Written evidence submitted by INTERNATIONAL AIRLINES GROUP (ASM0023)

EXECUTIVE SUMMARY

Airspace is a key part of the UK’s national transport infrastructure supporting jobs, trade and economic growth but air travel is severely hampered by airspace design in the UK and modernisation is long overdue. It is striking that British Airways (BA) is retiring aircraft that it equipped with precision navigation equipment and that has been used in modern airspace across the world but cannot be used with the UK’s out of date navigation systems.  Without improvement, 1 in 3 flights are forecast to be delayed by more than half an hour by 2030, modernisation must be delivered to avoid threatening consumer and economic interests.

With active leadership the Government can ensure that the CAA and NATS deliver airspace modernisation in a timely way – a date should be set to complete the London airspace management programme by 2024.

A vital policy step is to recognise that airspace modernisation is needed regardless of any airport expansion. Airspace must be modernised now and any new runway can fit into the new structure, so expanding Heathrow must not be used as an excuse to hold back airspace modernisation.

We recognise the impact that departing and arriving flights have on local communities and we continue to work hard to reduce noise and emissions. But the biggest barrier to airspace change is the political will to make difficult decisions that may upset some stakeholders and please others. We look for a balanced approach in this decision making.

INTRODUCTION

International Airlines Group (IAG) is pleased to submit comments to the Committee’s inquiry into Airspace Management and Modernisation. IAG is the parent company of BA, the largest airline operating at Heathrow Airport, as well as of Aer Lingus, Iberia and Vueling. In 2016, IAG carried over 100 million passengers in 548 aircraft to 279 destinations across the world. IAG is strongly of the view that the modernisation of UK airspace is fundamental to ensuring that airlines can continue to provide consumers with safe, efficient connections to destinations across the world and to deliver the economic benefits that air transport offers the UK.

THE ROLE OF GOVERNMENT IN FACILITATING IMPROVEMENTS TO THE AIRSPACE

Airspace infrastructure, like surface transport modes, facilitates travel for leisure and business and so delivers considerable economic and social benefits. However consumers, whether passengers or cargo-owners, currently experience significant delays due to airlines operating in an airspace structure that has been devoid of significant modernisation for decades. Without improvement forecasts show that 1 in 3 flights will be delayed by more than half an hour by 2030 with the total cumulative cost of delay and cancellation from 2016 to 2030 totalling c.£1bn in 2016 values. Beyond 2030 delays and cancellations will get progressively worse.

Government has a fundamental role in facilitating improvements to airspace by setting the overall policy objectives for the CAA and NATS to deliver. It is vital that Government shows active and positive leadership to ensure airspace is fit for purpose and suitably delivered. The delay to the completion of the London Airspace Management Programme from 2019 to 2023+ can only be considered a failure of this leadership for the end user of the airspace – the consumer.

IAG believes the Government is at last demonstrating the first glimmers of leadership with the recent “Upgrading Britain’s Airspace - Strategic Rationale” paper which outlines the need for modernisation and the plan to deliver it. Now the Government needs to ensure that airspace modernisation and management is given the same attention and priority as our rail and road infrastructure.

As part of its leadership role Government also needs to publicly make the distinction between the need for airspace modernisation and runway expansion in the South-East. Airspace modernisation is needed regardless of a third runway at Heathrow. Government policy should clearly articulate that the London Airspace Modernisation Programme Phase 2 (LAMP2) for lower-level airspace across the London Terminal Manoeuvring Area (LTMA) needs to delivered as soon as possible. This does not and must not wait for the delivery of runway expansion.

IAG is ready to support clear policy and BA has been part of exceptional collaborative work with Heathrow Airport Ltd (HAL) and NATS that has enhanced airport resilience through recent programmes such as Time Based Separation (2015) and future programmes such as Independent Parallel Approaches (2019). However, there is a significant danger that all these programmes will not fulfil their true potential without modernisation of the surrounding airspace. 

THE NEED FOR MODERNISATION, IN TERMS OF THE ECONOMIC AND ENVIRONMENTAL SUSTAINABILITY BENEFITS, AND THE RISKS FOR THE AVIATION INDUSTRY AND WIDER ECONOMY FROM MAINTAINING CURRENT AIRSPACE STRUCTURES

Aviation contributes c.£52bn a year to the UK economy and supports 960,000 UK jobs, pays £8.7bn in tax and continues to be a key driver for future economic growth providing opportunities for millions of holidaymakers and facilitating trade across the UK, Europe and worldwide[1].

The DfT’s “Upgrading UK Airspace – Strategic Rationale” paper outlines the compelling need for modernisation to deal with demand and make sure passengers can get to their destination on time. Commercial air transport is forecast to increase from 2.25m flights in 2015 to 3.25m flights by 2030. This growth in traffic cannot be delivered and the current level of delay cannot be sustained using the legacy airspace structures dating from the 1950’s and 1960’s. A piecemeal approach to airspace modernisation has limited development, despite the fact that airlines including BA have made considerable technical advances significantly optimizing their operations to extract the most from these constraining airspace structures.

The Government should ensure that progressed is delayed no longer. The wider Air Traffic Management (ATM) environment is due to become even more challenging due to the increase in traffic levels across Europe which saw new daily records in 2016 for ATM movements at Gatwick, in the LTMA and in Europe.  The Do Nothing graph from NATS below presents a truly unpalatable picture with the latest forecast indicating airlines can expect total of 5 million minutes of delay annually by 2030. This does not include the impact of a third runway at Heathrow which would significantly add to demand and increase delays without airspace modernisation; indeed IAG considers any new runway as undeliverable without fundamental airspace change.

Source: NATS

By 2020 air traffic delays are forecast to be 13 times higher than in 2015 and by 2030 will be 50 times higher than 2015 levels. 1 in 3 flights would be delayed by more than half an hour by 2030 with the total cumulative cost of delay and cancellation from 2016 to 2030 totalling c£1bn in 2016 values. Beyond 2030 delays and cancellations get progressively worse as demand for aviation grows. High numbers of cancellations would be likely to lead to permanent reductions in flying with increased delays also decreasing the levels of resilience across the air transport network. The experience of consumers, both passengers and cargo-owners, would suffer severely. The impact of this in London, and specifically at Heathrow where the majority of long-haul international routes operate, would be very significant and damaging to the UK economy.

Airspace modernisation improves environmental performance by allowing aircraft to fly more efficiently, using better departure and arrivals routings and operating procedures, including continuous climb and descent, and reducing or eliminating the need to hold arriving aircraft in orbital queues. These improvements will result in lower fuel use and improved carbon efficiency. Industry studies show that they could deliver a potential carbon saving to UK aviation of between 9% and 14% by 2050.

Combined with the introduction of quieter aircraft these improved procedures will deliver the potential to reduce UK aviation noise output by 2050 compared with levels in 2010[2].

THE ESSENTIAL CHANGES THAT NEED TO BE MADE TO UK AIRSPACE, PARTICULARLY THOSE ASSOCIATED WITH THE DEVELOPMENT OF AN ADDITIONAL RUNWAY IN THE SOUTH EAST

AND

PROGRESS OF THE CIVIL AVIATION AUTHORITY’S FUTURE AIRSPACE STRATEGY IN ACHIEVING ITS CORE OBJECTIVES OF REDUCING CONGESTION, IMPROVING SAFETY AND TAKING ADVANTAGE OF NEW TECHNOLOGIES TO ENABLE A MORE EFFICIENT AIRSPACE SYSTEM

There is a clear and compelling need for the entire network system to be modernised to deliver the transformative change that is required to enable UK airspace to meet the challenges of increased traffic in the 21st century.

The negative impacts outlined in the sections above are not new. The Future Airspace Strategy (FAS) was formulated in 2011 to address the need for airspace modernisation and programmes and projects were identified to deliver this and yet the progress to date has been very slow. 

IAG fully supports the approach of FAS groups which has been successful in bringing together different industry stakeholders including airlines, business and general aviation, airports, ATS providers and the CAA to progress the FAS strategy and initiatives. But, with BA’s main hub at Heathrow dependent on well-structured airspace, IAG views the delays to date, and the further anticipated delay in delivering the strategy and in particular the LAMP2 programme, with considerable frustration.

Although the first stage of the London airspace management programme (LAMP1) has been delivered the benefits are limited. The second phase of the programme to modernise London airspace at lower levels, in and around airports, was originally planned to be complete by the end of NATS Regulatory Period 2 in 2019. However, in 2016 the CAA agreed to push back this second phase to be delivered in NATS Regulatory Period 3 (2020-2024) and there is still no firm date for delivery of this programme. A firm commitment to a fixed date is needed from NATS and CAA for delivery within the next regulatory period.

This delay has injected significant uncertainty in the UK FAS programme and will result in the current delay levels being experienced by passengers today increasing and continuing for even longer. It is not acceptable for the Government or CAA to allow the programme to be left with no fixed plan for delivery while consumers pay the penalty. This is a key area where Government leadership can make a practical and positive difference.

The full, transformative benefits of FAS will only be delivered upon completion of the whole strategy including LAMP2. This includes measures such as 18000 feet Transition Altitude, Lower Airspace redesign, RNAV/RNP arrival and departure routes, Performance Based Separation standards, and Flexible Use of Airspace.

The Government consultation on establishing a framework to support the airspace change process needs to not only deliver the policy platform for such changes to be made and delivered. The updated airspace policy also needs to stipulate unequivocally the roles and responsibilities for the DfT and the CAA, and that they are fully focused on working with, and holding NATS to account for, delivery of airspace modernisation. In order to avoid the delays and lack of clarity over responsibilities IAG would suggest that an annual report advising the Secretary of State of progress on airspace modernisation delivery would be a practical way of coordinating work across these different stakeholders with public transparency, and with a single point of accountability to Government.

We acknowledge the reasons for the Government launching the UK Airspace Policy consultation alongside the draft National Policy Statement for Heathrow runway expansion. However whilst it seems that runway expansion has led to a renewed focus on the need to tackle airspace change and modernisation we are concerned this misses the point that airspace modernisation is needed regardless of runway expansion. This tendency across Government, CAA, and industry to link the requirement for new runways to the need for airspace change should be avoided. There is an urgent requirement for airspace change now, as was recognised by the original plan to modernise London airspace by 2019.

Making airspace modernisation simply an adjunct to a new runway risks delaying airspace modernisation further. This is not an acceptable position to IAG, BA or its customers. The remaining parts of the London airspace management programme (LAMP2) must be delivered ahead of Heathrow runway expansion.

The programme delays are particularly disappointing when put in a global context. BA devotes significant resource to the tactical and strategic management of air traffic control, airport and airspace issues to optimise its performance in today’s airspace now and in the future. However the lack of progress in modernising UK airspace over the last 20 years has meant that the aircraft that BA operates in the UK have not been able to fully utilise their advanced navigational capabilities despite being able to use them across the rest of the world. For instance BA equipped its Boeing 777 fleet with on-board navigation systems to enable area navigation routings (RNAV) but the old airspace structures in the UK have not allowed this equipment to be used. These aircraft are now being retired and so will have never been able to use this technology to benefit consumers and communities in the UK by operating more efficiently and precisely. Likewise newer aircraft BA now operates such as the Airbus A380 are forced to use traditional beacon navigation infrastructure despite their advanced on-board technology – indeed the A380 is unable to view raw data from some of the beacons the UK relies upon, as Airbus considered this technology obsolete. London is the only point on the BA A380 network that requires the aircraft to fly inefficient departure routings based on beacons.

Alongside the FAS, other essential changes needed include Government supporting the deployment and use of Performance Based Navigation that conforms to ICAO global standards which virtually all modern aircraft can use in order to fly more precise routes and take advantage of satellite based navigation too. In the interim period leading up to delivery of LAMP2 and runway expansion at Heathrow BA will continue to press for advancement for RNAV/RNP operations in the LTMA.

THE BARRIERS TO MODERNISATION OF AIRSPACE, INCLUDING THE ENVIRONMENTAL AND COMMUNITY CONSIDERATIONS ARISING FROM CHANGES TO THE CURRENT ARRANGEMENTS FOR MANAGING UK AIRSPACE

Fundamentally the primary requirement for modernising airspace is to have a well-defined, robust and stable policy framework for airspace modernisation that clearly articulates the policy of Government. This in turn can then be used to outline clear responsibilities and deliverables for the CAA, NATS and the wider industry. Achieving this will allow local communities impacted by airspace changes to understand the need, process and basis of decisions and to be fully engaged and able to participate in the process. However, fundamentally the biggest barrier to airspace change is political will to make difficult decisions that will undoubtedly upset some stakeholders and please others; noise policy is the prime example.

Due to the nature of legacy UK airspace structures and the piecemeal development of subsequent airspace change BA and other airlines have optimized their operations in order to generate the most available capacity. BA is disproportionately affected by airfield and airspace constraints at its hubs more than any of its European competitors given that the airline operates from both the busiest single runway and busiest two runway airports in the world. However, there is a relative priority within this area as the operational constraints placed upon LHR outstrip LGW. As FAS deployment progresses there is a significant level of complexity in unpicking modes of operation that have been optimized for the current airspace arrangements.

IAG believes that there is a case to review the NATS licence policy of “first come, first served” for managing aircraft in UK airspace. With the delay to the London airspace programme and increasing demand resulting in furthers delays and congestion it may be more appropriate to move to a “best equipped, first served” policy that incentivises airlines and aircraft operators to invest in and deploy newer aircraft navigational technology. Whilst this would represent a departure from accepted practice worldwide London and South-East airspace is the busiest and most congested airspace in the world and so this approach does merit careful review. A further proposal could be to adopt a “first scheduled, best served” approach where airlines and aircraft operators who submit schedules and flight plans first are given relative priority over others. This would avoid scenarios where scheduled operations are being adversely impacted by last-minute “on the day” demands on airspace.

Notwithstanding this we are concerned that there are high regulatory barriers to change. For instance the CAA’s new airspace change process has nearly doubled the time required for the process to take place. Consultation requirements should be proportionate to the size of the airspace change proposed and need to reference back to the overall Government policy principles and objectives.

Government and CAA policy stability coupled with a clear FAS deployment plan will allow NATS and airlines to make the case for investment in equipment and systems to fully exploit new airspace capacity. Government leadership is particularly required to ensure that all stakeholders have confidence to invest and progress the FAS strategy despite the challenges of airspace change.

THE EFFECTIVENESS AND ADEQUACY OF ENGAGEMENT WITH AFFECTED COMMUNITIES WHEN PLANNING AND INTRODUCING AIRSPACE CHANGES AND THE LESSONS TO BE LEARNT FROM RECENT TRIALS, PARTICULARLY AT HEATHROW AND GATWICK

IAG believes that there is a key role to be played by the DfT and CAA when affected communities are engaged in the airspace change process. In order for changes to be made leadership is needed from Government and the regulator in articulating what the process and objectives are and what the sponsors responsibilities are as well. In particular all stakeholders need to work together with local communities to ensure that a repeat of the airspace trials in 2014, where local communities did not feel they had been properly consulted, are not repeated and that trust is built in the process even if the outcomes may not be agreeable to all.

Ultimately whilst every effort should be made to identify the best available solution and mitigations for affected communities the reality is that there is no optimal solution for each and every community. In order to deliver airspace change that meets the Government's overall policy objectives, difficult decisions that are perceived negatively by some communities will need to be made. The Government, CAA and industry must be able to demonstrate that the overall outcomes lower the impacts of airspace modernisation and management across the UK system and take a balanced decision in the overall interest.

IAG will continue to work with NATS, airports and the CAA to do everything we can to minimise the impacts of our operations on local communities. We support the Government policy objectives of achieving the best possible overall outcome on noise, air quality, capacity, safety and environmental performance. The airspace change framework and decision-making process should support these objectives.

THE MERITS OF AN INDEPENDENT AVIATION NOISE AUTHORITY AND DESIRABILITY OF CLASSIFYING AIRSPACE WITHIN THE NATIONAL INFRASTRUCTURE COMMISSION'S REMIT

We understand that the proposed Independent Aviation Noise Authority (IANA) has now been named the Independent Commission on Civil Aviation Noise (ICCAN). In the context of the airspace change process we are concerned that the ICCAN may be used to increase the regulatory hurdles unfairly or effectively become an appeals body. The ICCAN should facilitate knowledge sharing on aircraft noise and contribute to building trust with local communities, but it is not appropriate for the ICCAN to have direct enforcement powers.  We welcome measures to ensure a balanced assessment of noise impacts based on a proper understanding but this could potentially add a further element of bureaucracy to the already revised airspace change process, particularly where communities disagree with a decision or where decision-making bodies want to avoid taking decisions or defer a decision to another body. IAG would encourage the Government to be very clear about whether, and if so how, the ICCAN has a role in the airspace change process.

IAG would support proposals for UK airspace to come under the remit of the National Infrastructure Commission. This would reflect the importance of airspace as nationally significant infrastructure underpinning the UK economy and provide an independent voice on issues that can be highly politically sensitive. Whilst not seeking additional funding for airspace modernisation we would not want to add bureaucracy to the process either.

The Airspace Change consultation contains proposals for ongoing noise management performance to be given to the designated airports - Heathrow, Gatwick and Stansted. IAG is concerned that this would grant significant powers to airports, and would remove the Government’s voice from the noise management performance process degrading the ability for a system-wide view to be taken that is evidence-based and strikes a balance between competing priorities. We would note that both Heathrow and Gatwick are both deemed to have monopoly power by the CAA and it is unclear what safeguards, if any, are in place to ensure that airports will have the appropriate incentives in place to balance their responsibilities towards both local communities and to their airline customers. IAG is particularly concerned about the level of operational impact and possible costs that airlines may face from airport decisions which do not take account of the needs of those paying airport charges and without recourse to any appeal body. IAG suggests the Transport Select Committee considers the impacts of these proposals in their inquiry.

THE UK'S RELATIONSHIP WITH THE EUROPEAN UNION IN TERMS OF AIRSPACE MANAGEMENT AND ANY POTENTIAL ISSUES ARISING FROM BREXIT

IAG is a European company with Spanish, Irish and British airlines and is alive to the difficulties presented by Brexit. However, we do not anticipate a substantial change for the UK in co-operating with other European countries in managing airspace and air traffic across Europe.

Continued participation of the UK in the Single European Sky program (SEASAR) is essential to ensure alignment with the high level European targets which include a 50% reduction in the cost of ATC provision, a three times increase in airspace capacity, a 10% reduction in environmental impact per flight, and a 10 times increase in safety). Although EC driven, the continued delivery of SESAR air traffic control modernisation in the UK is essential for all airspace users following Brexit. A modern, harmonised and synchronised air traffic management system across the whole of Europe should continue to be an ambition to both benefit consumers, airlines and air navigation service providers and enable the UK to keep up with the rest of Europe.

A significant area of concern is EU funding support for FAS and Single European Sky projects where alternative funding sources are not available or to provide impetus to proceed with complex projects. It is not clear whether the UK will be able for apply such funding in future, whether received funding may have to be returned, and whether allocated funding is still available. The FAS runs up to 2025 and is based on funding of up to £200m a year for airspace change projects. If this funding stream is no longer available then the Government may need to provide alternative funding to keep the UK's Future Airspace Strategy plans on track.

13 April 2017