The International Air Transport Association (IATA) has attacked UK aviation policy and called on the British government to transform air transport competitiveness through tax cuts, regulatory reform and bring an end to crippling climate change taxes.
IATA director general Giovanni Bisignani blasted Britain's "punitive policy" on climate change carbon emissions, particularly its Air Passenger Duty now weighing down the industry with GBP2.7 billion ($4.3bn) in taxes.
"Any industry can only take so many knocks before the damage is permanent. The government's policy pillars of excessive taxes, inefficient airport regulation and limiting growth will destroy the UK's proud aviation legacy," he said.
Speaking to the Aviation Club in London, Bisignani noted that aviation supports 1.5 million British jobs along with $76bn in economic activity.
The World Economic Forum's Travel and Tourism Competitiveness report ranks the UK last out of 133 countries for cost competitiveness, 129th on fuel prices, and 121st on ticket taxes and airport charges, he noted.
"While the global industry was cutting costs and improving efficiencies, the regulator allowed BAA a 50-percent increase for Heathrow charges. He was even more generous for 2008-2013, with an 86-percent increase," he said.
On capacity, Bisignani said: "With the decision to abandon plans for a third runway, London Heathrow is becoming a secondary hub. Heathrow has two runways limiting growth compared to other major European hubs with greater runway capacity: Amsterdam has five while Paris, Madrid and soon Frankfurt will have four.
"If building 2,000 metres of runway takes decades, building or upgrading 650 kilometres of rail will take lifetimes. And it will probably take more money than the Chancellor of the Exchequer could write a check for," he said.
On climate change, he said: "This is potty. For an industry that generates nearly $600bn in revenues the margins are pathetic. The 2.7-percent margin that airlines earned last year does not even cover the cost of capital, which is around seven to eight percent. And the margin will shrink to 1.5 percent this year."
