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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 76-iii
House of COMMONS
TAKEN BEFORE the
Northern Ireland Affairs Committee
An Air Transport Strategy for Northern Ireland
Wednesday 13 June 2012
Antoinette McKeown and Aodhan O'Donnell
Evidence heard in Public Questions 220-291
USE OF THE TRANSCRIPT
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Taken before the Northern Ireland Affairs Committee
on Wednesday 13 June 2012
Mr Laurence Robertson (Chair)
Mr David Anderson
Mr Stephen Hepburn
Dr Alasdair McDonnell
Examination of Witnesses
Witnesses: Antoinette McKeown, Chief Executive, Consumer Council for Northern Ireland, and Aodhan O'Donnell, Director of Policy and Education, Consumer Council for Northern Ireland, gave evidence.
Q220 Chair: Welcome. Thank you very much. Sorry to delay you by 10 minutes but we had lots of business to get through. We are very glad you were able to come. As you know, we are looking at aviation policy, with particular regard to the impact on Northern Ireland: its business, tourism and people travelling to see friends and family. We would very much like to hear what you have to say. Would you like to introduce yourselves and maybe make a very brief opening statement?
Antoinette McKeown: Thank you. I am Antoinette McKeown, Chief Executive of the Consumer Council.
Aodhan O'Donnell: I am Aodhan O’Donnell, Director of Policy.
Antoinette McKeown: We very much welcome the opportunity to give evidence today to this Committee. We recognise the very strong track record this Committee has on taking account of the issues facing consumers in Northern Ireland and making sure that their voice is heard. We have seen that on APD. I am just going to make a few overarching points and then will be happy to answer questions.
The importance of air links to our economy has already been detailed in other evidence to this Committee by the Chamber of Commerce and the regional airports, so today the Consumer Council’s focus is very clearly on Northern Ireland passengers and consumers. This Committee has acknowledged that for many people in Northern Ireland travelling by air is not a luxury but an essential element of family and economic life. The main focus for the Consumer Council is not whether Northern Ireland should be served by a UKwide strategy or a Northern Ireland strategy, but that the outcomes of that strategy should be clearly focused on passengers, with coherence between the reserved and devolved issues, of which we are not seeing a lot.
We want an air transport strategy that promotes competition, choice and connectivity for consumers and the development of sustainable routes. We want to ensure that proposed service and infrastructural developments at Northern Ireland’s airports are assessed rigorously economically, socially and environmentally. We want the strategy to address issues concerning surface access to airports and public transport links and we want to ensure that the unique aviation needs of Northern Ireland’s consumers are fully recognised by both the UK and Northern Ireland governments.
We want to raise and talk about specific issues in relation to connectivity: the fact that Northern Ireland passengers travelling on domestic services account for 75% of all passenger movements, in contrast to only 17% at UK level. We want to focus on the fact that Northern Ireland passenger travel is 9% higher than the UK average. We want to raise our concern in relation to connectivity to Heathrow and the potential impact on the service operating between George Best Belfast City Airport and London Heathrow following the acquisition of bmi by IAG. Despite raising concerns with the Secretary of State, with the European Commission and with IAG, we still have no confirmation as to the nature or format of the commitment given by Willie Walsh, and we have real concerns about that.
In particular we want to draw to this Committee’s attention the fact that the handling of bmi’s withdrawal from George Best Belfast City Airport was very poor. The Consumer Council had no notice whatsoever. We were advised 10 minutes ahead of the announcement by City Airport. We were concerned that Belfast was the first airport in the UK that bmibaby pulled out of. It was at a time when many consumers had their holidays booked to destinations over the summer period. We were very disappointed that the airline failed to comply with its obligations under (EC) 261/2004. They offered to refund passengers instead of offering them alternative travel arrangements and they did not do it within the statutory time required, leaving many passengers very distressed. The airline did not have sufficient staff resources or call centres to handle the volume of calls and the Consumer Council had to open our helplines to scores of distressed consumers. There was a lack of information for consumers throughout the period and there was a lack of information even to the Consumer Council, despite our best efforts. We were left with the impression that Northern Ireland passengers were more expendable than our GB counterparts. That is a very difficult position to be in as a statutory representative of consumers.
In relation to air passenger duty, I want to put on record the fact that we have already given evidence to this Committee. We welcome the recommendation that you made, but the planned devolution of bands B, C and D will do nothing for 98% of passengers in Northern Ireland. We want to see the abolition of band A included in current considerations, as this Committee has recommended.
In relation to public transfer links to and between Northern Ireland airports, we published research in 2010 that indicates the number Northern Ireland passengers travelling to airports by public transport is low. There are a number of reasons for that; we are happy to go through those in terms of questions and answers.
The Consumer Council has welcomed the Government’s proposal to give the CAA a primary focus on furthering passengers’ interests via the Civil Aviation Bill. However, as other witnesses have said, there needs to be much more detail on how that is going to be effectively implemented. Essentially, the CAA must consult passengers as part of that.
Finally, as this Committee has demonstrated a keen interest in airport parking charges, I wanted to put on record that the Consumer Council, in February this year, examined the cost of car parking at Northern Ireland’s airports and compared it with the cost of parking at other UK airports. We found that, with the exception of East Midlands Airport, all GB airports have higher "turn up and pay" prices for seven day parking than the Northern Ireland airports. However, with the exception of London Luton Airport, George Best Belfast City Airport and Belfast International Airport have the highest charges for one day’s "turn up and pay" parking in the short stay car park compared to GB airports. Regardless, what we found is that long stay and short stay parking in all three regional airports has increased significantly in the past 18 months. In our view, car parking seems to be an easy revenue raiser, which is passed on to the consumers, who are already paying disproportionate costs in relation to APD. We feel that this is a disproportionate burden on Northern Ireland consumers. I am happy to leave it at that and we are open to questions and answers.
Chair: Thank you very much; I am sure we will cover a number of those areas.
Q221 Ian Paisley: It is good to see you both here; thank you for coming. That is a very good summary of where things stand. You have expressed very clearly the feelings of people when BA pulled out the last time and, ultimately, why today an investment by a multibillion pound company into Northern Ireland is not being welcomed with flags of celebration; people are rightly thinking about this one. As you know, Willie Walsh is on record as saying some things about the certainty of continuing the routes between George Best Belfast City Airport and London Heathrow. Do you believe the assurances that have been given that the slots that British Airways has now procured will not be reallocated for more lucrative routes?
Antoinette McKeown: Unfortunately the Consumer Council is not confident about the security of the current slots. We wrote to Willie Walsh in December when the acquisition was made, and we wrote again in March. We have still to receive a response to either of those letters. We have written to the European Commission; and I have in front of me a letter to the Secretary of State and response. What we are receiving is confirmation that the routes will continue, but we do not know about the frequency of them or the capacity numbers. It is vital, given that Heathrow is a vital hub airport for Northern Ireland, that we secure confirmation as soon as possible.
Q222 Ian Paisley: This Committee will be talking to Mr Walsh and his team in the future. It would be helpful for us to have copies of those letters you have sent to him. If you shared them we would be able to use them.
Antoinette McKeown: We are happy to provide those.
Q223 Ian Paisley: I must say it is disappointing that you have not even had a reply since March.
Antoinette McKeown: Not even an acknowledgement, Mr Paisley.
Ian Paisley: That is a very poor show.
Q224 Oliver Colvile: BA pulled out of the Heathrow to Belfast route in 2001. Do you get the impression that they will make more of a commitment to Northern Ireland and preserve these routes or not?
Antoinette McKeown: Again, unfortunately, the Consumer Council has to say that, based on the experience of Northern Ireland consumers when bmibaby was withdrawn with very little notice and very little additional services or support put in, we do not have confidence in any commitment at the minute in relation to the IAG’s continued investment. We think it is vital that it is secured, and secured now.
Q225 Lady Hermon: It is very nice to see both of you here this afternoon representing the Consumer Council for Northern Ireland. Ms McKeown, could I ask you to reflect on a little bit of the evidence you gave us at the very beginning? Who do you blame for the very poor communication to you, as the Consumer Council and a very well-known representative of the Consumer Council? Who should we, as a Committee, be looking at? Why were you not consulted and given much greater notice of the changes and bmi pulling out of Belfast City Airport?
Antoinette McKeown: We are not sure, Lady Hermon. We work very hard with the full range of airlines working in Northern Ireland. We have a very good relationship with them, so it was to our disappointment that we did not have the communication. However, our focus was more on Northern Ireland passengers and consumers than on the Consumer Council. What we found most difficult was that passengers were not able to get information and we were not able to get information on behalf of passengers. George Best Belfast City Airport coped incredibly well and was very supportive of its passengers and customers, but we did not see the same level of commitment from IAG. Our focus is on getting the right representation for consumers.
Q226 Lady Hermon: You explained to us that in the end you had to open up your own helpline to consumers. Can you give us an indication of the number of consumers who had arrangements made and found they were all lost in this takeover?
Antoinette McKeown: I think the announcement was made at 10 to five on the Wednesday evening. By the Friday morning we had dealt with just under 100 calls from very distressed passengers,
Q227 Lady Hermon: Are you able to tell us whether those people have now had their concerns addressed?
Antoinette McKeown: We have provided advice to all of those passengers. Some have followed through on the advice, have come back to us and we are taking their complaints through. We are getting some positive results and IAG are actually providing what is required by law of them. There will be other consumers who have not come back to us as yet, but we are monitoring that very closely.
Q228 Lady Hermon: Moving on to a completely different issue, we have taken evidence from the Department of Enterprise, Trade and Investment in Northern Ireland and we have some indications of what will encourage growth in the economy. From your perspective, representing consumers, what are consumers saying to you would help economic growth in Northern Ireland? Is it connectivity, either internationally or within the UK? Is it corporation tax? Is it APD? Or is it a combination of a whole lot of things? It would be very helpful if you could throw some light on that for us.
Aodhan O'Donnell: Connectivity is one of the key issues, both in terms of air and ferry travel-the cost of ferry travel is another related issue. Consumers and passengers are under a lot of cost of living pressures, with increasing energy bills, but in relation to transport and connectivity, air passenger duty is a key issue for them. We talk about 98% of the air traffic being short haul and domestic; 75% of that is domestic travel, to places like Manchester, London and Newcastle. Passengers feel that they are at a significant disadvantage because they are paying almost a double tax-a tax to get to another domestic destination. That is an impact for us.
We do have to look forward at what the future could look like in terms of connectivity. Passengers have clearly told us that there are easier links. For example, there are better road networks to Dublin Airport. The exchange rate is changing and air travel tax there is €3. So there is an incentive to travel to another airport, which impacts on the consumer spend in Northern Ireland, the sustainability of Northern Ireland airports and the connections, both for small domestic business and for international business. We really have only one long-haul link, which caters to America. Growing that is a significant incentive to grow business and investment in Northern Ireland and give the consumer choice. We want to see sustainable routes for passengers. As we have seen in airline markets in the past, they quite quickly disappear. We saw that with bmibaby and their "sunshine routes", the majority of which were taken out before the summer even began. That had a massive impact. The security of routes is a big thing for passengers to give them confidence that they can book six months ahead and know that they will not have to deal with a refund or rebook at a much higher cost.
Q229 Lady Hermon: Have you been lobbying both the Northern Ireland Executive and the Treasury here in Westminster about getting rid of APD across the board in Northern Ireland?
Aodhan O'Donnell: Very much so. Air passenger duty has been one of the key issues for us for a number of years. We welcome the change there has been to long-haul flights and the devolution of that. However, as we said previously, it does not go far enough to make an impact for the majority of passengers. It is a perverse fact that you will pay more in tax to fly 104 miles to Glasgow and back than you would to fly to Portugal or Spain. That has a real impact on the vast majority of air traffic, which is GB based; they are paying a higher rate than they should be. We do not have the luxury or the ability to depend on alternative forms of transport.
Q230 Lady Hermon: Ms McKeown, you mentioned that you had made representations to the Secretary of State. Is this an issue that you have raised with the Secretary of State? Have you had a positive or encouraging response from him?
Antoinette McKeown: Our focus has been on working with the Northern Ireland Executive and this Committee in relation to APD. In the last couple of months we have given evidence to the Committee for Finance and Personnel at Stormont. We directed them to other European Member States that have scrapped or radically reduced APD. We wanted them to look at the opportunity cost of APD: the inward investment and the opportunities for tourism. We think that still needs to be explored.
Q231 Kris Hopkins: On that final point, I meet loads of people with very good, justified reasons for why they should not pay tax. It is easy to say that. There may be very justified reasons why you are doing it but the hard bit is where you plug the gap as a consequence of not paying tax. My suggestion to you would be to come up with a cunning plan for how to fill that hole. It might be the fact you have greater growth as a consequence. However, lots of businesses do not want to pay tax. If there is a reason, that needs to explained, but the key thing about it is where the revenue comes from.
My particular question relates to the importance of expanding. Do you have a view on the importance of expanding air capacity in the South-East of England? I know there is a great debate about the hub and the knockon effect. This might be something you want to put on paper rather than give me a long response to because it is quite complex. However, particularly in relation to Heathrow, what do you see as the consequences of expansion or otherwise for Northern Ireland’s economic development?
Antoinette McKeown: I will briefly respond to the APD issue and ask Aodhan to respond to the latter point. The issue with APD for Northern Ireland air passengers is that we are paying double. We are paying APD of £26 return to get into Heathrow, a hub airport, before we can get access to Europe, whereas our GB counterparts are paying only for access to Europe. So we have a double tax. We think we are being punished simply because there is an Irish Sea between us and the hub airport that it is in the UK’s interest to get encourage Northern Ireland’s passengers to go to. We can argue that Paris, Frankfurt or Schiphol are actually better hub airports.
Q232 Kris Hopkins: I understand that. Like I said, you might have very justified reasons for doing it, but at the end of the day the Chancellor of the Exchequer will need to balance that account. It would be really useful if someone came up with another alternative for how you plug that gap.
Antoinette McKeown: I recognise what you are saying. The final point I would make is that the UK Government is investing approximately £32 billion in a high speed rail link in GB. The Northern Ireland taxpayer is not going to benefit from that. In one sense we are being asked to find £50 million in revenue because Northern Ireland consumers are being punished, but on the other hand we are not benefiting from a £32 billion investment in other forms of transport. We would ask for Westminster to take that into account. We have asked the Committee for Finance and Personnel in Stormont to raise that as well. I am going to hand you over to Aodhan to answer the second part.
Aodhan O'Donnell: We recognise that capacity at Heathrow is at a ceiling and the slots are precious. That comes back to some of the first discussions we had about the danger of the reallocation of slots at Heathrow in terms of the bmi takeover. For us at the Consumer Council, it comes back to making sure we have security of access to hub airports. If there is further development of Heathrow or development in the southeast of London then there needs to be a recognition that, for regions that depend on air access, as Northern Ireland does, there has to be that security of access. That is not guaranteed anywhere. That is something that would have to be pushed going forward as a potential strategy: that those security of access routes are maintained.
Interlining is a key aspect for onward journeys. There are pointtopoint journeys that can be made to a whole host of different airports, but for interlining opportunities for onward journeys, at the moment Heathrow is the key airport for Northern Ireland consumers. The question we have to ask is: should it be the only airport that provides that facility? Are there opportunities for other UK airports to act as supporting hubs or additional hubs for onward journeys, or for extra routes to be developed from Northern Ireland to other European hub airports? From a consumer’s point of view, if they are going on a long distance journey it potentially does not matter where the hub airport is; it is about getting the service and accessing the hub at a cost that is fair. That is where the wider debate has to be had: around where the hub airports should be and whether they should be UKbased or promoted routes to alternative hubs.
Q233 Oliver Colvile: Given that you are in competition with what else happens in Europe, do you recognise that what is really important is to make sure we try to produce as low taxation as we possibly can in order to encourage inward investment, and that that almost certainly would help Northern Ireland’s economy?
Aodhan O'Donnell: In terms of investment, yes, we would agree with you.
Q234 Nigel Mills: Does the CCNI believe the interests of consumers are best served by having two airports in the Belfast area, or would you rather there was only one?
Antoinette McKeown: You have heard evidence from both Belfast airports stating this issue: both airports are private concerns; they do not take money from the public purse. Since competition was introduced, both airports have doubled in size. For us, they are offering consumer choice. The sustainability seems to be there. Although, as my colleague Aodhan said, we are concerned with the long term sustainability of certain routes and the choices open to consumers, they are private enterprises, they are being sustained and they have grown.
Aodhan O'Donnell: Although we have seen growth in passenger numbers across the board over the last few years, numbers have fallen back in all airports. That is probably a natural impact of the recession and the economic downturn. We have seen an increase in choice for consumers; there has been an increase in the routes being served for consumers; and there has also been an increase in competition on certain routes, both within the two airports and between the two airports. If that is helping to provide increased choice and better value fares, it has been an important impact for consumers. That is something that has to be welcomed.
Q235 Nigel Mills: I agree entirely with that. The only downside is that, in times of fiscal constraint, finding the money to invest in public transport links to both is not going to happen. That means that someone is going to have to choose which airport gets the rail link.
Aodhan O'Donnell: They are quite close but in somewhat different geographical settings; one is citybased and the other is further out of Belfast. The point to remember around the operation of the airports is that there is a restriction on Belfast City Airport in terms of seats for sale, of around 2.2 million seats and around 48,000 air traffic movements. Due to the demand for air travel from Northern Ireland, both airports are supporting different markets. There is some overlap in terms of short haul domestic routes, but for long-haul and cargo they are quite separate. Where competition is working to provide better choice and fares for consumers, it is working well, and where the airports have an opportunity to play to their strengths, that is good for the airports.
Q236 Dr McDonnell: You mentioned in passing the cap. Some people have claimed that removing the cap on the number of passengers using Belfast City Airport would create a few hundred jobs. It has also been mentioned to us at different times that a later flight from Heathrow to Belfast would assist and support the business and economic development efforts. These initiatives might help the economy but they certainly would not benefit the local residents. What is your view on that? Do you believe there is a compromise there or do you believe the two positions are irreconcilable-they are directly at odds with each other?
Aodhan O'Donnell: Seats for sale has been quite a longrunning issue and it has been something that the Consumer Council has taken a key interest in and fed into as well. We are trying to recognise the balance between ensuring choice and frequency for passengers wanting to use Belfast City Airport, and the fact that Belfast City Airport, both in terms of land and departure, cuts right across quite a population size. The impact of the airport operations cannot be underestimated. When it comes to seats for sale, we have been clear in the responses we have provided that we need to see effective noise monitoring systems put in place to make sure that the airport tracks and monitors the noise and impact that it has on local communities. That is something that they have been working on implementing in the last number of years. They are trying to make sure those impacts are recognised and dealt with if they are significantly over any threshold where action is required. You mentioned the potential for later flights. That is something we would be less comfortable with because there are quite clear operational guidelines and frameworks for Belfast City Airport in terms of when flights can first take off in the morning and when they can last land in the evening. There would have to be strong arguments and examination to move away from them because people and communities living under the flight path are affected by aircraft noise and movements and that is something you would not want to increase in any way.
Q237 Dr McDonnell: You mentioned the flight path there. Have you any suggestions as to how Belfast City Airport might be persuaded to direct more of their flights in and out over the lough?
Aodhan O'Donnell: I am not sure about the specific opportunities to direct traffic. I do know that in the planning agreement there is a bias that flights have to take off and land over the lough. The airport does report on the percentage of flights that take off and land, to the Belfast City Airport Watch and the community forum that Belfast City Airport has established. So there is a bias; I am not sure whether that has been shifting over time, but I do know that is something they report on and they seek to ensure that the majority of traffic flies over Belfast Lough as opposed to the city.
Q238 Dr McDonnell: My impression is that there is a bias but it is not observed.
Naomi Long: It is roughly 70:30-70% over the lough and 30% over the city.
Dr McDonnell: Yes, that’s right. But it is not observed: sometimes it drifts down to 55:45. That would relieve some of the pressure. I am not saying there are not any people out over the lough or adjacent to the lough who might be distressed but the lough route, out towards Carrickfergus, is less threatening on most days to the people I am familiar with in and around Stranmillis.
Do you think it is in the best interests of consumers that we have three airports in Northern Ireland and that they are all so individually dependent on one airline-although not the same airline in each case?
Antoinette McKeown: It goes back to what we said earlier. Derry City Council chooses to support the City of Derry Airport. That is a choice the Council has made. The other two are private enterprises. They offer choice and competition and both have been growing in recent times. As long as they are both offering competition, choice and sustainability-our key focus is on the sustainability of the routes-there is a real opportunity. That is why the Consumer Council is very keen on an air transport strategy. It is possible to seek the best interests of airports working together, recognising that there is competition between the three but that there are times when they can work together in their best interests and in the best interests of consumers. I do not see the interests of consumers and the interests of airports as being necessarily always mutually exclusive. We believe that an air transport strategy could help to bring some coherence to that.
Q239 Dr McDonnell: What about the dependence on one airline? That is a big concern.
Aodhan O'Donnell: It depends on the airline. Going back to the security of routes, airports are conscious of the fact that many of them are dependent on one key airline. We saw the impact on consumers of bmibaby removing its services from Belfast City Airport. That is something that the airports need to take a commercial interest in: they need to make sure they try to spread that risk a bit, if it is possible. The environment for introducing new airlines and new routes is perhaps not as good as it once was but, certainly from a consumer point of view, no passenger wants to go through the issues they went through with bmibaby. We have seen a lot of other instances where routes have been taken off at short notice. It is also worth recording that, from the Consumer Council’s point of view, the responses airlines are providing to passengers once they decide to remove a route or cancel an existing route are very inconsistent in terms of the information and advice provided. Just recently we saw two routes taken off by two different airlines. The information provided to passengers was different even though they both come under the same regulations. I think there is real uncertainty for passengers about what to do when things like that happen.
Q240 Kris Hopkins: I have an observation on the bias towards takeoff direction. A plane ideally wants to take off into the wind; there is a cost implication. If my geography is right, the prevailing wind is to take off into the city. Therefore, it is a financial disadvantage to fly into the lough. That may be one of the considerations in why they do what they do. I live on a flight path and, certainly over the last 20 years, the noise reduction has been significant; it has been astronomical actually. I used to be a director at an airport and there were a significant number of complaints. That has died off over the years. There are still people who do complain but the reduction in numbers has been significant. I just wondered when the cap was put in place, because if the cap was put in some time ago and technology has taken over, there has to be a different impact now from when the cap was put in place. If it is about environmental factors and impact upon communities, then certainly the technology is different now; an aeroplane taking off and landing now has a hugely different impact on the environment. I was just thinking that that might be an opportunity to explore as far as numbers are concerned.
Antoinette McKeown: You are absolutely right. It is an interesting issue. George Best Belfast City Airport has to monitor noise levels and we work with them on that. It might be interesting for this Committee to go back and see the developments in technology and what impact they have had. The other issue, about the cost of taking off in a particular direction, is a valid one, but that is why we want to see an air transport strategy that gives equal weighting to social, environmental and economic issues. I do not think you can always balance the commercial and cost issue when there are residents right under the flight path. It is about getting that balance right.
Q241 Lady Hermon: Could I just seek clarification on one point? We are today in the middle of June 2012. Am I right in understanding from your evidence earlier that the Consumer Council, while trying to balance the interests of consumers with those of residents who live under flight paths-many of them in my constituency in North Down-has a fixed view that it is opposed to a later flight from Heathrow to Belfast City Airport?
Aodhan O'Donnell: The position is that the airport has to operate within its existing planning agreement, which has limitations.
Q242 Lady Hermon: That is what the airport has to do. But you are a consumer group reflecting the views of the consumer in Northern Ireland. Has the Consumer Council come to a fixed view of opposition to, for example, a later flight into Belfast City Airport? The reason I ask is that, on a number of occasions, you have mentioned to us that we as a Committee should have an air transport strategy. You obviously, as the Consumer Council, have some views about what we as a Committee should come up with for this air transport strategy. I am just looking for themes, pointers or indications as to what you think that strategy should contain. As yet, I do not have a definite guide as to what you think that strategy should develop.
Antoinette McKeown: That is a valid point. The Consumer Council has a very clear view that any further developments outside the current operating environment or rules for George Best Belfast City Airport would have to be very strongly evidencebased and that City Airport would have to demonstrate that there was no additional detriment to consumers. We have expressed concern about putting on a later flight if, for example, noise reduction has not been very strongly evidencebased. As you are aware, there are two key inquiries going on at the moment. The public inquiries will have brought transparency and the whole range of evidence to the table and we want to update our formal position on the basis of the evidence presented. However, our current position is that we would have very serious concerns about moving outside the current operating guidance if there was not strong evidence to support the noise reduction or if there was not further support from residents. That is our formal position.
The issue for us in terms of what an air transport strategy would bring is that we want equal weighting to be given to commercial, socio-economic and environmental issues, as opposed to just always taking the commercial route. We want more coherence between the reserved matters and the devolved matters and to get some synergy and complementarity between those two issues.
Chair: We have covered a lot on APD but is there anything else you would like to pick up on, Kate?
Q243 Kate Hoey: Yes, there is. Can I firstly say that I think it is great that you continually talk about flying being an essential rather than a luxury? The more that everybody says that and drums it in, the better. I often wonder if the Secretaries of State and Ministers had to pay their own fares back and forward to Northern Ireland out of their own pockets they might feel differently on this. Clearly this Committee has its view on APD and the Consumer Council shares the same view. Apart from the Treasury, who is actually against it in Northern Ireland? Are any political parties or campaign groups against it? For example, is the Green Party against a reduction or abolition of APD on domestic flights?
Antoinette McKeown: We have not seen opposition to the abolition of APD on band A, but there is some concern that the decision to devolve band A decisions to the Northern Ireland Executive would result in a loss to the block grant.
Kate Hoey: Of approximately £60 million.
Antoinette McKeown: Yes, £55 million to £60 million. There is a genuine and valid concern around that. Our counterargument has been about the £32 billion investment for GB in high speed rail. If all UK taxpayers are contributing to that £32 billion, we are suggesting that all the UK taxpayers should be contributing to the £55 million.
Q244 Kate Hoey: What more would you like us to do as a Committee to move forward the campaign you are leading on this?
Antoinette McKeown: We would like to see the abolition of APD on all routes and a recognition that band A is impacting the 98% of passengers in Northern Ireland who are travelling as part of everyday living, rather than as a luxury. Ms Hoey, you referred to that in the last evidence session you held on APD, which we very much welcomed.
Q245 Mr Anderson: In your submission you state that the people of Northern Ireland would welcome the introduction of a rail link to Belfast International. Having flown in and out of there a few times, I would welcome one as well. However, we are advised that the cost could be £98 million. How could that be justified given the strain on public finances?
Aodhan O'Donnell: The issue around access to airports is key. At the moment only around 5% of people travel back and forth to the airports on public transport. If you include private buses and operators it goes up to about 8%. We would like to see opportunities to encourage more access through public transport, whether that is road or rail access. At the moment the majority of people are driving to the airports, and there are issues around car parking charges. There has to be a clear examination of what the value and potential usage of road and rail links could be. We have not said that there must be a rail link; what we have said is that there needs to be an examination of how public transport links can be improved to Northern Ireland.
Links to the airports are very good from Belfast and potentially from the NorthWest as well, but through the research we have done, passengers have told us that if, for example, you want to go to Enniskillen on public transport after flying into Belfast International you have to take a bus back to Belfast, which is completely the opposite direction, to then come back again. That is where the opportunity to grow public transport usage is. We need to look at how it can facilitate people from right across Northern Ireland to get access to the airports. In areas like Enniskillen and some other areas of the Province, we have done work that shows that they have much better road and public transport links to Dublin Airport. There is a real challenge here in terms of making sure there is choice for people so that they do not have to take the car and pay high car parking charges and they are able to use public transport or taxis to Northern Ireland airports from wherever they are in Northern Ireland.
Q246 Mr Anderson: What volumes are you talking about? How many people?
Aodhan O'Donnell: In terms of who we have engaged with and spoken to?
Q247 Mr Anderson: No. I can understand why a transport system to Enniskillen should be there, but have you any idea how many people would be using it?
Aodhan O'Donnell: We have not said what form that public transport would take. There are already good pointtopoint links on public transport from Enniskillen through Dungannon to Belfast. The branchingoff or the connections to both airports need to be looked at because at the moment many consumers are telling us it is difficult and cumbersome. Around 8% of the people we have surveyed would look at driving to Dublin Airport. We know there is a new advertising and promotional campaign from Dublin Airport to try and attract more custom from Northern Ireland. That could even go further and, if we can improve the links we have to public transport, given the fact that many people depend on that as a form of transport, that could improve the overall connectivity experience from their door, through public transport and on to the plane.
Antoinette McKeown: Rather than looking at the cost, there is an opportunity lost if we have consumers in Enniskillen and Newry saying it is easier to travel to Dublin. The tax from Dublin is a €3 flat rate, in comparison with our APD rates. We are losing investment in the Northern Ireland economy as people spend money in airports and in car parks. We are actually losing that out of the local economy by not providing the proper public transport access.
Q248 Mr Anderson: Again, do you have any ideas what numbers would be involved in that?
Antoinette McKeown: No, but it I think it is a useful question. The airports may be in a better position to give that information.
Q249 Naomi Long: It is good to see you both. I want to go back to the issue of car parking. The figures you provided to the Belfast Telegraph earlier this year showed that passengers at Northern Ireland airports are paying more than airports in GB or the Republic for their car parking. The airports disputed that and said there were a whole range of offers available both at Belfast City Airport and Belfast International, and indeed at the City of Derry Airport. Their allegation would be that you cherrypicked and compared them against the cheapest rather than the average and made them look bad by comparison. What would be your answer to that charge?
Antoinette McKeown: The first thing I want to say is that the report the Consumer Council prepared in February 2012 in relation to airport car parking charges across the United Kingdom was fair, balanced and very strongly evidence based, as is all of our work. We are happy to make that report available to this Committee if it is of use. In fact, the first point we reported on was that, with the exception of East Midlands Airport, all GB airports have higher "turn up and pay" prices for seven days’ parking than the Northern Ireland car parks. We reported that very positively. However, there is a mixed bag. The information is accurate; it was assessed against a whole range of GB airports; and the reality is that we have seen significant increases over the last 18 months at all three airports. I have written to each of the three airports asking for some additional detail in relation to the report, which we made available to whoever wished to have access to it. The airports have come back but they have not actually answered the questions. In one case we had to follow up with a very specific additional request for information in relation to charges that were provided to us but were not available on the website, for example. So we would dispute very strongly the views expressed by the three airports and, as I said, we are continuing to follow up and seek answers to questions we have asked in relation to it.
Q250 Naomi Long: Do you believe the report was robust? You have said it was robust in terms of the evidence, but do you think it was reported as a mixed bag? Do you think, for example, it came through that the "turn up and pay" seven day parking in Northern Ireland was cheaper than in other parts of the UK, or do you think that the sensitivity arises out of the fact that the focus was more on where it was dearer? That does not necessarily reflect your report, but rather the reporting of your report.
Antoinette McKeown: I totally understand. Our report was very fair, very balanced, and, where we could say something positive, we were very clear about saying it. We cannot take responsibility or provide comment on the reporting of our report. However, we believe that in the report that was made available to the airports and in the additional correspondence that followed in seeking answers to specific questions, it was clear that we have valid concerns. We still await answers to those concerns.
Q251 Lady Hermon: As a matter of curiosity, in the questions that you asked each of the airports, did you ask, "How much did you raise in the last financial year through car parking?"
Antoinette McKeown: We did not ask that question. We understand that that is highly commercially sensitive.
Q252 Lady Hermon: But we would love to know-
Ian Paisley: And share.
Antoinette McKeown: I recognise that this Committee had asked for that information of a particular airport and I do not believe you were any more successful in obtaining the information than the Consumer Council was.
Lady Hermon: We were hoping that, as the Consumer Council, you would perhaps have the inside knowledge that we would have benefited from.
Q253 Dr McDonnell: I want to change the direction slightly and ask you about the Civil Aviation Bill. Do you think that will create circumstances where the Civil Aviation Authority will be able to stand up better for passengers’ interests where they come into conflict with the aviation industry?
Aodhan O'Donnell: In the consultations, the Consumer Council has broadly welcomed the progress of the Civil Aviation Bill. It is probably no surprise that reprioritising the focus of the CAA to further and pursue passenger interests is something we would welcome. From a consumer point of view-and I know this view is shared by the industry and the aviation sector-there is still uncertainty around the detail of how this is going to work in practice with regard to fee structures and licensing regimes. Ultimately, on the balance of it, a focus on consumers and passenger interests is welcomed by us. We want to see detail of how they are going to engage with passengers and seek their views. In terms of dealing with complaints, I think there is potentially a better framework in there to deal with airport and airline complaints. There is also scope within the legislation to keep up with changing consumer demands. Whereas before, ATOL protected the package holiday booked in one go, consumers are now changing and booking holidays separately from car hire and flights. Therefore, the opportunity to extend ATOL protection is welcome, but again, we would like to see the detail of how that is being worked through, how consumers are being consulted, and especially how it will be paid for-the charging structure and who the cost eventually rests with.
Q254 Dr McDonnell: You mentioned ATOL protection. Do you think it is reasonable that, if I want to book a car, a flight and a bed in, say, Munich, that requires ATOL protection?
Aodhan O'Donnell: The issue for passengers at the moment is confusion. Passengers have often come away from a website or a travel agent thinking that they have booked a package when actually they have not. They may have paid one fee for all this holiday but in actual fact there are separate elements to the booking that the travel agent has compiled for them. That should deal with some of the concern that people have misunderstood the fact that they have not had the protection they thought they had. We need to recognise that the way people book their holidays has changed and that they do need the protection of ATOL. We have recently seen a lot of scheduled airline failures and tour operators going to the wall, which has left people wanting to travel and those stranded on holidays in a lot of distress. This has not been their fault, but sometimes they have only been reimbursed for their flights, while the rest of the holiday has been wasted as well. There is an issue to explore there.
Q255 Dr McDonnell: That adds between £3 and £6 to the cost of the booking, which is almost as much as air passenger duty.
Aodhan O'Donnell: The interest of the consumer is in making sure they have the confidence that they are fully covered. It does not take away from looking at other alternative insurance opportunities to protect themselves but, at a basic level, we want to make sure consumers have the confidence in making a booking that they will be protected and that if something beyond their scope or control goes wrong, they will not be out of pocket.
Q256 Naomi Long: Do you believe that the flexible licensing regime arrangements that are proposed in the Bill would enable the Civil Aviation Authority to intervene when airport charges are disadvantaging a particular group of passengers? Do you think they are sufficiently robust to do that?
Aodhan O'Donnell: That comes back to the previous point. These are things the Consumer Council wants to see more detail on as we work through the process. In our responses around the flexible licensing regime, we recognise that there is an opportunity for the CAA to intervene, especially for vulnerable and disadvantaged groups. How and when that would work in practice is something that we want to see more detail on, but we also want to be involved as a consumer body in developing how those schemes and interventions could work. I know that is something the CAA is developing and is proposing to take forward over the next few weeks as well.
Q257 Lady Hermon: There is one rather unusual aspect to the Civil Aviation Bill. I say "unusual" as a favourable comment. I have to say that, because I have to preface my remarks very carefully as I am now going to quote from my former party leader, Sir Reg Empey-now Lord Empey in another place. If I understand correctly, Sir Reg has proposed that there should be an amendment to the Civil Aviation Bill that slots at Heathrow should be ringfenced for flights coming from Belfast City Airport. Have you been in touch with Lord Empey? Are you working closely with him? Has he been in touch with you? We would be very pleased to hear anything that would fill in some of the background.
Aodhan O'Donnell: This is an area that we welcome and a point we want to follow up with Lord Empey as well. The transport team in the Consumer Council have directed themselves to follow up personally with Lord Empey to see whether there is any further support or information that is able to be shared to support that. That motion is going forward because the protection of slots for domestic routes would deal with a lot of issues that were coming out at the start of this evidence session.
Q258 Lady Hermon: Could I push you a little bit further? When you say "the domestic routes", do you mean the domestic routes between Belfast City Airport and Heathrow being ringfenced, rather than domestic routes generally, meaning Aldergrove Airport as well?
Aodhan O'Donnell: That is something we need to look at in more detail as well. That is a priority that we have some concerns over at the moment, especially in light of what has happened recently. However, if there are opportunities for increasing secure and better connectivity to hub airports or to other regional destinations, that should be welcomed as well.
Q259 Lady Hermon: Ms McKeown, you are nodding your head in agreement.
Antoinette McKeown: Absolutely. This goes back to my comment that the Consumer Council really welcomes this Committee’s inquiry into an air transport strategy. We know how important the slots are commercially. However, if we only ever take decisions in relation to commercial viability and not environment and social issues, then, where a particular group of passengers are disadvantaged-and we would argue that Northern Ireland passengers quite often are-the commercial interest takes over. That is why we very much welcome Lord Empey’s intervention.
Q260 Lady Hermon: Thank you. Will you keep the Committee updated on how you get on and what agreement you come to? That would be very helpful to us.
Antoinette McKeown: Absolutely.
Q261 Chair: We have to draw this session to a close now, but thank you very much for your very interesting and very useful evidence. Thank you very much indeed.
Antoinette McKeown: Thank you for your time.
Examination of Witness
Witness: Jim McAuslan, General Secretary, British Airline Pilots Association (BALPA), gave evidence
Q262 Chair: Thank you for joining us Mr McAuslan. You are very welcome. I think you sat through the last session.
Jim McAuslan: It was fascinating.
Q263 Chair: So I do not need to give the normal introduction. Would you like to make a very brief opening statement? There will be a vote some time after four o’clock so we want to try to get all the questions in before then.
Jim McAuslan: My name is Jim McAuslan. I am the General Secretary of the British Airline Pilots Association. We represent 8,500 pilots flying for UK commercial operators. We have British Airways, bmi, easyJet, Flybe, Jet2, Thomson and Thomas Cook, as well as a number of members in Ryanair, although that is not a recognised company with BALPA. We are a professional association as well as a trade union; this month is our 75th anniversary. We had our first conference in Croydon when the airport for London was in Croydon. That says something about the way in which the world changes.
As we mentioned in our written evidence, we have a number of issues about the industrial scene within bmi, but listening to your questioning earlier, clearly there are a number of wider issues the Committee is interested in and I will try to answer those. We ran a small poll among our pilot members based in Northern Ireland in advance of today’s hearing and I would be quite happy to share those results and some of the opinions expressed with you.
Q264 Ian Paisley: You are very welcome. Many happy returns; you do not look anything like 75.
Jim McAuslan: That is kind of you; I might do at the end of this.
Q265 Ian Paisley: Could you give us an update regarding bmi’s takeover of IAG? We know about the closure of bmibaby and bmi Regional but could you let us know where you think things stand?
Jim McAuslan: There are four issues for us with the IAG takeover. They bought it from Lufthansa, as you know. With bmi mainline, we are close to a deal that will integrate bmi pilots and operations into the BA operations based at Heathrow. We had a number of concerns about redundancies that were going to be declared in the outstations, but we negotiated a deal whereby all pilots took a pay cut of three days in return for preserving those jobs, which we were successful in doing. So the jobs in bmi mainline have been preserved.
The other issue in bmi mainline is over the future of the defined benefit pension scheme. Lufthansa has essentially passed it into the Pension Protection Fund in the UK and that is causing us great concern. We are taking legal advice, pressing the regulator and indeed going to Frankfurt, hoping to see Lufthansa, to press our case for some more support for preserving that pension fund rather than dumping it on the UK taxpayer. Bmi Regional, which is based in Aberdeen, has now been bought by an organisation called Granite and it looks as though that will continue without much of a blip.
Bmibaby has been our biggest concern and, much like you heard earlier, we have had a pretty poor response from BA, which is handling the brief about the negotiations there. We were asked whether we could come up with any suggestions to make sure the operation could be costeffective. We proposed £3 million in cuts, which were substantial pay cuts for pilots in bmibaby, as a way of preserving jobs. However, it was quite clear throughout those consultations that there was no intention of preserving bmibaby and it was a legal tick box to make sure there was no legal exposure for BA from having gone through a bad procedure. So we have been trying to engage constructively and we have tried to talk to a number of other possible suitors, but everyone has walked away and, to all intents and purposes, bmibaby is now an exairline. There is no winter schedule being published for 2012/13. It is not taking money, it is not operating, and it will close down totally from September.
Q266 Ian Paisley: I am trying to assess whether you are in a position of strength, neutrality or weakness with regard to your position vis-à-vis British Airways. You said there were about 8,500 pilots in the UK. Are there 8,500 jobs for those pilots, or are there too many or too few? Where are we in terms of the overall pattern of jobs in relation to actual pilots?
Jim McAuslan: It changes quite often. At present a number of pilots are having to leave to work in the Middle East and the Far East. It is that sort of job; pilots have to do that. Emirates, Etihad Airways, Qatar Airways and suchlike are recruiting, so there are jobs to be found for pilots but they are having to up sticks and move abroad to get that work. There is a churn all the time. People are retiring, so companies like Jet2, Monarch and Flybe have been recruiting and pilots have been able to find jobs there. However, I would say that we have an abundance of labour at present in the UK, which is difficult for a negotiator because, when there is too much labour, it drives down price. That is an issue for us.
Q267 Oliver Colvile: You have had discussions with BA. Have you come to an acceptable agreement with them?
Jim McAuslan: Tomorrow we have a meeting of our two key committees representing BA pilots and bmi pilots and we hope to have an agreement there which we will present to BA management. This is about bmi mainline and BA coming together. All the indications are that BA management would accept that. We have made an agreement to avoid redundancies. Bmi Regional is no longer on the BA brief, because it has been bought by Granite Aviation. The issue is bmibaby; we have no agreement there. We are going through a charade of a consultation; I do not see an agreement emerging from that. We are seeing Keith Williams later this month. With regard to your questioning earlier, do not pin everything on Willie: Keith Williams is now the Managing Director for BA. I do not know whether you are going to invite Keith Williams to a hearing but he has certainly been flexible about it. We are hoping to persuade him to look for ways in which, rather than taking on new pilots out of school, he can find jobs for these displaced bmibaby pilots. That is what we will be pressing the company to do.
Q268 Oliver Colvile: Could you let us know, after your meeting tomorrow, how that has gone and we can think about it as well? That would be really helpful.
Jim McAuslan: That would be helpful. We actually have a meeting in the House on 27 June about a number of issues. There will be bmi pilots present at that who will be pressing their MPs on the issue of pensions. They will be available to answer questions.
Oliver Colvile: Believe you me, I have everybody writing to me about every single pension that seems to exist in the world.
Q269 Mr Anderson: Can I ask whether there was a TUPE arrangement when this happened? Should that not protect your pensions?
Jim McAuslan: We discovered that TUPE does not extend to pensions in the way we hoped it would. There are certain aspects of it, such as widows and orphans, which are contractual, but the defined benefit scheme itself is not protected by it.
Q270 Mr Anderson: Should they not offer you a similar scheme as part of the TUPE arrangements? That is how it used to be.
Jim McAuslan: I am afraid not Mr Anderson.
Q271 Mr Anderson: You give an example in your brief of somebody being £18,000 a year worse off, which is a huge chunk for anyone.
Jim McAuslan: Yes. Part of that is because the Pension Protection Fund is capped at about £30,000. That sounds a lot. I can understand that for a low paid person it would be a lot and they would ask, "What is wrong with a £30,000 cap?" However, when you have worked all your life and built up a £42,000 pension, to see it reduced by that extent is quite frightening.
Q272 Mr Anderson: What element of that will be picked up by the public purse?
Jim McAuslan: The fund itself will transfer to the Pension Protection Fund. However, like all funds it has a problem because of gilts at present, so there will be a deficiency in that. We imagine it will be somewhere in the region of £132 million to £200 million that the public will have to pick up.
Q273 Dr McDonnell: You may have alluded to it already-and you have certainly referred to bmi Regional and bmibaby-but I just want to double check with you: are the only pilots who are in difficulty or threatened with redundancy at Belfast, or are there pressures at Manchester and Edinburgh as well with bmi mainline?
Jim McAuslan: There was pressure in all the bmi mainline outstations-that is those that are not based at Heathrow-but we have now managed to preserve those jobs. The individuals will have to commute in to Heathrow to work but the jobs themselves have been preserved because all bmi mainline pilots took a pay cut to fund the preservation of those jobs.
Q274 Naomi Long: Willie Walsh is already on record stating that bmi routes between Belfast City and Heathrow are secure. However, 13 of the 42 landing slots that BA have gained as a result of the takeover are going to be reallocated to longhaul routes. I suppose there has been a growing concern that that is the purpose of the takeover: not to acquire the bmi brand and routes but actually to use the landing slots at Heathrow for other, more lucrative purposes. How much confidence do you have in the assurance that the Belfast City to Heathrow slots will not be reallocated? We know they are protected until October of this year but how much confidence would you have beyond that point?
Jim McAuslan: I would not have any confidence. I don’t say that in a critical fashion; the commercial reality is that Heathrow serves 166 destinations and Frankfurt serves 266. BA has to be a commercially successful company. If it has capacity it is going to put that where the money is. That is one of the prices of liberalisation, which has been a huge success story for aviation in the UK, but comes at a price. I do not know who needs to pull all these threads together but what I see happening in aviation is that when an airline sees a competitor coming on to its routes, it reacts. For instance, if there was a huge upswell in people looking to use Schiphol by flying from Belfast, as sure as eggs is eggs, you would see Willie Walsh and the company responding to that, because that would be stealing longhaul passengers; KLM would be picking up those passengers, rather than BA picking them up at Heathrow. So you have to look at other ways.
It is a bit like what they were saying about repositioning the whole debate and the strategy that you adopt to try to put pressure on companies to deal with you fairly. You can do that by introducing public service obligations, or you can look at creating a market and making it an issue for the likes of BA to say, "We need to look after Belfast because if we don’t, we will see some of that longhaul traffic go to KLM or Lufthansa out of Frankfurt, or to Air France out of Charles de Gaulle". I would not have any confidence about people’s words. That is not because they are untrustworthy: when Willie says something, he means it-as I have experienced industrially-and he is making that company a success. You have to look at other ways in which to respond to that if your prime interest is looking after passengers coming out of Northern Ireland.
When we asked our pilots what their issues were, APD was named as the biggest hindrance-and I can answer your question about taxation and what you do as a result of that. The second issue was about having confidence in whether there was enough of a future in Northern Ireland aviation. Thirdly, we asked them how important the link was to Heathrow and 89% said it is critical. However, at the moment I do not see the levers there to make that real. Willie might say it at the time but he is driven by commercial pressure.
Q275 Lady Hermon: Could I just double check something? When you give that figure that 89% of pilots say it is crucial, does that relate to the link between Belfast City Airport and Heathrow?
Jim McAuslan: They did not distinguish between airports. I can tell you the three questions we asked.
Q276 Lady Hermon: Yes, please. Can you tell us what the questions were and then the results?
Jim McAuslan: The poll was of our 70 pilots who are resident in Northern Ireland. It is not a huge number to pick from; it is simply an indication. We asked, "Do you believe Northern Ireland should have different air passenger duty rates to the rest of the United Kingdom?" 93% said yes, it should. We asked them, "How concerned are you about the future of aviation in Northern Ireland?" 96% said they were concerned, with 52% saying that they were very concerned about the future of aviation in Northern Ireland. We asked them, "How important is the air link between Northern Ireland and Heathrow Airport?" 89% said it was important, with 64% saying it was very important.
When they were given the opportunity to express their views in free text, the issues that came up included a fear that passengers will fly to lower APD places, such as the Republic, Schiphol or Charles de Gaulle. Their concern is that APD is a blunt tax but it is also a tax that people can avoid by going to other countries and one that may lead to a loss to the Exchequer in the long term. When we asked about capacity, they said that there was probably too much and not of the right type: "Do there need to be two airports in Northern Ireland 14 miles apart?" "Why has that emerged?" "One of them has too short a runway for some of the aircraft they would like to operate out of it". So there was an issue about the quality of that capacity. They also had some technical questions about being allowed to have steep approaches to NorthEast to 04. I do not know whether you have experienced that in Leeds Bradford before but there were technical questions around the way the whole thing was designed.
The third area they expressed concern about was the withdrawal of BA from Belfast, which would damage the connectivity into Heathrow. While there might be some scraps thrown to Northern Ireland and they could tick a box and say, "We have given you a slot", it could be an absolute disaster of a slot: first thing in the morning might not suit when you are trying to get into Heathrow to get an evening connection. So there were issues about how good that connection would be and there were concerns raised about some operators in Northern Ireland having very fragile, narrow routes than can get knocked over, operationally, very quickly and cause huge problems for air passengers. There is not the robustness in Northern Ireland that there is in mainland UK airports. Those were the three areas that our members commented on.
Q277 Kate Hoey: That is most interesting and it is great to have those results. Are you really suggesting that the only thing that is going to upset or hit BA and make them look at things differently is if another smaller airline, such as easyJet, decided to really concentrate on a deal with, say, KLM to take people from Belfast to Amsterdam-where they fly already-and concentrate on getting people to have their links outside the UK?
Jim McAuslan: Yes. We are the British Airline Pilots Association; we are not the British Airways Pilot Association, although I represent 3,000 BA pilots. Another suggestion is that you may want to think about inviting Ms McCall. She would not have to repaint the aircraft; they are all orange, so it would suit Amsterdam very neatly. That is a very good point: what is to stop another UK operator having a partnership deal with an international hub like Amsterdam and building that up, rather than putting all their eggs into whether Willie will help them by giving them some slots?
Q278 Oliver Colvile: I am rather curious about this. British Airways seem to have been playing around in other places as well; do you know what their general strategy is towards the business? Have they decided something similar to Dr Beeching in 1964? He decided that intercity was the key thing as far as rail was concerned and cut a lot of branch lines. Do you think British Airways have that kind of approach and want to concentrate on international routes rather than domestic flights?
Jim McAuslan: Definitely. That is the clear policy because that is where you make money. You make money on longhaul and in the front of the aircraft. That is where they will concentrate their business. They are increasingly frustrated by changes in policy by all governments in the UK. Sometimes they are a bit strident in what they say. I do not think that endears them to politicians. Part of the reason for the strategic merger with Iberia is that in Madrid there is a large airport with lots of capacity and they want to build up that traffic, as well as gaining access into South America. So their strategic direction is international, not domestic; not having the likes of bmibaby or bmi Regional on their balance sheet and clearing the balance sheet up to focus on where they are going to make money. That is what they are about: return to shareholder. My point about liberalisation is whether there is a balance that needs to be brought into it by politicians to say, "That’s fine. We want you to do that, but there are also some things you need to make possible as well". That is not taking place at present, which is why I am suggesting that you might want to look at how you can create more competition to try to get people to behave in a different way.
Q279 Oliver Colvile: So you think the key thing to do is to try to encourage more competition within the domestic market, and that will almost certainly give British Airways a bit of a kick?
Jim McAuslan: It is less about the domestic market per se, and more about the connectivity to longhaul routes.
Q280 Oliver Colvile: We understand that there are a number of key targets the NI Executive considers necessary for growth to the Northern Ireland economy. Between 2011 and 2015 Invest NI aims to secure a total of £31 billion of investment into Northern Ireland. They are also looking at how they can increase exports up to about 20% and increase the number of visitors using Northern Ireland as a tourist destination. Do you agree that those are ways of getting growth into the Northern Ireland economy?
Jim McAuslan: I’m not able to comment on that.
Q281 Oliver Colvile: What do you perceive to be the obstacles to growth?
Jim McAuslan: In terms of aviation per se it is about having a strategic plan. We just ran a feature in our magazine, which I am happy to share with you, which talks about the number of strategic plans there have been for aviation in the UK since Roskill in the late 1960s. There have been so many: Maplin Sands; Vale of Aylesbury; and there is now "Boris Island". Having certainty means that people will invest with some certainty. However, people expect plans to change. If the Committee is looking to develop a plan for Northern Ireland, it has to be an all-encompassing plan, but one that investors have some confidence is going to become real, rather than one that might change because political preferences change.
Q282 Oliver Colvile: So APD, corporation tax or something else?
Jim McAuslan: APD is a big part of it. Our members would like to see the tax axed. I think that is unrealistic, for the reasons that you gave earlier: there is still a hole in the public finances. You need to look at more degrees of sophistication, and you have secured that in Northern Ireland, which is to your credit, although it affects only a small number of long-haul operations. More gradations and a look at distances would help. If we do not do that we will experience something similar to what happened to the Dutch. People started flying out of Paris rather than Amsterdam. They then axed the tax. That was a similar issue. Our members report that they are already seeing colleagues who used to fly in the back of their aircraft saying, "I am off down to Dublin now because I can avoid APD".
Q283 Kate Hoey: If the politicians changed their mind in Amsterdam, why can it not happen here?
Jim McAuslan: You are still left with the issue about how public finances are plugged. All tax will change behaviour, but a tax that is so easily avoided by going to another departure point is one to be avoided.
Q284 Kris Hopkins: I would like to ask the same question I asked earlier about the impact of expanding Heathrow Airport on Northern Ireland. If you could send us a note on that I would appreciate it.
The question I would like to ask now is about the fact that we always come down to a crunch issue on a Committee like this. One of the main dramas we have to face up to is whether we go for a rationalisation of airports. The problem for several members of the Committee is it is a bit like asking turkeys to vote for Christmas. Do they want to shaft the local airport that might be in their constituency or that might attract a lot of people from their constituency? The answer we received earlier was that they are private enterprises. However, if you are going to make one of them viable and more effective, it is about where you may invest some of the limited public resources. People need to make judgments about things like railway infrastructure into what was Aldergrove, because there is no connectivity there at the moment; it passes the end of the runway. If you clearly designated that as your primary airport then you could feed it. I wonder what your and your members’ view is on that. People keep saying, "Make a strategic decision". Actually, making a call on something like that is one of the key issues around making a strategic decision.
Jim McAuslan: The people who responded to our survey did not see the sense of two airports 14 miles apart: they said there is overcapacity and the wrong sort of capacity. The one that seems most sensible has the shortest runway, or not an appropriate runway. We also jump from foot to foot. When I look at Heathrow, where half of our members support expansion and half do not, it comes down to politicians and how brave politicians are going to be. If we are going to recreate the Victorian era, with great big Bruneltype decisions, then there are some infrastructure projects where you have settle and say, "That is what we are going to go for". I do not know whether having three airports in Northern Ireland, and two within 14 miles of each other, is sensible. Our members do not see that either.
Oliver Colvile: A great man, Brunel.
Q285 Dr McDonnell: You obviously do not feel we are best served by two airports and you feel it would be better for consumers if there was one. You have said that one has the right runway and the other does not, but the right airport has the wrong runway. How do we sort it out?
Jim McAuslan: I was thinking about this earlier; I do not think it is a flip of a coin but there are issues around safety and whether there are safety consequences of expanding Belfast City Airport. That would have to be looked at. There are issues about public demand and what the public want. There is an issue about how politicians-and all of us in civic life-engage the public in a mature debate about some of those issues, including choices, how you make choices and what the right choices are. I do not see that sort of debate taking place. If you cannot have that sort of debate in a city of 270,000 people, that is a bad state of affairs, but I think there is a case for trying to bring people together in talking about the choices and explaining the benefits from having one airport, whether it is in Aldergrove or in the city. That would be a brave thing to do, but probably the right thing to do.
If our members had the choice I do not know what they would say. The ones who responded to the poll indicated that they would prefer City with a longer runway, but I am not sure whether that would be the safest option, the right option, the most cost effective option, or an option that would be most preferable to the citizens of Northern Ireland. All of those things would have to be taken into account. It would be wrong for me to say it should be this one or that one; that would not be the right approach.
Q286 Dr McDonnell: You mentioned debate; we are having this inquiry to kick start that debate. I certainly would welcome further discussion with your organisation because we know that what we have at the moment does not have the maximum cost benefit or cost effectiveness. I started out on this discussion looking more at access to the airports, but it is fairly obvious that we have two airports that are not fully utilised, are competing with each other and may very well be damaging each other. Yet they are privatised-they are commercial entities-and there is a limit to how much interference you would want Government to have. However, I think you are 100% correct about the debate you refer to. That is why we are holding this inquiry as a starter. I see this debate getting more intense with time.
Jim McAuslan: You might not go far amiss to talk to the people at Prestwick and Glasgow Abbotsinch, as it was called, about what it has been like to have two airports within 17 miles in Renfrewshire and Ayrshire. I used to go to Prestwick as a boy because I loved aircraft and it was marvellous to go there. It is now an absolute ghost town. It would be useful to talk to the people who operate Prestwick about what their experience has been and how, in the West of Scotland, they could create one decent airport rather than two halfway houses. There is experience elsewhere that you can draw upon.
We have been watching the way you have approached this from a distance and I think it is terrific. If UK aviation had similar sort of questioning and levels of debate that you are managing to generate on Northern Ireland then we would be in a far better place than we currently are with the ping pong we have about UK infrastructure.
Q287 Naomi Long: Could I just ask another question on a slightly different tack? This is about the cap on the number of passengers using Belfast City Airport. It has been claimed that removing that cap could create 350 jobs. It has also been put to us that a later flight from Heathrow to Belfast City would assist the business community. There would obviously be potential disadvantages to the local community who live under the flight paths from those decisions, but from a pilot’s point of view, would there be implications for pilot safety, fatigue and so on if the arrangements were to change significantly at Belfast City Airport?
Jim McAuslan: There are issues around fatigue but if we have proper fatigue rules it should not cause a problem, depending on how pilots are rostered and what times of day they operate. Some pilots did suggest that another hour of operation at Belfast City and variations to approach would help greatly. I recognise that noise is becoming a bigger issue but when you walk about here now and listen to the aircraft coming into London City Airport, the new 146s, they are an absolute whisper. A lot of it depends on the quality of the aircraft that you have. That is from a Brazilian manufacturer; it is a great aircraft and pilots love flying it. With some of those modern aircraft it should not be a huge inconvenience to the public to have that sort of extension.
Q288 Mr Anderson: One of the things that could possibly build the airport would be travelling to new destinations, particularly outside the UK. Is that a realistic prospect? If it is, where would you suggest could be opened up as new markets?
Jim McAuslan: I couldn’t really suggest. As I said earlier, Heathrow has 166 destinations, compared with Frankfurt with 266. The UK is badly served to international destinations, which is a shame given the importance of developing trade. China is opening 56 new airports in the next five years so we are going to be very constrained. But we are now seeing the likes of Emirates operating out of Newcastle and Virgin flying out of Manchester and Glasgow, so there is demand from London’s hinterland. However, I think you will struggle, given the population of Northern Ireland, to service a huge number of international destinations. You have to have the connectivity into a decent hub.
Q289 Mr Anderson: Would there be the technical scope? You wouldn’t have to extend runways, for example?
Jim McAuslan: I don’t think that you would need to extend at Aldergrove, but certainly you would at Belfast City. I am not sure how people in the city would feel about a 747400 coming over.
Q290 Mr Anderson: We questioned the earlier witnesses about the potential for upgrading the rail links to the airport; they were very keen on doing it. Do you think that would make a big difference to the amount of people who would travel by car? Do you think they would choose new rail or bus links if they were better?
Jim McAuslan: We had the Heathrow Express put in from Paddington and it did not really change what is happening around the M25. People have got used to the convenience of the car. The number of cars around the airport causes more environmental damage than the aircraft. We campaigned with the Scottish Parliament to try to get a rail link from Glasgow to Glasgow Airport, but that was unsuccessful so there are still cars going in there. Does it cause a huge jam? Not really. The bus is terrible from Glasgow to Glasgow Airport, which is about the same distance, so people use cars and taxis, and it does not jam up Glasgow Airport. That is probably the same sort of catchment that we are talking about here. There is a question about how much public transport is used and required; I do not have figures on that but the Consumer Council would be the people to put that question to. I cannot really answer more than that.
Q291 Naomi Long: Do you foresee the Civil Aviation Bill, which is currently going through Parliament, having any particular consequences and implications for BALPA members?
Jim McAuslan: We have commented to the Committee about our concern. There is not enough focus on safety. The Bill tries to be economic; it tries to be regulatory; and it tries to deal with safety. It tries to deal with too much and it lacks focus. It should be a debate about what the role of the CAA is and then you build it back from there.
Chair: Thank you very much. That was some very interesting information. I apologise for the rush, but thank you very much for joining us.