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IATA warns Britain on air trade future

LONDON: November 08, 2017. Speaking at the UK Aviation Club, IATA director general and CEO Alexandre de Juniac has warned the British government it has just 11 months to start and complete bilateral aviation agreements with the rest of the world prior to its withdrawal from the European Union in March 2019:

"For an industry with a mission to connect people, the thrust of Brexit has to be characterized as disappointing. The tide of globalization may not have lifted all people evenly, but the overall prosperity it has generated is undeniable. And aviation connectivity is one of the key vectors.

"In building the post-Brexit world, the prosperity of the UK will depend on the strength of its connectivity links with Europe and the rest of the world.

"There is a real challenge ahead. When the UK leaves the European Single Market, it will also leave the European Common Aviation Area. And when it breaks from the European Union, all traffic rights to the rest of the world associated with Europe will also be thrown into question. And, as we all know, the basis of international aviation is bilateral air services agreements. There is no WTO agreement to fall back on.

"For that reason, I don't see any alternative to a negotiated agreement.

"I don't believe that people will accept anything that turns back the clock on the achievements of the EU Common Aviation Area. Getting to a solution, however, will take effort. And there are both political and competitive interests at stake.

"IATA is, of course, not directly involved in these discussions. But we are monitoring them closely. And I need to ring a warning bell because time is precious. The Brexit clock is ticking towards a deadline of March 2019. But the aviation deadline is earlier. Normally passengers can book travel a year in advance.

"At a minimum, the flight schedules and seat and cargo inventories must be available at least six months in advance. So that puts the airlines' deadline at October 2018 - just 11 months from now.

"My message to all involved is three-fold: Get started. Don't step backwards. And don't underestimate the work ahead.

"On that last point, while the focus is on bilateral flight details, there are lots of other aviation issues to be discussed. What will the Customs environment be, for example? Currently the UK processes about 4.6 million Customs transactions a month. That could balloon to 21 million a month. Adjusting staffing, systems and processes to this reality will not happen overnight.

"How will EU nationals be processed at UK borders and UK citizens when traveling to Europe? And what resources will be needed if, for example, it is decided that access to automated border kiosks is no longer acceptable?

"And what will be the UK's relationship with EASA, the European Aviation Safety Agency?

"These are only some of the issues that will need to be tackled. And the pressure is mounting, with passenger numbers predicted to grow irrespective of Brexit. So solutions need to be found quickly to ensure a smooth transition. And with the amount of work that needs to be done, there are good arguments to put transition agreements in place.

"The growing demand for travel is also putting pressure on the UK's infrastructure. That's no secret.

"The Secretary of State for Transport, Mr. Chris Grayling, has said that all five London airports will be completely full by the mid-2030s. And it will be May 2021 before we reach even the planning permission approval stage for any expansion.

"IATA believes that Heathrow is where that expansion should take place. I know the struggle to build a third runway has meant decades of frustration. But the UK will be left behind in the globally connected world if it does not come to a final decision and implement it.

"Look at what is happening in Beijing, for example. Its main airport was expanded to handle 100 million passengers in 2008. And in a few years it will have a second 100 million passengers airport. The business and tourism opportunities that aviation will create will go elsewhere if the UK's main hub cannot handle the demand.

"Expanding Heathrow is about building prosperity. The potential economic boost to the UK from a third runway at Heathrow is £200 billion according to the Department for Transport's Draft National Policy Statement. And estimates for the jobs it would create range up to 110,000.

"Delivering on that promise should be a priority for the UK - all the more so when looking to the challenges of a post-Brexit world.

"Concerns about environmental sustainability are serious, and I believe solutions are in hand. On carbon emissions, they are covered by our global strategy that I described earlier. Local emissions from surface transport will similarly be covered with new automobile technologies, avoiding adding congestion charges to the airport's costs.

"On that note, I want to be clear that I am not saying to build the third runway at any cost. The original estimates of £17 billion were completely unacceptable.

"Heathrow Airport's recently announced intention to reduce that cost is a step in the right direction, but Heathrow is already the most expensive airport in the world from which to operate. It is essential that Heathrow's charges do not rise from today's levels. The construction of the third runway must enhance Heathrow's competitiveness, not destroy it!

"For any airport, airlines have three needs: capacity, quality and affordability. In delivering the third runway, the capacity issue will be resolved for now. But achieving the right quality at the correct price requires consultation with the airlines. And one idea from the airline community that should be taken into consideration by the government is seeking competitive bids from developers.

"There are tough issues to resolve, as we have discussed today. On top of that, profitability is hard won. Surprises are many. Weather, volcanoes, pandemics and politics are among the factors that can change the business in an instant. Safety and security need a constant razor-sharp focus.

"But the fruits of our labor are real. This year our work will enable four billion people to fly. A visit to any airport's arrivals hall will evidence how important that is. We make the world a better place by bringing people together.

"This should send a strong message to governments about the benefits of borders that are open to people and trade. We are the business of freedom. And nothing should stand in the way of the good we do."

A chaotic post-Brexit aviation environment will put at risk 40 percent of UK trade by value.

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