Growing opportunities for UK aviation
Address to the Airports Operators Association Conference regarding the success of aviation and Heathrow expansion.
And thank you Ed for that introduction.
It’s a real pleasure to join you today (21 November 2016).
And a welcome opportunity to address an airport audience for the first time as Transport Secretary.
It has been remarkable few months for this industry.
First, we had the EU referendum – with Brexit opening a world of new opportunities for aviation.
Then - shortly after my appointment - I approved the £344 million expansion of London City Airport.
And in October there was the small matter of backing a third runway at Heathrow, and announcing a consultation on modernising our airspace.
So – lots of different developments.
But to me, they send out some clear messages.
They show that Britain is changing – and our place in the world is changing.
They show that UK aviation is a success story – and that airports have a critical role to play in building a prosperous future.
And they show that our government is prepared to take the difficult decisions necessary to help your industry grow.
And that last point is vital.
I said after my appointment that I wanted a transport plan that works for everyone.
That doesn’t just mean for passengers.
It also means transport working for the benefit of the whole country.
And that’s what airports do.
The services you provide don’t just support growth.
They create it.
You’re responsible for 40% of all Britain’s imports and exports by value outside the EU.
You’re major employers in your own right.
And you’re serving unprecedented numbers of passengers.
In fact 2015 was the busiest year since records began.
Britain needs a thriving, profitable airports sector.
So, yes, we want you to grow.
Sometimes governments have been unwilling to commit themselves to this simplest of objectives.
As if you should perhaps tread water for a while.
It was treading water for so long that left our main hub airport with no spare runway capacity, while our competitors built for the future.
To give an idea of where global aviation is heading, the industry anticipates that there’ll be demand for 33,000 new passenger and freight aircraft over the next 20 years.
That will pretty much double the size of the world’s fleet.
Though we’ll be flying on a new generation of lighter, cleaner, quieter aircraft.
But what’s important is that Britain is in a position to take advantage of that growth.
The Confederation of British Industry says that if the UK retains its aviation market share, air traffic growth in Asia alone will create an extra £4.7 billion in exports over the next 10 years, and the creation of 20,000 high value jobs.
Well let me assure you, there’s no question of us sitting back again while we watch others overtake us.
We have to connect with those fast-growing cities in Asia, South America, and Africa - while maintaining our strong connections to vital markets like the US, Australasia and Europe.
And now we know Britain’s future is outside the EU, those global connections are even more crucial.
That’s why on October 25th I announced the government’s support for a new northwest runway at Heathrow.
There were 3 good proposals on the table.
But the new runway at Heathrow was the right decision – for Britain and the aviation industry.
With room for an extra 260,000 aircraft movements a year, the new runway will deliver more flights, more destinations and more growth.
The benefits to passengers and the wider economy will be worth up to £61 billion.
It will bring more business and tourism to Britain, and offer more long-haul flights to new markets.
By expanding Heathrow, we will show that we are open for business, confident about who we are as a country, and ready to trade with the rest of the world.
And the project will include a world-leading package of compensation and mitigation for local communities.
Worth up to £2.6 billion, it will address air quality, noise disturbance and provide generous compensation for any loss of homes.
And we’re going to get cracking building the new runway as soon as possible.
That’s why we’re delivering it using a National Policy Statement.
Once the statement has been designated by a vote in the House of Commons, we will grant a development consent order and the airport operator can submit a detailed planning application, confident that the high-level arguments are settled and won’t be re-opened by the planning inspector.
This streamlined process will speed up planning, not slow it down as critics wrongly claimed.
And finally, we’ll be able to move beyond the stalemate of the past and get on providing the capacity Britain needs.
I need hardly remind this audience that the new runway won’t just benefit London and the south east.
It was the right decision for the whole country – which is why so many of you voiced your support for a third Heathrow runway.
It means Heathrow expects to add 6 new domestic routes, bringing its total UK network to 14 airports.
And it will certainly not prevent London’s other airports from expanding.
Gatwick, Luton, London City, Stansted and Southend all have crucial roles to play to meet growing demand for air travel.
Of course growth will not be limited to the south east.
Airports across the country will expand.
Indeed, this is already happening.
Last year our regional airports handled over 97 million passengers.
Several have achieved double digit growth over the past 5 years, including Edinburgh, which has grown by more than a quarter, and Bristol, which has recorded an 18% increase in passengers.
We’re seeing massive investment in new terminals, passenger facilities and improved access.
We’re seeing airports diversify into business parks and business aviation.
And many airports are launching new routes.
Manchester for example, which will shortly start work on a £1 billion upgrade, now has direct services to Beijing, Singapore and Houston.
With San Francisco, Turin and Luxembourg among the new routes to come.
Our chairman spoke eloquently earlier about the importance of promoting growth throughout the industry.
I absolutely agree.
The prospects for UK airports are extremely bright.
In fact even brighter as a result of the Brexit vote.
It’s understandable that the vote has caused some uncertainty in the industry.
This is a momentous change for the country.
But it’s also a momentous opportunity for aviation.
One we should be confident about exploiting.
We have the third largest aviation network in the world.
And following the Heathrow announcement, we now have a plan for growth that will allow us to compete for routes more effectively, particularly with major European hubs like Amsterdam, Paris and Frankfurt.
By expanding Heathrow, we will open up new opportunities at airports throughout the country.
We also have some of the best, most innovative airlines in the world.
More people fly with British airlines each year than carriers from any other country outside the US and China.
And we have an economy that over the past 6 years has outstripped the rest of the developed world.
All these facts bode well for the future of British aviation post Brexit.
Other countries want to do business with us.
And they want to do business with British airlines and airports too.
That’s not going to change after we’ve left the EU.
Meanwhile we are working hard across government to ensure that our exit strategy addresses the concerns of the aviation industry.
That includes on issues like air traffic management, safety regulation, customs and border control.
It’s vital we have best possible access to European markets – this will be a fundamental consideration when it comes to negotiating our future relationship with the EU.
And it’s vital we seek to quickly replace EU-based third country agreements, particularly with the US and Canada.
While continuing to update our air services agreements with the rest of the world.
We’re also considering our participation in the European Aviation Safety Agency System.
I will work closely with the AOA as we make progress with plans.
I very much value your insight and experience on many of these key issues.
They will be important as we move forward.
But if our aviation system is going to grow in a sustainable way, then we also need to modernise our airspace.
That’s why we recently announced a consultation on UK Airspace policy.
Although new technology is available to make journeys better, faster, more reliable and more environmentally friendly, our outdated airspace structure means we are not currently able to benefit from the full potential of these new technologies.
Our Future Airspace Strategy is designed to renew our airspace and air traffic management systems.
This will bring us into line with global best practice.
The framework will balance the needs of passengers, industry and communities affected by aircraft noise.
Particularly around the new runway.
I welcome the industry’s efforts to reduce noise.
But despite newer aircraft being quieter than ever before, it remains a concern.
So our proposals will help make airports better neighbours to surrounding communities.
They will ensure those communities are properly involved in the changes.
They will make the process more transparent.
And as a result it will help us meet our growth aspirations for UK aviation in a sustainable way.
So it’s a critical part of our wider plans.
And as I said last month, we will soon set out our proposals.
All of these issues will be part of our new Aviation Strategy which Ed mentioned in his speech.
It’s a long-term framework covering airports, safety, security, competitiveness, consumers, regulation and capacity.
We’re focusing on issues where government can make a difference.
Where we can support the industry.
And we’ll stay clear of issues where we can’t.
We want to build on the momentum of the Heathrow decision - so the whole of Britain can benefit from new aviation capacity.
While also focusing on what this industry can do for the country outside the EU.
It’s a time of real challenge and change.
But most of all, it’s going to be a time of incredible opportunity.
And it’s my job to work with you.
In a spirit of partnership.
To help you realise that opportunity.