Regional Airports

Lord Dodds of Duncairn Excerpts

Tuesday 15th July 2014 Westminster Hall

[Mike Kane]

I am grateful for that contribution. We must continue to consider APD. We live in a competitive world and we want a competitive market, but we also want a level playing field with competing airports across Europe, such as those in Spain, particularly Barcelona. A temporary APD holiday would be in line with the Government objectives of making best use of existing capacity and promoting links to emerging economies and economic growth near regional airports.

[Mr Nigel Dodds (Belfast North) (DUP)]

I commend the hon. Gentleman on securing this important debate. He may be aware that in Northern Ireland, international flights are exempt from APD, because it is now a devolved matter for the Northern Ireland Executive. I heartily endorse what he and the Transport Committee have suggested. Although we have devolved power, as a result of intense competition from Dublin international airport just down the road, which has zero APD, it is nevertheless a major cost to the Northern Ireland block grant, meaning that the money cannot be spent in other important areas such as health, education and so on. I agree totally with what he says about the need for action at a UK level.

[Mike Kane]

I look forward to flying from Manchester to Belfast on Friday morning to represent Wythenshawe in Falcarragh over the weekend. However, we could not secure a route from Manchester to Londonderry airport. We need further connectivity between UK airports.

Clearly, strict rules would be needed to prevent airlines from churning from one airport to another to create new routes. The route would need to introduce net additional capacity from the UK. The Treasury could also review the impact of APD on the economy and on connectivity, as there is anecdotal evidence to suggest that high rates have damaged connectivity. To give just one recent example, AirAsia ceased operations in the UK, citing APD levels as the primary cause.

There is also a case for greater liberalisation of access to UK airports, particularly regional airports. Given that the UK long-haul carriers have consolidated their services at Heathrow, airports elsewhere must rely predominantly on overseas carriers to provide direct scheduled links to long-haul destinations. The Government have gone some way towards further liberalising foreign access; the last aviation framework document said that access would be granted, even without reciprocity, on a case-by-case basis. However, where there are concerns about issues such as state aid, access may still be refused and UK airlines have the right to object. But if UK airlines are not interested in serving points directly from airports such as Manchester, the Government should be prepared to open the market to airlines that are.

Aviation is vital to Britain’s competitiveness and future economic success. It is undoubtedly a key driver of our regional economies and a catalyst for the UK’s economic growth and jobs. Through mechanisms such as APD and the regional airport connectivity fund, the Government should continue to look at how they can maximise support for our regional airports, which would increase connectivity, remove pressure from congested airports in the south-east, and help to create additional capacity for jobs and growth throughout the UK. Supporting regional airports is a win-win situation not only for our regional economies but for the UK as a whole.

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[Jim Shannon]

I thank the hon. Gentleman for his contribution. Yes, I can remember the 1982 World cup. I was in the stadium when Billy Armstrong scored—

[Mr Dodds]

Gerry Armstrong.

[Jim Shannon]

Sorry—Billy Hamilton passed to Gerry Armstrong. I remember that very well. However, on the issue the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) raises, we have similar opinions, and we want to see an impact for all the regional airports.

Let me give some background information about Belfast. The city has sizeable port, airport and logistics infrastructure, which supports more than 26,000 jobs and generates more than £60 million gross value added for the local economy. In May 2013, almost 140,000 passengers flew between Northern Ireland and the rest of the world, representing 2.5% of the total for the UK regions. It is worth noting that that does not include Northern Irish passengers who transferred to the Republic of Ireland by road or rail to start their journey. Clearly, the interest in air travel is greater than ever, and the figures for people flying globally from Northern Ireland’s airports in just one month are substantial.

Some weeks ago, I attended a Northern Ireland chamber of commerce and industry reception. Everyone there was committed to ensuring that we better utilise air travel and interested in how we do that. Small businesses emphatically believe that connectivity will encourage inward investment and facilitate export growth in Northern Ireland. The Federation of Small Businesses recently carried out a poll of its members, and 96% agreed or strongly agreed that air connectivity can and will encourage inward investment and export growth. Clearly, there is a willingness among businesses to support connectivity. A further 93% of the FSB’s members described George Best Belfast City airport as having a positive impact on the local economy. Good air links are therefore vital for the Northern Ireland economy, and the hon. Member for Wythenshawe and Sale East made the same point about regional economies generally.

The most pressing issue for small businesses is having more destinations and routes available to them. That can be critical for businesses looking for new markets to export to, or looking to secure investment or business from other parts of the UK. For a country such as Northern Ireland, which exports most of what it produces, it is important to have contacts with the outside world—on the UK mainland and beyond.

Northern Ireland has the largest percentage of small businesses in the UK relative to its size. Recently, Brian Ambrose, the chief executive of Belfast City airport, revealed the airport’s desire to have more routes to European destinations. With that in mind, the airport has set about improving infrastructure and encouraging exports from the airport. However, it is subject to a so-called “seats for sale” restriction, which puts a bit of a limit on things. The airport reports that if it could develop as much as it wished, the extra passengers would contribute another £13.2 million gross value added and there would be a further 270 jobs. Clearly, we could do a lot more if we had the connectivity and the opportunity.

Some 86% of the FSB’s members were supportive of the airport’s move. The critical factor for Belfast City airport is the impact of aircraft noise on local residents. That is a big issue that has to be addressed. If it can, the potential for the airport is great, and the airport will develop further.

The 2003 White Paper on air transport recommended that the planning agreement for Belfast City airport be reviewed. It said the scope to develop capacity at Belfast International airport within existing boundaries was significant and should be supported. It also said that the development of City of Derry airport should be carried out in conjunction with the Government of the Republic of Ireland. This is not about British Airways and Aer Lingus; it is about how we can best work together to develop connectivity.

The Northern Ireland Affairs Committee concluded in 2012 that it was critical to ensure that Northern Ireland continued to have access to Heathrow, as the UK’s hub airport, and I believe that is true. Like me, the Northern Ireland chamber of commerce and industry sees Heathrow as critical to our regional airport development—that applies to Belfast City, Belfast International and City of Derry airports. The Northern Ireland Executive have stressed the importance of the route, and Northern Ireland’s unique access position within the United Kingdom should be reflected in emerging aviation policy. We must maintain Northern Ireland’s links with the USA through Belfast International airport, and consider extending Northern Ireland’s direct links with long-haul destinations, as has been suggested. Devolution of air passenger duty is a key part of that. Tourism Ireland has recommended potential routes, making the case for carriers. Northern Ireland’s direct connectivity with mainland Europe continues to increase, and new destinations are in the process of being confirmed.

Belfast City airport’s almost 3 million passengers amount to nearly 10,000 a day, and the core catchment area is 75% of Northern Ireland. The annual passenger figure for Belfast International has been more than 4 million; 65% of passengers were on domestic flights and 35% on international flights. City of Derry airport has also contributed greatly to the numbers travelling, mostly to holiday destinations. It is vital to maintain those links, which will help to promote business links, enterprise development and inbound tourism.

The Heathrow hub—and Gatwick, to a lesser extent—can only improve with greater connectivity, more flights and the road and rail infrastructure already referred to taking passengers quickly and on time to their international flights or UK mainland destinations. The three Northern Ireland airports, George Best Belfast City airport, Belfast International airport, and City of Derry airport, all want and intend to be part of that. With the help and support of the Westminster Government, that can and must happen.