The Pacific Asia Travel Association held its Hub City Forum in London earlier this month. CEO Martin Craigs spoke to ABTN about how APD and the lack of a hub airport strategy have been damaging the UK’s reputation in Asia
Do you think that Heathrow and the UK can preserve its status as a major global aviation hub?
I’m personally interested to see how London can evolve as a hub. We are now being asked by some quite serious entities to assess what the long-term connectivity and convenience argument is for London.
The Beijing Tourism Commission last month give us a project to produce a report on where the best place for them to set up their representative office in Europe would be, which begs a lot of question about how Europe will look in five or 10 years in terms of connectivity and convenience.
If you froze things in time right now, then London still has many distinct advantages. But businesses like airlines and tourism offices don’t think in political timeframes, they think in long-term timeframes.
Political timeframes cause the logjams that are currently hurting aviation and tourism at the moment as people are not willing to make bold and decisive decisions because they keep worrying about the short-term political implications.
What issues did you raise with trade and investment minister Lord Green during your forum?
I appreciate getting a hearing with Lord Green – it was very useful conversation and he agreed to take forward some of the advocacy points that I raised. These included APD, which may be the easiest tax for George Osborne to collect but there seems to be an almost hypnotic attraction to increase the collection because it’s so easy. The downside is that this is having a bad effect on Britain’s reputation overseas.
We absolutely do not accept that Europe has a right to tax and suppress job creation in travel and tourism in Asia. Some people have gone as far as to say that APD and EU ETS are a form of European neo-colonialism. Also it is remarkable to think that Osborne has managed to raise this tax to such an extent that the total takings this year from APD will be £2.5 billion which is more that the combined projected profits for all 233 IATA airlines this year.
I find it remarkable that he has time to go to Brussels to argue in favour of bankers’ bonuses, but he does not address this issue. The reason he has been able to get away with it is that nobody has been confronting him and his Treasury department colleagues about it. But it’s my job to raise this point.
How much will this tax and the lack of an aviation policy hinder the UK’s progress in doing business in Asia?
I have no wish to be negative or destructive to London or Britain’s interests in growing its travel business – quite the contrary; I would love to see this year being a springboard for future growth with all the great things going on, such as the diamond jubilee and Olympics. I want to be helpful, not destructive – I don’t want to see this as just a high point for Britain in 2012 and then everything went downhill from then on because we had no aviation policy and upset so many people with our unreasonable taxation.
Heathrow has suffered a lot of negative publicity in recent months – what’s your view on the UK’s hub airport?
We had BAA’s Colin Matthews come to speak to our forum and he is making the best of a difficult job. The fact is that he is spending £100 million a month improving Heathrow. It’s not easy doing that much engineering at the same time as trying to put one million passengers a week through the buildings. He was honest and pragmatic - he’s not trying to pretend that everything’s perfect but he was trying to explain what the issues were.
What messages have you taken back to Asia about the UK?
I have been saying: don’t give up on London. It’s well known for its fighting spirit and there are a lot of people who will not allow this pernicious tax to keep expanding. There is also this very illogical attitude of having no aviation policy, or whenever aviation comes up they just keep on kicking the tin down the road. That’s no policy at all and that’s a shameful situation to keep saying maybe we will change or maybe we won’t, or maybe we will agree to do this but in the next political cycle, it will change again.
It’s a kind of democratic gridlock, which is appearing in many other parts of the world as well. It’s fundamentally created by having weak-willed politicians who are beholden to week-by-week pollsters who themselves are beholden to a very small number of single-issue ideologue groups who terrorise them into telling the politicians you mustn’t do that because you will lose two per cent of the vote. Whatever happened to strong-willed, far-sighted politicians?
How will PATA be continuing to campaign against APD in the next few months?
This is not a one-hit wonder. We have a five-year plan of how we are going to advocate on this because we are not going to be restricted by political cycles. We are doing a dinner for 50 at the House of Commons on November 5 – the first night of World Travel Market.
The next morning I will be speaking to more than 80 tourism ministers from PATA about how they need to get out of their comfort zone and start being more proactive. I’m happy to be their spokesperson – that’s my job – but they have to speak up a little more vocally. They will be speaking directly to Westminster MPs.
Frankly, the one way we are going to do this is to shame Westminster politicians by saying you can’t go around the world lecturing people on free trade and then impose a detention tax on your own people and the world’s most illogical tax on exports. By putting on APD, you are taxing exports, even though the UK government wants to increase exports. It’s like Osborne is pulling up the drawbridge so you can’t connect with the fastest-growing export markets. You can only fly to three cities in China from the UK which is ridiculous. It looks like doublespeak or one hand doesn’t know what the other is doing.
pata.org.uk