Examination of Witnesses (Questions 116
WEDNESDAY 19 DECEMBER 2001
116. Good afternoon, gentlemen. I am sorry to
have kept you waiting. As you can understand we had a lot of evidence
to take. Can I ask you to identify yourselves for the record.
(Mr Anderson) I am Ed Anderson. I am the Chairman
of the Airport Operators Association and the Managing Director
of Leeds Bradford Airport.
(Mr Toms) I am Mike Toms. I am the Group Planning
and Regulatory Affairs Director of BAA plc.
(Mr Jowett) I am Keith Jowett. I am the Chief Executive
of the Airport Operators Association.
117. Gentlemen, you will have noticed this room
absorbs voices. You will have to speak up, I am afraid. Mr Anderson,
did you want to say anything?
(Mr Anderson) Can I make a brief opening statement,
Chairman. The terrorist attacks of 11 September have had serious
effects on the aviation industry in the UK. Airports, airlines
and service providers have all seen their businesses suffer over
these past three months. The principal effect on UK airports has
been a fall in revenue combined with substantially increased costs.
The decline in revenue has come as a result of consumer reaction
following the attacks and an on-going overall fall in passenger
traffic. The biggest fall in traffic has been at those airports
most exposed to the North Atlantic market while the picture at
other UK airports has been more mixed with the majority continuing
to record significant falls. Overall, the figures are well down
on industry forecasts and have had a significant effect on revenue.
As was mentioned in your last session, we are all looking with
some trepidation to the position on forward holiday bookings which
will emerge in the New Year. At the same time, British airports
have experienced substantially increased costs principally in
relation to enhanced security measures and third party war and
terrorism insurance cover. In our evidence to this inquiry we
have tried to quantify these costs but it should be noted that
these figures are preliminary and they may not include a number
of further costs which are likely to emerge, such as those relating
to additional security equipment, infrastructure and general airport
liability insurance. We do not believe that it is the proper role
of Government to bail out industries facing difficulties in the
course of normal trading conditions but in these most extraordinary
of circumstances, where an attack on a state has taken place,
and the UK has sought to counter the potential terrorist threat
through specific measures delivered by the aviation industry,
it is right and proper that Government should provide assistance
in a targeted manner. Also, it is very much the role of Government
to ensure a level playing field, for example, with the USA. Finally,
British airports, we believe, responded positively and swiftly
to the events of 11 September implementing the enhanced security
measures immediately. In the wake of 11 September the main challenge
that we all face in this industry is to restore public confidence
in flying and we hope that an increasing effort will be made towards
realising that objective.
118. Can I ask you what specific things you
are doing as a group of airport operators to assist airlines?
Are you considering deferring payments? Are you dropping your
charges to airlines?
(Mr Anderson) I can speak from my personal experience
and my colleague from BAA will probably want to come in as well.
Certainly, airports are being approached by all their suppliers
and I think we are trying to do what we can to help but as we
are facing a drop in passenger numbers as well, and increased
costs, then our scope to be flexible is limited.
119. Is there a specific area that you are concentrating
on that could help?
(Mr Anderson) Suppliers are asking us to reduce our
costs and certainly from my airport's point of view on a short
term basis we are helping to some extent and also with cash flow.