Minutes of the External Advisory Group, 25 November 2008

Attendees: Jonathan Moor (Chair) - DfT, Ken Crawford – Scottish Executive, Martin Capstick - DfT, Sean Coulter - Northern Ireland, David Hart – DfT, Roger Wiltshire –British Air Transport Association, John Parkinson - DfT, Rita Burns – BAA, Lucy Gordon – DfT, Nic Ferriday – Friends of the Earth, Michael Dnes – DfT, Paul Ellis – British Airways, Brian Corbett – DfT, David Bishop – Airport Operators Association, Miriam Lea - DfT, Tim Johnson – Aviation & Environment Federation, Sarah Weston - DfT, Anna Mahoney – Strategic Aviation Special Interest Group, Michelle Cakebread - DfT, Owen Simon – Confederation of British Industry, Danny Pedri – DHL

Apologies: Jonathan Bailey – Manchester Airport Group, Eddie Redfern – Charter Airline Group, Mike Carrivick – BAR-UK, Duncan Kay – SDC, Simon Evans – AUC, Keith Thomas – Welsh Assembly, Barry Humphries – Virgin Atlantic.

1. Introduction and Update on Progress

Jonathan Moor, Director of Airports Strategy, welcomed everyone to the thirteenth meeting of the External Advisory Group (EAG). The minutes of the June meeting were agreed and Jonathan Moor confirmed that they would be made available on the DfT website.

Jonathan Moor then handed over to John Parkinson, Head of Airports Policy, who provided an update on key airports policy developments since the last EAG meeting, including: the ministerial decision to allow for an increase in the use of Stansted’s existing runway which had been announced in October; the Newham Local Authority decision on 8 October to allow an increase in flight movements at London City Airport; the Equalities Impact Assessment consultation which had been published in September as part of work to update the Impact Assessment for the Adding Capacity at Heathrow Airport consultation and had closed on 9 November; the Planning Bill which was due imminently to receive Royal Assent. John Parkinson explained that one of the key reforms introduced through the Planning Bill was the establishment of an independent Infrastructure Planning Commission which would make decisions on nationally significant infrastructure projects within the context of National Policy Statements issued by the government. Ministers had stated their intention to produce an NPS for airports based on the 2003 Air Transport White Paper which satisfied the requirements set out in the Planning Bill. It would therefore be subject to an appraisal of sustainability, consultation and Parliamentary scrutiny. EAG members requested clarity on the planning system to which a possible application for a third runway at Heathrow would be subject. Jonathan Moor explained that this was dependent on a number of factors. If the government confirmed its support for a third runway, it would then be for the airport operator to bring forward a planning application. The timing of any application would also be a matter for the operator. The Government envisaged that the Infrastructure Planning Commission (IPC) would be ready to begin receiving applications from spring 2010. Therefore, if the airport operator submitted an application following implementation of the new planning regime, the IPC would consider it.

Martin Capstick, Head of Aviation Environmental Division, provided an update on aviation and environmental developments, including: the reforms to Air Passenger Duty (APD) which had been announced in the Pre Budget Report on 24 November. These reforms included the introduction of rates based on four distance bands rather than the previous two, and were aimed at strengthening incentives for the aviation industry to improve its environmental performance. Overall, it was estimated that the APD reforms would save 0.6 million tonnes of carbon dioxide. Martin Capstick went on to report that the European Council had agreed in October to include aviation in the EU Emissions Trading Scheme, and that the DfT was now focusing on setting up the regulator to administer the scheme in the UK. He also mentioned that the Group on International Aviation and Climate Change (GIACC) had met in July with some progress made on goals and working group arrangements, with three working groups established. EAG members asked several questions about the assumptions used to calculate the revenues and environment impacts of the APD reforms and how these compared to the current APD. They also asked for more details on the timing of the establishment of the ETS regulator, and noise issues relating to EU Directives and noise maps. Martin Capstick agreed to follow up these questions and provide responses to the EAG after the meeting.

Jonathan Moor provided an update on industry and passenger issues, including the signing of two Service Level Agreements (SLAs) for immigration queues at Manchester and Heathrow airports. This followed up a commitment made in the DfT’s ‘Improving the Passenger Experience’ document published in November 2007 (‘An analysis of end-to-end journeys with a focus on Heathrow’). The UK Borders Agency were expecting to have SLAs for the remaining top ten UK airports completed by the end of the year, and all the remaining airport SLAs in place by the end of March 2009. Jonathan Moor also reported on the recent failure of the tour operator XL and explained that the DfT was currently working with the CAA on a ‘lessons learnt’ exercise. He went on to mention the recent publication of the DfT’s “Delivering a Sustainable Transport System” (DaSTS) document which set out the DfT’s five goals for transport, focusing on the challenge of delivering strong economic growth while at the same time reducing greenhouse gas emissions. The document was accompanied by a consultation on transport strategy and planning out to 2014 and beyond. Jonathan Moor encouraged EAG members to respond to the DaSTS consultation which was available on the DfT website. He also mentioned that the DfT was due to publish in the coming months two further end-to-end journey analyses for Gatwick Airport and on air freight. Some members asked if, due to recent market changes within the aviation industry (e.g. airline acquisitions and mergers); there would be a possibility of non-UK airlines being represented on the EAG. Jonathan Moor explained that the DfT was open to suggestions of members which would benefit the EAG, but there was general agreement that it was probably not necessary to invite additional airline representatives given that BATA and BAR-UK were both already members of the EAG.

David Hart, Head of International Networks Analysis and Support, provided an update on progress on the DfT’s Review of the Economic Regulation of Airports. He explained that two stakeholder seminars had taken place in London and Edinburgh, and that the independent advisory panel was looking to publish its emerging thinking on the DfT website in early 2009. The DfT planned to consult on its proposals by March 2009 and issue its conclusions during the course of 2009. The key topics currently being investigated by the Review were (i) the principle of regulatory duties and whether these should be aimed at serving the end user or a wider range of stakeholders, including airlines; (ii) whether the regulatory regime should be licensed or rules based; and (iii) whether the CAA should have a concurrent duty on competition. David Hart also reported that the recommendations of Sir Joseph Pilling’s strategic review of the CAA were also being taken forward. It was likely that primary legislation would be needed as a result of both the Review of Economic Regulation and the Pilling Review.

2. Air Transport White Paper Evaluation

Lucy Gordon and Michael Dnes, Airports Policy Division, presented the DfT’s proposals for implementing an evaluation of the Air Transport White Paper (ATWP). The ATWP had committed the Government to monitor and evaluate ATWP policies, and the DfT had published an evaluation framework, produced by NERA, in November 2007. At the last EAG meeting, priority areas for evaluation had been discussed and the DfT had agreed to come back with more detailed proposals for taking the work forward. Lucy Gordon and Michael Dnes presented a proposal for a phased approach focusing on two specific areas of evaluation: an evaluation of the administrative approach of the ATWP and an evaluation of airport master plans. These areas had been selected as they were considered ready for evaluation and were comprehensive topics (e.g. master plans covered a range of issues from airport capacity development to local environmental mitigation measures).The DfT would involve EAG members (or the organisations they represented) in the evaluation process, which would be likely to include interviews to gather qualitative data. It was proposed that the research would be carried out by external contractors on behalf of the DfT to ensure the expertise and objectivity required for this work. The EAG welcomed the proposed approach, recognising the usefulness of evaluating these key elements of the ATWP.