Airport Operators Association                            ZAS0055

Written evidence from the Airport Operators Association

Introduction

This response is submitted on behalf of the Airport Operators Association (AOA), the trade association representing the interests of airports across the UK. The AOA represents over 40 airports, and is the principal body engaging with the UK Government, Parliamentarians and regulatory authorities on airport matters.

The AOA welcomes the opportunity to respond to the Environmental Audit Committee’s inquiry into net zero aviation. UK airports are committed to delivering growth sustainably, working with Government and industry partners to address carbon, noise and air quality impacts. To deliver on ambitious targets, the UK aviation industry will require a framework which is long term and predictable, allowing the industry to make long-term investments without the danger of ‘moving goalposts’.

The AOA is proud to be a member of Sustainable Aviation (SA) – the industry coalition of airlines, airports, aerospace manufacturers and air navigation service providers seeking to address the external impacts of aviation. The AOA refers the Committee to SA’s Decarbonisation Road-Map and its submission in response to this consultation for full detail on industry views on aeronautical emissions – the AOA endorses and supports that response. This AOA response focuses on the key issues from an airport’s perspective and will set out any areas where we have views separate to those of SA.

The role of aviation in the UK

Airports are the engines of growth. Pre-pandemic, aviation contributed more than £92bn to the UK economy, supported more than a million jobs and provided more than £8 billion in tax revenues to the Exchequer.

Aviation provides essential connectivity for UK exporters, businesses relying on imports and inward investors. 49% of the UK’s non-EU trade by value travelled by air in 2017, predominantly in the belly-hold of passenger planes.[1] This is higher than most other European countries, who ship between 20%-40% of their goods by value by air. Germany, for example, ships just 25% of its non-EU export value by air. Only Ireland ships a greater share of its non-EU exports by air than the UK.[2] For example:

• Manchester Airport opened new routes to Hong Kong (2015) and Beijing (2016) in recent years. This satisfied an existing demand from businesses, investors and tourists but also drove significant new economic activity. Since opening, these routes have stimulated demand from the North by more than 20% and reported an increase of inward investment of more than £500 million. Prior to the pandemic, frequencies were increased in response to that demand, offering greater choice for consumers[3];
• The Emirates route from Newcastle to Dubai was so successful that Emirates upgraded its capacity ten years after it started. UK Trade & Industry analysis shows that trade between the North East and Australasia has grown from £150m in 2007 to over £360m in 2015. The value of exports flown out of Newcastle has grown from under £20m in 2006 to over £350m in 2016;

Furthermore, business use travel to connect to customers, travel to trade fairs and service their products abroad. In 2019, 10% of UK residents travelling abroad did so for business.[4] On the inbound side, 21% of visits to the UK by people from other countries were for business purposes (account for 20% of visitor spending in the UK, around £5.7bn).[5]

Tourism businesses rely on aviation, with around 75% of visitors to the UK travelling by air each year.[6] As a result, aviation supports more than half a million jobs in the tourism and travel industry.[7] For example, prior to easyJet’s route between Edinburgh and Hamburg, travelling there was inconvenient as people had to go via a hub airport. Following easyJet’s introduction of that route, travel between the Hamburg area and Scotland increased tenfold. 80% of that travel was Germans coming to Scotland.[8]

Furthermore, aviation plays a major role in UK society: 52% of the UK population flew at least once in 2019.[9] Not only does aviation enable millions to go on holiday, but it is also vital to people visiting family and friends abroad. In 2019, 25.3% of visits abroad by UK residents was to visit friends and relatives[10], while 30.4% of visits by people resident outside the UK were for that purpose.[11]

However, this once booming sector has suffered its worst crisis in aviation’s history due to COVID-19. Between April-Dec 2020, passenger numbers were down nearly 90% year-on-year. This has had some major economic impacts:

• Economic output for the air transport sector between Feb -Dec 2020 reduced by 89%.[12]
• On 30 June 2021, 58% of staff in the air transport sector were still on furlough.[13]
• Research by business consultancy Steer for the AOA shows that by 2025, between £32 billion and £95 billion of industry GVA is projected to have been lost relative to 2019.

The stated intention of the Government is to establish the United Kingdom as a ‘Global Britain’ trading with the world. Post-Brexit, the quality of our aviation connectivity will become even more important to making Britain an attractive and competitive place to invest and do business. There is an opportunity to ensure that aviation builds back better and provides the necessary connectivity for a globally trading UK through an improved air connectivity network than in 2019, but not at 2019 emission levels. This would build on the UK’s existing aviation and aerospace strengths, creating green aviation jobs and expertise that the UK could then export.

Moving towards net-zero aviation

Along with SA, the AOA was part of the UK aviation’s industry’s commitment to reaching net-zero aviation emissions by 2050, a world first for a national aviation industry. Despite the pandemic, the AOA and the aviation industry as a whole continue to stand behind that commitment.

The AOA therefore supports the UK Government’s proposal in the Jet Zero consultation for international aviation to be net zero by this date. We also agree with the UK Government that a trajectory should be set for achieving net zero by 2050, on a net basis. A plan that allows unlimited greenhouse gas emission increases in interim or where reduction is backloaded will not be credible. However, the transition to net zero will not a straight line and the government’s plan should allow for this, due to the long investment horizons in aviation and the expectation that some crucial technologies, such as hydrogen or electric propulsion, will not come to market until the 2030s or 2040s. As the SA interim targets for 2030 and 2040 suggest, this means that proportionally more of the progress may come towards the end of the period to 2050.[14] Regular reviews would allow for changes to be made and policies to be adapted to emerging realities.

On the proposed 2040 net zero target for domestic aviation, the AOA believes that this could be possible but only with an early view of how this would be achieved and government support for development and deployment of the solutions. We would note that, for example, on sustainable aviation fuels, the UK Government has not moved as fast as the SA Sustainable Fuels Road-Map had assumed for areas such as investment support and that this has pushed back commercialisation and thus deployment of sustainable aviation fuels in the UK.[15] The need for government support would be especially true where substantial investment would be required in fixed ground infrastructure to achieve it, e.g. electric power for aircraft.

It is vital that we have an appropriate path to achieving this target: maximising our carbon reduction at the lowest cost to the consumer, the UK economy and the aviation industry. The Committee rightly noted in its Call for Evidence that aeronautical emissions are some of the hardest to eliminate without substantial disruption to society. There is clearly a unique and distinct set of challenges in this.

While airports are essential for aviation and will play an active part in enabling others in the industry, such as airlines, to reduce their emissions through the necessary ground and airspace infrastructure, the characteristics of airports’ own emissions issues are not ‘aviation’ emissions as such, but rather are more of a type with other forms of ground infrastructure – i.e. the construction and/or operation of roads, sea ports, railways (including stations/freight terminals), retail centres, distribution centres etc. The AOA believes that airports’ non-aeronautical related emissions may be better dealt with in line with those facilities, rather than aeronautical emissions as some proposals in the Government’s Jet Zero consultation suggest, with which airports’ buildings have a limited amount in common.

The role of operational efficiencies

Airspace modernisation

An important part of aviation’s journey towards Net Zero for aeronautical emissions, as set out in SA’s Decarbonisation Road-Map[16], is airspace modernisation. Importantly, this will be delivered way ahead of the industry’s ambitious plans for SAF and electric aircraft.

Upgrading UK airspace became Government policy in 2018 and in 2019, the Airspace Change Organising Group was set up to coordinate a masterplan for modernisation between airports and NATS. This work was paused during 2020 because of the pandemic, but it has now remobilised, in large part due to crucial Government funding for airports’ work to reach the next stage of the modernisation process. Consultation with local communities is a vital part of that modernisation process for airports.

Airports are required to upgrade their local airspace below 7,000ft while NATS, the UK’s main air navigation service provider, is responsible for modernising the network of airspace routes that sits above that. This is happening already. Within NATS’ responsibility at network level, Free Route Airspace (FRA) will be implemented in Scottish Upper Airspace in November 2021. FRA means pilots can determine their own optimum route through certain blocks of airspace. Modernisation of network airspace above 7,000ft in the West of the UK will go to consultation this summer, along with proposals for FRA in the upper airspace in the same region. Proposals to separate arrival routes for Luton and Stansted airports will be submitted to the CAA very shortly.

Upgrading airspace aims to optimise the routes airlines fly, reduce the potential for congestion and delay as well as reduce overall noise impacts for communities around airports. The current network of aviation routes was designed in the 1950s and gradually expanded. It was designed for aircraft that flew lower and slower than modern aircraft. While aircraft have modernised since then, the fundamental structures and technology underlying airspace has not kept pace. Moreover, when airspace was designed in the 50s and 60s, it was never envisaged that it would need to cope with the volume of flights – over 2.5 million a year – that it did in 2019. 

Upgrading airspace with existing technology, such as satellite-based navigation, will make it easier for today’s aircraft to fly more direct routes, with quicker climbs to more efficient cruising altitudes and later descents to help reduce emissions, as well as provide opportunities to reduce the noise footprint on the ground.

Modernisation offers the potential to reduce aviation emissions by around 5% by 2050, while also accommodating a doubling of passenger numbers. Airspace changes made over the next few years will mean less airborne holding and fewer miles flown per aircraft, resulting in less fuel burn and CO2 emissions. Without a wholesale upgrade of UK airspace, CO2 emissions would be expected to rise by 8-12% per flight compared to current levels.

However, it is important to note that In the airspace that airports are responsible for, reducing noise impacts where possible is the priority in line with the Government’s Airspace Strategy. This may mean that aircraft do not use the most efficient route from a decarbonisation perspective.

While the initial funding from government to ensure all airports achieve the next stage (stage 2) of the airspace modernisation process has been of great value, we would urge the Committee to recommend that Government should provide further funding to ensure full delivery of airspace modernisation by 2025 (to fit with first check point on progress against the plan). As we have made clear to the Government and the Transport Select Committee in response to their enquiries, there is also a role for Government to promote the overall need for modernisation and ensure communities understand how the local consultations fit in with wider efforts in aviation to reduce noise and emissions and that this is part of a global move through ICAO, EUROCONTROL and other organisations towards the next generation of air traffic control and airspace management, known as performance-based navigation.

Reducing emissions at airports

Airports have, in the past decade, invested significantly in green infrastructure to reduce both emissions from aircraft and other third-parties such as ground handling companies at their airport, but also the airports’ own emissions.

For airport operations, this has focused on improving energy-efficiency in airport buildings, purchasing renewable electricity and generating electricity from renewable source on or near-to the airport. Airports are also investing in low-emission or zero-emission vehicles, such as electric shuttle buses to car parks landside and aircraft stands airside. To reduce private car journeys to the airport, a number of airports have also introduced charges for “kiss and fly” journeys as a way of disincentivising these types of journeys, benefitting both air quality near-to the airport and encouraging modal shift to reduce emissions. Renewable heat generation remains a major challenge across the UK economy, and thus also at UK airports. However, some airports have implemented renewable heat initiatives, such as Heathrow Airport’s biomass plant that generates heat from sustainable wood chip and Gatwick’s biomass drier and boiler that generates heat from organic waste collected at the airport.

To support other airport users in their emissions-reduction journeys, airports have put and continue to invest in sustainable infrastructure. This has included electric vehicle charging infrastructure airside (for ground handlers, etc.) and landside (for passengers, staff and others travelling to the airport) as well as on-stand electricity for aircraft to reduce the use of aircrafts’ Auxiliary Power Units (APUs). For some long-haul, wide-bodied aircraft, pre-conditioned air can also be a way to reduce emissions and where appropriate, airports have invested already or are investigating what would work for their fleet mix.

As sustainable aviation fuels are drop-in fuels, used as part of a mix with jet fuel, airports’ fuel infrastructure is ready to supply sustainable aviation fuels to aircraft, once supply comes on stream in the UK. For alternative power sources, such as electricity and hydrogen, a number of airports are part of research initiatives into these to generate an understanding of how airport infrastructure would have to adapt.

The AOA believes there are further opportunities to build back sustainably in and around airports. In normal times, most of these would be (part-)funded by airports and the wider aviation industry. However, the COVID-19 pandemic has had a devastating impact on airports’ balance sheets as a result of losses amounting to billions of pounds. This has meant that airports have had to cut back planned significant if not most of the capital investment they had planned, including in sustainable alternatives to existing operations. There is a risk that the pandemic’s medium-term impact will result in lower levels of capital investment in the coming years. This should not lead to a hiatus in the industry’s steps to reduce its environmental impact: the coming years cannot and should not be lost years. That is why the AOA recommended in our UK Airport Recovery Plan[17] that the UK and devolved governments should step in and bridge the funding gap.

One recommendation in the AOA UK Airport Recovery Plan was that a Green Airports Fund be created. This could bridge the funding gap with grants for power infrastructure for aircraft, scrappage and conversion grants to grow low emission or zero emission airside vehicle fleets, renewable electricity and heat generation and other sustainability initiatives. We would urge the Committee to consider recommending such a fund in its report.

Longer term, further support for charging infrastructure for electric aircraft and/or hydrogen production/delivery would be required to facilitate infrastructure being ready for significant use of zero-emission flights. For electrical power, this would include addressing quantity of supply to the airport as well as charging infrastructure at it. Clarity would need to be given regarding the status for airports’ carbon footprint of electricity supply for zero-emission planes prior to decarbonisation of electricity supply, anticipated for 2035. The AOA believes the Committee should consider what role the UK Government has in ensuring essential infrastructure is in place for zero-emission aircraft.

Other areas of operational efficiencies

In the UK Government’s Jet Zero consultation, a proposal is included to look at variation in slot regulations and landing charges to take account of environmental factors. A number of airports already vary their charges to airlines based on the environmental performance (noise and/or emissions) of the aircraft used. While the setting of charges (other than at Heathrow and London Gatwick, where the CAA has a regulatory role) is a commercially negotiated agreement between airlines and airports, a clear framework on environmental pricing structures could be helpful so that, where differentiation is applied, it can act in a co-ordinated fashion to help promote change with UK aviation.

As regards including CO2 charging in the slots system, the AOA believes this should be addressed in the upcoming 18-month World Airport Slot Guidelines review first as this is likely to look at environmental drivers for efficiency. If then needed it can be looked at in the five-year Jet Zero review process. But compared to the importance of delivering the commercialisation of sustainable aviation fuels with government policies to de-risk initial investments, airspace modernisation, etc. slot reform is not a priority for next few years.

The role of taxation in the move towards net zero

Currently, Air Passenger Duty (APD) is a blunt revenue-raising tool, based on the distance flown. It has no environmental credentials, as it does not take account of environmental performance of different aircraft, for example. It could, however, be changed to take better account of environmental impacts. The AOA believes there is a role for taxation in enabling the transition to net-zero aviation and urges the Committee to consider this further.

For example, a reduced APD rate could encourage the uptake of sustainable aviation fuels. When sustainable aviation fuels are available in sufficient quantities to be commercially viable, those flights operating with high levels of such fuels could benefit from lower APD rates, thus help offset the costs involved. Zero-emission flights could even be exempted from APD in future, incentivising the take-up of zero-emission technology as it becomes available for commercial use.

Managing demand for aviation

As set out at the start of our response, aviation plays a vital role in the UK economy and wider society and as a result of this, there is growing demand for aviation. As the SA Decarbonisation Road-Map has shown, this growing demand can be met sustainably, with the right investment climate, UK government support and an international approach through ICAO. This should be the focus of our efforts, rather than managing demand.

In the UK, unlike in European countries, international rail is not viable for a majority of the population to travel to their desired destinations. That means any demand-management policies could not encourage modal shift, leaving pricing people out of travel as the only viable alternative to manage demand. This would have profound social and economic effects, for example for those with lower incomes who could be priced out of the opportunities afforded by international travel, including work or study abroad. Another example is that more than a quarter (3.8m) of children under 18 currently living in the UK have at least one parent who is born abroad, meaning that the impact of demand-reduction measures on families cannot be underestimated. The pandemic has given an insight into the mental health impacts travel restrictions have on people with relatives of friends abroad, with many missing out on life events such as births, weddings and funerals.

Similarly, while the pandemic has shown that business can, to an extent, continue virtually, generating new business and maintaining existing business relations does often require face-to-face contact. Airports have been told by local businesses and business groups of companies have lost out on new export opportunities due to travel restrictions, for example. Increasing the cost of travel to manage demand could make UK business offers uncompetitive internationally.

Moreover, aviation is a global industry and national measures have a more limited impact as a result. The impact of demand management measures is likely to be that airlines seek routes for their aircraft elsewhere. This would harm UK connectivity, just as the UK Government aims to increase its global reach, while not significantly impacting greenhouse gas emissions. These emissions would simply shift somewhere else. Investing in the decarbonisation of aviation, however, would enhance the impact of UK measures as it would take on a global leadership role, enabling UK innovation and products in aviation and aerospace to have an impact across the global aviation industry. For example, the UK initiative of Continuous Descent Operations (reducing noise impacts and emission) in the early 2000s has been taken up in countries across the world.

The AOA would strongly urge the Committee to recommend measures and proposals that seek to accelerate the decarbonisation of UK aviation, rather than reduce demand for it. This would ensure that aviation is treated the same as other forms of transport, such as car use, where the focus is on decarbonisation rather than limiting travel opportunities.

An airport-specific target

In its Jet Zero consultation, the UK Government proposes that airports in England should be singled out for a specific different early target date for net zero. The AOA disagrees with this approach.

As noted above, emissions from airports do not fall under aeronautical emissions as such and emissions from airports’ own operations and the non-aeronautical emissions by third-parties operating at airports are already included in the wider economy’s target for net zero by 2050 (2045 in Scotland). The AOA sees no reason to single out airports from the wider economy and bring forward the target date to 2040 for English airports specifically.

Indeed, instead of placing additional costs and burdens on English airports, the UK government should let airports channel their investments into the technologies and solutions that support the decarbonisation of in-flight emissions (the bulk of the aviation sector’s emissions). We would anticipate that this would have a higher impact in terms of carbon reduction per pound spent than removing the final marginal percentages of airports’ scope 1 and 2 emissions.

The logical pathway towards decarbonising airports is in line with other similar major infrastructure / commercial sites in the UK. Airports have characteristics in common with such diverse facilities as seaports, rail freight terminals, shopping centres and production/manufacturing sites and so should be dealt with in line with these sites.

For example, all these sites share the common challenges of making heat generation more sustainable and net-zero compliant. A society-wide solution is needed on renewable heat generation, which airports would then fit in. If an absolute zero solution for gas for heating is not delivered by 2040, under the government’s proposals, airports would then be exposed to significant risks and potential costs, in contrast to the rest of the economy and their transition to net zero.

Increasingly, businesses across the economy have set, or are setting, their own targets for achieving net-zero. This includes airports and several have set a net-zero target date in the 2030s for emissions from airport operations. These voluntary targets show that the airports sector is taking its responsibility, negating the need for the UK Government to mandate it across England and singling out airports from the wider economy for no clear reason.

For further information, please contact AOA Head of Public Affairs & PR Henk van Klaveren

September 2021