EUROPE/CIS: IATA’s Bisignani blasts UK aviation policies

The International Air Transport Association (IATA) called on the British government to improve its global competitiveness in air transport by taking a global approach to aviation and climate change, reducing taxes, changing the economic regulatory structure for airports, and developing a proper strategy to safeguard the economic benefits of aviation. “The UK has a great […]


The International Air Transport Association (IATA) called on the British government to improve its global competitiveness in air transport by taking a global approach to aviation and climate change, reducing taxes, changing the economic regulatory structure for airports, and developing a proper strategy to safeguard the economic benefits of aviation. “The UK has a great tradition of leadership in aviation. But any industry can only take so many knocks before the damage is permanent. I respect the UK for its historic role but to write a successful next chapter, we must say ‘basta.’ The government’s policy pillars of excessive taxes, inefficient airport regulation and limiting growth will destroy the UK’s proud aviation legacy,” said Giovanni Bisignani, IATA’s director general and CEO in a speech to the Aviation Club in London. Bisignani noted that aviation supports about 1.5 million UK jobs along with US$76 billion in economic activity. “Aviation provides critical global connectivity to this island nation. It is a great mystery to me why the government seems so intent on destroying its competitiveness with a policy agenda stuck in the past,” said Bisignani. To support aviation’s economic benefits, he called for urgent policy action in the areas of cost, capacity, privatisation, winter weather and climate change. On cost Bisignani pointed to the World Economic Forum’s Travel and Tourism Competitiveness report ranks the UK last out of 133 countries for cost competitiveness, 129th on fuel prices, and 121st on ticket taxes and airport charges. “Recent decisions have got it all wrong. While the global airline industry was cutting costs and improving efficiencies to survive, the regulator allowed BAA a 50 per cent increase for Heathrow charges. He was even more generous for 2008-2013, with an 86 per cent increase. The economic regulatory model for airports is broken and must be urgently fixed,” said Bisignani. In terms of capacity he said that, “with the decision to abandon plans for a third runway, London Heathrow is becoming a secondary hub,” said Bisignani. Heathrow has two runways limiting its growth compared to other major European hubs with greater runway capacity¡ªAmsterdam has five runways while Paris, Madrid and soon Frankfurt will have four. “The corporatised NATS, with industry and government working together as shareholders, has delivered many benefits. It is more efficient, and more focused on its customers, than when it was a governmentrun monopoly. Efficient air traffic management contributes to the success of business connectivity. Any change to the structure of NATS must be carefully considered. A golden share or keeping some of the shares for the government is an option, and any change must include an effective regulatory structure that drives further efficiencies,” said Bisignani. Bisignani also called for better preparedness for severe weather in the wake of major airport shutdowns in December. “The inconvenience to passengers and the paralysis of the UK economy for many days is unacceptable from any perspective. Shovelling snow is not the airline’s responsibility. The financial losses they suffered must be compensated, and we must approach next winter with a better plan,” said Bisignani. On the issue of climate change Bisignani criticised the UK government for taking an isolated and punitive policy approach to managing aviation’s emissions, particularly with the Air Passenger Duty now standing as a GBP2.7 billion burden on the industry. “That is enough to offset all of UK emissions¡ª not once, but four times. To borrow a UK phrase ‘this is potty’. Environment policy should not be designed around paying the bills for the government’s failure to effectively regulate the financial sector,” said Bisignani. He called for an immediate end to the unjustified burden of Air Passenger Duty and for the UK and Europe to cooperate on a global framework for economic measures coordinated through ICAO. Bisignani also called on the government to support the commercialisation of biofuels, with the potential to reduce aviation’s carbon footprint by up to 80 per cent and to stimulate the economy at the same time.