Transport and the Economy - Transport Committee Contents


Written evidence from FlyingMatters (TE 40)

1.  FlyingMatters welcomes the Transport Committee's Inquiry into Transport and the Economy and is pleased to submit these comments for consideration.

2.  FlyingMatters is a broad coalition of organisations which support sustainable growth in air transport in the UK. Our membership includes trade unions, business organisations and tourism organisations, as well as airports, airlines, aerospace manufacturers and air traffic control.

3.  The Committee's inquiry into transport and the economy is timely and appropriate - particularly in the context of public spending priorities at a time when the Government's priority is deficit reduction.

4.  However, with the exception of a small number of lifeline services in the Highlands and Islands, aviation receives no public subsidy and pays for all it's own infrastructure and therefore largely falls outside the discussion about strategic transport spending priorities.

5.  We believe that there are some critical questions around aviation policy in the UK which we think would benefit greatly from in depth examination by the Committee and which build on the Committee's previous inquiry into the future of aviation policy and your current work on transport and the economy and which merit specific stand alone inquiries.

6.  The first of these is an examination of whether the UK's international gateways and connections are adequately aligned with current and future sources of direct foreign investment and international trade opportunities.

7.  In addition, the Prime Minister recently made a speech emphasising the economic importance of tourism to the UK. Any examination of our preparedness to take advantage of any growth in foreign direct investment would not be complete if it did not also look at our capacity to take advantage of similar trends in international visitors.

8.  In this context it is possible to have a meaningful and productive examination of our aviation infrastructure and services, both from a regional development point of view as well as a national perspective.

9.  If the UK has an economic and strategic need, for frequent, reasonably priced links to, for example, China or India, should government use policy levers to support and encourage their development?

10.  Understanding what levers and signals would work and produce the services needed would require an examination of how the aviation market in the UK works, both domestically and internationally. The hub and spoke model and its value seems to be very poorly understood by many policy makers. We are frequently asked what difference it would really make to the UK if we lost our hub status and the majority of passengers travelled via European hubs.

11.  Questions about how to maintain our hub status can only really be answered in the context of the UK's strategic transport needs allied with an understanding of the consequences of its loss. In the absence of a lead from central government on policy in this area, the Committee has an opportunity to do a sort of "back to basics" examination which would provide valuable space for policy makers to look objectively at the issue.

12.  In a highly competitive market, routes are not sustainable if they are not competitively priced. There is an opportunity to examine whether and to what extent UK domestic taxation of aviation is affecting our ability to compete as a destination for investment and for visitors.

13.  The impact of tax and competitive pricing is felt particularly sharply at regional airports. The highly integrated relationship between the location of airport and airline services and regional development is intuitively understood. Scotland, for example, within the scope of the Calman Commission is looking at varying the application of the rate of APD in order to reinforce the attractiveness of Scotland as a destination. It is possible that Wales will also begin to look at this option.

14.  There is an opportunity for the Committee to conduct a systematic exploration of the relationship between air links and regional development so that we can fully take account of the catalytic impact aviation has. There may also be lessons to be learned from the experience of deprived European regions and their experience of the impact of new air links.

15.  We would also argue that there is scope for an examination of the social impact of access to affordable flying. The rise of the low cost sector and the highly competitive nature of the industry have progressively forced prices downward over the last 30 years. We believe that the growth in access to air travel has changed society for the better in innumerable ways, however others contest this and argue that restrictions (whether through limiting infrastructure or the use of price signals through taxation) would be beneficial.

16.  Lastly, the environment. We would argue that environmental impact, the measures and targets set by government and by the industry to reduce that impact should be considered in an integrated and balanced way within the scope of the other issues mentioned in this submission.

September 2010


 
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