Air passenger numbers are growing again. Now we need the public policies to ensure growth can continue, says Airport Operators Association chief executive Darren Caplan
Two months ago, the Civil Aviation Authority reported that air passenger numbers in the UK had increased during 2013, from 221 million in 2012 to 228 million, a shift of around 3.5%.
This year, growth seems set to continue, according to a survey we at the Airport Operators Association – the trade body for UK airports – carried out last week.
Of 25 AOA airport members polled, 67% said they were ‘confident’ that growth will be stronger in 2014 than 2013, 23% believed growth in 2014 will ‘more or less match’ 2013, and 9% thought there would be no growth in 2014 (although they did not think the sector would contract).
So while passenger numbers are not quite up to the level they were in 2007 (240 million), it is clear that things are moving in the right direction. Airports are enjoying success in securing and sustaining new routes, and airlines are displaying faith in the strength of the UK economy and the level of future demand for air travel.
This good news corresponds with a step-change in attitudes towards aviation from politicians and stakeholders in Westminster and around the UK.
It is clear that the “better not bigger” mantra of circa 2010 policy-making has been replaced by an Aviation Policy Framework, published last year, which expresses a belief that aviation should be allowed to grow in future, and an Airports Commission which is calling for airport expansion, including a commitment to additional runways.
So, we are obviously pleased that the importance of our sector is now being properly recognised by political decision-makers.
Given aviation supports one million jobs, generates over £50bn GDP and raises more than £8bn in tax revenues every year for the Treasury, and given aviation’s vital role as key infrastructure enabling the wider UK plc to prosper, connecting people and businesses to destinations at home and abroad, it’s a wonder that – even allowing for the vicissitudes of politics – there were such negative attitudes towards our sector in the first place.
However, we are where we are and it’s clear that in 2014, policymakers have come to the conclusion that a thriving aviation sector can help the wider economy, supporting tourism, exports, manufacturing, investment, services and a whole host of other industries as everyone works to accelerate the economic recovery.
Here at the AOA, with a general election less than a year away, we have developed a number of key ‘asks’ of the political parties to enable our sector to grow, and we will be promoting these later in the year.
Chief amongst these though will be a call on government and opposition parties to promote, via that Aviation Policy Framework, a planning and regulatory regime geared towards sustainable development of airports, and a plea to support the work of the Airports Commission by committing to seeking political consensus before and after the general election and to acting on the recommendations once they are published in the summer of 2015.
Despite the confidence of the sector and a sea change in the politics, we still face difficult challenges, particularly the continued high rates of Air Passenger Duty (APD).
Although the Treasury announced in its March Budget that long-haul APD would be lowered – which we welcome – the duty is still far higher than any other country, and it remains the case that it needs to be reduced across the remaining bands from April next year.
Passenger figures may be comparatively healthy, but imagine how many more air travellers and routes there would be if we had fairer levels of aviation taxation.
In addition to calling for APD cuts we – along with colleagues in the A Fair Tax on Flying coalition – are actively making the case to politicians that the government should commission a Treasury study to consider the impact of the duty on the whole of the UK economy.
We were heartened to learn recently that the Chancellor has set up government ‘dynamic modelling’ studies to look into the effect of recent reductions in both Fuel Duty and Corporation Tax, reports which concluded that reducing such levies boosted growth in UK GDP by impressive amounts (in the case of Fuel Duty, between 0.3% and 0.5% (£4.5 billion to £7.5 billion in today’s prices)); and so we ask that this ‘dynamic modelling’ study be repeated for APD.
There is also the challenge of sustainability, growing our sector while dealing with noise and carbon impacts. In the last couple of years, the Sustainable Aviation coalition (of airports, airlines, aircraft and engine manufacturers, and air traffic service providers NATS), has produced Road-Maps which clearly show how air traffic movements in the UK can grow by 90% to 2050 without any significant increases in noise and carbon.
We are now calling on the political parties to help us deliver even more on the sustainability agenda by setting clear land-use policies, curtailing the building of housing and other noise sensitive buildings around airports so that fewer people in future live in areas where there is aircraft noise, and by working closely with the aviation industry to incentivise the take-up of sustainable aviation fuels to further reduce carbon, which has the potential to be a huge UK success story in future years, as we become world leaders in developing green technologies and jobs.
So in summary, it is great news that passenger numbers are trending upwards and that there is confidence that this will be maintained.
But we still need to overcome constraints on the future success of UK aviation, ensuring there is supportive policy for sectoral growth, battling against high air taxes, and rising to the sustainability challenge by delivering on noise and carbon as the sector expands, while also communicating to policy makers and influencers the great work the aviation sector is doing in this area.
UK aviation has made great strides since 2010; providing we work hard to keep policymakers with us on the key challenges we face as a sector, there’s no reason this progress shouldn’t continue in to the years ahead.