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Smaller airports are economic and social enablers. They facilitate vital national and international connections for people and businesses in the UK.
We found that Air Passenger Duty (APD) is the principal threat to the smaller airports sector. APD cannot be amended to support people, businesses and regional economies because of the operation of European competition law, while proposals to devolve it to the regions would serve only to spread a patchwork of market distortions across the UK. It was disappointing that the concerns we raised about APD in our First Report of Session 2013-14 on Aviation strategy were ignored by the Treasury. We urge Transport Ministers to pursue those recommendations and the important concerns raised by smaller airports with the Treasury.
The Airports Commission will publish its final report on expanding hub airport capacity in the south-east shortly after the general election. The whole country will only be able to share the economic benefits if airlines secure slots to provide services to UK airports outside London. The DfT needs to assess how new slots might be allocated and whether slots could be ring-fenced for domestic services.
The DfT recently began to promote the use of Public Service Obligations (PSOs) to subsidise existing and new air routes from smaller airports. This is an interesting new initiative to facilitate regional connectivity, but the European Commission rules governing PSOs are opaque. The DfT needs to seek clarification from the Commission as a matter of urgency to allow airports and airlines to plan effectively and to engage with this policy.
Manston airport closed just before the start of our inquiry in May 2014. We considered this case in detail both to inform our wider recommendations and because the Kent public are concerned. We found a relatively small district council grappling with complex questions in relation to the current and future use of the airport which were beyond its expertise and resources. We welcome the DfT's recognition of that point and subsequent intervention, which we hope will provide the district council with access to the necessary advice. To ensure that similar cases do not arise in future, the Government needs to review the backing provided by higher-tier local government and central Government to small district councils in complex, one-off cases and examine whether it has the necessary powers to protect strategic transport assets.
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