Memorandum by Belfast International Airport
Ltd (BIA)
AIR SERVICE AGREEMENTS BETWEEN THE UNITED
KINGDOM AND THE UNITED STATES
Belfast International Airport wishes to present to
the Sub-committee its views on the three Terms of Reference as
outlined in Press Notice 20/1999-00 of 9 March.
(a) The impact of a continued failure to resolve
the negotiations over the bilateral air services agreement between
the United Kingdom and the Untied States on the economy of the
United Kingdom as the leading gateway for air passengers between
Europe and the United States, and on the passenger and freight
air transport industry.
Belfast International Airport is the largest
of the three civil airports in Northern Ireland to handle air
transport movements. It is the only one with a runway long enough
to support intercontinental flights, and it is the only one currently
to be served by scheduled passenger services from Heathrow Airport.
As an offshore Province of the United Kingdom,
Northern Ireland's population of some 1.6 million is insufficient
to justify frequent direct air services to the USA.
For some years now, the airport has been linked
by Aer Lingus to New York through the operation of a three or
four times a week service via Shannon Airport. In 1999, this service
carried 42,000 passengers at an average of 115 passengers a flight
in each direction.
In addition, the airport supports regular Summer
charger flights to Orlando—there were 34,000 such passengers
in 1999.
All other business and leisure travel needs
of the Province for the USA therefore have to be met by services
from other airports. Northern Ireland needs to be linked with
those airports if it is to benefit from inbound business travel
and tourism, and if those benefits are to be shared with Northern
Ireland residents.
Because of the relatively small extent of the
Northern Ireland market, there are few air services to those continental
cities that have frequent air services to United States:
— there are no services from any Northern
Ireland Airport to Amsterdam or Frankfurt;
— although there are three flights
a day to Paris Charles de Gaulle via intermediate cities, the
earliest arrival is currently 1700 hours, well after all flights
for the USA have departed;
— the single daily non-stop flight
to Brussels arrives at 1625;
— the one-stop turbo-prop flight to
Copenhagen arrives at 1310;
— there are no services to Dublin.
Apart from the land journey to Dublin, all journeys
to other European airports require either two short sea crossings
or connections at a mainland airport.
As a result, the Province has to rely almost
entirely on its air links with other UK airports for onward travel
to the USA, specifically Heathrow, Gatwick, Manchester, Glasgow
and Birmingham, to all of which there are currently frequent air
services.
It is vital for the health of the Northern Ireland
economy that these mainland airports are not restricted in their
ability to offer services to the USA.
BIA is concerned that the recent impasse between
the DETR and the US authorities is harming the ability of airlines,
whether British, American or of other nationalities, to offer
the air services to the USA needed by the business communities
throughout the United Kingdom.
BIA is convinced that the whole British economy
benefits from the historic strength of London's airports, particularly
due to their impressive array of scheduled passenger services
to a wide range of American destinations.
BIA would urge the DETR to reach an agreement
with the US authorities which would allow the expansion of such
services, giving advantages to peripheral regions of the United
Kingdom that may not be enjoyed by other peripheral regions in
Europe.
BIA would also ask the DETR not to concern itself
with the nationality of the airlines—the economy benefits
as much from the introduction of a daily service to the USA by
a foreign carrier as it does from a British carrier. Apart from
services from London, there is only one scheduled flight a day
to the USA by a British airline [BA B767 Manchester-New York]
and the regions are otherwise reliant on services provided by
airlines from the USA and elsewhere. The regions do not wish to
return to an era where foreign airlines can only operate a route
if a British carrier also wants to.
Nevertheless, BIA must sound a note of caution.
It is excellent news for the United Kingdom economy as a whole
if London's dominance in transatlantic air travel is retained.
It is less good news if this can only be achieved at the expense
of connecting air services from those parts of the United Kingdom
reliant on air transport—Northern Ireland, northern Scotland,
the Isle of Man and the Channel Isles.
If the air links from Belfast to Heathrow and
Gatwick are "traded in" for the improved links to the
USA, then this Province—and no doubt many other peripheral
areas of this nation—will not be allowed to share in these
benefits. Indeed, it is likely to suffer significant damage.
This risk of "trading in" comes form
two sources. Firstly, earlier discussions between the UK and the
US authorities on the proposed BA/AA link appeared to focus on
the number of Heathrow slots that the two airlines would have
to release to potential new operators. There was a refusal to
state which slots were likely to be conceded, but most observers
suspected that BA would hand over significant numbers of its domestic
operations in order to win the greater prize of anti-trust immunity
for its proposed link with American Airlines.
As BA gradually retrenches its domestic operations
at Heathrow—firstly Plymouth and Newquay, then Inverness,
then Guernsey and now Jersey—business and commercial interests
in Northern Ireland are concerned that any future requirement
by the US to gain extra slots at Heathrow for its carriers will
be borne by the peripheral cities of the nation.
Secondly, the natural commercial interests of
the two airlines operating between Belfast and Heathrow—BA
and British Midland—will be put sorely to the test if they
are indeed allowed to increase their services to the USA (or indeed
to any long haul destination).
With BMA recently cutting back on its frequencies
to Teesside and Leeds Bradford, Northern Ireland is naturally
concerned that its links to Heathrow will be under immense strain
if either of the two airlines is permitted to open up new routes
to the USA.
BIA senses that in the near future, Heathrow
will become an airport only for intercontinental flights. The
domestic connections and those from the smaller European cities
will be snuffed out, to the eventual detriment of Heathrow itself
as the airlines find that large proportions of the feed traffic
they originally relied upon is no longer able to access the airport.
It believes that the DETR's attempts to win
additional rights from the USA should be tempered by the realisation
that it might accelerate the loss of air links from Heathrow to
the British regions, to the ultimate economic detriment of those
regions.
It is important to realise that existing flights
from Belfast International to Heathrow cannot be easily replaced
elsewhere. There are no slots available at Gatwick for such evicted
flights, and soon there will be no peak time slots available at
Stansted. London City cannot accommodate the size of aircraft
that would be needed to carry the dislocated traffic, and Luton
Airport still does not have the rapid access to London or the
necessary connections to satisfy the demand.
In 1999 there were almost 1.9 million passengers
flying between the three Northern Ireland airports and the five
London area airports, and of these, over 1.2 million were on the
Heathrow route to Belfast International. With Northern Ireland
hoping to benefit from rapid economic growth following the cessation
of hostilities, it should not be expected to face the prospect
of increasing difficulties in accessing London and the outside
world because of a slot shortage at Heathrow and Gatwick.
(b) The benefits and disadvantages for regions
of the United Kingdom and for the nation as a whole of granting
increased numbers of fifth freedom rights both in the United States
and Europe
BIA understands that—apart from Heathrow
and Gatwick—US airlines now have unrestricted ability to
mount additional third and fourth freedom routes to the USA. Apart
from historic city-pairs agreed over the years, they do not have
the ability to extend those routes beyond the UK into Europe and
beyond for the purposes of carrying traffic between the UK and
that point.
There has been a certain take-up of these new
rights by US airlines, but all of them so far have been single
sector flights with no extensions into Europe.
BIA believes that there would be negligible
impact on British airlines if US carriers were allowed to link
regional points of the UK with onward points in Europe or Asia.
Demand for such links from the regions will never be substantial,
and have been generally ignored by British airlines. Additionally,
scheduled passenger airlines now rarely operate more than two
sectors on a route, and economics dictates that the add-on sector
is normally quite short. Most requests by US airlines would therefore
be for major cities in North West Europe already well-linked to
the major UK regional airports.
With respect to granting rights for other nation's
airlines to carry traffic between the UK and the USA, there has
long been a large number of such airlines operating between London
and New York—currently such rights are exercised only by
Kuwait Airways and Air India, but many others enjoy the ability.
In addition, Pakistan Airways operates between Manchester and
New York.
These airlines will never be able to compete
effectively with third and fourth freedom carriers on large routes
but may be able to offer routes which neither British nor American
airlines wish to operate.
Northern Ireland currently benefits from Aer
Lingus offering connections to New York by the use of sixth freedoms.
If it was able to enjoy fifth freedoms, it might be possible for
them to operate a Dublin-Belfast-New York service which would
enhance the attractiveness of the route for the Belfast market.
In short, BIA cannot see that there are any
risks from increasing the availability of fifth freedom rights
both to the USA and also for US operators.
(c) The steps which might be taken now and
in the future, including for example changes to infrastructure
and to arrangements for granting slots to air transport providers,
to resolve the impasse in negotiations between the United States
and the United Kingdom, as well as the role of the European Union
in future negotiations with the United States over air service
agreements
BIA is firmly of the opinion that, had there
been sufficient runways at Heathrow and in South East England
generally to be able to accommodate the demand of the airlines
for additional flights to the USA that there would not have been
this impasse.
With sufficient runways, the regions of the
United Kingdom would not be fearful of losing their sole air links
to the capital, and onwards to the global economy, in favour of
more lucrative long haul flights.
With sufficient runways secondary trading in
slots would not have developed, nor would the EU be concerning
itself with how this scarce resource should be allocated.
With sufficient runways, the United Kingdom
would with ease regain its position as the world's leading aviation
nation, and the whole economy would benefit from the advantages
this gave it in world trade.
In the short term, the DETR must find a way
to protect vital links between the capital and the peripheral
regions of the nation. This may necessitate revisions to the lot
mechanism, or adjustments to the PSO (Public Service Order) regulations.
BIA understands that the DETR is already giving urgent consideration
to these topics.
In the medium and long term—with no reduction
in air transport growth seen on the horizon—the DETR must
urgently seek to provide additional runways in the South East.
Ideally these should be at Heathrow and/or Gatwick; less ideally
at Stansted or further out. The DETR should be actively studying
the upgrading of existing airfields which are able to provide
relief—Northolt has been mentioned, as also has Farnborough.
Helicopter links to Heathrow might provide some benefit for long
haul passengers anxious to reach the regions.
BIA recognises the potential for environmental
detriment if such additional runways are constructed, but it is
also concerned for the wider economic health of the nation, and
particularly of those regions already suffering from above-average
rates of unemployment. BIA has a duty to the Northern Ireland
market to fight for the interests of all its citizens, to ensure
that access to London and the wider world is not put at jeopardy
by necessary agreements with the US authorities, or by a lack
of will to provide the necessary infrastructure in the South East
of England.
Mike Pearson,Deputy Managing
Director
May 2000
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