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UK Policies will destroy the legacy of its Aviation
- The International Air Transport Association (IATA) has called on the British government to improve its global competitiveness in air transport by taking a global approach to aviation and climate change, reducing taxes, changing the economic regulatory structure for airports, and developing a proper strategy to safeguard the economic benefits of aviation.
“The UK has a great tradition of leadership in aviation. But any industry can only take so many knocks before the damage is permanent.The government’s policy pillars of excessive taxes, inefficient airport regulation and limiting growth will destroy the UK’s proud aviation legacy,” said Giovanni Bisignani, IATA’s Director General and CEO in a speech to the Aviation Club in London.
Bisignani noted that aviation supports about 1.5 million UK jobs along with $76 billion in economic activity. “Aviation provides critical global connectivity to this island nation. It is a great mystery to me why the government seems so intent on destroying its competitiveness with a policy agenda stuck in the past,” said Bisignani. To support aviation’s economic benefits, he called for urgent policy action in the following areas:
• Cost: The World Economic Forum’s Travel and Tourism Competitiveness report ranks the UK last out of 133 countries for cost competitiveness, 129th on fuel prices, and 121st on ticket taxes and airport charges. Bisignani took aim at the UK’s “phantom regulator” as one of the causes of weak cost competitiveness. “Recent decisions have got it all wrong. While the global airline industry was cutting costs and improving efficiencies to survive, the regulator allowed BAA a 50% increase for Heathrow charges. He was even more generous for 2008-2013, with an 86% increase.
• Capacity: “With the decision to abandon plans for a third runway, London Heathrow is becoming a secondary hub,” said Bisignani. Heathrow has two runways limiting its growth compared to other major European hubs with greater runway capacity—Amsterdam has five runways while Paris, Madrid and soon Frankfurt will have four. Selling the government’s share in UK NATS: Bisignani, who sits on the Board urged the government to consider carefully the sale of its shares.
• Winter weather: Bisignani called for better preparedness for severe weather in the wake of major airport shutdowns in December. “The inconvenience to passengers and the paralysis of the UK economy for many days is unacceptable from any perspective. Shoveling snow is not the airline’s responsibility. The financial losses they suffered must be compensated, and we must approach next winter with a better plan."
Climate change: Bisignani criticized the UK government for taking an isolated and punitive policy approach to managing aviation’s emissions, particularly with the Air Passenger Duty now standing as a GBP2.7 billion burden on the industry. “That is enough to offset all of UK emissions—not once, but four times," said Bisignani. He called for an immediate end to Air Passenger Duty and for the UK and Europe to cooperate on a global framework for economic measures coordinated through ICAO.
