“Aviation is the lifeblood of our island-economy”

Earlier this afternoon our Chief Executive, Richard Deakin, gave a speech at the Airport Operators Association annual conference earlier today. It was wide ranging, taking in market contestability, airport capacity, regulation, Europe and the environment, so we thought it was worth reproducing here in full.

“I’m always interested by the passion air travel arouses, and why compared to other forms of travel, it’s usually negative. Everyone in this room spends a sizeable chunk of our working lives having to defend our industry, even though it’s the lifeblood of our island-economy!

“Even Sustainable Aviation – our move to be cleaner, quieter, and smarter about how we operate, always seems to struggle for political support.

“But given that we all take it for granted we can fly off on holiday or business whenever we want, or eat fresh mangoes for breakfast, why is it that developing pragmatic aviation policy to support economic growth, causes political meltdown?

“The Airports Commission will deliver its interim report in December – hugely anticipated – but won’t be making any recommendations before the next General Election because the Government knows it is electorally too difficult.

“The fact is that aviation policy is a knotty electoral problem for the very reason that it excites such emotion. We all like to fly, we just don’t want the aircraft flying over our homes….. which is a bit tricky in southern England, some of the busiest airspace in the world. There isn’t anywhere that isn’t already overflown!

“Add to that, the fact that aviation requires long term and brave policy decisions when governments are by their very nature focused on the short term. – It’s hardly surprising we have a policy conundrum.

“But we can make it better, and quieter, for more people on the ground. The London Airspace Consultation, which we launched last week, is the first stage of consultation around airspace change to deliver the Future Airspace Strategy – which everyone here is involved in – and which designs in PBN, the latest precision navigation capability, which is part of SESAR deployment.

“New European legislation requires all Member States, including the UK, to revise our airspace to incorporate PBN – and we are all looking forward to the improvements in efficiency that will bring across Europe.  But in the UK, it also gives us the opportunity to modernise our airspace structures to improve efficiency, and to reduce the environmental impact of air traffic.

“At Gatwick we are consulting jointly with GAL, as they own the low level routes and they propose the changes.  PBN means they can consider designing respite routes – which is surely good.  London City Airport is considering its low altitude routes for a future stage of consultation. Future phases of airspace redesign will bring in other airports in joint consultation with us.  We see these airport partnerships as key to unlocking future benefits through airspace development.

“The great benefit of PBN is that we can design airspace to exploit the capabilities of today’s fleet.  It enables aircraft to fly very precise lines – in line also with government policy to concentrate noise rather than disperse it. But our experience tells us people prefer a fair distribution of noise.  – Another policy challenge!

“Overall the proposals will reduce noise – continuous climb and descent, moving away from conventional holding patterns to new holding structures that will be higher and largely over the sea. At Gatwick, the possibility of respite routes to provide predictable quiet times for the people living below the new, very accurate flight paths.

“And all of this is improving efficiency, reducing distances flown and cutting CO2 emissions.

“But – and here’s the ultimate policy challenge – they will still be flying over us!

“Airspace is the invisible pillar of our transport infrastructure – airports and airlines don’t function without it.  Mostly, airspace is managed by government agencies, but we should never forget that it’s the bottom line costs on which our customers are relentless focussed.

“What I think is true, is that where governments have been brave enough to create an environment that encourages competition, common standards and customer-focused service, it provides stimulus for change. In the UK, a combination of regulated service provision and competition for airport air traffic control services has seen significant improvements in price and service provision. Since privatisation in 2001, NATS has seen direct operating costs fall by more than 30%, and flight efficiency levels improve to deliver an average delay per flight of 1.4 seconds (just 1/20^th of the European average) in a year with the added operational challenge of the London Olympics – while continuously reducing fuel burn for the airlines.

“Here’s another policy dilemma.  The CAA looked at the UK air traffic control towers market and said it doesn’t fully meet the contestability criteria set by the European Commission, and that there therefore needs to be a degree of regulation.

“Basically that’s saying that the regulator is better placed to negotiate your ATM contract than you are. One only has to look at the lamentable process made by the European regulator in the Single Sky programme over the past decades to see that is a claim which is difficult to justify!  In my experience you’re quite capable of driving a very hard bargain!  We believe there is contestability, and we believe that the current environment encourages you to be clear about your requirements and it encourages us to be efficient and to innovate to better meet your needs.

“NATS is very much at the forefront of driving the Single European Sky where we are dealing with a legacy European network that still functions, but could function a whole lot better. The notion behind SES – about improving the way we manage our airspace, both to meet future capacity demand but also to improve air traffic management performance – is something every government and every part of our industry should be doing all we can to support.

“However, despite some observers claiming that if only SESAR was to be implemented all of Europe’s inefficiencies would be solved, we should be honest and recognise that a technology upgrade will not address the underlying political and social inefficiencies which are at the heart of the European ATM challenge.

“We urgently need regulatory reform and common standards to stimulate contestable markets and accelerate progress across Europe.  What we don’t need is yet more regulation and legislation which, to date, has not delivered the progress required.

“We need to think differently, to be prepared to consider different models for service delivery and, where we can, to do it without the need for State intervention so we can speed up the process and demonstrate the innovation that undoubtedly resides in our industry.

“And we need a level playing field across Europe. Our customers tell us that disproportionate taxes like APD, disjointed regulatory standards and punishing visa requirements, are damaging their business.  What damages our customers, damages us.

“If we are to make the progress we need to, we need a new political formula and a different approach that puts customers, rather than politics, at the heart of what we do.”