Distinguished guests, ladies and gentlemen, can I welcome you all to the Annual Dinner of the AOA. It is very good to see so many of you here and I am sure we are going to have a great evening.
We have a number of distinguished guests on our Top Table but I would particularly like to welcome Justine Greening, the Secretary of State for Transport. We are delighted to have you with us this evening, Secretary of State. You addressed our Annual Conference back in October, when you had only been in the job a couple of weeks; we do appreciate your record of engaging with the aviation sector since you’ve been in office; and we are looking forward to hearing you speak shortly.
This is the fourth year of our Corporate Sponsors scheme. The Corporate Sponsors are the principal sponsors of the AOA’s showpiece events, namely this Annual Dinner and our Annual Conference. We now have 7 Corporate Sponsors and we are proud that each one of them is a world leader in their field: they are Lafarge; Redline Aviation Security; Selex Systems Integration; Siemens; SITA; Thales; and VanDerLande Industries. We are delighted to have 7 such prestigious companies as our Corporate Sponsors and we are most grateful for their sponsorship this evening. Can I mention that on each of your tables there is an envelope. We are going to run a raffle of business cards once again this year, along with a collection for the charity Orbis.
Many of you will be aware of the work that Orbis does for blind people throughout the developing world. It is estimated that some 39 million people worldwide are blind and that for 80% of them their blindness could either be treated or could have been prevented, if resources were made available.
As many of you will know, for many years Orbis has run a Flying Eye Hospital in the form of a converted DC-10 aircraft, which will carry out its operations in a number of developing countries during this current year. Orbis is currently fundraising for the conversion of a replacement MD10 aircraft. All the funds raised this evening will go towards that project; it is an excellent cause; and I would urge you all to give generously.
In terms of the logistics, can I ask one person on each table to take charge of the envelope, and can you please encourage each person on your table to place a large banknote in it together with a business card. These envelopes will be collected after the main course.
Later, there will be a draw which will result in a prize for the winning table in the form of champagne; and there will also be a draw of the business cards – for which British Airways have kindly donated 2 tickets to New York for the winner. Let’s make this a generous contribution to this excellent charity and we are most grateful to British Airways for this donation.
I spoke last year of the economic recovery being slow and uncertain and that has certainly been the case, with some commentators still talking about the risk of a double dip back into recession.
This industry has a massive impact on the UK economy. Aviation contributes some £50 billion to the economy. It pays £8 billion in tax each year. And it supports around a million jobs in the UK.
We clearly have the potential to assist massively in the economic recovery. And we wish to work constructively with Government to create the jobs and growth that are so badly needed in these difficult times.
In order for our industry to prosper and make its full contribution to the economic recovery, we do, however, have two things that we continue to ask of Government, one immediate and the other longer term. I make no apologies for the fact that our first request relates to tax.
Many of our members are telling us that the current level of Air Passenger Duty is regularly quoted as a major reason why their airlines will not put on new routes or grow their traffic at their airport.
Next month we are due to have a double inflation APD increase, and the forward forecasts show further increases down the line. We are working closely with the Fair Tax on Flying campaign; and we say enough damage has been done and all increases in this tax must be halted now.
We are totally out of line with the rest of Europe and, now that we have joined the EU Emissions Trading Scheme, the industry effectively has a double tax as well as double inflation APD increases.
It seems particularly perverse that a further increase in APD is planned on the eve of the Diamond Jubilee celebrations and the Olympics, around which a massive campaign is to be run to increase the number of inbound tourists!
And it is remarkable that, by raising APD to such eye-wateringly high levels, the Government has even succeeded in provoking the AOA’s good friend Michael O’Leary to stop firing off at everyone else in the industry, and share a platform – and take a common line – with other airline leaders!
It is clear that taxes on aviation have gone far enough and there should be no further increases in APD; and now that revenues from EU ETS are starting to flow, APD should start to be phased out.
A year ago the Chancellor announced in his budget that he would delay the APD increases planned for the following month. This evening I would like to ask the Secretary of State to press the Chancellor to do the same once again this year.
So, the first thing we ask of Government is a fair tax regime. Our second request relates to the forthcoming aviation policy which is expected as a consultation draft very shortly.
This is an ideal opportunity to provide a policy framework within which aviation can grow sustainably and make its full contribution to the economic recovery. AOA’s position is very clear: we wish to see excellent aviation connectivity right across the UK, ensuring that we have both vibrant point to point airports and sufficient world class hub capacity. The policy must encourage airports in all parts of our nation to thrive and grow in a sustainable way.
We need a planning and regulatory regime which helps, not hinders, all our airports around the country.
And if the Government feels that further studies are required as to how the hub capacity should be provided, then we would urge that that be done without further delay; and to set out a clear timescale for determining its policy position, and then stick to it.
Airports are crucial to the success of UK plc, its regions, and its ability to compete and trade with existing and emerging markets. Dragging its heels on these issues only helps our competitors
So, we have two requests of Government. No more tax increases and a positive policy framework.
What can our sector offer in return? Many things, but I will highlight two. First is our commitment to the environmental agenda. We continue to support aviation joining the EU Emissions Trading Scheme this year, which will ensure that overall emissions are capped. The real goal though has to be a global deal and I would urge the Government to fight hard for that.
As well as supporting the emissions trading scheme, we are also working hard, in every part of our industry, to reduce our own emissions and make aviation truly sustainable.
And I would like to pay tribute to the excellent work that is being done by the Sustainable Aviation coalition, in which AOA is an active participant.
Tomorrow will see the launch by Sustainable Aviation of an updated carbon road map which will show how the industry can continue to grow in the period to 2050, while reducing its carbon emissions.
The second thing we can offer Government as an industry is a commitment to their agenda of ‘Making our Airports Better’ in order to provide an even better experience for our passengers. With this in mind, we are working closely with the CAA as they start to put together their Consumer Panel.
Airports have invested heavily to improve the facilities and services we offer our passengers. We do, however, need the positive policy framework that will enable airports to prosper in order to invest even more in the passenger experience in the future.
So, my message to all politicians here this evening is this. We are very keen to work with you in contributing to this country’s future prosperity;
we are determined to create a truly sustainable aviation industry; and we will do all in our power to provide airports in which we can all take massive pride.
In return we ask for a policy framework that allows us to get on and deliver the economic benefits I have described. And we ask for no more tax increases; and no new taxes unless accompanied by reductions in APD.
The coming year will be immensely important both for the UK and also for UK aviation.
We are working with a number of Government departments and agencies as they prepare for the Queen’s Diamond Jubilee celebrations and of course the Olympics.
We will play our part in encouraging the growth of inbound tourism on the back of these once in a lifetime events.
A vibrant aviation industry is absolutely vital for the future prosperity of our nation. There is an opportunity now to establish the policy and fiscal framework that will enable our industry to prosper. I would urge all AOA members, and the whole of our industry, to unite over the coming year in getting these messages across to Government.
Thank you all once again for coming this evening. Please don’t forget to place a large banknote and a business card in the envelopes on your table, and let’s enjoy the rest of the evening.
Thank you.
