Member Article

IoD calls for British aviation shake up

Business leaders have called for a complete overhaul of the UK’s aviation policy, if businesses are to make the most of emerging markets.

A new report from the Institute of Directors (IoD) has shown that 63% of its members think direct flights to emerging markets will be important to their companies in the next 10 years.

Investment bankers Goldman Sachs said that by 2050, they predict that currently emerging markets will make up 70% of the world’s GDP, while figures showed that British trade is 20 times higher in countries linked to the UK with direct flights.

IoD’s report, “Flying into the Future”, which is part of the institutes Infrastructure for Business review, showed several issues that must be addressed.

Figures showed that while the UK’s passenger capacity is well over the number of passengers the country takes, it is not geographically distributed according to demand.

The Department for Transport found that while the five airports in London can currently handle 181m passengers a year, demand could rise to 204m by 2050. Comparatively, no airport outside London will require a new runway until 2040.

IoD also found that the UK’s “hub” capacity must be increased, which means more airports with connecting flights with a wider range of routes.

A more competitive visa system was also one of IoD’s recommendations to make it immigration more efficient, while the institute also criticised the UK for having the highest tax levies on flying in the world.

Recommendations were made to make the most of the current passenger capacity in the UK, and the expand Heathrow airport with a new runway in the future after 59% of IoD members said the lack of a third runway was damaging to inward investment.

A second runway at Gatwick was also suggested, after predictions that demand at the London airport will far overrun its current capacity, Fairer air taxes and better visa and border systems were also on the IoD’s 25 long list of recommendations to the Government.

Corin Taylor, Senior Economic Adviser at the IoD who wrote 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.

“An aviation strategy is not just about laying new tarmac. Runways, transport links, noise and air pollution, tax on flights and the visa system must all be considered together if the UK is to make the most of the huge potential of aviation.

“The world economy is shifting towards high-growth economies, including the BRIC nations: it is absolutely vital that we have an aviation strategy which embraces the enormous opportunities this brings.”

This was posted in Bdaily's Members' News section by Miranda Dobson .