To advance the Pacific Asia Travel Association’s (PATA’s) advocacy platform on behalf of PATA members, PATA CEO Martin J Craigs met with Lord Stephen Green, UK Minister of State for Trade and Investment in the Foreign and Commonwealth Office in London on July 9.
Lord Green invited Martin Craigs to the meeting. The PATA CEO said: “Lord Green’s invitation reflects the importance he attaches to PATA as a strategic organisation with global reach and influence.”
The previous week the Minister issued a statement expressing his support for PATA’s successful Hub City Forum held in London on 5th July 2012.
During the meeting on July 9 Craigs took the opportunity to underline PATA’s fundamental remit to support and foster travel and tourism to, from and within the Asia Pacific region and to describe how PATA’s membership successfully straddled the public and private sectors from national tourist authorities to global multinationals, to multi various SME’s, creating synergy and unique opportunities for all.
Craigs explained how PATA’s advocacy role was increasing in importance, bringing strategic issues of concern to the travel and tourism industry to the attention of decision makers and encouraging a dialogue between governments and those in the industry.
The PATA CEO said that PATA was looking for opportunities to promote ‘aligned advocacy’ with other stakeholders such as IATA, UNWTO and WTTC. He told Lord Green that PATA recognised the vital importance of London as a regional and global hub, and as an international centre city of influence, reach and business opportunities.
Craigs, a UK national, described how the controversial UK Air Passenger Duty (APD) was having a detrimental impact on the travel and tourism industry, not least because of the rise in the tax by 8% as of April 1, 2012. The amount raised from this tax was more than the combined projected profits of all 233 IATA airlines in 2012.
Lord Green was surprised by this statistic. Both parties agreed that it reflected the fragility of the airline sector. The Minister was sympathetic to the issue and undertook to raise the matter with Treasury. However, he cautioned that in the present economic climate it would be unlikely that the policy would be reversed. In response, Mr Craigs asked for the APD to be capped or, as a minimum, not to be raised at a higher rate than UK inflation.
The PATA CEO pressed the point that the APD was damaging the UK’s good reputation for fairness and free trade. He told Lord Green that the issue was consistently raised with him by Asian ministers and business leaders. Craigs pointed out that the Australian government, after a sustained advocacy campaign by business and other interests, had reversed its position on its equivalent of APD. In France and Germany equivalent taxes were considerably less than those of the UK, said Craigs.
The PATA CEO pledged to provide Lord Green with two authoritative reports by Oxford Economics commissioned by IATA/WTTC which contain substantive data on the damage caused by APD. Craigs advised that the issue was urgent and that the UK is at a tipping point for its reputation.
The EU Emissions Trading Scheme
Lord Green accepted that the inclusion of the aviation sector in the EU Emissions Trading Scheme (EU ETS) since January 1, 2012 had elicited strong opposition from international aviation organisations and non EU countries including USA and China. The Minister said that the UK government was monitoring the situation closely but cautioned that there was strong support from the European Parliament for the inclusion of aviation. Mr Craigs noted that: “A Global solution via ICAO was the long term goal, which IATA is energetically working on.”
UK Aviation Strategy
During the July 9 meeting, the PATA CEO also expressed concern about the apparent lack of a coherent UK aviation strategy. Lord Green accepted that it was an understandable observation. The government had previously ruled out a third runway largely due to the environmental impact on south west London. The Minister said he also believed that with the introduction of more A380’s and new 787s, environmental noise issues would abate. With further technological improvements designed to reduce engine noise, the trend towards quieter aviation would continue. However, Lord Green accepted that Boris Johnson’s proposal for an airport in the Thames estuary had reenergised the debate.
The Minister told the PATA CEO that there was now a closer alignment with future planning for high speed rail links and aviation hubs. Furthermore, in the medium term, fast rail would reduce the dependence on internal flights between UK cities.
Lord Green stated that the UK government was committed to the success of the aviation industry. He said that five government ministers were visiting the Farnborough International Air Show 2012 including the Prime Minister David Cameron and the Business Secretary Vince Cable. But he also suggested that airlines need to play their part in opening up new routes in Asia.
The Heathrow Experience
Martin Craigs raised concerns about the Heathrow experience for passengers. This included the issue of lengthy queues at border control which risked putting off Asian business partners, investors and tourists. Lord Green agreed that capacity was an issue and since Heathrow routinely runs at 98% capacity when there was a glitch it tended to have immediate consequences for passengers. However, Lord Green said that Terminal 5 was world class and the new Terminal 2 will be even better—so that Heathrow had a good story to tell. John Saville, Director Asia, UK Trade & Investment, who was also attending the meeting, offered to provide PATA with further information on overall development strategies to welcome visitors to the UK. Mr Craigs noted his appreciation of Mr Collin Matthews, Chief Executive Officer, BAA Airports Ltd and Mr Rob Whiteman, Chief Executive, UK Border Agency positive presentations and open dialogue at the PATA Hub City Forum in London on July 5.
Security Issues and the UK Border Agency
Lord Green pointed out that security remained the highest priority for the UK government. He also said that the UK Border Agency’s programme of ‘exporting’ the UK border and improving the system for issuing visas, whilst a work in progress, was going well. He said that the UKBA was now represented in 12 Chinese cities.
Lord Green noted that there was cause for optimism that the Schengen Area visa requirements might be harmonised with UK requirements in light of French and German interest in biometric technology. There would still be a requirement for two separate visas but it might be possible for passengers to receive these simultaneously.
Martin Craigs pointed out that there was considerable opportunity for synergy between Lord Green’s office with its interest in encouraging inward investment to the UK and PATA members who were looking for opportunities for investment and collaboration with British companies. PATA HQ could be a catalyst for such engagement, said Craigs. Lord Green was enthusiastic about this idea and could see considerable merit in further collaboration.
Possible PATA Event, London, March 2013
It was tentatively agreed that there could be a joint UK-PATA conference held in London in March 2013 and a further PATA event in China in the second half of 2013.
Lord Green said he was keen to underline the British government’s interest in nurturing this relationship, as travel and tourism has a vital link to trade and investment development.
PATA’s access to Asia-Pacific corporate, business and financial leaders as well as governmental figures in Asia would be particularly valued. Lord Green agreed that the upcoming PATA dinner in the House of Commons on November 5, 2012, hosted by Andrew Rosindell MP, offered the opportunity for PATA to showcase its high-level links to important public and private decision makers in both the UK and Asia Pacific.
Both parties agreed that the July 9 meeting had been very productive with both Lord Green and the PATA CEO looking forward to further cooperation and adding substance to the initiatives discussed.
Lord Green reiterated that he would raise PATA’s concerns about UK APD with the Treasury. At the end of the 40-minute discussion, PATA CEO sincerely thanked the Minister on behalf of all PATA members for his time and empathetic ear.