28 NOVEMBER 2011

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Article from BTNews 28 NOVEMBER 2011

COMMENT: Positive news from Government or not

Perhaps surprisingly to some, but not to others who believe that industry pressure is at last beginning to have an effect, the Government has published its draft Civil Aviation Bill, this year rather than next, a decision applauded by all.  Words have been found by the Department of Transport to effectively acknowledge that the future of the air transport industry is getting increasingly precarious and that action is needed now.

Highlighted in the draft is a proposal to give the CAA new powers to promote the interests of passengers, including the ability to fine airports for poor performance.

Parliament itself has been quick to react, the Transport Select Committee, an official all-party grouping of MPs, has requested written comment from interested parties (not more than six pages they say) and pointing out that once submitted the views are public property.  Two oral evidence sessions are expected before the end of the year with a report expected by early 2012.

On Tuesday the Chancellor announces the autumn statement with Air Passenger Duty (APD) expected to feature.  This will of course affect airports.  The Chairman of the Energy and Climate Change Committee, Tim Yeo MP, has written to the Chancellor urging him not to bow to "self-interested lobbying" from airlines who want to see a cut in APD.  Mr Yeo has grown up children.  Unlike the majority he does not presumably pay their holiday air taxes, assuming they fly from time to time.  Mr Yeo’s views seem to be in a minority, even the normally august Institute of Directors pointing out the damage that high taxation produces.

Virgin Atlantic in many ways summed up the general view regarding new Secretary of State Justine Greening’s statement.

“Reform is long overdue – the current regulatory regime has failed passengers. Airport charges have been allowed to increase way above the rate of inflation, hitting passenger pockets and completely ignoring the economic climate. Last winter’s snow showed that the performance of airports had not improved at the same rate.

“Regulation must produce better outcomes for our passengers and as the Bill enters Parliament, our focus will be on ensuring that the new framework delivers improvements in practice.

“We are also pleased the Government has responded to our call for airlines to be given an equal right of appeal to CAA decisions.”

According to Government the draft Bill is designed to modernise the key elements of how the industry is regulated and contributes to economic growth.  It also extends to aviation security, the 'user pays' principle which exists elsewhere in the sector (eg safety regulation).  This will involve the transfer of certain aviation security functions, such as monitoring and enforcement, from central Government to the CAA which charges the industry for its activities.  However, the responsibility for setting aviation security policy and making aviation security directions to the industry will remain with the Secretary of State for Transport.  It is estimated that this move could save UK taxpayers over £4m a year whilst seeing a better quality service delivered.

By publishing a draft at this stage, the Government says that it aims to give the Select Committee and wider stakeholders the opportunity to consider the Bill before it is brought before Parliament.

Much of the legislation surrounding aviation dates back to the 1980s and is in need of modernisation.  It is possible that the scope of the Bill may be extended before it is introduced.  One area which could be included is the reform of the Air Travel Organisers’ Licence (ATOL), following the recently finished consultation on measures to protect consumers better in the 21st century holiday market and help create a more level regulatory playing field for businesses.  Association of British Travel Agents (ABTA) also issued a statement supportive of the proposal.

Progress is still slow.  Boris Johnson, The Mayor of London, thinks that an estuary airport could be built in eight years once approved.  But how long will that take?  The Government now says that the new Civil Aviation Bill will actually be published early into the New Year.  Let us hope so.  Air transport needs some good news.

Malcolm Ginsberg
Editor in Chief

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