Annex C
TEXT OF LETTER FROM CHRIS MULLIN MP TO MRS
GWYNETH DUNWOODY MP 22 MARCH 2000
ACCESS TO
UK REGIONAL AIRPORTS
When the Government responded to the Environment
and Transport Committee's report on Regional Air Services in January
1999, we said that we would review our policy on granting access
to regional airports by early 2000. We have now completed a further
consultation with interested parties, and have concluded that
we should not change our current policy. That policy is to grant
unrestricted access to UK regional airports only if our aviation
partners grant reciprocal rights, ie also allow unrestricted access
for UK airlines from UK regional airports to points in the foreign
country; and to continue to seek to trade fifth freedom rights,
recognising, however, that they could be critical to the viability
of a service to a regional airport, and that new services to regional
airports bring wider economic benefits.
The results of our consultations were not unexpected.
I am attaching copies of the letter that the Department sent to
interested parties and of the responses that we received. We also
received responses from two parties who asked that their responses
should not be published. As you will see, regional airports generally
argued that fifth freedom rights could make all the difference
between a service starting or not starting, or going elsewhere;
and emphasised the wider economic benefits that international
scheduled services can bring to regional economies. They also
drew attention to our declared policy of seeking to make maximum
use of regional airports. The UK airlines, scheduled and charter,
argued that it would be wrong to give away rights to countries
that did not themselves pursue liberal policies and where they
faced difficulties in transacting business.
I would like to make clear that it remains the
Government's policy to make maximum use of our regional airports,
not only because this must bring wider economic benefits to the
regions but also because of the pressure on Heathrow and Gatwick
capacity. I will explain below how, we believe, our approach to
bilateral air services negotiations is consistent with that.
First of all, I would like to review the experience
of the last 18 months since the offer was made. Only 17 countries
have accepted the UK's regional offer out of a total of 74 countries
who were offered it. Some parties have argued that this somewhat
disappointing response means that we need to make the offer more
generous—by abandoning reciprocity and conceding unilaterally
fifth freedom rights; others have claimed that the original offer
was not fully understood by some countries. We think that some
countries may have misunderstood the original offer, and propose
to write again to those who have not responded, or declined it.
I should say, however, that we do not expect this process to produce
many new services to regional airports. Many of the countries
that have not replied at all are served only by an infrequent
service from London, and presumably recognise that demand would
not support a service from their country to a UK regional airport.
Although it is true that nearly all services
from UK regional airports to countries outside the European Economic
Area (within which, of course, there are no restrictions) are
provided by foreign airlines, we do not think it would be right
to abandon the requirement for reciprocity. This would carry with
it the risk that a foreign country would accept the rights but,
once one of its airlines had established a service from a UK regional
airport to, say, its capital city, then deny the right for a UK
airline to come on to the route to compete. We would then have
established a monopoly service, which would not be in the long-term
interest of UK consumers.
We are prepared to be more liberal in our approach
to fifth freedom services to and from UK regional airports. Within
the bilateral framework we have sometimes offered fifth freedom
rights from regional airports without seeking specific rights
in return: we did so recently to Singapore. Generally, however,
we seek to trade such rights, especially if in our view the aviation
partner is not meeting its bilateral obligations—for example
by making it difficult for UK airlines to remit earnings to the
UK.
In preparing for negotiations where access to
a regional airport, and fifth freedom rights, are clearly going
to be under discussion, we invite the regional airport to take
part in key meetings to decide the UK's negotiating strategy,
and ask the Civil Aviation Authority to carry out an analysis
of the likely effects of new services operated by a foreign airline
on UK airlines' revenues and on airport revenues and the wider
regional economy. We do, therefore, take account of the wider
economic benefits of new or additional services on the regional
economy when deciding our negotiating strategy.
Reviewing the experience of the last 18 months,
there have not been any negotiations where our negotiators have
sought "too much" in return from their foreign counterparts
so that a service to a regional airport has been lost. We know,
however, that in recent negotiations—with Pakistan and Greece—we
have managed to obtain valuable rights for UK airlines in return
for granting fifth freedom rights from UK regional airports. It
is this experience with convinces me that it is in the best overall
interests of the UK to continue with our current case by case
approach of seeking to trade fifth freedom rights.
My officials would be very willing to discuss
this with you.
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