The business body urges a comprehensive overhaul of UK aviation policy in its report, which also says the UK’s international competitiveness is under threat as European airports gain ground. As well as runways, the report delves into tax, visas, environmental and rail policies.
The IoD say that 63% of their members think direct flights from the UK to emerging markets will be important to their business in the next decade. This, together with the Goldman Sachs projection that emerging markets will make up 70% of global GDP by 2050, and the fact that British trade is 20 times higher with countries which have a daily direct flight to the UK than with countries without such an air link, make allowing those routes to connect to London essential.
The report, ‘Flying into the Future’, warns that the lack of a positive aviation strategy from successive governments has left us at risk of missing out on the economic opportunities arising from emerging markets. They say inaction and policy errors have left us without the runways we need, with air taxes which are the highest in the world and with visa and border systems which are unwelcoming to visitors.
The report makes 25 recommendations encompassing all the requirements to meet the economic and environmental challenges.
Corin Taylor, Senior Economic Adviser at the Institute of Directors and author of the report said: “British aviation faces several key crunches which require swift, co-ordinated action. Aviation is economically crucial, and the world is only going to become even more interconnected. We cannot afford to ignore the reality that demand for air travel in the South East will soon be more than our airports can handle. This means airport capacity must expand, alongside other measures to improve our competitiveness in terms of taxes and immigration processes.”
The report outlines four “Aviation Crunches” – the South East Capacity Crunch – where forecast demand by 2050 of 250m passngers exceeds current maximum capacity of 188m; the Hub Capacity Crunch where Heathrow, our only hub, is already full and falling behind international competitors; the Tax Crunch where Air Passenger Duty has risen from £5 for flights within Europe and £10 for outside Europe to between £13 and £184 – out of keeping with the international direction of travel, say IoD; and the Visa Crunch where UK visas more, are harder to apply for, and take longer to be granted than the Schengen visa for Europe.
The 25 detailed recommendations range from capacity, immigration and tax, to rail connections and the environment.
They include continuing with operational freedoms at Heathrow in the short term to reduce delays, while working on an expansion in south east and hub capacity to address the twin capacity crunches. The IoD’s preferred long term solution involves action at both Heathrow and Gatwick, with Heathrow expamding by one, or preferably two, runways, and Gatwick adding one.