EU - Transport Policy

Written evidence from British Airways plc (EU 03)

British Airways welcomes the opportunity to contribute to the Transport Select Committee’s call for evidence on EU Transport Policy. There are a number of issues being discussed at the European level that impact on British Airways and UK aviation which we believe the Committee may wish to raise as part of its scrutiny of EU policy.

1. Single European Sky (SES)

1.1 Following the Volcanic ash crisis, the European Commission and EU Member States agreed to accelerate the implementation of the Single European Sky. They undertook to organise European airspace into so-called ‘Functional Airspace Blocks’ (FABs) by 2012. FABs are determined not by national boundaries, but by traffic flows - this would replace the current patchwork of 31 national air navigation service providers across Europe.

1.2 We fully support the expedited implementation of SES that will reduce delays and flight times for passengers, improve safety, reduce CO2 emissions by up to 12%, airlines and reduce operating costs by almost 4 billion Euro per annum.

1.3 However, it is essential that robust Performance Targets be agreed if the real benefits of the Single European Sky are to be fully realised.

2. Consumer Protection Legislation

2.1 The recent mass grounding of aircraft across Europe caused firstly by the airspace closure due to volcanic ash and most recently by the severe winter weather, has again highlighted the issue of compensation for customers adversely affected by such disruption.

2.2 British Airways prides itself on providing the highest possible standards of care during times of disruption. Our focus on the customer is deeply ingrained and we know that without loyal and satisfied customers, we have no business.

2.3 However, when the current EU Regulation 261 on Consumer Protection was first drafted, it was never intended that airlines would effectively become 'insurers of last resort' - providing unlimited, open-ended assistance for events that were completely outside of their control.

2.4 Consequent to the recent disruptions, airlines have been burdened with additional costs for customer care running into tens of millions of pounds - on top of the hundreds of millions in lost revenue because of the grounding of aircraft.

2.5 The Commission is currently consulting on the operation of this Regulation in the broader context of customer rights in general. We look forward to a sensible solution being found that is fair and balanced, that protects customers and that imposes reasonable requirements on airlines.

3. Slots

3.1 The European Commission is currently considering a revision of Regulation (EEC) 95/93 on common rules for the allocation of slots at EU airports.

3.2 Slot allocation takes place across a complex global network of airports and airlines. The current Regulation works well and provides stability for airline operations. It also creates business certainty for operators, which in turn leads to investment in new routes, equipment and employees and is consistent with the IATA global scheduling guidelines applied throughout the world.

3.3 British Airways (and all of the major airline organisations including IATA, AEA and the majority of EU Member States) opposes any revision to the current slot regulation.

4. EU Emission Trading Scheme (ETS):

4.1 Aviation joins the EU ETS in January 2012: British Airways has long supported carbon trading, alongside other operational and technical measures, as being the most environmentally effective and economically efficient way for aviation to manage its impact on the environment. Our business is a global business, and we support a global emissions trading scheme for aviation that is non-discriminatory.

4.2 While negotiations continue on such a global scheme, the EU is taking the first step with the inclusion of aviation in EU ETS from January 2012. We support such a scheme, provided it avoids competitive distortion; there is no retaliation from 3 rd countries that could impact our operations; and provided it builds a strong foundation for the development of a global approach.

4.3 UK Air Passenger Duty (APD): APD is already the highest aviation tax in the world by some distance and has direct implications for British competitiveness and jobs. The UK is also one of the strongest supporters of the EU Emissions Trading Scheme as the preferred method for managing aviation emissions. Therefore, once aviation enters the EU ETS in 2012, APD should be reduced accordingly to ensure UK airlines and customers are not unfairly disadvantaged or over-taxed.

January 2011