Select Committee on Transport Written Evidence

APPENDIX 13 Memorandum submitted by the British Helicopter Advisory Board

  The British Helicopter Advisory Board was established as a non-profit making organisation in 1969 to promote the use of helicopters throughout the United Kingdom. It is concerned that helicopter operations are conducted safely and responsibly with due regard for environmental issues. On behalf of our 242 members that include major Offshore operating companies, maintenance and repair organisations, Police and Air Ambulance operators, and private owners, we submit the following memorandum to the Committee.


  Civil Aviation is generally divided into two sectors: Commercial Air Transport and General Aviation. The former is well served by the Regulator although there are issues in relation to size of the operation and disproportionate costs borne by small companies. General Aviation has several definitions according to the context of the discussion but it is generally accepted that General Aviation encompasses all aviation activity for which an Air Operators Certificate is not required. The objectives for the CAA that are set out in Section 4 of the Civil Aviation Act 1982 focus on British airlines and Section 3 contains only oblique references to General Aviation. It is not surprising therefore that there is no clear policy on General Aviation in the UK. Despite protestations by the major airlines to the contrary, it is known that the majority of pilots entering commercial aviation do so from a General Aviation background on a path that starts with small commercial operators. General Aviation operates in the main from minor or private airfields and in unregulated airspace, both of which are under threat by property and wind farm developments. Without a clear general aviation policy, these developments continue to encroach upon General Aviation activity to the detriment of the industry.


  In our view, there are three areas that require comment with regard to the establishment and operation of the CAA and these must be related to the inevitable convergence of UK and EU policy for aviation:

2.1  Aviation Policy

  Aviation has burgeoned since the end of World War II to the extent that it has now become an integral part of our everyday lives. Holiday makers, businessmen, sportsmen and housewives depend upon aviation for travel, recreation and groceries. Aviation contributes a significant amount to the UK GNP yet the industry is regulated from the perspective of safety rather than National policy. There is a clear need to formulate a policy for aviation that has regard for the process as a whole. The policy must extend to include General Aviation in order to prevent its suffocation from unsustainable regulatory charges and inappropriate legislation.

  European integration under the European Aviation Safety Agency depends upon the convergence of policy whilst retaining equivalent or better levels of safety. A policy that embraces the framework of training, funding, taxation, airports, airspace and regulation is fundamental to this convergence.

2.2  Cost Recovery

  Almost alone amongst the European States, the UK has been required by Government to fully recover the cost of regulation from those regulated since its formation in 1972. Elsewhere in Europe, some States administer a partial regulatory charge but in the main, regulation is funded by government. Convergence under these terms cannot be achieved in a fair and transparent way and ultimately it will be our own industry that pays the price for trading on unequal terms.

  Currently, the CAA and industry are engaged in an ever increasing round of consultation, committee work and self assessment aimed at improving the efficiency of the CAA and reducing the cost of oversight. This effort is significant and is detrimental to the real tasks of aviation and regulation. It is known that the entire regulatory cost of aviation in the UK could be met by an almost unnoticeable passenger levy of approximately £1.00 per passenger journey. This simple policy change, if implemented, would both simplify and improve the efficiency of regulation along the path to convergence.

2.3  Return on Capital Employed

  The CAA is unique in Europe in one other area; that is the UK Department for Transport requirement that the Agency makes a return on capital employed of 6%. As a Self-Financed Public Corporation, the CAA should be subject to HM Treasury instructions set in September 2003 that returns are be limited to 3.5% where no competition is present. However, were the CAA to be funded by passenger levy, this inconsistency would be removed at a stroke.


  The British Helicopter Advisory Board submits three policy issues for consideration by the Transport Committee. They are:

    —  The requirement to formulate an integrated policy for aviation that is capable of European convergence.

    —  That consideration be given to the way in which the CAA is funded in comparison with existing European practice.

    —  That the rate of return on capital employed is reduced in line with HM Treasury instructions.

10 November 2005

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