BTN Europe presents an overview of business travel and MICE predictions for this year
Virtual Event - 25-26 May 2021
Virtual Event - 9 June 2021
Thursday 9th September, JW Marriott Grosvenor House
THERE COULD BE SOME GOOD NEWS for business travellers using Heathrow this summer: the long awaited debut of the £25 million 'robot taxis' ferrying passengers from T5's car park to the terminal in just four minutes may finally be given the green light. No matter that the driverless pods, which travel on a dedicated 4km track, are two years late in arriving due to gremlins in the software and, even at this stage, may suffer more glitches - the world's busiest international airport can celebrate some success.
Unfortunately, this may be as good as it gets for Heathrow and the rest of Britain's airports. Their future remains clouded in uncertainty as they - and the airlines - suffer from a regulatory overhaul in both Whitehall and Brussels. The coalition government's anti-expansion stance - Heathrow has been barred from building a new runway, as have both Gatwick and Stansted - has left the airline world unsure of where its future lies.
EasyJet's CEO Carolyn McCall has admitted to frustration at the new government's attitude: "We really need a clear aviation policy because it's such an important part of the future of Britain," she says.
The International Air Transport Association's (IATA) outgoing director general Giovanni Bisignani also recently told UK aviation leaders in London that the coalition government appeared "intent on destroying the country's competitiveness with a policy agenda focused on increasing costs and limiting capacity growth". Even London's Conservative mayor Boris Johnson has called the government's aviation policies an "absolute disgrace".
Given the overwhelming level of criticism of the government's new stance on aviation policy, it is hard not to feel some sympathy with Philip Hammond, who was parachuted into the job as Transport Secretary in the heady days after the 2010 general election, when the coalition administration was being formed. Hammond had been all set to become deputy to Chancellor George Osborne as Chief Secretary to the Treasury when the needs of the coalition meant a Liberal Democrat was given the job instead.
Hammond, a Tory high-flyer, had little choice but to accept the job, even though it has a reputation of being something of a poisoned chalice. In the 13 years of the last Labour government, there were a dozen different politicians put in charge of transport. None of them stayed around long enough to have had much real influence and the odds are that in David Cameron's first reshuffle as PM - which could come this autumn - Hammond will be given a new Cabinet post.
Although aviation policy covers a range of issues, from climate change to taxation, it is the lack of expansion at Heathrow and elsewhere that has been at the heart of much of the debate over the past year. Labour had laid down the most far-reaching airport strategy in a generation in the 2003 White Paper, The Future of Air Transport, which looked ahead to the country's airport-needs up to 2030. It concluded that not only Heathrow, but also Stansted, Edinburgh and Birmingham airports should all be allowed runway expansion. In 2009, then-Transport Secretary Geoff Hoon gave the go-ahead for a third runway at Heathrow and expansion at Stansted.
The decisions seemed something of a 'no-brainer' at the time, particularly for Heathrow. Building a third runway (and a sixth terminal building) was deemed essential by a wide coalition of interest groups, ranging from business people to trade unions. Their case was based on the fact that Heathrow was already full to bursting and so the lack of capacity was damaging to UK economic growth, and other Continental airports hubs - particularly Paris CDG and Amsterdam Schiphol - had wooed airlines and international passengers away from Heathrow.
In addition, new figures (from Flightglobal) show that Heathrow's stretched capacity means that it is losing out on the number of aircraft from regional airlines that could be using the airport. In April, Heathrow handled just 283 regional jet and turbo-prop flights (down 11.6 per cent on five years ago), fewer than the 1,244 at Paris CDG or 1,380 at Madrid Barajas in the same month.
What changed the future for Heathrow and other UK airports was the unexpected conversion in the latter years of the last decade by the Conservative Party, under new leader David Cameron, to all things 'green'.
While the Lib Dems obviously favoured environmentally-friendly polices, the Tories were traditionally a party that backed big business. Labour appeared more pragmatic over environmental issues, supporting higher curbs on carbon emissions but backing Heathrow expansion because it was good for business. Lord Soley, a Labour peer, had led the Future Heathrow pro-expansion campaign that backed a new runway.
The coalition government's stance is that airport expansion cannot be in the best interests of the environment in an era when measures to lessen the impact of climate change are deemed so important. After duly blocking new runways at Heathrow, Stansted and Gatwick - as well as denying the expansion of Heathrow capacity through measures such as 'mixed mode' use of existing runways - Hammond delivered a new policy approach last March outlining a 'sustainable framework for UK aviation'.
"We are not anti-aviation, but anti-carbon," says Hammond. "But we are not prepared to support growth at any price." The objective, he adds, is to make "our airports better, not bigger".
Hammond was also due to respond in July to the Committee on Climate Change's 2009 report into the options for reducing aviation emissions back to 2005 levels, by 2050, and says the government is pressing ahead with plans for the inclusion of aviation in the EU's Emission Trading System due to come into force next year.
Unsurprisingly, this is proving rather controversial, with legal challenges planned by non-EU airlines and International Airlines Group CEO, Willie Walsh, warning in June of a possible aviation trade war with China, Russia and even the US if non- EU airlines are forced to take part in the initiative from Brussels.
The timetable for the 'scoping' document is for an end-of-September cut-off date for comments, followed by a draft policy framework to be published next March for further consultation, with formal adoption of this framework by the spring of 2013. As it stands, there are likely to be few surprises, with the EU wide emissions trading scheme the focus of reducing aircraft emission, including for long-haul flights. Limits on acceptable aircraft noise levels will also be reviewed, along with the way the CAA regulates the financial performance of UK airports.
In addition, the government thinks that regional airports and new high speed trains linking major British cities can take some of the strain away from the over-crowded south-east.
The coalition's green credentials on aviation, however, have been somewhat tarnished by its decision not to switch liability for airline passenger duty from passenger to plane, which is considered more environmentally-friendly and encourages greater aircraft efficiency. The government shelved plans to switch the tax - which was first introduced by Kenneth Clarke when Chancellor in 1994 - after doubts were raised (although not confirmed) over the legality and feasibility of such a move.
The real issue, however, remains extending the capacity of Heathrow and other-south east airports. "We are all for regional development but there is an overwhelming need for additional airport capacity in the south-east right now," says Mike Carrivick, CEO of the Board of Airline Representatives (BAR UK), which represents scheduled carriers.
Probably the best hope of the negative policy on airport expansion being reversed would have been the coalition's collapse and the return of a Labour government, especially given the importance of the aviation industry to mega-unions such as Unite. But the Labour Party is currently reviewing its transport policies, which anti-expansion groups believe will see the party's pro-runway development stance abandoned. Time, perhaps, for a 'plan B' at Heathrow?
At about the same time as Prince William was marrying Catherine Middleton at Westminster Abbey on Friday April 29, officials at the European Commission in Brussels were being forced into an embarrassing U-turn on plans to ease restrictions on air travellers carrying liquids in cabin luggage, after a revolt by 10 of the 27 member states, including the UK, France and Italy, as well as opposition from the US Department of Homeland Security.
These countries were unhappy about the security implications of even partially relaxing the ban (which would only have affected transit passengers) even though new scanning technology now enabled airport security staff to detect dangerous liquids in luggage.
While the liquids ban had been regarded in some parts of Europe as an overreaction, the UK and US believed that now was not the time to ease up on airport security.
Yet other member states, said to include Germany and the Scandinavian countries, thought some relaxation of the rules would end the confusion and hassle at airports. But just three days after the U-turn by Brussels, the game changed when US special forces killed Al-Qaeda leader Osama Bin Laden. Security - especially at airports - was back at the top of the agenda.
But it seems a decade after 9/11, there is a growing belief that the restrictions have become too intrusive.
Sir Martin Broughton, deputy chairman of International Airlines Group, pointed out earlier this year: "The current procedures have grown, Topsy-like, every time there is a new security incident. Every time, it's a procedure to stop a repeat of what has already been attempted - rather than a programme to prevent a new attempt by terrorists."
Airport security measures have increasingly come under criticism for being too scatter-gun in approach, targeting everybody who flies rather than focusing resources on identifying potential terrorists. Security officials, however, have been loathe publicly to adopt profiling measures, not just because of accusations of racial stereotyping, but also because this could let a terrorist slip through the net.
However, the US Transportation Security Administration is launching a pilot programme for frequent travellers flying within the US later this year (international flights and passengers will be excluded initially). The aim is to enable those who have shared their flight data and personal details to have a quicker passage through security.
The US authorities are also working on a hi-tech checkpoint system, which will employ recognition and detection technology at airport check-in.
IATA also unveiled a similar technological solution to the 'security checkpoint of the future' at its conference, basically categorising travellers according to risk and then funnelling them though three security tunnels involving different degrees of scanning. The less of a risk the traveller is perceived to be, the quicker the process. But don't hold your breath: it could take five years for the system to be rolled out commercially at airports.
Yet one emerging threat appears to be the ease with which terrorists can get hold of stolen or forged passports and other documents 'proving' identity. Interpol estimates there are some 28 million such illegal documents in circulation, with just 40,000 travellers caught using them last year. As Interpol chief Ron Noble says: "With the help of the airline industry we must urgently plug this glaring security gap."