More Air Travel Can Improve the World Economy

Air travel taxes will drive passengers elsewhere, airline execs warn.

On the concluding day of the WTM in London, senior executives said in a debate on the future of the airline industry that the ash-cloud crisis earlier this year had helped to highlight the importance of air travel and its benefits. “The ash cloud crisis brought a degree of balance to the debate about the costs of aviation and showed the extent to which we are dependent on aviation for our global economy,” Colin Matthews, CEO of BAA (British Airports Authority), said.

With goods waiting to be exported to Europe from elsewhere in the world and restaurants temporarily empty of tourists in northern Europe, it was easy to see that the world economy depended on ease of air travel. However, the executives added, with a third of the world’s airline capacity grounded it was clear that there had been an over-reaction to the volcanic ash.

“You can’t take chances with safety, but there was enough experience globally to have reopened airspace earlier,” Stephen Kavernagh, commercial director at Aer Lingus, explained. “Prolonged further, many airlines could have gone under.” Birmingham Airport Chief Executive Paul Kehoe blamed a lack of leadership, and credited airline bosses from British Airways and KLM for getting onto planes to check the severity of the ash. He said that the airline industry lacked its own Al Gore, “someone saying what a brilliant job you do. Otherwise we’re always on the back foot and we lose out to environmentalists.”

Kavernagh said that “air travel can be more effective environmentally than rail, car, bus, etc., when you consider use of concrete, steel and other factors.” Another controversy in the industry is the increase in Air Passenger Duty in the UK. The president of the Emirates airline, Tim Clark, said: “We need to work harder to persuade people that we add value,” adding that Emirates will “adjust if demands falls off.” Newcastle in northern England is one area that has benefitted from routes via the Middle East, increasing trade to more than €350 million.

Matthews warned of the long-term impacts: “If it’s more expensive to fly from a UK airport, people will make other choices. The new affluent Chinese middle class, for example, will holiday in France. In fact, France gets six times more Chinese visitors.” Pegasus Airlines’ Sertac Haybat said that after domestic taxes were lifted in Turkey, revenue increased and passenger figures went from 10 million to 20 million. “European governments should learn from this,” he concluded.

WTM

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