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REPORT – WTM 2010: The airline industry should have seized the opportunity to show its value to economies in the aftermath of the ash cloud crisis, a WTM panel concluded.Airlines failed to show the importance of aviation to the global economy during the closure of much of Europe’s airspace when trade and tourism was deeply affected. This failure means the industry will remain a target for increased taxation, leading experts agreed during the Airline Industry in Turnaround debate…
REPORT – WTM 2010: The airline industry should have seized the opportunity to show its value to economies in the aftermath of the ash cloud crisis, a WTM panel concluded.
Airlines failed to show the importance of aviation to the global economy during the closure of much of Europe’s airspace when trade and tourism was deeply affected. This failure means the industry will remain a target for increased taxation, leading experts agreed during the Airline Industry in Turnaround debate.
Paul Kehoe, Birmingham Airport, Chief Executive said the industry’s problem was that it “lacked an Al Gore figure” to promote it. Emirates’ President Tim Clark admitted: “We were too busy trying to sort out the mess to turn it to our advantage and spin it out.”
As a result, airlines received huge compensation bills from passengers. In addition, the failure to lobby properly in the past means the industry now faces an increased taxation burden from Air Passenger Duty.
Colin Matthews, BAA Chief Executive, said airlines had become an easy target for a revenue-hungry government. He said the current highest level of APD of £170 compared with a maximum in Europe of Euros 45.
“That is positively encouraging someone to fly a less carbon efficient route by going via one of our competitor hubs,” he said. “It also discourages a Chinese tourist from coming here. France has six times the number of Chinese tourists that the UK gets.”
Clark warned Emirates could easily reconsider its position in the UK if need be and switch capacity to other European hubs.
“People will start to make an alternative choice and possibly fly via Europe. We will do what we have to do as demand falls off, which I certainly hope we will not have to do.”
With goods waiting to be exported on the other side of the world and restaurants empty of tourists here, Colin Matthews BAA CEO said: ‘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.’ Stephen Kavernagh, Aer Lingus’ Commercial Director, added: ‘Air travel can be more effective environmentally than rail, car, bus etc. when you consider use of concrete, steel and other factors.’
Over-reaction to the volcanic ash was another issue, with a third of the world’s airline capacity grounded, agreed senior representations of Aer Lingus, Pegasus Airlines, Emirates, Birmingham Airport and BAA, whose airports include Heathrow and Edinburgh. Kavernagh said, ‘You can’t take chances with safety but there was enough experience globally to have re-opened air space earlier. Prolonged further, many airlines could have gone under.’
Birmingham Airport Chief Executive Paul Kehoe blamed a lack of leadership and credited airline bosses from BA and KLM for getting onto planes to check the severity of the ash. He said 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.’
A current controversy is increase in Air Passenger Duty (APD). President of 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 is one area that has benefitted from routes via the Middle East increasing trade to £300m.
Matthews also warned of the long-term impacts. ‘If it’s more expensive to fly from an UK airport, people will make other choices. The new affluent Chinese middle-class for example will holiday in France – in fact, France get six times more Chinese visitors. ’ Pegasus Airlines’ Sertac Haybat reported that after domestic taxes were lifted in Turkey, revenue increased and passenger figures went from 10m to 20m. ‘European goverments should learn from this.’
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
