Examination of Witnesses (Questions 1-19)
5 MAY 2004
MR MIKE
TOMS, MR
STEVE HARDWICK,
MR ALAN
CRUICKSHANK, DR
JONATHAN BAILEY
AND MR
KEITH JOWETT
Chairman: Good afternoon, gentlemen.
A little bit of housekeeping first, please.
Members having an interest to declare?
Ian Lucas: I am a member of Amicus.
Mr Stringer: A member of Amicus, Director
of the Centre for Local and Economic Strategies.
Chairman: Mrs Dunwoody, ASLEF.
Mr Donohoe: Transport and General Workers'
Union.
Clive Efford: Transport and General Workers'
Union.
Miss McIntosh: BA, BAA, BAE.
Q1 Chairman: Thank you very much. Gentlemen,
those of you who have appeared before undoubtedly know the House
rules. If you agree with an answer, please do not repeat something
that has already been said. If you want to catch my eye, please
do so. Firstly, would you identify yourselves starting at the
end of the table.
Mr Cruickshank: Alan Cruickshank
from BAA.
Mr Hardwick: Steven Hardwick,
Director of Public Affairs for BAA.
Mr Toms: Mike Toms, Planning Director,
BAA.
Mr Jowett: Keith Jowett, Chief
Executive of the Airport Operators Association.
Dr Bailey: Jonathan Bailey, Head
of Government and Industry Affairs, Manchester Airports Group.
Q2 Chairman: Thank you very much for
coming. I think you are all going to have to belt it out a bit
more because this is a room that absorbs sound and you will realise,
I am sure, that we are taking a record of what you have to say.
Did anybody want to say anything before we begin?
Mr Jowett: Chairman, in the interests
of brevity, and to avoid repeating ourselves, we have agreed,
as a team, that I would invite my colleague from BAA in the first
instance and then from Manchester Airports Group in the second
to make some brief opening statements without duplication.
Q3 Chairman: Mr Toms?
Mr Toms: Thank you, Chairman.
We at BAA and UK airports generally recognise Europe as a key
part of our framework. We cannot ignore it, we probably encourage
it at our peril, but we do have to manage it. In that sense, we
are comforted by the underlying principle of the Treaty of Rome
which is securing the free movement of people and goods. Europe
has had some important benefits to aviation. The three packages
of liberalisation have been instrumental in reducing air fares
and increasing choice for travellers in Europe. The EU should
have further benefits for aviation as it strengthens the EU nations
in dealing with third parties outside, and in that instance the
EU/US relationship will be an important test. However, to realise
these benefits Europe does need adequate, competent with a small
`c', and expert staff resources to help it manage its part of
the negotiations. It does need to avoid the temptation to delve
in what are truly national matters. One final point I would like
to mention is that we at BAA have a principal topical concern
in Europe at the moment, which is to help this Government to implement
its White Paper commitment to have aviation incorporated in the
EU emissions trading scheme. We believe climate change is a legitimate
concern and we believe emissions trading provides the greatest
opportunity for firmly capping emissions whilst allowing people
to travel and we hope that the European Union will pick up the
baton provided by the British Government.
Q4 Chairman: That is very helpful, Mr
Toms. Dr Bailey, you wanted to say something?
Dr Bailey: Thank you, Chairman.
I would like to focus on just two areas, the EC regulation of
aviation generally and the negotiation of Air Service Agreements
in particular. As we noted in our written evidence, we believe
the majority of the legislation brought forward by the Commission
in relation to aviation has been enormously beneficial to the
industry and also to consumers. There has always been a strong
argument for dealing with issues that transcend national boundaries
at the Community level. The Commission's tendency to constantly
revise legislation can at times be unhelpful. Turning to the negotiation
of Air Service Agreements: we have previously expressed support
for the EU taking responsibility for negotiations with major aviation
powers, in particular the US. In our written evidence we also
raised concerns about delays to the implementation of Air Service
Agreements with other states caused by lack of any administrative
machinery to deal with the approval of these agreements. The draft
regulation designed to handle this has been adopted and we expect
it to enter into force within the next few weeks, however the
procedure, even if it works, represents yet another bureaucratic
hurdle for the industry. We are also concerned about the practical
implications of the Commission's wish to extend its negotiating
mandate to countries other than the largest aviation powers unless
it proves possible to negotiate with significant blocs. Part of
that is practical. With 25 Member States the number of ASAs would
be truly enormous. If you imagine just 50 per country then you
are up to over one thousand agreements and that just simply is
not manageable. The Commission also does not have, and is unlikely
to get, the resources to deal with that. Manchester Airports Group
would therefore prefer to see Member States retaining responsibility
for negotiating most Air Service Agreements outside the major
trading blocs within the framework of EC law. Thank you.
Q5 Chairman: Thank you, that is very
useful. I have no doubt that we will come on to the European Commission
and the question of Air Service Agreements later. What do you
think is important about those particular measures that you have
been mentioning, some of which you say have been helpful? Is it
their content or is it the fact that they are actually being made
at European level?
Mr Toms: It is both the content
and the fact that they are made at European level. My colleague,
Dr Bailey, made a very good point in relation to the number of
separate negotiations which would be required if some of these
matters were to be dealt with on a bilateral basis with, I think
it is now, 25 European states. 25 to the power of 25 is a number
that I cannot comprehend but that is the number of negotiations
which would be needed, for instance, to deal bilaterally with
the issue of slot allocation or the issue of ground handling.
Europe does, at the very least, allow a simpler mechanism for
dealing with those issues. I have to say also that although there
are many imperfections in Europe on issues such as ground handling
and slot allocation, the content of the European legislation which
we now have in place has generally been beneficial in creating
a more transparent and open market for the provision of airport
and other services.
Q6 Chairman: Let us take that particular
instance. Was it easy to reach consensus?
Mr Toms: On the slots?
Q7 Chairman: On that particular Directive.
Mr Toms: It is never easy to reach
consensus in Europe, I think it is fair to say. There was a great
deal of to-ing and fro-ing, particularly on the latest version
of the slot allocation regulation.
Q8 Chairman: Let us take the Ground Handling
Directive first which is quite an interesting example. Was it
easy to reach agreement?
Mr Toms: No, it was not, it took
a great deal of time. It is fair to say that what resulted was
probably less than perfect because it was a compromise.
Q9 Chairman: Are there specific agreements
at the moment that you do not agree with?
Mr Toms: It is difficult to put
my finger on it. I will ask my colleagues in a second whether
they can identify anything. It is difficult to put our fingers
on anything specific at the moment although we are watching developments.
We have some concerns in particular in relation to passengers
of reduced mobility, which is an issue coming up the European
agenda. I will ask my colleagues whether they have any examples
they want to bring forward.
Q10 Chairman: What about denied boarding?
Mr Toms: I think you have a very
good point there. Denied boarding is a problematic piece of legislation
inasmuch as it is going to allow the consumer to recover rather
more than the air fare which they paid in the first place. I believe
my colleague from Manchester probably has greater expertise in
this area than I do.
Q11 Chairman: Dr Bailey, do you want
to comment on that?
Dr Bailey: Only to say that at
the levels it is set the compensation, which is based on distance
travelled, is sometimes several-fold higher than the average fares
being charged by the airlines.
Q12 Chairman: Thank you, that is helpful.
Gentlemen, you have had a second or two to reflect, have you thought
of anything else before we move on?
Mr Cruickshank: If I may, Chairman.
In individual pieces of legislation there are parts of those that
we would not necessarily fully agree with. The one that is in
my mind at the moment is the emphasis on the somewhat complicatedly
defined new entrant provision in the slot regulation which was
aimed to improve competition within Europe but actually has not
achieved that result and we do not believe it is an appropriate
way of doing that. There are pieces of legislation which we fully
support but as an overall piece of legislation there are elements
which we feel are probably less than ideal.
Q13 Chairman: What about this instance?
That is quite an interesting example, is it one on which you think
it is easy to reach a consensus or not?
Mr Cruickshank: I am sorry, could
you repeat that question, please?
Q14 Chairman: Is that a particular instance
in which it would be possible to reach a consensus opinion in
the committees discussing it?
Mr Cruickshank: I think that would
be very difficult indeed. I have been party to the many discussions
on issues relating to slot allocation or ground handling and other
matters and I do see the plethora of opinions that are expressed.
Usually a compromise can be found but it takes a long time.
Q15 Chairman: How long did it take on
the Ground Handling Directive from beginning to end? How long
are we talking about, Mr Toms?
Mr Toms: Several years. We will
give you the precise number separately, if we may.
Q16 Chairman: More than five?
Mr Toms: It must have been around
about five; five or more.
Q17 Mr Stringer: Mr Toms, you have given
some specific instances of where EU regulations have caused you
problems and you have welcomed the free market aspect of it but
your written evidence is much more anti than that. You say that
you are very worried that the European Union is anti air travel
and prefers rail. Would you care to expand on that statement?
Mr Toms: Yes, I will. The particular
point which we had in mind in raising that issue with the Committee
was the European White Paper on Aviation and Transport which espoused
a general principle that it would be a good thing if travel was
diverted from air to rail as a general principle. Whilst we can
understand the broad reasoning which might tempt you in that direction,
that is a very heavy attempt to distort and manage the market
with a not very clear purpose behind it and a not very clear notion
of what its consequences might be. We were concerned by the tone
of the White Paper. That is probably the best example.
Q18 Mr Stringer: Your argument is that
aviation should be treated in exactly the same way as rail in
terms of emissions and impact on the environment generally?
Mr Toms: I think our argument
was slightly more fundamental than that, which was that there
needed to be a clearer analysis of what the costs and benefits
of individual forms of travel were before any conclusion was reached,
and that the Commission and Europe in general should think twice
before attempting to direct travellers to the form of transport
they should use.
Q19 Mr Stringer: Do you see what is contained
in the White Paper as being potentially a greater burden than
the benefits given by a free market in Europe?
Mr Toms: We do not see that at
present as the White Paper currently stands, but were this tone
and this trend to become more firmly in legislation it would become
increasingly problematic, yes.
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