Airline Industry

Part of the debate – in Westminster Hall at 10:17 am on 14th November 2001.

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Photo of Mr John Wilkinson Mr John Wilkinson Conservative, Ruislip - Northwood 10:17 am, 14th November 2001

I am grateful to my hon. Friend Mr. Wilshire for this timely debate. Like his constituents, many of mine work at Heathrow and depend for their livelihood on the vigour, strength and prosperity of the airline industry, and that is the case throughout west London. The industry is crucial to London's economy as a whole. The London airport system includes Heathrow in the west, Luton in the north, Stansted to the north-east, City, and even the two business airports at Farnborough and Biggin Hill. It is important to our country's prosperity that we develop policies that will revive the airline industry, which has suffered acutely not just from the economic downturn but from the acts of aerial terrorism on 11 September. Obviously, confidence in the industry will have been further shaken by the recent tragic accident involving an American Airlines airbus in New York.

It behoves us all to see what we can do to help the industry. I am sure that most hon. Members were deeply impressed by the lobby from airline workers last week. I addressed a huge meeting, as did other hon. Members, at which I said that the Government must introduce a policy for the air transport industry at the earliest possible date. As my hon. Friend made clear, that is overdue and now is the time to do it.

No decision would give greater confidence to the industry and the travelling public than a favourable decision on T5. The opening of that terminal as early as possible—my hon. Friend says that it could not be done before 2007—would help British Airways to consolidate its operations at Heathrow. It would also assist the smooth flow of passengers. The current terminal system was designed for a maximum of 54 million passengers a year, but around 62 million a year now use it in conditions of some discomfort. That must be rectified by the construction of the overdue fifth terminal and improvements to the surface transport system to help to bring passengers more smoothly and easily into the fifth terminal and into Heathrow for the benefit of our airlines. The airport needs railway links from Reading and Waterloo, the construction of the M25 motorway spur and, last but not least, the crossrail link. Surface transport access is an important determinant for passengers in deciding from which airport to depart.

It is noteworthy that in October passenger numbers fell by 12.7 per cent. at Gatwick and some 20 per cent. at Heathrow, but increased by 4.9 per cent. at Stansted. To a large extent, that was because north Atlantic traffic suffered severely after the aerial terrorism in the United States in September. Numbers fell by one third at Gatwick and Heathrow. Regional traffic and intra-European traffic has not been so adversely affected and airport passenger figures have increased not just at Stansted, but at Scottish airports. It is interesting that low-cost carriers such as easyJet, Ryanair, go and buzz and, to some degree, British Midland are weathering the storm more effectively than the high-cost flag carriers.

In the aftermath of the demise of Sabena and Swissair and, most recently, of Canada's No. 2 carrier, it is instructive to ensure that the European Commission produces measures on a European scale to allow a competitive environment to exist while tiding the industry over its current difficulties. I note that the Belgian Government are to be permitted to make a temporary loan of some 125 million euro to Delta Air Transport, Sabena's subsidiary. That may be acceptable if it is temporary, but long-term subsidies such as those described by my hon. Friend are not acceptable. The Government must either eliminate the passenger departure tax or, perhaps more intelligently, allow its revenue to be applied to airlines for the provision of the security measures necessary in the current emergency situation. It is also necessary for the Government to bear part of the burden of insurance costs on a more continuing basis and that they reimburse the revenue lost during the four days when north American airports were closed.

Last, but not least, I hope that in pursuing a competitive strategy, Her Majesty's Government will encourage the confidence necessary to get passengers back into aircraft. They have done so to some degree with the Prime Minister's flight to the United States on Concorde, and the re-establishment of the Concorde service across the Atlantic by Air France; and British Airways symbolises the determination of the European airline industry to get back in the business and not to be put off. I was pleased that the Minister for Transport also went on the inaugural restored Concorde service.

In pursuing that competitive strategy, I hope that airlines will also play their part. British Airways must not only consolidate, as Mr. Eddington wishes to do, with other European carriers, such as KLM, but move towards meeting the needs of the majority of the travelling public by attracting more passengers back into aircraft. It should not devote its attention to premium traffic, which has been its strategy in recent months.

I am pleased that my hon. Friend secured this debate and I am confident that the industry will be restored to strength, but that needs the support and encouragement of Her Majesty's Government.