APPENDIX 5
Letter to the Clerk of the Committee from
Ray Webster, Chief Executive, easyJet
easyJet is delighted to have the opportunity
to give evidence to the House of Commons Environmental Audit Committee.
I will keep my comments as brief as possible.
Despite what many environmentalists would like
to see, aviation is here to stay. Its substantial contribution
to the economy and tourism is beyond doubt and few governments
are likely to want to damage excessively a key driver of their
economies. All parties must therefore realise that the debate
should centre on reducing its impact upon the environment, rather
than getting rid of flying altogether.
Comments attributed to the Treasury in early
2003 when the Chancellor floated the idea of further increasing
Air Passenger Duty get to the very heart of the issue. The press
cited a Treasury spokesman who stated that the aviation industry
should be "encouraged to take account of its contribution
to global warming and air and noise pollution". Many have
suggested that airlines, airports etc should be "punished"
for flying, that their actions should be subjected to a punitive
tax. The reason? That the taxes levied on flying do not contribute
towards its environmental damage.
While easyJet believes that the premise behind
this argument is debatable, it is also unclear whether simply
levying a greater tax burden on aviation could lead to be beneficial
to the environment. Put simply, why would paying more in
tax reduce the environmental impact of aviation—especially
as, we presume, the tax would not be hypothecated? There is no
environmental logic in increasing APD it is purely a revenue raising
exercise. If the government wants to reduce the environmental
damage of aviation by reducing the amount of flying being undertaken
then it should make this aim explicit so consumers and voters
can make up their own mind.
There is another way.
It is clear that the aviation genie cannot be
put back in the bottle—people are always going to want to
fly. The question comes back to how the industry can be encouraged
to find new ways of reducing environmental and noise pollution—levying
a tax does not provide an incentive to improve. We would argue
that stringent new measures should be applied to aircraft operations,
whereby, from a certain date, only aircraft meeting certain criteria
can operate at the busiest airports. Faced with the possibility
of redundant aircraft stock, manufacturers would make greater
advances in technology.
This is not a theoretical argument. The industry
has made giant steps to improve the impact of aviation in recent
decades. The industry's move to Chapter 3 aircraft was facilitated
by incentivising the airframe and engine manufacturers to produce
quieter aircraft (by setting a deadline after which they could
only be used to land at certain airports)—and for airlines
to use them. The move to the even quieter Chapter four noise standard
is occurring by the same process. The new Airbus A319 aircraft
which easyJet has ordered will be among the cleanest and quietest
aircraft ever produced.
Simply levying a flat-rate tax on flying would
not provide the incentive for the manufacturers to improve the
technology even further. Any and all legislation MUST be linked
to improvements in technology to recognise those that operate
the most environmentally-responsible aircraft.
easyJet also argues that more can be done, in
the short-term, to reduce the current volumes of flying—without
pricing people out of the skies.
At present, ownership and control restrictions
essentially make cross-border mergers and acquisitions impossible.
This serves only to protect inefficient companies from exiting
the market (as would happen in any "normal" industry).
Such airlines tend to operate the oldest, most environmentally
damaging aircraft. It is within the gift of governments to remove
these restrictions for the benefit of the consumer, the industry
and the environment.
easyJet is also a firm supporter of increasing
global deregulation. One of the reasons why the airline industry
has grown to become so inefficient is because it has been regulated
by governments, not by consumers. Government-controlled bilateral
agreements, which restrict route access, serve only to protect
inefficient, incumbent airlines, rather than providing the framework
for competition to flourish. Pushing ahead with deregulation on
a global scale would result in more point-to-point flying—rather
than "hubbing" through major airports, such as Heathrow.
This would mean fewer flights, less environmental impact and may
even reduce the need for massive airport expansion.
Moreover, I would suggest that European governments
should be doing more to reduce the environmental impact of today's
flying. The EU's single skies proposal should be rapidly introduced
as it would result in much more efficient routing of aircraft—rather
than wastefully zig-zagging across different "parcels"
of nationally-controlled airspace, as happens today. This adds
to flight-times and thus to unnecessary use of scarce resources
and their impact on the environment.
easyJet recognises that this is a crucially
important issue and I hope this succeeds in explaining our position.
May 2003
| 
