Future of aviation (HC 499-i) Transport Committee 6 May 2009

Q25 Mr. Eric Martlew (Carlisle): There has been a passing reference to it with regard to the reduction in the amount of flights from Manchester to Heathrow because of the high-speed train. I have just attending a meeting at lunchtime where we were talking about high-speed trains from Amsterdam and Cologne. The people I was talking to were railway people, so they were perhaps biased, but their view is that it would take 60% of the traffic. What effect do you think high-speed Continental railways coming into the UK will have on the short-haul, even in the medium term?

Mr Murphy: I think the interesting issue is to look fairly closely at what has happened. Japan, France and even Germany are the three countries which are the best examples of this. The resilience of the Japanese high-speed trains has not actually taken out domestic air services. If you look at the service from Tokyo to Osaka, for instance, there are something like 250 daily high-speed trains. There are also over 100 daily air services between the two places. If you go to France, even Lyon still has seven flights a day to de Gaulle. Marseilles has about 16 to 18 flights a day, despite the TGV.

Q26 Mr. Eric Martlew (Carlisle): But this will be people who are interlining, though, will it not?

Mr Murphy: Yes, exactly. What has happened is that about 80% of the market goes on high-speed and about 20% of the market stays with air. That has already happened on Paris-London. I realised there was a particular difficulty with Paris-London because for about three years the airlines kept flying services to keep the slots until Bermuda 2 was abandoned, so you found Air France and British Midland were slot warming on Paris - because it is a route you can do now, you can offer low fares and actually get some reasonable loads - until they started using the slots for other destinations. But Paris-London now is largely, point to point, all about Eurostar.

Q27 Mr. Eric Martlew (Carlisle): You can see that happening with, say, Amsterdam?

Mr Murphy: Amsterdam is the only European destination at the moment which looks a really good bet for high-speed rail from London to replace air.

Dr Bush: Could I just also add a point about people suggesting that somehow a high-speed rail link gets away from the need for a third runway, because I think you have to look at the proportions there. With something like the UK mainland (i.e. taking out the bits you have to get across the water for) about 11% of traffic is domestic, so if you assume that not all of that would migrate to high-speed rail because people still might, for various reasons of convenience, even if there was a good rail service, want to travel by air, then you are dealing with a proportion of that 11% that might migrate to a high-speed rail link. Now, if you then say 5%, just for the sake of argument, that is quite a small proportion in relation to the shortage of capacity at Heathrow, because you have to remember that at Heathrow what one wants to do, if possible, is to create a certain amount of headroom anyway to try and improve the resilience of the airport. So you could probably find the high-speed rail being put in and simply not generating any new flights but just improving the resilience of the airport, but it is a very high cost to pay for that very small increment in capacity.

Q28 Mr. Eric Martlew (Carlisle): Can I go on to something totally different, passenger predictions? We have seen various airlines go down and this Committee - and I disagreed with the decision - suggested putting a levy on to make sure we get the passengers back. Is that still viable, and even more important, perhaps, Dr Bush, are we not in the situation where the tour operators, as opposed to the airlines, could well be in trouble because the amount of levy that there is will not cover the major tour operators going bust?

Dr Bush: The CAA is actually now consulting on putting up the levy.

Q29 Mr. Eric Martlew (Carlisle): That is because you do not think there is enough in there?

Dr Bush: Exactly. There is the failure of XL and the general trend of the economic recession means that the position is a lot more fragile than it looked, obviously, when the new arrangements came into force and so the CAA is now consulting on the possibility of putting up the levy from £1 to £3 per passenger.

Q30 Chairman: Dr Bush, could you tell me, is the Air Travel Trust Fund in trouble?

Dr Bush: It is not so much in trouble -

Q31 Chairman: But there have been newspaper reports, have there not?

Dr Bush: I think what we are saying is that in order to prevent it getting into trouble we are consulting on putting up the levy on the tour operators.

Q32 Mr. Eric Martlew (Carlisle): If one of the major tour operators went down this summer, which hopefully will not happen, is there enough money to cover getting the people back and paying the monies?

Dr Bush: There is sufficient money in there at the moment to deal with what needs to be done. What we need to do is put it in a more robust position looking forward and given the risks -

Q33 Mr. Eric Martlew (Carlisle): Let us just say, the doomsday scenario, that there is not enough money. Would you suspect the government will bare the losses, the country of government?

Dr Bush: I think in those circumstances - there have been government guarantees on the trust, but the trust has to be met out of funds that come from the tour operators and eventually the passengers.

Q34 Mr. Eric Martlew (Carlisle): So the bill would come to the Government?

Dr Bush: There would have to be some means of dealing with any exceptional event not expected, any exceptional event, through some form of government guarantee.

Mr. Eric Martlew (Carlisle): Thank you.

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Q96 Mr. Eric Martlew (Carlisle): At the very end of your answers to Mr Stringer you mentioned what I felt was the individual carbon ration card. Is that right, that individuals would have a certain amount? Can you explain and expand on that?

Lord Smith of Finsbury:I purely refer to it as an idea which has emerged from some quarters, and I am not saying necessarily it is the answer. It was proposed, I think, by the then Secretary of State for the Environment about a couple of years ago, which would be for each individual citizen effectively to have a carbon budget which they could make decisions about how they wanted to deploy in the activities they undertook.

Q97 Mr. Eric Martlew (Carlisle): I am sorry, I forget who the then Secretary of State was.

Lord Smith of Finsbury:He is now the Foreign Secretary.

Q98 Mr. Eric Martlew (Carlisle): What happens when your credit runs out?

Lord Smith of Finsbury:Then the price mechanism would clock in.

Q99 Mr. Eric Martlew (Carlisle): Just a bit like the black market used to work during the war!

Lord Smith of Finsbury:I do not think that is an entirely fair analysis.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

The full transcript may be read here.

On behalf of Eric Martlew, 3 Chatsworth Square Carlisle Cumbria CA1 1HB