Identifying the government's priorities for the aviation sector.
Thank you for that introduction Keith.
Ladies and gentlemen it’s a pleasure to be here today. The aviation sector will always enjoy strong support in Parliament. I’m very much aware of APAG’s wealth of knowledge and expertise in this field - not least because of the qualified pilots you number amongst your membership. Over the past 16 years, this group has played an important role championing British aviation and holding successive governments to account on issues affecting the sector. And you continue to make an important contribution today, as the coalition develops a new policy framework to deliver a sustainable and successful future for aviation.
Two of the coalition’s highest priorities are to tackle the debt crisis and supporting growth. So it is important that we have a policy framework that allows the aviation industry to flourish in a highly competitive global market. Britain’s civil aviation industry has a long and distinguished history of innovation. From the pioneering early years of the 20th century - throughout its history - Britain’s aviation industry has adapted successfully to meet a host of different and difficult challenges. The statistics are well known but it’s worth repeating some of them. Our aviation industry generates about £11 billion a year, and employs around 200,000 people. By conquering distance and bringing communities across the world closer together, aviation supports hundreds of thousands of jobs elsewhere in the economy.
And of course the industry stretches well beyond the passenger market to cover:
- the air freight sector
- the aerospace and the engineering specialists involved in aircraft assembly and maintenance
- the legal, finance and insurance companies who support aviation related transactions
- and, not forgetting general aviation, which probably accounts for around 8% of the commercial aviation sector’s economic contribution
The task we face is to enable the industry to operate in a sustainable way, one that is consistent with meeting our climate change commitments as well as reducing the impact of flying on local communities by addressing issues such as air quality and noise impacts on local communities. We rejected proposals for new runways at Heathrow, Gatwick and Stansted because they would have caused an unacceptable level of environmental damage - particularly in relation to noise. Aviation needs to play its part in helping to deliver a low carbon transport system while contributing to sustainable economic growth.
British engine and wing technology is already playing a major role in progress towards achieving this goal. We can be proud of the fact that new aircraft like the Airbus A350 will contain so much British engineering excellence, including British wings and British engines. The Boeing 787 Dreamliner also contains lots of British engineering, including the popular Rolls Trent engines. We can be proud that UK manufacturing can still provide world beating technology. Together these new aircraft will increase efficiency for passengers, reduce emissions around airports and help address noise problems. Over the horizon I hope we can look forward to real advances on biofuels and new engine technology such as the advanced open rotor which Rolls have championed for some years.
South East Airport Taskforce
But the decision to reject new runways at the south east’s 3 biggest airports makes it more important than ever to ensure that we make the best use of the capacity we have. We need to improve our airports and we need to improve the quality of the passenger experience within the capacity constraints we face. To assist us in delivering those goals we established the South East Airports Taskforce. The remit of the taskforce focuses on improving the passenger experience at Gatwick, Heathrow and Stansted, but I am confident that its work will also help other airports address issues affecting passengers. Regional airports right across the country make a vital contribution to local economies. A key part of our approach to aviation is to seek to create the right conditions for regional airports to flourish. So it is important that the work of the taskforce benefits the wider industry.
Three of the issues under consideration are:
- border queues
- and resilience
Taking those in turn, we are working with the Home Office and the UK Border Agency on ideas for improving the way border checks for passengers are handled. Securing our border against crime, terror and illegal immigration is vital in the dangerous times we live in. The impressive work being done by UKBA, particularly with new technology, is focused on delivering this crucial policy goal in a way which minimises inconvenience for passengers.
There is also some encouraging news on security. Although the tragic events in Moscow recently were aimed at the landside of the airport, the threat to aviation as a whole is one against which we need continuing vigilance. The UK’s aviation security regime has performed well over the past 30 years or so and continues to do so. Nevertheless, we are analysing ways in which the regulatory framework for aviation security could be reformed with the aim of providing greater efficiency, while maintaining the same high levels of passenger security or better.
The aviation industry told us that system we inherited from the last government can sometimes be too prescriptive and process-driven in its requirements. So we are working on a fresh approach that will set the industry very demanding outcomes to achieve, but gives them more flexibility to work out the best and most efficient processes by which to deliver those outcomes. I believe this will enable airports to further improve security and do so in a more passenger-friendly and efficient way. I am confident that such an approach can enhance our ability to deliver our security goals as well as benefiting airlines, airports, staff and passengers. We propose to consult soon on our reform proposals.
Resilience and capacity management
Turning to a third key element of the work of the taskforce we have established a sub-group on resilience and delays which is looking at ways to make better use of existing capacity both inside and outside the terminal. This could involve improving the flow of passengers through the airport or changing the scheduling and movement of aircraft on the ground. We’re hoping to find collaborative solutions which see airlines and airports in working more cohesively together to improve the overall journey through the airport. We’re considering the overall approach taken to capacity management. In any transport system there is a trade off between capacity and resilience. For years, the question at Heathrow was always how many more flights can be squeezed in? Arguably, insufficient regard was paid to the impact on resilience of continuing to fill up the airport ever closer to its physical capacity limits. I believe that needs to change. We need to tilt the balance the other way and place a much stronger focus on resilience to see if better working practices give the airport more breathing space to recover when things go wrong. Following December’s severe weather the resilience sub-group is also considering measures to improve winter preparations. The licensing system we propose to introduce could give the CAA much more effective power to check that regulated airports are preparing properly for severe weather.
But there are a number of ways in which we expect our reforms of airport regulation to improve the quality of service that airlines and passengers receive. We want to replace the existing framework for setting price caps at regulated airports with a more flexible system. Rather than focusing the bulk of regulatory action on a single price review every 5 years we propose to give the CAA the powers it needs to become a more responsive regulator throughout the control period. Whether it’s security queues, passenger facilities, or aircraft stands the licence based system we propose should enhance the effectiveness of the regulator by enabling it to intervene more quickly if an airport is failing its customers. And new enforcement powers, including financial penalties, should enable the CAA to tackle poor performance more effectively. An important part of the regime is giving the CAA a primary duty to promote the interests of passengers. But let me emphasise that this does not mean that the voice of airlines will go unheard or disregarded by the regulator. I fully recognise the importance of ensuring that the reformed system is responsive to the concerns of airlines as the direct users of airports. It’s very clear to me that protecting the passenger interest will often be best served by listening to the airlines whose business it is to give their customers what they want in a highly competitive market. I know the airline community is concerned about the decision to focus the new regulatory system on end users - passengers - but this is consistent with the approach in many other regulatory contexts, and in the limited range of cases where the interests of airlines and their customers are not aligned I believe it is right for the regulator to give priority to passenger concerns.
General aviation (GA)
I was asked today to focus on the government’s overall approach to the aviation sector as a whole. However, no speech to the Air League would be complete without reference to general and business aviation. I’ve already acknowledged the economic significance of GA. But I also fully recognise that GA’s contribution to aviation goes beyond the merely economic. It provides thousands of enthusiasts the chance to enjoy their passion for flying, providing world class training for pilots, technicians and many other roles and inspires many youngsters to take up a career in the aviation business. So I fully appreciate the importance of ensuring our policy and regulatory framework for aviation deals with GA in a proportionate way. While some issues and standards will clearly cut across the whole of the aviation sector, there will be other areas where a one-size-fits-all approach would have an unfair and disproportionate impact on general and business aviation. So we engaged with Ofcom when their proposals on spectrum pricing looked set to impose a very heavy burden on GA. While the outcome still involves additional charges, they are far more modest than the initial proposals and reflect the fact that GA concerns have been heard and acted on.
After discussions with the Parliamentary Aviators’ Group, I wrote formally to my DCLG colleagues emphasising the importance of small airfields. My goal was to make sure the transport benefits of these facilities were properly taken on board in the planning system. I would urge this group and others interested in GA to engage with the Department for Communities as they take forward their plans on reforming the planning system.
This is a useful opportunity for voices to be heard. And I’ve been hassling my officials on the new EASA rules on pilot qualification. The decision to require US registered pilots to obtain a licence from an EU member state was taken by the previous government. I’m afraid this was a fait accompli before I arrived as Aviation Minister. But I want to assure you that we’re doing what we can to minimise any unnecessary bureaucracy and to give pilots sufficient time to comply with the new rules. And lastly on GA matters, I should mention that I will shortly be writing to Siim Kallas who covers transport for the European Commission about the importance of GA. The Commission’s 2007 communication on general and business aviation contained much that was welcomed by the GA community. The response of the European Parliament was also positive. The point I want to make to Commissioner Kallas is that we’ve yet to see the good intentions laid out in those documents manifest themselves in practical application. In particular, the EU institutions should take more seriously the need to properly assess the differential impact that new regulations can have on general aviation and to ensure that a proportionate approach is adopted reflecting the specific characteristics of the sector. To persuade the Commission that a one-size-fits-all approach across the sector is not always the best one.
Ladies and gentlemen, I’ve tried this morning to give you further insight into the coalition’s vision for aviation, setting out some of our ideas for meeting the core economic, environmental and customer service challenges facing the aviation sector. In the months ahead, we will be expanding on that vision. March will see my colleagues at the Treasury publish their conclusions on Air Passenger Duty. I can assure you that the DfT has contributed to Treasury work on this with analysis on the impact of aviation taxation. We’ve also tried to ensured the views of different industry players have been fed into the decision-making process. In the same month, DfT will publish a scoping document posing strategic questions on the way forward for aviation. A draft policy framework will be published for consultation during 2012. I look forward to working with the Parliamentary aerospace group to help us write a new chapter for aviation policy in Britain. Aviation has often been a divisive subject in recent years, all too often portrayed as a battle between 2 polarised extremes. The coalition wants to try to build a wider consensus through a more open and inclusive dialogue and better mutual understanding than the last government achieved. That won’t be an easy task, but with your help, I believe we can achieve it.
(This speech represented existing departmental policy but the words may not have been the same as those used by the minister.)