. These include improving rail access to Stansted to help fully utilise spare capacity and continuing with the Government’s efforts to reform the slot allocation system. Both of these measures could be implemented quickly and would complement the work of the Commission by addressing the capacity issues in London and the South East.

In uncertain economic times it is imperative that Government look at the most cost effective solution to improving the UK’s aviation capacity and one that must be sustainable and able to handle more of London’s demand with limited noise and environmental impacts on the local community. For this reason it is important that the Commission considers the important role that point-to-point airports have to play in meeting future demand for air travel.

22 October 2012

Written evidence from the Adams Group (AS 93)

A Proposal for a Solution to the Siting of a New London/UK Hub Airport

1. Introduction

In reflecting on the discussions about where the next UK Hub Airport should be located there are numerous aspects that must be considered but, in our view, there are three (at least) that should play a major part in shaping the progress towards a solution :-

1) that Heathrow, even with an Interim solution to the present runway capacity shortage, will have only a limited effective life (2030 ?) as a Hub because it’s future potential will not be sufficient to meet the International Aviation traffic demands of the 21st century and further, environmentally it will always be seen as an unacceptable threat to the large (and growing) urban residential communities of Central and West London. It must therefore be seen as an Airport that will not be fit for purpose and must be either substantially reduced in size or completely closed.

2) that to be an effective replacement to Heathrow, the necessary new Hub Airport at any another location must be sited within a thirty/forty mile radius of London with rapid connections to the centre. This would require that the capital costs of the airport construction and the surface connections that must be put in place to make it a successful operation should be constructed and installed as economically as possible but also, that those surface connections, wherever possible using existing elements of the capital’s existing facilities, must provide uninterrupted high speed links to the centre. ( within twenty – thirty minutes)

3) that the location, the facilities and the surface connections of the New Hub are of such a high standard that existing and new International Airline Operators will find the new Airport an attractive proposition for their operations.

There are, of course, many other considerations and later in this paper we shall identify them but, in our view, these are three key factors and in approaching an ‘acceptable’ solution it is vital that a) the new Hub should have sufficient capacity to meet the expected demand, b) that it be located where there will be the minimum of disruption from noise and pollution for those who live and work in the new Airport’s neighbourhood and c), that it meets the requirements of airlines and their passengers.

In pursuing these thoughts, we do not want to gloss over the significance of our suggestion that Heathrow be either closed or reduced to a very much smaller business type airport serving West London. Nor have we overlooked the possible impact that developing a new major Hub serving London and the South East will have on the other existing ‘London’ airports. Again we should like to return to this aspect later in this paper but, we believe that it must be accepted that the creation of new modern 21st. Century Hub Airport, well connected and capable of meeting the demands of the substantially increased International traffic potential that London can generate as a destination, will have a compelling attraction for the world’s airlines as opposed to the other existing airports on the London fringe. As we see it, the consequences of building

the new Hub Airport will change the pattern of all airport activity, not only in the South East but also throughout the UK.

With these remarks in mind, we should like to develop our opinions about the siting of the new London Hub Airport.

2. The Present Political Position

The Government’s approach (and indeed that of all Political Parties so far) to finding a solution to this pressing problem has appeared to demonstrate that they are afraid to make any decisions other than the initial announcement that there will be no more new runways in the South East and, more recently, the Prime Minister’s declaration that he would be interested in a greater study of the detailed proposals for a new airport in the Thames Estuary.

That apparent avoidance of positive steps to reach any decision has been further masked by a protracted series of ‘consultations’ that have been described in many of the Department for Transport’s documents as “seeking high level guidance” in order to formulate an Aviation Policy for the UK. This utopian hope for apparent ‘divine’ guidance has been mostly interpreted by those concerned with finding a more practical solution as 1) kow-towing to the Environmentalist Lobby, 2) paying lip service to EU rulings and their new proposals and, 3) desperately trying to make sure that they, the Government or other Parties, do not lose votes (parliamentary seats) at the next election. Perhaps it is a combination of all three.

The disastrous economic consequences of this behaviour have already been eloquently and repeatedly defined by the UK Aviation Industry, by the UK Financial and Business Communities and also, comprehensively described and debated in the Media. We do not believe that this document needs to repeat those arguments and criticisms but, it is evident to us that, so far, the Political Establishment and their bureaucratic advisors have seemed to not only failed to understand the consequences of their ‘inactivity’ but, it also seems in the end, that they will wait to have the Aviation Industry find the answers for them.

3.The Right Location

In some of the pronouncements explaining the other motivations behind the Government’s intended Aviation Policy, there have been (perhaps accidentally) some sensible phrases used e.g. “we must make full use of existing resources” and “Aviation should continue to make every effort to minimise it’s impact on the environment and communities”. We completely agree with both of those objectives and have considered and incorporated them in our thinking and our proposals.

However, in suggesting that the Heathrow Hub cannot continue effectively to serve the UK, any replacement must certainly have a greater runway capacity together with other improved design features and facilities for airlines and their passengers. If the New Hub is to be a success and attract carriers to develop route networks that will fulfil the UK’s aspirations to continue as a major part of the new expanding Global International Aviation Network, the most modern equipment and design techniques must apply.

To conform to those sensible Government intentions already mentioned and, in our view, to achieve major commercial success, the new Hub Airport must have a profile as follows:-

1. It must have the right location – in a an area of minimal residential occupation, within thirty minutes (or faster) direct travelling time of London and, be capable of being connected by fast road/rail links to the other parts of the UK that are able to generate greater potential wealth.

2. That location must also ensure that the Airport can operate effectively. There must be Air Traffic Control acceptability; maximum operating hours; it must have a good weather record; acceptable staff availability; good internal and local surface access etc.etc.

3. There must be a sensible design layout and robust construction with thought given to the need to conform not only to Regulatory requirements but also to the provision of easy and quick traffic flows for aircraft, for passengers and the other necessary facilities; the availability of energy sources; easy access to Utilities eg. water fuel supplies, drainage.

4. It must be owned and/or managed by professionals who understand the Aviation Industry, the Airport’s catchment areas and, also be capable of applying intelligent approaches to the necessary Business, Marketing and Charging philosophies.

5. There must be a recognition that all Airports ( and this must certainly be the UK’s ‘showpiece’ airport ) have a responsibility to/with their employees, their customers and their neighbours to protect the local Environment and conduct their operations accordingly.

6. Management must have an understanding of the economics of the airport operation and operate it so efficiently that investors, customers and employees can share in the success.

These factors ( and more ) can make a success of any Airport and, coupled with an acceptance of the agreed Government requirements of ‘using existing resources’ and ‘minimising the Environmental Impact’, such an Airport can then rightly be seen as an asset rather than a threat However, whilst recognising the vital importance of Factors 2 to 6 above, the main purpose of this paper is to concentrate on considering item 1 – the right location for the new Hub Airport.

London’s status as a Global Financial, Commercial, Cultural and Tourist attraction, means that it is essential that the new Hub Airport must have fast and easy access to the Capital by rail and road. In our view, a location to the South or West of the Capital would be environmentally unacceptable and strategically wrong. Everything suggests that, as in recent years the Financial, Commercial and Industrial London has moved and is still moving Eastwards, the new Hub should be somewhere East of the Greenwich Meridian.

The proposed options for doing that, as we see it, are either a new Estuary Airport or an expansion of Stansted Airport.

Estuary Airport

The idea of an Estuary Airport has, for some, a challenging civil engineering appeal in the great Victorian tradition and for others, it has the merit of being positioned where noise will not be a disturbance and is not intrusive. However, in practical terms:-

• it would be extremely difficult and very expensive to construct and would probably fail to attract investors. • the surface links with London would be even more costly and they would have to be funded by the taxpayer. • it would also certainly need the protection of a new Thames Barrier against extreme tidal fluctuations not to mention unpredictable North Sea surges. • on these grounds alone it would be difficult to get it approved and, if it was, it might take twenty/twenty five years to get approval, secure investment, build the airport and the necessary surface links with London and the mainland. • by that time the rapidly developing Global International Aviation Network traffic would probably have decided on better solutions offered at Continental Hubs but, if it was built, there would be the operational problems of achieving a safe operation:- o poor weather ( river fog) in the winter months (October – March) o the higher risk of bird-strikes. o a possible hazard to/from active shipping lanes. o the considerable damage to and the responsibility to restore the long established riparian environment – avian and marine. o and, a very important consideration, the inevitable consequence of building such an airport in this location would mean that London City, Stansted and possibly Gatwick would become redundant.

For all of these reasons it does seem to us that making proposals for an Estuary Airport would result in the building of the most expensive white elephant in aviation history and it is not the direction to take.

Stansted

The case for a re-development of Stansted as the new UK Hub Airport is much more compelling and attractive because:-

• it already exists as an airport. • it was originally intended to have two runways and could have three possibly four built to a very much faster time scale. • it would be acceptable as part of the new Air Traffic Control plans for the London TMA. • it could successfully fulfil everything offered by an Estuary airport and more at a very much lower cost. • it is in a ‘rural’ location and there would be less of an environmental impact. • It’s development would release Central and West London from the very large number of ‘over-flights’ and the consequent environmental blight. • it already has a (poor) rail link to the City of London (Liverpool Street Station) that could be significantly improved and, there could also be provision for a fast connection to be made to the new Crossrail to link

the Airport with Central London and/or HS1(Europe) at St.Pancras or Stratford. • there is already an experienced airport work force there and existing maintenance facilities that already form the nucleus of an existing Aviation Culture ready, almost immediately, for rapid expansion.

We do believe that for these reasons, this suggestion deserves serious examination and, although the Environmental Lobby, the genuine and ‘the false’, will violently oppose such a proposal ( they will oppose whatever solution is put forward ) a sensible programme to alleviate noise and pollution can be effectively introduced.

Other Thoughts on the possible Wider National Benefits

Moving the existing Heathrow Hub Airport to a better located and fully developed new Hub Airport facility at Stansted will provide the UK and London itself with the all important required connection that the Country must have to the expanding and vital economic Global International Aviation Network.

In our view, the fast surface connections by rail and road to the capital are not sufficient to make the new Stansted Hub location fully effective for the UK Economy. A major UK Hub Airport should have ‘connections’ with other parts of the country. Those ‘connections’ in this new situation of a Hub Airport with much greater capacity can, without doubt, provide an additional economic stimulus through new and existing domestic air routes to all of the Regions and further, the Airport would encourage all carriers to develop that traffic from all parts as a feature of its Marketing Strategy to attract Transfer Traffic.

If we may introduce the much wider subject of a cohesive Transport Strategy for the UK. Our thinking on this is that a major UK Hub should have “support alternatives” or secondary hubs ( perhaps call them ‘Gateways’) that are capable of accepting traffic as either ‘overflows’ or alternatives in the event of poor weather or any other emergency circumstances that interrupt the Stansted operation or, additional destination preferences for carriers. These ‘Gateways’, ‘alternates’ or ‘secondary hubs’ we suggest should be at Manchester ( an Airport with two existing runways and very close to Liverpool Airport ) and further, Glasgow Airport ( which has the benefit of being close to Prestwick ).

With this kind of wider UK spread of ‘Hub’ Airports, already in existence and classified as part of the UK ‘Aviation Gateway’ system, led by the new major Hub at Stansted, we believe that one could see the emergence of a National Transport Strategy that could involve air, rail, road and sea connections. This is long term thinking but, the advantages of a primary North – South multi modal Transport Axis with strategically planned East – West connections would do much to serve and benefit the UK Economy in very many ways. We would suggest that:-

• in bilateral aviation negotiations with other countries the UK could offer all three locations in exchange for similar concessions including ‘Fifth Freedom’ rights. This would not only encourage new operations at Manchester and Glasgow it could also bring further economic advantages to the Regions that those airports serve.

• we have spoken earlier in this paper of linking Stansted with HS1 through St.Pancras or Stratford. Taking the view that as yet, there is

not a “National Transport Strategy” in existence for the UK and, recognising that the new Stansted Airport Hub must be a key component in any such future National Plan, it is not too ridiculous to consider an extension of HS1 via Stansted to Manchester and Glasgow Airports. That would certainly add meaning to what we believe is every Political Party’s wish that “the North” should play a more direct role in becoming additional ‘generators’ of the wealth and prosperity that is seen as apparently exclusive to the London and South East Region. Such thinking would make HS2 unnecessary.

• should the HS1 high speed rail links be included in such National Transport Strategies, we believe that adjacent road links (motorway standard) should also be considered from the Stansted Hub location to links with the new Deep water Port nearing completion on the Thames which must also be part of the new Strategic Transport infrastructure.

The scale of the possible proposals involved in our suggestion that Stansted should be the new UK hub Airport does naturally lead on to such considerations about the future planning and the extra benefits that could follow for the whole of the UK if the forward thinking could take in a much wider canvas than simply London.

Internationally, the UK is too often seen as ‘London’. This needs to be changed and those of us who live and work here know that there is much more to it economically, commercially, regionally etc. To achieve that objective of a new international perception the first obvious ‘direction’ to drive this proposal is to create a strong North-South axis. The suggestions above about a London, Manchester, Glasgow connection could begin that process.

The Northern Ireland sector of the United Kingdom connection is clearly best served by air and the Stansted Hub would encourage that to a high frequency. Road and Rail connections at Glasgow and Liverpool would serve freight .

The South West surface connections with London (road and rail) do need to be improved but again, that Region of the UK, using as it’s focus, could have much more frequent and reliable direct links with London and the benefits of the International Hub at Stansted.

Wales, North and South, could also enjoy better connections through Manchester and Cardiff airports as well as taking advantage of the much greater capacity that the Stansted Hub could provide.

We make these comments because we believe that Aviation, International and Domestic, is a vital part of the total Transport concept. Too often and for too long in the past “Aviation” has been seen as something separate and different from “Transport” in it’s widest sense. Happily, this is beginning to change but, it is still true that in order to attract Investment for the growth of trade and the generation of prosperity for everyone in the United Kingdom, we must have a highly efficient and up to date Transport System – road, rail, sea and air – that works.

If we take this opportunity to effectively link the UK into the new Global International Aviation Network by creating a new Hub Airport at Stansted and, give thought, support and action to the domestic connections referred to above, we shall certainly secure and

enjoy the Social benefits and prosperity of the Financial and Commercial and potential that is well within the capability of this Country and it’s Citizens.

______

William T.Charnock. Director - The ADAM Group

P.S. In view of the suggestions made in this Paper, we would strongly suggest that the present procedures for the ‘sale of Stansted’ ( a decision that seems is mainly based on a ‘technicality’ by the Brussels ‘Government’ and the Competition Commission ) be put on hold until after the final decision is made about the location of the new UK Hub. If Stansted does become the Government’s choice as the location for the new main UK Hub Airport, a possible untimely change of ownership could create additional complexities. The present and/or possible new owners might not be prepared to invest in the necessary expansion. It may be that that should become one of the conditions of future Ownership.

22 October 2012

Written evidence from Flybe (AS 94)

1. About Flybe

a. Headquartered in Exeter, Flybe is Europe’s largest regional airline and the UK’s number one domestic airline. Employing more than 3,200 staff, we currently operate 83 aircraft on 181 routes from 35 UK and 49 European airports in 17 countries and carried more than 8 million passengers in 2011.

b. Flybe has established a comprehensive regional route network and its spread of airports is intended to offer customers a convenient local point-to-point network, particularly in transport-isolated areas like Northern Ireland, the north of Scotland and the south west. Our domestic route network does not compete with surface transport where alternative road or rail options give journey times of three hours or less. We offer nearly three times more domestic routes than our nearest competitor and as such can legitimately claim to understand the needs of the UK’s regions better than any other airline

2. Questions

What should be the objectives of Government policy on aviation?

a. How important is international aviation connectivity to the UK aviation industry?

b. To properly understand the importance connectivity of aviation to the UK economy, one need look no further than the Department for Transport’s own consultation document on its Aviation Policy Framework where it points out, among other things that i. “With the increasing globalisation of our economy and society, the future of the UK will undoubtedly continue to be shaped by the effectiveness of its international transport networks” (para 2.13, page 16) and ii. “The broader the range of destinations served and the higher the frequency of flights to and from those destinations, the better connected an airport, city or country is.” (para 2.14, page 17)

c. Flybe exists to provide transport connectivity solutions for our passengers, particularly those in the UK regions. We provide that connectivity not only within the UK with services like our Belfast City, Inverness, Newcastle and Newquay flights to London Gatwick, but also by means of our services to European hub airports like Paris CDG, Amsterdam and Frankfurt, where a huge range of global destinations are available.

d. We also have sought to support our regional passengers by means of the creation of our ‘Manchester hub’. Introduced in March 2012, the airline created a regional network hub by optimising scheduling options through Manchester airport, meaning that Flybe passengers instantly benefitted from an additional 86 regional point-to-point connections.

e. By working with Manchester Airport to streamline connectivity and reduce minimum connecting times to as little as 35 minutes, Flybe significantly added to the choice of our domestic flights, giving passengers an affordable choice of multiple day returns throughout the UK. In addition, the hub has created a long- haul alternative to Heathrow for the UK’s regional communities, allowing them

to access the many flight connections to the rest of the world offered from Manchester Airport.

3. What are the benefits of aviation to the UK economy?

a. Again, when considering the benefits of aviation to the UK economy, the APF document makes it crystal clear that aviation is absolutely crucial to the UK economy, pointing out, among other things that:

i. The whole UK aviation sector’s turnover in 2009 was around £49 billion and it generated around £17bilion of economic output. The sector employs over 220,000 workers directly and supports many more indirectly.” (para 1.8, page 7)

b. Aviation is particularly important to the UK regional economies in terms of access to market, through connecting services, but also as outlined above, crucial in allowing passengers to complete a day return journey that would, by rail or road, be impossible. A combination of practical and political obstacles, compounded by a London-hub driven transport policy, will ensure, for decades to come, no adequate rail infrastructure will be developed in the UK regions. For anyone needing to get from, say, Exeter to Glasgow and back in a day the choice is under 2 hours on an aircraft versus 14 hours on a train.

c. To that end, Flybe wholeheartedly agrees with the statement in the APF document:

i. “The Government recognises the very important role airports across the UK play in providing domestic and international connections and the vital contribution they can make to the growth of regional economies. For more remote parts of the UK, aviation is not a luxury, but provides vital connectivity.”

d. While we would take issue with use of the word ‘remote’, the sentiment is correct for the 19 million plus passengers that took a domestic flight last in 2011.

4. What is the impact of Air Passenger Duty on the aviation industry?

a. Air Passenger Duty is a barrier to economic growth. It is well documented that the UK has the highest aviation tax in the world – a seriously short-sighted policy for an island nation. Indeed, the government themselves have explicitly acknowledged that APD constrains demand, evidenced by their decision to approve a reduction in Continental’s APD from Belfast International to Newark in order to retain the service.

b. As can be seen from the table below, the numbers of UK domestic air passengers has fallen by nearly 20% since 2007-08. While this drop has been in part the product of the recession and continuing economic challenges, the fact that APD for a domestic flight was £5 per passenger per flight in 2007-08 and is now £13 per passenger per flight has undoubtedly had an impact.

Variation from 07-08 2007-08 2008-09 2009-10 2010-11 2011-12 and 11-12

Total domestic passengers 25,326,857 23,579,169 22,060,930 20,275,085 20,172,440 - 20.3%

c. Flybe commissioned an economic analysis by Oxera examining the regional impact of APD in 2011. The study showed, amongst many other conclusions, that a reduction in APD for the regions, but not London, would have relatively little impact on London itself - mainly because the proportionate impact on regional airports of a small percentage of passengers switching from London is quite substantial.

d. We argued strongly in our response to the Treasury’s 2011 consultation that any reform of the banding structure of APD must remove the inherent unfairness that means UK domestic passengers pay the tax on both legs of their journey, while those flying abroad pay just once. The fact that, for example, a return passenger travelling between Glasgow and Belfast City (208 miles) pays double the tax that someone flying between Glasgow and Dalaman in Eastern Turkey does (4,086 miles) is inequitable.

e. Although the government decided against such an amendment, Flybe still believes that this ‘double hit’ must be addressed in order to safeguard UK domestic aviation and UK regional economic competitiveness. The practical effect of APD on a predominantly domestic operator like Flybe was that, during 2011-12, the airline paid some £64 million in APD to the Treasury, some 11% of our UK revenue, in a year where the airline recorded a loss before tax of £6.2 million.

f. APD is, of course, not the only barrier to growth for the industry – excessively high airport landing charges, the recession and the stubbornly high cost of fuel all make for a challenging environment – but it is something that impacts more heavily on UK airlines than their European counterparts.

This is a subject we would be happy to expand upon separately – in particular with regard to flying UK passengers to mainland Europe in order to access global flights with lower APD charges.

5. How should improving the passenger experience be reflected in the Government’s aviation strategy?

a. It is still too often the case that passengers travelling for a flight of an hour or less can expect to suffer queues and security delays amounting to the same length of time as the flight. Where gaps in the market exist in the case of airlines, or where there is a perception that passengers are not getting value for money, the -competitive nature of the industry means that, those gaps are quickly filled by competition. Unfortunately, the same cannot be said of airports and profits made by the airports are often far in excess of anything made by the airlines that operate from them.

6. Where does aviation fit in the overall transport strategy?

a. Transport policy development must be embedded into the government’s growth and productivity strategy. In practice, this means Whitehall and the Cabinet - in particular, the Chancellor, BIS and DfT - working more closely together and putting country before party and short term popularity in the polls. An example of where this could have happened is in the area of aviation taxation and the government’s policy of re-balancing the economy away from London. In their response to the 2011 APD consultation, HM Treasury stated the following:

i. “The Government is committed to rebalancing the UK economy across the regions. As made clear in the National Infrastructure Plan 2011, the Government is also committed to maintaining the status of the UK as an international hub for aviation, with excellent connectivity to both developed and emerging markets. The Government will continue to work with stakeholders to examine the role of the tax system in support of these objectives.” (para. 3.31 on page 11 of ‘Reform of Air Passenger Duty: Response to Consultation', Dec. 2011).

We have yet to see any evidence of tax reform in this area.

7. How should we make the best use of existing aviation capacity?

a. The Government must address the lack of aviation connectivity to the national hub as a matter of urgency and if necessary, empower the CAA to guarantee regional access to those airports, both now and in the period until new capacity comes on line. Bluntly, regional access to hub airports must be protected for the benefit of regional economies and connectivity to markets.

b. Meanwhile, such connectivity can be satisfied to some extent through airports such as Manchester, Glasgow or Birmingham which can act in the short term as ‘relief valves’ for London, and also through Schiphol or Paris CDG.

8. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

a. Heathrow is effectively full and has, because of that lack of capacity and the high cost of slots, seen a gradual erosion of regional access from around the UK. Looking at just one statistic starkly exemplifies that fact: in 1990, there were 18 direct domestic services to London Heathrow. Today just six are left, from Manchester, Newcastle, Belfast, Aberdeen, Edinburgh and Glasgow. Medium term solutions can be found as long as there is courage, imagination and drive from government. Nothing should be ruled out, including radical ideas such as using Northolt as an ‘extension’ to London Heathrow. One thing is clear though – the nation needs a world-class hub airport.

9. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

a. We refer you to the Manchester hub concept, briefly described above, which we would be happy to expand upon verbally. There are other options available to make better use of capacity, such as extending the hours of flying available to airlines at regional airports – something which Flybe has experience of that and

can offer more flights without undue environmental or noise disbenefits.

10. How can surface access to airports be improved?

a. Surface access and public transport, both road and rail, needs to be improved to the overwhelming majority of the two dozen or so UK airports Flybe serves. For a best practice transport hub that connects rail, road and air, we would recommend the Committee examines . It has all the features that a 21st century integrated cross-modal facility should have, with a train station a matter of 100 metres from the check-in hall and rapid access to both the M27 and the M3. Of note, Flybe’s post-code analysis of where our passengers commence their journey shows that increasing numbers are from South and West London, and are opting to travel from Southampton airport rather than the busier, slower alternatives of London airports.

b. Flybe understands and accepts that major regional transport infrastructure improvements such as those in relation to road and rail need Government pump priming funds to enable delivery. Aviation on the other hand, pays all its own infrastructure costs and all its own security costs, thereby improving the nation’s infrastructure.

What constraints are there on increasing UK aviation capacity?

11. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

a. Flybe supports the government’s suggested use of differential landing fees to encourage the use of quieter and cleaner aircraft and such incentives could be used to bring about investment in low-noise, lower-emission aircraft.

b. In the same way that HM Treasury suggested it could work with stakeholders to use the tax system to re-balance the economy geographically, there are existing measurements available to promote such noise reduction programmes. One such gauge is the Ecolabel, introduced by Flybe some five years ago which rates the environmental impact (noise, CO2 and NOX) of each aircraft type on the local and journey environment.

12. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

a. Similar to noise reduction by means of financial incentives, Flybe supports the concept of giving airlines an incentive to invest in new aircraft by introducing a financial penalty on aircraft over 15 years old. Aviation total emissions do, of course, remain a small part of global emissions and domestic aviation even smaller, however, government can do more to incentivise airlines to invest in lower-emitting equipment.

13. Do we need a step-change in UK aviation capacity? Why?

a. Although Flybe do not operate from London Heathrow, we supported the concept of a third runway which, wholly or in part, would have served the UK regions.

b. The government’s decision to constrain growth in the south east has had one very important impact on domestic services; the increase in landing charges for smaller, mainly regional aircraft using London Gatwick. A rises of some 107% between 2007 and 2012 is designed purely and simply to drive out such aircraft in order to attract bigger, long-haul aircraft that are thought to be more profitable. Flybe continues to seek to persuade the DfT that the CAA should be given a legal obligation to protect and enhance regional services, and in particular access to London and we will lobby on this issue on the back of the DfT’s Draft Aviation Policy Framework document.

c. Given the slim likelihood of any extra capacity in the south east over the next 20 years, airlines like Flybe will seek to provide services to Europe from the regions, as demonstrated with the introduction of our Manchester hub. We will also, in part as a reaction to charging regimes at London airports like that outlined above, continue to forge partnerships with European airlines to create what are, in effect, ‘virtual’ hubs at Paris Charles de Gaulle in association with Air France and at Amsterdam Schiphol, connecting the UK’s regions with the rest of the world.

22 October 2012

Written evidence from the Wildlife Trusts (AS 95)

[Incorporating Berkshire, Buckinghamshire & Oxfordshire, Essex, and Middlesex, Kent, London, Surrey and Sussex Wildlife Trusts]

Summary

1. The seven Wildlife Trusts whose interests are most directly affected by aviation and airport development in the South East1 are pleased to have this opportunity to provide evidence to the Transport Select Committee’s Aviation Inquiry. We are acutely aware of the relentless pressures – through a range of both public policy and private initiatives – to expand airport capacity in the South East. The options and measures vary from more efficient use of and extensions to existing infrastructure,2 to a completely new London airport.3 Any one of the options could have damaging impacts on our wildlife.

2. The key question for us is simple: Is airport development in the South East sustainable?4

3. We support development which has been properly tested for its sustainability, where environmental consequences have been fully considered and the impacts duly moderated through the application of the conventional planning hierarchy in order to minimise damaging effects on our natural heritage. We have examined the policy framework and the emerging development proposals for aviation and airport development. Our primary concern arising from this assessment is that none of the public policies, including the Government’s new aviation policy framework, nor the various airport development proposals which focus largely on the South East take a proper strategic approach to aviation and, critically, none have been adequately tested for their sustainability.

4. We are further concerned that in the current climate of ‘enhancing economic performance over all else’, the process to define aviation policy and airport

1 Berkshire, Buckinghamshire & Oxfordshire Wildlife Trust; Essex Wildlife Trust; Hertfordshire and Middlesex Wildlife Trust; Kent Wildlife Trust; London Wildlife Trust; Surrey Wildlife Trust; and Sussex Wildlife Trust. 2 For example the Aviation White Paper (Department for Transport 2003 The future of air transport; Cm 6046) argues for two additional runways in the South East but sets as a first priority making the best use of existing capacity at all airports and in particular Stansted and Luton; DfT’s Draft Aviation Policy Framework (2012) proposes measures to deliver enhanced use of existing capacity; the ‘third runway at Heathrow’ debate has recently been extended to consider a major reconfiguration to accommodate 4 runways; there are also recent suggestions that Northolt could provide short term ‘relief’ for Heathrow (North by Northolt: A new London airport at RAF Northolt; Aerospace International; June 2012, p. 16; http://media.aerosociety.com/aerospace-insight/2012/06/01/north-by-northolt/6875/) and Gatwick’s 2012 revised master plan (http://www.gatwickairport.com/Documents/business_and_community/Gatwick%20master%20plan/2012-07-18- GAL_Masterplan.pdf) anticipates “.. that, in the longer term, a second runway at Gatwick may be needed.” 3 The focus over more than five decades has been on a new London airport at a range of locations in and around the Thames Estuary. The history of these is set out well in House of Commons Library Standard Note Aviation: proposals for an airport in the Thames estuary, 1945-2012 (SN/BT/4920; updated July 2012); and Standard Note SN 6144 Aviation: Mayor of London’s proposals for a Thames estuary airport, 2008-. summarises the current scheme for a Thames estuary ‘island airport’. 4 Our reference point for ‘sustainable development’ is the set of shared guiding principles referred to in the section titled ‘Achieving Sustainable Development’ of the National Planning Policy Framework for England (page 2; http://www.communities.gov.uk/documents/planningandbuilding/pdf/2116950.pdf). This is based on ‘Securing the Future’ (http://www.defra.gov.uk/publications/files/pb10589-securing-the-future-050307.pdf) which refines the fundamental principles that became known as the ‘three pillars of sustainable development’ (see http://www.un.org/en/ga/president/65/issues/sustdev.shtml) first set out by Gro Harlem Brundtland in ‘Our Common Future’ a quarter of a century ago (http://www.un-documents.net/wced-ocf.htm), and comprises ensuring a strong, healthy and just society, living within environmental limits, achieved through a sustainable economy, good governance and responsible use of sound science (‘Securing the Future’ 2005 Chapter 1, section 4; p. 16). development strategy risks marginalising environmental considerations. Two particular examples which demonstrate the nature of problems which could act as barriers to proper consideration of the natural environment as we prepare the way for future aviation are: • The recent Policy Exchange/CentreForum publication5 takes a refreshingly clear and honest approach to factual matters concerning aviation. It unequivocally states (in the context of air quality and climate change) that “Flying is bad for the environment, and although it will improve it will remain bad for the environment.”6 It also takes inadequate, simplistic approach to assessing the environmental impact of its ‘preferred solution’ to maintaining an international hub by developing a 4-runway westerly extension to Heathrow; the importance of wildlife sites is assessed –and dismissed– in one paragraph.7 • The Marketing Director for an airport in Kent, during the process of public scrutiny of its proposed plans to expand is reported as saying “So what if a few rare species of plant get wiped out – we should have the right to cheap and easy air travel.”8

5. If we fail to properly integrate the full suite of environmental considerations right at the start of aviation – and indeed wider transport and communications – policy formulation and strategic planning, then we risk that this sector will continue to erode our natural heritage and wildlife assets.

Introduction

Who are we and what do we do?

6. This joint submission of evidence is contributed by the seven Wildlife Trusts most directly affected by aviation and airport development in the South East. We have a combined membership in excess of 201,000 individuals; the total membership of the 47 Wildlife Trusts is ca 800,000.

7. We are partners in The Wildlife Trusts movement which has a collective vision of an environment rich in wildlife for everyone and a mission to create Living Landscapes and secure Living Seas. The 47 independent Wildlife Trust charities in the UK, Isle of Man and Alderney share the common primary objective: to safeguard nature. In parallel we promote access to and enjoyment of nature for the cultural, spiritual, aesthetic, educational and other benefits this brings to maintain and enhance our quality of life. We operate principally at a local level, supported by and working for our local membership and the wider communities in our areas. We manage our own nature reserves, provide advice to land, water and marine resource users and managers, develop and collaborate with others on landscape-scale actions to protect and to rebuild our natural assets in towns and cities, the wider countryside and marine and coastal environments. We undertake and support surveys, data collection and research to underpin our understanding and knowledge of the natural world, we provide educational services to children and young people in our communities and we lobby for governance (legislation, policy frameworks and strategic planning) and decision making at all levels –from local to European– which support our objectives.

Why are we interested in aviation policy and airport development strategies?

8. We support development which has been properly tested for its sustainability. We accept that aviation is part of our way of live and is likely to remain so for the foreseeable future. Our interest is to see that any development meets the highest standards of sustainability. This will

5 Tim Leunig (2012) ‘Bigger and quieter: The right answer for aviation’. Policy Exchange/CentreForum, London. http://www.policyexchange.org.uk/images/publications/bigger%20and%20quieter.pdf 6 ibid. Chapter 14 ‘Airports, aviation and global warming’; see p. 66. 7 ibid. Chapter 9 ‘Heathrow’; subsection ‘Does this proposal work for the area west of London?’ pp. 47-49. 8 See ‘Extinction is ok – according to Lydd manager!’ Posted on Aviation Environment Federation (AEF) website, 6th June 2007; http://www.aef.org.uk/?p=154. include taking due account of new technologies and behaviours that can help to reduce the need and demand for air travel.

9. Aviation and airport development have direct and indirect impacts on wildlife and on the wider environment. Aircraft emit greenhouse gases (GHGs) and noise affects the environment at airports and along flight paths; surface transport used by passengers and staff and for freight and support services emits GHGs and other pollutants (such as NOx and PM10 particulates) into the air.

10. The expansion of airports damages important wildlife areas through direct land take of key habitats and fragmentation of the landscape. It increases local pressures on the environment, for both people and wildlife. Impacts on wildlife can range from loss of habitats to depletion of water resources,9 noise and other disturbance of species populations, and both incidental and deliberate killing of birds arising from bird/aircraft collisions and management measures taken to reduce the risks of bird strikes.10

General observations

11. We have set out below our views and supporting evidence in response to the headline questions of the Inquiry.

12. However, we are concerned that, in common with the DfT’s new Aviation Policy Framework and the range of private sector proposals coming forward for new and/or expanded airport development in the South East,11 the Inquiry is too narrowly focused to address the critical question: is airport development in the South East sustainable?

Detailed comments on the main questions of interest to the Aviation Inquiry

What should be the objectives of Government policy on aviation?

13. The briefing for this Inquiry raises the question ‘Where does aviation fit in the overall transport strategy?’ This presupposes that there is an ‘overall transport strategy’ for the country. But there is not.12 We have an incomplete suite of public policies and strategies covering different elements of the transport sector, and of different ages. None of these appear to be integrated with each other, nor is there any apparent attempt to integrate these with the other key element of communications.

9 For example, Heathrow’s official website section on sustainability states that “Airports use significant quantities of water, mainly for construction projects, sanitation and catering. Airport operations also generate considerable volumes of surface runoff and wastewater that, if they contain pollutants, have the potential to impact on the quality of water courses and the wildlife they support.” (http://www.heathrowairport.com/about-us/community-and- environment/sustainability/environment/water). Heathrow is deemed to be the biggest single water consumer in the area. The impact of further development on a region under water stress seems not to feature as a major consideration in proposals for airport expansion. 10 See, for example, section on ‘Bird hazard management’ (page 6 in ‘Towards a sustainable Heathrow: A focus on health and safety. Briefing document published by Heathrow Airport Ltd 2012; http://www.heathrowairport.com/static/Heathrow/Downloads/PDF/A_focus_on_safety-LHR.pdf) and the US Bird Strike Committee’s selected list of significant bird strikes in the webpages on ‘Understanding and Reducing Bird Hazards to Aircraft’ at http://www.birdstrike.org/events/signif.htm. 11 The announcement by the Secretary of State for Transport on September 7th this year of the ‘Davies Commission’11 to assess the “.. options for maintaining this country’s status as an international hub for aviation” has prompted the high-profile publication of several ‘hub’ proposals, each of which could quite justifiably be subtitled: ‘Why [insert name of selected airport or location] should be the UK’s main international hub airport’. 12 For evidence for this see, for example, House of Commons Research paper 11/22 Transport policy in 2011: A new direction? (March 2011) which refers to “…the 15 specific transport-related policies in the Coalition Agreement …” (p.7). The list is not settled policy, but it does reflect the piecemeal approach to transport policy. 14. The new ‘Aviation Policy Framework’ is described as “… the Government’s draft sustainable framework for aviation.”13 There is no evidence from the consultation document or accompanying Impact Assessment14 that the framework has been properly tested to determine its sustainability. The policy framework characterises “Aviation’s environmental impacts [as] both global (climate change) and local (primarily noise, as well as air pollution and congestion).”15 These are, of course, very important issues; but they amount to an extraordinary and indefensibly narrow consideration of the environmental consequences of any country’s aviation strategy.

15. While we do not underestimate the scale of the task to provide the country with a comprehensive, integrated and up to date transport and communications strategy, we do believe that this is a task that a responsible Government should set itself for the benefit of the population and communities they serve. A fully integrated, long-term transport and communications strategy fit for the 21st century could be properly consulted upon in the normal way and tested for sustainability through the process set out in the EU Strategic Environmental Assessment Directive.16

How should we make the best use of existing aviation capacity?

16. Our key concern is that any plans to adjust frameworks and rules of operation (extension of ‘fifth freedoms’ to Gatwick, Stansted or Luton, or changes to periods closed to normal aircraft movements, for example) which could have the effect of altering the scale and pattern of airport use, including surface transport infrastructure and its use, should be subject to early assessment of their likely environmental effects making full use of the established tools and procedures for such assessments.

17. Surface access to airports is of particular interest to us. Poorly planned infrastructure is damaging to wildlife.17 Proper consideration of the natural environment, using the conventional ‘planning hierarchy’ has the potential to ensure that surface transport infrastructure is integrated with wider environmental objectives, such as landscape scale enhancements, including habitat defragmentation. Combining enhancement opportunities with avoidance strategies, effective mitigation measures and, where absolutely necessary, proper compensation for unavoidable damage, would help to meet the new policy objectives for the natural environment. The challenge of shifting gear from an expectation of ‘no net loss of biodiversity’ to ‘net gain for nature’, as set out in the Natural Environment White Paper and reinforced in the National Planning Policy Framework. These policy considerations must be integrated with aviation policy and strategies for enhanced use of existing airport capacity.

What constraints are there on increasing UK aviation capacity?

Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

13 Para 1.4 in the DfT Consultation document Draft Aviation Policy Framework (Department for Transport, July 2012; p. 6). 14 DfT Aviation Policy Framework Impact Assessment (27/06/2012) http://assets.dft.gov.uk/consultations/dft-2012-35/draft- aviation-policy-framework-impact-assessment.pdf 15 Para 1.14 in the DfT Consultation document Draft Aviation Policy Framework (Department for Transport, July 2012; p. 8). 16 Current guidance on implementing this Directive is set out in A Practical Guide to the Strategic Environmental Assessment Directive Practical guidance on applying European Directive 2001/42/EC “on the assessment of the effects of certain plans and programmes on the environment” (ODPM; 2005). http://www.communities.gov.uk/documents/planningandbuilding/pdf/practicalguidesea.pdf). 17 Fragmentation of the landscape by linear transport routes is known to have a detrimental impact on wildlife. A recent publication by the European Environment Agency summarises the available evidence on the effects of fragmentation on wildlife in EEA Report 2/2011 Landscape Fragmentation in Europe (http://www.eea.europa.eu/publications/landscape- fragmentation-in-europe) 18. In our view the Government’s proposals are not sufficient. They are unreasonably constrained. Our concerns over the local environment extend significantly beyond the impacts of noise on local residents.

19. Paragraph 4.104 of the Draft Aviation Policy Framework states that looking for the least environmentally damaging solution is a policy imperative, and continues that the planned call for evidence (subsequently cancelled) “…will make it clear that environmental sustainability, including protection of habitats, species...is one of the factors which respondents should aim to address.”18 This aim of environmental sustainability should be the keystone of any future policy and supports our view that, rather than the environment being a constraint, sustainable development principles should guide strategic planning of aviation capacity development.

20. However, we are concerned that the development of a national policy statement (NPS) on aviation as set out in paragraph 4.103 of the Policy Framework will follow the conventional practice of excluding costs of environmental damage when assessing the ‘net economic costs and benefits’ of a development. This would result in the costs in terms of loss and damage to natural capital – ecosystem functionality (and services) and biodiversity – being ignored. The National Ecosystems Assessment19 recognises that the benefits that we derive from the natural world and its constituent ecosystems are critically important to human well-being and economic prosperity. Aviation strategy must ensure that aviation pays for the environmental damage it causes. Currently, the external costs associated with environmental impacts are not internalised in the planning system and decision making processes.

Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

21. Aviation is the fastest growing source of greenhouse gas (GHG) emissions. Aviation strategy must be consistent with the country’s legal obligations to address climate change.20 The Government’s own estimates put the total cost of aviation’s climate change impacts at £69.5bn for the period 2000-2060, £20bn more than the cost without expansion. This cost is ignored when aviation’s net economic impact is assessed.

22. The draft Aviation Policy Framework does not extend to a consideration of the full range of GHG emissions associated with the proposed options to expand aviation. Consequently, we believe that no predictions can be made of the implications for changes to carbon emissions.

23. We are aware that there are a number of technological solutions being actively investigated that would have the effect of reducing carbon emissions from aircraft. Some of these appear to be well developed technologies that could be introduced in the relatively near future, including the use of more fuel efficient propfan engines;21 others are innovative airframe design concepts that seem to be a considerable way from commercial production.22 There is a wide range of options available for sustainable forms of transport, investment in which would help to reduce carbon emissions by surface access transport. These sorts of measures would clearly help the aviation industry to be more sustainable. However, from the perspective of wildlife and habitats and ecosystem functionality we feel it is essential that a strategic assessment of the implications for the natural environment of a range of aviation scenarios should be undertaken. This must be

18 DfT Draft Aviation Policy Framework; July 2012 p. 71. 19 UK National Ecosystem Assessment (2011) The UK National Ecosystem Assessment: Synthesis of the Key Findings. Cambridge: UNEP-WCMC (http://uknea.unep-wcmc.org/Resources/tabid/82/Default.aspx) 20 Climate Change Act 2008 21 See Chapter 5 (Transport and its infrastructure, section 5.3 Mitigation technologies and strategies - 5.3.3 Aviation). In: B. Metz, O.R. Davidson, P.R. Bosch, R. Dave, L.A. Meyer (eds) 2007 Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge: University Press (pp 352-356). http://www.ipcc.ch/pdf/assessment-report/ar4/wg3/ar4-wg3-chapter5.pdf 22 See NASA’s report on research commissioned to examine the concepts for aircraft designs that may enter service in 20 to 25 years time. ‘Beauty of future airplanes is more than skin deep’ (17 May 2010) http://www.nasa.gov/topics/aeronautics/features/future_airplanes.html done properly and as an integral part of the development of ideas, solutions and proposals from other sectoral perspectives.

Do we need a step-change in UK aviation capacity? Why? What should this step-change be? Should there be a new hub airport? Where?

24. Our focus here is on the proposals for a new London airport in the Thames Estuary. As a general observation, we are not aware of any evidence to demonstrate that aviation and airport development will not result in unsustainable impacts on the natural environment in the South East. In our experience the calls for increased capacity/expansion, including new airports, are not supported by rigorous evidence of their likely costs and impacts.

25. There have been several proposals for hub airports in or around the Thames Estuary in recent years, from both the private and public sector, with most of the recent proposals for coastal developments in North Kent23 as well as the relatively recent and well-known proposals by the Mayor of London, dating from 2008. The concept goes back several decades, and clearly none of the proposals has been implemented.

26. The environmental arguments against using the Thames Estuary as a location for an airport are stronger than they have ever been. The importance of the area for coastal and marine wildlife is recognised through international, European and national site designations and increasing evidence of the scale and diversity of wildlife the estuary supports. Some of the important assets are the internationally important populations of breeding, migrant and over- wintering birds, marine mammals including small cetaceans (harbour porpoise and bottle-nosed dolphins), grey and common seals and less conspicuous but equally important species like water voles.

27. There is a wider, more complex interaction between the Thames Estuary to the functionality of adjacent marine ecosystems in the and North Sea. The Environment Agency reports that the estuary plays a major role in maintaining North Sea fish stocks.24

28. Landward environmental impacts of a Thames Estuary airport have barely been given any thought by the proponents. At the very least, major new surface transport infrastructure in the area would add to the overall impacts on the environment.

24 October 2012

23 See Section 2 ‘Onshore [coastal] airports’ (House of Commons Library Standard Note SN/BT/4920; July 2012 pp 5-24). 24 Environment Agency (December 2009) River Basin Management Plan: Thames River Basin District (p. 79) http://cdn.environment-agency.gov.uk/geth0910bswa-e-e.pdf

Written evidence from the Government of Guernsey (AS 96)

I am writing on behalf of the government of Guernsey in response to the Transport Select Committee’s call for evidence relating to its inquiry into UK aviation strategy.

The Committee’s advice on providing evidence is to keep submissions short and relevant; therefore this submission is deliberately concise. However, we would value the opportunity to elaborate on the issues below and further discuss aviation issues of relevance to Guernsey, and will be in touch to arrange a meeting in due course.

The government of Guernsey is simultaneously responding to the UK Department for Transport’s (‘DfT’) consultation on a draft Aviation Framework. In responding to the Committee’s call to evidence, we would reiterate the main points we will be making to the DfT:

• The maintenance and development of air links between Guernsey and the UK is to the economic advantage of both jurisdictions. These links, particularly between Guernsey and Gatwick, enable significant business flow between Guernsey and the UK and in particular the City of London. The relationship between London and Guernsey as international finance centres is beneficial not only to the island but also to the City of London and wider UK economy. Evidence for this can be found in the 2009 HM Treasury-commissioned independent ‘Review of British offshore financial centres’ undertaken by Michael Foot CBE (“the Foot Review”). The Foot Review explained that the Crown Dependencies of Guernsey, Jersey, and the Isle of Man make a “significant contribution to the liquidity of the UK market”. The Foot Review found that at the end of June 2009, UK banks had net financing of approximately $74.1 billion from Guernsey in addition to $218.3 billion from Jersey and $40.1 billion from the Isle of Man. The finance industries in the Crown Dependencies also generate significant professional fees for UK lawyers, accountants, fund managers, compliance and advisors, and the Crown Dependencies are an important factor in London’s pre-eminence as a global financial centre. However, Guernsey is also connected to the wider “UK plc” and there exist clear mutual economic benefits in areas such as renewable energy, creative industries, intellectual property and the digital economy.

• The central role of economically viable links to a London hub/gateway airport, particularly Gatwick, in the economic relationship between Guernsey and the UK cannot be underestimated. However, the financial pressures placed by the operators of Gatwick Airport on short-haul regional carriers such as those serving Guernsey present a real challenge to the economic viability of these routes. The government of Guernsey acknowledges the ability of Gatwick Airport Limited to set charges under the Civil Aviation Authority’s price cap. However, the government of Guernsey would reiterate that current slot allocation arrangements at major UK airports, London Gatwick in particular, must take into account the economic and social interests of regions such as Guernsey by reserving slots for existing regional services and enabling a proportion of any slots released to be reserved for new entrants that wish to extend such services.

• As a small island community, Guernsey depends on commercially provided regional air services to the UK for a significant amount of its economic, cultural and social well-being, as well as for the support of public service delivery in areas such as health and education. Guernsey depends upon its connections with the UK mainland and specifically into London Gatwick. Last year, 177,533 passengers flew from Guernsey to Gatwick. Guernsey passengers use the Gatwick route not only to access the capital city but also for onward connections to other areas of the UK and around the world.

• In developing an aviation strategy, we would respectfully encourage the UK Government to balance economic, social, and environmental issues. The government of Guernsey would take this opportunity to reiterate that Guernsey’s year- round lifeline air links with the UK are provided by regional airlines, which operate smaller, quieter, and less polluting aircraft than those used by long-haul international carriers.

24 October 2012

Written evidence from Mr Terence Hughes (AS 97)

I would like make the following points for consideration by the House of Commons Select Committee on Transport with regard to the expansion of Heathrow. I apologise for the length of my statement and assure you that I am not “anti-aviation.” but wish to be constructive.

The Environmental Issue

Noise

I have lived in Putney for over 40 years and during that time the disturbance from aircraft noise has grown considerably for the simple reason that aircraft movements have increased, the planes are larger and the engines more powerful. Although the government claims that the average noise level has decreased since the 1960’s ( by 20 decibels), it is hard for people who do not live under the flight path to understand the degree to which the residents of a large part of London suffer. I find it difficult to work when there is a constant low rumble in the background and almost impossible when the stream of planes fly overhead – sometimes more than a hundred- at intervals of just over a minute. It is impossible to have a conversation with any person next to you.

Yet the expansion of Heathrow will lead to a massive increase in the number of flights and even bigger aircraft.

Impact on Health

Hopefully the Transport Committee will be aware that excessive aircraft noise has a high social and health cost The effect of noise on people is complex and insufficiently understood. It is more than a question of intensity but also of pitch, frequency and atmospheric conditions. WHO Europe states that

“excessive noise seriously harms human health and interferes with people’s daily activities at school, at work and at home and during leisure time. It can disturb sleep cause cardiovascular and pyschophysiological effects, reduce performance and provoke annoyance responses and changes social behaviour.”

These judgements are supported by clinical studies in Munich which have shown that school children suffer a loss of attention and ability to learn as a result of aircraft noise.

Noise as Torture

The US Department of Defense would certainly agree with the WHO’s conclusions since it has used unbearable levels of sound in Iraq and elsewhere to force its enemies and prisoners into submission. Surely our government will not permit what can be described as a form of torture to be inflicted on thousands of Londoners who live on the approaches to Heathrow.

New Engines? The expansion lobby maintains that there will be a decrease in noise levels as new engines and aircraft are brought into service. However, this assumes further technological advance by engine manufacturers and a massive investment in new power plants by the airlines. Where is the evidence for these developments? Modern aircraft such as the Boeing 777 and Airbus are still unacceptably noisy as they fly over our neighbourhood and how “quiet”is “quiet” for a ? Furthermore, will the many different airlines flying into Heathrow be willing to find the cash to re-equip their fleets with new engines at a time of recession? If so, how long would it take for the older engines to be replaced?

Surely it would be foolhardy for the government to invest billions in expanding Heathrow on the back of a mere promise of quieter engines when they do not exist at anything like acceptable levels and may never exist. Moreover, many residents of London are deeply sceptical of undertakings given by the aviation industry since it has a poor track record in respecting planning decisions. Many remember the judgment of the Planning Inspector into construction of the 5th Terminal that any additional runway would mean that the noise level would be intolerable.

Aircraft Movements

The expansion lobby maintains that the environmental objections can be overcome as larger aircraft come into service allowing more people to be moved by fewer planes. Yet air traffic increases at an average of 5 per cent a year and according to the previous government’s 2007 forecast set out in “Adding capacity to Heathrow” current aircraft movements of 480,000 will rise massively to 605,000 in 2020, and a staggering 720,000 by 2030 if a third short runway is built. Only a small proportion of these movements are likely to be by large aircraft and it defies all reason to think that this huge increase in flights across London will not have a serious effect on the environment.

Risk

Noise is just one major environmental reason for abandoning any scheme to expand Heathrow, there is also the problem of safety. A massive increase in aircraft movements over London will surely increase the risk of an accident. Whilst Heathrow’s safety record is good with 11 accidents ( 7 fatal)since it started civil operations, there is always an inherent risk in flight. Some of the most advanced aircraft in the world- the Concorde, the A380 and the Boeing 777 have had accidents. In 2008, disaster was only narrowly avoided through the skill of the pilot when a Boeing 777 crash-landed at the edge of Heathrow’s runway.. We trust that the Committee will make every attempt to assess the likely risk of an aircraft accident over London and how the emergency services would cope in such an event.

The Economic Case.

Travelling to the BRICS

The expansion lobby claims that Heathrow needs more runways so that the UK can boost its trade links with emerging markets. However it seems odd that British business should blame lack of a runway for its relatively poor performance in global markets compared to France and Germany. Do the Chinese buy more German goods because there are better airports at Frankfurt and Munich – or do they just like BMW’s?

If the Chief Executive of British Airways is so concerned about his airline’s connections with the BRIC’s surely he could change the corporation’s route structure by reallocating the short haul slots that BA has recently acquired from BE.

The China case

As a hub airport Heathrow has been of great economic benefit to London and the Southeast but why should the Midlands and North be denied the advantages of developing their major own airports because so much traffic is attracted to London? In berating the UK’s slow pace of runway construction, the pro-expansion lobby makes endless comparisons with China’s a large airport building programme to overcome is communications needs. . Yet by comparison Britain is well served with three times more airports per capita than China. Many local airfields have been developed in the Uk and Europe by low cost carriers such as Easyjet and Ryanair making it easier to by-pass Heathrow. As these regional airports become more attractive and their international appeal grows the demand for point to point flights will surely increase offering business alternatives to the Heathrow hub.

On the ground

For many travellers – business or otherwise – even getting to Heathrow is a daunting experience. Its ground links are already inadequate. The Committee should try travelling on the at peak or try driving into London on the M25 at rush hour. Yet the expansion lobby pays little attention about to the costs and disruption of providing ground infrastructure.. What will be the scale of the additional road and rail links required by a third runway, perhaps followed by a fourth? How long will the ground links take to construct? What will be the economic and social disruption caused by major road building around the M25? Who will pay the infrastructure costs? Why the silence?

It is well recognised that airports attract a great deal of property development to meet business and domestic demand, If Heathrow grows in size there is every possibility that there will be an urban sprawl surrounding the airport and extending along the M4 corridor towards Reading. Much of the construction will be on valuable green field sites and the economic axis of London will take a further shift west, away from the eastern side of the city where there is a need for development.

An Expensive White Elephant?

Much of the justification for Heathrow seems to be based on our financial services and IT based economy – the laptop travellers rather than the tourist trade. Is it wise to spend billions expanding Heathrow when the business community is beginning to use more cost effective electronic means of communication than expensive, time-consuming air travel? .

The Political Case – a Running Sore.

Perhaps the greatest issue arising from the Heathrow debate is the risk to democratic values. All the main political parties made manifesto commitments to scrap a third runway following a successful grass roots campaign organised by local people backed by their elected councils. However, the well- funded Heathrow lobby has worked tirelessly to reverse the electorate’s decision. BA, BAA - both internationally owned – have exploited the current economic recession by assiduously courting Whitehall and the Westminster village. This serves to undermine the public’s confidence in the parliamentary system which has been forced to weather the scandal of MP’s expenses and the cynical operations of the spin doctors.

Whatever one thinks of the Mayor of London’s proposals for a new London airport one can only agree that we may be presented with a ”fudgerama” when urgent action is necessary. Why do we have to wait three or four years before any decision is reached on Heathrow? Why are there no representatives of constituencies affected by the airport’s operations and environmental disturbance on the Transport Committee? In fact the committee seems tilted towards accepting Heathrow expansion. For example, Londoners can only be dismayed by the strong public positions taken by some members.

If the government allows further expansion of Heathrow and fails to reverse a planning failure we have lived with for so many years there will be intense opposition from many quarters. Sadly there will be a colossal waste of political energy when there are so many other serious social and economic issues to be tackled. People will once again campaign vigorously against expansion for the simple reason that they have no alternative, - they cannot tolerate the continuous noise and environmental deterioration that will not go away. They do not need the US Department of Defense to tell them that excessive noise undermines well-being.

Future opposition

Many legitimate avenues of resistance to Heathrow expansion will be actively explored through the UK courts and with planning appeals together with action at the European level. Hopefully the Transport Committee will give due regard to the EU’s 2002 directive calling for member states to establish active plans to control and reduce harmful effects of noise exposure. There is ever reason to expect that the European Parliament could tighten up environmental requirements.

Why reinforce a Failure?

In many ways I have a great respect for those who have to manage Heathrow. They do an impressive job in handling the huge amount of traffic that has contributed to the economic well being of the country. In no way am I anti-aviation but the growth of London’s airport has been a story of muddling through under pressure from the international aviation industry. Ironically, it is the aviation industry and British business that should have been calling for a new state-of- the-art hub airport in the right place years ago. Heathrow has had its day and now needs to find another environmentally acceptable role in serving the country’s air travel needs..

The time has come for radical and imaginative thinking. Britain has world-class architects and civil engineers who have built spectacular airports and projects around the globe. As the Olympics have shown we also have the management skills to build the biggest and most complex projects. The UK even has the capability of raising long term funding through the City of London, the world’s leading financial centre. Why should we have to put up with the second best?

It is surely odd that the country which created the original communications revolution and owes so much to the imagination and enterprise of its forbears should continue in this way,

11 October 2012

Witten evidence from the RSPB (AS 98)

Summary i. The RSPB welcomes this inquiry and the opportunity to comment on aviation strategy in the UK. The Government’s aviation strategy is currently under consultation in the form of the Draft Policy Framework (DPF)1. This will set the overarching policy within which decisions about aviation and airports will be taken. We understand from the Department for Transport that any options ruled out by the Framework will not be considered by the Airports Commission which will report in 2015. ii. We are concerned that Government appear to be signalling a presumption in favour of capacity expansion without giving due regard to the potential impacts this could have on climate change and the natural environment. iii. To ensure that Government’s aviation policy framework is genuinely compatible with the principle of sustainable development and the Government’s own ambition to be the ‘greenest ever’, we recommend that:

1. International aviation emissions are not excluded from the UK’s Carbon Budgets 2. Better use of existing capacity and alternatives to flying are clearly prioritised over any capacity expansion, which should be seen as a last resort. 3. The ecological impacts of expansion should be a key consideration and any increase in capacity must not result in additional pressure on protected sites and species. 4. The Government should reaffirm the previous target to cap the sector’s overall emissions at, or close to, 2005 levels by 2050. 5. Appropriate environmental assessment is undertaken at an early stage if any site-specific proposals are put forward to ensure special places such as the Thames Estuary are protected. This should give irreversible impacts on wildlife, habitats and accessible green space equal weight alongside the noise impacts on local residents.

Background - RSPB position on aviation iv. The Royal Society for the Protection of Birds (the RSPB) is the largest wildlife conservation organisation in Europe. We have 1.1 million members, and own or manage approximately 135,000 hectares of land for nature conservation on 200 reserves throughout the UK. v. The RSPB considers that sustainability should be at the heart of decision-making. The RSPB’s policy and advocacy work covers a wide range of issues including planning and regional policy, climate change, energy, transport, and agriculture. As well as commenting on national planning policy issues, the RSPB’s professional conservation and planning specialists make representations on over 1,000 items of planning casework each year throughout the UK, including development plans and individual planning applications and proposals. We thus have considerable planning experience, including on major infrastructure projects such as ports and wind farms. The RSPB also makes over 100 planning applications a year on its own reserves and estate.

1 Department for Transport, Draft Aviation Policy Framework, 2012 vi. Our approach to the aviation sector is underpinned by two principles: that all development should avoid unacceptable harm to wildlife, and that the UK must continue on the path to meeting its carbon budgets, as legislated for in the Climate Change Act (2008). vii. The RSPB considers that human-induced climate change is the greatest long-term threat to humans and global biodiversity. Up to one third of land-based species on earth could be committed to extinction by 2050 if we do not act to address this problem. Rapid and deep emission cuts in all sectors are essential to avoiding dangerous climate change. An urgent challenge for the UK is therefore to tackle rising carbon emissions from transport and aviation in particular. The Committee on Climate Change (CCC) says that at least a 60% cut in domestic emissions is needed by 2030 to be on the path to secure a 90% cut (equivalent to at least 80% once emissions from international aviation and shipping are factored in) by 20502. viii. It is therefore essential to ensure that the aviation sector makes a fair contribution towards meeting the UK’s overall climate change targets. This will require Government to commit to a sector-specific emissions target at least in line with the pre-existing 2009 one to limit the sector’s emissions to 2005 levels by 2050. It will also need robust mechanisms to ensure the sector is on track to meet the target, and a mechanism to review whether it is fit for purpose in light of developments in climate change policy and the scientific ability to accurately measure the impacts of aviation’s non-CO2 emissions. Since the UK airport system, in terms of planning permissions granted, is already close to the maximum number of passengers compatible with achieving the 2050 target, any growth in the sector should only be permitted when the industry has demonstrated that any growth is possible within emission limits that reflect the carbon budgets. ix. Any new developments must be seen as a last resort and should avoid all unnecessary damage to places of high ecological value, particularly protected areas. In the recent past, the RSPB has objected to proposals for airport developments at both Cliffe and Lydd in Kent. The Cliffe proposal would have resulted in the single biggest destruction of a Site of Special Scientific Interest, a Special Protection Area or a Ramsar site ever in the UK. Following the RSPB’s 2002 campaign, Government decided not to support the Cliffe option. Since 2007, the RSPB has supplied evidence of the substantial ecological impact an airport at Lydd could have. A final decision is still awaited from the Secretary of State for Transport, following a public inquiry at which the RSPB presented evidence.

1. What should be the objectives of Government policy on aviation?

1.1 Aviation policy should be based on the following objectives:

• Demand reduction, efficiency, and making best use of existing capacity should be prioritised over expanding capacity. • The aviation sector should make an appropriate contribution to meeting the UK’s carbon budgets, and any plans for capacity expansion should be demonstrably compatible with our carbon budgets. • Aviation should be one part of a coherent, overarching low carbon transport strategy for the UK. e. Where does aviation fit in the overall transport strategy?

2 Committee on Climate Change, Meeting the UK aviation target – options for reducing emissions to 2050, December 2009 1.2 Aviation must be placed within the wider framework of the UK’s transport strategy, and should be part of a coherent, overarching low carbon transport strategy. Transport policy should ensure that demand for aviation is tempered by lower carbon alternatives, which, in turn, requires policy to ensure such alternatives are readily available and competitive in terms of cost, convenience, comfort, etc.. Examples of lower carbon alternatives to air travel that should be clearly prioritised over further investment in aviation include:

• Schemes such as WWF’s 1-in-5 initiative, which promote the increased use of video- conferencing as a substitute for international business travel3. • Rail investments that encourage modal shift, including better intercontinental, high speed routes. • An accessible, high quality, low-carbon surface transport network.

1.3 RSPB recently co-published a report along with the Campaign to Protect Rural England and the Campaign for Better Transport, entitled The Carbon Impacts of High Speed 24. This report, undertaken by Greengauge 21, shows that High Speed 2 could provide higher CO2 savings but that it depends on stimulating modal shift from air travel to HS2.

2. How should we make the best use of existing aviation capacity? b. Does the Government’s current strategy make the best use of existing capacity at airports outside the South East? How could this be improved?

2.1 The RSPB is concerned that Government’s current Draft Policy Framework starts from a place of assuming that there is an impending ‘capacity challenge’. This assumption is questionable given conclusions from analysis done by WWF and the Airport Environment Foundation. Reducing demand and making best use of existing capacity should be the priorities for the Aviation Policy Framework. The WWF/AEF findings demonstrate that if the industry stays within a growth limit target which the CCC have advised on (60% growth in demand by 2050, and 2050 emissions no higher than those in 2005) there is currently enough spare capacity to meet demand out to 2030 and even most of demand by 20505. The shortfall is not of a scale that would justify the kinds of expansion being put forward by the aviation industry or the assumption of an impending capacity challenge.

2.2 Regional airports in particular, and airports in the London area other than Heathrow, have substantial unused capacity which could be exploited (Gatwick’s situation is much less urgent than Heathrow’s since it currently operates with 15% spare runway capacity)6. This could avoid the need for costly and environmentally damaging investment in new capacity in the UK. In addition, more strategic distribution of the kinds of flights offered at different airports would ensure that the UK made best use of existing capacity.

2.3 AEF and WWF conclude that a new airport in the South East is not justified, given the urgent limits that must be placed on aviation demand to help the UK achieve its climate change objectives. They also believe that very little new airport expansion is justified anywhere in the UK on the basis of these figures: spare runway and terminal capacity that already exists can be used

3 WWF, One in Five Challenge: Annual Report 2009/10, http://assets.wwf.org.uk/downloads/one_in_five_challenge_annual_report.pdf 4 Greengauge 21, The Carbon impacts of HS2, 2012 5 WWF/AEF, Available UK airport capacity under a 2050 CO2 target for the aviation sector, 2012 6 Ibid. to accommodate increases in demand and flights. The RSPB urges Government to carefully consider these conclusions and we recommend that Government invest far more into measures which could help to make better use of existing capacity. Possible mechanisms to achieve this would be to adjust relative airport charges in order to make hub slots more expensive and encourage carriers to shift point-to-point leisure flights to regional airports.

3. What constraints are there on increasing UK aviation capacity?

3.1 Constraints should include avoiding unnecessary impacts on the natural environment and on the UK’s climate change commitments through the Climate Change Act. Demand should in turn be limited in order to ensure that these environmental limits are not breached. a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

3.2 The DPF refers to the likely requirement of a National Policy Statement (NPS) on aviation - the RSPB welcomes this commitment, particularly in the case that Government proposes some expansion.

3.3 The NPS should be a first step before any decisions on specific expansion proposals are taken. The NPS should include strategic location-specific options for expansion and compare them on sustainability grounds. For example, the Nuclear NPS set an important precedent in that it was location specific and its Appraisal of Sustainability was conducted by independent consultants7. We recommend that the same approach be taken for any aviation NPS – it should include specific locations and a thorough examination of the impacts of alternative sites.

3.4 The test of environmental sustainability for new infrastructure laid out under an NPS of this kind should be an appropriate Strategic Environmental Assessment and a Habitat Regulations Assessment if any European site is threatened by a proposal, all as part of an Appraisal of Sustainability (AoS).

3.5 Previous Appraisals of Sustainability (AoS) have been of poor quality8. As the Strategic Environmental Assessment Directive sets out, any AoS must include a sufficient number of reasonable (as opposed to feasible) alternative options. Otherwise, consideration of sustainability could risk being left until the public consultation phase when such alternatives would effectively have been ruled out. This means that the RSPB is calling for: • An aviation NPS which is specific about locations where expansion might take place • An independent Appraisal of Sustainability applied to an aviation NPS • Habitats Regulation Assessment and Strategic Environmental Assessment as part of an Appraisal of Sustainability b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

7 Collingwood Environmental Planning (2010), Appraisals of Sustainability and the New National Policy Statements: Opportunities Missed and Challenges to Come? Final Report to RSPB and WWF, January 2010 8 Ibid. 3.6 Government’s proposals on aviation’s contribution to climate change Draft Policy Framework, are not extensive. We do not believe that the proposals, as they stand, will lead to a significant decrease in aviation emissions and will in fact permit an increase.

3.7 Emissions from aviation are growing faster than any other transport sector. By 2050, aviation could be responsible for 25% or more of the UK’s total greenhouse gas emissions. The right policy levers still do not exist to reduce emissions and ensure that aviation’s contribution to mitigation is in line with other sectors of the economy.

3.8 The Department for Transport’s own most recent forecasts predict an increase in emissions 9 from aviation . Emissions in 2005 stood at 37.5 MtCO2 . The Committee on Climate Change advised the previous Government on how to keep 2050 emissions no higher than 2005 levels10. However, DfT’s forecasts from 2011 predict emissions in 2050 to be anywhere between 39.6-

58.4 MtCO2. We do not believe that the mitigating measures laid out in the Draft Policy Framework by Government will sufficiently abate this increase. We understand that DfT are currently producing new forecasts, but these are not immediately available.

3.9 The Draft Policy Framework’s approach to climate change is to prioritise international action, followed by European and finally domestic action on emissions. While we recognise the importance of any eventual global agreement and of course of improving the EU ETS, this hierarchy of priorities should be reversed.

3.10 Relying on international and European mechanisms to abate emissions from aviation does not give due consideration to our domestic climate change commitments. Furthermore, it results in delaying action to reduce emissions by linking action to the success of processes that Government are able to influence but not determine. Problems with sustaining a sufficiently high carbon price within the EU ETS and the low likelihood of any international agreement in the near future mean we recommend reversing the hierarchy and putting domestic action ahead of EU measures and, finally, international action. Government should prioritise domestic actions, including:

• Limits to demand growth and capacity expansion, in line with the Committee on Climate Change’s recommendations • Including international aviation emissions in the Climate Change Act 2008 and the UK’s carbon budgets

3.11 The International Civil Aviation Organization (ICAO) is the forum through which the UK works with other countries in an attempt to secure a global deal on aviation emissions. Regrettably, it is unlikely that any global agreement under ICAO will be achieved in the foreseeable future given the lack of progress in this forum to date.

3.12 At the EU level, the RSPB welcomes the inclusion of international aviation emissions in the European Emissions Trading Scheme, and applauds the EU’s strong response to resistance from other countries to this arrangement. The EU ETS promises to be an important tool to reduce emissions in a cost-effective way in the long-term, however it continues to be marred by

9 Department for Transport, UK Aviation Forecasts, August 2011 10 Committee on Climate Change, Meeting the UK aviation target – options for reducing emissions to 2050, December 2009 implementation problems, such as the over-allocation of allowances, which have meant that it has so far largely failed to reduce emissions significantly11.

3.13 The RSPB therefore does not believe that the inclusion of aviation emissions in the EU ETS alone is sufficient, both in terms of mitigation effort for the sector and in terms of accounting for emissions from aviation.

3.14 The Committee on Climate Change have advised Government that limiting aviation growth is “likely to require policy measures to restrain demand which go beyond our central projected carbon price”, either through economic measures or the planning system, to a maximum of a 60% increase in passengers (or a 55% increase in air transport movements (ATMs)). These are far more ambitious than what was set out in the previous White Paper12. The CCC recommends that beyond the carbon price, additional instruments could be used to limit demand growth, including an additional tax on CO2 and restrictions on the allocation of take-off and landing slots. Other regulatory and fiscal measures that could be introduced to reflect the true cost of carbon and other greenhouse gases include:

• Reversing the tax exemption for aviation fuel. • Retaining and strengthening air passenger duty (APD) or re-considering a switch to per- plane tax

• Supporting taxes on non-CO2 pollutants such as nitrogen oxides

3.15 The 2050 Aviation Target (limiting the sector’s emissions to 2005 levels of 37.5 MtCO2 by 2050) adopted by the previous Government is in line with advice from the CCC on aviation’s contribution to the UK’s overall climate targets, and provides a mechanism to limit aviation emissions. At the very least, a renewed commitment to this target would be welcome. The RSPB’s view is that in order to avoid placing greater burdens on other sectors of the economy to decarbonise, interim targets should be put in place to ensure that emissions do not peak at higher levels ahead of 2050 to ensure the industry is on track to meet the target. It is essential to keep in mind that the non-CO2 global warming effects (which approximately double the impact of aviation’s emissions) are not included in the 2050 Target. The Target should therefore be reviewed periodically to take account of developments in the understanding of aviation’s non-CO2 climate impacts, and adjusted once these are included in carbon budgets.

3.16 Industry are concerned that unilateral domestic action will lead to emissions leakage – aviation moving overseas and taking its emissions with it – a concern that is routinely over- stated by the industry. This is borne out by the strong growth of UK aviation despite the fact that APD is several times higher than equivalent taxes in neighbour countries.

3.17 These are the constraints on the industry required as part of an economy wide effort to stop dangerous climate change. The aviation industry must demonstrate how it can meet these constraints if it wishes to continue to grow.

3.18 The RSPB believes that Government must not exclude international aviation (and shipping) emissions in the Climate Change Act and the UK’s carbon budgets. Anything else would amount to undermining the credibility of the Act and exempting one particular industry from the same standards applied to others in our economy. This will ensure that the industry is legally

11 Sandbag, Rescuing the EU ETS from redundancy, 2009 12 Committee on Climate Change, Meeting the UK aviation target – options for reducing emissions to 2050, December 2009 obliged to reduce its CO2 emissions. The Committee on Climate Change has provided detailed advice on how to include these emissions. It explains that inclusion is merely a technicality since the carbon budgets have to this date accounted for, although not formally included, these emissions. However, to omit them would be akin to a change in the status quo and a watering down of the UK’s commitments under the Climate Change Act.

3.19 We understand from the Department for Transport that the Airports Commission will operate and take decisions within the Policy Framework. If this framework remains as it is and Government were to decide not to include international aviation emissions in the carbon budgets, there would be next to no meaningful climate change limits which would influence the Commission’s decision.

3.20 The Draft Policy Framework sets out the role that Government hope biofuels will play in decarbonising the aviation sector. The RSPB would urge extreme caution towards the claims being made about biofuels’ ability to deliver significant greenhouse gas savings, the sustainability of their production, and imminent introduction into widespread service.

3.21 The Committee on Climate Change’s Bioenergy Review determines that a combination of land-use change and emissions associated with the processing of biofuel crops can significantly undermine emissions savings. The CCC outlines a Constrained Land Use scenario, in which the bioenergy supply is constrained in line with stringent environmental regulation to protect natural habitats. In this scenario there is only a very limited amount of available sustainable bioenergy – amounting to 1.4% of total global primary energy supply13.

3.22 Nonetheless, given the range of decarbonisation options available to the surface transport sector, the UK should transition to using the majority of available sustainable biofuels in aviation, where the options for decarbonisation are far more limited. As long as appropriate safeguards are in place, such as stringent and sector-specific sustainability standards, this transition could provide an ‘exit route’ from the UK’s Renewable Transport Fuels Obligation, which commits us to levels of biofuel use that could easily exceed available sustainable supply. This would allow existing biofuel plant to continue operating, while putting aviation’s biofuel needs ahead of those of surface transport. c. What is the relationship between the Government’s strategy and EU aviation policies?

3.23 The Government’s strategy depends heavily on the role of the EU Emissions Trading Scheme to reduce emissions from aviation. However, as explained in paragraphs 3.13-3.15 we do not believe that the mechanism in its current form can be relied upon to produce meaningful emissions reductions in the sector. Adjustments to the scheme in its Phase III period, beginning in 2013, could make it viable but there is no guarantee that they will successfully resolve its numerous problems14. Our key concerns are:

• The cap on aviation under the EU ETS is not currently strict enough for it to deliver significant emission reduction levels. • Legal challenges from non-EU countries continue to beset the decision to include aviation.

13 Committee on Climate Change, Bioenergy Review, December 2011 14 Open Europe, Europe’s Dirty Secret: Why the EU Emissions Trading Scheme isn’t working, August 2007 • A track record of over-allocation of permits has resulted in a failure of the scheme to drive emissions reductions15. Over-allocation can lead to price crashes; a recent price crash (the third in the scheme’s history) in April 2012 saw the carbon price reach a record low of €5.99.

4. Do we need a step-change in UK aviation capacity? Why?

4.1 As described in paragraphs 2.1-2.3 above, we do not support the idea that there is an urgent need for new airport capacity in the UK in the immediate or even medium-term future. The real step change which is needed in UK aviation capacity is to use existing capacity better, and encouraging the use of lower carbon alternatives to aviation.

a. What should this step-change be? Should there be a new hub airport? Where?

4.2 Claims that the UK’s connectivity is falling behind also seem to be prey to exaggeration. For example, Heathrow has 990 departure flights each week to the world’s key business centres. That is more than its two closest rivals, Charles de Gaulle (484) and Frankfurt (450), combined.

4.3 As detailed above, there is good evidence of plenty of spare capacity already present in the aviation sector, both in terms of runway capacity and terminal capacity. Such evidence seriously undermines calls for an expensive brand new hub. More sustainable, politically easier and more financially sound options are available, primarily better use of this existing capacity. b. What are the costs and benefits of these different ways to increase UK aviation capacity?

4.4 If expansion is undertaken without respect for our carbon budgets, then it will be at the cost of the UK’s international leadership position on climate change, and our ability to meet our carbon targets, and thus our goal, agreed at the international level and enshrined in the Climate Change Act (2008) of keeping the world within safe limits of climate change.

4.5 If aviation emissions are permitted to rise and our overall emission target is to be met, other sectors of the economy would have to make deeper emission cuts, placing a greater financial burden could be based on other industries.

4.6 The benefits of limited expansion, which reduces and limits demand for aviation would be a shift of demand to other forms of transport. It would also ensure maximum benefits were reaped from investments in projects such as HS2, which, as evidence shows, provide maximum

CO2 reductions per pound invested if demand shifts from high-carbon forms of transport such as flying.

24 October 2012

15 Sandbag, Rescuing the EU ETS from redundancy, 2009

Written evidence from the Campaign to Protect Rural England, Kent Branch (AS 99)

1. Recommendations

1.1 Our submission is based on the National Planning Policy Framework (NPPF), which requires that any development needs to respect the triple bottom line of social, environmental and economic effects (NPPF paragraph 8), that the benefits must be greater than the adverse impacts (paragraph 14), and that economic, social and environmental gains should be sought jointly and simultaneously (paragraph 8). It also requires that such gains should be clearly calculated.

1.2 Our view is that clearer objectives are needed for the industry to ensure that aspects of the NPPF are fully considered.

1.3 We consider that a more equitable fiscal framework is required for the industry, so that it contributes more fairly to the social good of the country. This would also promote greater efficiency.

1.4 The Government’s new Review of Planning Practice Guidance1 must ensure better integration of the planning system with air transport policy to protect our increasingly scarce tranquil areas as well as our landscapes.

1.5 The Carbon Budgets and Emissions Trading Scheme must recognise that the global warming impacts from aircraft emissions are some two-and-a-half times as large as those of the carbon dioxide alone.

1.6 Tourism should be contributing even more to the UK economy, especially to that of Kent & Medway. Regrettably, that is likely to remain just a vision while so many people fly abroad. This appears to be encouraged by the draft Policy Framework and needs to be reviewed.

1.7 Aviation should be taxed in the same manner as other transport modes. The carbon dioxide emissions of driving a car per person-mile may be similar to those of taking a flight, but the car journey involves paying Fuel Duty and VAT on the fuel and on services used. Air transport avoids all these. The taxation loss distorts competition and encourages people to fly, thereby reinforcing the tourism deficit.

1.8 We contend that no further expansion of airport capacity, especially in the south east, should be considered without evaluating the effects of the proposals above, the consequent likely growth in passenger numbers (if any), and a realistic appraisal of the current spare capacity.

2. Responses to Questions

2.1 Is there a need for expansion? 2.1.1 We believe that this is the most fundamental question, and it does not appear on the list published with the announcement of the inquiry. CPRE Protect Kent believes that a robust case for expansion has yet to be proven, and that more rational use of existing

1 www.communities.gov.uk/planningandbuilding/planningsystem/planningpolicy/reviewplanningguidance/

runway capacity (and airspace) would deliver economic, environmental and social benefits. London for example has six airports (Heathrow, Gatwick, Stansted, Luton, Southend and City), more than any other European city. Only Heathrow is near maximum runway capacity. Manston, for example, in north east Kent, has been quite unable to attract any traffic which should have arisen if there were an overall shortage of capacity in the south east. 2.1.2 The Government’s own forecasts for passenger flights per annum show a declining rate of increase, confirmed by the latest information from the Department for Transport. We believe that this will and should continue because of the following factors: 2.1.2.1 The effects of a slowing economy; 2.1.2.2 The continuing increases in oil price, particularly over the longer term; 2.1.2.3 The need to meet climate change requirements. Air transport is the most polluting mode of transport with impacts more than double others and, as such, needs to be managed to reduce that pollution. Since 1990 UK air transport emissions have steadily increased in contrast to other sectors; 2.1.2.4 At present over £12bn is lost to the UK economy because of the absence of taxation such as VAT and Fuel Duty. VAT should apply at least to domestic flights as well as to all air transport maintenance and other activities, and would yield £3bn; 2.1.2.5 The recognition that re-directing proposed investment in air transport to more useful and productive sectors would reap greater benefits for the UK. In the South East, for example, around 164,000 people were employed in low-carbon jobs and the environmental sector in 2010-11, with more than £11 billion of sales; and 2.1.2.6 The cost to the UK economy. The UK is losing money from air transport due to the current tourism deficit of £13bn, which is equivalent to the loss of some 600,000 UK jobs. The graph below reflects the deficit plotted against the number of air passengers. These data cover the period 1980 to 2011 from the ONS and CAA. There are far more UK residents flying abroad than overseas residents flying to Britain.

Deficit vs mppa

Deficit vs mppa

80.00

70.00

60.00

50.00

40.00

30.00

20.00

10.00

0.00 0 50 100 150 200 250 300 -10.00

-20.00 Million Passengers per Annum

Graph: Tourism Deficit (£bn pa) vs passenger numbers

2.1.3 Tourism and tranquillity are vital parts of Kent’s economy in, employing 45,000 in 2010. Nationally, the CAA has recently confirmed the importance of rural tourism supporting 380,000 jobs and £13.8bn value, of which tranquillity is worth 186,000 jobs and £6.8bn a year to the economy2. This must not be damaged by increased air transport activity.

2.2 What should be the objectives of Government policy on air transport?

2 ERCD, June 2012, report 1207

2.2.1 We believe the Government’s principal objectives should be these: 2.2.1.1 To provide a clear Air Transport Policy Framework to reduce the conflict between the air transport industry and those potentially affected so that they can work together to provide the best results for everyone; 2.2.1.2 To minimise public subsidy to air transport in keeping with the current and longer term economic imperatives; 2.2.1.3 To meet the essential air transport needs for users which cannot appropriately be met by other transport modes, and to do so in a manner which respects environmental limits as required by the NPPF; 2.2.1.4 To ensure the prudent use of land and air travel activities to ensure economic efficiency and environmental responsibility; 2.2.1.5 To address the issues of taxation including fuel subsidies as well as irresponsible pricing and marketing of leisure travel. 2.2.2 The Government’s review of Planning Practice Guidance1 is an opportunity to ensure that previous guidance, such as PPG24 on noise, is updated and replaced so that better integration is achieved between air transport policy and the planning system. This is essential to protect unique areas such as Romney Marsh from inappropriate development. 2.2.3 We consider that expansion will only be needed if there is a clear lack of connection to important business customers, and that air transport from the UK is the most environmental and efficient mode for such connection. If a proven need for expansion or amended services was to develop in the future, the government must ensure that clear minimum standards for climate change emissions, noise, air quality and access to airports are achieved, and monitored in a transparent manner. Direct regulation should be reduced to the minimum (a key government objective), to give the freedom to operators to choose the best way to operate, with monitoring of compliance. 2.2.4 These standards should also be subject to a similar process to that used by quality and environmental management systems (such ISO 14001), which require continual improvement over time, another of the government’s objectives in its Draft Framework (4.61).

2.3 What are the benefits of air transport to the UK economy? 2.3.1 Although there are economic benefits from the relatively small direct employment of 120,000 jobs in the air transport industry (paragraph 2.2 in the Air Transport Policy framework), we consider that air transport does not provide net benefits to the UK because of the tourism deficit and the lack of taxation. 2.3.2 The claimed benefits from improved connectivity (2.10 of ATPF) assume that we get all the benefits, but connectivity is a two-way process. It provides similar access to our markets for overseas countries, such as China seeking to export more – as illustrated by the Chinese enthusiasm for the ‘China Gateway’ at Manston Airport in Kent. 2.3.3 The benefits of ‘just in time’ to business are overstated, because the air transport industry has minimal taxation and low external environmental costs, while the construction and operation of a warehouse in the UK incurs taxes including VAT. This unbalances the economic equation, and gives an apparent benefit from using air transport with a small stockholding in the UK. If air transport paid its full costs and taxes, it would be cheaper to do more in the UK, and we would gain tax income, an improved environment and greater employment – a triple benefit.

2.4 What is the impact of Air Passenger Duty (APD) on the air transport industry? 2.4.1 We believe currently very little. The CAA noted that the decline in growth of passengers pre-dated the introduction of APD, and considered that changes in consumer expenditure best explain the decline in international traffic demand from the UK

resident leisure passenger segment. 2.4.2 APD (equivalent to less than a third of the industry depreciation of £9bn) is paid by passengers, so other costs are more important. Some airlines also add all sorts of charges to the basic ticket price, so actual cost can be far greater than first expected. They would hardly add all these extras if they thought it would reduce passenger numbers. 2.4.3 We would propose that the current APD (worth £2.7bn) should be replaced by an Air Transport Duty on each aircraft, payable by aircraft operators, based on its maximum take-off weight. This would provide a strong incentive for operators to ensure that the plane has maximum payload, instead of wasting runway slots and airspace. This could be used in conjunction with a Fuel Duty (worth £12bn, if charged at road fuel duty rates) to encourage the use of more efficient and less polluting aircraft. 2.4.4 APD is also relatively inflexible and does not reflect the value of a flight. For example a one passenger business jet could pay a single person APD, but that flight would use a slot and airspace which could be used more efficiently by a larger aircraft. So an APD charged on the aircraft’s Maximum Take-Off Weight would be far better. It would be non-discriminatory in terms of airlines, so all planes that take off from UK airports would be subject to the tax. 2.4.5 We note that the USA, often considered a ‘low tax’ country, levies a 7.5% charge on commercial air transport as well as a $16.70 head tax for arrival or departure plus other taxes on air transport both for passengers and freight. This shows that such taxation is legal and practicable3. Some EU states levy Fuel Duty and/or VAT on tickets for domestic flights.

2.5 Where does air transport fit in the overall transport strategy? 2.5.1 We believe that there is a need to establish some objectives for the nation’s entire transport system, and in this, agree with the New Economics Foundation who state that this requires moving from the: ‘isolated, uni-modal policy debates and scheme appraisals with a disconnected and disjointed transport system with competing priorities, built on false promises which do not give taxpayers good value for money’4. 2.5.2 Air transport should fit in with a national integrated transport strategy. High Speed Rail and air transport need to largely complement each other wherever possible. We cannot afford to have them compete significantly, either in terms of the cost to the environment of unnecessary additional capacity, or the loss on return from the considerable investment. There is a similar parallel to public transport on the continent where buses and trains provide an integrated service, whereas here they are more likely to compete. High Speed 1, for example, has significant surplus freight capacity through the tunnel to London, so could provide a service as fast as air to many European areas, and with far lower global warming emissions.

2.6 How should we make the best use of existing air transport capacity? 2.6.1 The government cannot tell the industry how to manage itself, so has to define minimum standards and provide incentives, such as Air Transport Duty, to achieve its objectives. The objective should include avoiding duplication of services, for increasing the load factors of aircraft and thus ensuring the appropriate size of aeroplane for the traffic. These objectives will also benefit airlines, so there is significant common ground.

2.7 How do we make the best use of existing London airport capacity? Are the government’s current measures sufficient? 2.7.1 Economic regulation of London’s airports restrains charges, and de-regulation could improve utilisation of the airports, but that must be accompanied by the requisite

3 www.nbaa.org/admin/taxes/federal/fet/ 4 www.neweconomics.org/blog/2012/08/31/men‐mice‐no‐we‐need‐a‐coherent‐national‐transport‐strategy

minimum environmental standards in the ATPF for all airports. 2.7.2 Lack of universal minimum standards also means that some airports have disproportionate impacts. For example, East Midlands Airport has many night flights, which affect a large area, because it does not have the protection of the standards embodied in the designation enjoyed by the three main London airports. We are very concerned that without national limits, the same could happen at Manston in Kent.

2.8 What more could be done to improve passenger experience and airport resilience? 2.8.1 Airport resilience depends critically on airspace availability. Although Kent & Medway has relatively little originating air traffic, the lack of airspace means that airports around London have an adverse effect locally. West Kent, for example, is particularly badly affected by continuous noise from flights to or from Gatwick. Airspace is a key scarce resource, which has a value, as the CAA has recognised. That value would be best realised by charging more for it, to ensure that those who use it are doing so in the most efficient way possible.

2.9 Does the government’s current strategy make the best use of existing capacity at airports outside the south east? 2.9.1 The plummeting fortunes of airports such as Manston (annual loss £4m)5, Durham Tees Valley Airport (annual Loss £3m)6 and Lydd (annual loss £1.9), all of which have alternative nearby airports, suggest that capacity constraints are not the principal issue in the south east or elsewhere. Better use could be made of airports outside the southeast such as Manchester and Birmingham, subject to minimum standards as described above (paragraphs 2.7.1 and 2.7.2).

2.10 How could this be improved? 2.10.1 By Ensuring that the Framework has sufficiently strong minimum standards, and applying APD to all aircraft take-offs; this would ensure much greater efficiency in the system.

2.11 How can surface access to airports be improved? 2.11.1 The NPPF (paragraph 17) requires that fullest use is made of public transport plus cycling and walking. It also requires Travel Plans (paragraphs 29 & 36). All airports should have travel plans which have increasing targets (we suggest a minimum of 40% for non-car use, increasing by 5% every 5 years) and for increasing use of public transport, cycling and walking. Airports should be required to support alternative travel modes. 2.11.2 DfT research has shown that parking restriction is the strongest incentive for use of alternative modes, so airports must set targets to reduce parking space and contribute to non-car transport improvements, including bus frequencies and cycle facilities. 2.11.3 Surface access is a significant contributor to the ‘sprawl’ aspects of airports. We would not wish to see large areas of car parking at Manston, nor Lydd should it be allowed to develop. The review of Planning Guidance needs to ensure that sprawl is considered as part of airport planning.

2.12 What constraints are there on increasing UK air transport capacity? 2.12.1 Apparent capacity constraints arise because of inefficient use of resources. Heathrow for example has spare terminal capacity, but its planes are 25% empty. Fewer flights

5 www.shepway.gov.uk/UserFiles/File/pdf/lydd‐airport/documents/rcoun20090924%20LAA%20A‐09‐ 05%20appendix%205.pdf 6 www.nebusiness.co.uk/business‐news/interviews‐with‐business‐people/2012/08/13/robert‐hough‐ chairman‐durham‐tees‐valley‐airport‐51140‐31609346/)

per day to some destinations would increase load factors, and release runway and air space. Heathrow airport charges are capped and APD does not go to the airline, so the apparent scarcity of runway and air space is not reflected in costs to airlines. 2.12.2 Air transport must keep within environmental limits, as required by the UK Sustainable Development Strategy7, which is the fundamental basis of the NPPF. Any proposals for airport development or changes in operations must ensure that they do not increase environmental impacts. As the NPPF says: “economic, social and environmental gains should be sought jointly and simultaneously” (paragraph 8). It also means complying with the Natural Environment White Paper8 (paragraph 9). This also requires prevention of soil, air, water or noise pollution as well as reducing existing pollution and enhancing the natural environment. Environmental limits and constraints must not be breached or traded off. Where limits conflict then there may be a need to reduce Air Traffic Movements rather than breach environmental limits.

2.13 Are the government’s proposals to manage the impact of air transport on the local environment sufficient, particularly in terms of reducing the impact of noise on residents below flightpaths? 2.13.1 No. For example, the residents of Herne Bay (population 35k) are affected by the noise of Manston flights. As they are outside Thanet District Council area which controls Manston, they have no influence over the airport. This illustrates the need for more than just ‘local’ control and for minimum national standards as well. 2.13.2 The government’s own research, such as ANASE, has shown that people are now much more adversely affected by aircraft noise than previously considered. The NPPF (paragraph 123) requires that noise from new developments does not cause adverse impacts on health or quality of life. The government also committed to reducing noise levels towards the World Health Organisation noise standards9,10. Hence the Framework proposals on noise are far too weak. 2.13.3 In terms of planning, the former Planning Policy Guidance 24 needs to be replaced with updated guidance. As well as the forecast noise of the activity, British Standard BS 4142 requires background noise to be assessed, and this is vital to reflect the impact aircraft noise can have on country areas. Likewise all aircraft, especially including the large numbers of General Aviation planes, must be required to have transponders to provide effective monitoring, which has been lacking at problem aerodromes such as Wycombe Air Park.

2.14 Will the government’s proposals help reduce carbon emissions and manage the impact of air transport on climate change? 2.14.1 No. The government continues to ignore the non-carbon emissions, hence under- estimates the warming impacts of air transport, which are some two and a half times those of the carbon dioxide alone11. A multiplier of 1.9 was accepted by the DfT12 but more recent data on contrail induced clouds has increased that multiplier13. The EU Emissions Trading Scheme (ETS) only accounts for the carbon dioxide element of the emissions, so air transport will effectively be paying less than half price. This means that when an airline buys allowances, from (say) an electricity generating company, should buy 2.5 tonnes of CO2 from the supplier to allow the airline to offset 1 tonne CO2 from

7 www.defra.gov.uk/publications/2011/03/25/securing‐the‐future‐pb10589/ 8 Defra, 2011 Natural Choice: Securing the Value of Nature 9 WHO 1999 Guidelines for community noise 10 WHO 2009 Night Noise Guidelines for Europe 11 www.sciencedirect.com/science/article/pii/S1352231009003574 12 DfT 2009 Aviation Carbon Dioxide Emissions Forecasts 13 www.nature.com/nclimate/journal/v1/n1/full/nclimate1068.html

its aircraft. Nevertheless the ETS itself has been shown to be ineffectual by Sandbag14 and others. This is reinforced by DECC’s latest carbon values15 now being half previous ones. 2.14.2 The DfT has also stated “In the 2009 forecasts, it was assumed that air traffic management and operational efficiency gains would meet the midpoint of the IPCC projection of a 6%-12% gain in fuel efficiency over the period 2006- 2019. However, on the basis of the advice of independent experts working on the MAC curve analysis it is unlikely that these gains will be realised. Our calculations show how the fuel used per passenger has fluctuated without a clear downward trend. So it is insufficient to expect that improving aircraft fuel efficiency will solve the problem. 2.14.3 We strongly support the evidence (11 October, 2012) from the Chief Executive of the Committee on Climate Change (CCC), to the Energy and Climate Change committee that excluding air transport and shipping from the UK’s carbon budgets, would make it very likely for the UK to miss our climate objective of limiting the risk of global warming exceeding 2 degrees, and they should now be included. 2.14.4 Although we feel very strongly about tranquility, we support the NPPF (paragraph 8) in requiring benefits to be sought jointly and simultaneously, so that emissions reductions must be required as well as noise reductions.

2.15 How can air transport be made more sustainable? 2.15.1 By having targets for total climate change emissions which relate to 1990, as all industries are required to do. 2.15.2 B the application of increasingly stringent noise levels over time. 2.15.3 By requiring airports to come within the Industrial Emissions Directive16 which would ensure that the impacts from an airport are properly managed. 2.15.4 With no spatial national airport policy and no regional planning there is a significant strategic gap to assess the cumulative effects, whether on demand (i.e. viability), emissions or areas of tranquillity. Hence it is vital that the review of Planning Policy Guidance includes some mechanism to enable this gap to be filled. This is made more urgent because most local authority Planning departments do not have, and cannot be expected to have, air transport expertise. 2.15.5 It is important that revised Planning Policy Guidance ensures that impacts such as emissions, caused by the aircraft using an airport are included as part of the airport’s overall impacts,

2.16 What is the relationship between the Government’s strategy and EU air transport policies? 2.16.1 Our perception is that industry and the Government not only want to avoid ‘gold plating’, but also seek to weaken policies, for example with regard to air quality in the Environment Theme of its ‘Red Tape Challenge’17 which says (Page 7) “Working in partnership with other Member States, we will also use the European Commission review of Air Quality Legislation, expected in 2012, to seek…amendments to the Air Quality Directive which reduces the infraction risk faced by most Member States, especially in relation to nitrogen dioxide provisions.” We cannot understand how a Government can propose to allow dangerous air pollution to continue, just to avoid an ‘infraction risk’. 2.16.2 The EU Transport White Paper includes policy for the modal shift of medium distance flights18 to high speed rail, but it is unclear if such considerations influence the Policy

14 Sandbag June 2012 Losing the lead? Europe's flagging carbon market 15 DECC October 2012Updated short‐term traded carbon values for policy appraisal 16 IED, www.environment‐agency.gov.uk/business/regulation/137903.aspx 17 www.defra.gov.uk/publications/files/pb13728‐red‐tape‐environment.pdf 18 Under 1,000 km, or 600 miles; by comparison Gatwick to Inverness is 470 miles

Framework. 2.16.3 In this connection, it would be better for policy to focus on connectivity in terms of passengers/freight rather than Air Transport Movements as that would ease considerations of modal shift including evidence of climate change benefits such as in the Greengauge 21 report19. This report shows that using a multiplier of 2 (see 2.14.1 above) for air transport multiplies HS2 benefits by two and half times, which highlights the importance of integrating transport planning.

2.17 Do we need a step change in UK air transport capacity? What should this step- change be? Should there be a new hub airport? Where? 2.17.1 A new hub airport could only be built if (a) most existing airports were to be closed down, or (b) it charged less to attract traffic, both of which appear unlikely. Promoters of any new airport will need to show how they will attract traffic from existing airports and still be viable, as their airport charges are likely to be higher than other airports to pay for their construction costs. 2.17.2 We have been very active against the devastating proposals for an airport in the Thames estuary, since the consultation on the 2003 White Paper, and still consider this to be an unacceptable area for such development. The planning system, such as the new review of Planning Practice Guidance, needs to be clear in showing how air transport policy can be integrated with protecting valuable areas such as the estuary so that both promoters and ourselves can work together for the benefit of the UK as a whole. 2.17.3 We consider that the UK would gain far more benefit by applying the resources claimed to be needed for a new airport to improving existing facilities such as rail connections instead. This is of particular relevance to Kent, whose railways do not provide easy or direct connection to any major airport.

2.18 What are the costs and benefits of these different ways to increase UK air transport capacity? 2.18.1 We believe that there would be significant benefits to the UK if capacity were constrained. Notwithstanding the increasing environmental impacts of expanded aviation capacity, expansion would damage our economy by encouraging disproportionately more people to fly abroad and spend money out of the UK than it would encourage inward tourism.

24 October 2012

19 www.greengauge21.net/wp‐content/uploads/The‐carbon‐impacts‐of‐HS2.pdf

Written evidence from the States of Jersey Economic Development Department (AS 100)

We have given careful consideration to this scrutiny. Many of the questions raised by the Committee are for the United Kingdom alone and are not for us to comment on.

However, parts of your first question have particular relevance to the needs and problems of island communities more dependent on air travel than others who live in mainland Britain. It is in that context we comment as follows -

1. What should be the objectives of Government policy on aviation?

a. How important is international aviation connectivity to the UK aviation industry?

International connectivity is vital if the industry is to meet passenger needs. Poor connectivity deters business and leisure travel. The diversity and inter-connectivity of the aviation route network is of vital interest to our island community. It is imperative that Jersey, no doubt echoing the concerns of other similar communities, retains suitable landing slots at the main London hubs airports. The Government of Jersey has had discussions with UK ministers on this specific issue over the number of years, whenever we felt concerned. There is an apprehension that slots currently allocated to “regional” services will be replaced with “international” slots at the main London airports. This would have a severe impact upon our economy and given the close links between Jersey’s finance industries with the City of London in particular, any loss of service would undoubtedly have a detrimental impact upon the UK economy also.

b. What are the benefits of aviation to the UK economy?

Jersey is not in a position to comment on the wider impacts upon the UK economy in general. However, air travel between the Island and the United Kingdom provides our lifeline link to the UK. It is the main form of passenger travel to and from the UK, which benefits both our communities. The majority of Jersey residents have strong family links with the United Kingdom. There is a very strong link in terms of the Islands use of the UK’s health and education facilities for which the island is charged for the benefit of the UK economy.

c. What is the impact of Air Passenger Duty on the aviation industry?

Air Passenger Duty deters air travel. Jersey does not levy airport passenger duty as it sees this as a disincentive to travel and has the potential to make marginal routes uneconomic to the detriment of ourselves and the UK linked airport.

It is our view that Air Passenger Duty should be as low as reasonably possible for travel between British offshore islands and mainland Britain rather than being based on distance alone.

d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

The passenger experience is best enhanced by good road and rail access into the major regionally and international hub airports.

There should also be a minimum of passenger transfer from one hub to another for onward connexions. Inter-hub transfers are inevitably time-consuming; they are not environment-friendly and are not cost-effective.

e. Where does aviation fit in the overall transport strategy?

This is for the UK to address as a whole but alternatives such as better rail and road transport are relevant for travel within mainland Britain. It is international connectivity and connectivity between hub airports and the remoter regions of the British Isles that should form a significant part of this strategy.

24 October 2012

Written evidence from the London Borough of Hounslow (AS 101)

1. Executive Summary Hounslow represents approximately 256,000 residents and 10,000 businesses operating within the boundaries of this densely populated, socially vibrant and economically dynamic part of west London.

1.1 Aviation policy has a massive impact upon the economic well-being and the quality of life of our community. London Heathrow Airport is an important source of employment and wealth generation for us, both directly and through its use of the local supply chain - over 11,000 Hounslow residents (around 10% of our working population) are employed at the airport.

1.2 Yet through its very size, Heathrow also causes distortion of our local economy, generates serious congestion on our road and rail networks, and produces massive environmental and health impacts in the form of noise and air pollution.

1.3 Thousands of our residents as well as many of our schools and businesses are intensively overflown by commercial aircraft, some of which are a very short distance from the airport’s perimeter fence. Our Borough experiences flights overhead every 90 seconds, and has to endure an average of 16 night flights before 0600, sometimes even more. These night flights have been proven to have a serious affect on the health and well-being of local people as shown by the HYENA study1

1.4 For the avoidance of doubt, Hounslow Council has absolutely no desire to see the closure of Heathrow or a significant reduction in its volume of air traffic because of the associated economic and employment benefits that it brings to our community.

1.5 Hounslow believes that the only responsible way forward is to manage aviation demand by considering and assessing the costs, including social and environmental costs, of meeting the predicted demand, and then determining if the benefits of meeting demand outweigh those costs. It is only then that a reasoned decision should be made on whether demand should be met in full, met in part or not met at all.

1.6 As a starting point to demand management, Hounslow holds the following as of the highest importance:

• Retention of Heathrow’s 480,000 Air Transport Movements (ATM) annual cap; • Retention of runway alternation – no Mixed Mode operations; • No return of the third runway proposal; • Movement towards a complete night flights ban; • Better and more generous mitigation schemes for the effects of Heathrow on residents, businesses and communities; and • Progress towards the incorporation into compacts, regulation and ultimately law of the mitigation of these limits and practices.

2. How to make best use of existing capacity We would caution the Committee against believing the line promoted by the aviation industry that significant airport expansion is necessary. The previous Secretary of State for Transport and the previous Aviation Minister called for proper evidence for the need of additional airport

1 Hypertension and Exposure to Noise near Airports (HYENA): Study Design and Noise Exposure Assessment http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1310905 capacity, if indeed such a need exists at all. They were critical when in office of the lack of substantial evidence provided by the industry.

2.1 A 2011 report by WWF and Airport Watch 2 demonstrated that London has greater connectivity to the key centres of business than any other European city, despite having fewer transfer passengers than the four other major European hubs. This study concluded that there is no evidence that an increase in transfer passengers is critical in maintaining Heathrow’s outstanding connections with the world’s business centres. Therefore the key question is not lack of capacity at Europe’s airports but how that capacity is used.

2.2 The argument is consistently made that we must expand in order to maintain connectivity that is essential to businesses. Yet only thirty per cent of passengers at Heathrow are travelling for business purposes. We believe that the value of each flight from Heathrow should be maximised for the benefit of UK Plc. and that this could be achieved through more intelligent routing of aircraft, making best use of airport capacity throughout the country.

2.3 We agree that Heathrow offers a premium product and therefore argue that a premium price should be paid by airlines wishing to fly in and out of it. The CAA has historically kept landing charges at Heathrow low to avoid BAA abusing their monopoly position in the South East, however this monopoly no longer exists. We assert that a deregulation of the landing charges would help to create a truly free market competition for slots at Heathrow and would help other airports to compete effectively for traffic and passengers.

2.4 We believe that Heathrow is an example of market failure in the aviation sector. This is because the rational allocation of the available air transport movement capacity should incentivise the use of the largest possible aircraft, carrying the maximum possible number of passengers, too and from the UK’s principal international hub airport. Instead, capacity is wasted on small short- haul aircraft, general aviation and executive jets that should be displaced to other London airports. Capacity is also wasted on multiple airlines serving the same destinations, often with aircraft that are less than full – a problem especially prevalent on trans-Atlantic routes.

2.5 Evidence suggests that airlines operating in a completely free market will tend to use new capacity to operate yet more flights on existing profitable routes rather than open up new ones. Taking Virgin Atlantic as an example, despite the industry mantra that it is necessary to have more flights to China when newly obtained slots are assigned, Virgin choose to fly to San Francisco, Vancouver and Manchester3

2.6 The key to the rational use of existing capacity is the development of a more transparent secondary market for slots at Heathrow. If airlines really want to be able to operate large aircraft to new destinations, they should be able to purchase the slots from airlines currently running small aircraft to minor cities or half-empty aircraft on over-served routes. The smaller and less busy aircraft could then find new slots at less busy London airports if there is a need for them to operate at all. Existing slot holder should sell these slots at a realistic price.

2.7 The Government should also take a market-oriented look at international treaty obligations, which continue to protect the historic rights of flag carriers on international routes. These treaty obligations could lead to distortions in the market. We support the principle of expanding the UK’s open skies policy initiatives and believe they will help to correct this potential market failure.

2 International Air Connectivity for Business, August 2011, WWF & Airport Watch http://www.airportwatch.org.uk/?p=3608 3 Information obtained from http://www.virgin-atlantic.com/gb/en/footer/media-centre/press-releases.html 2.8 Hounslow desires to use the economic engine of Heathrow to enhance the skills and, therefore, the earnings potential of its local population. As it is Hounslow people who bear the brunt of the environmental impact of Heathrow, we believe it is Hounslow people who should enjoy the best employment opportunities there.

2.9 We assert that Hounslow misses out on greater economic benefits because the vast majority of airline passengers merely pass through Heathrow on their way to or from central London. We believe that the advent of Crossrail will bring Heathrow much closer to central London in terms of journey time, enabling visitors to London to consider using hotels and other facilities in west London during their stays. We wish to work with adjoining Boroughs and the Greater London Authority to maximise the benefits of this new connectivity for Hounslow.

3. Surface access Congestion on our local road and rail networks generated by the presence of Heathrow is a significant issue. It gives rise to poor air quality, affects community health and limits the ability of our local economy to diversify. High air pollution levels could ultimately attract a fine from the European Union, which may have to be partly met by local authorities such as ours.

3.1 We welcome the benefits Crossrail will bring, which may include an associated reduction in surface congestion, but recognise that it provides a modal shift of only 1% away from road transport.

3.2 For Heathrow to achieve its full potential in terms of passenger numbers, substantial investment in surface access improvements will be necessary. We support the present Government’s initiative on improving rail access to Heathrow from the west and in proceeding with Crossrail but we greatly regret the decision of the Mayor of London to delay all planned improvements to the London Underground Piccadilly Line. We call for an urgent joint effort by the Government and the Mayor to expand the capacity and reduce journey times on this vital artery with new trains and signalling systems.

3.3 To further the sustainable access to Heathrow we are part of a group promoting a revised rail scheme known as Airtrack Lite. This would facilitate heavy rail access from the south of the airport. Unlike the previous scheme this does not have the associated difficulty of extended level crossing down times. We believe this scheme has the potential to provide a step change improvement in the way passengers and workers access Heathrow, thus helping to reduce congestion, reduce carbon emissions and improve air quality.

3.4 We are generally supportive of the first phase of HS2 to Birmingham in particular the proposed sub-regional hub at Old Oak Common. We would like to see this realised as a key sub- regional interchange complete with wider orbital rail links - including integration with the . However we are not yet convinced that HS2 will ease demand for new capacity at Heathrow. The supporters of HS2 rightly argue that improved city centre to city centre journey times by rail within Great Britain will reduce the demand for short haul flights. We are concerned, however, that the proposed spur line from HS2 to Heathrow will increase the connectivity of the airport for international travellers beginning and ending their journeys from cities in the UK other than London, thereby undermining the growth plans of airports such as Birmingham, Leeds-Bradford and Manchester whilst stoking demand at Heathrow.

3.5 We believe that the development of a domestic high-speed rail network may contribute towards reducing pressure for the further expansion of Heathrow, and have separately responded to the UK Government’s consultation on this. However, we are concerned that the Government has failed to research this point and reserve our right to object to the HS2 Bill on these grounds.

3.6 Surface access strategies should address modal shift for passengers and workers, especially shift workers who need access to the airport for 24 hours per day. Heathrow needs to be a public transport hub, which should include:

• Frequent 24-hour bus services; • Heathrow Express being included within the TfL fare structure, making it a mass transit service rather than a premium product; • The Piccadilly Line upgrade to be brought forward; and • Implementation of a charge for ‘Kiss and Fly’4 with revenues hypothecated to local public transport improvements. • The aforementioned rail access from the south of Heathrow.

3.7 Equally, surface access to Heathrow needs to address the air quality issue from a strategic perspective. Although the Heathrow Area Transport Forum could be considered by some to be a useful initiative, its air quality sub-group was ineffective. The airport/aviation component of the air pollution concentrations within the Heathrow area needs to be defined and agreed by stakeholders once and for all before more meaningful discussions on resolving this issue must take place.

3.8 The Borough is also compromised when it comes to air quality, with the area regularly breaching EU limit value for nitrogen dioxide of 40 microgrammes per cubic metre expressed as an annual average. We would argue that it is all well and good having a roadmap to dealing with air quality, yet is the implementation of this strategy that is key. Indeed the London Assembly Environment Committee report, Plane Speaking, highlighted that poor air quality leads to 4,000 deaths a year in London and made a series of recommendations that could improve the lives of the community close to Heathrow, including better use of public transport.

4. Improved noise mitigation scheme for local communities In relation to Heathrow, aircraft noise is Hounslow’s top priority. Our Borough hosts an environment that is probably the noisiest in the UK, indeed Hounslow is currently the fourth noisiest borough in London even before aircraft noise is taken into account. Suburbs of our Borough such as Cranford are situated less than 500 metres from Heathrow’s perimeter fence but the extent of overflying across the whole of the Borough is considerable.

4.1 Government should not allow expansion to go ahead on the basis that technological improvements within the industry will solve all the concerns around noise and air quality. Whilst new aircraft may well be less noisy and less polluting this is offset by the dramatic increase in the number of flights over the last 30 years or so. It is vital that mitigation measures are put in place protect communities and schoolchildren in particular.

4.2 Our stance on this is based on the fact that noise directly affects our residents’ health including the often-overlooked areas of mental health. We feel that this position is justified by current and emerging health related research. There is an increasing body of evidence that night noise has direct consequences for public health. Research from Warwick Medical School published 8 February 2011 in the European Heart Journal shows that prolonged sleep deprivation and disrupted sleep patterns can have long-term, serious health implications which are: increasing risk of heart disease/ stroke; high blood pressure and cholesterol; diabetes and obesity.

4 “Kiss and fly” is where passengers are given lifts in private cars by friends or relatives to or from the airport

4.3 Annoyance In policy terms, Hounslow would like the UK to be consistent with the EU standard of 55Lden in regard to the noise and argue that as this is also the metric used in Heathrow’s Noise Action Plan; it should be the qualification point for noise mitigation and compensation. We believe that airport operators should be referring to the European Environment Agency’s “Good Practice Guide” when developing and the implementing any noise related schemes including those within the Heathrow Noise Action Plan and actions related to mitigation.

4.4 Mitigating Aircraft Noise The Council’s starting point in relation to the mitigation of aircraft noise is that future developments should not make the current, unacceptable situation worse. This means that we are fundamentally against any increases in runway capacity, which includes a third or a fourth runway. We are also against the introduction of operating practices that worsen the noise environment such as mixed mode. A predictable period of respite is the single most effective noise mitigation measure available. We are equally committed to the preservation of the existing runway alternation pattern and segregated mode operation.

4.5 Mixed Mode Hounslow is extremely concerned about the “Operational Freedoms” trials at Heathrow, which we fear are a device to introduce Mixed Mode operation by stealth. Notwithstanding this exercise it is Hounslow’s view that improved resilience should be achieved by a reduction in the numbers of aircraft scheduled at Heathrow.

4.6 The present ATM cap was established by the Terminal 5 planning inquiry with the principle aim of protecting the community from aircraft noise. We will strenuously resist any proposal for this to be lifted through either more intensive use of the existing runways via the introduction of Mixed Mode operations or the creation of additional runways. This stance is taken due to the unacceptable environmental and public health impact of such schemes on Hounslow.

4.7 Framework for A Mitigation Scheme for Aircraft Noise The community surrounding Heathrow has had to live with a noise mitigation scheme that is much less generous than other comparable airports. The Council recognises that BAA has proposed a new scheme but believes the revised boundary is not wide enough to fully redress, mitigate and compensate the effects of aircraft noise upon the local community.

4.8 As stated above, a new noise mitigation scheme should encompass the 55Lden contour and should provide the following:

• Maintenance of the annual movement limit; • Establishment of a new contour cap that provides a real incentive for aircraft and airports to improve their noise performance and comply with Government policy; • Introduction of area limits on the higher contour bands for example > 65Lden; • Greater differentials between the landing charges for highest and lowest noise emitting aircraft; • Noise insulation and appropriate ventilation for windows/roofs out to 55Lden; • Noise attenuation, for example the installation of material that reduce sound reverberation in school classrooms; • Examination of new aircraft operating practices designed to reduce community noise; • A revision of the fine system for departing aircraft in terms of noise limits and the levels of the fines; • A review of the operating practices such as continuous decent approach and aircraft arrivals so establish if a fining regime for non-compliance is appropriate; • Greater consideration for the mitigation of ground noise and road noise associated with the travel to and from Heathrow; and • A compensation scheme for local authorities who are obliged to build schools and other public buildings to higher specifications because of aircraft noise.

4.9 Mitigation Scheme Administration Hounslow would like to engage with BAA on a constructive debate about its noise insulation and mitigation scheme. It has been over a year since Hounslow responded to BAA’s consultation on this scheme and the Borough is still waiting to receive even an informal response from BAA.

4.10 The support given to the community-led body that is responsible for making necessary decisions involved in administering the schools and community buildings scheme is variable at best. It is frustrating that after BAA agreed to provide £25million for this body it has only managed to spend £4.6million in seven years of existence. The Council feels that a lot more could be achieved in providing mitigation, particularly to schools, if more project, staff and administrative resources were supplied by BAA.

4.11 Fines Fund Aircraft departing Heathrow airport are fined if the noise they create is above a certain level. This scheme was designed to penalise poor flying practices. Historically the fines money has been used for mitigation for example noise insulation or more general environmental improvement projects such as tree planting. Hounslow believes that this scheme is no longer effective as noise level at which a fine is incurred is too low. The fiscal penalty does not reflect the level of community disturbance, as such it should be reviewed, with a view towards making the fines and penalties more stringent.

4.12 Noise and Schools The RANCH (2005)5 study recognised that schools exposed to high levels of aircraft noise are not healthy educational environments. Aircraft noise also impairs cognitive development in children, specifically reading comprehension. We believe that no child in Hounslow and beyond should suffer any educational deficit because of the fact that they are educated in a school that is affected by aircraft noise. It is vital that noise criteria, as defined by the appropriate British Standard or Building Bulletin standard, can be met. Therefore appropriate insulation must be provided for any premises where education is undertaken.

4.13 Aircraft Noise Mitigation and the Abolition of the Cranford Agreement The Cranford Agreement prevented aircraft departing from the northern runway to the east over London. As a result of its abolition 15,000 plus households will suffer a 1dB or greater increase in noise disturbance. Residents have bought their homes on the basis that the Cranford Agreement was operating. We believe that a 1dB increase is significant and mitigation/compensation should be available. This would be comparable to mitigation measures available by statute when roads are constructed. We are also concerned about increases in ground noise levels resulting from aircraft taxiing off the eastern end of the southern runway, as this is a new operating practice.

4.14 Night Noise Night noise from aircraft is the biggest cause of community disturbance and annoyance from the airport. As such it is the Council’s position that a night curfew should be instigated between the hours of 11pm to 7 am, emergencies excepted.

4.15 However, as an interim measure increasing the differential between the largest and smallest landing fees and placing the money into a community fund could achieve massive improvements. During the sensitive times of the day (06:00 - 07:00 and 22:00 - 23:00) an additional charge

5http://www.wolfson.qmul.ac.uk/RANCH_Project/publications/FinalDraftGlossy_220405.pdf could be added (base plus x £ to all but the quietest types (Quota Count (QC) 0.25). QC 0.25 and below, that fly with at least 90% loading, might be rewarded with a base minus x£ fee.

4.16 For direct examples of the current insulation and mitigation scheme on offer at Heathrow please see the Bureau Veritas report.6 This report, commissioned by the London Borough of Hounslow looks at major international airports in the UK, Europe and world wide and compares the relative merits of each mitigation and insulation scheme. Interestingly it demonstrates that BAA offers far more generous insulation schemes to communities near to the other airports they operate in the UK.

4.17 The Need for Further Research Aviation policy has for too long been driven in the UK by the aviation industry. Hounslow, therefore, believes that truly independent research is needed to underpin sensible decision- making for the future. Much of this is beyond the scope of hard-pressed local authorities such as ours to resource. Such research needs to include:

• A Health Impact Assessment of the presence and activity of Heathrow Airport fully examining the impact on and the provision of services for the community; • A revised UK noise annoyance study or consideration and adoption of more up to date international research; • An assessment of the effect of the use of landing charges as an environmental lever; and • Further research into the effects of aviation emissions on climate change.

25 October 2012

6 Comparison of airport noise insulation grant scheme, Bureau Veritas, June 2011 www.hounslow.gov.uk/airport_noise_insulation_grant_scheme.pdf

Written evidence from the Yorkshire and Northern Lincolnshire All Party Parliamentary Group (AS 102)

INTRODUCTION AND SUMMARY

The All Party Parliamentary Group (APPG) for Yorkshire and Northern Lincolnshire has been formed by MPs to bring together key industry, public sector and Parliamentary voices, to debate and reach some practical agreement and conclusions on the critical issues impacting on the future growth and prosperity of the region.

There are a number of airports in Yorkshire and Northern Lincolnshire, including

• Leeds Bradford International Airport, • Robin Hood Doncaster Sheffield Airport and • Humberside International Airport.

There are also good links to Manchester Airport and Teesside Airport, which impact on our region and support the economy.

At a meeting of the APPG on ‘Transport in Yorkshire’ on 11th September it was emphasised that the Transport Select Committee inquiry into aviation should receive evidence from this group and reinforce the importance of regional airports – including those in Yorkshire and Northern Lincolnshire. Attendees of the meeting felt that it is too often assumed that people will travel south to London to fly, when there is considerable untapped potential to expand the airports of the North and ease the vastly stretched capacity across London and the South East.

Local Government Yorkshire & Humber, on behalf of the APPG for Yorkshire and Humber, has gathered MP and partner views from the last meeting and also contacted the region’s airports to identify local concerns.

By supporting regional airports aviation strategy could provide a boost to regional economies, improve regional connectivity, support inward investment and help grow the tourism economy. The Select Committee’s Inquiry final report must reflect the potential for an uplift in airport capacity outside the south-east to support economic growth and recommend other measures that would help our region’s airports to be competitive.

WHAT SHOULD BE THE OBJECTIVES OF GOVERNMENT POLICY ON AVIATION?

• An aviation policy which places too large an emphasis on London Airports and just a few major UK airports and a lesser support to regional airports growth could have a negative knock on effect on the regions and economic growth outside London. We need to support regional connectivity; avoid decline in regional economic output, and raise the issue that a lack of inward investment and decline in the number of overseas visitors will impact on the region greatly.

• The Inquiry should recognize that regional airports are important for the Northern economy due to their direct positive economic impact, bringing in inward investment and that they offer Yorkshire & North Lincolnshire businesses much needed access to global markets. They

are important to our local economy as they bring direct and indirect benefits from services and employment to logistics and tourism.

• Improved international connectivity is underpinned by regional connectivity which in turn enables our economy to compete more successfully in the international market place. Supporting our regional airports will help increase inward investment and grow the tourism economy which is crucial in Yorkshire and North Lincolnshire.

• Aviation tax has a greater impact on the northern airports than the south which needs to be appreciated in universal policy decisions. In particular Air Passenger Duty (APD) is felt to be having an impact on the regional growth of our airports, which could have a devastating impact on price competitiveness in the north.

• We support the airports’ view to work with the government to develop alternative options which would help address the disproportionate impact on the north of both APD and the Emissions Trading Scheme. (Other European countries have abolished APD due to the negative effect it had on their economy. The British Chamber of Commerce cited that an increase APD by 5% annually could lose the economy as much as £3 billion by 2020 and £100 billion by 2030.)

• The APPG for Yorkshire and North Lincolnshire supports the High Speed Rail proposals, however feels the Government should also support other transport improvements – including aviation. High Speed Rail could be seen as a catalyst for other transport improvements which underpin and support aviation connectivity.

• Integrating air, rail and bus transport modes for a holistic transport solution needs to be an essential part of this strategy and Government policy. Improving linkages between current and new transport hubs and our regional airports should be included in the strategy also. This should emphasise rail links to Leeds Bradford International Airport, Humberside International and Robin Hood Doncaster Sheffield Airport.

• For example there are plans that will significantly enhance the surface connections to Robin Hood Airport Doncaster Sheffield. This will support economic growth by integrating road (the M18 and A1(M)), rail (the Inland Port Strategic Rail terminal), water (the Humber ports) and air to form a logistics hub for not only but the wider region serving a population of 5 million. The Gateway project will create an estimated 20,000 new jobs and has already attracted support from a Regional Growth Fund award of £18m to Doncaster Borough Council,

HOW SHOULD WE MAKE THE BEST USE OF EXISTING AVIATION CAPACITY?

• The regional airports have both runway and terminal capacity to accommodate future growth in travel demand and develop regional connectivity which will stimulate economic growth. We feel that our regional airports have untapped potential to contribute to UK aviation capacity as well as a key element as part of economic recovery.

• £11m has been invested in the terminal at Leeds Bradford which will support new routes and unlock further business connections across central Europe and the middle East.

• Local Authorities and LEPs are working together with airports regarding future economic development of local areas. The Local Development Frameworks can be a catalyst for capturing positive developments which foster economic growth.

• Regional connectivity can be the key to unlocking regional economies’ potential for growth, inward investment and the tourism economy. However since the economic downturn connectivity in the UK has fallen. Investment in regional connectivity would make best use of existing capacity, increase revenue and improve growth rates.

• The improvements associated with the will provide the potential to improve rail access to Manchester Airport. Given that Manchester Airport is the only airport in the north with a business focused range of international services, these connections are very important to Yorkshire and Northern Lincolnshire.

WHAT CONSTRAINTS ARE THERE ON INCREASING UK AVIATION CAPACITY?

• Improved connectivity from the UK’s regions to key European and International markets could have a significant impact on the UK’s economy. The lack of connectivity is seen to be impacting on regional growth.

• Connectivity both to and from London Heathrow airport is also critical to the successful growth and development of the Yorkshire economy.

• If a percentage of new hub capacity, both in and outside London was ring-fenced for regional services, this would further enable region’s access to international markets and grow local economies in the north.

• The APPG is supportive of environmental protection measures, but also mindful of the impact overly stringent measures will have on the economy. Therefore it is important to strike a balance to enable sustainable economic growth whilst moving towards goals to reduce carbon emissions.

DO WE NEED A STEP-CHANGE IN UK AVIATION CAPACITY? WHY?

• We are keen to stress, in conclusion, that the underuse of regional aviation capacity and the declining competitiveness of our regional airports are real concerns.

• Regional airports have demonstrated over the last decade that they are essential for regional connectivity and regional growth. We support this being emphasized in the Inquiry’s final report and further support for our regional airports needs to be highlighted.

26 October 2012

Written evidence from Marinair, the Thames Estuary Airport Company Limited (AS 103)

Thames Estuary Airport

1.0 Preamble

1.1 In all that follows in this submission to the current Parliamentary Transport Committee, the inescapable and indeed overriding fact remains - as it has done for the past 40 years - that for Great Britain to successfully meet future demand for adequate runway capacity in the south- east of England, it is necessary for HM’s Government to both demonstrate leadership by confirming the need for an appropriate and long-term solution to the current inadequacies in the provision of hub-airport facilities to serve the region and also, to support in a timely manner, a clear and positive policy which defines the principles of the solution to such serious problem.

1.2 A continued approach of ‘patch-and-make-good’ has in the past been and remains today, a wholly unacceptable response. This has been demonstrated not only to be not in the best interest of Great Britain but also, damaging to Great Britain’s economy.

1.3 For a period in excess of 20 years, TEACo has identified sources of finance to take forward the Marinair solution to the lack of runway capacity in the south-east of England and which have been reported to successive Parliamentary Transport Committees. However, no financial institution will move matters forward in the absence of support from HM’s Government for a new airport to be created within the Thames Estuary.

1.4 TEACo’s Marinair project is THE ONLY effective and environmentally acceptable long- term solution to the provision of a hub-airport to serve London and the south-east of England and it is THE ONLY genuine Thames Estuary island airport submitted to Government.

2.0 General background to Marinair

2.1 The Thames Estuary Airport Company Limited (TEACo) was founded in 1988 by a group of architects, engineers, economists, aviation consultants and other design, engineering and cost consultants, who were aware of predictions by credible authorities that suitable runway capacity in the south-east of England which was at that time provided principally by London Heathrow Airport (LHR) and London Gatwick Airport (LGW) would, at a time in the not too distant future, be insufficient to accommodate air traffic movements (ATM’s) to serve the capital city of Great Britain and to maintain London’s position as the pre-eminent first choice of entry to Europe for long-haul travellers.

2.2 TEACo was set up to be the special purpose vehicle (SPV) both to lobby HM’s Government to recognise that ‘piecemeal’ development at LHR and LGW would serve only to delay the time when a new hub-airport would need to be constructed and also, to be the focal point for parties interested in providing funding for both a new hub-airport in the south east of England and the marine and land based infrastructures that would be required to properly serve such a facility.

2.3 The Directors of TEACo were aware that a potential problem of providing suitable runway capacity in the south east of England had been identified as early as 1973 when HM’s Government granted approval for a third London airport to be constructed on Maplin Sands albeit that the project was abandoned following the subsequent global oil crisis. In addition to the provision of a new hub-airport, the Maplin proposal also included a deep-water harbour, a high-speed rail link to London and a new town to accommodate the airport workforce.

2.4 Since the abandonment of Maplin, improvements have been made to both LHR and LGW to increase both the number of ATM’s and the passenger and cargo throughput and, civil aviation operations have commenced in 1987 at the newly constructed London City Airport (LCY) and in 1991 at the newly converted (STN).

2.5 Customers of airlines – be these passengers or cargo distributors – wishing to gain access to London have many different requirements. However, the two principal requirements are to gain access to London as the destination or, to gain access to London for onward travel to a destination elsewhere in Great Britain or outside of Great Britain. The latter of these is described as ‘hub-and-spoke’ operations whereby long-haul and medium-haul services are supported principally, by other medium-haul or short-haul services to other destinations operating from the same airport. LHR and LGW are both hub-airports from which ‘spoke’ operations operate.

2.6 Although STN has sufficient runway length, it has never gained a position as an airport favoured by long-haul operators. Airlines that have at times in the past attempted to operate long-haul services from STN include Air Asia X, , Continental Airlines, Eos Airlines, MAXjet Airways and Sun Country Airlines. All of these long-haul operators have now ceased services from STN with some of them having transferred to LHR and/or LGW.

2.7 Whilst it might seem that it is a good idea to locate airports in different locations around London, the reality of the situation is that such dispersal of facilities fails to provide the airlines with what they really require which is, a multi-runway airport which can operate without restrictions and which can accommodate all long-haul, medium-haul and short-haul ATM’s within one facility so that ‘hub-and-spoke’ operations can be efficiently and cost effectively carried out to the benefit of the airlines and their customers. Transfer between LHR, LGW, STN and LCY is today possible only by surface transport systems and then, only with changes between various modes of such surface transport. For this reason alone – and there are many other good and practical reasons – any future expansion of LHR, LGW and STN so as to try to attract long-haul and medium-haul operators to serve these airports, will be no more than a short-term solution to a long-term problem. For the avoidance of doubt, LCY does not have a runway of sufficient length to accommodate long-haul flights without refuelling stops on the way.

2.8 To state what has become obvious to those involved in the air transport industry, there is no long-term solution to the proper provision of suitable runway capacity in the south-east of England other than the construction of a new hub-airport. If this statement is accepted as factual – and there has not yet been a credible argument offered against the statement – then the only question that needs to be answered is where, within the south-east of England, the new hub-airport should be located.

2.9 The technical parties associated with TEACo, reviewed all previously considered locations for a new hub-airport. These included sites around London and further to the north and west of London and included former and existing military airfields and ‘green field’ sites. To a greater or lesser degree, all of these required the ‘disturbance’ of centres of population and/or the loss of prime agricultural land. Given that a new 4-runway airport suitable for long-haul operations with its attendant on-airport and off-airport facilities must by its operational requirements cover a significant area of such land, TEACo concluded that there was no suitable land based site on which the new hub-airport could be located.

2.10 For the reason given above, TEACo concluded that the most suitable place to locate a new hub-airport would be off-shore. TEACo established that the location of a suitable site off- shore closest to London and capable of being linked to major surface infrastructures is in the relatively shallow water in the Thames Estuary to the north-east of Herne Bay and to the east of the sea forts.

2.11 During the period from 1979-1982, one of the advisors to TEACo had been involved in the selection of the site for and the physical master planning of the new Hong Kong International Airport, the airport island for which, has been created by reclaiming land from the

sea within the Tung Chung Basin to the north of Lantau Island. The airport island was created by demolishing the 460m (1500ft) high island of Chek Lap Kok and using the spoil for reclamation. Hong Kong International Airport and the Kansai International Airport which is also constructed off-shore in Osaka bay, are two off-shore airports constructed on artificial islands. The principle of building and operating civil airports off-shore is therefore well established.

2.12 For reason that the site selected by TEACo for further study and promotion as being a suitable site for an airport was located in a marine environment, the project was given the name ‘Marinair’.

2.13 As stated above, the location proposed for Marinair is in the Thames Estuary to the north-east of Herne Bay. In principle, the project proposes:

2.13.1 The construction of an airport island by way of reclamation; 2.13.2 4No x 4,000m instrument runways and attendant taxiways; 2.13.3 Passenger and cargo terminals and attendant parking aprons; 2.13.4 Aircraft maintenance hangars and attendant parking aprons; 2.13.5 Landside airport surface infrastructure; 2.13.6 New road link from M25-J29 via A127 and M25-J30 via A13 to tunnel to and to the airport island; 2.13.7 New road link link from M20-J7 and M2-J5 via extension of A249 across Isle of Sheppey and tunnel to the airport island; 2.13.8 New HS rail link from north of Maidstone alongside A249 and across Isle of Sheppey and tunnel to the airport island; 2.13.9 New rail link by way of extension to Crossrail from Abbey Wood and across Isle of Sheppey and tunnel to the airport island; 2.13.10 New industrial parks and housing estates in south Essex and north Kent; 2.13.11 Electricity generation by way of water driven turbines incorporated into the airport island.

2.14 During the time to date that TEACo has been trading, the company has made many submissions to promote Marinair reference to some of which, are listed below;

• 1990: Submission No1 to RUCATSE; • 1992: Submission No2 to RUCATSE; • 1996: Presentation of evidence to Parliamentary Transport Committee; • 2002: Submission of First Edition response to First Stage Consultation; • 2003: Submission of Second Edition response to First Stage Consultation; • 2003: Presentation to All Party Group of MP’s with copies to The Secretary of State for Transport and the Department for Transport; • 2003: Presentation of evidence to Parliamentary Transport Committee.

3.0 The Advantages of Marinair

3.1 The principal advantage of the proposed location for Marinair over all other locations that have been suggested for a new hub-airport in the south-east of England (RAF Upper Heyford; RAF Lyneham; Cliffe; other locations within the ‘Thames Gateway’ and most recently, the expansion of STN to create a 4-runway airport) is that it is in the sea.

3.2 For this reason, the size of the airport island would not be restricted by limitations on land-take and, if and when the airport may at a time in the future require to be enlarged, then this could be easily achieved by reclamation of additional seabed.

3.3 Of equal importance is that the proposed alignment of Marinair is such that all aircraft approach and departure corridors in and out of the location would be along the line of the and therefore over water. In fact, the closest land to the west of the extended centrelines of the proposed runways on the airport island is at a distance from Marinair in

excess of 30 statute miles. Missed approaches and other ‘go-around’ procedures would also be made over water.

3.4 In addition to the safety advantages of approaches and departures being made over water – and unlike approaches from the east into LHR which are at relatively low level over the London conurbation – given that the approaches and departures would not be over built-up areas, there would be no reason for the proposed new airport to have its ATM’s restricted by operating curfews. Marinair could therefore operate 24-hours a day, 7-days a week and 52- weeks a year.

3.5 Other advantages are those of noise pollution and pollution from aircraft engines the latter of which, according to a study published by MIT during October 2012, causes some 50 pollution related deaths each year under the LHR flight path.

3.6 Marinair is the only proposal which provides for all ATM approaches and departures to be over the sea.

4.0 Matters Raised by Objectors to a Thames Estuary Airport

4.1 Access

4.1.1 From the centre of London (traditionally Charing Cross) the ‘straight line’ distances to the three principal international airports serving London are approximately:

• LHR: 15 miles • LGW: 25 miles • STN: 30 miles

4.1.2 All three airports are served by ‘heavy’ railway services – LHR is also served by the London metro service – and are within 3 miles of a motorway junction.

4.1.3 The proposed location for Marinair is approximately 55 miles from Charing Cross.

4.1.4 However, with modern modes of transport, it is time and not distance that is of primary interest. From London St Pancras to Ashford in Kent, the travel time on HS1 trains is 30 to 40 minutes depending upon the service. Given that from St Pancras the proposed location for Marinair is at the end of approximately the same length of railway line as is Ashford from St Pancras, it is not unreasonable to assume that a similar travel time could be expected.

4.1.5 In addition, an extension of Crossrail would provide rail access to Marinair from the west of London from as far west as Maidenhead.

4.1.6 However, it should be remembered that Marinair is intended to be a new hub-airport for the south-east of England and not just an airport to serve London so, the road links proposed from the M25 would provide for access to the airport from the A1(M) M1, M2, M11 and M20.

4.2 Bird Strike Risk

4.2.1 The Isle of Sheppey is surrounded by water in the forms of the River Thames to the north and east, the River Medway to the west and The Swale to the south. The easternmost part of The Swale where it joins the Thames Estuary is approximately 12 miles to the south-east of the site proposed for Marinair. Some 8 miles to the west of this, is the RSPB Elmley Nature Reserve. The nature reserve is approximately 20 miles to the south-west of the proposed location of Marinair. As has been stated above, the westerly flight paths out of Marinair would be in a westerly direction and would pass some 7 miles to the north of the Elmley Nature Reserve.

4.2.2 As has been stated above, there are numerous examples around the world of civil airports located either within the sea or adjacent to the sea.

4.2.3 In fact, some 12 miles to the south-east of the site for Marinair, is Kent International Airport Manston which is some 24 miles to the east of the Elmley nature Reserve. The runway 28 threshold at Manston is less than 1 mile from the water’s edge at Pegwell Bay.

4.2.4 LHR is surrounded by areas of water and bird reserves as follows:

• London Wetlands: 8.5 miles directly east of the centreline of runway 09L/27R; • The Queen mother Reservoir: 2.5 miles directly west of the centreline of runway 09L/27R; • Reservoir: 1.5 miles directly west of the centreline of runway 09R/27L; • King George Vl Reservoir: 0.75 miles south-east of the threshold of runway 09R.

4.2.5 To put the matter of bird strike risk into perspective, it should be noted that Sacramento International Airport in the USA is located some 100 miles east of the California coast and between 1990 and 2007, there were 1,300 bird strikes recorded. That is an average of in excess of 72 per year.

4.2.6 Given the shape of Great Britain, there is nowhere within the Country further from the sea than 70 miles. At a cruising speed of 500 mph, 70 miles will be covered in 8½ minutes. Bird strikes do not always occur at low level and have been recorded at heights between 6,000 metres (19,685 feet) and 9,000 metres (25,528 feet) above mean sea level.

4.2.7 If on the 15th January 2009 after suffering total engine failure following ingestion of Canada geese, US Airways flight 1549 had not had the Hudson River in which to ‘ditch’, the outcome of the forced landing would have been tragic.

4.2.8 It would be wrong of TEACo to disregard the issue of bird strike risk. Preliminary studies have been carried out into the risk relative to Marinair and, if and when Government support for the project is given, bird strike risk and other risk management and risk avoidance studies will be carried out.

4.3 Noise and Air Pollution

4.3.1 Studies have been carried out using noise generation advice for modern civil aeroplanes. Aircraft noise is principally directed along the line of the aeroplane with ‘side spill’ noise being significantly less. The greatest noise generation is produced when aeroplanes are under power during the take-off roll and when climbing and when using ‘reverse thrust’ after touchdown. The studies have suggested that from the centre of the Marinair airport island, significant noise will spread to a distance of some 2 miles laterally (a 4 mile ‘footprint’) north and south and some 6 miles longitudinally (a 12 mile ‘footprint’). By the time aeroplane generated noise reaches the coast, it will have moderated to an acceptable level of background noise.

4.3.2 As has been stated above, all approaches to and departures from Marinair would be over water which has the capacity to absorb carbon dioxide and other pollutants.

4.4 Shipping Channels and Fisheries

4.4.1 The principal shipping lanes into and out of the River Thames from the North Sea are located to the north shoreline of the Thames Estuary. Preliminary studies have demonstrated that the location proposed for Marinair will not interfere with the recognised shipping lanes.

4.4.2 Other preliminary studies have demonstrated that Marinair would not have an adverse effect upon tidal flows or pose a risk to the fishing industries that operate within the Thames Estuary and the waters to the east. Similarly, there is no evidence to suggest that the Whitstable oyster beds would be adversely affected by the airport or the aviation operations it would generate.

4.5 Airlines would not operate from Marinair.

4.5.1 When in the distant past the idea of a Thames Estuary airport was first promoted by TEACo, it was claimed that ‘The Airlines’ would not relocate to Marinair from LHR and LGW. As is always the case with proposals to change the status quo, various parties with vested interests in maintaining their positions put forward al, manner of reasons why the relocation of hub- airport facilities away from LHR and LGW would never be successful. As time has passed and the reality of the situation relative to ATM’s at LHR having become an issue, such former ‘cannot do’ attitudes have been changing. Although the Director of Dubai International Airport has recently stated that a Thames Estuary airport could never be funded and would become a ‘white elephant’, Willy Walsh has recently stated that even if LHR was granted a third runway, it would only delay the need for a new purpose designed hub-airport to serve the south-east of England and he is only one of a number of people now stating this.

4.5.2 It is difficult to understand why, if the airlines were not provided with a purpose designed four-runway hub-airport with good surface transport access and no curfews, they would not wish to operate their services from such an airport.

5.0 Government Support for a Thames Estuary Airport

5.1 The principal problem that TEACo has faced since the company’s formation is that, whilst a number of credible sources of funding for the construction of a new hub-airport in the Thames Estuary and the necessary infrastructure have been identified, the project can be realised only if HM’s Government is prepared to promote the building of such a new hub- airport in preference to enabling short-term solutions to current problems affecting existing airports in and around London.

5.2 To date, since the abandonment of Maplin, there has been no Government support for a new hub-airport to be built in the south-east of England.

5.3 In addition, for Marinair to be realised, it would be necessary for The Crown to agree to the new airport island being constructed on seabed owned by The Crown as the site selected for Marinair, is to the east of the eastern extremity of the seabed under the control of The Authority.

5.4 However, Marinair does not require the obtaining by Compulsory Order, of seven villages in the north of the Isle of Grain as is the case with some of the proposals for sites in or adjacent to the Thames Estuary.

5.5 A new hub-airport located in the Thames Estuary is of national importance. The unavoidable fact is that before TEACO and/or any other party can take matters forward, the principle of such a development requires the unequivocal support of HM’s Government and The Crown. In the absence of such promotion, no investor will be prepared to make a public statement about funding elements of the development.

5.6 To state the obvious, the future of British aviation interests rests with HM’s Government.

6.0 Conclusion – The Advantages of Marinair Outweigh the Disadvantages

6.1 The inadequacy of the three existing principal airports that serve London and the south- east of England and the advantages that Marinair would bring to the region are as follows;

6.1.1 London is currently not served by a ‘world class’ hub-airport; 6.1.2 Proposals for the upgrading of LHR, LGW and STN will not result in the region being served by a ‘world class’ airport; 6.1.3 LHR, LGW and STN do not collectively provide for optimum ‘hub-and-spoke’ ATM’s with an integrated multi-modal transport infrastructure within the region;

6.1.4 There is no technical impediment to the construction and operation of a ‘world class’ hub-and-spoke’ airport in the Thames Estuary; 6.1.5 Airports located in the sea pose no greater risk to ATM’s than do airports located inland. In fact, in certain circumstances, they are advantageous; 6.1.6 The location and alignment of Marinair would allow for all low-level ATM’s to be over water; 6.1.7 Marinair would resolve the issue of heavy aeroplanes over-flying London at relatively low levels; 6.1.8 ATM’s at Marinair would not need to be subject to operating curfews; 6.1.9 Existing surface infrastructure could be upgraded to offer greater capacity; 6.1.10 New high-speed rail links and motorway links could be created mostly along existing ‘corridors’; 6.1.11 Areas of under-developed land in south Essex and north Kent are available for the development of supporting facilities; Marinair could be integrated with proposals for a River Thames Outer Tidal Barrier and power generation.

6.2 Finally, the directors of TEACo respectfully direct the attention of the Parliamentary Transport Committee back to the Preamble at the beginning of this submission.

26 October 2012

Written evidence from the Mayor of London (AS 104)

Summary

1. Aviation plays a vital role at the heart of the London and the UK economy in a world that is becoming increasingly global. Demand for air travel for both passengers and freight is growing fast. We will only be able to meet our long-term connectivity and capacity needs with a new hub airport. To achieve the critical mass of point-to-point and transfer traffic required, this hub must serve London. Building a new hub will maximise the social and economic benefits of aviation, is consistent with the Government’s emissions targets and can ensure the Government meets it environmental objectives. This is why the Mayor of London is calling for one.

2. Government has the critical role in enabling the delivery of a new hub airport. A clear policy framework that provides the right conditions to attract airlines and infrastructure investors could make such a project work. With strong political backing, construction could be undertaken over a challenging, yet feasible 10 years, and a new hub airport could be well established before 2030.

1. What should be the objectives of Government policy on aviation?

1.1. How important is international aviation connectivity to the UK aviation industry?

3. Industries and jobs across the UK are supported by the connectivity offered by a global hub airport located in the UK. This includes but is not limited to, the UK’s aviation industry.

4. A hub airport located in the South East and capable of meeting current and projected demand can bring benefits to the UK aviation industry – and the wider UK economy – across three main areas:

• Direct effects – employment generated by the new airport (estimated to be approximately 1 person per 1000 passengers) and economic output (e.g. at airports), • Indirect effects – employment and activity generated in the industry’s supply chain, • Induced effects – employment and/or economic output created through the household spending of those employed.

5. Aviation plays a vital role in supporting economic growth and can help rebalance both the sectoral and spatial distribution of the UK’s economy.

6. Aerospace is one of the UK's highest value adding manufacturing sectors. The UK is home to Europe's largest aerospace industry and the second largest, after the USA, in the world. In 2009, the aerospace sector (both commercial and military) generated turnover of some £22bn and new orders of £32bn1, and employed up to 100,000 people directly and 220,000 indirectly2.

7. Research and design investment in aerospace (both commercial and military) in the UK in 2009 was £1.468bn. This represents 10% of all UK industry-wide R&D spend.3

1.2. What are the benefits of aviation to the UK economy?

8. Aside from the benefits of the aviation industry described above, international aviation connectivity is vital for London and the UK. London needs to maintain its place at a global aviation connectivity crossroads in order to ensure its ‘world city’ status, giving the UK access to global markets, facilitating inward investment and enabling millions every year to continue to visit – for business, leisure or study.

9. Key to this connectivity is a hub airport - drawing on London’s unique aviation catchment for point-to-point traffic, combined with transfer traffic, to enable a significantly greater range of routes and frequencies than could otherwise be supported. The UK’s existing hub airport, Heathrow, accounts for more than two-thirds of all UK scheduled longhaul traffic. Without transfer passengers, approximately 80% of longhaul routes from Heathrow would suffer a reduction in frequency or be lost altogether.

10. Much of London’s economic success can be attributed to its position at the heart of a global network of “world cities”. Key aviation-reliant sectors have historically located their headquarters in London because of its air connectivity offer. Ready access to business travel is one of the essential factors which allows London and the UK to play their leading roles in the world economy.

11. The UK is the world’s 2nd largest recipient of Foreign Direct Investment (FDI)4 and accounts for half of all European headquarters established by non-European firms between 1998-20095. In 2010/11, over 94,000 jobs were created and safeguarded in the UK by foreign companies’ investments6. Data from the European Investment Monitor suggests London’s share of all UK FDI projects between 1999 and 2009 averaged 33%7.

12. Air freight is also an important element of aviation’s economic contribution. In 2005, freight carried by air accounted for around 25% of the UK’s total visible trade by value8 and 55% of the value of UK manufactured exports to non-EU countries9.

1.3. What is the impact of Air Passenger Duty on the aviation industry?

13. Aviation provides important economic benefits for the UK. In addition to business travel and freight, inbound tourism makes a valuable contribution to the UK economy. However, the social benefits of aviation should not be underestimated – not just the value that millions of Brits every year place on flying away on holiday – but also for those travelling to visit friends and relatives (‘VFR’). Britain’s diverse and cosmopolitan population relies on aviation links to keep in contact with every part of the globe and many place immense value on the ability to do so.

14. A detailed assessment should be undertaken to help fully understand the impacts of APD, both economic and social, and the extent to which it is affecting the UK’s competitiveness.

1.4. How should improving the passenger experience be reflected in the Government’s aviation strategy?

15. The Mayor warmly welcome significant recent investment into improving the experience of passengers as they use London’s airports. However, the underlying capacity constraint is the single greatest issue adversely impacting customer experience – typified by Heathrow’s regular delays.

16. The Government must not fall into the trap of making adjustments that free up modest amounts of additional capacity, but that will have substantial negative consequences – for instance the introduction of mixed mode operations at Heathrow, or any relaxation of night flying restrictions. These would be wholly unacceptable because of their effects on hundreds of thousands of local residents.

17. The correct long-term strategy is the provision of a new hub airport – one that can provide the capacity and airport layout enabling the fundamental issues that undermine the passenger experience for so many to be addressed. Only an efficient airport with state-of-the-art facilities, excellent surface access links and sufficient runway capacity on a site with minimal constraints can offer the comfortable, hassle-free experience that travellers expect of a world-class hub.

1.5. Where does aviation fit in the overall transport strategy?

18. Britain is an island and aviation is a largely non-substitutable form of transport. Four out of five trips to and from the UK are made by air10. The economies of London and the UK depend to a great extent on the available air connections. Aviation is unique in the extent to which it connects Britain to developed and emerging markets worldwide, contributing to our economic growth with links that cannot easily be replicated by other modes.

19. High speed rail can provide an alternative mode of transport for approximately 10% of Heathrow’s flights. For the most part, high speed rail complements, rather than substitutes, hub airport capacity, increasing the airport’s catchment area and so facilitating a wide network of longhaul routes (which, needless to say, cannot switch to rail).

20. Connecting London’s future hub airport to a national high speed rail system will also allow regions outside the South East to share fully in the hub’s global connectivity benefits. This would encourage UK-wide growth in international trade, tourism and investment and offers the potential for strong contribution to rebalancing the national economy.

2. How should we make the best use of existing aviation capacity?

2.1. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

21. Heathrow in particular, as Britain’s existing hub airport, is severely hampered by its lack of spare runway capacity and highly constrained site. This curtails the airport’s operational effectiveness and directly impacts the passenger experience. Delays are too commonplace for what is the main international gateway for London and the UK.

22. Improving Heathrow’s performance must not be done at the expense of local residents who already suffer significantly from the environmental impacts of the airport. Many Londoners are concerned that the tactical measures being employed as part of the ongoing Operational Freedoms trial will have a detrimental impact on their quality of life. The Mayor will study the results of the trial carefully and is calling for it to be conducted in an open, transparent manner and for Heathrow, the DfT and the CAA to not rely solely on the simple measure of complaints received to provide a conclusive barometer of impacts.

23. We cannot rely on other airports around London and further afield to address the long- term capacity challenge. The particular nature of a hub, dependent on building a critical mass of point-to-point and transfer traffic, means that spare capacity elsewhere cannot be used as a substitute. It is true that in the short term, other non-hub airports including Gatwick, Stansted, Luton and possibly Birmingham could help serve a proportion of traffic, effectively ‘spillover’ routes and frequencies which cannot be accommodated at Heathrow. Though sub-optimal and requiring both the full co-operation of airlines and the patient acquiescence of passengers, this could serve as a palliative to London’s connectivity crisis in the short term, while a new airport is built.

2.2. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

24. Demand for international connections is most concentrated in London and the southeast. The London airports handle just under three quarters of all UK inbound tourist arrivals11. Regional airports have a useful role to play, but not as a substitute for new hub capacity in the southeast. Any redistribution of traffic from the southeast through regional airports would not only result in millions of people travelling significantly further by road and rail to fly but also in a likely deterioration in overall connectivity.

25. Moreover, in such a scenario, much of the key hub passenger traffic would shift, not to UK regional airports, but to rival hub airports elsewhere in Europe, who would willingly assume the connectivity benefits that entails.

2.3. How can surface access to airports be improved?

26. Surface access is key to the attractiveness of an airport and for Britain’s major airports providing sufficient capacity and connectivity, particularly by sustainable modes is key.

27. The Mayor supports improved surface access to airports and the particular role of rail to provide improved connectivity and increased capacity. Nonetheless, it is important to ensure that any investment is commensurate with passenger demand and the future role of the airport and that the airport operator bears an appropriate share of the costs.

28. Investment in surface access should be considered in the long-term context of a strategic plan for UK aviation. High-quality surface access connections will be essential to support a new hub airport, enabling a step-change in mode share and maximising its catchment area, as well as air-to-rail mode shift.

3. What constraints are there on increasing UK aviation capacity?

3.1. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

29. The Mayor fully agrees with the Government’s draft objective to limit, and where possible, reduce the number of people in the UK significantly affected by aircraft noise. Minimising the number of people affected is best achieved by relocating the UK’s hub to a less densely populated area.

30. The Mayor is responding to the Government’s consultation by asking that serious consideration be given to establishing a new and improved noise metric instead of the current 57LAeq decibel contour as the level marking the onset of significant community

annoyance. Night noise and the importance of respite periods must be better accounted for.

31. What is abundantly clear from our research is that no airport in Europe can compare with Heathrow for the severity of its noise impacts on hundreds of thousands of people – accounting for 29% of all the people in Europe affected by aircraft noise. This is only in small part due to its size and is mostly a function of its location in a densely populated urban area. Addressing and managing these impacts poses a very serious challenge given the current scale of airport activity, with no easy solutions available.

32. In addition to noise, other local environmental impacts of airports should not be ignored. Air quality is also important, with emissions not just from aircraft but also from the associated infrastructure and activities emanating from an airport. The consequences of poor air quality can be substantial and should be fully considered as part of any assessment into the impacts of an airport.

33. A recent study by the Massachusetts Institute of Technology (MIT)12 found that Heathrow’s location exacerbates its local environmental impacts. It stated that moving the UK’s hub airport to the east of London would reduce the health impacts of the UK hub by 60-70% (versus a 3-runway Heathrow). This is because of Heathrow’s position upwind of London’s population centres, as well as its extreme proximity to them.

34. In conjunction with significant road-based emissions in the vicinity of the airport, EU limits for NOx are already being breached at Heathrow, subjecting local people to significant health risks.

35. The severity of the noise and air pollution impacts of Heathrow are inescapable and more must be done to address these in the short-term. In the long-term, the only feasible solution is a new hub airport, likely to the east of London, without the severe noise and wider health impacts that plague the local communities around Heathrow today.

3.2. Will the government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

36. The Mayor fully supports the Government’s draft objective to ensure that the aviation sector makes a significant and cost effective contribution towards reducing global emissions.

37. The Government is right to set ambitious targets, and continue its work towards an effective emissions trading regime. It is early days for the current regime and we must acknowledge that, in the UK, we are at the forefront of international efforts to find a workable solution to an extremely difficult problem: striking the right balance between the costs, benefits and environmental impacts of activities across all walks of life.

38. Given the enormous benefits that aviation delivers, ways must be found to address aviation’s impact on climate change while not unduly constraining air travel. Many measures will form part of efforts to manage this. The aviation sector should continue in earnest to pursue improvements in aircraft efficiency, propulsion technology, aerodynamics and making feasible the use of alternative fuels; encouraged appropriately by the Government and the international community.

39. The UK’s Committee on Climate Change has recommended in a central case that UK-wide our airports can accommodate in the region of 150 million more passengers per annum by 2050 over current levels – while still adhering to our emissions commitments. This is compatible with development of a new hub airport. This assumes continued, realistic progress in aircraft fuel efficiency and the adoption of more efficient air traffic control regimes.

40. It is worth noting that travel to and from airports can also be a key contributor to the aviation sector’s impact on climate change. Low carbon modes accessing Heathrow only make up a 40% modal share13, compared to up to 70% at other leading international airports.

3.3. What is the relationship between the Government’s strategy and EU aviation policies?

41. Substantial aviation growth is forecast across Europe and across the globe, as the sector benefits from further liberalisation and increasing competition. If the UK does not have the hub capacity to take advantage of this, we will be left behind and our rivals will benefit from the explosion in global connectivity.

42. The inclusion of aviation in the European Emissions Trading Scheme (EU ETS) is most welcome and the Mayor considers this to have great potential to be an effective mechanism for monitoring, managing and controlling aviation emissions. We must set a clear example, but also remember that caps and limits minimising aviation’s impacts will be most effective when agreed at an international level.

4. Do we need a step-change in UK aviation capacity? Why?

4.1. What should this step-change be? Should there be a new hub airport? Where?

43. A hub airport with a step-change in capacity is fundamental to ensuring the global connectivity that the UK needs, now and in the future. The Government’s own forecasts for an unconstrained hub airport predict demand for up to 180 million passengers per annum by 2050 – and Heathrow, even if it could be sustainably expanded, could never hope to achieve that. Britain needs a new hub airport of this scale – with at least four runways – if it is to secure future economic growth and prosperity.

44. The unique profile of London and the southeast requires that the UK’s hub airport be located here. The region has a huge, critical mass of inbound and outbound business and leisure travellers, underpinned by a constellation of businesses with an above average requirement for access to global air links.

45. Over the coming 12 months, the Mayor will be assessing, in detail, a number of location options to input into the work of the Davies Commission. While he is disappointed that the Government appears to be requiring the Davies Commission to take three years to issue their conclusions, he hopes that by accelerating his own work programme to develop a credible solution, he can help reduce their timescales.

46. Our initial work suggests that, based on a number of criteria including spatial, environmental and surface access, a location to the east of London would be most appropriate – options include an Inner and Outer Thames Estuary location as well as Stansted.

4.2. What are the costs and benefits of these different ways to increase UK aviation capacity?

47. Part of our work to assess a new hub airport location will examine the costs of various options, as well as the relative benefits. The need to be able to sustain a commercially viable airport handling up to 180 million passengers per annum, means that several sites, both new and existing, can be deemed unsuitable.

48. Government has a fundamental role in enabling delivery of a new airport – setting out a clear policy framework that provides the right conditions to attract the airlines and potential infrastructure investors that will be key to making the project work. Government also has a central role if the considerable development potential of a new hub airport is to be realised – regenerating deprived areas and stimulating the creation of thousands of jobs.

49. The challenge is considerable, but with cross-party consensus, it is not insurmountable. The sterling effort to put on the London 2012 Games demonstrates our potential. There will be costs to address in building a new hub airport and associated surface access links. But there are, and will continue to be, significant costs to the UK’s economy if we erode our connectivity and cede our competitive edge to those economies investing in their futures.

26 October 2012

5. Endnotes

1 http://www.ukti.gov.uk/export/sectors/advancedengineering/aerospace.html 2 http://www.adsgroup.org.uk/pages/62968081.asp 3 http://www.ons.gov.uk/ons/rel/rdit1/bus-ent-res-and-dev/2009- edition/index.html 4 UNCTAD statistics database 5 Inward Investment Monitor, Ernst & Young, 2010 6 UK Inward investment report 2010/11, UK Trade and Investment, 2011 7 Economic Evidence Base to support the London Plan, the Mayor’s Transport Strategy and the Economic Development Strategy, GLA Economics, May 2010 8 Focus on Freight, DfT, 2006 9 The Economic Contribution of the Aviation Industry in the UK, Oxford Economic Forecasting 2006 10 National travel survey, DfT, 2010 11 Passenger Survey Report, CAA, 2007/08, 2008, 2009 12 Air quality impacts of UK airport capacity expansion, MIT Laboratory for Aviation and the Environment, October 2012 13 Passenger Survey Report, CAA, 2011

Written evidence from the City of London Corporation (AS 105)

Introduction

1. The City of London’s leading position as an international finance and business centre is heavily dependent on it being easily accessible not only from across the UK but, crucially, also from all over the world.

2. Aviation services remain crucial to the wellbeing of London and the UK economy, and the City welcomes the creation of the Independent Commission to be chaired by Sir Howard Davies to consider options for maintaining this country’s status as an international hub for aviation. The City Corporation will shortly publish research to build on the previous City-backed studies into the importance of aviation set out below. This new piece of work is expected to be available later this year in order to feed into the Davies Commission.

3. The City of London Corporation is not in a position to respond fully to all the questions posed by the Committee but is able to share the initial findings from forthcoming research1 as they relate to the importance of aviation to the economy and the need for a new hub airport.

Previous research into the importance of aviation

4. The City Corporation first commissioned research into the importance of aviation in 2002. The study2 identified that the provision of air services in London that would compete with and outperform services available in other financial centres are essential if London is to remain globally competitive. This was updated by a further study by published in July 20083 which looked further at the extent to which City businesses relied on air travel. Although it did not go as far as placing a monetary figure on the value of aviation to the UK economy, this research demonstrated that, at the time, 64% of businesses regarded air travel as critical or very important for internal company purposes, and that 73% considered aviation critical or very important for meeting external clients or service providers. In addition, 82% of businesses regarded Heathrow as critical or very important to their operations, making it the most highly-valued airport in the South East by some margin. This was largely attributed to the wide range of destinations served and the frequency of the service. The research concluded that that this hub airport plays a key role in the functionality of the financial services industry in the UK.

5. The 2008 report concluded that, in recent years, Heathrow had stagnated and lost some of its market share to European competitors. This is reflected in the fact that, while the frequency of services from Heathrow rose between 2003 and 2008, the number of destinations to which it provided air services declined and, in comparison with other major European hub airports where additional runways have been built to meet rising demand, the rate of expansion has been noticeably slower. Furthermore, 50% of businesses surveyed regarded road and rail access to London’s airports as worse than that of airports in other major cities.

1 “The Importance of Global Aviation Connectivity to London”, York Aviation, published by the City of London Corporation, October 2012 2“The Use of Aviation Services in the City of London and the Central London Business District and the Implications for Future Aviation Policy”, Oxford Economic Forecasting, published by the City of London Corporation, December 2002. 3 “Aviation Services and the City”, York Aviation, published by the City of London Corporation, July 2008.

6. Whilst recognising the importance of Heathrow to London’s business community, both pieces of research highlighted major weaknesses in the airport’s management. The 2002 report indicated that there was real concern about time wasted at airports waiting for security checks reflecting the expense to companies of having staff unable to work because of overly-long airport security processes. The 2008 report also identified that inefficient security procedures led to passenger delays and also prevented many flights leaving Heathrow at the time scheduled.

7. The 2008 research4 identified some of the environmental concerns inevitably attached to any of the expansion options, in particular aircraft noise disturbance and local air quality. This aspect has also been recognised by the Corporation as important.

The importance of a hub airport

8. The need for businesses to travel to and receive visitors from emerging countries will increase over time as their economies grow. The principal concern, therefore, is the extent to which London will be able to keep pace with its competitors in future and this is the main issue considered in the forthcoming York Aviation research. The vast majority of London’s business related air connectivity beyond Europe is provided by Heathrow and in terms of the BRICS countries (including Hong Kong), Heathrow provides 95% of the flights and 88% of the seats5.

9. A key reason why services to the emerging economies tend to be concentrated at Heathrow is its status as a hub. Often routes to individual cities within emerging countries are too small to support direct services without feeder traffic through a hub. The dependence of particular markets on transfer traffic overall varies considerably, with routes to countries such as Brazil, China, India and Mexico far more dependent on transfer passengers than routes to countries such as Pakistan, Poland or Turkey. In terms of services from Heathrow, these are far more dependent on transfer traffic than routes from Gatwick or, indeed, the other London airports6. This reflects the ability of Heathrow to function as a hub and the ability to operate such routes from a hub airport.

10. In some markets from Heathrow, transfer passengers make up a very high proportion of overall demand; as high as 65% in the case of the route to Mexico City from Heathrow. Other countries with particularly high dependence on transfer traffic from Heathrow include the Czech Republic, India and South Africa. It is also evident that British Airways is more dependent on transfer passengers than other airlines at Heathrow. For example, over half of BA’s passengers on Heathrow routes to Brazil, Egypt, India, Morocco, South Africa and Taiwan are making transfer connections onto such flights. The ability of Heathrow to function as a hub is a factor in securing a wider route network than would otherwise be the case. This is relevant to considering the extent to which Heathrow will be able to continue to provide a gateway for the opening up of such point to point services in future.

11. Capacity at Heathrow has been constrained for some time, running at 97-98%. Nevertheless, carriers at Heathrow have been able to adapt their networks so that, in

4 “Aviation Services and the City”, York Aviation, published by the City of London Corporation, July 2008 5 “The Importance of Global Aviation Connectivity to London”, York Aviation, published by the City of London Corporation, October 2012. 6 It is only on the route to Mexico that BA relies on a reasonable (28%) proportion of transfer passengers at Gatwick. Other airlines do not use Gatwick as a hub to any great extent either, with only 6% of passengers in the relevant markets transferring onto flights at Gatwick with other airlines. overall terms, key business connections are maintained. This, however, has been at the expense particularly of UK domestic connections and connectivity to Europe from Heathrow. This is where other London airports have made a particular contribution, with a particular increase in the range of European services overall across the London airports.

12. It is clear that the scope for enhancing the range of services to the emerging economies at Heathrow is ultimately limited by the shortage of slots. The extent to which it will be possible to introduce services to newly emerging world cities will be limited by the need for these services themselves to be supported by feeder traffic, largely from the European and domestic network but also by services from the US, which also provide feeder traffic onto routes to Asia and to Africa.

13. Development of new direct services by airlines will be influenced by the nature of airline alliances. To the extent that services need to be supported by hub feed at both ends of a route, a foreign airline may favour service to an alliance hub, such as Frankfurt for Star Alliance members or Paris/Amsterdam for Skyteam members. This has to date been a factor in the development of direct routes to China as, whilst Cathay Pacific of Hong Kong is a One World member allied to BA, China Airlines, China Southern and China Eastern are all Skyteam members and Air China a member of Star Alliance.

Conclusion

14. Whilst to date it would appear London has not lost connectivity in either absolute or relative terms because of capacity constraints, this may not continue to be the position as economic power shifts to new centres and demand for air travel to new routes increases. This underlines the importance of the work of the Davies Commission to find an urgent long-term solution which enables the UK to keep pace with the connectivity provided by competing centres’ airports. It is suggested a greater range and frequency of connections to key cities in the emerging economies is more likely to develop through a focus on hub capacity than relying on non-hub airlines to develop services feeding their own hubs overseas.

26 October 2012

Written evidence from Engineering the Future (AS 106)

This is an Engineering the Future response to the Transport Select Committee inquiry on the government’s Aviation Strategy. Engineering the Future is a broad alliance of engineering institutions and bodies which represent the UK’s 450,000 professional engineers.

We provide independent expert advice and promote understanding of the contribution that engineering makes to the economy, society and to the development and delivery of national Policy.

1. What should be the objectives of Government policy on aviation?

i. The Government should review the role of aviation as part of a low carbon dioxide travel and transport strategy and low carbon dioxide economy for the future.

ii. Any transport policy that is produced needs to demonstrate integration between the modes where a multi modal approach better accomplishes transport policy objectives. The Government’s aviation strategy should be balanced on the principle of accessibility for communities who rely on it for connectivity, and driving technological change to reduce aviation emissions, noise and other negative externalities.

iii. Government should pursue a balanced aviation strategy that allows businesses and customers across the UK to connect to the most dynamic and fastest growing markets and economies. With a growing amount of international trade the need for companies to have its entire manufacturing, financing and operational headquarters in one place no longer exists.

iv. UK domestic flights and international departures are one of the fastest growing sources of greenhouse gas emissions and policies to reduce air traffic movements, alongside fuel efficiency, will be needed to reduce GHG emissions to meet commitments in the Climate Change Act.

a. How important is international aviation connectivity to the UK aviation industry?

i. The UK’s aerospace industry is the second largest in the world with a 17% global share of the market. We must maintain good connectivity to the aviation industry around the globe so that we can demonstrate our achievements and skills within this industry, encouraging international investment in the UK.

b. What are the benefits of aviation to the UK economy?

i. The benefits of aviation to the UK economy include the creation of wealth and employment through our service industries and business communities. The use of Rolls- Royce engines and the involvement that UK manufacturers have in partnerships with Airbus and Boeing benefits the UK economy. Currently the UK aviation industry employs 234,000 staff and contributes £18.4 billion to the UK GNP and £7.8 billion in taxation to

the Exchequer. In 2011, 129 million passengers and 1.1 million tonnes of cargo was carried as UK airline output.

ii. Hub airports draw in passengers from a range of places in order to reach a critical mass of passengers to make flights to other destinations economic. Having a European hub located in Britain gives cost and convenience advantage to the British people. It also makes the UK an attractive location for emerging markets to set up their European headquarters.

c. What is the impact of Air Passenger Duty on the aviation industry?

i. Increased taxes and duties can help aviation pay for its environmental costs and provide funds to reinvest in other transport infrastructure. Airlines currently pay no VAT on their fuel and changing this will provide extra revenue.

ii. Notwithstanding the objectives behind Air Passenger Duty, the application of a unilateral tax of this nature distorts the long distance aviation market while doing little to incentive airlines to utilise greener aircraft or to increase passenger load numbers on flights, as the tax is effectively passed on to the passenger.

iii. Suggestions include that air passenger duty ought to be raised on short haul flights to make them less attractive and to try to encourage other more sustainable types of transport for shorter journeys. Changing Air Passenger Duty to a ‘per plane’ duty would also ensure that flights that are not full, still account for the environmental externalities. Alternatively a tax on fuel usage could be another approach as this would encourage airlines to use more fuel efficient aircraft across their fleet and to maximise overall load factors, thus incentivising emissions reductions, while also bringing aircraft used for freight into the scheme.

iv. While taxation of aircraft fuel is favoured by the European Commission, an attempt to introduce this through ICAO (which would require a worldwide agreement to overturn provisions in the 1944 Chicago Convention) was rejected at the ICAO level. As a compromise, Directive 2003/96/EC allowed EU Member States to tax aviation fuel for domestic flights and through agreements on a case by case basis with other EU member states, which could be an option to explore alongside withdrawing APD for certain destinations.

d. How should improving the passenger experience be reflected in the Government's aviation strategy?

i. Passenger experience can be improved by Government taking a balanced approach when deciding its policies. A holistic strategy is needed that includes reference and acknowledgement to the impacts of emissions, noise and cost. Developments with information communications technology (ICT) allow the use of ‘apps’ on hand-held devices that can provided a complete door to door route option. These systems can provide options of re-routing as a result of travel disruption.

e. Where does aviation fit in the overall transport strategy?

i. The overall transport strategy should give an integrated plan on how journeys that are point to point can encourage the use of the different modes encouraging low carbon dioxide travel. This multi-modal transport strategy needs to take into account capacity and address peoples need to travel.

2. How should we make the best use of existing aviation capacity?

i. Make better use of the information gathered by the CAA, NATS, Airlines and Airport Operators to manage the flow of passenger and freight traffic through all of our airports is required.

ii. Aviation capacity should be carefully planned and managed to ensure that it is focused in those areas where there is greatest need, alternatives are impractical and the local environment is duly protected.

a. How do we make the best use of existing London airport capacity? Are the Government's current measures sufficient? What more could be done to improve passenger experience and airport resilience?

i. There needs to be more work done on integrating our transport links between our airports and cities. An example of this can be seen with Stansted airport which runs at less than full capacity. It is fairly remote with poor rail links into London and elsewhere across the country.

b. Does the Government's current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

i. By mapping the flow of passenger and freight traffic across our South East network we could make better use of the capacity available. Commercial opportunities must be taken into account as airports are businesses. We can therefore not dictate to them which airlines and destinations they should serve.

ii. Other regional airports tend to be more accessible to the majority of the UK population. Regional airports could also be better placed for UK businesses, including those in the engineering and manufacturing industries, than those airports to the south or east of London

c. How can surface access to airports be improved?

i. Many of the adverse impacts of aviation disproportionately affect local populations with noise, light and air pollution.

ii. Through a national integrated transport strategy the UK could make certain there were good point to point multi-modal links. Individuals need to think about how they travel. Questions such as “Should we use rail for our longer domestic journey rather than flying?”, need to be asked as currently rail is a less attractive option as these journeys are

not competitive on price. This should be improved once the high speed network is extended. The Government should also consider alternative forms of travel which link suburban, urban and medium distance/intercity connections such as tram-train, which could help to reduce surface access congestion, emissions and noise issues.

3. What constraints are there on increasing UK aviation capacity?

i. There are constraints in terms of land use, planning time and applications, and the need for better surface transport links to and from our airports.

a. Are the Government's proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

i. Government needs to ensure that it works alongside the regulatory bodies including the Climate Change Committee, the Civil Aviation Authority and the World Health Organisation to make sure it is proposing targets that will have the overall impact of improving the local environment, including reducing the impact of noise on local residents. The CAA (for noise) and the Environment Agency (for air quality) need to be given a legal duty and the necessary powers to require those in breach of limits to come back into compliance.

ii. Careful consideration should be given to attempting to reduce noise without understanding the potential impact this may have on other aspects of the design of an aircraft. For example, it is possible to reduce the noise by design but this may lead to an increase the environmental impact however, manufacturers are aware of this trade off.

iii. Other noise issues such as road vehicles used at an airport could be reduced through the use of electric or hybrid vehicles. The Government should link increased aviation capacity with stricter rules on the noise category of aircraft allowed to use that increased capacity, thus helping to incentivise environmental mitigation even more so if done during peak hour slots.

iv. Air pollution is also of great concern to local populations. In the past this has been attributed to road traffic, which whilst still an issue, there has also been a real terms increase in nitrogen dioxide emissions from aircraft and auxiliary power units on the ground. Depending on the location this can severely impact local residents.

b. Will the Government's proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

i. Improved technology, more efficient air traffic management, the use of biofuels and other measures will help to reduce the impact of aviation on climate change. However the Committee on Climate Change concluded that in order to reach the interim milestone of cutting carbon dioxide by 26% by 2020, “deliberate policies to limit demand below its

unconstrained level are [...] essential”1. Any policies to increase air capacity are incompatible with this.

ii. It is helpful that the Government have recognised that there are non-CO2 contributors to climate change. These too need to be included in the EU Emissions Trading System.

iii. The Government could implement additional incentives in contracts with OEMs which design, build, test and/or manufacture aircraft. The Government could also introduce tax incentives which operate in a similar manner to the Patent Box or RD Tax Credit schemes. These could be targeted at improving the design and operation of aircraft; this could have a positive effect on those aircraft characteristics which may impact the climate.

iv. The OEM takes the business risk when choosing to develop a new type. If Governments are to implement additional incentives, it would be by way of regulations and legislative changes, these changes would need to influence the design and operation of aircraft.

v. Of particular mention is the development of biofuels. For a sector that is completely reliant on a portable liquid fuel as an energy source, the development of sustainable alternatives must be prioritised. At present, there are Renewable Transport Fuel Certificate (RTFC) incentives to drive biofuel feedstock and supply into the road transport sector, not into aviation. A government policy must be put in place to govern the allocation of feedstock and resource across all transport modes and other sectors that could exploit biofuels, such as energy-intensive industrial processes. This should be carried out in consideration of other government policies such as the implementation of the electric car.

vi. On the subject of business risk, at present investment banks are hesitant to invest due to lack of overall business case, poor integration and assurance within the value chain and product maturity. This is stalling and stunting development of biofuel refineries and jeopardizing the future of this technology. Some incentive programme from the government must step in to provide the economics to drive a sustainable and investable way forward.

c. What is the relationship between the Government's strategy and EU aviation policies?

i. Government’s strategy needs to build on the work done by the Future Aviation Strategy developed by the CAA building in the work being done through programmes such as the Single European Sky Air traffic Management Research (SESAR).

4. Do we need a step-change in UK aviation capacity? Why?

i. Aviation has significantly increased over the last 30 years which is the time when the UK focussed its business on the financial services - and as stated in the document London is an exceptionally well served capital city. Do we need to have a long term vision understanding what our strategy is for the entire country, understanding what our

1 COMMITTEE ON CLIMATE CHANGE. 2009. Meeting the UK aviation target – Options for reducing emissions to 2050. Available from: http://www.theccc.org.uk/reports/aviation-report

business focuses will be over the next 50 years and ensuring that we have the right aviation policy for the entire UK and not just focus on the south east? The Committee on Climate Change have calculated that there is the potential to reduce business travel by up to 30% through teleconferencing.

ii. Our transport system needs to maximise our resources for the long term. As an island with over 60 million people living on it we are always going to be space limited when it comes to expansion of our airports therefore we need to look at how we can improve the efficiency to maximise the throughput of passenger traffic to meet the future demands.

iii. Policy should focus on encouraging connections from regional airports into all the major networks.

a. What should this step-change be? Should there be a new hub airport? Where?

i. No comment

b. What are the costs and benefits of these different ways to increase UK aviation capacity?

i. No comment

29 October 2012

Written evidence from the Institute of Directors (AS 107)

About the IoD

The IoD was founded in 1903 and obtained a Royal Charter in 1906. It is an independent, non- party political organisation of approximately 40,000 individual members. Its aim is to serve, support, represent and set standards for directors to enable them to fulfil their leadership responsibilities in creating wealth for the benefit of business and society as a whole. The membership is drawn from right across the business spectrum. 80% of FTSE 100 companies and 60% of FTSE 350 companies have IoD members on their boards, but the majority of members, some 72%, comprise directors of small and medium-sized enterprises (SMEs), ranging from long-established businesses to start-up companies.

1. General comments

1.1 Aviation provides significant benefits to the economy, which have been well-rehearsed. As the pattern of UK trade continues to change, shifting away from heavy goods and towards high end manufacturing and services, flying will become increasingly important. At the same time, the emerging markets will account for an increasing share of world GDP, and providing direct connections to these markets will be increasingly important for UK businesses.

1.2 Aviation has negative impacts on the environment, specifically, CO2, noise, and local air pollution. It is possible to manage the impacts of all three, ensuring that aviation continues to grow in a sustainable way. In the absence of a global agreement, the decision to apply the EU ETS to airlines was a mistake, but it does allow aviation to grow while ensuring that the overall carbon reduction targets are met.

1.3 The UK faces four related crunches: Hub capacity now; overall capacity around London by 2030; tax; visas and borders. Each of these makes it a little harder to get to and from the UK, making this country less attractive as a destination to visit for business or leisure.

1.4 In May 2012, the IoD surveyed 1,076 IoD members, and a number of interesting conclusions can be drawn. − First, most IoD members travel to their nearest airport by car or taxi; − Second, Heathrow is an important airport for all regions; − Third, for indirect flights to European destinations, IoD members are now as likely to fly via Amsterdam as Heathrow, and for some regions, considerably more likely; − Fourth, one third of IoD members say that that direct flights to emerging markets are currently important to their business, but a decade from now, two thirds say that direct flights to emerging markets will be important to their business; − Fifth, 59% believe that a lack of spare capacity at Heathrow has a damaging effect on inward investment to the UK; − Sixth, nearly 8 in 10 support new runway construction; − Seventh, when asked to choose just one option to increase capacity, a third runway at Heathrow is the most popular; − Eighth, if a new hub airport in the Thames estuary required the closure of Heathrow to be viable, IoD members would oppose it.

1.5 Three points should be emphasised when setting out a good long-term plan for the aviation sector:

− We have been here before – almost every option has been proposed before, while nine years after the publication of the 2003 White Paper, we are effectively back to square one; − The main blockage is planning not money; − A single airport capacity solution is not likely to be sufficient to meet forecast capacity and hub capacity shortfalls.

1.6 The IoD believes that an aviation plan needs to be holistic in nature, and should address six key areas: − Making the best use of existing capacity in the short term; − Making decisions about where new runways should be built as soon as possible, so they can open in the medium term; − Ensuring good surface access and integration with the wider transport network, in particular planning rail services together with airport capacity, not separately; − Dealing with noise and other local environment impacts; − Not raising taxes any further; − Improving the visa regime and operations at the UK border.

1.7 The IoD’s main proposals in each of these six areas include: − First, continuing with operational freedoms at Heathrow (but not mixed mode); reducing the level of regulation of Gatwick and Stansted; opening up the Channel Tunnel to passenger rail competition; promoting the benefits of airports outside of the South East; and introducing code-sharing between rail and air on the West Coast Main Line, primarily to encourage greater use of Birmingham Airport; − Second, expanding Heathrow airport by one or two runways and allowing Gatwick airport to construct a second runway after 2019; − Third, given the recommendation above, constructing the Heathrow Hub and running HS2 directly through it; and ensuring that code-sharing is implemented for rail services on both HS2 and the Great Western Main Line to reduce the number of domestic flights and car journeys to Heathrow; − Fourth, any expanding airport should be subject to the strictest environmental standards, including banning the noisiest planes from the airport; restricting or banning flights between 23:00 and 06:00; increasing angles of descent for narrow-bodied aircraft; requiring aircraft to be towed to and from the runways and electric airport vehicles to be used; and ensuring that an appropriate strategy is put in place to reduce air pollution and CO2 from road access to the airport; − Fifth, freezing Air Passenger Duty in cash terms and introducing an offset for the impact of the EU ETS; − Sixth, employing more permanent border staff; modernising Border Force working practices; accelerating development of advance-clearance systems; overhauling the visa application process, including allowing single applications for both Schengen and UK visas; and removing international students from the net migration target during the period of their study.

1.8 Since demand forecasts are liable to be quite wide of the mark, the UK must end up with an airports system that allows for a flexible response to changing economic circumstances, travel patterns and technology. Investing large sums of government money into a new hub airport is far more risky than allowing existing airports to make their own investments in increased capacity. The London airports system is far more competitive than it was when the 2003 White Paper was published, which can only be a positive development.

1.9 The IoD will be publishing a longer report examining these issues, but it is not yet sufficiently complete to be submitted to this inquiry as supplementary evidence. We would be happy to submit it once it is complete.

2. Responses to specific questions

1. What should be the objectives of Government policy on aviation?

2.1 The IoD believes that aviation policy should have four objectives: − The UK should have sufficient hub capacity to provide world-class connections around the globe for all parts of the country; − The aviation industry should grow in an environmentally sustainable way; − Airports should connect seamlessly with the wider transport network; − Flying to and from the UK should be a smooth experience. b. What are the benefits of aviation to the UK economy?

2.2 A number of studies have examined the benefits of aviation to the UK economy. The key conclusions include the following.

2.3 Aviation contributes £50 billion to UK GDP, including £21 billion from the sector directly, £16 billion from the supply chain and £12 billion from the spending by the employees of the industry and its supply chain. In addition, there are an estimated £21 billion in “catalytic” benefits from tourism.1

2.4 The aviation sector supports 921,000 jobs, including 326,000 jobs directly supported by the sector, 346,000 supported through the supply chain and 249,000 jobs supported by the spending by the employees of the aviation sector and its supply chain. In addition there are a further 519,000 people employed through the catalytic (tourism) effects of aviation.2

2.5 The aviation sector contributes nearly £8 billion in tax, including around £6 billion from aviation firms and employees and £1.9 billion from Air Passenger Duty. In addition, a further £5.9 billion is raised via the aviation sector’s supply chain and £4.3 billion through taxation of the activities supported by the spending of employees of both the aviation sector and its supply chain.3

2.6 Air transport supports trade, with 35 million business passengers passing through UK airports every year and 30% of all UK exports by value transported by air. The aviation industry handles 55% of the UK’s exports, by value, of manufactured goods to countries outside the EU.4 According to the 2006 Eddington Transport Study, “each day there are 72,000 international air business passenger journeys made to and from the UK (compared to 60,000 long-distance domestic business trips)”.5 c. What is the impact of Air Passenger Duty on the aviation industry?

1 Oxford Economics, Economic Benefits from Air Transport in the UK, 2011 2 Ibid. 3 Ibid. 4 Oxford Economic Forecasting, The Economic Contribution of the Aviation Industry in the UK, October 2006 5 Office for National Statistics, Transport Statistics Great Britain, 2005, cited in The Eddington Transport Study, December 2006, p.25

2.7 The UK’s taxes on flying are the highest in the world. APD is now levied at a much higher rate than the environmental costs of flying would suggest. It is, of course, now principally a revenue-raising measure.

2.8 Excessive levels of APD are undoubtedly having a negative impact on the aviation sector. An “exorbitant” level of tax was one of the main reasons cited by the CEO of Air Asia X, Azran Osman-Rani, for pulling out of the UK earlier this year: “The implementation of the Emissions Trading Scheme and the escalating air passenger duty taxes in the UK, which will rise yet again in April 2012, have forced our decision to withdraw our services to Europe.”6

2.9 The Netherlands’ short-lived experiment with APD was particularly revealing. The tax generated €300 million but was estimated to have caused a loss of €1.3 billion to the broader Dutch economy.7

2.10 High APD rates are also damaging regional airports. For example, passengers flying out of Newcastle this year are expected to pay a total of £49 million in APD, almost as much as the airport’s turnover last year of £52 million.8 Continental Airlines (now part of United) would have abandoned flights from Belfast to the US if the level of APD had not been reduced in Northern Ireland.9

2.11 APD is also encouraging passengers to alter behaviour. Nearly a million people depart from Dublin airport despite being resident in Northern Ireland, with APD a major factor. And according to evidence presented to the All Party Parliamentary Group for Aviation, passengers are increasingly flying long-haul via Amsterdam, using two separate tickets, to avoid long-haul APD.10 d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

2.12 Improving the passenger experience is important. The benefits of more capacity would be substantially reduced if it takes visitors two hours to pass through passport control and three months to get a visa in the first place.

2.13 Improving the passenger experience should involve several actions on the part of Government, in addition to the actions of the private sector airports and airlines: − Ensuring that there are good connections to and from the rest of the world for all parts of the UK, primarily by ensuring that there is sufficient hub capacity; − Ensuring that surface access is swift and efficient, and that ticketing is flexible and encourages multi-mode journeys; − Ensuring that the process of applying for a visa to visit the UK is swift and efficient, particularly for repeat visits; − Ensuring that entry into the UK is reasonably swift.

6 Air Transport World, 13 January 2012 http://atwonline.com/international-aviation- regulation/news/airasia-x-stops-europe-flights-over-taxes-eurozone-woes-0112 7 House of Commons All Party Parliamentary Group for Aviation, Inquiry into Aviation Policy and Air Passenger Duty, August 2012, pp.12-13 8 Financial Times, 15 July 2012 http://www.ft.com/cms/s/0/579aff2c-c78c-11e1-a850- 00144feab49a.html#axzz20mFHlkPg 9 House of Commons All Party Parliamentary Group for Aviation, Inquiry into Aviation Policy and Air Passenger Duty, August 2012, pp.12 and 15 10 House of Commons All Party Parliamentary Group for Aviation, Inquiry into Aviation Policy and Air Passenger Duty, August 2012, p.13

e. Where does aviation fit in the overall transport strategy?

2.14 Aviation is a vital part of the UK’s overall transport strategy. Given that the UK is an island nation, and given the UK’s dependence on international trade, air transport is particularly important to the success of the economy. A growing and sustainable aviation sector, and one which connects well with the rest of the transport network, are two key elements of an overall transport strategy.

2. How should we make the best use of existing aviation capacity? a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

2.15 It is difficult to see any measures that will transform existing usage patterns in London. The best that can be hoped for are incremental improvements, which is why a decision on new capacity needs to be made as soon as possible. Nevertheless, there are several measures that can be taken.

2.16 First, operational freedoms should be extended at Heathrow, although we are persuaded that mixed-mode should not be introduced. Operational freedoms are delivering positive results.

2.17 Second, competition is key. Gatwick airport has improved substantially since it was taken over by new owners, and Stansted now has similar potential. Competition is probably the most effective way of spreading demand around the London airports. Ensuring that Gatwick and Stansted, now that they are no longer part of a monopoly airports system, have a light-touch regulatory regime is crucial to giving them the freedom to innovate, grow traffic and introduce new routes.

2.18 Third, opening up Channel Tunnel passenger services to competition should be a priority, but progress in introducing Deutsche Bahn services has been frustratingly slow. The Eurostar monopoly has also meant that prices can sometimes be astronomical – far more than flying, even including travel to the airport. But even so, rail now accounts for high proportions of the London-Paris and London-Brussels market, which illustrates the potential for competition to drive further traffic to rail.

2.19 There is now an excellent high speed rail network to destinations in France, Belgium, the Netherlands and parts of Germany, and both the Channel Tunnel and HS1 have plenty of spare capacity. Running direct trains from London to Amsterdam and Frankfurt has the potential to replace a significant proportion of point-to-point journeys between these destinations and London, helping to relieve some of the pressure on Heathrow.

2.20 Fourth, investing in radically improved rail services to Stansted would help to increase the airport’s attractiveness, although this would entail significant expense. Further work would be needed on the possible options, which include extending Crossrail to the airport. b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

2.21 Airports outside of the South East generally have considerable spare capacity. The case for improving surface access to each one should be evaluated on its own merits. The capacity shortfall, however, is in the South East, so any regional airport strategy should

examine how to encourage South East travellers to fly from Birmingham, and how to encourage more people in the South West, for example, to fly from Bristol.

2.22 Government, however, cannot mandate where airlines choose to locate, or where passengers choose to fly from. The most that can be done is to encourage changing travel patterns. The IoD would suggest two measures.

2.23 First, a campaign to promote the benefits of airports outside the South East, not least in terms of lack of congestion, should be undertaken. British embassies and trade missions abroad should promote non-South East airports as possible point-to-point locations for new routes.

2.24 Second, Birmingham airport is the only non-South East airport that is easily accessible from London. With a runway extension set to open in 2014, the airport could start to operate long-haul routes. Code-sharing for rail services on the West Coast Main Line to Birmingham airport would increase the attractiveness of using the airport. It currently takes 1h 10m from Euston to Birmingham airport, with very cheap advance fares on offer at off-peak times. However, fares are extremely expensive at peak times, and if flight arrivals are delayed, then an advance ticket is no longer valid. Code-sharing between the new operator of the West Coast Main Line and key airlines at Birmingham would offer better prices than at peak times and the flexibility to take the first available train from the airport after landing. With rail services to London every 20 minutes during the day, and the possibility of reducing journey times to Euston from 1h 10m to about an hour on the existing line, such a proposition could make air passengers think beyond the London airports. c. How can surface access to airports be improved?

2.25 There are a number of infrastructure enhancements that can be made, including more capacity (in addition to the Thameslink upgrade) to the Victoria-Brighton line to assist Gatwick Airport, and a fast rail link to Stansted.

2.26 The most significant improvement, however, would be to transform Heathrow’s rail connectivity, and to think about the growth of the UK’s only hub airport and the construction of the UK’s most ambitious rail project since the Victorian era together, not separately.

2.27 Rail already provides a good substitute for flying between major cities in the UK. City- centre to city-centre, major rail routes are already quicker than flying, although they may be more expensive at peak hours. But Heathrow is incredibly badly connected to the national rail network, with rail passengers from the North and the West having to travel into London and then out to Heathrow. With the exception of driving for shorter journeys, flying to Heathrow and then changing planes is generally quicker and more convenient.

2.28 Currently, there are a number of disparate schemes to improve rail access to Heathrow, including a link from the airport to the Great Western rail line running west, and an eventual spur line from HS2 during the second phase. These are welcome, but a fully integrated plan would deliver more benefits at potentially lower cost.

2.29 The IoD believes that the Heathrow Hub is an excellent plan.11 Currently, Heathrow only has direct rail access from London. The Heathrow Hub would transform the airport’s rail

11 For more details, see http://www.heathrowhub.com/

connectivity to the rest of the UK. It should be implemented whether or not Heathrow expands, but if Heathrow is chosen as the location for the UK’s main hub airport, it would seem particularly odd not to run the high speed line directly via the airport:

2.30 If Heathrow does not expand, the Heathrow hub would allow passengers to travel direct to the airport in less than two hours from most key cities, and less when the second phase of HS2 is complete. This could free up much-needed capacity at Heathrow by replacing domestic flights on a number of key routes, while enabling the airport to continue to draw in hub traffic.

2.31 If Heathrow does expand, the Heathrow Hub could help to support further long-haul routes, by ensuring that a greater proportion of hub traffic from the Midlands and the North arrives and departs Heathrow by rail rather than air. It is worth emphasising the importance of running rail services direct to the airport. It would make travelling from, say, Manchester to a long haul destination far easier, and quicker, than flying from Manchester and transferring at Heathrow. Changing at Old Oak Common, by comparison, would be much less convenient.

2.32 Other airports, such as Amsterdam, Paris and Frankfurt, have high speed lines running directly through the airport, not on branch lines. A direct line allows a high frequency of service to and from the airport, and combines city centre with airport traffic. It is far superior to putting Heathrow at the end of a branch line, which would greatly reduce the frequency of service.

2.33 The Heathrow Hub terminal makes it easier to demolish Terminal 4 and provide a more coherent airport, with the Piccadilly Line running to Terminals 2 and 3 and Terminal 5, without the need for a Terminal 4 branch.

2.34 Compared to the current HS2 route and a western connection to Heathrow, the Heathrow Hub and the altered HS2 route could save £2.2-3.6 billion. It would also greatly enhance the connectivity benefits of HS2, while increasing journey times by just 3 minutes.

2.35 Should the Heathrow Hub plan not be implemented, the next best solution would be to build the spur line to Heathrow from HS2 during the first phase rather than the second, bringing it forward by six years, and press ahead with the Western rail link. Other important developments that should also be pursued are a connection to Heathrow from the South, probably via Staines, and an upgrade to the Piccadilly Line, which will reduce journey times to central London by a fifth.12 Extending Crossrail to Reading would also seem sensible.13

2.36 Taken together, these improvements are not only necessary to reduce the number of domestic flights to Heathrow while retaining the airport’s ability to draw in hub traffic, but are also essential to reducing the volume of road traffic to and from the airport. Further work would be needed to develop these options, but fundamentally, if Heathrow is to continue to be the UK’s main hub airport, then rail planning and airport capacity planning have to be conducted jointly, not separately.

12 See http://www.tfl.gov.uk/corporate/projectsandschemes/18098.aspx 13 Network Rail’s Route Utilisation Strategy for London and the South East, published in 2011, recommended a detailed examination of extending Crossrail to Reading. Direct Crossrail trains from Reading would then pass through Heathrow on their way to London. See Network Rail, London and South East Route Utilisation Strategy, July 2011, Table 8.1

2.37 Code-sharing would also be vital to encourage passengers who currently take domestic flights to Heathrow for the first leg of their journey to travel to the airport by train instead. High fares at peak times and a lack of flexible tickets could potentially put passengers off. Code-sharing on both HS2 and the Great Western Main Line would offer lower fares for passengers booking their rail and air journeys together, and would allow arriving passengers to take the first available train after landing, whether or not their flight is delayed or arrives early.

2.38 Making the journey to the airport as seamless as possible and ensuring that different transport modes connect well not only physically, but also on the ticketing side, will be key to encouraging passengers to take the train rather than the car or the connecting domestic flight.

3. What constraints are there on increasing UK aviation capacity?

2.39 The key constraint is the planning system, and the inability of national government to make a decision on where new capacity should be located. No local councils in the South East want new runways at present, so the national government has to decide. Only then will private investment follow. a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

2.40 Aircraft and car engines are becoming quieter and cleaner all the time, and noise contours have been steadily diminishing, even as traffic has increased. For people living under existing flight paths, the impact of noise and local air pollution should diminish steadily over time. But new runways will inevitably expose more people to noise. The IoD believes that any airport constructing new runways should be subject to the strictest environmental standards, reducing the negative impact on newly affected communities and improving the position of existing communities. The proposals below would affect airports building new runways only, and would apply immediately upon the opening of the new runway.

2.41 First, no planes above a certain noise threshold should be permitted, except in an emergency. The noise limits should be agreed as part of the planning process and therefore announced before the construction of any new runways, giving airlines a number of years to adjust. They should also fall further over time. It is outside the IoD’s competence to determine exactly what the noise levels should be, although we are persuaded by the conclusions of a recent Policy Exchange and Centre Forum report. The report stated that all planes arriving at their suggested four-runway Heathrow would have to be QC 0.5 or lower on arrival, while narrow bodied departures would be QC 1 or lower and wide bodied departures QC 2 or lower. This would allow a large range of existing long-haul and short-haul aircraft to operate, although would mean that a number of airlines, not least British Airways, would have to upgrade their fleets.14 Further work would be needed, but this may be a sensible noise limit for any airport building new runways.

2.42 Second, the angle of descent should be increased so that planes are higher above people’s homes when they land. This can also dramatically reduce noise levels. Planes currently descend to land at Heathrow at an angle of 3 degrees, compared to 5.5 degrees at London City. Although the steeper angle of descent is necessary at London

14 Tim Leunig, Bigger and quieter: The right answer for aviation, Policy Exchange and Centre Forum, October 2012, pp. 43-45

City because of the M25 bridge at Dartford, rather than as a noise mitigation measure, it illustrates that steeper landings for smaller planes are perfectly possible. Although it is unlikely that wide-bodied planes could land at 5.5 degrees, it may be possible to raise their angle of descent above 3 degrees by the time new runways open. Again, further work would be needed to determine the precise angles that would be safe.

2.43 Third, there should be severe restrictions on flights between 23:00 and 06:00. The best option may be to ban scheduled flights between those hours, but allow for a very limited number of flights per month to retain resilience. This regime would not be appropriate at all airports, especially the express freight gateways – in particular, East Midlands, Stansted and Edinburgh – which depend on night flights.

2.44 Fourth, best-practice ground procedures should be mandatory, including towing aircraft to and from the runways and using electric airport vehicles. This will reduce CO2 and air pollution from airport ground activities.

2.45 Fifth, any expanding airport, especially Heathrow, should be required to produce a strategy to reduce emissions of CO2 and air pollution from road access to the airport, with measurable goals. Such a strategy should both inform, and be informed by, improvements to public transport services to the airport. b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

2.46 Including emissions from international aviation in the EU ETS was a development that the IoD opposed. In the absence of a global agreement, it could easily lead to an aviation trade war. At the time of writing, indications are that the Chinese and American governments will refuse to allow their airlines to pay the charge.

2.47 Having said that, the EU ETS offers another way for the aviation industry to expand. The logic of the ETS is that carbon emissions are lowered in the most cost-effective way. Carbon emissions from aviation can be reduced, but if aviation isn’t the most cost- effective area to cut emissions, then the industry can pay for reduction elsewhere. Given that CO2 is subject to a shrinking cap overall, it doesn’t matter where the emissions originate. It’s the emissions cap that is important, not its composition.

2.48 Earlier this year, the Committee on Climate Change set out how aviation could grow sustainably. The report found that, with reasonable fuel efficiency improvements and a gradual uptake of sustainable biofuels, UK aviation demand can increase by 75%-125% 15 on its 2010 amount, without CO2 emissions increasing beyond their 2005 levels.

4. Do we need a step-change in UK aviation capacity? Why?

2.49 The UK has two capacity crunches. The first crunch is capacity around London. According to the Department for Transport’s forecasts of unconstrained demand, demand in the South East will outstrip the maximum capacity of the five London airports by 2030. Given the length of time before new runways can open, decisions on new capacity need to be made as quickly as possible, and planning approval granted swiftly, so that new runways can actually open before 2030.

15 Committee on Climate Change, The 2050 target – achieving an 80% reduction including emissions from international aviation and shipping, April 2012, p.21

2.50 By contrast, according to the same DfT forecasts, no airport outside of London will need a new runway before 2040.16 Even if a portion of South East demand can be shifted to airports outside of the South East, new runways will be needed unless demand is to be constrained.

2.51 The second crunch is hub capacity. Heathrow is by far the UK’s largest airport and its only hub airport:17 − In 2011 Heathrow handled 69 million passengers, 32% of all UK passenger traffic and more than twice as many passengers as the next largest airport, Gatwick; − Heathrow handled more passengers than the other four London airports combined; − Heathrow handled more passengers than the nine largest airports outside of London combined (Manchester, Edinburgh, Birmingham, Glasgow, Bristol, Liverpool, Newcastle, East Midlands, Belfast International); − In 2011, Heathrow handled 1.5 million tonnes of freight, 65% of the total for UK airports. No other UK airport handled more than 300,000 tonnes of freight; − In 2010, 36% of Heathrow’s passengers were transferring onto other flights. Of these, 88% were transferring onto international flights; − No other UK airport comes close to this proportion of transfer passengers. At Gatwick, the airport with the second highest proportion of transfer passengers, only 8% were connecting in 2010.

2.52 The UK’s largest airport, and only hub airport, is already virtually full. Heathrow’s terminals may be able to accommodate more passengers, but the airport has a regulated limit of 480,000 Air Traffic Movements (ATMs) a year, and in 2011, ATMs reached 476,000.18 Under existing arrangements, Heathrow has no more room. No forecasts are necessary – the numbers speak for themselves.

2.53 According to the Department for Transport’s central forecasts of unconstrained demand:19 − London and the South East, overall, will have a capacity shortfall of 16 million passengers per annum in 2030, rising to 57 million in 2040 and 106 million in 2050. − Hub capacity will be constrained more quickly, given that Heathrow is currently the UK’s only hub airport – Heathrow will have a capacity shortfall of 9 million passengers per annum in 2020, 29 million in 2030 and 54 million in 2040.

2.54 Hub capacity matters. The key reason for this is that a range of routes and a high frequency of services are only made viable by the transfer passengers connecting through a hub airport. And global businesses will want to locate in cities that are well connected, both in range of destinations and frequency of flights, even if they have to pay a premium in office rent and salaries to do so.

2.55 The important of transfer passengers to sustaining routes at Heathrow is illustrated by the fact that in 2010 there were 39 routes at Heathrow on which more than 50% of passengers were transferring, and a further 92 routes on which more than 25% of

16 Department for Transport, UK Aviation Forecasts, August 2011, unconstrained terminal passenger forecasts by airport (central forecast) 17 Civil Aviation Authority, UK Airport Statistics 2011, Tables 10.3 and 13.2 18 Civil Aviation Authority, UK Airport Statistics 2011, Table 06 19 Department for Transport, UK Aviation Forecasts, August 2011, unconstrained terminal passenger forecasts by airport (central scenario). It’s worth noting that larger planes on average will increase the number of passengers carried on the same number of ATMs, but the capacity shortfalls will still be large.

passengers were transferring.20 These routes are important not just for London’s connectivity, but for UK regions as well.

2.56 Heathrow’s lack of spare capacity constrains the development of new routes. Established markets are well served, but other European hubs serve the high growth markets such as China and Brazil far better. And these countries will be increasingly important over the coming years, as they continue to urbanise and develop.

2.57 Over the next 40 years, urban areas are set to grow by more than 2.5 billion people, a 75% increase. In China and India alone, cities are expected to grow by 800 million people by 2050.21 By 2050, Goldman Sachs estimates that the BRIC countries will account for nearly 40% of world GDP and emerging markets overall over 70%. a. What should this step-change be? Should there be a new hub airport? Where?

2.58 There are a number of solutions that have been proposed, some of which were proposed previously and rejected by the 2003 White Paper. There are several which would be less likely to work.

2.59 First, a new hub airport in the Thames estuary would be sufficient to meet capacity needs, even if Heathrow were to close, but it is not a viable option for several reasons. First, it would be the wrong side of London, especially for people living outside of the capital. For most people, journey times to the airport would be lengthened considerably relative to Heathrow. Second, the closure of Heathrow would be the only way to ensure that the airport was sufficiently used, and indeed the only way to finance it. Closing Heathrow would devastate the local economy, and hit the numerous businesses that are located nearby. Third, there are serious environmental objections.

2.60 Second, “Heathwick” should be dismissed. Such a long transfer between airports would make the hub experience appalling, and connecting one airport that is full to another that is likely to be full once the new rail link opened would not provide any new capacity.

2.61 Third, making full use of Birmingham airport’s capacity would not increase hub capacity at all. Greater use of Birmingham should be seen as an interim measure, before new runways open.

2.62 Fourth, Stansted could be developed, either with a new runway, or with three new runways. It would be possible to improve rail services to London substantially, perhaps by extending Crossrail, although this would come at a cost.22 But Stansted has no hinterland outside of London and is badly connected to other parts of the UK. It has not been a location of choice for full-service airlines, and is dominated by Ryanair. New owners will undoubtedly improve the airport’s attractiveness, and traffic is likely to grow. But the airport has around 50% spare capacity, and serious inroads into that would need to be made before new runways should be contemplated. Nevertheless, it would be the best location for a new hub airport, should it prove impossible to expand Heathrow.

20 Institute of Directors, Big Picture, Q3 2011, p.10 21 United Nations, Department of Economic and Social Affairs, World Urbanisation Prospects, the 2011 Revision 22 The proposal for a four-runway Stansted and an extension of Crossrail to the airport was made by the London Stansted Airport Delivery Company

2.63 There are several options that do, however, look promising. First, Gatwick airport has improved remarkably since it was acquired by new owners, and will continue to grow its traffic. It is likely to need a second runway by 2030, which would allow for the continued growth of existing routes and the development of new routes. Combined with improved rail access to London, a larger Gatwick would be an attractive proposition. With the exception of capacity improvements on the rail link, public investment would not need to be forthcoming, and so there would be little risk to the taxpayer if the new runway was not to prove successful. It may be possible for Gatwick to compete with Heathrow as a hub (as is the case with JFK and Newark in New York), but this is far from certain. A second runway would, however, give the airport the chance to try. Expanding Gatwick further would not be advisable, not least due to the nature of the terrain.

2.64 Second, Heathrow airport remains the location of choice for passengers and airlines, particularly given that so many still travel to the airport by car or taxi. Attempts to force traffic away from Heathrow have failed every time. The airport is well located for surface access, and with a re-routing of HS2 and construction of a Heathrow Hub, its rail connectivity could be transformed, providing for many cities a genuine alternative to flying on the first/last stage of indirect journeys from/to the UK. The fact that existing infrastructure is in place does not mean that expanding Heathrow is a “make do and mend” solution – the opposite, in fact, is true.

2.65 A third runway at Heathrow would improve the airport’s connectivity, but a fourth runway would be needed for the longer term in order to meet the forecast hub capacity shortfalls. It may be possible for Gatwick to compete as a hub airport with Heathrow, but it would be more sensible to see additional capacity at Gatwick as complementing, rather than competing with, Heathrow.

2.66 It is outside the IoD’s competence to determine which solutions would be best at Heathrow. We note four possibilities, in isolation or in possible combination: − A short third runway to the North, at Sipson; − A close-parallel runway to the South of the existing Southern runway, which could be contained almost entirely within the existing airport boundary, together with the demolition of Terminal 4 and it’s relocation to the central area;23 − Reconfiguration of the runway at RAF Northolt to serve as a third (or a fourth) runway, with a fast rail link between the terminals;24 − The construction of two pairs of close parallel runways immediately to the West of the existing site, with Terminals 2, 3 and 5 retained and a new Heathrow West terminal.25

2.67 The biggest drawbacks to Heathrow’s development are noise and air pollution. To address these issues, we would emphasise the measures outlined in paragraphs 2.40- 2.45. These will be difficult issues to resolve, but not insurmountable.

2.68 The final point to make is that the best should not be the enemy of the good. Expanding Heathrow and Gatwick seem to be the most sensible solutions, but if expansion of Heathrow proved to be impossible, then other options should be considered seriously, in particular the development of Stansted.

29 October 2012

23 This proposal was made by Aras Global Ltd 24 This proposal was made by Rothwell Aviation Ltd 25 This proposal was made by Tim Leunig, Bigger and quieter: The right answer for aviation, Policy Exchange and Centre Forum, October 2012

Written evidence from the Aberdeen Airport Consultative Committee (AS 108)

Preamble

Aberdeen Airport Consultative Committee is established under UK civil aviation legislation. It is independent of the airport’s ownership and management, although the Managing Director attends and advises meetings as appropriate. The Committee has 20 members, drawn from the local authorities most closely affected by its operations, local community councils, professional and trade organisations, such as the local Chamber of Commerce and ABTA, organisations connected with aviation, including NATS and the local Airport Operators’ Committee and passenger representation. The airport is predominantly a business airport, with a throughput of more than 3 million passengers a year. In addition to scheduled services to London and most of the UK’s provincial airports, and international scheduled services to Europe’s main hubs, Aberdeen is also the world’s busiest civilian helicopter airport, servicing the off-shore energy sector.

We are pleased to offer the following observations in respect of your Committee’s invitation to interested parties to submit evidence. All that we say has been said in one way or another to the DfT, your own Committee, to the All Party Group on Aviation and to other consultations over the past few years, but we feel that the points must continually be reiterated, in the hope that government pays attention to them. We shall attempt to keep our responses brief. However, we are also willing to forward to your Committee a copy of the response we have today sent to the Secretary of State in relation to the current consultation on Aviation Framework, if you so wish.

Objectives of Government policy on aviation International aviation connectivity is critical to the whole of UK plc, as we seek to regain some of our former competitive edge in relation to international commerce and trade. At the moment, it seems to us, our near European competitors (France and The Netherlands in respect of the Sky Team alliance and Lufthansa in relation to the Star Alliance) have stolen a march on the UK in terms of the number of destinations served, but not necessarily in terms of frequency of services to some key international destinations served by the One World alliance, led by BA.

From our own perspective, as one of the more peripheral regions of the UK, aviation connectivity is vital, not just in relation to international services, but also in relation to domestic connectivity. Aberdeen is at least 7 hours by rail from London and other major UK provincial cities, and longer by road in many cases. Business and leisure travellers therefore rely substantially on good frequent point to point air links across the UK, whether to do a day’s business away from their office, or to connect to longer haul flights that are only available from major hubs. For us, aviation will always fit into the overall transport strategy: even when HS2 reaches the of Scotland, we shall not be ‘near enough’ to London to encourage a general modal switch for journeys which, by road or rail, take longer than 3.5 to 4 hours.

We therefore reiterate our long-held view that Government must find some way within general competition policy and EU regulation to ensure that sufficient slots are retained at both Heathrow and Gatwick for services from the further UK regions, now and for as far as one can see into the future. This might also require the CAA to change its current opinion, to ensure that landing fees for the aircraft that operate such routes are not priced off the airfield.

We base our case not least on the very substantial contributions that the energy, distilling and other sectors based in the north east of Scotland make to the UK exchequer, and the fear that, without connectivity, energy majors may be tempted to relocate, not elsewhere in the UK, but beyond our borders.

As far as APD is concerned, we would be more amenable to the tax if it were seen as a source of income for environmental improvement, rather than as straight income to the general exchequer. One of our concerns is that every domestic passenger making a return journey within the UK pays APD in each direction, whereas a passenger flying directly from the UK to an international destination only pays for the outbound journey. In the Chancellor’s consultation on APD last year, we suggested that a return flight within the UK should only attract one APD levy, or that APD should not be charged at all for domestic flights where there is no alternative surface transport with a journey of 4 hours or less. Neither suggestion was accepted.

Existing capacity There is a potential conflict between ‘best use’, whereby airlines focus their efforts on the most profitable long haul routes using wide bodied jets, depending primarily on a catchment area close to their hub, and ‘best use’ that serves the interests of the whole of UK plc. All the time BA and Virgin, the UK’s two remaining long haul airlines, focus almost all their services on London’s two main airports, they will be sucking in demand from all round the UK (as well as from beyond). We believe a balance needs to be struck, as we have already indicated, between long haul point to point services and the needs of UK businesses and citizens from the further regions, who also require access to such services.

One option might be to build on existing capacity at Birmingham and Manchester airports to offer an alternative hub network. But unless BA and Virgin are prepared to develop a network of services from these airports, the attraction for interlining passengers will still be Heathrow and, to a lesser extent, Gatwick. For effective interlining, members of a single alliance or code share arrangement need to offer feeder services from other UK airports, with through ticketing. At the moment such services are not available. Is it, then, little wonder that more and more UK passengers are turning their business to such airlines as Air France/KLM and Lufthansa, through European hubs, and Emirates, through Dubai?

The future We do not feel competent to express a view on whether there should be a new hub airport for the UK, or where it should be. We do understand the impact of aviation on residents of parts of London (although Heathrow and Gatwick airports have been operational for many more decades than many residents have lived near to them). As we hope we have emphasised, whatever the future, we urge Government to ensure the aviation needs of all the UK are taken into account, and not simply the interests of the south east of England.

29 October 2012

Written evidence from Greenpeace (AS 109)

What should be the objectives of Government policy on aviation?

1. Greenpeace believes that if the Government is serious about tackling climate change, aviation policy must be shaped within the parameters set out by the legally binding climate targets established in the Climate Change Act.

2. To be clear, the government has a legally binding commitment to reduce greenhouse gas emissions (GHG) by 80% using 1990 as a base line. During the passage of the Climate Change Bill in 2008, the then Climate and Energy Secretary, Ed Miliband, made clear that he accepted all of the Committee on Climate Change’s (CCC) recommendations, including the inclusion of shipping and aviation emissions by the end of 2012, when a suitable methodology for accounting for these emissions had been agreed.

3. In addition to this, the former Government set a target that aviation emissions should be no higher in 2050 than they were in 2005. It should be noted that even reducing aviation emissions to 2005 levels affords the aviation sector special treatment compared to every other sector of the UK economy which is required to reduce emissions by at least 80% on 1990 levels. Allowing aviation to remain at 2005 levels means that these sectors have to do even more – cuts of at least 85% - and pick up the costs of doing so.

4. The current government has said that they will make their position clear on both the inclusion of aviation and shipping and the 2005 levels target by the end of this year.

5. The CCC has said in no uncertain terms that the government should plan on the assumption that aviation emissions will be no higher in 2050 than they were in 2005, and in fact aviation and shipping emissions have already been accounted for in the first four carbon budgets. Allowing aviation to grow beyond the tight constraints set out by the CCC means watering down the UK’s climate targets and reducing our chances of limiting global temperature rises to 2 degrees Celsius.

6. In light of this clear commitment in the Climate Change Act, which secured a cross- party consensus, aviation policy must operate within the carbon limits set out.

How important is international aviation connectivity to the UK aviation industry?

7. The aviation industry and indeed wider business community will undoubtedly argue that international connectivity is vital to the UK aviation industry, which in turn is necessary to secure economic growth in the medium to long term.

8. Greenpeace believe that the key point that is missing in this debate is that the UK and London are already exceptionally well-connected to the rest of the world, much more so than any other city in Europe. The default position of the aviation industry is that the UK is losing this status, and therefore expansion is necessary. This is simply not true.

9. As the former aviation minister, Theresa Villiers noted in a Commons debate earlier this year:

“It is very clear that London is one of the best-connected cities in the world, with its five busy and successful airports—six, if newly expanded Southend is included. Together, those five airports provide direct links to around 360 international destinations, including virtually all the world’s great commercial centres. That compares with just 309 such links from Paris, and 250 from Frankfurt. Heathrow provides more flights to New York than Paris and Frankfurt put together, and has more flights to the crucial BRIC— Brazil, Russia, India and China—economies than other European hubs, including more services to China………….it is simply not true to claim that London’s connectivity is falling off a cliff-edge.” i

10. Specifically with regard to Heathrow, the airport has long been Europe’s biggest hub airport and remains so today. In 2011 it carried 69 million passengers.ii This compares to a 2011 total for Paris Charles de Gualle of 61 millioniii, Frankfurt’s 56 millioniv and Schipol’s 49 millionv. Heathrow and Gatwick combined carried more than 103 million passengers in 2011vi, 15 million more than the nearest metropolitan combination of Paris CDG and Orly.vii

11. Heathrow delivers over 9,000 flights every year to New York and 2,500 to Singapore and New Delhi, more than any other airport in Europe. BAA and the Confederation of British Industry claim that the UK is “lagging behind” other airports because it only has 30 direct flights to China.viii However, this ignores the 3,000 flights every year to Hong Kong (an important hub airport); taking these into account, there are in fact 81 direct flights a week to China from Heathrow airport.ix

12. According to an analysis by Prime, a policy research think tank on macroeconomics, Frankfurt, London Heathrow and Paris CDG all have a broadly similar level of links to the BRIC countries - Brazil, Russia, India, China - (with the exception of Frankfurt, where Germany’s historically close relationship with Russia explain the high number of flights to Russia.) The table below taken from their report sets out those links in 2011.x

13. As the report notes – “Schipol in recent years is the only hub to have built up a broader range of BRIC destination and London remains far ahead in terms of connectivity to North America.”xi

14. Looking beyond Heathrow, there is not anything to stop individual airlines from offering direct flights to emerging markets from the other major London airports. Gatwick Airport has the capacity to handle up to 40 million passengers a year, but in 2010 just 31.3 million people travelled through it.xii Stansted has permission for 25 million passengers; in 2010 it serviced just 18.6 million.xiii If there was sufficient demand for flights to China, India or other emerging markets, then there is already enough capacity at London’s airports for airlines to offer them. It is also worth noting that 75% of London’s aviation demand is for leisure travel and only 25% for business.xiv

15. It is clear then that the UK and its capital city, London, is exceptionally well-connected, and that despite bluster from the aviation industry, the country’s connectivity isn’t lagging behind that of its European counterparts.

What are the benefits of aviation to the UK economy?

16. Greenpeace believes that an assessment of the benefits of the aviation must be looked at alongside the economic, environmental and social costs of the sector.

Tax breaks:

17. The significant tax benefits that the industry enjoys must be balanced against the contribution the industry makes to the economy. The industry is exempt from paying fuel duty and VAT amounting to around a £9 billion a year subsidy. Whilst the fuel duty arrangement would need to be addressed internationally, the UK government should make moves to push for this.

18. Environmental costs must be included in any balanced and objective assessment. Aviation is without question responsible for a growing portion of UK emissions, which are driving climate change and this should be recognised in any calculation of costs and benefits. The Stern Report estimated that if we carry on with business as usual, climate change will cost between 5 and 20% of global GDPxv.

Jobs:

19. As the aviation industry has grown, airlines and airports have become more efficient, with fewer members of staff per thousand passengers. Three reports, each sponsored by the aviation industry, show that the number of direct jobs in aviation fell from 180,000 in 1998 to 141,000 in 2007.xvi Over the same period, the number of passengers grew from 159 million to 218 million, meaning that the industry went from employing 1,132 people per million passengers to 646 people per million in nine years.

20. This increase in productivity is dramatic and is driven by the growth of the low-cost operators. Individual airlines have been employing fewer people in real terms: British Airways, for example, shed 42% of its workforce between 1998/99 and 2009/10.xvii The difference between low-cost and premium airlines is stark: British Airways had 1,157 employees for every million passengers in the year ended 31 March 2010 whilst Ryanair had just 106 employees per million passengers.xviii

Tourism deficit: 21. Greenpeace believes that there is evidence that the rapid growth in the aviation sector over the last decade or so has caused a loss of income in domestic tourism.

22. As the Department for Culture, Media and Sport noted in its Government Tourism Strategy, people in the UK are far more likely to holiday abroad than at home. Less than 40% of our total holiday spending goes on domestic tourism; just 20% of us holiday at home, compared to a European average of 28%.xix Almost a third of people in the UK (29%) holiday abroad each year, compared to just 16% in the rest of Europe. This has a direct effect on UK tourism: budget hotel operator Travelodge says that budget airlines "are the single biggest cause of decline in traditional tourism resorts”.xx

23. Although the UK continues to attract international tourists, our predilection for foreign holidays has had a dramatic effect on our balance of trade. The UK’s balance of trade correlates closely with the number of passengers using the UK’s airports. In 2007, when our airports where the busiest they had ever been, our tourism deficit was also running at a record level. Research by Stop Stansted Expansion, using data produced by the Office of National Statistics, shows that when overseas leisure trips by UK residents fell from 60 million to 49 million between 2008 and 2011, the UK's tourism trade deficit also fell, from £20 billion to £13 billion.xxi

24. The level of inbound-outbound tourist deficit varies around the country. London and the South East are almost at parity, with a ratio of 1.3, where British tourists from that region spend £1.30 for every pound spent here by foreign tourists.xxii The largest tourist deficits are in the least affluent regions of the UK. The North of England has a ratio of 4.7: i.e. people from that region spend £4.70 for every pound spent in their region by foreign tourists. As a result, these are the areas whose local economies and jobs’ markets would have most to gain if a better balance could be achieved between outward, inward and domestic tourism.

How should we make the best use of existing aviation capacity?

25. Greenpeace believes that the capacity in the UK and Europe already exists to ensure that this country and our European partners are well connected with the rest of the world, including the emerging economies. The question must be whether this existing capacity is being used in the best way possible rather than automatically assuming that extra capacity is needed.

25. As Zac Goldsmith, MP for Richmond, noted in a debate on aviation earlier this year – “Does the hon. Gentleman agree that some of the problems that he has just described result not from lack of capacity but from poor prioritisation? Hundreds of flights every day to and from Heathrow involve places that do not in any way contribute to Heathrow’s hub status. We have short-haul flights, flights to Malaga and 15 flights a day to Cyprus. Such point-to-point flights could happen at any other airport. We have masses of spare capacity, but it is not all at Heathrow. If that is the problem, surely the priority is to make better use of existing capacity and to get rid of some of those pointless flights that could easily happen elsewhere.”xxiii

26. The point about prioritising existing capacity, for example in London, is an important one - both in terms of transferring short-haul flights onto rail, and by better using capacity currently within the system. For example both Gatwick and Stansted have spare capacity which could be used to improve connectivity to emerging economies, rather than building new runways. The former Transport Secretary, Philip Hammond, recently raised the question as to whether you could solve the issue with closer cooperation between Gatwick and Heathrow.xxiv

27. The same point applies to Europe. It is nonsense to argue that European hub airports can continue to grow indefinitely given that we are increasingly living in a carbon constrained world and that the aviation industry has to make real reductions in its carbon emissions.

28. The vast majority of flights in Europe are intra-European. Before rushing to expand European hubs we need to look at whether existing capacity is being used effectively. Short haul flights should be transferred to rail and European hubs must work how to complement one another rather than compete.

What constraints are there on increasing UK aviation capacity? Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

29. Above, Greenpeace has set out its belief that the main constraint on UK aviation capacity must be the government’s legal obligation to meet its climate targets as set out by the Climate Change Act.

30. An assessment must be made of aviation’s share of the UK’s total carbon budget between now and 2050, and aviation policy must be made on that basis.

31. A decision on the inclusion of aviation and shipping in the carbon budgets is due to be taken and announced by the end of the year. The government must agree to its inclusion and then from this calculate the proportion of the overall carbon budget that aviation is allowed to absorb. Aviation must work within these constraints.

What is the relationship between the Government’s strategy and EU aviation policies?

32. Much has been made of the inclusion of aviation in the EU ETS, leading some politicians to claim that its inclusion gives the aviation industry a free pass in terms of expansion.xxv

33. This is far from the truth. The Emissions Trading Scheme is a good start, but it won’t be enough on its own. It is dependent on the price of carbon and the number of credits. When the ETS first launched, the number of credits issued was greater than the amount of CO2 emitted, so the price of carbon crashed. Companies were given millions of free permits, which they traded with each other for less than the cost of actually reducing emissions. The ETS will cap emissions at 97% of their 2005 levels, falling to 95% of 2005 levels from 2013.

34. Although the EU subsequently reduced the amount of permits, the price of carbon remains extremely low. In 2011, the DECC valued one tonne of carbon at £13.50 (€15.70), but permits for one tonne were trading at just £5.40 (€6.45). As the aviation industry is allowed to buy credits from other sectors (which are polluting less because of the recession) there is no incentive for companies to clean up their act.

35. In addition, airlines will be given millions of credits for free. Just 15% of emissions have to be purchased on the open market. A study by US academics, funded by the American aviation industry, concluded that this was going to lead to a major windfall of around €2 billion a year, because the industry would pass on the cost of carbon to its passengers.xxvi

36. The government knows that the ETS alone won’t be enough to keep emissions under control. That’s why it asked the CCC for the UK’s carbon budgets, include sectors which were covered by the ETS, and it is why the government must include aviation and shipping emissions in future carbon budgets.

37. The CCC argued that the key was to stop emissions before they started through a suite of measures relating to investment and planning decisions. In other words, we shouldn’t get locked into high carbon infrastructure like runways.

Efficiency:

38. Whilst planes have made efficiency gains of around 1.5% each year any positive impact on emissions has been wiped out by the massive explosion in flights.

39. The industry claims that new technology will come on stream that will outstrip the rise in demand. But the fact is that many of the new technologies they refer to like blended wing aircraft, will require significant changes to airports.

40. In the first CCC report, the then Chair, Lord Turner issued a cautionary note on efficiency gains and the role that it could play: “whilst estimates and targets suggest significant potential to drive efficiency improvement, it is likely that many of these improvements are already factored into projections of aviation emissions. More radical changes….. to aviation technologies e.g. blended wing bodied aircraft, are likely to be more expensive, require changes to infrastructure and may not lead to significant additional emissions reductions.” He concluded that – “the limits to feasible fuel efficiency improvement… make it likely that aviation emissions will continue to grow significantly unless demand is constrained.” xxvii

The role of biofuels:

41. The Committee on Climate Change notes that - “concerns about land availability and sustainability mean that it is not prudent to assume that biofuels in 2050 could account for more than 10% of global aviation fuel.” [i]

42. Several airlines have run high-profile biofuels trials, including flights powered by biofuels obtained from algae. But these flights are about generating some positive headlines for a beleaguered industry. In practice, there are serious problems with powering planes with biofuels.

43. Concerns about biofuels have been raised by a wide variety of stakeholders including the Royal Society, the United Nations Food and Agriculture Organisation and the Environmental Audit Committee.

44. The greenhouse emissions generated by growing some crops for first generation biofuels are significant –particularly ethanol derived from maize grown in North America as well as those derived from palm oil in Indonesia . For example, biofuels continue to put huge pressure on land. Rainforests and other ‘carbon stores’, such as grasslands and peatland, are being cleared to make way for biofuel crops.xxviii Even when biofuels crops are being grown on land that is already cultivated, they often displace food crops, which forces farmers onto new land, again driving deforestation.xxix In Indonesia, for example, forests and peatlands are being drained, cleared and burnt to grow palm oil driven by biofuel demand, releasing colossal quantities of greenhouse gases in the process.

45. Although second generation biofuels, such as algae, are being developed, there is no evidence that they can be produced on a large enough scale to replace kerosene. For instance, British Airways is talking of a new plant in East London, which would convert domestic, agricultural, forestry and industrial waste into a biogas that will then be converted into synthetic kerosene. BA says that by 2014 the facility could be converting 500,000 tonnes of waste a year into 16 million gallons of biofuel. But this is less than 2% of the airline’s annual fuel needs.xxx We would need more than 50 refineries of this scale before BA would be kerosene free – and that’s just to cover the needs of one airline.

46. Given the rapacious demand of the aviation industry for fuel, it’s unlikely that there is a sustainable biofuel which can meaningfully contribute to emissions reductions. Whichever biofuel the industry were to decide upon, it would have a huge environmental impact if used at scale. Biofuels are not a silver bullet – and we can’t afford to let aviation expand on the off chance that one day someone might invent a sustainable fuel.

Do we need a step-change in UK aviation capacity? Why?

47. As set out above, we believe that there is no need to build extra capacity but there is a need to better prioritise existing capacity. London and the UK are exceptionally well connected. By transferring short-haul flights to rail and better coordinating the use of existing capacity we can ensure that it remains so.

48. The question then must be whether this existing capacity is being used in the best way possible rather than automatically assuming that extra capacity is needed.

Accurately projecting passenger demand:

49. Many of the assumptions underpinning calls for additional capacity are questionable, specifically the DfT’s passenger projections. Greenpeace believes that the DfT has a track record of producing misleading and incomplete assumptions about passenger demand, and that the latest projections published in 2011 are inadequate.

50. DfT suggests that by 2050, demand for aviation would, if not constrained by airport capacity or environmental limits, grow from 211 million passengers per annum (mppa) to between 400 and 700 mppa.xxxi

51. However, the DfT has a history of massively over-stating the demand for aviation growth. In 2000, it predicted that by 2020 unconstrained demand would be 400 million passengers per annum (mppa). By 2009 it had dropped its 2020 forecast to 365 mppa but was confident that in 2030 demand would be 465 mppa.xxxii Just two years later it had concluded that by 2020 demand would be just 245 mppa and revised its 2030 figure downwards to 345 mppa.xxxiii

52. In 2000 DfT thought that in 2010 276 million passengers would use airports in the UK. In 2009, it predicted that it would be 260 million people.xxxiv In reality, it was just 211 million. In just over a decade DfT had revised its 2020 forecasts downward by almost a third; in just two years, from 2009 to 2011 it had downgraded its calculations for 2015 by one quarter.

2000 forecast 2009 forecast 2011 forecast 2010 276 million 260 million 211 million 2015 333 million 315 million 240 million 2020 400 million 365 million 275 million 2030 465 million 345 million

Unconstrained passenger demand for aviation forecasts, 2000 - 2011, based on Department for Transport figures

53. As DfT notes: “even when outturn data for all the key drivers of demand are input into the model” i.e. even when we know what GDP, exchange rates, oil prices, carbon prices and all the other things which affect the number of flights taken, “the forecasts of UK air passenger numbers for 2009 and 2010 exceed observed passenger numbers.”xxxv In other words, the model overestimates passenger numbers but DfT then seeks to make policy on the basis of its own flawed model.

54. One reason that the government’s assumptions are so inaccurate is that they are based on questionable assumptions. For example, the latest forecasts assume that the price of oil in 2030 will be $90 (2008 prices). However, the latest forecast by the Department for Energy and Climate Change suggests that a barrel of oil would actually cost $120.xxxvi

55. DfT has not provided unconstrained data on future demand for aviation in the South East in its 2011 forecasts. However, it says that in 2010, 125 million passengers used airports in the South East. As the table below shows, passenger numbers eventually peak in 2040, at 185 million passengers, due to capacity constraints.

56. In other words, there is hardly an impending capacity crunch. Even in the supposedly congested South East there is enough capacity in the system for the next 28 years – and that is assuming that DfT is able to accurately model future aviation demand.

Conclusion: 57. Greenpeace believes that: demand constraint must be a central plank of the government’s new aviation policy. It is untenable that the UK can meet its legally binding climate change targets whilst allowing aviation to absorb an even bigger share of a steadily shrinking carbon budget.

58. If we are serious about moving to a low carbon economy and improving the quality of life for local communities around the UK, then we must cap airport capacity, support low-carbon transport and improve connectivity through technological means.

59. In the immediate term this means: ‐ The inclusion of aviation and shipping emissions in the UK’s carbon reduction targets ‐ An objective assessment of what proportion of this overall carbon budget can be allocated to aviation which then frames aviation policy. ‐ Ruling out any aviation expansion until this assessment is made. 29 October 2012

ihttp://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120704/halltext/120704h0001.htm#12070471000096, WH272

ii http://www.heathrowairport.com/about‐us/facts‐and‐figures iii http://www.aeroport.fr/les‐aeroports‐de‐l‐uaf/stats‐paris‐charles‐de‐gaulle.php iv http://www.frankfurt‐airport.com/content/frankfurt_airport/en/business_location/facts_figures.html vhttp://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F%2Fwww.schiphol.nl%2Fw eb%2Ffile%3Fuuid%3Dbb1c88b4‐0885‐4b7f‐a1ae‐0ac4f97c1e31%26owner%3D7ccedf61‐a8f4‐4180‐b5b0‐ 849e8def7d3e&ei=H02BUNH8HsOp0QWPqYCIBA&usg=AFQjCNEePFojHlzfzueBvrmEsWA69Q0q7w vi http://www.gatwickairport.com/business/about/facts‐figures/ vii http://www.aeroport.fr/les‐aeroports‐de‐l‐uaf/stats‐paris‐orly.php viii Speech to the Transport Times Aviation Conference, 18 April 2012. http://www.cbi.org.uk/media‐centre/press‐releases/2012/04/uk‐ will‐be‐a‐branch‐line‐destination‐without‐a‐clear‐aviation‐strategy‐cbi/ ix Data compiled from Heathrow Airport’s online timetable. http://www.heathrowairport.com/flight‐information/flight‐timetable x http://www.primeeconomics.org/wp‐content/uploads/2012/09/Heathrow‐3rd‐runway‐03092012.pdf xi http://www.primeeconomics.org/wp‐content/uploads/2012/09/Heathrow‐3rd‐runway‐03092012.pdf, P5 xii Gatwick Airport Master Plan. http://www.gatwickairport.com/masterplan/ Data on passengers from Transport Statistics Great Britain, Department for Transport. http://www.dft.gov.uk/statistics/tables/avi0102/ xiii Stansted Airport Interim Master Plan, BAA, 2006. http://www.stanstedairport.com/static/Stansted/Downloads/PDF/STN_interim_masterplan.pdf xiv http://www.primeeconomics.org/wp‐content/uploads/2012/09/Heathrow‐3rd‐runway‐03092012.pdf, P2 xv http://www.hm‐treasury.gov.uk/media/4/3/Executive_Summary.pdf xvi The Contribution of the Aviation Industry to the UK Economy. Oxford Economic Forecasting, 1999. The Economic Contribution of the Aviation Industry in the UK, OEF, 2006. What is the contribution of aviation to the UK economy?, Oxford Economic Research Associates, 2009. xvii British Airways Annual Report. xviii British Airways Annual Report and Ryanair Annual Report xix Government Tourism Strategy, Department for Culture, Media and Sport, 2011. http://www.culture.gov.uk/images/publications/Government2_Tourism_Policy_2011.pdf xx ‘End unfair subsidy of cheap air travel to regenerate British seaside resorts, Travelodge tells inquiry’, Travelodge, 29 January 2008. http://www.travelodge.co.uk/press_releases/press_release.php?id=288 xxi ‘Slowdown in cheap flights gives boost to British economy’, Stop Stansted Expansion, 30 April 2012. http://www.stopstanstedexpansion.com/press439.html xxii Aviation, jobs and the UK economy, Stop Stansted Expansion, August 2011. Ratios derived from passenger surveys by the Office of National Statistics. xxiii http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120704/halltext/120704h0001.htm#12070471000096, 260 WH

xxiv http://www.telegraph.co.uk/news/politics/9623148/Philip‐Hammond‐flies‐into‐airports‐row‐with‐Heathwick‐plan.html

xxv http://www.guardian.co.uk/environment/2012/aug/28/david‐cameron‐taunted‐tory‐mp‐heathrow

xxvi http://www.guardian.co.uk/environment/2012/jan/11/airlines‐windfall‐eu‐carbon‐trading xxvii Building a low carbon economy – Climate Change Committee, 1st Dec 2008, P316‐318 [i] P9, http://downloads.theccc.org.uk/Aviation%20Report%2009/21667B%20CCC%20Aviation%20AW%20COMP%20v8.pdf xxviii http://news.nationalgeographic.com/news/2008/02/080207‐biofuels‐carbon_2.html xxix http://www.guardian.co.uk/environment/2011/may/31/biofuel‐plantations‐africa‐british‐firms xxx http://www.guardian.co.uk/environment/damian‐carrington‐blog/2012/mar/16/aviation‐biofuel‐british‐ airways‐carbon xxxi UK Aviation Forecasts, Department for Transport, 2011. http://assets.dft.gov.uk/publications/uk‐aviation‐forecasts‐2011/uk‐aviation‐ forecasts.pdf xxxii http://webarchive.nationalarchives.gov.uk/+/http://www.dft.gov.uk/pgr/aviation/atf/co2forecasts09/co2forecasts09.pdf, p5

xxxiii http://assets.dft.gov.uk/publications/uk‐aviation‐forecasts‐2011/uk‐aviation‐forecasts.pdf, p44

xxxiv http://webarchive.nationalarchives.gov.uk/+/http://www.dft.gov.uk/pgr/aviation/atf/co2forecasts09/co2forecasts09.pdf, p42

xxxv http://www.transportxtra.com/magazines/local_transport_today/news/?ID=27945

xxxvi DECC oil price projections, Department of Energy and Climate Change, October 2011. http://www.decc.gov.uk/assets/decc/11/about‐ us/economics‐social‐research/2934‐decc‐oil‐price‐projections.pdf Figures given in 2010 prices and have been converted to 2008 prices for comparison.

Written evidence from British Airways (AS 110)

Introduction

British Airways is one of the world’s largest international airlines and the UK’s largest international scheduled airline, carrying approximately 35 million passengers worldwide annually on around 800 daily flights. The airline employs around 40,000 people, the vast majority of these at its sites throughout the UK. British Airways flies to more than 170 destinations in over 80 countries. In addition to passengers, the airline also transports cargo – more than 750,000 tonnes of cargo are carried each year.

In 2010, the airline completed its merger with Iberia of Spain to create the International Airlines Group (IAG). Following the acquisition of BMI earlier this year, our combined business offers flights to 205 destinations throughout the world on a fleet of 415 aircraft. It also commenced a joint business agreement with American Airlines, which further extends benefits for its customers.

The Select Committee’s inquiry is timely and important. British Airways, along with the rest of the aviation industry and much of the UK and international business community, has long argued that the existing policy vacuum surrounding the Government’s approach to aviation is unsustainable and damaging to the UK economy, and to its future ability to compete with key established and emerging economies. Following the publication of the Government’s Draft Aviation Policy Framework and the announcement of the appointment of Sir Howard Davies to chair an independent commission to consider the future direction of UK airports policy, it is imperative that Parliament scrutinises the Government’s progress and proposals.

1 What should be the objectives of Government policy on aviation?

1.1 The UK aviation sector operates in an intensely competitive global market. The overarching principle which should inform Government’s approach to developing such a policy should be to encourage the effective operation of free markets in aviation to meet passenger demand and customer needs in the UK, Europe, and beyond, and to intervene in that market only where merited by clear evidence of a market failure or overwhelming safety and security concerns. Government policy should also reflect the importance of aviation as a driver of the UK economy.

a. How important is international aviation connectivity to the UK aviation industry?

1.2 For all parts of the aviation industry, international connectivity is vital to making UK aviation-related businesses globally competitive and ensuring that the sector is able to meet UK passenger and freight demand growth. The nature of the aviation industry means that, even for those businesses which operate principally within the UK or the EU, good international connectivity to key established and emerging markets, as well as domestic, regional, and European links are essential in attracting passengers, investment, and continued growth.

b. What are the benefits of aviation to the UK economy?

1.3 UK aviation supports approximately 920,000 jobs directly or indirectly through aviation companies and their supply chains, or through the spending by these direct or indirect employees through the economy. These are high-productivity jobs: the average air transport services employee generates £66,178 in Gross Value Added (GVA), more than twice the productivity of the average UK job.1 The aerospace manufacturing sector in the UK, of which UK airlines such as British Airways are a key customer, support approximately 264,000 jobs in the UK. The UK aviation sector contributes approximately 3.6 per cent of

1 Oxford Economics, May 2011: Economic Benefits from Air Transport in the UK UK GDP, with further, substantial benefits derived from aviation’s role in facilitating and supporting the vital inbound tourism sector. 2

1.4 The wider economic benefits which the aviation industry confers on the UK economy are both more substantial and more difficult to isolate, as they permeate the economy. Air transport services allow UK businesses to access established and emerging markets, maintaining UK competitiveness and increasing international trade in goods and services. One in five UK businesses believes the quality of international connections, such as availability of or absence of direct flights, is a barrier to exporting.3 Air freight, much of which is carried as belly-hold cargo by passenger aircraft, transports 37 per cent of goods exports by value.4

c. What is the impact of Air Passenger Duty on the aviation industry?

1.5 British Airways believes Air Passenger Duty (APD) is putting UK aviation at a unique and increasing disadvantage among European competitors. APD distorts international markets and undermines the UK’s attractiveness as a destination for business and tourism. APD is the highest aviation tax of its type in the world, while several European countries – Belgium, the Netherlands, and Denmark - have in recent years abandoned their aviation taxes in recognition of the economic damage they had done.

1.6 Each seat sold by British Airways to a foreign customer constitutes an important export for the UK economy – yet these exports are taxed at a rate which makes the UK uncompetitive. Airlines are unable to develop new routes – and therefore to invest in accompanying new aircraft, jobs and skills, which they would otherwise be able to do, because APD creates artificial barriers to expansion and unnecessarily increases the cost of travel for consumers and businesses. British Airways believes that the Government should conduct a thorough economic analysis of the effects of this tax, and abolish it.

d. How should improving the passenger experience be reflected in the Government’s aviation strategy?

1.7 UK airlines operate in an intensively competitive environment, where airlines operate with different business models with a clear emphasis on maintaining and improving the overall passenger experience. British Airways does not believe that there is a clear role for the Government to intervene in this market in the absence of clear evidence of a market failure. Moreover, the Civil Aviation Bill, as previously considered by the Select Committee, places the passenger’s interests at the head of the Civil Aviation Authority’s list of regulatory priorities.

1.8 There are two areas, however, where the Government can make a significant contribution to improving the passenger experience as part of its aviation strategy. First, in the area of immigration and border control, the Government currently has no clear incentive to ensure that passengers arriving in the UK receive efficient and prompt service from the UK Border Force. While airlines are subject to robust competition, and dominant airports are subject to economic regulation, the UK Border Force is subject only to ministerial oversight and the threat of parliamentary rebuke. A key plank of the Government’s aviation strategy should be to subject the Home Office and the Border Force to a clear, binding accountability and performance management regime which at least matches that to which airport operators at designated airports are subject.

1.9 Second, perhaps the single biggest improvement to passengers’ experience of UK aviation over the long term will come from the adoption of a clear, enduring aviation strategy which provides a robust roadmap for the provision of improved resilience of the UK’s hub

2 Ibid. 3 British Chambers of Commerce, 2012: Exporting is Good for Britain, and Transport Connections Support Trade 4 HMRC, 2009: CHIEF Non-EU data. airport, permitting the development of links to new emerging market destinations, and certainty on the future location of hub airport capacity.

e. Where does aviation fit in the overall transport strategy?

1.10 Aviation should be seen as an integral element of the UK’s transport infrastructure, offering direct connections to international destinations but also important domestic connections both between points in the UK and to onward destinations, principally from the UK’s only hub airport at Heathrow. This connectivity is vital to businesses and individuals throughout the UK. The importance of aviation has been well recognised in many countries where sustained efforts have been made to ensure that aviation is fully integrated into the wider transport system

1.11 However, because aviation is a self-funding industry which does not receive public subsidies or rely on publicly funded infrastructure, UK Government policy on the integration of transport networks has historically paid scant regard to the role of aviation. This is perhaps best demonstrated by the weakness of planning for rail investment to integrate the UK’s major airports into the rail network. For example, the Government’s stated objective to align national strategies for aviation and high speed rail appears extremely challenging when the route for HS2 in the South East has been decided without any clear view on the future of the UK’s hub airport, at Heathrow.

2 How should we make best use of existing aviation capacity?

a. How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

2.1 British Airways believes that the best mechanism for optimising use of existing capacity is the current market-based system whereby airlines are subject to strong economic incentives to optimize the commercial returns from their use of airport capacity.

2.2 There is no clear, universal definition of the “best use” of airport capacity. “Best use” could be defined as: maximising the number of passengers; maximising the number of routes flown from a given airport; achieving an optimal balance between short-haul and long-haul routes, or specifying a given type of airline operation. Measures which seek to realise any one definition of “best use” are likely to carry unintended and perverse outcomes.

2.3 British Airways believes that the focus of immediate action should be on improving resilience in the operation of Heathrow airport within the existing cap on air transport movements. Improvements in resilience have a direct, positive impact on passenger experience, productivity, economic efficiency, and environmental performance. British Airways welcomes the Operational Freedoms trials to increase resilience during disruption.

2.4 British Airways is not in favour of the introduction of mixed mode runway operations to add more scheduled flights at Heathrow. We believe it will cause serious resilience problems at Heathrow which is already operating at 98.5 per cent capacity. This would mean there is no ability to recover from, for example, adverse weather and would lead to regular cancellations and disruption for passengers.

2.5 Airspace is a finite resource and a critical national asset. British Airways believes that efficient airspace management and planning can improve the utilisation of London’s existing airport capacity. Key initiatives such as the UK’s Future Airspace strategy and the EU’s SESAR programme could improve punctuality, more efficient routings, less “stacking”, and improved passenger journeys and environmental performance.

b. Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

2.6 Airports outside the South East play an important role in providing connectivity and feed for hub airports, and supporting point-to-point routes to international destinations. Many regional airports have direct international links, principally to hub airports in Europe, the Middle East, and North America. However, all airports outside the South East currently have spare capacity. There is no evidence that existing Government policy is leading to the under-utilisation of regional airports. Any action to increase the utilisation of regional airports would require intervention in the market which would distort competition. British Airways believes that any efforts to support the development of regional airports must not extend to distortive and unfair fiscal incentives, such as variable Air Passenger Duty or the subversion of the economic regulation system to deliver Government airport policy outcomes.

2.7 While regional airports fulfill an important role in the UK aviation economy, British Airways does not believe that regional airports can ever be an alternative to provision of effective hub airport capacity serving London and the South East. Anecdotal evidence from international air service agreement negotiations in recent years suggest that many foreign airlines have no interest in accessing regional airports as an alternative to access to Heathrow.

c. How can surface access to airports be improved?

2.8 While substantial progress has been made in recent years to increase the share of passengers reaching airports by public transport, British Airways believes there is significant scope to improve both the physical infrastructure and the policy development process supporting surface access to airports. We are encouraged by the Department for Transport’s announcement of a review of rail access to airports, and that the focus of that review will be on the ability of rail to provide improved access to airports. However, for the avoidance of doubt, British Airways does not believe there is any merit in using rail to provide connections between airports as a solution to the current shortage of hub airport capacity.

2.9 British Airways believes that the Government should prioritise infrastructure projects which deliver sustainable surface access improvements, such as the proposal for western rail access to Heathrow which the Government currently supports. However, there is also a need for greater integration of policy making within the Department for Transport and other Government departments and, crucially, for other infrastructure providers, especially Network Rail, to make access to airports a strategic priority. In particular, British Airways is concerned that the proposed route for High Speed Two does not go via Heathrow, inclusion of which would deliver an integrated air-rail transport solution. British Airways believes this is an example of a lack of integrated thinking in policy making. In general consideration should also be given to measures which ensure that public transport providers serve airports during full airport opening hours, and encouraging cooperation between airport operators and public transport providers to develop appropriate fare structures and promotions to encourage sustainable journey patterns.

3 What constraints are there on increasing UK aviation capacity?

a. Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

3.1 British Airways recognises that aviation has localised environmental impacts, and that noise is the most immediate concern for many residents around airports. However, British Airways believes it is imperative that objectives to reduce aircraft noise are set in the context of the other environmental impacts of aviation, reflecting the trade-offs which exist between, for example, carbon and noise impacts. It is important to note that the noise performance of the aviation industry is continuously improving. The industry has delivered a 65 per cent reduction in perceived noise around airports since 1960s and is on target achieve a further 65 per cent reduction by 2050 (compared to 2000). Noise contours using the standard 57db measure of aircraft noise were reduced by 52 per cent around Heathrow airport between 1991 and 2009.

3.2 The Government’s proposals as set out in its draft Aviation Policy Framework contain a number of suggestions to improve the management of the impact of aviation noise. While British Airways is broadly supportive of the Government’s overall objective to “limit and where possible reduce the number of people in the UK significantly affected by aircraft noise”, it is important that this objective is balanced against the objective to maximize the economic benefits of aviation. In balancing these sometimes competing objectives, it should be incumbent on the Government to ensure that the benefits of continued improvement in noise performance should be shared between local communities and growth in the aviation sector. Government should also prevent future population encroachment around airports where capacity growth is permitted, reflecting the fact that government policy has seen central decisions overrule local planning restrictions, resulting in more than 13,000 additional homes being built within the 2009 57db noise contour between 1991 and 2009.

b. Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

3.3 British Airways welcomes the Government’s recognition that carbon emissions are best tackled through coordinated, global action. The aviation industry has adopted a global target to reduce net emissions from international aviation by 50 per cent by 2050, relative to 2005 levels. British Airways is playing a leading role, through industry groups such as Sustainable Aviation, in identifying a pathway towards the achievement of this goal. Carbon trading is by far the most effective economic instrument to reduce emissions in the aviation sector, reflecting the global nature of the industry. A well designed EU Emissions Trading System which does not distort air transport markets and avoids international disputes can be a first step towards the adoption of a global emissions trading system. However, the scope of the existing EU ETS should be amended from its current form in order to mitigate the risks of retaliatory measures, non-compliance, and competitive distortions, in advance of the adoption of a global system.

3.4 Unilateral, UK-level measures to address international aviation emissions are inappropriate and ineffective, and are likely to create competitive distortions which do not serve the interests of UK consumers or businesses. Therefore while British Airways accepts the recommendation of the Committee on Climate Change (CCC) to include emissions from international aviation and shipping in UK carbon budgets for accounting purposes, we also agree with the CCC that there is no place for national level targets for carbon emissions from UK aviation.

3.5 Recent and future developments in aircraft and engine technology, and the development of sustainable biofuels, and improvements in air traffic management, all have the potential to play a major role in enabling the sustainable growth of aviation. British Airways is a leading participant in efforts to develop sustainable biofuels for aviation through our partnership with Solena to produce biojet fuel from industrial, agricultural and domestic waste, with the potential to bring significant economic, as well as environmental, benefits to the UK. However, in order to fully exploit the potential of biofuel for aviation, there must be a level playing of incentives with ground transport fuels, which could be achieved through the Renewable Energy Directive, as other EU Member States have allowed aviation biofuels to become eligible for Renewable Transport Fuel Certificates.

c. What is the relationship between the Government’s strategy and EU aviation policies

3.4 The Government’s aviation policies are broadly consistent with the EU’s aviation policies. The UK Government plays a leading role in the development of EU policy on the integration of airspace management and planning, and has been a leading force in the integration and liberalisation of European aviation. However, in the absence of a clearly articulated strategy for UK aviation, it is premature to judge the consistency of the UK’s approach with the full range of EU aviation policies.

4 Do we need a step-change in UK aviation capacity? Why?

a. What should this step change be? Should there be a new hub airport? Where?

4.1 We need to adapt to a world in which the centre of gravity is moving from West to East. If we do not have a hub airport that links us directly to world growth we will suffer for it. The case for extra capacity is overwhelming. There are already 21 emerging market destinations that are served from European hubs but not from the UK. The government needs to create economic opportunity through the aviation industry, not stifle it.

b. What are the costs and benefits of these different ways to increase UK aviation capacity?

4.2 British Airways believes that the independent Commission to be chaired by Sir Howard Davies should undertake a thorough, objective assessment of all the various options, including thorough and reliable assessments of the financial and economic costs of such schemes. British Airways believes that the Commission should not be prevented from considering any options as a result of the adoption of environmental or other restrictions in the Government’s Aviation Policy Framework.

29 October 2012 Written evidence from Gensler (AS 111)

1. Introduction 1.1 The following evidence is prepared by international design firm Gensler to assist the Transport Committee’s consideration of the Government’s aviation strategy. 1.2 Gensler are a firm of architects and planners with extensive experience in the planning of large scale urban development and the design of new airport facilities. Gensler employ 3,400 people worldwide located in 42 offices and have had an office based in the City of London for 25 years. 1.3 Gensler have developed a concept for a new UK aviation hub, Britannia Airport, located in the Thames Estuary. The concept overcomes many of the difficulties of constructing a new airport in the estuary with a practical solution that can be delivered quickly and economically. This evidence will explain why Gensler believe the Thames Estuary provides the most suitable location for accommodating the UK’s primary Hub Airport and allows for long-term aviation expansion.

2. The need for hub capacity 2.1 Gensler support the widely held belief that the UK needs additional aviation capacity and that the greatest pressure will continue to be on the UK Hub Capacity currently accommodated at Heathrow. The Department of Transport’s own forecast for passenger growth highlight the unprecedented demand for new airport capacity.1 2.2 International connectivity by air is essential for the UK to retain its global economic trading position. For many years the UK has benefited from the status of Heathrow as one of the world’s busiest international airports. However, Heathrow is increasingly losing ground to other European airports who have invested heavily in expanding airport capacity. The choice of destination, and connectivity with rapidly emerging economies, is increasingly being undermined by Heathrow’s severe capacity constraints.

3. The criteria for selection of the preferred location 3.1 In evaluating the most suitable location for the additional airport hub capacity Gensler used the following criteria. The best location will be one that:

1 Department for Transport – UK Aviation Forecasts, August 2011: 211 million passengers per annum (mppa) in 2010 to 335mppa in 2030. By 2050 the central forecast is for 520mppa. “Unconstrained” ** passenger number growth would be +50m by 2050, i.e., 520mppa rather than 470mppa. ** with an airport capacity capable of handling this level of flow.

• results in the least disruption to residents • minimises environmental impact • can accommodate direct high speed rail connectivity to the UK and Continent • can enable rail and metro connections to London and the UK • can be future proofed allowing for expansion to four and eventually six runways • can be delivered within an acceptable time frame and cost • can assist in long-term economic growth and regeneration of the UK

4. The Estuary Option 4.1 Following an evaluation of the various options for accommodating UK hub capacity Gensler concluded that the Thames Estuary provides the best long term prospect for the UK. The key reasons include: • the potential to build the largest airport in Europe • the opportunity to minimise impact of noise and congestion on local residents • 24 hour flying can be accommodated • maximises operational efficiency • direct high speed rail connections can be provided to both the UK and the Continent. • a simple one stop extension to Crossrail can be implemented • local rail and metro services can be easily provided • connectivity to the rest of the UK can be secured • four to six runways can be accommodated • opportunity to continue eastward regeneration of London and the Thames Gateway • minimises disruption to residents • minimises the impact of pollution on residents2

5. The Proposition 5.1 Although Gensler believe that the Estuary provides the best location for future aviation expansion we are aware of the challenges. In 2011 we set about developing a concept that could enable a new hub airport in this location but one that could overcome some of the more critical constraints, these include: • disruption to people from congestion, noise and air pollution • environmental damage to marine life

2 Massachusetts Institute of Technology – Laboratory for Aviation and the Environment. Air quality impacts of UK airport capacity expansion. Oct 2012.

• dangers of bird strike • avoiding disruption to shipping • dealing with flooding and sea level change • avoiding demolition of homes and industrial infrastructure • ensuring flexibility for expansion • the impact of obstacles such as the American Liberty Ship, SS Richard Montgomery

5.2 Critical to addressing these issues is identification of the optimum location within the estuary itself. Although this work is still in progress it has become increasingly clear that a more centrally located site within the estuary could provide the solution. However, to reclaim large areas of water to create land for the airport has its own problems, particularly with respect to the environmental impact on the river. 5.3 By floating the runways and their associated hard standing it is possible to avoid the negative effects of land reclamation. The location of the airport can then be optimised to avoid the most important bird feeding areas between high and low water. The floating concept provides much greater locational flexibility within the estuary, avoiding the very sensitive estuary edges, known obstacles and avoiding disruption to shipping and fishing. 5.4 Britannia Airport utilises the UK’s world leading capability of marine construction, developed for the oil and gas industry, by incorporating four full length floating runways, some 4.5 km long. The runways are tethered to the sea bed and to the final departure concourse which provides access to marine rail tunnels connecting directly to central London, and the European High Speed Rail Network. 5.5 The airport will provide a massive increase in capacity with potentially 150 million passengers per year served by some 400+ gates. The airport runways will extend over an area of approximately 1,400 ha punctuated by areas of open water as opposed to hard standing or grass to maximise opportunities for light to penetrate the water below. 5.6 The more central location within the estuary enables the airport to generate some of its own power from marine turbines within and adjacent to the floating runways. 5.7 Britannia will have unparalleled accessibility to the UK and Europe with a combination of international high speed rail with a connection to HS1, domestic rail with a single stop connection to Crossrail, London Underground and Network Rail Services. The scheme allows for direct ferry and catamaran services both to central London and the Continent. The scheme also includes purpose built cruise liner with direct access into the arrival concourse. 5.8 Car and taxi access will be dispersed to three new, land based, Departure/Arrival terminals located both north and south of the estuary while a new Central London terminal is proposed between Canary

5.9 The design has inherent flexibility whereby runways can be floated in and floated away as required. Spare runways can also be maintained in shipyards and floated into position as required. Additional runways to extend the airport to six runways can be provided when required. 5.10 The scheme can be built as a genuinely ‘national’ infrastructure project with the opportunity to manufacture large portions of the project in the ship yards and steel works across the UK which can then be floated by sea and positioned in the estuary. The concept utilises standard engineering technology for the airport construction and the rail connections. 5.11 The relocation of UK’s hub airport to the Thames Estuary enables the provision of a state of the art facility that will transform the quality of life for millions of Londoners and will provide London with the space and infrastructure to grow and thrive over the next century. 5.12 The construction of the airport will provide a major stimulus to the local and UK regional economy and could lead directly to long term business opportunities in the design and manufacture of similar facilities for cities across the world.

6. Heathrow is part of the solution 6.1 As the political debate about airport hub capacity in the UK continues, it is worth taking a broader perspective on how the modern city accommodates its most essential, but perhaps least loved, piece of transport infrastructure. With the inexorable growth in the aviation industry fuelled by our continued globalisation, cities across the world are beginning to reflect on how to plan for future airport growth. But what is the optimal location for a major international airport? 6.2 What we are seeing has parallels with the dramatic changes to our port infrastructure, and to a lesser extent our rail stations, with the advent of container shipping in the late 1960’s. Many port facilities and railway yards became surplus to requirements with this significant change in freight technology. From the 1960’s onwards the new ports and rail freight depots were located far beyond the city boundaries to take advantage of deeper water, cheaper land and importantly less congested road and rail infrastructure. For the last twenty years city planners have been working hard to reuse the extensive land areas released. In London the Canary Wharf, Broadgate and King’s Cross developments are at the vanguard of major urban redevelopment that reused land released by redundant transport infrastructure. 6.3 The challenge for many cities now is that airports conceived in the 1940’s have grown far beyond the expectations of the city planners in the immediate post war period. Incremental intensification has led

in many cities to an intolerable situation for many city residents. It has been a continual headache for politicians of all parties to argue for further expansion when we already suffer noise and pollution disruption as well as severe localised congestion, not to mention significant health hazards. 6.4 City airport relocations are a growing phenomenon and many cities such as Hong Kong have shown that with a well planned relocation and proper investment in the transport infrastructure to connect back to the city centre, great economic benefits can be achieved, minimizing disruption to city residents and allowing greater capacity, more flights and serving more destinations. 6.5 London is yet again at this crossroads. How can it maintain its global trading position without a significant expansion and improvement in its airport hub capacity? The problem for London’s planners is not unique, there isn’t an obvious place to put such a land hungry and, for many people, disruptive piece of infrastructure. The long debate in London has repeatedly come back to focus on the one area close to London with very little development and this is the Thames Estuary. 6.6 Like Hong Kong, the relocation of London’s main airport would transform Heathrow into one of the most important urban expansion sites in Europe. The former airfield with its extensive existing infrastructure could provide a vital release valve for the population growth pressures now being experienced across the Capital. 6.7 The low density of development at Heathrow compared to other parts of London is a consequence of its aviation use. Intensification of development to more typical London standards will release very significant potential land values. Heathrow occupies an area equivalent to the entire borough of and Chelsea but only accommodates 76,000 jobs within the airport and obviously no housing. 3 6.8 The UK continues to experience considerable pressure for urban growth and is expected to add 10.9 million people over the next 23 years 4 with the London alone adding an additional 1 million people. Heathrow offers one of the largest development opportunities in the capital and it is already served by suitable infrastructure. The proposals envisage a new future for Heathrow as the largest urban expansion project in Europe. Gensler propose the development of an eco-city on the former airfield that can utilise the existing infrastructure to provide additional homes for 300,000 people and jobs for over 200,000. The future value of Heathrow could be part of the solution to our greatest national infrastructure challenge and could help underpin the creation of a new purpose built hub airport in the East Thames Gateway.

3 Heathrow Related Employment, Optimal Economics, Draft Final September 2011 4 Office for National Statistics (ONS) Population Bulletin 2010: Population 62.3 million in 2010 will grow to 67.2 million over the ten year period to 2020, and to 73.2 million by 2035. http://www.ons.gov.uk/ons/rel/npp/national‐ population‐projections/2010‐based‐projections/stb‐2010‐based‐npp‐principal‐and‐key‐variants.html

7. Deliverability 7.1 There is ongoing work to optimise the airport location and complete a detailed feasibility study. The concept depends on standard, tried and tested engineering solutions albeit on a larger scale than has been attempted before. 7.2 Critical to delivery is the issue of cost and time. The detailed costing of the proposals still requires more technical studies to be undertaken. The initial indications are that the overall cost of the airport and its fixed links will be comparable to a land reclamation solution or expansion on existing developed land adjacent to an operational airport. 7.3 The floating airport removes the need for extensive land assembly, it avoids the need to remove or relocate existing land uses and is likely to face less local opposition than alternative concepts. 7.4 The construction of the airport itself is not dependent on the creation of new land or land assembly and can be undertaken immediately in a systemised way in factories and shipyards around the UK. 7.5 The deliverability of the proposals is affected by continued uncertainty in Government policy and the subsequent parliamentary/planning approval. It is normally the case in the UK that the approval process takes far longer than the construction and commissioning. 7.6 In addition to the airport itself it shouldn’t be under estimated the most complexity of gaining approval for the other critical elements such as the rail and road connections. Also from a construction standpoint it is the infrastructure connections that will ultimately determine the overall delivery date of the new airport rather than the airport itself. 7.7 The initial concept appraisals would suggest that setting aside Government decision making and the parliamentary/planning approval process the airport could be open within 12-15 years. Although there are still many undefined variables and much work to be done an early analysis would suggest that it is feasible to deliver the project for less than the widely quoted figure of £50 billion referred to in the media.

8. Conclusion 8.1 This is a once in a century project and the UK needs a bold vision, which will reinforce London’s position as the Global Capital for trade and commerce. The location of this airport concept within the Thames Estuary creates a new standard for the world, minimising nuisance and maximising environmental benefit. 8.2 The concept reinforces the feasibility of the Estuary as the only significant large area of undeveloped land capable of accommodating a new hub airport of a suitable international size and with all the domestic and international transport connections required.

8.3 The location of Britannia Airport provides the least impact on UK residents and helps to mitigate the negative effects of air pollution, noise and traffic congestion. The construction of the floating airport could provide a much needed boost to cities across the UK and offers the potential to regenerate major areas of deprivation within East London and the Thames Gateway. 8.4 The reuse of Heathrow and the creation of a new purpose built aviation hub could together provide the capital with the strategic solution for the next fifty years of growth and development to enable the UK to maintain its position on the international stage.

29 October 2012

Written evidence from the UK Travel Retail Forum (AS 112)

1. What should be the objectives of Government policy on aviation?

• In the interest of UK air passengers, UK airports and the UK duty free industry, the UK Travel Retail Forum (UKTRF) calls on the British Government to safeguard passenger rights – in an evolving aviation market.

• The UKTRF wants the British Government to recognise, based upon established practice and normal passenger expectations, that passengers have a right to carry specified items on board a flight in addition to their hand .

• Legislation, at national or EU-level, must be put in place as soon as possible to enshrine in law a right which passengers have enjoyed for the past 60 years and which has enabled UK airports to fund themselves without recourse to state aid.

1. The UKTRF is a national trade association whose members represent most sectors of the travel retail business. Non-aviation revenues, including the duty-free and travel retail businesses, are a crucial generator of income for airports of all sizes across the UK. The overall aim of our organisation is to secure a sustainable future and the most favourable operating environment for these companies.

2. The UKTRF’s number one issue is the refusal by certain airlines to allow their passengers to bring on board airport shopping in addition to the airline’s prescribed baggage allowance. This issue continues to impact consumer choice and regional airport revenue.

3. The UKTRF, supported by the Airport Operators Association (AOA), has noted the substantial impact this practice is having on the passenger experience and on airport retail sales at UK airports that rely heavily on commercial revenue to fund infrastructure, keep airport charges low and attract airlines.

4. Passengers travelling on these airlines are now required to cram all their personal belongings into a single carry-on bag with absolutely no exceptions. Otherwise they are forced to pay an exorbitant ‘fine’, throw the goods away or worse still, be denied travel. This runs contrary to established practice, is inconsistently applied and has led to enormous passenger confusion.

5. The practice is being implemented in at least 11 UK airports, with one Low Cost Carrier (LCC) enforcing it in nine airports.

6. Airlines who practice this policy maintain that this is a necessary measure for safety and efficiency. We dispute this claim entirely. If this were the case, the airlines operating this policy would do so on a consistent basis. Moreover the airline then sells items on board from their own duty free and travel retail selection, which has to be stored by the passenger until they arrive at their destination. Indeed, UK passengers have been enjoying airport shopping for over 60 years now without any operational difficulties for airlines.

7. Instead it appears that the practice stems from a desire to create additional revenue streams, as passengers are then encouraged to shop onboard from a very narrow product offering compared to that at airports. One low cost carrier experienced a 64% growth in ancillary revenue between 2005 and 2010.

8. The dominant market position of some airlines has made it difficult to find a commercial solution to this problem at many airports in the UK.

9. In general such airports are very reluctant to challenge the airlines in question for fear of losing vital traffic and routes. For the same reason, it would be very difficult for airports to make a complaint to the Office of Fair Trading, as that would risk retaliatory measures - certain low cost airlines have proven themselves very adept at withdrawing services at short notice, when an airport takes a policy stance they are not in agreement with. b) What are the benefits of aviation to the UK economy?

• Airport shopping in the UK is worth almost £1.5 billion per annum. These revenues are crucial to the continued development and well being of UK airports.

• It is estimated that over 20,000 people in the UK are employed directly in airport retail serving 220 million passengers each year.

• For most regional airports over 50% of their income comes from non-aeronautical activity, of which retail income is a hugely significant part.

10. Shopping is an important means of generating revenue for the development of a vibrant and attractive retail space, which is considered to be a critical element of new infrastructure development. Airports use this revenue to finance these upgrades and to reduce their aeronautical charges. Airlines pass-on these reductions to passengers through lower ticket prices. Indeed airport charges in the UK are among the most competitive in Europe due largely to income from airport retail.

11. The practice, of not allowing a bag of duty free and travel retail or food and beverage purchases – unless it is crammed into a passenger’s one piece of , threatens in the long run the viability of using retail income to finance airport operations. It also calls into question the justification for some airports to reduce aeronautical charges to below cost in exchange for a guarantee that a minimum number of passengers will pass through the airport in the hope that they can recoup their losses from retail sales.

• UK airports are losing conservatively over £3 million in annual revenue as a result of this practice.

• The clearest way to see the negative impact is in spend per head (SPH). Typically SPH by a passenger on an airline with a ‘one bag’ policy is between 35% and 60% less than passenger SPH on an airline where this policy is not applied.

12. Further evidence of customer confusion is clear from recent airport research that shows that passengers travelling on airlines who do not apply this policy are no longer confident that they can take their airport shopping on-board.

13. Airport retailers are already impacted by the general economic downturn, increased security costs and procedures, which reduce airside dwell time. With online check-in now the norm, people are arriving at the airport later and have less time to shop – statistics show that one minute less dwell time is equal to a decrease of 1% in retail sales.

14. Until recently the possibility of a regional airport being forced to close was limited as they were mainly state-run facilities. Today most airports in the UK are privately owned, and in recent years both Coventry and Sheffield City airports have been forced to close. In short, the commercial impact of this rule could have serious ramifications well beyond airport retail. d) How should improving the passenger experience be reflected in the Government’s aviation strategy?

• 39% of all passengers say that uncertainty about cabin baggage allowances prevents them from shopping at the airport.

15. The practice is inconsistently applied in the UK and in other EU countries, with the result that passengers never know whether they can take their shopping on board or not, even when travelling on the same airline. The confusion is so great that even on legacy carriers significant numbers of passengers think that they cannot take their airport shopping on board in addition to their cabin baggage. The UKTRF remains convinced that the only solution to this issue is EU-wide legislation, which will prevent this market abuse.

16. A recent study at a major regional airport revealed that 39% of all passengers, irrespective of airline, are now not shopping at the airport for fear of confiscation and conflict with airline staff during the boarding process.

17. The UKTRF and AOA believe this practice to be grossly unfair to both passengers and airports. On boarding, passengers find that the airline is offering similar goods for sale, albeit with a fraction of the choice available at the airport.

18. Unlike airport shops, airlines only carry a very limited range of goods on board for sale. By effectively preventing passengers from buying at the airport, airlines are denying consumer choice.

3. What constraints are there on increasing UK aviation capacity? c) What is the relationship between the Government’s strategy and EU aviation policies?

• The UKTRF is supported by the AOA and more than 30 cross-party UK MPs.

• There is growing momentum across Europe for new EU legislation.

19. The British Government has a strong record of taking leadership positions on international civil aviation matters, and it has an opportunity to continue this by taking action on this arguably restrictive practice, which is bad for passengers and bad for airports.

20. The UKTRF, AOA and Mike Crockart MP met with Theresa Villiers, in April this year – as a direct result of the strong political support pledged by more than 30 cross-party politicians including the Transport Select Committee Chair, Aviation APPG Chair and MPs with airports in or neighbouring their constituencies. Minister Villiers assured us that the government would take a fresh look at its position on this matter.

21. Mark Prisk, in his position as Better Regulation Minister, also agreed that action is required at an EU-level and designated one of his senior officials to work with us on this issue.

22. The forthcoming review of the Air Passenger Rights Regulation will give us a unique opportunity to solve this problem once and for all. We understand that a proposal will be forthcoming from the European Commission as early as December this year.

23. Across the EU, our position has received the full support of many governments including France, with others such as Italy and Portugal looking at it further. The European Parliament has now voted three times for legislation to solve this problem.

24. In May 2012, the European Parliament adopted Philip Bradbourn MEP’s report (The future of regional airports and air services in the EU), with an overwhelming majority. The adoption of this report reaffirms the European Parliament position, which had already been established in an earlier report by Keith Taylor MEP, which references the right of passengers to carry their airport purchases on board in addition to their baggage allowance.

25. We have now written to the new Aviation Minister asking him to outline the government’s position and to invite his team to play a crucial role in the evolution of this legislation.

Concluding remarks

• The only solution to this issue would be to introduce legislation, at national or EU-level, which will alleviate passenger confusion and prevent this market abuse.

• The forthcoming review of the Air Passenger Rights Regulation will give us a unique opportunity to solve this problem once and for all, and to give passengers the certainty they need to buy with confidence.

• Across the EU our position has received the full support of governments including France.

• On behalf of the British public, the travel retail industry and our airport partners, we urge the British Government to follow suit.

30 October 2012 Written evidence from The London Assembly (AS 113)

The London Assembly recognises the vital role aviation has to play in the UK’s economy and the need to strike a balance between the economic benefits there are to be gained from a dynamic aviation sector, and effectively managing the negative environmental impacts that can result from airport operations. We therefore welcome the Government’s commitment to developing a long-term sustainable approach to managing aviation impacts and we are pleased to submit this response to the Government's consultation on its draft Aviation Policy Framework.

The London Assembly’s position on expansion While this response provides comments and views on the national approach it will do so in the context of what it means for Londoners and how the policy approaches outlined in the consultation document might affect them.

The Assembly has consistently opposed proposals for expansion at London Heathrow on the grounds that the negative environmental effects are disproportionate to the estimated benefits an expanded Heathrow would bring to London.1 In 2003, we opposed the recommendations in the White Paper to expand Heathrow. 2 We maintained our position in 2005, when the British Aviation Authority produced an interim master plan for how expansion may take shape, raising concerns over the plan’s ability to meet air quality targets, to secure greater public transport access to the airport and to limit the impact of the airport on the quality of life for local communities.3 In 2007 we disputed the arguments in support of expansion, outlined in the Department for Transport consultation, Adding Capacity at Heathrow, on the basis that we were unconvinced that expansion at Heathrow was essential to the well being of London and the wider UK economy, and that the conditions placed on expansion did not adequately address the local and international environmental costs and impacts it would have.4 The Assembly reaffirmed its position this year, unanimously opposing expansion at Heathrow.5

Our response to the consultation This response does not revisit the merits of the argument for increasing capacity in the South East, whether through expansion at Heathrow or at another location, but it sets out what the Assembly believes are valid concerns and considerations that would need to be taken into account in managing the environmental impacts of aviation both now and in the future.

This response will focus on Chapters 3 (Climate change impacts), 4 (Noise and other local environmental impacts) and 5 (Working together) of the consultation document.

We draw on a considerable body of work including previous consultation responses by the Assembly, investigations led by the Assembly’s Environment Committee (on the environmental

1 See http://www.london.gov.uk/assembly/reports/plansd/heathrow_expansion.pdf 2 The White Paper “The Future of Air Transport” proposed a "balanced strategy" between airport expansion and the environmental impacts, in line with its "commitment to sustainable development", and concluded that the capacity of UK airports, particularly in southeast England, was "an important constraint on future growth". The White Paper supported runway expansion plans at Heathrow and Stansted airports. The Assembly maintained the position that the aviation industry must meet its environmental and external costs. The response is at http://www.london.gov.uk/who-runs-london/the-london- assembly/publications/transport/aviation-consultation-response 3 See http://www.london.gov.uk/who-runs-london/the-london-assembly/publications/transport/heathrow- expansion 4 http://www.london.gov.uk/who-runs-london/the-london-assembly/publications/transport/response- governments-consultation-adding-capacity-heathrow-airport 5 Motion passed at 11 July 2012 Assembly plenary meeting. See http://www.london.gov.uk/media/press_releases_london_assembly/assembly-says-no-revival-third-runway- heathrow impacts of operations at the London Heathrow and London City airports), 6 the Health and Environment Committee’s recent discussion with an expert panel,7 written submissions,8 and published research and information.

Summary of the response

Climate change The general approach Meeting the national target to reduce net GHG (greenhouse gas) emissions by at least 80 per cent below the 1990 baseline by 2050, as set out in the Climate Change Act 2008 will be a considerable challenge, requiring a significant curb in the growth of the expected increase in passenger numbers. 9

The Committee would caution against the emphasis placed on securing international agreement and on the European Emissions Trading System (EU ETS), as currently configured, to achieve the national target. Further improvements and greater uptake of the EU ETS may be needed before it can deliver the desired reduction levels.

A phased approach to reducing aviation emissions is needed, setting out short, medium and long term milestones; we previously recommended that these should be legally binding. We welcome the Committee on Climate Change’s advice to Government earlier this year that aviation should also be included in the five-yearly carbon budget system and would urge the Government to take this advice on board.10

Incentivising to improve aircraft performance The Government should continue to support and encourage technological developments through industry led projects. There is also scope for the Government to incentivise research into and the use of renewable transport fuels, other than biofuels.

Noise and other local environmental impacts Noise The Assembly welcomes the Government’s policy approach and its commitment to establish a framework that incentivises noise reduction and mitigation more strongly, and encourages better engagement and greater transparency between airports and local communities.

The Assembly is concerned with two key aspects of this approach: the measurement used and the threshold that is applied. The 57 dB LAeq contour, the level at which the Government deems individuals become annoyed at noise, does not fully reflect the numbers of people affected by aircraft noise and is inconsistent with EU requirements for drawing up noise action plans. Government should take the opportunity to review the approach to measuring noise levels, and bring it in line with EU requirements.

The Assembly cannot condone the introduction of an operational change that would deny residents such respite from aircraft noise, and have a detrimental impact on their health.

6 Flights of Fancy: can an expanded Heathrow meet its environmental targets? January 2010; Plane Speaking: air and noise pollution around a growing Heathrow Airport, March 2012 http://www.london.gov.uk/who-runs- london/the-london-assembly/publications 7 Health and Environment Committee Meeting, 16 October 2012. A transcript of the discussion is available at http://www.london.gov.uk/moderngov/ieListDocuments.aspx?CId=256&MId=4617 8 Submissions were received from London First and the WWF. 9 The level of gross emissions from a particular sector is the actual quantity of emissions emitted by the sector. The net emissions for the sector take account of the emissions allowances or international project credits that it has traded with other sectors 10 Page 9, Health and Environment Committee transcript 16 October 2012. See also http://www.theccc.org.uk/carbon-budgets The Assembly would wish to see a strategic approach to noise mapping and consistency in the way in which mitigation and compensation schemes are applied across London. The noise contours for London City Airport and Heathrow Airport are drawn up separately. There is a need for joint contours, as people are increasingly affected by the combined impact of aircraft noise arriving and departing from both these airports. The absence of joint contours completely underestimates the actual noise that is being heard. There is scope for developing joint contours or other indicators, such as flight path density plots, or noise event-based measures, for such areas.

Night noise The Assembly welcomes the Government’s planned consultation on the arrangements for managing night time flights at Heathrow, Stansted and Gatwick airports later this year, and the inclusion of a review of the costs and benefits of night flights and current literature on aviation night noise health impacts.

Air quality In addition to measures to improve air quality, such as increasing use of greener, quieter aircraft, ensuring on-site vehicles meet the latest EU emissions standards, and reducing airport related road traffic, there are a range of issues that will need to be tackled to improve surface access to Heathrow Airport to encourage greater use of public transport for journeys to and from the airport.

Working together Airport Consultative Committees The Assembly welcomes the Government’s commitment to see ACCs play a more effective role; they provide a useful forum within which to seek input from a wide range of stakeholders. In London we are seeing a growing need for inter-relationship between the Heathrow and London City Airports’ consultative committees and consider that there would be merit in enhancing arrangements for inter-airport liaison.

Role of the Civil Aviation Authority (CAA) The Assembly believes that there is scope for an independent body to monitor noise and administer airport mitigation and compensation schemes.

The lack of independent scrutiny of the noise action plans drawn up in the UK, are also a concern. Elsewhere in Europe they are drawn up by an independent third party. Independent administration could help rebuild the trust that has been loss by local communities in how airport operators seek to manage, mitigate and compensate for the negative environmental impacts that can arise from airport operations.

Further research into who might best be placed to carry out this role is needed.

Chapter 3 - Climate change impacts The Government is seeking views on: a) the general approach it is taking and, b) further ideas on how the Government could incentivise the aviation and aerospace sectors to improve aircraft performance with the aim of reducing emissions.

The Government’s approach The Government’s policy objective is to ensure that the aviation sector makes a significant and cost effective contribution towards reducing global emissions.11 Its’ emphasis is on global action as the best means of securing the objective, with action at European level a potential step towards wider international agreement. Around 95 per cent of UK aviation emissions come from flights departing from UK airports to international destinations.12 The Government maintains that measures to tackle emissions from UK aviation will need bilateral or multilateral

11 Paragraph 3.4 Draft Aviation Policy Framework (APF) 12 Paragraph 3.6 Draft APF agreement.13 It is committed to taking action at national level where appropriate and justified, in terms of the balance between benefits and costs.

The national target The Climate Change Act 2008 sets a legally binding target to reduce net GHG (greenhouse gas) emissions by at least 80 per cent below the 1990 baseline by 2050.14

Stakeholders have previously expressed concerns to the Assembly that the national target, while ambitious, appears to have been set without a clear pathway for how it might be achieved.15 Findings by the Committee on Climate Change (CCC) would appear to support this hypothesis. The CCC report notes that the exclusion of the non-carbon dioxide emissions of aviation – an estimated magnitude equivalent to up to two times that of the carbon dioxide emissions – could have implications for the UK’s overall emissions reduction targets.16 The report also advises that increases in airport passenger numbers across the UK would need to be limited to 60 per cent, instead of the 200 per cent growth forecasted on a ‘business as usual’ path, if the target is to be met.17

On the basis of this scenario, aviation could account for 25 per cent of total UK emissions in 2050. 18 Even accounting for improvements in technology and more efficient fuel use, huge efforts will need to be made by society in other areas, such as decarbonised power supply by 2030, electric vehicle use, fully insulated housing stock, to meet the 60 per cent growth. There are clearly critical choices to be made in the run up to 2050. It is therefore imperative that Government take a considered view of all the latest academic research on climate change to enable these choices to be fully informed.19 A long-term target is essential, alongside a clear sense of the incremental achievements needed and timings for them, to allow for review and/or remedial action as required. The Assembly believes that a phased approach to reducing aviation emissions is needed, setting out short, medium and long term milestones; we previously recommended that these should be legally binding.20 We welcome the CCC’s advice to Government earlier this year that aviation should also be included in the five-yearly carbon budget system. We would urge the Government to take this advice on board.21

13 As per the consultation document – see paragraph 3.6 14 The level of gross emissions from a particular sector is the actual quantity of emissions emitted by the sector. The net emissions for the sector take account of the emissions allowances or international project credits that it has traded with other sectors 15 Flights of Fancy: can an expanded Heathrow meet its environmental targets? January 2010 http://www.london.gov.uk/who-runs-london/the-london-assembly/publications 16This approach is consistent with the Kyoto Protocol and the Climate Change Act. Meeting the UK aviation target – options for reducing emissions to 2050, December 2009. http://www.theccc.org.uk/reports/aviation- report 17 http://downloads.theccc.org.uk/Aviation%20Report%2009/AviationReportPRESSRELEASE08.12.09.pdf 18 Page 6, Health and Environment Committee transcript 16 October 2012 19 Page 10, Health and Environment Committee transcript 16 October 2012. There is a school of thought which argues that a more urgent and radical approach will be needed, requiring a 90 per cent reduction in emissions by 2030 (with interim reductions of 40 per cent by 2015 and 70 per cent by 2020). The paper, Beyond Dangerous climate change: emissions scenarios for a new world, 2011, by the Royal Society http://rsta.royalsocietypublishing.org/content/369/1934/20.full.pdf+html reports that it is virtually impossible to stabilise the global mean surface temperature at or below 2C by 2050, and recommends taking much more radical short and medium term reductions in emissions, in order to achieve 90 per cent reductions by 2030, otherwise the science indicates temperature increases of 4C by 2050-70, a point beyond adaptation and collapse of most eco-systems. It should be stressed that this view goes beyond the current global consensus, is not necessarily endorsed by the Committee, and should therefore be carefully analysed alongside all the other available evidence. 20 Recommendation 5, Flights of Fancy: can an expanded Heathrow meet its environmental targets? January 2010 21 Page 9, Health and Environment Committee transcript 16 October 2012. See also http://www.theccc.org.uk/carbon-budgets Reliance on an international agreement Progress on securing international agreement is slower than first anticipated. The Climate Change Summit in Copenhagen presented an unrivalled opportunity to make significant strides forward in tackling aviation emissions on a global scale. It was particularly relevant for the UK given that the CCC aviation report assumes UK action in the context of an international agreement.22 The global agreement reached at the Summit – the ‘Copenhagen Accord’, fell far short of any legally binding commitments. Agreement has proved elusive in successive summits.

The Assembly acknowledges the commitments by the CAEP (Committee on Aviation Environmental Protection) on behalf of the ICAO (International Civil Aviation Organisation) to agree an international CO2 standard for aircraft by 2013 which aims to reward and encourage improvements in technology to reduce emissions. Also the agreement between UN Member states and relevant organisations working through ICAO to achieve global aspirational goals of carbon neutral growth from 2020 and average fuel efficiency improvements of two per cent per year up to 2050. The ICAO has recognised that the latter goal “is unlikely to deliver the level of reduction necessary to stabilise and then reduce aviation’s absolute emissions contribution to climate change and that goals of more ambition will need to be considered to deliver a sustainable path for aviation.”23

The Assembly welcomes the commitment by the industry to improving CO2 efficiency 1.5 per cent per year on average from 2009 to 2020 to deliver carbon neutral growth through a cap on net emissions from 2020 and to cut net emissions in half by 2050 compared with 2005 levels.24 Net emissions take account of emissions allowances or international project credits that can be traded with other industrial sectors. But it is currently unclear whether these actions will result in a reduction in gross emissions.

Effectiveness of the EU Emissions Trading System (EU ETS) Research indicates that the inclusion of aviation in the EU ETS will provide only part of the solution over the short-term.25

As of 1 January 2012, all flights arriving into and departing from the EU were included within the scope of the EU ETS. Under the EU ETS, these flights are subject to an emissions cap of 97 per cent of average annual emissions between 2004 and 2006. This cap will reduce to 95 per cent in 2013. The two per cent reduction in emissions under the EU ETS is to be welcomed, but cautiously, given the current economic climate and the resulting surplus in permits to purchase additional emissions allowances.26 The limited impact raises the question of whether the cap on aviation emissions under the EU ETS will be sufficient and highlights the need for a reduction in gross emissions as well as net emissions from aviation. Expert opinion is that Europe should be moving to a 30 per cent target as opposed to 20 per cent and that the UK should be pressing for this to happen.27

The CCC says that emissions trading to limit aviation emissions is feasible as part of a range of measures and that it will be useful for an interim period. But that over time aviation emissions

22 COP15 Copenhagen, Held 7 – 18 December 2009 http://en.cop15.dk/frontpage 23 Declaration by the high-level meeting on International Aviation and Climate Change (HLM-ENV/09) in October 2009 http://www.icao.int/environmental-protection/Pages/programme-of-action.aspx 24 Paragraph 3.10 of the consultation document notes that airlines represented by IATA – the International Air Transport Association – have committed to these targets. 25 According to the European Federation for Transport and the Environment, integrating aviation into the EU ETS will do little to reduce aviation emissions. The EU Commission’s assessment back in 2008 was that integration of aviation into the EU ETS policy will reduce emissions by just three per cent - Including aviation into the EU Emissions Trading Scheme, updated June 2008 26 http://www.guardian.co.uk/environment/2012/may/15/eu-airline-emissions-tax-success 27 Page 13, Health and Environment Committee transcript - comments from Sir Brian Hoskins growth will have to be carefully managed.28 The Committee has differing views on this. The Conservative Group supports the position of the CCC on this issue, but the majority of the Committee (the Green, Labour and Liberal Democrat Groups) is not confident that the trading scheme can be made workable, or generate a reduction in gross emissions overall.

Reliance on technological advancement The Assembly acknowledges the considerable effort by the aviation industry over the last 40 years to make aircraft more efficient. Despite this, trends in improvements in aircraft technology are relatively slow when compared to other industries.29 As expressed in the consultation document, the Government should continue to support and encourage technological developments through industry led projects.

There is also scope for the Government to incentivise research into and the use of renewable transport fuels, other than biofuels. According to the CCC, biofuels - fuel whose energy is derived from biological carbon fixation - will account for no more than 10 per cent of the total aviation fuel mix in 2050.30

The national target set is challenging, but necessarily so. What is open to question is whether the existing road map to achieving it, particularly in terms of the contribution the aviation industry will need to make, will be sufficient. Considerable reliance has been placed on reaching an international agreement, and with little outcome to date. It appears that a more rigorous approach to the EU ETS will be needed and progress in making aircraft more efficient will need to be stepped up. Crucially, even working on the assumption that all three elements – international agreement, the EU ETS and technology improvement – are progressing at the desired pace, significant life-style and industry changes will be required over the next 30 to 40 years.

Chapter 4 - Noise and other local environmental impacts

This section of the response presents the Assembly's views on the Government's overall objective on aviation noise, the appropriateness of the current method used to describe noise impact and determine noise contours, the case for reducing noise exposure levels, and the adequacy of approaches to mitigating and compensating noise impacts. This section also covers night noise and air quality impacts.

From time to time reference will be made to Heathrow airport, given that: a) it is based in London and accounts for around 70 per cent of people in the UK exposed to average noise from airports above 55 decibels (dB) - the level at which the World Health Organisation has said that people become seriously annoyed by noise, 31 and b) More than one in four people exposed to this level of noise around European airports lives near Heathrow.32

There are limits to what further improvements can be made to the noise generated by individual aircraft, with existing design and configuration.33 Therefore the main levers for managing noise levels on the ground are controls on how many aircraft can fly overhead, where and when.

28 Lord Turner’s Letter to Ministers, dated 9 September 2009. Available at http://hmccc.s3.amazonaws.com/CCCAviationLetterSoS%2009.09.09.pdf 29 Meeting of the Environment Committee, 5 November 2009 This view was expressed by Dr Sam Fankhauser of Grantham Institute for Climate Change and a member of the CCC 30 Carbon fixation is the conversion of carbon dioxide into organic compounds by plants 31 The World Health Organisation (WHO) is the directing and coordinating authority for health within the United Nations. It provides leadership on global health matters, shaping the health research agenda, setting norms and standards, articulating evidence-based policy options, providing technical support to countries and monitoring and assessing health trends. 32 Frankfurt, Paris Charles de Gaulle, Amsterdam Schiphol and Madrid, source page 49 draft APF

The Government’s overall objective on aviation noise The Government has adopted the high-level policy objective on aircraft noise set out in the previous administration’s 2003 white paper, The Future of Air Transport – to limit and, where possible, reduce the number of people in the UK significantly affected by aircraft noise.34 The objective is consistent with the Noise Policy Statement for England (NPSE) published in March 2010. 35

More and more London residents are being affected by noise from aircraft. Historically aircraft noise through Heathrow was previously considered to be a fairly contained problem, affecting residents to the west of London. But in just over a decade the problem has spread to the south east and east of London affecting residents living up to 20 kilometres away from the airport.36 Residents in these areas and also to the north of London are increasingly affected by noise from aircraft arriving and leaving London City Airport. In some cases residents have to bear the combined impact of aircraft noise from both airports. Stacking increases exposure to noise as capacity increases.

The Assembly therefore welcomes the Government’s policy approach and its commitment to establish a framework that incentivises noise reduction and mitigation more strongly, and encourages better engagement and greater transparency between airports and local communities.

Noise contour measurement methods and thresholds The Government is minded to retain the previous administration's policy to use the 57 dB LAeq,16h contour as the average level of daytime aircraft noise marking the approximate onset of significant community annoyance. The Assembly is concerned with two key aspects of this approach: the measurement used and the threshold that is applied. Simply put the measurement used for assessing noise pollution is based on averages, meaning that the actual number of flights is not fully reflected. In practical terms this results in an underestimation of the extent of the noise problem around an airport, and the number of people affected.

UK daytime aircraft noise is measured using the method LAeq, more commonly abbreviated to Leq.37 While Leq is recognised as the most common international measure of aircraft noise, drawbacks to the measurement are also well documented.38 The Government commissioned study, Attitudes to Noise from Aviation Sources in England (ANASE) concluded that the method of calculating noise, adopted since the eighties, was too narrow and failed to take account of either the growth in the number of flights or increasing public intolerance to noise. It recommended using an index, which would better reflect the number of flight events. 39

33 Page 15, Health and Environment Committee transcript 16 October 2012 34 The Future of Air Transport, DfT, December 2003, http://webarchive.nationalarchives.gov.uk/+/http://www.dft.gov.uk/about/strategy/whitepapers/air/ 35http://www.defra.gov.uk/environment/quality/noise/npse 36 All Change, Aircraft noise is no longer just a West London problem, HACAN, March 2011 37 The Leq method records individual plane noise in decibels and averages them out over a 16-hour day, between 7am and 11pm. The resulting figure is then averaged out over the year. As the measurement is based on averages it includes quiet periods when there are no planes, and excludes night-time flights and the busiest period of the day (6 to 7am), when both runways at Heathrow are used for landing. Information sourced from HACAN briefing note on airport related noise pollution, available at http://www.hacan.org.uk/resources/briefings/hacan.briefing.noise.pdf 38 The BAA written submission to the London Assembly Environment Committee notes that Leq is the most common international measure of aircraft noise. 39 Published November 2007. Available at http://www.dft.gov.uk/pgr/aviation/environmentalissues/Anase/ The 57 dB LAeq contour, the level at which the Government deems individuals become annoyed at noise, does not fully reflect the numbers of people affected by aircraft noise and is inconsistent with EU requirements for drawing up noise action plans. The EU requires Member States to draw up noise action plans using a measure called Lden , and applying a threshold of 55dB40. The Lden approach takes the combined effect of noise levels during the day, evening and night and averages them over a 24-hour period. But crucially, it weights the evening and night noise levels by adding 5dB and 10dB respectively to reflect the greater nuisance of noise at those times.

Results from aircraft noise mapping for Heathrow airport in 2006 show that an estimated 725,000 people were within the 55dB Lden noise contour (the EU threshold for noise action plans), compared to the 253,700 that are shown to be affected within the 57dBLAeq noise contour. 41 The World Health Organisation (WHO) suggests that the 57dB LAeq measurement is outdated, and notes that the thresholds of 50dB (for moderate annoyance) and 55dB (for serious annoyance) better reflect individuals’ experiences.42

Research by the campaign group HACAN shows that over two and half million people would be affected if a 50dB threshold were applied. This means that the affected area around Heathrow airport would extend into parts of South East and North London, and beyond Maidenhead to the West.43 Anecdotal evidence shows that residents are already significantly affected by aircraft noise in areas such as Clapham, , Stockwell, Camberwell, Kennington Park and Blackheath.44

The relationship between daytime Leq and Lden will depend on the pattern of operations at an individual airport, however, the overall outcome is that a 55dB Lden threshold shows that more people are ‘affected’ by noise than by the 57dB Leq threshold.

The Government’s method for measuring noise impacts should be consistent with the EU requirements for noise action plans. In light of the growing recognition of the need to review the 57dB LAeq method for measuring noise, Government must take the opportunity to review its approach, and seek to bring it in line with EU requirements.

The need to retain respite for local people Runway alternation is a valuable way of providing relief from aircraft noise to residents in West London. The Assembly cannot condone the introduction of an operational change that would deny residents such relief, and have a detrimental impact on their health. Analysis of data from the first phase of the ongoing operational freedoms trial at Heathrow shows that significantly more residents’ quality of life is being affected, with them noticing an increase in the frequency and noise from aircraft.45

Mitigating and compensating noise impacts The Assembly recognises that qualifying thresholds for mitigation and compensation vary considerably and that there can be plausible reasons for this. A recently published comparative

40 Directive 2002/49/EC requires EU Member States to produce noise maps in 2007 using the Lden noise metric. Lden takes the noise levels during the day, evening and night and averages them over a 24-hour period. But crucially the evening and night noise levels are weighted by adding 5dB and 10dB respectively to reflect the greater nuisance of noise at those times. 41 Page 22, Heathrow Airport Noise Action Plan 2010-2015 42 Guidelines for community noise, World Health Organisation 1999 http://www.who.int/docstore/peh/noise/guidelines2.html 43 Aircraft Noise and London Heathrow Flight Paths, February 2007, Bureau Veritas, Acoustics and Vibration Group. (commissioned by HACAN) Available at http://www.hacan.org.uk/resources/reports/st06145.text.final.pdf 44 All Change, Aircraft noise is no longer just a West London problem, HACAN, March 2011 45 http://www.heathrowairport.com/noise/noise-in-your-area/operational-freedoms-trial study of airport noise insulation grant schemes highlights the wide variance in the thresholds identified by airports world-wide.46 However we are concerned by the inconsistency that is evident within the Greater London boundary and believe that there is scope to redress this, and develop a strategic approach to recognising and mitigating the impacts of aircraft noise across London.

It is becoming increasingly apparent that there is a need for a strategic approach to noise mapping across London. Residents in areas in east London, such as the Docklands, have, in recent years, begun to experience combined increased levels of noise from aircraft serving London City Airport and Heathrow. The noise contours for both airports are drawn up separately. We understand that this situation may possibly apply to parts of south east London, such as .

The absence of joint contours in those areas where there are a significant number of both Heathrow and City aircraft completely underestimates the actual noise that is being heard. We would urge the Department for Transport in conjunction with the Civil Aviation Authority to consider the scope for developing joint contours or other indicators, such as flight path density plots, or noise event-based measures, for those areas of London where residents and communities are affected by the joint impact of noise from aircraft flying to and from Heathrow and London City Airports.

There should be consistency in mitigating and compensating for aircraft noise impacts. The noise mitigation scheme at London City Airport is currently based on the 57dB LAeq contour, while at Heathrow it is 69dB LAeq. Both thresholds are considerably above the 55dB recognised trigger point for serious annoyance by noise. Heathrow is proposing to adopt the Lden metric thereby reducing the threshold to 63dB. This is a welcome step in the right direction, as the move will narrow the gap between the respective thresholds, but we believe more should be done. At Heathrow the 57 LAeq contour would equate to the 59dB Lden contour at any given point around the airport.47 We have previously urged Heathrow airport to apply a 59dB Lden threshold in its revised mitigation scheme. Over time we would wish to see a lower threshold adopted by both airports.

Night noise The Assembly welcomes the Government’s planned consultation on the arrangements for managing night time flights at Heathrow, Stansted and Gatwick airports later this year. We welcome the inclusion of a review of the costs and benefits of night flights and current literature on aviation night noise health impacts. We intend to submit a full response to the consultation but think it worth reiterating here a number of points raised by the Assembly publication, Plane Speaking, earlier this year.48

Our report stressed the importance of a comprehensive review of the latest evidence on the adverse health impacts of night aircraft noise, including a cost benefit analysis. It also called for the consultation to take full account of the publication of the WHO Night Noise Guidelines for Europe in 2009.49 For as long as any night flights continue, for example, during a phase-out period, consideration should be given to modifying the current night rotation scheme to change runway use/direction nightly, rather than on a weekly cycle, so that, if people's sleep is disturbed on one night, they may have a greater chance of catching up on the following night.

46 Page 9, Comparison of Airport Noise Insulation Grant Schemes – An Update, by Bureau Veritas on behalf of London Borough of Hounslow, June 2011 47 Local Authorities’ Aircraft Noise Council consultation response to Heathrow’s review of its noise mitigation schemes, August 2011 available at www.laanc.org.uk 48 Plane Speaking: Air and noise pollution around a growing Heathrow Airport, March 2012 http://www.london.gov.uk/who-runs-london/the-london-assembly/publications 49 A copy can be downloaded at http://www.euro.who.int/en/what-we-do/health-topics/environment-and- health/noise/publications/2009/night-noise-guidelines-for-europe Air quality and other local environmental impacts Poor air quality is a London-wide problem, but particularly so around Heathrow. There has been little improvement in concentration levels of two key pollutants – NO2 and particulate matter (PM10), since 2001/02. Areas around Heathrow are already in breach of European Union (EU) air quality limits.

The Assembly has recently published two reports that consider air quality impacts quite extensively.

The first, Flights of Fancy, can an expanded Heathrow meet its environmental targets, in 2010 examined the environmental conditions attached to the previous Government’s expansion plans for Heathrow Airport. Among the key issues the report identified, are: the lack of a co-ordinated package of mitigation measures to reduce nitrogen dioxide (NO2) concentration levels around Heathrow; concerns over the perceived disproportionate reliance on aircraft technology, and inadequacy of existing and proposed transport measures to mitigate air pollution levels, plus the lack of clarity around enforcement of the air quality condition. See pages 22 to 28.

The second, Plane Speaking: air and noise pollution around a growing airport 2012, follows on from Flights of Fancy reviewing progress made by Heathrow Airport to address air and noise pollution around the airport. The report proposed addressing air pollution by: increasing use of greener, quieter aircraft, ensuring on-site vehicles meet the latest EU emissions standards, and reducing airport related road traffic. The report also highlights a range of issues that will need to be tackled to improve surface access to the airport and to encourage passengers and employees to use public transport more for their journeys to and from the airport. See pages 17 to 30.

Chapter 5 - Working together The Government is seeking views on how local collaboration might be and transparency might be improved. This section of the response presents the Assembly's views on the role of Airport Consultative Committees and the role of the Civil Aviation Authority.

Airport Consultative Committees (ACC) The Assembly welcomes the Government’s commitment to see ACCs play a more effective role; they provide a useful forum within which to seek input from a wide range of stakeholders. Our response on the noise impacts of aviation highlights the growing inter-relationships between Heathrow and London City Airports, such as the overlapping of flight paths, and differences in approaches to mitigation and compensation.

We consider that there would be merit in enhancing arrangements for inter-airport liaison in recognition of this growing relationship. Both airports have Consultative Committees which provide opportunities for monitoring issues and exchanging views between interested parties, including local authorities, stakeholders and the airport operator. Government guidelines strongly encourage interaction between Airport Consultative Committees where appropriate. Periodic joint meetings of the Heathrow and London City Airport Consultative Committees could be trialled, on an annual or bi-annual basis.

The role of the Civil Aviation Authority (CAA) The Environment Committee’s review of the environmental conditions attached to expansion at Heathrow highlighted the complexity of the governance structure for managing them. Accountability effectively spans three Government departments, (the Department for Transport, Department for Environment, Food and Rural Affairs and the Department of Energy and Climate Change), two regulatory bodies, (the Environment Agency and CAA), and the Committee on Climate Change.

The complex governance structure has not helped in facilitating transparency and improved communication with local communities. Our report, Flights of Fancy, called for a simplification of the governance structure to allow for a single reference point.

We welcome the conclusion of the Pilling Review that the CAA should have a general statutory duty in relation to the environment and that this should be executed within a clear policy framework set by the Government. 50 In our response to the Government consultation on its proposals to update the Regulatory Framework for aviation, we noted that the Government’s review could be an appropriate juncture at which to consider whether a more stringent environmental objective to prioritise environmental considerations in exercising the regulatory function is needed, and whether the CAA is best placed to deliver on the objective. We believe that the UK’s specialist aviation regulator should keep environmental considerations at the forefront of its agenda. We were pleased to hear that the CAA is interpreting its duty in this context.51

In our report, Flights of Fancy, we noted stakeholder concerns about the lack of independent scrutiny of the noise action plans that are drawn up in the UK.52 The airport operator, for example in Heathrow’s case BAA, is responsible for setting targets and actions for managing and abating noise nuisance, and for recording outcomes and monitoring progress. We understand that elsewhere in Europe the approach is to appoint an independent third party to draw up the plans. We would wish to see further research carried out on this point, and believe that the Government should examine and draw lessons from how noise action plans are drawn up by other Member States.

Earlier in our response we referred to the growing need for a strategic approach to noise mapping in London. In our view the CAA in conjunction with the Department for Transport would be best placed to deliver this.

There is also merit in the suggestion that an independent body administer the airport mitigation and compensation schemes. This could help rebuild the trust that has been lost by local communities in how airport operators seek to manage, mitigate and compensate for the negative environmental impacts that can arise from airport operations. We were pleased to hear that those within the aviation industry see a potential role for enhanced independent regulation and are open to looking at it as part of tackling the ‘trust deficit’ that exists between airport operators and local communities.53

31 October 2012

50 Sir Joseph Pilling, Report of the Strategic Review of the CAA, 2008 51Page 2, Health and Environment Committee transcript, dated 16 October 2012 52 Page 18, Flights of Fancy can an expanded Heathrow meet its environmental targets 53 Page 31, Health and Environment Committee transcript 16 October 2012

Written evidence from the CBI (AS 114)

1. The CBI welcomes the opportunity to respond to the Transport Select Committee’s inquiry into the government’s aviation strategy. The CBI is the UK’s leading business organisation, speaking for

some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the UK as well as representation in Brussels, Washington, Beijing, and Delhi, the CBI communicates the British business voice around the world.

The CBI published a refreshed position on aviation capacity in the first quarter of 2012, underlining the urgent need for action. Over the past year we have seen a change in political gear in the debate and building on positive messages in the Autumn Statement and Budget, we have heard a renewed commitment from the Prime Minister and Chancellor to provide long-term solutions to the challenge of rising demand, particularly at the UK’s hub airport. This has resulted in a number of announcements as well as publications – the Department for Transport’s draft Aviation Policy Framework (APF), a new inquiry from the Mayor of London, the Davies Commission’s forthcoming call for evidence on hub capacity and this Transport Select Committee inquiry.

In response to the committee’s inquiry, the CBI proposes that:

2. A future aviation strategy must have growth at the heart of its delivery • The aviation sector is a huge contributor to the UK economy and supports exports and investment across the UK • To accommodate future growth, a new strategy must support point-to-point and hub links • Without action, investment will be hindered and UK firms will be held back, unable to reach their full international potential.

3. This strategy must be all-encompassing – one which addresses short, medium and long term solutions to the capacity problem • In the short term, improvements to surface access, mixed mode operations, reducing the burden of APD and a review of the visa application system must be explored • In the medium term, we must see new runway capacity to serve the demand in the south and improvements to public transport to our airports • In the long term, all options must be explored, including the development of a new hub

4. Environmental goals do not have to constrain sector growth – greener aviation and growth across the industry must be more greatly aligned. • Meeting the emissions reduction challenge is key to delivering a sustainable strategy – inclusion of aviation in the EU Emissions Trading Scheme is a welcome step forward • A balanced approach must be taken to noise abatement policies

5. A future aviation strategy must have growth at the heart of its delivery The aviation sector is vital to the UK economy. As well as contributing directly to the Exchequer through job creation, the industry opens up international gateways and enables our economy to grow through investment and exports. Both the UK’s hub and point-to-point links are crucial to this growth. A future strategy must recognise the value of these connections and their contribution to the UK economy. The CBI has commissioned further economic analysis to put the spotlight on this relationship, which we will be able to share with this committee at a later stage in the inquiry.

6. The aviation sector is a huge contributor to the UK economy and supports exports and investment across the UK: The aviation sector contributes £46.9bn to the UK economy.1 It directly creates 920,000 jobs across the country and supports a thriving tourism industry, with 73.5% of visitors arriving by air.

7. The aviation industry also provides a gateway for new trade links with emerging markets, vital for future economic growth – the CBI has already highlighted how re-orienting UK exports towards high growth markets could lift GDP by £20bn by 20202. Further, this year’s Budget focused on growth and on driving an economic recovery powered by investment and trade. To achieve this, and to meet the Chancellor’s ambition for the UK to more than double its exports to £1 trillion a year, it is vital that the UK is served by the international connections necessary for trade.

8. The UK’s international connectivity has an impact on the UK’s attractiveness as a place to do business. The CBI/KPMG 2012 infrastructure survey, Better Connected, Better Business, found that the quality of international transport connections is an important factor for investment decisions for 65 per cent of companies.

9. To accommodate future growth, a new strategy must support point-to-point and hub links: Both the UK’s hub and point-to-point airports play an important role in supporting economic growth. Our regional airports provide direct links to the most popular destinations in Europe and beyond. By pooling transfer passengers from across the UK and internationally, our hub airport at Heathrow supports a network of global destinations that would be uneconomical to serve on a point-to-point basis from other airports in the UK. We need a strategy that reflects both these complementary functions – and supports them to develop to the wider benefit of the whole UK economy.

10. The government’s Aviation Policy Framework (APF) must clearly articulate the economic benefits of increasing the UK’s hub and point-to-point links. Currently, although it recognises the benefits Heathrow’s hub connectivity provides to the economy, it does not set out a clear vision for how this will be maintained beyond a short term perspective on potentially extending operational freedoms, minor improvements to the border regime and medium term improvements to rail surface access. Further clarity and greater vision for policy action to support our point-to-point links is also needed, and is currently lacking in the government’s draft APF document.

11. The CBI is in the process of undertaking analysis on the benefits of hub and point-to-point links to the UK economy. This analysis will focus on the patterns of growth for hub and point-to-point air links, as well as the links between direct air routes and trade investment flows between the UK and five other EU economies as well as the fastest growing emerging economies. Following the publication of our analysis, the CBI would welcome the opportunity to provide evidence to the Transport Select Committee on our findings.

12. Without action, investment will be hindered and UK firms will be held back, unable to reach their full international potential: Businesses have told us that despite the importance of international connections to their investment decisions, the availability of direct flights to emerging economies is an increasing concern: 54% of companies who deem direct flights to China crucial are dissatisfied with current availability. Our competitors are already serving more routes to high growth markets than the UK: for example, 176 destinations in 90 countries are served by flights from Heathrow with two routes to mainland China, whereas in Frankfurt, 225 destinations in 111 countries are served with six routes to mainland China3. Without action, the UK risks becoming a branch-line destination on the route map of global airlines. This is a damaging break in the UK’s export chain.

1 Economic benefits from air transport in the UK, Oxford Economics (2011) 2 Winning Overseas: Boosting business export performance, CBI/Ernst & Young, 2011 3Connecting for growth‐the role of Britain’s hub airport in economic recovery, Frontier Economics (September 2011) 13. This lack of connectivity has the potential to limit foreign direct investment in the UK. If we are to achieve increased trade with high growth economies and retain our reputation as an attractive place to invest, the government’s strategy must ensure that the UK remains a world-class business destination.

14. This strategy must be all-encompassing – one which addresses short, medium and long term solutions to the capacity problem The aviation strategy must balance support for thriving point-to-point airports across the UK with measures that address the impact of capacity constraints at the UK’s hub airport, delivering for passengers and freight traffic. It must also balance short-term measures to address capacity constraints, with a clear plan to sustain growth in the medium and long term.

15. In the short term, improvements to surface access, mixed mode operations, reducing the burden of APD and a review of the visa application system must be explored: In the short term a number of measures should be implemented to improve our airports to help support and expand their operations. Tough choices, such as mixed mode operations at Heathrow, must be made to maximise the efficiency of existing capacity to ‘bridge the gap’ from now until a more substantive decision is made. Other smaller measures, including surface access improvements, could also be reviewed to support current aviation in the UK. Already the government has announced the go-ahead for key surface access projects – the new £500m western rail link from Heathrow, and the £50m station upgrade at Gatwick, for example. The government must now build on these announcements and, as part of its interim report in 2013, the CBI will urge the Davies Commission to take forward some of these short term measures as a matter of urgency. • Surface access improvements: The CBI proposes key surface access improvements to help link our road and rail routes better to our existing airports. The government has already sensibly prioritised a number of key transport schemes in its National Infrastructure Plan 2011 and more recently, the government’s draft aviation policy framework announced further targeted surface access improvements to a range of UK airports including Heathrow, East Midlands Airport and Gatwick. In total, over this spending review period the government has proposed to invest £1.4 billion in rail and road schemes, which will directly or indirectly benefit airports across the UK. This is welcome news but we must ensure that these projects are implemented as a matter of urgency. • Fast-track mixed mode operations: The CBI urges government to use the APF to permit consideration of the only serious measure left to improve operations at Heathrow in the short term. It should provide a clear signal for the Davies Commission’s interim report at the end of 2013 to consider a fast-tracked move to ‘mixed mode’ operations at the airport. Extending existing trials of ‘operational freedoms’ at Heathrow – in which the airport can temporarily use both runways for departures or arrivals at times of acute delays – to ‘mixed mode’ operations, with Heathrow able to operate both runways flexibly more permanently, could in theory unlock 10% in capacity, which could be used to increase the airport’s resilience and give some capacity ‘headroom’. This would necessitate changes to the respite regime for local residents. In order to get the maximum capacity yield from mixed mode operations, a number of ground improvements would need to be made at Heathrow Airport. These improvements would be subject to planning permission from local authorities. • Reduce the burden of APD: The government’s current draft APF document notably avoids the question of taxation, but setting a clear and sustainable future for Air Passenger Duty (APD) is key to supporting a thriving aviation sector. The UK’s APD rate remains the highest air passenger tax in the EU and has seen significant increases in recent years. Following the Budget earlier this year, the CBI was disappointed to see that the government had not heeded on our calls to set aside the 2011 inflation increase (of 3%), deferred in last year’s Budget. This meant that we saw an above-inflation increase of 8% in April. There must be future restraint on changes to this tax: the government must balance the value of air travel’s contribution to the Exchequer with the potential impact of further duty rises on the UK as a place to trade and invest – this applies equally where APD is set to be devolved. • A review of the visa application system: The current UK visa application system is a barrier to entry and an additional cost to investors when looking to come to the UK. The UK short stay visa costs £78, compared to around £53 for a Schengen visa, which allows visitors access to 25 countries. This may have been a contributing factor to why France attracted eight times as more visitors from China last year than did the UK, and Germany six times more visitors than the UK.4 The burdensome form filling and administrative process needs to be reviewed if we are to attract business to the UK.

16. In the medium term, we must see new runway capacity to serve the demand in the south and improvements to public transport to our airports: The Department for Transport projects future passenger demand to increase by at least 40% by 2030, which is the lowest of future demand forecasts. New runway capacity in the south would help to accommodate this demand. The CBI proposes that the only way the UK can continue to compete in the international marketplace and can unlock substantial capacity is if new runway capacity is implemented to take some of the strain off our current hub airport. We propose that this should serve the south of the UK – at Heathrow, Gatwick, Stansted, Birmingham or elsewhere – subject to an urgent review of the most feasible option to address the current constraints at Heathrow.

17. It is vital that the Davies Commission, when assessing the UK’s capacity needs, implements a medium term strategy to ensure that the UK does not fall behind its competitors, whilst a longer term solution is implemented.

18. Building on our short term measures to help improve surface access and reduce emissions around airports, increasing public transport access in the medium term, to UK airports from 40% to 60% by 2030, will not only boost surface access, further driving down environmental concerns, but would help to improve the UK’s connectivity to its point-to-point airports. Major infrastructure projects such as HS2 and the Edinburgh tram link, are good examples which will support the UK’s international connectivity.

19. In the long term, all options must be explored, including the development of a new hub: Even with extra runway capacity in the medium term, aviation capacity constraints in the long term will still put a ceiling on the UK’s future growth. The CBI has therefore called for all options to be explored in the long term, including the development of a new hub airport for London.

The CBI believes that a successful hub for the long term should include the following characteristics:

• Sufficient runway and terminal capacity to accommodate future demand projections, with headroom to ensure resilience • Excellent connectivity to London and the wider UK transport network • Capacity to accommodate passenger and freight traffic on a single site.

20. Environmental goals do not have to constrain sector growth – greener aviation and growth across the industry must be more greatly aligned. Continuing to meet the emissions reduction challenge is key to delivering sustainable aviation development, in line with the Committee on Climate Change’s vision for growth in the sector up to 2050. Industry is committed to meeting the challenge, and is already innovating and responding to reach environmental targets: for example, the Rolls Royce Trent 1000 engine –

4 UK Tourism Statistics 2012 which entered service in 2011 on the Boeing 787 – has 12 per cent lower specific fuel consumption than the Trent 800 engine, which entered service in 1996. Similarly, the Trent XWB engine – due to enter service on the XWB in 2014 – will be over 15 per cent more fuel efficient than the first Trent engine, which entered service in 1995. It is clear that with increasing sustainable improvements across the sector, aviation growth should not be constrained solely on environmental grounds.

21. Meeting the emissions reduction challenge is key to delivering a sustainable strategy – inclusion of aviation in the EU Emissions Trading Scheme is a welcome step forward: In the absence of an international agreement to establish a global aviation emission trading scheme, the inclusion of aviation into the EU Emissions Trading Scheme (ETS) is a welcome step. Whilst we support the inclusion of aviation into this scheme, we are concerned about the impact this is having on the UK’s ability to trade. With a number of countries opposed to the scheme, we must ensure that this contention does not have a lasting knock-on effect on EU trade relations. It is vital that governments reach a durable solution on how to make the scheme more workable for all parties involved and must work constructively at an EU level, pushing for the International Civil Aviation Organisation (ICAO) to work towards a global deal.

22. A balanced approach must be taken to noise abatement policies: As part of a competitive service in the logistics industry, night flights are used where express packages are collected towards the end of the business day for delivery early the following morning. These flights are crucial: a runway slot used by a single express service contributes about £63,000 in overall economic benefits to the UK through productivity (compared to a scheduled passenger service which contributes about £22,000).5 The freight industry recognises the environmental and social impacts of these flights and applies noise and emissions abatement measures accordingly. It is therefore critical that the government works with industry on the review of the current night flights regime at Heathrow, Stansted and Gatwick to ensure it continues to protect capacity for express freight links and a balanced approach is taken in future.

23. A successful aviation strategy is key to the growth of the UK economy and the government must take firm decisions as soon as possible. A seamless strategy must be implemented which integrates the work of the Davies Commission on capacity as well as the Department for Transport’s Aviation Policy Framework.

1 November 2012

5 AICES, Night Flights: Vital for UK competitiveness, (July 2011)