Speech

Transport Times aviation conference: 17 April 2012

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Discusses the contribution aviation makes to the United Kingdom.

Thank you David. This is a key conference at a crucial time for Britain’s aviation sector.

I know how difficult the past few years have been for many in the industry.

With challenges like rising oil prices, a turbulent global economy, and a ruthlessly competitive marketplace have all taken their toll.

But paradoxically, the economic downturn has also made us appreciate, even more than before, the immense contribution that aviation makes to our country.

I’m sure it’s a familiar figure to many when I say, the sector generates around £9 billion of output each year and of course plays a crucial role in providing our gateway to the global marketplace.

And in the year of the Olympic Games and the Queen’s Diamond Jubilee, we are reminded of the critical role that aviation plays in supporting tourism, and making London such a popular destination.

But the very success of our aviation sector also presents us with a series of key challenges, these centre around:

  • how to accommodate growth while meeting our environmental commitments and addressing the quality of life impact of aircraft noise
  • how to improve our airports and the passenger experience
  • how to protect Britain’s position as one of the best connected countries in the world

Above all, the debate on the future of our airports must be grounded in reality and based on the facts. The reality is that Britain has an extensive and highly successful global aviation network.

Arguably, London is the most well connected city in the world.

It has 5 highly successful and busy airports 6 if you include Southend and some would also like to see Manston to play a role in meeting our aviation capacity needs as well.

The London airport network provides direct links to around 350 international destinations, including most of the world’s greatest commercial centres.

Heathrow delivers over 9,000 flights every year to New York making the UK the market leader in Europe, on this route.

2,500 to Singapore and New Delhi make us market leaders here too.

Then there’s China.

Like the rest of the Westminster village I’ve read on the escalators at Westminster tube station that we’re lagging behind in this important market lagging behind unless, that is, we include the 3,000 flights every year to Hong Kong.

If we do that it’s clear that in this market too, we lead with Heathrow delivering more services to China than any of its continental rivals.

And frankly I don’t think my colleagues in the Foreign Office would thank me if I started acting on the assumption, as some people seem to, that Hong Kong wasn’t a part of China!

So while it is true that Heathrow is pretty much full and Gatwick too is approaching capacity it’s simply not the case that London’s connectivity is falling off a cliff edge.

But good government is not just about tackling the problems of today it is also about planning for the future.

In the same way that we are not prepared to leave future generations with a fiscal deficit, neither should we leave them with an infrastructure deficit.

So it is right that we have the debate about our capacity and connectivity needs over the years and decades to come.

That is why the Chancellor announced in his Autumn statement that we would explore all the options for maintaining the UK’s aviation hub status with the exception of a third runway at Heathrow.

The coalition has always been clear that it does not support a third runway at Heathrow.

One of its very first acts as a government was to confirm this.

Heathrow is unique in Europe in terms of the magnitude of the noise impact it has on densely populated areas.

The airport accounts for approximately 70% of people in the UK exposed to average noise from airports above 55 decibels.

More than 1 in 4 people exposed to this level of noise around European airports lives near Heathrow.

Thousands live on a daily basis with a plane overhead every 90 seconds not to mention the flights that wake them up at 4:30am.

The quality of life impact of a third runway, with up to 220,000 more flights over London every year, would be massive and there is no technological solution in sight to ensure planes become quiet enough quickly enough to make this burden in any way tolerable.

So we need another solution and last year we kicked off the process to decide what that will be with the publication of our scoping document on a sustainable future for aviation.

Responses came from a wide range of industry and environmental stakeholders, members of the public and community and campaigning groups. I’d like to thank those who took part.

We are using them to inform the drafting of our consultation document on a sustainable future for aviation.

We are also developing a call for evidence on maintaining the UK’s hub airport capacity.

These two documents will be published in the summer a little later than planned but we remain committed to finalising policy framework by next spring as we originally promised.

I know some would like us to go faster but this decision is a crucial one which requires an objective, thorough and evidence based analysis of our connectivity needs and how best to meet them in a sustainable way.

A thorough assessment of the environmental impact of potential solutions will also, of course, be crucial.

As the coalition has said from the start we want aviation to grow but growth at any price and without regard for the environmental consequences would not be in the nation’s best interests.

Aviation needs to play its part in meeting our carbon commitments and protecting the quality of life of local communities.

As well as asking the right environmental questions we need to ask the right economic ones as well.

It’s worth noting that connectivity is the crucial outcome we want to secure and that connectivity and capacity aren’t always synonymous.

For example, the last time capacity was increased at Heathrow was when the Terminal 5 planning consent raised the movement cap to 480,000 flights per year.

But when capacity went up, the number of destinations actually fell because of an increasing emphasis on trans-Atlantic routes.

Conversely while additional capacity can certainly improve connectivity it is not the only means of doing this.

Another option is to make better use of the airports we have by using them more efficiently and by seeking to focus our hub capacity on the routes that are of the greatest importance to the economy as a whole and which will contribute most to the continuing success of Heathrow as one of the world’s most popular hub airports.

But I do acknowledge that the DfT’s latest published demand forecasts do indicate that airports in the south east are likely to be full by around 2030 with increasingly significant crowding pressure by the mid 2020s even if regional airports start to shoulder more of the load.

Given how long it takes to deliver new capacity we do need to start preparing now for those longer term challenges though it should be acknowledged that demand forecasts are presented as a range and can change as key assumptions about economic growth and oil prices are varied. So there is an element of uncertainty here.

Nor I’m afraid would it be right for me to stand here and pre-judge the outcome of the detailed and evidence-based decision-making process we started on with our scoping document and which we will continue with the documents we’re publishing in the Summer.

The experience of the last government shows what a tangled web you can weave if you start out with one outcome in mind and seek to reverse engineer the evidence to deliver it.

But whichever solution is ultimately chosen delivery is likely to span across more than one Parliament.

That is why the Secretary of State and her predecessor have both expressed an interest and willingness to seek cross-party consensus.

There is no doubt that the degree of cross-party support which has been established for HS2 is making the high speed rail project easier to deliver than it otherwise would be.

In taking the process forward to determine the right solution to the UK’s long term aviation connectivity needs we’ll consider very carefully how we can take the politics out of the debate and seek common ground with others.

But I would emphasise that our focus on the longer term is not distracting us from the action we’re taking to improve our airports right now and make the best possible use of our current capacity.

Legislation is going through Parliament to deliver a new system of economic regulation that will put the passenger interest firmly at the heart of the regulatory system and create the right incentives for investment in the improvements that customers want.

The licence based approach we are proposing will help the CAA intervene more quickly and more effectively if an airport is failing its customers than waiting for a 5 yearly price review.

We are also pressing ahead with measures that emerged from our South East Airports Taskforce.

These include reform of the aviation security regime moving it away from the prescriptive approach of today towards what we have called ‘an outcome-focused, risk-based’ system. Which I think would bring significant improvement.

We’re now consulting on those changes, which would give airport operators more flexibility on how to meet security standards.

We are confident that the new approach can deliver the same high standards as today or possibly higher but will enable these outcomes to be delivered in a more passenger friendly and efficient way by harnessing the ideas and expertise of the airport operators who actually deliver these services on the front line and enabling them to integrate more seamlessly into operations at the airport.

A further important initiative that emerged from the work of the taskforce is the tactical use of greater operational freedoms at Heathrow.

A trial of these measures commenced in November and they include the use of both runways for arrivals in certain prescribed circumstances.

We believe these freedoms could potentially deliver operational benefits by improving punctuality.

They could also provide environmental benefits by reducing the number of late running night-flights and reducing aircraft stacking.

We believe the trial will provide a sound factual basis on which to assess the impacts and benefits of theses operational freedoms being trialled.

A full consultation with local communities will take place after the end of phase 2 of the trial to enable us to decide whether any of these new operational freedoms should go beyond the trial stage to become long term changes to the way Heathrow operates.

A fourth key initiative for improving our airports is harnessing the latest technology to modernise airspace management through the CAA’s future airspace strategy and the single European sky programme run by the European Union.

This is a priority for the government and one which is starting to make some real progress.

A fundamental part of the SES programme is the establishment of functional airspace blocks.

By running airspace in bigger blocks which combine a number of countries, we can increase capacity, reduce fuel consumption, mitigate noise and improve safety.

The UK and Irish functional airspace block was the first to start operations and is already delivering practical benefits.

Fifthly and lastly - we are delivering a step change in the quality of the surface access links to a number of our busiest airports.

Manchester airport is going to be linked up to the Metrolink tram network for the first time and funding has been secured for a new airport link road connecting with the M56 and A6.

Thameslink will significantly improve rail connectivity to Luton and Gatwick.

Phase one of HS2 will provide a top class interchange with Birmingham airport and phase two to Manchester and Leeds will bring the airport within an hour’s travel time for the majority of the UK population.

Phase two will also give millions of people in the Midlands and the north a direct high speed rail route to Heathrow for the first time. The long awaited tube upgrade will improve London Underground services to Heathrow and a quarter of a century after the project was first mooted. Crossrail construction is now underway.

Two huge tunnel boring machines will soon be starting their journey under central London, delivering that crucial direct link between Heathrow and the global financial powerhouse in the city and Canary Wharf.

So ladies and gentlemen… we’re taking a range of actions right now to ensure our airports continue to provide top class international gateways to the rest of the world.

And we’re also carrying out the process needed to determine our future connectivity needs and how we meet them in a sustainable way.

This is an immensely important debate and I would urge all of you to take part when the call for evidence and consultation documents are published.

Thank for taking time to listen to what I’ve had to say on these key issues for our economy, our environment and our country.