Hansard of Oral Evidence: 28 Jun 2013 Open Skies Policy
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T Y N W A L D C O U R T O F F I C I A L R E P O R T R E C O R T Y S O I K O I L Q U A I Y L T I N V A A L P R O C E E D I N G S D A A L T Y N S T A N D I N G C O M M I T T E E O F T Y N W A L D O N E C O N O M I C P O L I C Y R E V I E W B I N G V E A Y N T I N V A A L M Y C H I O N E A A S C R U T A G H E Y P O L A S E E Y N T A R M A Y N A G H OPEN SKIES POLICY HANSARD Douglas, Friday, 28th June 2013 PP124/2013 EPRC-OS, No. 4/12-13 All published Official Reports can be found on the Tynwald website www.tynwald.org.im/Official Papers/Hansards/Please select a year: Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, Isle of Man, IM1 3PW. © High Court of Tynwald, 2013 TYNWALD STANDING COMMITTEE, FRIDAY, 28th JUNE 2013 Members Present: Chairman: Mr L I Singer, MHK Mr D M W Butt, MLC Mr M Coleman, MLC Clerk: Mr R I S Phillips Business Transacted Page Procedural ................................................................................................................................. 67 Evidence of Capt. Steve Bridson, Captain with Flybe........................................................ ….67 The Committee adjourned at 4.03 p.m. and resumed its sitting at 4.05 p.m. Evidence of Mr Brendan O'Friel, Chairman of TravelWatch, Isle of Man and Mr Paul Moncaster, Treasurer of TravelWatch, Isle of Man ................................................. 74 The Committee adjourned at 4.46 p.m. _________________________________________________________________ 66 EPRC-OS/12-13 TYNWALD STANDING COMMITTEE, FRIDAY, 28th JUNE 2013 Standing Committee of Tynwald on Economic Policy Review Open Skies policy The Committee sat in public at 3.35 p.m. in the Legislative Council Chamber, Legislative Buildings, Douglas [MR SINGER in the Chair] Procedural 5 The Chairman (Mr L I Singer MHK): Can I welcome you all here. The Standing Committee is taking evidence on the Open Skies inquiry. We have three witnesses today. First of all, Capt. Bridson, and then Mr Brendan O’Friel and Mr Moncaster of TravelWatch. Can I introduce you to the Members of the Committee, Mr Mike Coleman MLC and Mr 10 Dudley Butt MLC. I am Leonard Singer MHK, the Chairman, and our Clerk is Mr Roger Phillips. Can I ask everybody to ensure that their mobile phones are turned off and also in the second part that the witnesses do not speak over one another because then it is very difficult to record on Hansard. 15 EVIDENCE OF CAPT. BRIDSON The Chairman: So Capt. Bridson, can I welcome you? 20 Capt. Bridson: Thank you. Q254. The Chairman: I thank you for the evidence that you have forwarded to us. Would you like to give us an introduction of who you are, what you do and any initial comments that you 25 would wish to make on this? Capt. Bridson: Yes, I would. I have prepared a short statement which I would like to make. My name is Steve Bridson. I have been a Captain with the Flybe Group since they took over BA Connect, in 2006 it was now, and prior to that I was with Manx Airlines from 1996. I live on 30 the Isle of Man. My family live on the Isle of Man as well. I have a small statement which I would like to read. First of all, thank you for inviting me to speak to you on this matter of great importance to the Isle of Man. I concern myself primarily with the first part of the Committee’s remit, that being the question, ‘Is the Open Skies policy, in the light of changing circumstances, still in the best 35 interests of the Isle of Man in preserving and encouraging an adequate, frequent and long-term network of scheduled air services between the Island and major business and social destinations?’ I would like to make it very clear and state for the record that although I am employed by Flybe, anything I say today should not be considered as the view of Flybe – it may or it may not be. But I am here on my own to speak for myself as a person interested in this, who has got perhaps an 40 inside view of what is actually going on. I believe the changing circumstances and the reason for this review is to establish whether the arrival of an airline with large aircraft based off the Island is in the best interests of the Isle of Man. I suppose it depends what the Isle of Man wants. Does the Isle of Man want one or two flights per day to those major business and social destinations? Is that sufficient for the Isle of 45 Man? I can only assume that the preservation of current levels of frequency is what the Open Skies policy strives to achieve because that is in the remit of the Committee. _________________________________________________________________ 67 EPRC-OS/12-13 TYNWALD STANDING COMMITTEE, FRIDAY, 28th JUNE 2013 The arrival of a carrier with large aircraft based off-Island is unlikely to preserve the current level of frequency, nor will this service be as reliable. I will expand on the reliability point in a moment. 50 Official records show that the number of passengers travelling to and from the Island has changed little over the past 10 years; this despite the number of seats being available on the Island’s key routes increasing significantly. This extra capacity and lower fares borne by competition does not appear to have done anything other than move passengers from one brand to another. If I may comment on something which was said at the previous sitting? I was quite 55 surprised to hear Miss Gayward’s statement that in her opinion easyJet had not taken any passengers away from Flybe. Flybe’s load factor – that is the percentage of seats sold on board an aircraft – has decreased by 10% on the Gatwick route since easyJet started and there have been falls in the numbers of passengers using the Southampton, Luton and Birmingham routes as well. In fact, the reduction in 60 the number of passengers carried by Flybe to and from the south of England is surprisingly similar to the number of passengers now carried by easyJet to and from Gatwick. Looking at January and February of 2013 in comparison to the same period in 2012, Flybe carried 7,529 fewer passengers to the south of England, whilst easyJet carried 7,404 passengers on its new Gatwick service. I do not believe a new market has been developed; more that the market, 65 which is regionally mobile, has followed the cheap fares borne by competition. The shift of passengers from the regions to Gatwick has without doubt caused the reduction in frequency of services to those other airports as they become less viable to maintain. Just this morning, I spoke to a senior manager at BA CityFlyer. He was quite frank in blaming overcapacity to London – since easyJet’s arrival on a Gatwick route – for them cancelling their 70 early morning and evening services to London City from August. A major blow to the business community here. EasyJet’s load factor on this Gatwick route is approximately 55% – the same as Flybe is now – and this compares against a company-wide load factor for easyJet of 85%. That route may be performing to expectation, but with low fares and a poor load factor, I cannot see how that route 75 can be anything other than a loss leader at the moment. That will of course change next April when easyJet become the sole operator on the route. Once competition is removed, fares invariably rise. Also, the more seats that are sold on a particular flight, the more expensive tickets for the remaining seats become – a double whammy due to the removal of competition and reduction in capacity. 80 I do not believe that there is enough business for a carrier with a 150-seat aircraft to do more than two round trips a day to Gatwick, or for that matter to any airport per day as there are simply not enough people who want to come to the Isle of Man. As such, I believe the Open Skies policy fails that particular test regarding the frequency of services. I mentioned the reliability of services earlier, and I believe that there is a great benefit in 85 having aircraft based here on the Isle of Man with a full resource of engineers and crew. There is the obvious benefit for a first wave of departures and late arrivals. Having aircraft based here also means that when the weather is poor and landings are not possible, the locally based aircraft will hold for longer or in the event of a diversion, immediately return when conditions improve to ensure the continuation of the Island based line of work allocated to that aircraft and crew. An off- 90 Island based aircraft will have lines of work not involving the Isle of Man and will divert more readily to its appointed departure.