London Luton Airport                            ZAS0057

Written evidence from London Luton Airport (LLA)

Executive summary

Our response to the Environmental Audit Committee inquiry into Net Zero Aviation and Shipping has been set out in two parts: the first specifically looking at LLA and the second, providing a response more generally to the Call for Evidence. This response is in line with our recent submission to the Jet Zero Consultation. In order to pull together our response we carried out a series of conversations across the business and with our main suppliers, including major airlines easyJet and Wizz Air, to understand their position and thoughts on the Government’s Jet Zero consultation, which we are sharing with the Committee as well.

Our response outlines how essential it is for Government to commit and contribute financially to support the sector in making the necessary changes and investments, especially given the devastating financial impacts caused by the pandemic. Additionally, we highlight that a significant barrier to the creation of a more sustainable approach is the slow progress of Airspace Modernisation. Finally, with new and innovative solutions needed and tailored to an airport’s individual circumstances, the planning system needs to be more agile and flexible to meet the development and growth needs of airports. Doing so will foster an environment for innovation and technological and operational developments, aimed at cutting emissions to be carried out.

Part 1

Framing LLA

LLA is unique in the UK aviation ecosystem. The airport is owned by the local authority, but managed, operated and developed independently under a limited-life concession agreement. Based on passenger throughput, LLA has significantly less land space around the terminal and is dominated by short to medium haul traffic. These offer LLA a unique set of hurdles that the airport must overcome to reach the targets set; as well as opportunities which the airport is keen to embrace. For this reason, we urge Government not to pursue a one-size-fits-all-approach as something that might work for a large, privately owned hub, may not work for a small publicly owned airport like LLA.

From LLA’s perspective, there are three lenses through which we have viewed the Government’s roadmap to net zero aviation which we have outlined below:

1) Ownership structure - The ownership structure of LLA means that it is owned 100% by the people of Luton, as its freeholder is Luton Borough Council. However, the airport operator (supported by shareholders AENA and AMP) holds the concession to manage, operate and develop the airport until 2031.

• This means that the investment opportunity is difficult for the shareholder in terms of securing return on investment in sustainable technology (usually longer than a 10-year life span)
• Luton Borough Council (LBC) has been badly impacted by the pandemic which may limit their scope for long term investment in sustainable technologies such as renewables, fleet and gas
• For this reason, Government needs to ensure a level playing field for airports – especially following the pandemic

2)      Limited available land space - LLA is ultra-efficient in how it utilises its land space, meaning that, like other airports in the UK, there is very little unused land available to develop the infrastructure and technologies needed to decarbonise the airport and to support the airlines and surface access requirements.

• The challenge of simultaneously testing and developing new and old technologies cannot be underestimated
• LLA’s runway is 30% shorter than the length required by airlines for long haul flights (with no easy option to extend it due to the topography). This can be a barrier to implement new technologies in the future such as hydrogen powered aircraft which may need a longer runway. Therefore, consideration needs to be given around the practicalities of new technologies in the real world to avoid inefficiencies in the system, e.g. underutilised airport capacity
• To make matters more challenging, airports are restricted by strict planning criteria which delays an airport’s capability to embrace new sustainable solutions. A solution is therefore needed for the paradox between the Net Zero regulation which requires speed of change, and planning regulation which limits our capability to respond to the challenge

3)      Low cost and short haul airlines – The makeup of the fleet at LLA is also an important feature to explore as LLA hosts primarily short to medium haul flights, through our main low-cost carriers - easyJet, Wizz Air and RyanAir.

• Through our airline partners LLA has one of the youngest, most efficient fleets of any UK airport and has already welcomed new technologies such as the NEO and 737 MAX. These aircraft are already making a sizeable impact on reducing emissions and noise at the airport.
• To avoid distorting airline competition (resulting in an increase in airfares) and potentially diluting the speed of innovation, blunt and draconian levies placed on passengers must be avoided  

Key Asks and Solutions

Having outlined some of the challenges we face at the airport, we outline some of the solutions to the above challenges:

1)      Financial support - The pandemic has presented an existential threat to LLA which is still struggling to recoup funds lost, as travel is only slowly begining to pick up again. Therefore, it is vital Government commits to provide financial support for the sector to bring about and accelerate investments in green technology. For example, a package of tax breaks and financial incentives, similar to those offered to nudge people into buying Electric Vehicles (EV), to specifically help modernise airport infrastructure to adapt, become more efficient, and install new technologies. These incentives could be:

-          Support to minimise the risk linked to some of the infrastructure and technology solutions needed at speed

-          Create a ‘Net Zero Capital Fund’ and ‘Green Bonds’ linked to aviation. Not only this would provide returns but also carbon stewardship to ESG focused investors

-          Government grant schemes and incentives for investment in infrastructure (e.g. similar to UK grants on EV charging infrastructure)

2)      Airspace modernisation – One of the easiest short-term solutions is to speed up the ‘Airspace Modernisation Programme’. This will enable airlines to be more efficient and reduce fuel burn. Government needs to take a more active role in airspace modernisation with a focus on supporting the wider sustainability agenda.

-          As well as delivering airspace modernisation by 2030, Government must start looking into what should happen after this has been implemented. How can the UK better maximise its airspace beyond 2030?

-          From an airport perspective, the next logical step is to implement Airport Collaborative Decision Making (ACDM) which improves the efficiency and resilience of airport operations by optimising the use of resources and improving the predictability of air traffic.

-          However, unlike other airports, LLA depends on the successful implementation of the Airspace Modernisation Programme in order to implement ACDM. Additionally, the CAA should be adequately resourced to deal with the number and scale of the changes.

3)      Planning Flexibility – With new and innovative solutions needed and tailored to an airport’s individual circumstances the planning and regulatory system needs to be more agile and flexible, designed to promote innovation and environmental gains.

-          One such idea could be to follow similar principles applied in the creation of ‘Freeport zones’. That is to designate airports as zones which benefit from: 

• Simplified planning processes for the implementation of Net Zero technologies 
• Investment opportunities for new technologies and infrastructure solutions 
• Tax breaks and financial incentives that reduce barriers to entry for SME’s and others who can accelerate decarbonisation

Conclusions

It is essential for Government to commit and contribute financially to support the sector in making the necessary changes and investments. We therefore call on Government to provide a package of support which enables airports to modernise infrastructure and adapt to becoming more efficient.

Additionally, a significant barrier to the creation of a more sustainable approach is the slow progress of airspace modernisation. Airspace needs to be modernised quickly and effectively to improve efficiencies, such as getting planes to a higher altitude faster.

To foster an environment that is conducive to the new and innovative solutions that are required, the planning and regulatory system needs to more agile and flexible. The creation of unique ‘zones’ which promote partnership, reduce obstacles and incentivise change should all be part of the Government’s ‘toolbox’ for working with the sector to deliver on the Jet Zero strategy.      

We hope you have found our contribution helpful, and we would be delighted to discuss any areas further with the Committee.

Part 2

Response to Call for Evidence questions:

LLA supports the positions laid out by other industry bodies such as Sustainable Aviation and the AOA such as:

a)      Develop aircraft and engine technology R&D capabilities, ensuring the UK is among the first in the world to develop hybrid and electric aircraft;

b)      Accelerate UK airspace modernisation, to make use of new aircraft performance capability and reduce emissions and noise;

c)       Speed up the development of SAF and other biofuels; and

d)      Progress robust carbon offset measures and carbon removal technologies.

Timeframes

LLA takes its role in cutting carbon emissions and meeting the 2040 target for Net Zero seriously and we would like to see how Government intend to support this timeline more clearly. Additionally, in light of the pandemic, it is clear that more Government support is needed to help airports and airlines reach these goals. Many airports are working to be net-zero through the 2030s, so we believe a net-zero obligation for 2040 would be workable.  However absolute zero poses major challenges.

The move to newer technologies and fuels, electrifying ground fleets and becoming more efficient will require LLA to operate in a different way which will come with a whole new layer of training as well as the fact that there are still a lot of unknowns. However, the sector will only be able to meet these ambitious targets if Government continue to support the development and deployment of SAF, hydrogen, electric planes as well as new technologies to help on the ground.

Efficiencies

There are a number of changes to day-to-day operations which could further help to promote the Net-Zero agenda. Combined with action on aircraft and engine technology R&D, airspace modernisation, and carbon offset and removal, the UK could build a world leading sustainable aviation sector. This will help contribute to a wider UK green recovery, helping the UK bounce back from Covid-19.

LLA works hard to measure and reduce emissions with a proven track record of doing so on the back of a growing number of passengers using our facilities. For example, the deployment of LEDs, energy efficient heating systems, the pooling of ground handling equipment and the use of electric vehicles. However, to improve this further there should also be incentives to encourage operators to use more efficient energy sources on old infrastructure.

In addition, a concern for many airports is that local authorities do not have the resources to provide these incentives and therefore should be assisted by DfT, potentially via the spending review, to accelerate aviation becoming a more environmentally friendly sector.

LLA are also looking at new types of technology to trial, such as electric buses, electric tugs and fire engines and would welcome co-operation from DfT to ensure that the newest and most transformative technologies are used. The move to electrifying the ground fleet will require LLA to roll-out skills training to ensure that new technology is maintained properly.

However, government, the industry and the regulator all need to think more creatively about how electricity can be used at airports, for example if fields around airports can be utilized to increase sustainability.

Regarding modal shift, for those that are unable to use public transport, we are eager to promote more electric vehicles to be able to use the airport and LLA are hoping to have 10% electric chargers on sight. However, there are logistical issues around this, such as how can cars be left on charge for the full period of a holiday. We are looking at valet parking models that could be developed to support this.

Additionally, in early 2022 LLA will be opening the DART system which will remove the need for the diesel bus service from Luton Airport Parkway to the terminal building with an electrified monorail, supporting customers to switch their transport habits and improving surface access.

Sustainable Aviation Fuels

SAF is a good starting measure as part of the wider transition to Net Zero. However, Government needs to encourage investment into SAF and give confidence to the market for further development so it can become a more significant part of the journey to Net Zero aviation.

We also echo industry calls on Government to support emerging sustainable aviation fuels sector by committing £500m to early stage projects. By promoting sustainable fuels, many aircraft which sit on stands for long periods of time will be able to reduce their emissions. This will go a long way in reducing airport overall emissions.

It is important that the Government encourage collaboration between fuel providers and airports and give fuel providers incentives to invest in airport SAF. Even with the decarbonisation of the rest of the airport structure, without a solution to the pollutants from the flights then targets will not be met.

As part of our work with FlyZero, we are looking at what is required to cut emissions and improve SAF and Hydrogen, including how it should be stored.

This will require smarter policies and secure global green investment funding, particularly for scaling up sustainable aviation fuels and carbon removal as well as continuing to mature aerospace technology solutions.

Zero Emissions Flights

Our conversations in compiling this response have revealed that many of our airline carriers are more focused on the introduction of Zero Emissions Flights than SAF. SAF is seen as a short-term solution, whilst also more applicable for long haul flights, which do not operate out of LLA.

The FlyZero group is working on understanding what airports would need to support new aircraft such as electric or hydrogen. Some of this research is looking at how airports can supply more hydrogen on wings and the different designs that aircraft might take, which will reflect the need to adapt runways and stands. Although FlyZero discussions are still at early stages, it is clear that we are not looking for a like-for-like replacement to what is already produced. As reflected previously, storage of either hydrogen, SAF or electricity is going to require different processes and potentially needs to be handled in a more delicate manner meaning LLA will need to adjust its operations.

In regard to hydrogen specifically, we know this is a technology is favoured by one of our major airlines, but there is still a lot of unknown. Before it can be used for passenger flights, we need to build a better understanding around the impact of spillages particularly the potential effect on the water supply and how it can be stored. There also needs to be further research examining its impact on passengers and the airport. Hydrogen can be dangerous, therefore those in the sector and Government must work on this to build trust in passengers for the future usage.

This should go hand in hand with a more detailed plan of action for the aviation industry from Government that is also supported by the R&D investment needed to ensure the new technologies are on time and can deliver their ultimate aims.

September 2021

Appendix

About LLA

• The airport is owned by the local authority, Luton Borough Council through its specific operating company London Luton Airport Limited (LLAL) but it is managed, operated, and developed on a long-term concession agreement until 2031 by London Luton Airport Operations Limited (LLAOL)
• LLAOL is wholly responsible for the running the airport for its 100% shareholders, global airport operator AENA and specialist investment manager AMP Capital
• This response is from LLAOL, responsible for complying with the current planning restrictions set by the local planning authority (Luton Borough Council). Some of these restrictions relate to night noise.
• LLA is the fifth largest airport in the UK and carried 18 million passengers in 2019, an increase of 8.6% on 2018
• The airport indirectly employs over 9,400 staff and is a key economic driver for the Three Counties (Beds, Herts, Bucks) region
• A £160million redevelopment programme to transform the airport and increase capacity to 18 million passengers per year by 2020, including the complete redesign of the terminal, was completed in December 2018
• A £225million mass passenger transit system that will directly link Luton Airport Parkway station and the terminal building is currently under construction and is due to go into operation in 2021
• We have published a responsible ‘Responsible Business Strategy’ which outlines how we intend to play our part in making aviation sustainable.  We are committed to achieving Net Zero by 2040