Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence


Memorandum by London Luton Airport (IT 44)

A NEW DEAL FOR TRANSPORT:
BETTER FOR EVERYONE

1. INTRODUCTION

  1.1 The Government's commitment to an integrated transport system provides a welcome opportunity to develop a strategic and efficient inter-modal system of transport providing greater mobility for all.

  1.2 A very comprehensive statement of intent, much will depend upon the policy papers for each topic which will determine the practicability of attaining the White Paper's objectives.

  1.3 A UK Airports Policy warrants early preparation rather than await the outcome of the Heathrow Terminal 5 Public Inquiry given the current growth of traffic. LLA will respond comprehensively to the proposals when submitted.

2. LONDON LUTON AIRPORT

  2.1 LLA is currently one of the fastest growing airports in the United Kingdom. 4.3 million passengers are expected to be handled this year with five mppa likely in 1999-2000.

  2.2 In January, LLA embarked upon a £80 million expansion of the airport and is currently preparing proposals to increase capacity further in accordance with Local Plan Policy. The proposals will take account of the White Paper's objectives for integrated transport and sustainable development.

3. ENDORSEMENT TO THE PRINCIPLES OF THE GOVERNMENT'S PROPOSALS

  3.1 LLA supports the following key objectives, in principle, subject to a review of the more detailed policy papers:

  3.1.1 A predominantly advisory as opposed to regulatory role for Government supporting LLA's view that Government's role is one of stewardship as opposed to regulation.

  3.1.2 The reduction of pollution and improvements to air quality.

  3.1.3 The publication of targets.

  3.1.4 The views of the customer as a priority in determining transport needs. It is important that it is the transport users themselves who determine the "public interest".

  3.1.5 The need for strategic vision throughout transport policy, and within those other areas of Government policy that either impact upon or are affected by transport, most notably in the fields of environment and economic regeneration.

  3.1.6 Modernisation of the planning system and welcome emphasis on economic development issues, particularly in those areas in urgent need of regeneration policies.

  3.17 the provision of safe, secure, clean, efficient and value for money public transport and improved customer service training, reliability of journeys, provision and integration of information, fares, and interchange of transport systems;

  3.1.8 the production of Local Transport and Green Transport Plans;

  3.1.9 the development of Quality Partnerships and Quality Contracts;

  3.1.10 support for TENS, particularly where supporting integration.

4. AIRPORTS

  4.1 LLA regrets that the proposed Airports Policy will not be available for consultation until after the Terminal 5 planning process is complete. Both RUCATSE and the White Paper identify LLA as being able to provide relief to the other London airports, especially in the area of low fare scheduled services. Currently there is a lack of policy to support this role. LLA therefore urges Government to prepare a consultative document on Airports Policy as a matter of urgency on a "with and without" T5 basis.

  4.2 Airports are partners in improving access but should not be required to contribute a disproportionate cost of access improvements. The development of integrated local transport initiatives in which airports are key participants can provide the catalyst to public transport improvements and LLA will pursue this objective as it brings forward further proposals for expansion, in partnership with local authorities and the local community. Noteworthy is the recent TENS award of funding support to our feasibility study which will examine a potential transport link from the Luton Airport Parkway Station to the airport passenger terminal. It is intended that the link will integrate with other planned local transport improvements to the benefit of the community as a whole.

  4.3 In terms of rail access, the short term remit of the Franchise Director and his unwillingness to offer a Section 54 undertaking which would have secured private sector investment in the new Luton Airport Parkway Station, has resulted in a substantial delay to construction. Modal integration should have been a consideration as without doubt the Director's decision has limited LLA's capability to increase public transport modal share.

  4.4 Should it be determined that airports meet their external costs this should only be considered where the evaluation of all transport modes is undertaken on a fair and equitable basis and includes an assessment of the economic benefits derived from each mode.

  4.5 The redistribution of traffic through regulation has failed in the past, conflicts with consumer interest and has international implications likely to result in regulation and redirection of traffic within other countries to the disadvantage of UK airlines and industry generally. Better to encourage the development of additional services and/or increased route frequency from airports other than the main hubs, although relief to the south eastern airports should only be to satisfy local demand where this is economically justifiable. The role of low fare airlines at the less congested airports will be important as is the case at LLA now.

  4.6 Borrowing outside the PSBR should be available to all Local Authority airports or not at all. To do otherwise distorts competition. There needs to be consistency to ensure fair competition.

  4.7 Slots at airports are created by airport operators, in conjunction with the air traffic management organisation and other agencies at the airport, through their investment and the adoption of efficient operating practices. Airports thus have a legitimate interest in the allocation of slots at an airport, including the ownership of slots in the first instance.

  4.8 LLA supports the principle of transparent and non-discriminatory criteria for the allocation of slots administered by a neutral co-ordinator in accordance with EU procedures. Airports play an important role in serving regional communities, however, and slot allocation procedures should recognise that airports need to serve the full range of passenger demands to and from their catchment area, consistent with the economics of airline operation. This may require safeguarding of slots for particular categories of traffic. The needs of each airport will be different and should be recognised by continuing to allow local rules, provided that these are transparent and non-discriminatory and provide for the needs of the airport operator, its airline customers and passengers. This is particularly relevant in the case of UK regional air services requiring access to major UK and European hub airports to give consumers access to the full range of international air services.

  4.9 Whereas, in some circumstances, priority in the allocation of pool slots to new entrant airlines might be appropriate to encourage airline competition, LLA believes that it may be preferable to give priority to new route development or the introduction of competition onto existing routes, whether in the EU or otherwise, in order to increase the range of services available to passengers. This will depend on local circumstances. The ultimate test should be consumer benefit

  4.10 Responsibility for the negotiation of air services agreements by the EU should only be delegated when they can demonstrate that they can do it better.

  4.11 The separation of ATC safety, economic regulation and operational issues is welcome.

  4.12 All major UK airports have their own air noise policies, many of which are voluntary. Government needs to ensure that any noise standards are consistent to ensure that neither airports nor airlines can claim a competitive advantage, both within the UK and the EU. Further, airports must ensure that any planning conditions to which they are prepared to agree do not undermine the capability of other airports to meet similar conditions without disproportionately affecting their business.

  4.13 In respect of taxes, any proposals, if agreed, must be non-discriminatory. The Air Passenger Departure Tax for example, fails to distinguish between the low fare carriers and other scheduled operators producing a disproportionate affect upon ticket cost.

  4.14 United Kingdom regions have disparate needs and the devolving of transport decisions, amongst others, to the regions is sensible. National policies must not, however, be undermined by regional priorities. The objective should be to ensure the optimum use of airports as national, as well as a regional, assets.

  4.15 Any assessment of the cost of environmental impact must be evaluated on a fair and equitable basis between all transport modes and should include the economic and social benefits that transport can bring, particularly with regard to social inclusion.

  4.16 LLA is alarmed at the prospective EU Charges Directive that seems to suggest that airports will be permitted to cross subsidise others within their group (e.g., BAA) through commercially generated income. LLA has suffered adversely as a result of the competition from Stansted and offered evidence to support its claim that charges at Stansted were priced below cost as a consequence of which business was lost from LLA. Cross subsidy within BAA enabled this anti-competitive situation to arise. LLA urges Government to use its influence to ensure that the EU Directive preserves fair competition.

5. THE RELEVANCE OF THE INTEGRATED TRANSPORT POLICY WHITE PAPER TO THE FURTHER DEVELOPMENT OF LLA

  5.1 The current Phase 1 development works will provide a capacity increase to 5 mppa. LLA is currently developing proposals to increase capacity beyond 5 mppa.

  5.2 Locally the two most important environmental issues will be air noise and road traffic. It is to both that mitigatory measures will be focused.

  5.3 Simultaneously LLA is implementing an Environmental Management System (EMS) with a view to achieving accreditation to ISO 14001 in 1999. Not only will this address the need for continuing environmental best practice in the day to day operations of the airport, it will also be used to underpin the preparation of future Environmental Statements that will accompany Planning Applications.

  5.4 Further, LLA is but one business in a geographical corridor of Luton that includes other potential major development sites. All of these developments will bring pressure to bear not only on the access roads but also on the public transport system generally. There is, therefore, a major challenge, and opportunity, for the developers to contribute to the improvement to and integration of public transport within the town. LLA intends to be a leader in bringing about such development. This opportunity is further enhanced by the proactive transport policies of Luton Borough Council whose schemes include the Luton Dunstable Translink project which aims to upgrade and integrate public transport provision within the local conurbation.

  5.5 LLA will, therefore, specifically focus upon opportunities for improvements to the local transport network and public transport generally. This will be enhanced by the project to provide a new railway station closer to the airport in respect of which construction has already started and is scheduled for completion next year.

  5.6 In conclusion, LLA looks forward to the receipt of practical support as it pursues its role in delivering its contribution to the development of integrated transport within the United Kingdom.

24 September 1998


 
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