British Air Transport Association
[Check against Delivery]
1. Ladies and Gentlemen, thank you very much for inviting me as guest of honour at your annual dinner.
2. Whilst thinking about my remarks for tonight, I was struck by just how unique an industry civil aviation is.
3. What other global industry has transformed people's lives so much in the last 50 years? What other industry generates so much public comment across such a wide range of issues – be it about customer service standards, safety, security, or its impact on the local and global environment?
4. What other industry depends on diplomatic relations between Governments to deliver the permissions necessary to do so much of its business?
5. And what other business is constrained in its commercial dealings by matters such as the nationality of its owners?
6. But the things which make the industry so unique can also make it difficult for the aviation industry to deliver its full potential.
7. I believe that aviation should operate like any other global industry, tailoring its product to the needs of the market, in a way that is consistent with maintaining responsible safety, security and yes, environmental standards.
8. That requires three approaches - strong national partnership between the industry and Government, and concerted and co-ordinated efforts at booth European and International levels.
9. And tonight, I would like to focus my remarks on what we are doing at all three levels to achieve our policy objective of a safe, sustainable and competitive UK aviation industry.
10. For my first point, strong partnership is something that begins at home. And we have, in BATA, a strong and powerful voice for the industry that does, I believe, an effective job in representing your views to Government.
11. We may not always agree on certain issues…. Danny I listened very carefully to the point you made - but on APD I am not convinced by the case being made by some today in the industry.
12. Sir Nicholas Sterns seminal report was clear that in tackling climate change effectively trading and taxation are not alternatives - but that both have a role to play.
13. Indeed, in candour, aviation has a more pressing need to be transparent with the public on what it is doing to address climate change than focussing its energies on questioning the level of APD.
14. ….But there is common ground. We both share the same aim - a sustainable, successful UK aviation industry.
15. So what are we doing domestically to deliver that?
16. First and foremost, we are working with you to respond to the pressure for expansion in airport capacity.
17. We know that demand for air travel is forecast to increase significantly. And our White Paper acknowledged that by, in principle, supporting new capacity.
18. But equally, we are all aware that there is widespread public concern about the environmental impact of the growth of aviation.
19. That is why, in December, we announced our intention to establish a new "Emissions Cost Assessment" for the aviation sector. We will consult on the proposal this year. I genuinely want to see a wide range of views on this and I hope that you will take the opportunity to respond to that consultation.
20. We also need to be confident that we are making the best use of existing airport capacity, through a process of improvement, investment and modernisation - so I welcome the fact that most major airports in the UK have now produced master plans which set out their future development aspirations and give local communities the opportunity to engage with them.
21. At Stansted, BAA's proposals to make better use of the existing runway are subject to the planning process. Following last year's consultation, they intend to announce their plans for building a second runway, with a view to submitting a planning application in the second half of this year.
22. Turning to Heathrow – working closely with BAA, we are taking forward the remaining work to identify whether the stringent noise and air quality limits necessary to allow Heathrow’s expansion can be met, considering both mixed mode operation and a third runway. We expect to be consulting in detail later this year.
23. My second point this evening is to make clear that maintaining strong working relationships in Europe are also essential to the sustainable development of the aviation industry - and it is here where co-operation with our European partners is leading the world.
24. In today's world you simply cannot with any credibility be pro-environment and anti-European.
25. Indeed, you won’t be surprised to hear me say that I believe the best way for the industry to meet its environmental costs will be the successful establishment of aviation within an EU emissions trading scheme.
26. I know that many of you in this room have expressed your support for such a scheme, and I thank you for taking such an enlightened and responsible approach.
27. But I remain concerned that there are still powerful voices within the European aviation industry – let alone in other major world nations – that are still opposed to emissions trading.
28. We will continue to play our part at the Governmental level, reinforcing to other countries why emissions trading is absolutely essential to aviation’s sustainable future.
29. But here there is a key role for airport operators and airlines.
30. A key role in explaining to your fellow EU airlines and alliance partners why opposition to emissions trading is a short sighted position that can only damage their medium and long-term interests.
31. A common argument made by some opponents of emissions trading is that new technology is the answer. I accept that - in part - it is. And, of course I welcome the good progress that is being made towards developing more efficient and quieter aircraft in the future.
32. Improved operating practices can also make a difference, and I was very pleased to see the excellent joint working between the Department, BAA, NATS, CAA and airlines which produced the updated code of practice on noise from arriving aircraft – a good example of how constructive co-operation can define and promote good practice for the benefit of all.
33. But let me now turn to the third level of aviation governance I mentioned at the outset of my remarks - the international level. And it is here where the challenges we face are perhaps the greatest.
34. Because whenever we look at the reasons why aviation has developed in this distinctive way, we are drawn back to the Chicago Convention.
35. The Chicago Convention has in past decades served the international aviation industry well. It proved a solid foundation for the development and continued operation of world airlines. But it is 60 years old - reflecting the realities not of today but of 1944. And I would argue that its modernisation is now overdue.
36. For example, the system by which air service rights are agreed between Governments, subject to the whims of international diplomacy, rather than the commercial realities of the market.
37. It’s ironic – given the ongoing difficulties we face in agreeing a meaningful open skies deal with the US – that it was in fact the British who insisted on the bilateral system originally, in part to limit American domination of the world aviation industry.
38. But now the boot is on the other foot. We only need to look to the European common aviation area to see the huge benefits that have been achieved by sweeping away the bilateral system within the EU.
39. The establishment and massive expansion of low cost airlines would not have been acheived without that change.
40. Passengers now have more choice, and more competitive fares, than ever before.
41. Thinking more radically – I wonder if it might be time to look again at whether the notion of an airline’s traffic rights being linked to nationality of its ownership is really appropriate for the modern world.
42. The emergence of single aviation markets across national boundaries – as in Europe – has further complicated the picture. And the potential loss of traffic rights from a change in ownership has severely limited the ability of the airline industry to consolidate and for integrated, efficient global players to emerge.
43. I think it is important that we have a debate about these issues. Doing anything meaningful about them will need international agreement and modernisation of the Chicago Convention.
44. But we also need Chicago to reflect today’s realities in the areas of security, safety and the environment; while the International Civil Aviation Organisation itself is in urgent need of institutional reform.
45. The ICAO assembly in September this year provides an important opportunity to drive this debate forwards. Progress will not be made overnight. But we will be seeking the assembly’s agreement for work to begin on the modernisation of the Convention.
46. I know there will be resistance in some parts of the world – change can be unsettling. But I believe it is important that we grasp the nettle now, and make progress internationally on dealing with these deep-rooted issues which have a fundamental effect on the way you do business.
47. I genuinely hope that with your support I will be able to take forward this ambitious agenda.
48. My final point this evening is about security because it is vital that we continue to work together to do everything we can to ensure the safety of those who work in the industry and of course passengers.
49. We fully recognise the impact that the new and necessary changes in security have had on your operations since August. That is why we have worked hard to bring about a level playing field through our work in Europe and Internationally, to harmonise the new measures.
50. Overall, in the face of a determined, resourceful and adaptable enemy, I believe that, working together, we have managed to maintain a reasonable balance.
51. But we can never afford to be complacent. The reality of the terrorist threat is something that this industry will have to live with. We will need to continue to work together closely in the foreseeable future as we identify new threats.
52. My themes tonight have been ones of responsibilities and partnership. As a Government, we recognise the crucial importance of a competitive aviation industry.
53. And, where we can, we will work to break down the institutional barriers that prevent you from achieving your full commercial potential.
54. But – hand in hand with that – goes the need for a responsible aviation industry.
55. My offer to you is simple. You work with us to deliver the conditions necessary for the sustainable growth of the aviation industry, and we’ll work with you to deliver the infrastructure and regulatory framework to make it happen.
56. That way, in partnership, we can see real progress on both your commercial and our shared environmental objectives.
Thank you.
Delivered: 25 January 2007
(This speech represented existing departmental policy but the words may not have been the same as those used by the Minister.)
