John Spellar – 2002 Speech on Air Transport

Below is the text of the speech made by the then Transport Minister, John Spellar, on 11th November 2002.

Thank you for giving me the opportunity to say a few words at the start of your conference today.

I note that your conference papers describe the current exercise as “the biggest consultation ever undertaken on air transport”. I have to say, we did not consciously set out to break records in that particular respect. But I am happy to take the credit!

The issues are necessarily complex and far-reaching; and we have indeed tried our level best to do justice to them – and to give parties adequate time to comment.

Clearly, an enormous amount of work went into preparing the suite of consultation documents issued in the summer. But they are only the tip of the iceberg. Underneath are several years’ worth of technical detail and analysis, open to public scrutiny. No-one can accuse us of being superficial.

All told, we have issued nearly a quarter of a million summary and main consultation documents and there have been some 600,000 downloads on the Department’s special website.

Many of you will perhaps have attended one of the public exhibitions around the country. These have tried to give people a further opportunity to understand and explore the issues. Those in the South East attracted over 11,000 people.

So here we are, with just under a month still to go before the end of the consultation period. And you may be thinking there is nothing more that can be said.

Well, I’d actually like to take this opportunity to address some of the issues you will want to take into account in framing your response. And I will do so by hopefully answering some of the questions that may still be uppermost in your minds.

Demand forecasts

Firstly, the demand forecasts. Questions have been raised regarding the Government’s assessment of future demand.

Our forecasts envisage a three-fold increase in passenger numbers over the next 30 years, if demand is unconstrained and we think that’s realistic for three reasons.

Firstly, the forecast recognises the increasing maturity of the aviation market. So future growth should be less rapid than historic growth.

In fact, the forecasts assume a future rate of growth for the next 30 years at only half the rate that we have seen in the past 30 years.

Second, we have worked on the basis of a central forecast, pitched in the middle of a range which could see passenger numbers increase to anything between 400 and 600 million passengers a year over the period.

Of course, forecasting up to 30 years ahead cannot be precise. Aviation is a dynamic industry, and is constantly changing – witness the continuing burgeoning of the “no frills” sector for example.

In the space of 5 years to the Year 2000, “no frills” carriers in Europe achieved the same rate of growth as the total UK air travel market achieved over the last 30 years.

But the point is this. Our past record on air traffic forecasts is generally good. If anything, events have shown it to be a touch conservative.

And third, the lesson of history is that aviation enjoys strong trend growth. A little over a year ago, the doom-mongers were saying that September 11 would change everything.

Those tragic events have certainly had a profound effect on many aspects of the aviation industry. But traffic is returning, albeit more slowly in some areas than others. In short, the trauma of last year does not look set to overturn the long-run growth trends.

So, on the forecasts, we are confident that the underlying basis for the options appraisal is robust.

However, we’ve been accused of “predict and provide”. But in fact, there are likely to be major economic benefits from meeting at least most of this forecast demand. Much of this would accrue to air passengers. But there would be additional benefits to airlines and the UK economy.

Airports can help to attract inward investment. But they also help to keep UK business competitive: 30% of our visible exports, by value, go by air – worth some £60 billion a year.

And the ability of the small businessman to fly from his local airport can be just as important as it is for the giant corporation.

But there are also likely to be major environmental disbenefits from meeting the forecast demand in full. This is why the first question in the consultation is: How much airport capacity should be provided?

Alternative modes?

The benefits of air travel are all very well, but its arguable that a better alternative would be for some of this air traffic to go by rail.

The answer to this point is that we need to be realistic. Many passengers on domestic flights are interlining with international flights out of the UK – in the case of Manchester to London, about 50% of all passengers.

Others, for example, are doing business near to the airport rather than wanting to access central London, where the major rail terminals are. Rail travel, even where it is reasonably time-competitive with air, will not be a particularly attractive alternative for such people.

In some cases, we can expect to see some rail/air substitution, particularly where rail service improvements offer the prospect of markedly shorter journey times and good airport connections. We acknowledge that in the consultation documents, and have taken it into account in our analyses.

And, for all the regions which currently enjoy air services to London, we ask in our consultation documents about the scope for switching from air to rail links.

We will expect the SRA, in considering rail proposals, to continue to take account of the potential for abstraction from air. But it does not get us off the hook in terms of having to confront the issue of airport capacity.

The Regional Question

Make no mistake, regional airports are a crucial part of the transport mix. Again, we say this quite clearly in the consultation documents. They help to ensure that economic benefits are enjoyed as widely as possible across the UK.

Indeed, regional airports have a role to play, not just in maintaining links to other parts of the UK, but also in linking the regions to key continental hubs connecting with European and long haul destinations.

We want to strengthen the contribution that our regional airports can make to the country’s overall economic prosperity, and the prosperity of their own region, and support those getting up to critical mass and mini-hub status.

But we cannot escape the fact that it is the South East of England which accounts for the lion’s share – 60% – of UK air travel, and where demand is strongest.

On population grounds alone, London is a major generator of travel. Since 1989, the capital has seen its population grow by nearly 600,000 – equivalent to absorbing a city the size of Sheffield.

And in the next 15 years the population is set to increase by another 700,000 – equivalent to adding a city the size of Leeds.

Access to high quality air services has been cited as one of the main reasons why London ranks as a world city, and the best city in Europe for business; and why London is the chosen headquarters location for one quarter of Europe’s largest companies.

The South East is important, not just because there is a higher ‘propensity to fly’ – with 60% of the population of the region making at least one trip a year, compared with a national average of 50%. In itself the figure of 50% represents a remarkable change for this country.

Heathrow in particular handles a significant number of passengers from overseas who are en route to destinations beyond the UK. That simply reflects the advantages of a major airport which is capable of serving a wide range of destinations around the world. It then tends to act as a hub, generating yet more connecting services.

We recognise there are real benefits to be gained from having an airport, or perhaps more than one, which can act in that way. But the consultation seeks views on that, and accepts that such a hub need not be limited in future to Heathrow, or indeed to the South East. And we specifically seek views on whether Manchester Airport could, and should, seek to become a major hub airport.

Environmental costs

So far I have covered demand forecasts, rail substitution and the regional issues. I now want to move on to environmental issues.

Some people will argue that aviation is of itself ‘unsustainable’. We have never sought to deny that, unless properly managed, aviation has substantial environmental disbenefits, both local and global. And we expect aviation to cover its external costs, including the environmental costs it imposes.

That is why, from the outset, we have made clear our commitment to sustainability. There will need to be a proper balance between economic, social and environmental considerations. And if there is to be further capacity, steps will need to be taken to address the environmental impacts.

In most cases, this will mean local solutions to local problems

– first, through appropriate environmental controls;

– second, through mitigation of effects such as noise

– and third, through arrangements to ensure that those most affected receive due compensation.

Responses to our Future of Aviation consultation showed that this is what the public expects.

Research further suggests that noise and air quality top the list of people’s concerns. Public feeling on these matters often runs high – borne out, as you would expect, at the public exhibitions.

First, noise. Aircraft noise has got progressively less over recent years, due to quieter engines. Nearly a quarter of a million fewer people are affected by noise at the four biggest airports in the UK, compared with the position 20 years ago.

At Heathrow, it remains our policy to do everything practicable to continue to improve the noise climate over time. As you will be aware, conditions have been imposed in the planning permission for Terminal 5 both to cap air traffic movements and to limit the noise contour.

And we’ve suggested in the consultation documents that future growth in air traffic may call for the imposition of similar noise contour caps elsewhere.

Night noise is another sensitive issue. I appreciate the genuine concerns, but it is not directly related to the question of airport capacity. Night flights at major South East airports continue to be regulated, and we will be consulting specifically on the future regime at Heathrow, Gatwick and Stansted later this year. Meanwhile, we are doing further work on public attitudes to night noise.

A key part of sustainability is also that the aviation industry bears the costs of mitigating effects on communities living near airports. And if capacity enhancements are to be provided, a quid pro quo may be for aircraft and engine manufacturers to accelerate the delivery of reductions in noise.

Air quality is a second major concern. Further action may well be needed in some cases to tackle local problems, for instance from ground-based emissions.

At Heathrow, where the problems are exacerbated by high levels of road traffic emissions, concerted action will be needed to tackle the problems. We have made it abundantly clear that any airport expansion could only be approved if air quality standards can be met.

But by far the biggest element in the environment debate is climate change – the effects of CO2 emissions from aircraft. We have allowed for this in our demand forecasts, on the basis that the aviation industry will be expected to bear the costs of the damage which aviation causes through its contribution to global warming.

Precisely how this is achieved is a matter of continuing debate. Climate change issues are best pursued internationally, through the auspices of the International Civil Aviation Organisation.

We’re actively seeking to encourage work on possible measures such as an open emissions trading system for limiting greenhouse gas emissions, assuming this was widely supported among the international community.

Our conclusions on these matters will be set out in next year’s White Paper.

Next steps

As you know, the consultation period on airports runs until November. We will then carefully assess the responses and use them to inform our decisions on what additional capacity we think is deliverable and sustainable, and where we think it should be located.

Any future infrastructure developments will of course continue to be governed by the planning system. Reforms have already been announced, with a view to speeding up the arrangements for projects of national importance, such as airports.

As for timing and funding, these will be commercial decisions stemming from the private sector. But with the White Paper in place, setting out a clear and long-term strategy, the industry should be in a position to plan with confidence.

In the White Paper, we will also be setting out our policies across a range of other air transport matters, from airline policy to air traffic management and consumer protection, on which we consulted previously.

In many of these areas, we operate within European and international frameworks and must work in conjunction with our partners – and in some cases, competitors – to realise our objectives.

To sum up, the air transport industry is undoubtedly one of the UK’s great business success stories. In turn, it contributes much to the success of our economy. We want to ensure that it continues to flourish in an increasingly competitive world. But it needs to do so in a way that respects the environment and the needs of the communities it serves and affects.

The challenge in the coming months will be to strike the right balance to secure a sustainable future for aviation. And your responses to that debate will help us get it right.