Select Committee on Environmental Audit Written Evidence


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


 
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