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IATA Warns UK Aviation Policy Needs ChangeApril 25, 2012 By: George Dooley Travel Agent
The International Air Transport Association (IATA) asked the United Kingdom's government to address high taxes and severe capacity constraints while developing policies to support the airline industry’s commitments on climate change. Aviation should be used to drive UK economic growth and job creation, IATA says.
“The UK is the world’s second largest market for international air travel, bringing enormous benefits to the economy. Aviation in the UK is at the center of over GBP 90 billion of economic activity and supports the livelihoods of nearly 1.8 million people. The connectivity provided by aviation enables London to function as a global financial center, to be a global hub of culture and to host the Olympics. Great Britain is an island. Aviation connects it to the global community and global economy. Government policies must recognize and nurture that important role,” said Tony Tyler, IATA’s director general and CEO.
"Aviation’s future capability to be a pillar supporting the UK economy is jeopardized, however, by a regulatory approach that constrains the growth of the UK’s only hub airport (Heathrow) and a fiscal policy that burdens the industry with heavy taxes. IATA encouraged the government to address these issues in a national aviation policy that will follow from the ongoing consultation process," Tyler said.
New capacity is urgently needed to support the needs of London as a global capital of finance and culture, IATA says. “The UK is falling behind in connectivity. London has less frequent links to 27 emerging market destinations than the daily connections offered from continental European hubs. If the UK wants to do business with these developing markets, air connectivity is the enabler,” said Tyler.
He noted that London has no non-stop services to some developing markets such as Manila, Jakarta, Santiago and the Chinese cities of Chengdu, Shenyang and Guangzhou, although daily services exist from continental European hubs.
IATA forecasts indicate that 205 million people will travel to or from the UK in 2015, accounting for about one in every seven international air travelers. “The Government needs to make Heathrow’s expansion a priority in a competitive new UK aviation policy so that the UK can realize the economic benefits of connectivity and continue to punch above its weight globally,” Tyler said.
The national policy must also reduce the UK’s high tax burden on aviation, IATA says. “The ever increasing Air Passenger Duty (APD) is a GBP (British Pound) 2.9 billion annual burden on UK businesses reliant on connectivity. And passenger demand is growing more slowly than at other European hubs because the APD is pricing air travel out of the range that consumers can bear.”
IATA estimates the planned increase in the APD will result in the loss of 7,000 UK jobs on top of the damage that it is already doing to the economy.
“The national aviation policy discussion is a great opportunity to replace the tax, regulate and restrict policy trajectory of today with one that supports connectivity, jobs and economic prosperity with sustainable growth."
"That’s exactly what is needed to re-start the UK economy. By refocusing the policy agenda towards competitive, cost-efficient and sustainable growth, aviation can do so much more than the already impressive support for GBP 90 billion of economic activity and 1.8 million jobs. A strong aviation industry is a foundation stone of an economically strong and competitive Great Britain,” said Tyler.