Aviation Policy Framework

Thursday 12th July 2012 Written Statements

[The Secretary of State for Transport (Justine Greening)]

In March 2011, the Government launched a scoping exercise towards developing a new sustainable policy framework for UK aviation. I am grateful to the more than 600 organisations and individuals who responded. We have given careful consideration to their responses in preparing the draft aviation policy framework consultation document, which I am publishing today.

The responses to the scoping exercise reflected a wide degree of consensus on aviation’s significant economic contribution and its other benefits, that its global and local environmental impacts are real and need to be tackled effectively and that maintaining the UK’s excellent international connectivity is critical. The consultation document sets out the Government’s high-level policy in each of these areas and seeks views on some of the measures we propose in support of our approach.

We clearly recognise the value of aviation as an important economic sector in its own right and as a key driver of UK economic growth. It contributes around £17 billion of economic output and employs over 220,000 workers directly and many more indirectly. And we recognise the strength of the UK’s aviation connections which give us the third largest aviation network after the US and China and make London one of the best connected cities in the world with direct links to over 360 destinations worldwide, more than either Paris or Frankfurt.

The Government have a package of measures underway to improve the passenger experience at our airports and make the best use of existing capacity, as well as taking forward a process to address the UK’s international connectivity needs in the medium and longer term.

First, we are improving efficiency at our borders. My right hon. Friend the Home Secretary is reviewing the UK’s visa regime, to improve the passenger experience and to ensure that our border policy supports our prosperity agenda whilst maintaining effective security. Any changes to the UK’s visa regime will be implemented during the course of 2013. The Home Office has also brought forward the recruitment of 70 additional staff at Heathrow to provide additional flexibility to secure the border while dealing with increased passenger numbers. And it is looking at how we can improve the role of automation in the expedited clearance of passengers, linked to the development of a registered traveller scheme to replace the current IRIS scheme which has been extended.

We are improving reliability and reducing delay at Heathrow through the trial of measures introducing greater operational flexibility. If operational freedoms show clear benefits in terms of resilience, reducing delays and allowing planes to land more effectively, thereby reducing the impact of noise for residents under the flight path, then we will consult on making these benefits permanent.

We are taking forward other recommendations of the South East Airports Taskforce, such as airport performance charters which will set out the level of service that airlines and their passengers should expect, as well as new guidelines developed in a Civil Aviation Authority (CAA) chaired industry group which will make the best use of existing capacity.

We are transforming the economic regulation of airports through our Civil Aviation Bill to promote passengers’ interests. We propose to replace the current uniform approach to regulation—where designated airports are subject to mandatory five-year price caps—with a modern licensing regime where licence conditions can be tailored to the specific circumstances facing individual airports. By allowing for more proportionate regulation, the new regime also enables the CAA to take steps to reduce the degree or scope of economic regulation imposed on individual airports if they decide this would benefit passengers. The Bill will also ensure that airports can respond more flexibly to real-time events such as severe weather or volcanic ash and put in place a long-term framework for improving quality of service and investing in better infrastructure and facilities. The Bill is on track to receive Royal Assent by spring 2013 and we expect the new licensing regime to be implemented from April 2014.

We are improving surface access to airports with significant new investment. In total over this spending review period the Government are supporting investment of £1.4 billion on rail and road schemes which will directly or indirectly benefit airports across the UK.

This includes a fleet of 30 new electric trains on the Stansted Express to London which entered service last year and a £53 million upgrade of Gatwick airport station with improved passenger facilities, an extra platform and more track and signalling by 2013 and a regional growth fund contribution of £19.5 million for junction enhancements to be completed by 2014 which will improve access from the Ml to Luton airport.

And the Metrolink extension to Manchester airport is due to open in 2016 which will provide a tram every 12 minutes between Manchester airport and Manchester city centre.

In the future, Luton and Gatwick will receive improved rail services through the Thameslink programme and we expect Heathrow passengers to benefit from Crossrail.

But we recognise that we need to go further now in enhancing the capability of UK airports, particularly in the south east. So today we are also announcing:

The commitment of up to £500 million towards a western rail link to Heathrow, subject to a business case and conclusion of agreements with the aviation industry. This recognises the continued importance of Heathrow as our major international hub.

Businesses west of the airport have been calling for this vital investment for many years. It will cut typically 30 minutes off the journey to Heathrow from the west of England and south Wales, with significant benefits for growing cities like Swindon, Bristol and Cardiff. The service could come into operation as early as 2021. I will shortly publish a rail investment strategy, which will recognise the importance of transport investment to the economy, including improving connectivity between cities and airports.

Proposals to further liberalise the UK aviation market to encourage foreign airlines to develop new routes by extending to Gatwick and Stansted the ability for foreign airlines to pick up passengers when flying to other destinations.

Our proposal to remove bilateral restrictions on air services on a case-by-case basis. This will mean open access to airports outside the South East for new air services, in order to facilitate inward investment in new routes and extra choice for business and passengers without necessarily having to secure reciprocal access for UK airlines to the airports of the other country.

Our commitment, building on the Olympics and the GREAT brand, to develop a new marketing package, working with BIS, UKTI, and others to market the benefits of flying to a range of UK airports and to target new carriers, particularly carriers in emerging markets such as Latin America, India and south-east Asia.

That we will work with airports to explore, with the US authorities and others, the feasibility of US pre-clearance facilities being made available in the UK, which could improve the competitive offer airports operating such a scheme would be able to make.

That we will invite train companies to explore the potential of “code-sharing” between flights and long-distance train services, to enhance competition between trains and domestic flights.

Our intention to identify options, within the EU legislative framework, aimed at ensuring that slots at our congested airports are used in the most economically beneficial way for the UK. The focus of this work is on seeking to optimise the functioning of the secondary trading market for airport slots. We expect to engage with key stakeholders later in the summer and publish a progress report in the autumn. We are also working with the EU, in the context of the Commission’s proposals on reform of the rules on landing slots to secure measures to support UK regional connectivity, such as protecting the provision of air services between Northern Ireland and Heathrow.

Our support for the introduction of new rules by airport operators aimed at maximising the use of existing capacity at our busiest airports—for example, by limiting access to smaller planes.

In doing so, we recognise the very substantial efforts the aviation industry is making in continuing to invest and respond to the market.

For example, Heathrow and Gatwick are investing £5 billion and £1 billion respectively over the next few years in better infrastructure and Birmingham airport will shortly begin constructing a £65 million runway extension which will increase the airport’s scope to open new routes to long-haul destinations.

Airlines are launching new routes to key emerging markets, such as British Airways who recently announced a new service to Seoul. China Southern Airlines is now flying from Heathrow to Guangzhou and Gatwick is showing its potential, for example with Air China’s new service to Beijing.

These are positive developments and will help to maintain the UK’s excellent international aviation connectivity in the short term. The Government recognise, however, that they must not only take steps for the short term but also address the issue of fixture airport capacity and we are committed to doing so.

Following our scoping exercise last year, our draft aviation policy framework is the next step towards that and we welcome responses to this consultation. We will follow this, later this year, by issuing an open call for evidence inviting stakeholders to submit specific, evidence-based proposals for consideration in identifying the medium and long-term steps needed to meet the Government’s economic and environmental objectives for aviation. This is a structured process towards delivering a solution that is sustainable, not only economically and environmentally but also politically. The failure of successive Governments to tackle this issue shows that we need to get it right this time. Success depends upon agreeing a solution that can be delivered regardless of the political cycle and that requires an objective evidence-based process which draws on the views of the full range of interested parties.