Aviation has been one of the UK’s great success stories, making a huge contribution to our economy and to our international trade links – but Ministers shouldn’t make the mistake of thinking that the sector’s future success is guaranteed.
To the contrary, a succession of recent airline bankruptcies offers a vivid reminder that this is an industry facing a threatening combination of rising costs and slowing revenues.
The roll call of airline failures over the last two years is a long one: Monarch and Air Berlin in 2017, Primera Air and Cobalt Air last year and Flybmi and Germania this year. Rising costs over the past two and a half years have been a key factor in precipitating these failures, at the same time as a decline in business confidence and economic conditions have hit revenues.
Last year the UK yet again saw a reduction in direct connectivity and this was caused by lack of capacity at our largest airports and a cost base that has hampered the ability of carriers to serve new destinations viably. This must change if airlines are to deliver the new routes and connections that will be vital to ensure stronger trading links for the UK with the rest of the world.
The Government wants to build a global Britain, but this can’t happen if the costs of sustaining routes consistently outweighs revenue.
As IATA has recently suggested, for the typical airline in Europe the combination of weakening economies, intense competition for slowing revenue and high infrastructure and regulatory costs are likely to mean that 2019 will be a tough year.
Now, more than ever, UK aviation needs long-term backing from the Government and policies that will help us to succeed in the face of an intensively competitive environment. Fortunately, Government Ministers now have a perfect opportunity to help us to deliver success over the next 30 years in the form of the Aviation 2050 strategy on which they are currently consulting.
There are many ways in which the Government could help to ensure route viability and aviation success – certainly by taking a fresh look at the high cost of regulation, but also by policies to deal with congested airports and airspace. Continued Government support for a new runway at Heathrow and openness to Gatwick’s ideas for expansion will help and so will a commitment to play a leadership role in delivering the airspace modernisation that the UK so badly needs.
Some people say that backing aviation is exactly what the Government should not be doing right now. Parliament has just agreed that we face a climate emergency and the Committee on Climate Change, the Government’s own independent advisers, have urged the Government to cut UK greenhouse gas emissions to net zero by 2050.
But it is a false choice to say that you can’t be both for the environment and for aviation. We share the Committee’s ambition to bring emissions into line with the Paris Agreement and we look forward to discussing with the Government how we can work together to rise to this challenge, while still enabling the many positive benefits that aviation brings by connecting people across the world.
We are proud of our sector’s success in recent years in decoupling aviation growth from growth in emissions thanks, among other things, to considerable investment by airlines in the latest aircraft technology, as well as improved operating procedures and air traffic management. Looking ahead, we see exciting opportunities to further reduce emissions through the development of hybrid electrical aircraft, the use of sustainable aviation fuels and modernisation of UK airspace.
We stand ready to partner with Government on that vital agenda and, in return we hope that Ministers and officials will listen and respond sympathetically as we outline our ideas on how the Government’s Aviation Strategy could be crafted to ensure the future success of UK aviation.
Baroness Vere, our new Aviation Minister, says she has joined the Department for Transport at an exciting time. She is right about that and right to note that aviation and aerospace are great industries to work in. We look forward to working closely with her and her officials on an Aviation Strategy that will deliver for passengers, for the environment, for the aviation sector and for UK PLC.
