“AIRPORT SLOT LEASING COULD RAISE £10 BILLION FOR GOVERNMENT” – SIR RICHARD BRANSON

Richard Branson today called for a radical review of global aviation policy including the removal of restrictive ownership and operational regulations and the creation of a free market in take off and landing slots – which could raise up to £10 billion. The money raised could remove the need for the unpopular Air Passenger Duty or provide airports with funding for vital improvements in airport infrastructure.

Richard Branson was speaking at the “Future of Air Transport” conference in London where he launched Virgin Atlantic’s Aviation Manifesto “Freedom in the Skies“. The main elements of the manifesto are:

· The creation of a Trans Atlantic Common Aviation Market, encompassing US, Canada, UK and rest of the EU, within which airlines would be free to operate without restriction.

· A reform of slot allocation at all the world’s leading airports through the ending of “Grandfather Rights” and the leasing of slots to be operated by airlines on a fixed term basis.

The manifesto outlines Virgin’s vision for the future and Richard’s call to the Government to prepare the industry for the 21st Century:

“Over the past century the aviation industry has made enormous technical progress, but it is still held back by out-dated government regulation and interference. It is about time air transport was treated like the mature industry it so clearly is. What this means is removing the dead hand of government as much as possible. The role of government in the regulation of air transport should be limited to ensuring that competition is fair and safety is paramount, the same role adopted for most other industries.

“The main challenge before us now is to persuade the Americans to negotiate a fully liberal air services agreement. Without a doubt, there are two ways guaranteed not to achieve this objective: give in to the US and accept their model, as the UK has come perilously close to doing on more than one occasion; or drip-feed concessions to the US, which risk wholly undermining the UK’s negotiating leverage.

“It is a fact that we have to accept that the UK is unlikely alone to persuade the US to abandon its protectionist policies. To succeed in doing that we have to use the strength of Europe as a whole. This is why Virgin has for long urged the UK Government to support a mandate for the European Commission to negotiate with the US.

“There is a real chance of reproducing what we have achieved within Europe, and what the Americans achieved in their domestic market, by creating a Trans-Atlantic Common Aviation Area. That would open up enormous new opportunities for ambitious, innovative as well as benefiting consumers.

“We are certainly ready for the challenge. And it wouldn’t stop there. An agreement between the EU and US would soon be expanded as other liberal-minded countries sought to join. It would not be long before the bulk of international aviation was at last dragged into the 21st Century.”

Richard highlighted the other key proposal:

“As long as access to key airports around the world remains limited, the availability of take-off and landing slots will be a major barrier to expansion for airlines such as Virgin Atlantic. Unlike BA, we have not had the advantage of having been given by our former government owner a large route network and its associated slots.

“The key obstacle here is the so-called “Grandfather Rights” which have the effect of cementing into place the current structure of the industry. This has to change if we are to have real competition. Virgin has proposed a system whereby slots are granted only for a limited period, just as franchises for TV or radio stations are. At the end of the period they should be handed back and re-allocated.

“We also believe that the most effective way of allocating slots is to sell them to the highest bidder, with safeguards against abuse by dominant airlines. We estimate that if slots at Heathrow and Gatwick were granted for 10-year periods and auctioned to the highest bidder, the Treasury could raise up to £10 billion during the next decade. The money raised could remove the need for the unpopular Air Passenger Duty or provide airports with funding for vital improvements in airport infrastructure before Britain falls further behind the rest of the world.”