The Scottish aviation gateway - problems, prospects and policy possibilities
Margaret Grieco, Professor of Transport and Society, Napier University, Edinburgh and Visiting Full Professor, Cornell University, Ithaca, N.Y.
The provision
of a good airport infrastructure and direct air links to other centres of
economic activity is vitally important to the development and competitiveness
of any economy. Given its relative geographic isolation, this might be said to
apply especially to
1.Introduction: characterising the present.
The remoteness of
S1W-25585 Tommy Sheridan: To ask the Scottish Executive what representations it has made, or will make, to (a) Her Majesty’s Government, (b) the Civil Aviation Authority and (c) BAA Scottish Airports to ensure that airport tax levels at (i) Glasgow, (ii) Edinburgh and (iii) Aberdeen Airports are not set at a level which would put these airports and the airline operators who use them at any economic disadvantage or would act as a disincentive to tourists and visitors using these airports.
S1W-25586 Tommy Sheridan: To ask
the Scottish Executive what representations it has made, or will make, to BAA
Scottish Airports to ensure the economic competitiveness of (a)
Concerns about the intensification of remoteness as a consequence of the commercialisation and privatisation of primary communication services such as mail delivery interact with concerns about aviation (http://www.scotlibdems.org.uk/press/0207093.htm. The viability of communities and the economic welfare of remote communities are adversely affected by facing higher commercial charges as a consequence of a combination of their remoteness and small market base in a context where cross subsidies of essential services such as mail delivery are withdrawn and uniform postal rates no longer hold. Internal aviation and its viability clearly have an important role to play in such a context and internal aviation gateways to effective economic and social development clearly require consideration.
The viability of internal aviation is only part of the
Scottish aviation gateway story: the importance of international aviation for
Scottish economic and social development also requires consideration. There has
been widespread acceptance that long distance international aviation access to
It has always been
SCDI policy to fully support and encourage the development of commercially
viable direct flights from
However, it has also been noted that the increasing busyness of Heathrow may contain very negative consequences for Scottish aviation traffic and may reveal the limits of interlining as a strategy commensurate with Scottish development:
It should be
noted, however, that increasing pressure due to lack of international terminal
capacity at Heathrow could, in the near future, have detrimental impacts on
Scottish interlining connections as domestic flights are gradually excluded to
allow access to more profitable international flights. Furthermore, business
transfer passengers to and from
2. Policy and policy agencies.
British Government policy documents recognise that current commercial pressures on Heathrow favour the allocation of slots to international traffic over the allocation of slots to 'thin' internal airline routes and markets: the consequence is that Heathrow fails to serve or deliver an interlining service to Scottish regional airports such as Inverness:
This has
accelerated the trend to reassign slots at major airports to the most
profitable routes. These are mostly the intercontinental routes and others with
high volumes of business passengers. This may mean that on thin routes
(including many domestic services), services primarily aimed at leisure
travellers and all-cargo services might be reduced or squeezed out of the most
congested airports. For example, during the 1990s
Overall Britain has been relatively slow in moving to correct the problems experienced by remote areas as the uniform service levels of the public sector welfare state have been rolled back in favour of privatised, competitive commercial forms. As we shall see in later sections of this short paper, Britain has been slow to make use of Public Service Obligation Orders permitted by European trade law in ensuring that remote communities do not pay inequitable prices to achieve access to civic participation whilst other member states have made use of PSOOs to ensure that a communication safety net is placed beneath their populations in remote locations (http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmhansrd/cm020508/halltext/20508h05.htm). The importance of aviation as a gateway for remote communities to civic participation has received very little British policy attention indeed and interestingly pressure to use the PSOOs has recently been applied by the MP for Orkney and Shetlands, a remote community sitting on the route and in the vicinity of the wealth pipes of North Sea Oil.
More flexibility has been found in Government responses to
less remote Scottish locations and potentially less thin routes. The SCDI has
called for the establishment of and extension of Fifth Freedom rights in
For many years
SCDI has repeatedly called for full Fifth Freedom rights to be granted to
foreign operators wishing to fly through
3. Users' views, complaints and suggestions.
Reviewing the annual reports of the Air Transport Users Council, concerns about lost luggage on connecting flights, delayed flights and the need to open up the transatlantic market to companies working out of airports other than Heathrow all make an appearance (http://www.auc.org.uk/reports/0001report/0001report.pdf). Each of these issues is relevant to the development of an effective Scottish aviation gateway - both in terms of interlining and in terms of exploring other more direct options.
Another source of users' views is to be found in the
Parliamentary questions put by MPs representing remote locations. The MP for
Orkney and Shetland, Mr Alistair Carmichael called a debate and drew the
attention of
Since 1997, the Government have placed great emphasis on the need for social inclusion. We in Orkney and Shetland regard air services and the provision of transport services as a matter of social inclusion. Social inclusion is as important for a peripheral island community as it is for a peripheral housing estate in Glasgow or Edinburgh.
Let me give a few examples of our
transport arrangements. The ferry alternative to air services to Shetland is a
14-hour overnight journey from Shetland to
The return ticket that I bought in
Orkney for this week's journey to
There is a massive knock-on extra
cost for the provision of health services on the islands, because specialist
services are increasingly provided from
I hesitate to speak of rugby clubs in your presence, Mr. Deputy Speaker, but there is a fine one in my constituency. Orkney rugby football club is striving to get into Scottish national division four. For a community of our size, that is a considerable achievement. We have a budget of £40,000 a year to run that club. I hazard a guess that there is not another rugby club in the country that cannot pack the first 15 into four cars and drive them wherever they need to go. That is the extent of the burden that is placed on us, whereas many communities on the mainland take ease of travel for granted.
The constant threat to communities such as those that I represent is that of depopulation. To make those communities attractive so that people move to them and stay in them, they must be made accessible, but if one speaks of subsidising air routes, state aid rules comes into play. The Minister will be aware that derogations, through the provision of public service obligation orders, are allowed under European Union law. (http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmhansrd/cm020508/halltext/20508h05.htm).
Carmichael's arguments did not inspire the Minister responsible to consider a change in strategy (and indeed the Minister's responses paid little attention to either to the extreme character of the difficulties experienced by those in the Orkneys and the Shetlands or to the role of this region of the country in contributing to the economy through the channel of North Sea Oil), however, similar arguments on the link between air travel and social exclusion are made by the airport operators in their response to the Government's consultation document on the future of aviation:
It is essential that the new policy framework fully recognises the social benefits that derive from air transport. Access to air travel must be available to everyone and policies must be developed that encourage rather than deny or restrict these opportunities.Air travel cannot become socially exclusive and a preserve of the affluent. Air travel must therefore be positioned as an integral element of the nation's public passenger transport network.(http://www.wolverhamptonbusinessairport.co.uk/pages/aoa.htm
4. Options and actions.
Issues of ensuring the survival of 'thin' routes and the importance of thin routes in the development and sustainability of peripheral regions have surfaced in Government aviation policy documents - and the case is recognised for:
powers for slots to be protected for services to and from peripheral or development regions, and to prevent them from being traded away from that route; (http://www.aviation.dft.gov.uk/consult/future/08.htm)
in the proposal for the auctioning of landing and take off 'slots' at Heathrow and other congested airports.
The demography and geography of the
At the same time,
we have increased our investment in other modes of transport. In the current
period, and continuing through 2003-04, we have made substantial investment in
public transport programmes. We are supporting bus services, particularly in
rural areas; improving airport facilities in the
Equity and development considerations are key in
understanding the public ownership of
The company
provides an efficient, economic and safe airport infrastructure of ten airports
in the
The public ownership of airports is, however, only part of the sustainability equation of remote Scottish communities - these airports depend on the aviation activities of commercial airline companies for their survival and within this equation low cost airline operators such as Easyjet occupy a key role:
Our existing
cross-border routes to Gatwick and
'Thin routes' in the Scottish context have an interesting contemporary history - the advent of oil with its much enlarged expansion of air traffic and then comparatively sudden reduction as the oil industry reduced its relative air traffic needs made for alterations in types of service arrangements made by commercial air line companies. The history of Loganair in its movement from an air taxi through various forms and formats and franchise arrangements with British Airways provides an example of the complexities of historically thin routes in peripheral areas of a modern economy where a boom and bust extractive cycle has taken place (http://www.loganair.co.uk/about_loganair/brief_history.htm).
Interestingly, Shetland - a major winner in the local capture of oil earnings - is interested in operating its own airport:
As a result of representations
from Shetland Islands Council in 2000, Ministers invited the Council early in
2001 to prepare a business case to set out their objectives for taking over
control of
Orkney and Shetland have also raised the issue of Public
Service obligation orders through a debate in
The European Commission's third package of air transport liberalisation measures was adopted under Council regulation 2408, which trips very nicely off the tongue, in 1992. That regulation contains provisions under article 4 that permit the imposition of a public service obligation on scheduled air services within the European Union. Under the regulation, member states have the legal authority to impose a PSO in respect of scheduled air services on routes serving peripheral and development regions within their jurisdiction. The rationale for imposing a PSO should be based on the consideration that the maintenance of regular air services is vital for the economic development of the region in which the airport is located.
Furthermore, a PSO should be
imposed where adequate provision of air services in terms of continuity,
capacity and pricing would not be possible if air carriers considered solely
their own commercial interests. That is very much the case in the highlands and
islands. In selecting routes for PSO designation, member states are required to
incorporate public interest considerations in addition to an assessment of the
adequacy of services provided by alternative modes of transportation. A service
that charges £528 plus taxes for travel between Orkney and
I will examine briefly the
experience of other countries within the EU that impose PSOs
on domestic routes. The first example is that of
In
In
It is not, however, all about cheap fares. Fares are the most easily identifiable issue about which constituents who approach me speak most animatedly. With PSOs, there are all sorts of possibilities. With them comes the opportunity to stipulate minimum service standards, the size and nature of the aircraft that is to be provided, the seating capacity and the timetabling—people can leave the island for the mainland at a time of day that is useful and that will allow them to return when they have completed their business.
The penalties that can be imposed for non-compliance with a PSO are also of great importance. Many of the benefits that I see in the imposition of PSOs stem from the fact that at present we are greatly dependent on our air services, yet we have little control over them. I pay tribute in particular to Loganair, which operates the British Airways franchise to Orkney and Shetland. The company is meticulous about keeping me and my colleagues in the Scottish Parliament informed about what it is doing and how it feels the service can be better operated. That is because it chooses to do so. If it chose not to, I could do nothing about it.
For something that is so important
to many aspects of island life, that measure of local control is absolutely
essential. We already have some experience of PSOs,
as all the internal flights within Orkney and Shetland operate under them.
Until recently in Orkney, that was limited to a handful of flights. However,
the difference that the operation of PSOs made to
communities like Papa Westray and
It is probably awfully poor form
to refer to one's maiden speech, but I cannot help recalling time and again
something that I said when I first came to the House—that I come here to
represent communities that are proudly self-reliant. We are not subsidy
junkies; we have a great contribution to make to the rest of the
The comparison of the circumstances of British islands with other European islands in terms of air services and fares under the same European legislation, coupled with the contribution that Shetland makes through North Sea Oil to the British economy and its severe adverse transport circumstances raises the issue of a visible and transparent service deficit. The response of the Westminster Minister was to require the Westminster MP for Orkney and Shetland to pass through others to the Scottish Parliament to raise the issue of Public Service Obligation Order status for Orkney and Shetland: a suggestion which surely increases the deficit.
5. Conclusion: rethinking the future
Servicing
Similarly, there is a need to closely examine the role that Public Service Obligation Orders could play in ensuring that there are Scottish aviation gateways to full civic participation.
Widespread consultation is now being undertaken in
Get involved in
shaping the future of air transport in
Much of
References:
Department for Transport, The Future of Aviation: The Government's Consultation Document on Air Transport Policy (http://www.aviation.dft.gov.uk/consult/future/08.htm)
Loganair - A brief history. (http://www.loganair.co.uk/about_loganair/brief_history.htm
Scottish Council for Development and Industry, (2001) The Future Of Aviation: The Government’s Consultation Document On Air Transport Policy
On line materials:
http://www.aviation.dft.gov.uk/consult/airconsult/scotland/index.htm
http://www.scottishsecretary.gov.uk/News_2002/ss0132.htm
http://www.scotland.gov.uk/pages/news/2002/09/SEET119.aspx
http://www.epolitix.com/data/companies/images/companies/Freedom-to-Fly/260202.htm
http://www.transtat.dft.gov.uk/tables/2002/fperson/air02.htm
Notes: 1.The study of airports in the south east and east of England will consider whether the Government should encourage growth at regional airports in order to cater for some of the demand currently met by south east airports, bearing in mind that some 80 per cent of all passengers who end their journey at Gatwick and Heathrow airports have a final destination in the south east (DFT).
2. Fifth Freedom: The privilege for an airline registered in one state and en-route to or from that state to take on revenue passengers, mail and freight in a second state and to put them down in a third state.
[1] The Inverness- Heathrow air link, after being closed in 1997, was
restored in 2004 ‘thanks to a deal between HIAL and bmi’ @ http://www.hial.co.uk/Default.aspx.LocID-014new119.RefLocID-01402w00h001.Lang-EN.htm