Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 116 - 119)




  116. Good afternoon, gentlemen. I am sorry to have kept you waiting. As you can understand we had a lot of evidence to take. Can I ask you to identify yourselves for the record.
  (Mr Anderson) I am Ed Anderson. I am the Chairman of the Airport Operators Association and the Managing Director of Leeds Bradford Airport.
  (Mr Toms) I am Mike Toms. I am the Group Planning and Regulatory Affairs Director of BAA plc.
  (Mr Jowett) I am Keith Jowett. I am the Chief Executive of the Airport Operators Association.

  117. Gentlemen, you will have noticed this room absorbs voices. You will have to speak up, I am afraid. Mr Anderson, did you want to say anything?
  (Mr Anderson) Can I make a brief opening statement, Chairman. The terrorist attacks of 11 September have had serious effects on the aviation industry in the UK. Airports, airlines and service providers have all seen their businesses suffer over these past three months. The principal effect on UK airports has been a fall in revenue combined with substantially increased costs. The decline in revenue has come as a result of consumer reaction following the attacks and an on-going overall fall in passenger traffic. The biggest fall in traffic has been at those airports most exposed to the North Atlantic market while the picture at other UK airports has been more mixed with the majority continuing to record significant falls. Overall, the figures are well down on industry forecasts and have had a significant effect on revenue. As was mentioned in your last session, we are all looking with some trepidation to the position on forward holiday bookings which will emerge in the New Year. At the same time, British airports have experienced substantially increased costs principally in relation to enhanced security measures and third party war and terrorism insurance cover. In our evidence to this inquiry we have tried to quantify these costs but it should be noted that these figures are preliminary and they may not include a number of further costs which are likely to emerge, such as those relating to additional security equipment, infrastructure and general airport liability insurance. We do not believe that it is the proper role of Government to bail out industries facing difficulties in the course of normal trading conditions but in these most extraordinary of circumstances, where an attack on a state has taken place, and the UK has sought to counter the potential terrorist threat through specific measures delivered by the aviation industry, it is right and proper that Government should provide assistance in a targeted manner. Also, it is very much the role of Government to ensure a level playing field, for example, with the USA. Finally, British airports, we believe, responded positively and swiftly to the events of 11 September implementing the enhanced security measures immediately. In the wake of 11 September the main challenge that we all face in this industry is to restore public confidence in flying and we hope that an increasing effort will be made towards realising that objective.

  118. Can I ask you what specific things you are doing as a group of airport operators to assist airlines? Are you considering deferring payments? Are you dropping your charges to airlines?
  (Mr Anderson) I can speak from my personal experience and my colleague from BAA will probably want to come in as well. Certainly, airports are being approached by all their suppliers and I think we are trying to do what we can to help but as we are facing a drop in passenger numbers as well, and increased costs, then our scope to be flexible is limited.

  119. Is there a specific area that you are concentrating on that could help?
  (Mr Anderson) Suppliers are asking us to reduce our costs and certainly from my airport's point of view on a short term basis we are helping to some extent and also with cash flow.

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