Examination of Witnesses (Questions 500-505)
WEDNESDAY 19 MARCH 2003
MR GEOFF
MUIRHEAD, MS
ROWENA BURNS,
AND DR
JONATHAN BAILEY
500. If you do not mind, I would like you to
answer the question that I asked. (Mr Muirhead) I will
answer that question, but it would be interesting to ask it the
other way around, that if there was no restriction, then let us
see what would happen. There are examples. Air Jamaica is one
in particular which immediately comes to mind which was prevented
from flying to Manchester by bilateral restrictions. They have
now been overcome, but that took about four or five years to get
there.
501. Are there any others? (Mr Muirhead)
Air Hong Kong Freight. I think what we would like to do is go
back and see where we can give you some examples.
Chairman
502. Go back far enough to give us a series
of example, will you? (Mr Muirhead) Yes, if we can.
Mr Stringer
503. Can you also expand on the point you were
making in your evidence that you believe that the economic regulation
that is applied to Manchester and BAA airports is distorting things?
Can you expand on that point? (Mr Muirhead) Economic
regulation has driven what is fundamentally exactly the opposite
outputs in terms of pricing that you would normally expect to
see in the market. It has meant that the London airports, the
most congested airports, are also the cheaper airports or the
cheapest airports. That fundamentally just seems to reinforce
the roles of the congested airports and increase the attractiveness
unnecessarily of congested airports. That is a direct result of
economic regulation, because they are limited to rate of return.
Chairman
504. Why has Bournemouth not taken off the way
you expected it to? (Mr Muirhead) Bournemouth has taken
off the way we expected it to. It is ahead of our acquisition
plan. It has not taken off as well as we perhaps might have expected,
given an agreement with a low-cost carrier that was taken over.
505. Can I ask you finally about new runway
capacity in the South East. You recognise it is very urgent, so
what ought we to do to find quicker options than the ones that
have been suggested? (Mr Muirhead) I think there is
always a fundamental issue in growing any new capacity anywhere
other than at the area where there is existing capacity. New airports,
unless they are so far away obviously that they do not affect
people or the environment, I do not believe will ever get off
the ground at all. So the issue is, how do you expand existing
airports in the South East and how do you use the capacity that
is currently available in the regions more effectively? We believe
we have given you a flavour of that, but whatever the regions
can do we do not believe will sort out in totality the issue of
congestion in the South East. So I think that if you have a proper
planning framework that gives some certainty about outcomes and
takes away a lot of the debate about need, and you start just
managing impact, then I think you will be able to shorten the
planning process. But even so, I think that in this country we
have a predisposition to complain about things ad nauseam
and not accept defeat. It is a good trait in many ways, but in
terms of making progress here, it is a clear block.
Chairman: Mr Muirhead, we are very grateful
to you for the quality of your evidence. We are grateful to you
for coming, as always. We look forward to hearing you again in
the future. Thank you.
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