Simon Buck, chief executive of the
British Air Transport Association
, tells Central Lobby:
“We did some work and found out our members’ staff live in just about every constituency in the whole of the United Kingdom.
They have employees from John O’Groats to Lands End and covering 80% of UK postcode districts.”
BATAis the trade association for UK-registered airlines. Its members directly employ 73,000 people and carry 131 million passengers and 1.1 million tonnes of cargo a year on a fleet of more than 770 aircraft.
The Government has approached the issue of airport capacity by creating a commission that will recommend short, medium and long term solutions.
BATAhas made submissions to the commission, but Buck says it should go further than simply “whether and where to pour concrete”.
“The remit of the commission is maintaining the UK’s status a global hub for aviation which is quite narrow,” he said.
“We believe the commission should be taking a much more holistic approach to the whole issue of the future of airports.
“They should be looking at wider issues, such as does the UK have a competitive visa and tax regime as well as efficient border operations and general airport connectivity, not just focusing on capacity shortages.
“However, new capacity is essential to maintain our connectivity and status in the world. Both hub capacity and non-hub capacity should be increased as and when required.”
The Government’s taxation of aviation and the travelling public through Air Passenger Duty (APD) is a source of frustration for
BATA’s members.
“The UK has the highest air passenger tax in the world,” says Buck.
“Within Europe there are only five other countries levy any sort of comparable tax – France Austria, Germany, the Republic of Ireland and Italy – and none of those comes even close to the cost of air passenger duty.
“It is incredible that in 1994 when APD was introduced, initially you paid £5 per person for a short haul journey or £10 for a long haul journey.
“Now it is so escalated that you can be paying up to £188 for a long haul flight if you travel in a premium cabin.
“If you look at the World Economic Forum’s 2013 Travel and Tourism Competitiveness Report, the UK ranks 139h out of 140 counties in terms of taxation on tourists. The only country that has a worse regime is Chad.”
Buck cites a recent study by PricewaterhouseCoopers on the economics of APD that shows the tax actually harms the UK economy.
“They used a model very similar to the Treasury model to simulate how changes, such as tax policy, affects the rest of the economy,” he explains.
“They worked out that if APD was to be abolished it would bring a lasting boost to the UK economy, it would generate a net tax gain from increased economic activity.
“It would create 60,000 jobs. At a time when we have such a high level unemployment, we would have thought that would be something the Government would have welcomed.
“We hope the Government has an evidence-based policymaking approach – they are being presented with clear evidence of how damaging the tax is.”
Buck says the high cost of UK visas is another factor that works against the UK’s economic interests.
“The UK has a complicated status as it is a non-Schengen country,” he says.
“Many tourists from places like China apply for a Schengen visa which allows them to go to nearly every other country in Europe apart from Britain. They have to apply for a separate, more expensive visa simply to come to the UK.
“That puts us at a major disadvantage.
“We are unlikely to do much about changing our Schengen status, but we think the Government should be looking at ways of making sure that when people apply for a Schengen visa they can do a little ‘add on’ at minimal cost to allow them to come to the UK too.
“It seems very cumbersome to fill out all the visa applications again just to come to the UK and it is damaging to visitor prospects, especially when combined with the highest tax on flying. It makes the UK a very expensive place to visit.”
Buck has made the case for scrapping APD and making it easier for visitors to Europe to come to the UK, but is the Government listening?
We hope they do listen to us,” he says.
“One of the advantages of being a trade association is that the Government sees us as a focal point for talking to the UK airline industry and we have some very useful engagement, particularly on things like border control we are able to have a dialogue about issues of concern to us.”
While ministers have turned to a commission to come up with solutions for airport capacity, it won’t be paying for the infrastructure. The contrast with the railways is striking.
“The aviation industry pays for all its own infrastructure and regulation costs,” explains Buck.
“We are not anti HS2, and we agree there should be a fully integrated transport policy in the UK but we just don’t have that.
“HS2 would be complementary to, and not a replacement for aviation, because many of the domestic air services, for example, are to places in the UK that are remote or are in places where a high-speed rail link would not be viable.
“It is interesting to look at the contrast between the way aviation is taxed and seen as a public ‘bad’ almost, and £5bn annual public subsidy that goes into rail. We do sometimes wonder where the logic is on that.”
Despite high taxes, the
BATA’s members are investing in their future.
“We have a high proportion of young employees and a high number of people, around 550, in apprenticeships – we are giving people their first jobs and training them,” says Buck.
“And if you look at the current orders for new aircraft from
BATAairline members, they are quiter and more fuel efficient aircraft. There are about 250 aircraft on order for BATA members and there will be a step change difference in terms of noise and emissions.
“We are seeing dramatic improvements.
BATAmembers know they have a role to play and are determined to play their part.”
Buck adds:
“It is a great industry to work in and the Government should support it as something that can help Britain get out of the economic crisis. It provides a link with countries overseas and if helps with creating jobs and attracting tourists and inward investment. But without a link to these places, we just not in the same game as our competitors.”