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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