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CAA Insight Note 3 - Aviation Policy Future

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  • 8/3/2019 CAA Insight Note 3 - Aviation Policy Future

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    CAA

    INSIGHT

    NOTE:

    AVIATION

    POLICY FOR

    THE FUTURE

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    KEY INSIGHTS

    COMPONENTS OF A SUSTAINABLE FRAMEWORK

    UK Aviation would benefit from a policy

    framework that is both robust and flexible;

    The CAA considers that clarity and durability can

    be achieved by formulating the policy framework at

    two distinct levels:

    o At the strategic level, the Policy Framework

    should set clear objectives and outcomes;

    o At the level of implementation, it is important that policy isconsistent with the levers available to Government, in order to

    create a credible platform for delivery.

    STRATEGY: DEFINING OBJECTIVES AND OUTCOMES

    The CAA has a primary duty to ensure safety. Once safety has been assured, the CAAs view is that

    the Governments focus should be to maximise consumer benefit subject to environmental constraints.

    CAA

    INSIGHT

    NOTE:

    AVIATION POLICY

    FOR THE FUTURE

    PAGE 2

    KEY INSIGHTS

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    PAGE 3

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    INSIGHT

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    FOR THE FUTURE

    The objective of the policy framework should be to facilitate development of an aviation sector that is:

    o Safe and secure;

    o Geared to delivering choice and value to consumers;

    o Environmentally sustainable.

    Safe and Secure

    Safety and security underpin all other aspirations that the sector might have. Aviation policy should

    be designed to ensure that flying remains amongst the safest ways to travel, with policy backed up by

    a focus on continuous improvement by those best placed to deliver. This document does not focus on safety issues in detail. The Policy Framework should recognise

    the State Safety Programme as the primary source of UK aviation safety policy.

    Choice and Value for Consumers

    The development of the Sustainable Aviation Framework offers an opportunity to look beyond

    current economic difficulties and develop a sustainable framework that is consumer-focused at all

    levels. The CAA considers that the Policy Framework should focus on delivering choice and value for

    aviation consumers.

    International comparisons show that UK aviation consumers are currently very well served in terms

    of the choice available to them. The CAA suggests that the framework should set as a policy outcomethat the levels of aviation connectivity that UK consumers currently enjoy are at least maintained.

    On the basis of the analysis set out in Aviation Policy for the Consumer, we consider that the

    following broad levels of service provision would be consistent with achieving this outcome:

    o For principal short-haul routes: All UK consumers should have access to direct connections to

    principal short-haul destinations;

    o For medium and long-haul routes: Consumers should have access to direct services from the UK to

    KEY INSIGHTS

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    PAGE 4

    CAA

    INSIGHT

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    FOR THE FUTURE

    key global markets UK. Recognising that some routes may only be commercially viable if operated from

    a hub airport, the Government should seek to facilitate successful hub operations in the UK. Consumers

    using other UK airports should have single-stopover transfer access to the same key global markets.

    Environmentally sustainable

    The aviation sector will need to address and mitigate its environmental impacts in the areas of

    climate change, noise and local air quality if aviation consumers are to continue to enjoy current levels

    of choice and value.

    Climate change outcomes should be framed in order to maximise emissions reduction whileminimising carbon leakage and competitive distortions.

    The development of the aviation policy framework presents an opportunity to develop a new, twin-

    track approach to noise policy focused on two high-level noise outcomes:

    o Continued reductions in the numbers of people affected by noise; and

    o Improved engagement with local communities.

    The current framework for managing local air quality already sets clear national policy outcomes,

    through mandatory targets.

    IMPLEMENTATION: ACHIEVING OUTCOMES WITH LIMITED LEVERS

    It is important that Government limits the outcomes it sets to those that it can achieve or influencethrough use of levers that it controls, or has the ability to create.

    In considering the potential for policy intervention to deliver the outcomes, the Government should

    address three questions:

    o Whether to intervene?

    o At what level to intervene?

    o How to intervene?

    KEY INSIGHTS

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    ADDRESSING THE CONSUMER OBJECTIVES

    Direct short-haul connections for all consumers

    The CAA does not consider that specific intervention is currently required in order to facilitate

    continued high-levels of direct short-haul connectivity across the UK.

    Direct access to key global markets from at least one UK airport

    A number of non-infrastructure measures have the potential to enable better use of existing

    capacity and introduce additional flexibility and resilience into the system, particularly in the short

    and medium-term. We do not judge that these measures will have sufficient impact to represent a long-term

    solution to the costs to consumers generated by capacity constraints.

    Appropriate additional capacity could therefore deliver significant benefits for consumers. The

    Framework should seek to set in place a platform which will facilitate a credible path to provision

    of additional capacity.

    Given the challenges to the delivery of major infrastructure in the UK, the development, in due

    course, of a National Policy Statement for Aviation may help to build long-term confidence in the

    Framework.

    Single-stopover transfer access from other UK airports Passengers in the UK regions will continue to need to use a transfer airport to access the

    majority of global destinations: either a UK hub, accessed by surface transport or a domestic

    flight, or a foreign airport.

    The Government faces a strategic choice in terms of how to ensure global access for aviation

    consumers in the UK regions. Options available to the Government include:

    o Facilitate access for regional consumers to a UK hub airport for example, by providing

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    FOR THE FUTURE KEY INSIGHTS

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    additional capacity, or;

    o Explore, in discussion with European partners, the development of a network of European

    hubs as a way of tackling security of supply issues.

    ADDRESSING THE ENVIRONMENTAL OBJECTIVE

    Climate Change

    Climate change is a global challenge. The Government should continue to promote and

    pursue a coordinated global solution for the aviation sector.

    Despite the challenges to the inclusion of aviation in EU ETS, the European Union EmissionsTrading System (EU ETS) offers a next-best and interim solution.

    Technical and operational measures, in particular the modernisation of UK airspace, offer

    significant potential to improve the UKs performance on aviation emissions.

    Noise

    A number of policy options that are available to Government, the regulator and sector players

    to reinforce the current trend towards noise reduction. The measures span changes to regulatory

    or operational approaches, potentially backed-up by economic instruments.

    In Aviation Policy and the Environmentwe also proposed a number of potential measures that

    the Government could explore in order to unblock the policy stalemate around aviation noise. Areformed institutional framework could allow the debate to focus on bespoke solutions for

    individuals or specific communities.

    Air Quality

    The CAA considers that the current framework for managing local air quality is seen as credible

    and effective. We do not see merit in Government seeking to amend the existing approach.

    CAA

    INSIGHT

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    FOR THE FUTURE

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    KEY INSIGHTS

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    CONTENTS

    KEY INSIGHTS 2

    INTRODUCTION 8

    PART 1: The Components of a Sustainable Framework 11

    PART 2: Strategy: Defining Objectives and Outcomes 13

    PART 3: Implementation: Achieving Outcomes with Limited Levers 18

    PART 4: Creating a Framework for Delivery 24

    Achieving Choice and Value 24

    Direct short-haul connections for all consumers 24

    Direct access from the UK to key global markets 25

    Single-stopover transfer access from other UK airports 31Achieving Environmental Sustainability 35

    Climate Change 35

    Aviation Noise 36

    Local Air Quality 38

    Conclusions 40

    References 41

    CONTENTS

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    PAGE 8

    INTRODUCTION

    In the CAAs response to the

    Governments scoping consultationI

    we set out how we consider that clarity

    and durability can best be achieved by

    formulating the policy framework at two distinct levels:

    The strategic level: the Government should set broad objectives

    and the outcomes it is seeking to achieve;

    The implementation level: the Government should then set out the steps that it

    intends to take in order to make the outcomes come to pass; ensuring the

    Government only intervenes where it has the ability to drive forward strategy.

    CAA

    INSIGHT

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    FOR THE FUTURE INTRODUCTION

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    The CAA committed to publish a series of three Insight Notes to build on its initial consultation

    response:

    Aviation Policy for the Consumerconsiders the issue of connectivity from the perspective of

    current and future consumers. In particular, it addresses the implications of forecast demand

    growth for the choice and value offered to UK consumers;

    Aviation Policy for the Environmentconsiders how UK aviation can grow without

    unacceptable environmental consequences, focusing on the key challenges of climate change,

    noise and local air quality;

    Aviation Policy for the FutureCreating a Sustainable Framework is the final document in the

    series. It considers a number of the challenges that will need to be addressed to ensure that the

    framework provides a robust strategic platform for successful delivery of the investment and

    improvements to the UK aviation system that will be needed to meet the needs of aviation

    consumers and the UK economy.

    Part 1 reviews the principles underlying the two-stage approach to development of aviation

    policy that the CAA recommended in its Scoping Response;

    Part 2 draws on the analysis and evidence presented in Aviation Policy for the Consumerand

    Aviation Policy for the Environmentto recommend a set of policy outcomes;

    Part 3 considers the challenge facing Government to put in place a credible policy framework

    given that it has limited levers at its disposal. This section provides advice to inform

    Governments choices as to when, at what level and how to intervene;

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    Part 4 addresses the implications for policy, and covers some of the issues that the

    Government may wish to include in the draft framework it is due to publish in Spring 2012.

    The purpose of this Insight Noteis not to recommend what policy should be; the CAA is

    clear that such policy decisions rest with Ministers. This document seeks to set out a

    direction of travel and highlights a number of areas that Government should explore in its

    forthcoming consultation.

    The Scoping Response and all three of the Insight Notesare available on the CAAwebsite: www.caa.co.uk/sustainableaviationframework

    CAA

    INSIGHT

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    FOR THE FUTURE

    PAGE 10

    INTRODUCTION

    http://www.caa.co.uk/sustainableaviationframeworkhttp://www.caa.co.uk/sustainableaviationframework
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    UK Aviation would

    benefit from a policy

    framework that is bothrobust and flexible

    PART 1: THE COMPONENTS OF A SUSTAINABLE FRAMEWORK

    In the CAAs response to the Governments Scoping Consultation, we outlined an approach to

    the Framework which we consider would create an appropriate balance between the desire

    to give credible long-term investment signals to the sector and a recognition that policy will

    need to be sufficiently flexible and agile to adapt as and when circumstances demand.

    The development of the policy framework creates an opportunity to shape the future of UK

    aviation by sending credible signals about the long-term direction of policy. In doing so, the

    Government can help to align decisions in a way that is consistent with a common strategicdirection. The more effective Government is in generating policy stability, and the more

    robust the policy framework, the more effective the investment signals it sends to industry.

    However, policy stability should not come at the cost of restricting the sectors ability to

    adapt to change. The framework should be designed in such a way as to enable the industry

    to adapt its approach to the inevitable unforeseen challenges that aviation will inevitably face.

    Stability should provide a platform which encourages innovation rather than stifling it.

    The CAA considers that clarity and durability can best be achieved by formulating the policy

    framework at two distinct levels, with a clear separation between strategy, which should beexpected to be robust over time, and implementation, which will need to balance the need

    to be sufficiently flexible as to adapt to change while ensuring sufficient stability to drive

    investor confidence.

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    INSIGHT

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    PART 1: THE COMPONENTS

    OF A SUSTAINABLE

    FRAMEWORK

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    At the level of

    implementation, it is

    important that policyis consistent with the

    levers available to

    Government, in order

    to create a credible

    platform for delivery

    The Governments initial focus should be to set the objectives and outcomes which it wants to

    achieve through aviation. These objectives and outcomes should be expected to remain stable

    through time in order to provide long-term credibility that supports investment in assets or

    technology, and promotes innovation in service delivery. Without credibility, the framework will

    not sustain and support the sector in meeting Governments objectives.

    The policy levers at Governments disposal are limited. Many regulatory aspects are governed by

    European and international law. The aviation sector is largely privately-owned and liberalised. The

    framework needs to recognise these constraints whilst recognising that Government can exertconsiderable influence through the mechanisms it has for engaging and incentivising the actions

    of stakeholders.

    Therefore, as well as setting out the actions that Government will take, the Government should

    also specify those actions which it expects over stakeholders to take. In doing this, the

    Government should recognise that service delivery in the aviation sector involves multiple

    organisations interacting as part in a complex supply chain.

    Effective delivery is only likely to occur where the sector is incentivised to deliver the outcomes.

    Where incentives are not aligned, Government will need to consider whether it has the levers topromote and encourage delivery of the desired outcomes. Where Government does not have

    powerful levers to guide delivery, or it considers that the use of available policy levers would

    inconsistent with wider Government policy, its ability to prescribe outcomes in detail without

    taking some direct control for delivery will be limited.

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    PART 1: THE COMPONENTS

    OF A SUSTAINABLE

    FRAMEWORK

    At the strategic level,

    the Policy Framework

    should set clear

    objectives and

    outcomes

    G

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    PART 2: STRATEGY: DEFINING OBJECTIVES AND OUTCOMES

    The Government set out in its Scoping Consultation document that aviation should be able to

    grow, but to do so, it must be able to play its part in delivering our environmental goals and

    protecting quality of life of local communities. The CAA supports this high-level proposition.

    The objective of the policy framework should be to facilitate development of an aviation sector

    that is:

    Safe and secure;

    Geared to delivering choice and value to consumers; Environmentally sustainable.

    SAFE AND SECURE

    The UK aviation industry has one of the best safety records in the world. However, pressure

    on this record is expected to increase in the future; demand growth will potentially put strain

    on airspace management and airport capacity while technological development will increase

    the complexity of the total aviation system. The need to improve aviation safety in a

    proportionate and cost-effective way is therefore one of the major challenges faced by the

    aviation sector.

    This document does not focus in detail on safety issues. The UK State Safety Programme,

    which incorporates the CAA Safety Plan, is the primary mechanism for driving improved

    safety performance across all sectors of the industry. The CAA Safety Plan has been

    developed in partnership with industry because although the CAA has a safety oversight

    responsibility, industry has prime responsibility for managing their safety risk.

    The CAA has a primary

    duty to ensure safety.

    Once safety has been

    assured, the focus of

    policy should be to

    maximise consumer

    benefit subject to

    environmentalconstraints.

    Safety and security

    underpin all other

    aspirations that the

    sector might have.

    Aviation policy should

    be designed to ensure

    that flying remainsamongst the safest

    ways to travel.

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    PART 2: STRATEGY:

    DEFINING OBJECTIVES

    AND OUTCOMES

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    The State Safety Programme and the CAA Safety Plan are consistent with the outcome-based

    approach the CAA proposes for the policy framework. Both initiatives focus on delivery of

    improved safety outcomes, codified as a clear set of high-level goals developed in collaboration

    with the aviation community. The CAA therefore considers that the policy framework should

    recognise the State Safety Programme as the primary source of UK aviation safety policy.

    In addition, the framework should recognise the interdependency between safety and the

    Governments consumer and environment objectives. Measures to deliver improved consumer

    experience and environmental performance will need to satisfy the relevant safety requirements.The framework should also create appropriate incentives to drive the investment necessary to

    deliver continuous improvements in safety performance.

    CHOICE AND VALUE FOR CONSUMERS

    The development of the Sustainable Aviation Framework offers an opportunity to look beyond current

    economic difficulties and develop a sustainable framework that is consumer-focused at all levels.

    Aviation Policy for the Consumershowed that UK aviation consumers are currently very well

    served in terms of the choice available to them. UK consumers currently enjoy a very high

    level of airport accessibility with nearly 90% of the population living within two hours traveltime of at least two international airports. The choice and frequency of services offered by

    Londons five major airports make the UK capital one of the worlds best connected cities.

    Despite the current economic uncertainty in the UK and Europe, growth elsewhere in the world

    is forecast to stimulate significant growth in demand for aviation over the next 20 years. While

    this demand growth may lead to increased route choice for consumers at some regional airports,

    CAA

    INSIGHT

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    FOR THE FUTURE

    PAGE 14

    PART 2: STRATEGY:

    DEFINING OBJECTIVES

    AND OUTCOMES

    The Policy Framework

    should focus on

    delivering choice and

    value for aviation

    consumers.

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    The framework

    should set policyoutcomes such that

    the levels of aviation

    connectivity that UK

    consumers currently

    enjoy are at least

    maintained.

    capacity constraints at many UK airports, particularly in the South-East, will increasingly limit the

    choice and value available to consumers.

    While regional passengers may benefit from capacity constraints in the South-East if this leads to

    increased choice of direct routes, routes to London are likely to be squeezed further. The

    development of significant hub-and-spoke networks at regional airports seems unlikely.

    On the basis of the analysis set out in Aviation Policy for the Consumer, we consider that the

    following broad levels of service provision would be consistent with meeting this objective: For principal short-haul routes: All UK consumers should have access to direct connections to

    principal short-haul destinations;

    For medium and long-haul routes: Consumers should have access to direct services from the UK to

    key global markets. Recognising that some routes may only be commercially viable if operated from a

    hub airport, the Government should seek to facilitate successful hub operations in the UK. Consumers

    using other UK airports should have single-stopover transfer access to the same key global markets.

    These outcomes are intended to be indicative not prescriptive. The CAA considers that where

    there is effective competition, airlines are best placed to configure route networks that meet

    consumer demands. The purpose of the Policy Framework should be to create the conditions thatwould enable the market to provide this connectivity.

    ENVIRONMENTALLY SUSTAINABLE

    The aviation sector will need to address and mitigate its environmental impacts in the areas of

    climate change, noise and local air quality if aviation consumers are to continue to enjoy current

    levels of choice and value.

    CAA

    INSIGHT

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    AVIATION POLICY

    FOR THE FUTURE

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    PART 2: STRATEGY:

    DEFINING OBJECTIVES

    AND OUTCOMES

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    Climate Change

    The aviation sector continues to make progress in terms of improvements in aircraft efficiency. However,

    given the scale of the challenge, it is likely that the rate of progress will need to accelerate over the coming

    decades. Further improvements in the CO2 emissions performance of the sector remain a priority.

    Global aviation accounts for around 2% of global aviation CO2 emissionsII. However, as other

    sectors decarbonise and as global demand for air travel grows, that impact is going to grow

    proportionally unless significant action is taken.

    UK aviation CO2 emissions account for around 6% of UK CO2 emissions. That proportion could

    rise to up to 25%III, even if aviation emissions return to 2005 levels by 2050 and UK carbon budgets

    are metIV. Reducing emissions is therefore a matter of priority. In parallel, aviation entered the EU

    Emissions Trading System (EU ETS) at the start of 2012 and with emissions capped at 95% of 2004-

    06 levels from 2013 to 2020, the sector is forecast to rely on allowances to meet this target due to

    forecast demand growth in the latter part of the decade.

    Non-CO2: There are potentially significant non-CO2 effects from aviation which arise from the

    emissions of gases and particles including contrails and induced cloudiness. Considerable work has

    been undertaken in the past decade to quantify these effects and to assess potential policy optionsfor reducing non-CO2 impacts, for example through a multiplier or a flanking instrument. Scientific

    understanding of non-CO2 climate change impacts of aviation needs to be improved further before

    policy action can be taken.

    Overarching outcomes should ideally be set at an international level. At a national level, there is potential for

    outcomes to be specified in order to encourage and incentivise implementation of airspace modernisation.

    CAA

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    FOR THE FUTURE

    PAGE 16

    PART 2: STRATEGY:

    DEFINING OBJECTIVES

    AND OUTCOMES

    The Policy Framework

    should frame

    outcomes in order to

    maximise emissions

    reduction while

    minimising carbon

    leakage and

    competitive distortions.

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    The development of

    the aviation policy

    framework presents

    an opportunity to

    develop a new, twin-

    track approach to

    noise policy focused

    on two high-leveloutcomes:

    Continued

    reductions in the

    numbers of people

    affected by noise;

    and

    Encouraging better

    engagement with

    communities.

    Noise nuisance

    The noise generated by aviation activity can have a significant impact on the quality of life of those

    living close to airports or under flight paths. As many as 725,000 people around Heathrow and under

    its flight paths are affected by aircraft noise, based on the European standard measure of 55LDen. Within

    the range of noise impacts, night noise is generally considered to be the most contentious issue.

    Recent decades have seen considerable progress in reducing noise generated by aircraft. This has

    been driven by technological improvements and controls on the expansion of aircraft operations at

    selected airports.

    However, the experience of recent years suggests that a policy approach based exclusively on

    noise reduction is likely to be insufficient. Despite the positive trends towards noise reduction, the

    strength of feeling of those affected by noise has arguably increased. Improved engagement and

    communication between the aviation sector and local communities would appear to be a

    prerequisite for a framework which aims to generate lasting consensus around aviation policy.

    Local Air Quality

    Many specific locations across the country, most frequently at roadsides, have been assessed as

    having levels of nitrogen dioxide that exceed European limits. Road transport is the major source ofair pollution at most hotspots. Aviation contributes to local air pollution near airports through a

    combination aircraft engine emissions, ground operations, and surface access road transport.

    The current framework for managing local air quality sets clear outcomes, through mandatory

    targets. The CAA considers that this framework is seen as credible and effective. We do not see

    merit in Government seeking to amend this framework.

    CAA

    INSIGHT

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    AVIATION POLICY

    FOR THE FUTURE

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    PART 2: STRATEGY:

    DEFINING OBJECTIVES

    AND OUTCOMES

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    PART 3: IMPLEMENTATION: ACHIEVING OUTCOMES WITH LIMITED LEVERS

    The UK aviation sector is largely driven by private investment. While some areas of the sector are

    highly regulated, many other aspects of aviation have been increasingly liberalised over many

    years. Accordingly, Government alone cannot deliver choice, value or sustainability. We discussed

    this challenge in some detail in our initial scoping response.

    In considering the potential for policy intervention to deliver the outcomes, the Government will

    need to address three questions:

    Whether to intervene? At what level to intervene?

    How to intervene?

    WHETHER TO INTERVENE?

    Efficient markets can provide accurate signals such that the decisions made by airport operators

    and airlines produce economically and socially optimal outcomes, as long as the framework within

    which the market operates is well-specified. However, it is important not to take a nave view of

    markets. Issues such as externalities, market power, information asymmetries, or other factors

    can all lead to market failure and have a detrimental impact on consumers or the general public.

    Many of the challenges facing aviation derive from the existence of market failures, in

    particular externalities such as CO2 emissions and aircraft noise. Where market failures exist,

    the Government should assess the extent and significance of these failures and determine

    whether there is potential to improve outcomes with proportionate policy measures, including

    by encouraging the market to take full account of costs and benefits to other actors and to

    society in general.

    Government should

    limit the outcomes it

    sets to those that it

    can achieve or

    influence through use

    of levers that it

    controls, or has the

    ability to create.

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    PART 3: IMPLEMENTATION:

    ACHIEVING OUTCOMES

    WITH LIMITED LEVERS

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    Intervention in a commercial and competitive sector comes with risks, but can improve outcomes. Indeed,

    there is a broad consensus that, in the absence of policy intervention, the decisions taken by actors in the

    aviation industry, in common with many other markets, would not reflect the full cost of environmental harm,

    and that measures such as noise regulations and emissions trading can improve outcomes, despite their costs.

    AT WHAT LEVEL TO INTERVENE?

    One of the key challenges for Government will be to determine the appropriate level for intervention,

    recognising that, in many cases, action may be more effective if taken by others. In developing a strategic

    national level framework, the Government will need to ensure that the framework effectively balances

    economic and consumer benefits, for which governance is primarily national, and environmental impacts which

    are either global, in the case of climate change, or highly localised in the case of aviation noise and air quality.

    Local: As we examined in Aviation Policy for the Environment, some of the most contentious policy

    issues around aviation concern highly localised environmental impacts such as noise and local air quality.

    We noted that the lack of effective engagement between the aviation sector and local communities was

    one barrier to effective progress on aviation policy, and that the development of the policy framework

    represents an opportunity to develop a more constructive approach. This would also be consistent with the

    current Governments localism agenda;

    National: While policy measures will need to be tailored to the specific challenges of individual locations,

    the CAA considers that it is important that the strategy is set at the national level in order to facilitate the

    integration of the Government aviation policy into wider transport policy, as well as to ensure consistency

    with the Governments strategic agenda in other policy areas;

    International: Aviation is a global industry. International and European law place a number of constraints

    PART 3: IMPLEMENTATION:

    ACHIEVING OUTCOMES

    WITH LIMITED LEVERS

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    on Governments scope to intervene. For instance, international aviation law limits Governments

    ability to link aviation taxes to fuel consumption or to include noise-incentives in aeronautical

    charges. In addition, a number of key policy levers and enablers operate at European or

    international level. The Single European Sky and SESAR airspace programmes are prominent

    European initiatives that have a major impact on national policy.

    HOW TO INTERVENE?

    Whilst it is difficult to recommend particular forms of intervention or reforms to market

    processes, less prescriptive approaches are likely to be more flexible and resilient to change. The

    policy framework should be clear where markets and other decision-making approaches are

    expected to deliver, and where Government intends to intervene directly.

    The principal levers available to Government under the existing structure of the sector are:

    Planning Policy;

    Regulatory approaches;

    Operational approaches;

    Intermodality;

    Environmental measures;

    Taxes and Subsidies; Improved information.

    Planning Policy

    The planning system has an important role to play in generating certainty among stakeholders, in

    particular infrastructure investors. Given the long lead times involved in delivering aviation

    infrastructure and in developing new technologies, this stability will be crucial to generating the

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    investment necessary to deliver Governments objectives.

    The CAA considers that the Governments programme of planning reform and the

    development of a National Infrastructure Plan are positive steps as they potentially provide a

    more robust and credible foundation for infrastructure delivery. The development, in due

    course, of a National Policy Statement for UK Aviation may help to generate long-term

    confidence in the framework.

    Regulatory Approaches

    The CAA considers that effective competition amongst airports, airlines and other service

    providers, with consumers being suitably empowered to engage, generally offers the best way

    to promote consumer interests. The UK has adopted a regulatory approach to the sector that

    based on liberalisation of the sector and encouraging competition in the market. However,

    there are a number of areas which continue to be subject to regulation.

    The CAA continues to regulate charges at Heathrow, Stansted and Gatwick airports, as these

    airports are designated by the Secretary of State, and the CAA is currently consulting on its proposed

    approach to the next regulatory period, Q6 in order to ensure that this approach adequately protects

    consumers and strikes the appropriate balance between competition and regulation.

    Operational Procedures

    UK airspace is an essential component of our aviation infrastructure. A policy framework that

    takes a holistic view of fully integrating airspace into future aviation needs would be beneficial.

    The CAAs Future Airspace Strategy (FAS) aims to establish safe, efficient airspace that has the

    capacity to meet reasonable demand, balances the needs of all users and mitigates the impact of

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    aviation on the environment. In Aviation Policy for the Environmentwe outlined a number of additional

    operational measures that have the potential to mitigate aviations environmental impacts.

    Intermodality

    Improved integration of UK airports into the wider surface access network, including through the

    Governments proposals for high-speed rail, has the potential to increase accessibility to aviation. As we

    noted in Aviation Policy for the Consumer, UK aviation consumers currently benefits from very high-levels of

    surface connectivity to airports with nearly 90% of the population living within two hours travel time of at

    least two airports. However, at the level of individual airports, surface access improvements can increase the

    size of catchment area and potentially influence the range and frequency of services that can be maintained.

    It is important that proposed surface access improvements are subject to appropriate funding arrangements.

    Where airport operators would be expected to contribute to any investment, the Government should

    provide clear guidance setting out how the level of such contributions would be determined.

    Environmental measures

    All of the major environmental challenges facing aviation involve significant externalities. Accordingly,

    there is a case for intervention to address aviations environmental impacts. Aviation Policy for the

    Environmentconsiders these issues in detail. Environmental sustainability is also a key focus of this note.

    The Framework should set clear and credible environmental parameters. In addition, policy measures

    should adhere to the following principles:

    Government should ensure that intervention to address environmental challenges takes place at the

    level where it is most effective and proportionate;

    Where policy intervention is appropriate, measures should be designed in a way which maximises

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    their effectiveness and efficiency;

    Intervention should be based on robust information and recognise the trade-offs inherent in the

    formulation of policy to address environmental challenges.

    Taxes and Subsidies

    Where Government is minded to use taxation as part of its aviation policy toolkit, any measures should

    be non-discriminatory in order to minimise distortions and unintended consequences. Tax measures are

    likely to result in sub-optimal outcomes if they are used in an attempt to shape the sector.

    The CAA recognises the importance of Public Service Obligations (PSOs) in supporting lifeline

    services to remote areas, in particular in the Highlands & Islands of Scotland. However, at the level

    of national policy, the CAA considers that PSOs have, at best, a marginal role to play. Similarly, State

    Aid restrictions around the use of Route Development Funding limit the potential for such

    measures to have a long-term impact.

    Improved Information

    There may be more that could be done to monitor industry performance and facilitate informed

    consumer decisions through the improved provision of information. Consumers need clear

    information on price and service quality in order to make informed choices and to ensure thatmarkets deliver consumer benefits in practice.

    Research undertaken by the CAAV found that almost two fifths (38%) of consumers thought that

    having access to information about the environmental impact of the flight they were booking,

    including carbon emissions, is very or quite important. Making environmental information available to

    consumers may result in better informed passengers choosing better performing airlines and airports.

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    In Part 2 of this note, we set out a set of high-level outcomes that Government could adopt in

    order to deliver its consumer and environmental objectives. In this section, we consider some of

    the implementation measures that might contribute to achieving these outcomes.

    ACHIEVING CHOICE AND VALUE

    DIRECT SHORT-HAUL CONNECTIONS FOR ALL CONSUMERS

    The analysis we set out in Aviation Policy for the Consumerindicates that UK aviation

    consumers from all regions benefit from very high levels of connectivity on short-haul routes.

    Competition, facilitated by liberalisation, has delivered significant benefits for consumers in

    terms of choice and value.

    Capacity constraints at the larger London airports are likely to result in some short- and

    medium-haul routes being squeezed out of these airports in favour of higher yielding long-

    haul services and/or fares increasing on these routes. DfT forecasts indicate that all London

    airports will be full by 2030. At the same time, while there is significant spare capacity outside

    of the South-East, a number of the smaller regional airports face challenges in terms of

    commercial viability.

    The CAA does not

    consider that specific

    intervention is currently

    required in order to

    facilitate continued

    high-levels of direct

    short-haul connectivity

    across the UK.

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    The CAA considers

    that, as a result of the

    costs to consumers of

    capacity constraints,

    policy intervention

    may be justified in

    order to facilitate

    direct access for UK

    consumers to global

    markets.

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    DIRECT ACCESS FROM THE UK TO KEY GLOBAL MARKETS

    Airport and airspace capacity constraints in London and the South-East are already affecting

    consumers by: restricting competition, restricting route choice, affecting value through higher

    fares, and affecting service quality as a result of resilience issues. These impacts are expected to

    become more pronounced in the future as a result of forecast demand growth.

    Capacity constraints at Londons airports may already mean that they are less able than

    airports in other European cities to adjust as global economic activity shifts to emerging markets

    such as China, India and South America. This trend is likely to become more pronounced;

    Capacity constraints will increasingly shape network configuration by reinforcing the trend

    towards focusing on the most profitable, high-yield routes. At Heathrow this is likely to lead to

    further specialisation on long-haul routes, in particular those routes for which geography or

    economic, cultural and historical links give London an advantage;

    The additional opportunity cost of launching new routes may result in airlines being less

    likely to take a chance on launching services to emerging markets from London, especially

    where UK-based demand does not generate a sufficient volume of premium traffic;

    The lack of available capacity at Heathrow has already had a negative effect on the UKs

    ability to liberalise Air Services Agreements with foreign states, which would potentially open

    up routes into emerging markets. This trend is likely to become more acute as Londons otherairports become more congested;

    Fares at congested airports are predicted to increase significantly as a result of capacity

    constraints. The value of fare premiums resulting from capacity constraints at UK airports is predicted

    to total 1.7bn in 2030. This equates to an additional 10 per passenger on a return air fare;

    Resilience issues will become more widespread as more airports become congested, if

    appropriate mitigations are not put in place.

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    MAKING BETTER USE OF EXISTING AIRPORT CAPACITY

    The measures that could enable better use of existing capacity broadly fall into three categories:

    Regulatory approaches,

    Operational approaches, and

    Intermodality.

    Regulatory approaches

    The CAA considers that effective competition amongst airports, airlines and other service

    providers, with consumers being suitably empowered to engage, offers the best way to promote

    consumer interests. The UK has adopted a regulatory approach to the sector that based on

    liberalisation of the sector and encouraging competition in the market. However, there are a

    number of distinct areas where further improvement is possible:

    Legislative framework for regulation

    While the UK has a diverse and competitive airport sector that delivers significant benefits for

    consumers, economic regulation is necessary in some cases where competition is more limited.

    The current legislation governing economic regulation is out-dated and in acute need of reform.

    The proposed revisions to the regulatory framework, which give CAA a new duty to put the

    interests of passengers and cargo users first, coupled with a more modern licence-basedregulatory regime, will enable more flexible and responsive regulation. The proposed reforms also

    promote the improved provision of information as a means of informing consumer choices and

    incentivising better performance.

    Airline competition

    Liberalisation of Air Service Agreements. Despite the fact that the airline sector is one of the

    A number of

    measures have the

    potential to provide

    additional flexibility

    and resilience into the

    aviation system,

    potentially enabling

    better use of existing

    capacity, particularly

    in the short and

    medium-term.

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    most international of industries, rules governing access to foreign markets remain highly restrictive in

    many cases. Liberalisation of intra-European aviation services in the 1990s and the increasing number of

    Open Skies style agreements have delivered significant consumer benefits. The Framework provides

    an opportunity for the Government to reiterate its commitment to liberalisation of aviation markets and

    give a renewed impetus to the opening up of the remaining restrictive air service agreements.

    Reform of airport slot allocation rules. Airline competition is dependent on access to take-off

    and landing slots. Scarcity of slots at congested airports can therefore represent a barrier to effective

    competition. Secondary slot trading has proven to be very useful in allowing airlines to respond to

    shifting market conditions and encouraging efficient use of scarce airport capacity. Current proposals

    for reform of the existing EU Slot Regulation offer an opportunity to further improve the system of

    secondary trading in the UK and elsewhere in Europe, potentially increasing the liquidity of the

    market for slots.

    Operational approaches: Improving Airport Resilience and Airspace Management

    Airport Resilience

    Through the work of the South East Airports Taskforce (SEAT) and the Airport Performance

    Facilitation Group (APFG) a number of mechanisms are being developed, including performance

    charters and capacity guidelines, which have the potential to avoid or mitigate the resilience issuesexperienced at some South-East airports being replicated at other airports if demand growth continues.

    At Heathrow, a set of operational freedoms is currently being tested. These additional measures

    allow the airport to apply certain tactical measures to prevent or mitigate disruption and to facilitate

    recovery. The measures include, for example, use of temporary departure routes and temporary

    desegregation of runway operation. Use of these measures is subject to rigorous safeguards and

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    confined to certain defined and limited situations. There is no increase in the number of flights at

    Heathrow which remain capped at pre-existing levels.

    Airspace Management

    Future Airspace Strategy. Ensuring that national airspace is not a constraint on reasonable

    demand growth is a key element of the CAAs Future Airspace Strategy (FAS). The FAS has the

    potential to make a substantial contribution to the Governments objectives as part of a

    sustainable framework that will guide the aviation industry in its investment and technological

    development plans.

    There are already congestion hotspots in UK airspace today that must be addressed as predicted

    traffic flows increase, in order to minimise delay and to deliver continuous improvements in

    safety. Under the levels of traffic growth set out in the Governments latest demand forecasts,

    the pressure on the UKs airspace system will continue to grow with a changing profile of

    demand from different user groups leading to a tightening in the supply/demand balance for

    airspace at certain times and in certain places, in particular in the South-East.

    Intermodality

    Improving the integration of aviation into the wider transport system has potential to improveconsumer choice, quality of experience and, at the margin, may lead to more efficient distribution

    of demand between airports at the margin. Governments proposals for High-Speed rail may have

    some impact on demand for aviation, but should be considered alongside other improvements to

    surface transport:

    Improved surface access to airports may have the potential to increase airport catchment areas.

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    This could facilitate the provision of additional routes from these airports, increasing choice and

    value for consumers. Where catchment areas overlap, consumers would further benefit from

    increased competition.

    Substitution from air to rail would be expected to reduce demand for aviation on a limited

    number of domestic and very short-haul routes. This may free up a limited amount of capacity at

    congested airports;

    Integration between high-speed rail and airports along the high-speed network may provide

    additional feeder traffic at these airports. This may support the development of some additional

    long-haul routes from these airports.

    Reduced rail journey times between Manchester and London have had an impact on market

    share of point-to-point air traffic, demonstrating the potential for air to rail modal shift. However,

    even with existing rail journey times of approximately 2 hours, demand for onward air

    connections from transfer passengers continues to sustain demand for multiple daily flights. In

    addition, 60% of UK domestic passengers in 2010 were travelling either on routes which do not

    pass through any London airport or on which currently proposed high-speed rail routes would

    offer no significant journey time benefit.

    Evidence on the complementarity between rail and air is limited. A credible rail-air product wouldneed to maximise intermodal convenience, ensuring that the rail-air interface was as seamless as

    possible and in particular minimised connection times. Relevant factors would include the

    proximity of the railway station to the main airport terminal as well as the provision of through-

    ticketing, remote baggage handling and other procedural formalities.

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    Appropriate additional

    capacity could deliver

    significant benefits for

    consumers. The

    Framework should

    seek to set in place a

    platform which will

    facilitate a credible

    path to provision of

    additional capacity.

    TOWARDS A LONGER-TERM SOLUTION

    The initiatives and measures outlined above offer some potential to improve the flexibility of the

    UK aviation system and ease capacity constraints, particularly in the short and medium term.

    However, we do not judge that they have sufficient impact to represent a long-term solution to

    the consumer and economic costs of capacity constraints.

    The CAA does not consider that it is necessary or appropriate to take a view on the location of

    any additional capacity at this stage. This should be the subject of a further process.

    However, Aviation Policy for the Consumerhighlighted that capacity constraints are likely to have

    a particular impact on the ease with which airlines could establish new routes to the key

    emerging markets that are likely to drive economic growth in the future. Accordingly, there would

    appear to be some benefit in any additional capacity being fit-for-purpose for the hub operations

    that may help support the commercial viability of such routes.

    It is also appropriate and timely to propose some criteria that any proposed new capacity would

    need to meet. The CAA considers that these should be set out in any call for evidence on

    additional capacity:

    Overall consumer benefit: As with any transport project, proposals should be subject to a full

    analysis of costs and benefits, with proposals only considered for approval where it is clearly

    demonstrated that they would be expected to deliver overall net benefits.;

    Affordability and commercial viability: Any additional capacity would need to commercially

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    viable and affordable. Additional capacity funded through steep increases in the charges faced by

    consumers may not deliver overall consumer benefits;

    Operational feasibility: Airspace in the South-East of the UK is among the most congested in

    the world. Developments proposed as part of airspace modernisation programmes being taken

    forward at national and European level offer some potential relief. But it would be important that

    any additional capacity were consistent with these initiatives in order to ensure that additional

    capacity could be utilised in a safe and efficient manner.

    Integration into the national surface transport network: As we discussed earlier in this note,

    surface access improvements, including the Governments proposals for High-Speed rail, have

    potential to improve consumer access to UK airports. Any additional capacity should be

    integrated into the national transport network to ensure ease of access for the maximum feasible

    number of consumers.

    Environmental sustainability: The Government has made it very clear that environmental

    sustainability is one of the key objectives of the framework. The CAA supports this view.

    Accordingly, the provision and utilisation of any additional capacity would need to be consistent

    with achieving the environmental outcomes we set out in Part 2.

    SINGLE-STOPOVER TRANSFER ACCESS TO GLOBAL MARKETS FROM OTHER UK AIRPORTS

    A limited number of long-haul routes operate from some of the larger regional airports. These

    tend to be focused on a limited number of destinations, principally in North America and the

    Middle East, leisure destinations in the Caribbean, and routes where the UK has particular cultural

    ties, such as parts of South Asia.

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    The Government faces a

    strategic choice in terms

    of how to ensure global

    access for aviation

    consumers in the UK

    regions.

    Regional passengers may benefit to some extent from capacity constraints in the South East if

    this leads to increased choice of direct long-haul routes. Such routes are mostly likely to be

    focused on links to foreign hubs. The CAA considers that significant hub-and-spoke networks are

    unlikely to develop at regional airports seems unlikely.

    As a result, passengers in the UK regions will continue need to use a transfer airport to access

    the majority of global destinations: either Heathrow, accessed by surface transport or a domestic

    flight, or a foreign airport.

    The options available to Government include:

    Ensure access to a hub airport from across the UK for example, by providing additional

    capacity and improving surface access;

    Explore development of a wider hub network to tackle security of supply issues.

    Additional hub capacity in London and the South-East

    Aviation Policy for the Consumernoted that as a result of forecast demand growth and capacity

    constraints in the South-East, there are likely to be increasing pressures on regional connectivity

    to London. The provision of additional capacity would be expected to at least partially relieve this

    pressure, creating slots for commercially viable regional services.

    Network of Hubs

    Regional passengers can use a range of hubs to access global destinations. The evidence

    presented in Aviation Policy for the Consumershowed that the majority of consumers from

    Northern England and Scotland who use a transfer airport to reach long-haul destinations

    already connect at a foreign hub rather than connecting in the UK. There is currently a

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    particularly rich network of connections between regional airports and the hubs at Amsterdam

    and Paris Charles de Gaulle.

    The UKs geographical position on the North-West of Europe means that airlines operating out of

    London can offer competitive journey times for connections to North America compared to other

    European hubs. Geography, and other factors such as economic, historical and cultural links,

    would suggest that other European airports might represent more convenient transfer points for

    routes to other world regions such as Asia, Africa and South America.

    Accordingly, the other major hubs in Western Europe and beyond play a positive and important

    role in providing additional choice and value to UK consumers. However, there may be security

    of supply risks if foreign hubs also become capacity constrained in the future. Forecast published

    by EurocontrolVI predict that by 2030, capacity constraints at airports across Europe could means

    as many as two million flights, some 10% of predicted demand, will not be accommodated.

    Under this scenario, it might be expected that connections to UK regional routes would get

    squeezed as has been the case at Heathrow over recent years.

    There may therefore be merit in considering a network approach in order to ensure

    connections for UK regional consumers to a variety of hubs. Such an approach would better

    take account of the cross-border nature of some of the challenges facing UK aviation in

    meeting the needs of consumers and would also be consistent with the joined-up approach

    taken with the Single European Sky airspace initiative.

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    Outcomes Actions Levers Issues

    Choice: Direct short-

    haulconnections Direct accessfrom UK tokey globalmarkets; One stopaccess fromother UKregions

    Value: Effective

    competitiondrivesconsumervalue

    Capacity: Additionalcapacity in

    South-East; Agnostic onlocation.

    Planning System: Development of a National PolicyStatement may help generateinvestor confidence

    Economic Regulation Any additional capacity would havea significant impact on airportcompetition and would haveregulatory implications.

    Economic Regulation / Funding: Affordability / Commercially viability; Additional capacity could result in consumerdetriment if charges become prohibitive;

    Operational Issues: Airspace management; Resilience

    Operational Issues: Interaction between airports; Optimal vs potential capacity

    RegionalConnectivity:

    Strategic choice: Connections toLondon; Connections toother hubs

    Surface Access: Developer Contributions

    Taxation / PSOs / RDFs:Protect access for regional routes atcongested airports

    Taxation measures should be non-distortionary.PSOs and RDFs locally important but limitedscope for widespread use

    Additional Capacity in SE See above

    Network of Hubs: Explore idea of a wider network ofhub airports

    Could help address security of supply issues.UK likely to be net winner.

    Achieving Choice and Value for Consumers

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    Outcomes should seek

    to maximise emissions

    reduction while

    minimising carbon

    leakage and

    competitive distortions.

    Overarching outcomes

    should ideally be set at

    an international level.

    At a national level,

    there is potential for

    outcomes to be

    specified in order to

    encourage and

    incentivise

    implementation of

    airspace modernisation

    ACHIEVING ENVIRONMENTAL SUSTAINABILITY

    CLIMATE CHANGE

    There is greatest potential for overall emissions reduction if policy action is taken at the global

    level. An appropriately designed multilateral solution would minimise competitive distortions and

    should mitigate carbon leakage between countries.

    Climate change is a global challenge. The Government should continue to promote and pursue a

    coordinated global solution for the aviation sector. The current debate around the implementation

    of the EU ETS potentially creates a window of opportunity to move the global debate forward as

    non-EU countries make their positions clear, for the first time in some cases. Progress towards a

    global solution is likely to require a combination of both political and technical approaches.

    Despite the challenges to the inclusion of aviation in EU ETS, the European Union Emissions Trading

    System (EU ETS) offers a next-best and interim solution. In light of the strong case for immediate

    action to tackle aviations CO2 emissions and the challenge of achieving multilateral consensus, the

    EU ETS, which will cover approximately 25% of global aviation emissions when it comes into force,

    offers a next-best solution. However, EU ETS is, and was always envisaged as, an interim solution

    and should not be seen as an alternative to a full global agreement.

    The options for intervening at the national level in response to a global challenge such as climate

    change are extremely limited. Where multilateral measures are in place, for example through the EU

    ETS or the development of a global solution, it is not necessary to set a national target. Moreover, a

    national target is likely to distort behaviours, leading to more limited emissions reductions than a

    cross-sectoral approach that optimises reductions across the economy as a whole.

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    The development of

    the aviation policy

    framework presents an

    opportunity to develop

    a new, twin-track

    approach to noise

    policy focused on two

    high-level outcomes:

    Continued reductions

    in the numbers of

    people affected by

    noise

    Encouraging better

    engagement with

    communities.

    There are a number of technical and operational improvements that can be taken forward at a

    national level or on which the UK can take a leading role. In particular, airspace modernisation has

    considerable potential to improve the efficiency with which UK airspace is utilised, leading to

    reduced fuel burn and CO2 emissions, as well as potentially delivering noise reduction benefits.

    Further work is required to develop scientific understanding to improve the accuracy of quantification

    of effects and better judge the most appropriate policy measures. The Framework should be kept

    under review to ensure it takes non-CO2 emissions into account as understanding in this area improves.

    AVIATION NOISE

    We expect there to be a continuation in the trend for improvements in technology to drive down

    aircraft noise. Action at the local level, involving regulatory, operational or economic policies, has

    the ability to accelerate the uptake of these technologies at specific airports.

    In addition, in Aviation Policy and the Environmentwe outlined a number of policy options that are

    available to Government, the regulator and sector players to reinforce this trend through changes

    to regulatory or operational approaches, potentially backed-up by economic instruments.

    Improved information: The complexity of the available information on aircraft noise and the

    portrayal of its impact is one of the significant barriers to better engagement on noise issues.

    Improvements in information may have an important role to play, both in incentivising

    improvements in aircraft noise performance and facilitating more constructive debate between the

    aviation sector and communities affected by aviation noise. The CAA has already undertaken work

    to develop information that can be presented in a form that is more readily understood. Future

    advances in this area will be investigated.

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    Regulatory Approaches: Policy decisions on the approach to airspace regulation can have a

    significant impact on the way that noise is distributed. The decision on whether to favour dispersion or

    concentration of flight paths is of particular importance. The Government has an opportunity to clarify

    its policy in this area.

    Operational Practices: The operational practices employed by airports and airlines can have a

    considerable influence on the level of noise created, the impact of the noise and the populations

    affected. A number of alternative practices could be employed to reduce noise emissions including

    continuous descent approaches (CDAs), steeper approaches and displaced thresholds for landings

    and continuous climb departures for take-offs. Many of these measures are being advanced as part

    of the CAAs Future Airspace Strategy workstream.

    Economic instruments could play a greater part in dealing with noise, consistent with

    polluter pays principle.

    Noise-based charging is already well-established part of the pricing structures at a number of

    airports in the UK, including the three noise-designated airports, Heathrow, Gatwick and

    Stansted. However, Air Navigation Service Providers (ANSPs) currently make no distinction in

    their charging structures to account for the noise performance of different aircraft.

    Using a similar concept to the cap and trade approach used in emissions trading schemes, a

    noise trading system could be adopted. As with other cap and trade schemes, the benefit

    of such an approach is that it would lead the aircraft operators who generate the noise

    disturbance to internalise the impact of the disturbance caused to local communities.

    CAA

    INSIGHT

    NOTE:

    AVIATION POLICY

    FOR THE FUTURE

    PART 4: CREATING

    A FRAMEWORK

    FOR DELIVERY

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    The current framework

    for managing local air

    quality sets clear

    outcomes, through

    mandatory targets. The

    CAA considers that this

    framework is seen as

    credible and effective.

    In Aviation Policy and the Environmentwe also proposed a number of potential measures that

    the Government could explore in order to unblock the policy stalemate around aviation noise.

    Improved engagement and communication between the aviation sector and local communities

    would appear to be a prerequisite for a framework which aims to generate lasting consensus

    around aviation policy. Given the starting point, it will clearly be challenging to achieve such

    consensus. However, there do not appear to be any reasons in principle why the aviation sector

    and civil society should not be able to engage more effectively on noise issues.

    It follows that a reformed institutional framework should allow the debate to focus on bespoke

    solutions for individuals or specific communities. Given the need to tailor solutions to local needs,

    the menu of potential options is necessarily very broad. Some illustrative examples that could be

    worthy of consideration include such measures as a council tax rebate scheme funded through a

    levy on airport charges or greater airport engagement in community projects, for example

    providing funding for community facilities or services.

    LOCAL AIR QUALITY

    The UK has adopted an outcome-based, non-sectoral approach to addressing air quality, based on

    the implementation of European legislation. We do not see merit in Government seeking to

    amend this approach.

    Indeed, there may be lessons that could be learned from the outcome-based, non-sectoral

    approach to air quality that could be useful in addressing other environmental impacts, for

    example as part of an alternative approach to noise policy.

    CAA

    INSIGHT

    NOTE:

    AVIATION POLICY

    FOR THE FUTURE

    PART 4: CREATING

    A FRAMEWORK

    FOR DELIVERY

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    CAA

    INSIGHT

    NOTE:

    AVIATION POLICY

    FOR THE FUTURE

    PART 4: CREATING

    A FRAMEWORK

    FOR DELIVERY

    Outcomes Actions Levers Issues

    Reduce overallGHG emissions

    Work towards globalsolution

    Exert influence at ICAO Limited prospects of a solutionin short- or medium-term

    Implementation ofEU ETS

    EU ETS EnforcementStakeholder engagement

    Challenges to EU ETS

    AirspaceModernisation

    FAS / SES and SESAR;NATS efficiency metric

    Improve understandingof non-CO2 impacts

    R&D funding

    Noise: Improve aviationsnoise performance; Improve communityengagement on noiseissues

    Operational measures Displaced thresholds;Steeper approaches

    This is a menu of options forconsideration. All would needfurther development.

    Safety requirementsPolitical choice betweenconcentration and dispersion

    Legacy of broken promises

    Regulatory approach Air Navigation GuidanceConcentration vs dispersion;Noise Envelope

    Economic instruments Noise-based chargingAirport level cap and trade

    CommunityEngagement toimprove trust

    Improved InformationExplore measures which would give atangible benefit to local residents

    Air Quality: Reduce PM10 and NOxemissions from aviation

    EU Air Quality Directivealready implementedthrough UK regulations

    Current non-sectoral, outcome-based approach works well.Seen as credible and trusted.

    Achieving Environmental Sustainability

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    CAA

    INSIGHT

    NOTE:

    AVIATION POLICY

    FOR THE FUTURE

    CONCLUSIONS

    Aviation Policy for the Futureis the final document in the CAAs series of three Insight Notes

    intended to inform the development of a Sustainable Framework for UK Aviation.

    In this note we have:

    Outlined an approach to the Framework which we consider would create an appropriate

    balance between the desire to give credible long-term investment signals to the sector and a

    recognition that policy will need to be able to adapt as and when circumstances demand;

    Proposed a set of policy outcomes which are consistent with achieving the Governments

    stated objective that aviation should be able to grow, but to do so, it must be able to play its part

    in delivering our environmental goals and protecting quality of life of local communities.

    Considered the challenges facing Government in putting in place a credible policy framework

    given that it has limited levers at its disposal.

    Addressed the case for policy action against a number of the key challenges:

    o Additional capacity we identify a case for the Framework to support and promote the

    provision of additional capacity in the South-East, subject to meeting a number of criteria.

    o Connections from regional airports to major hubs Overseas hubs play in an important

    role in offering choice and value to aviation consumers in the UK regions. A wider network of

    competing hubs, may offer a solution to potential security of supply issues that may arise if

    and when these hub airports become capacity constrained;

    o A new approach to noise policy We propose a twin-track approach to noise, addressing

    both noise reduction and improved community engagement. We propose a number of

    potential policy approaches that the Government may wish to explore.

    CONCLUSIONS

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    REFERENCESI http://www.caa.co.uk/docs/589/UK_CAA_Response_To_Sustainable_Aviation_Framework.pd f

    II Committee on Climate Change (2009), Meeting the UK aviation target options for reducing emissions to 2050

    III Committee on Climate Change (2009), Meeting the UK aviation target options for reducing emissions to 2050

    IV Committee on Climate Change (2011), Meeting Carbon Budgets - 3rd Progress Report to Parliament

    V Accent Research into Consumer Preferences,

    http://www.caa.co.uk/docs/2107/2131ConsumerResearch06122011.pdf

    VI http://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdf

    CAA

    INSIGHT

    NOTE:

    AVIATION POLICY

    FOR THE FUTURE REFERENCES

    http://www.caa.co.uk/docs/589/UK_CAA_Response_To_Sustainable_Aviation_Framework.pdfhttp://www.caa.co.uk/docs/589/UK_CAA_Response_To_Sustainable_Aviation_Framework.pdfhttp://http//www.caa.co.uk/docs/2107/2131ConsumerResearch06122011.pdfhttp://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdfhttp://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdfhttp://http//www.caa.co.uk/docs/2107/2131ConsumerResearch06122011.pdfhttp://www.caa.co.uk/docs/589/UK_CAA_Response_To_Sustainable_Aviation_Framework.pdfhttp://www.caa.co.uk/docs/589/UK_CAA_Response_To_Sustainable_Aviation_Framework.pdf