09 Aug 2024
By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
It has been some time coming, but the Scottish Government has finally completed the consultation it began in October 2021 on an Aviation Strategy for Scotland. Published late last month, we now have an Aviation Statement explaining the significance of the industry’s contribution to Scotland. Presumably the word strategy has been dropped following John Swinney’s comment on becoming First Minister that he would demand ‘more concrete actions and fewer strategies.’
Glasgow Chamber of Commerce has been calling for clarity on the Scottish Government’s aviation position for some years and there is much to welcome in the document we now have. But there is one lingering concern. It offers much less than it could for the economy of the West of Scotland.
We fully support the statement’s underlying premise that aviation is an important factor in achieving economic growth. Given Scotland's island geography, airline connectivity is fundamental for achieving the goals set out in two previous - and excellent - Scottish Government strategies on international trade and inward investment. Our daily work with local businesses exporting whisky, seafood and engineering products and services underscores this point. The same is true for the steady stream of inward investment in financial services, health and life sciences, and advanced engineering technologies.
Airports are essential assets for regional economic development. Glasgow Airport alone generates £1.44bn of economic output, supports some 30,000 jobs and enabled around £1.8bn of international trade in 2023. It has a clear ambition to grow these figures to over £2.54bn in output and 45,000 jobs by 2040. The Hillington Industrial Estate is a close neighbour and the new Advanced Manufacturing Innovation District, with the National Manufacturing Institute for Scotland (NMIS), is right next door. We have the beginnings of a large new cluster of advanced manufacturing.
This is why Glasgow Chamber believes the growth of the airport is one of the most critical projects to help Glasgow City Region contribute its fair share to faster national economic growth. We have consistently heard from our members that they need to see more international routes at Glasgow Airport, so it is encouraging that the Government’s statement commits to growing international connectivity.
However, economic growth does not dominate the statement. The Government insists that alongside improved connectivity there must be meaningful progress in decarbonising aviation and delivering on net zero targets. Again, it is helpful that the Government endorses work being done to meet the industry’s own commitment to net zero by 2050. Sustainable aviation fuels, hydrogen and electric planes for shorter flights – where Loganair has been especially active – and decarbonising airport operations all feature. However, the statement offers less detail on other important measures, such as the use of advanced aircraft design, including the use of lightweight materials which is a priority for the Light Manufacturing Centre of Excellence at NMIS. Overall though, the emphasis on technological solutions is encouraging
Perhaps the rather dismissive comments from the Scottish Green Party’s co-leader Patrick Harvie helps explain the long delay in the statement’s publication. Technological measures are simply ‘environmental window dressing’ and only reducing the demand for flying will do. The Government’s more optimistic view on the role science and technology can play is heartening. After all, with fuel making up around 30% of aviation costs according to IATA, surely it is in the industry’s interests to do all it can to improve fuel efficiency.
Where the document falls short in its uneven approach to regional development. Perhaps the most egregious example is its commitment to a so-called ‘strictly neutral’ stance on air route development, where the decision on which airport to use is left entirely to the airlines, with the Government refraining from any influence.
While the Government may consider this process neutral, the outcomes tell a different story. Over the past two years, the Government has supported five transatlantic flights to the United States and Canada, all departing from Edinburgh Airport, with none from Glasgow or Prestwick. According to an answer in Parliament, the Government spent £14.5m on supporting air services and while we don’t know how much was used to support the Edinburgh flights, there must be a risk that so much route development going to the one airport is distorting the market.
Even if one accepts that the current process is neutral, why is that considered a good thing? The First Minister for example, made it a clear priority to reduce child poverty and where are the greatest concentrations to be found? The West of Scotland. Why does the aviation policy take no account of wider national economic aims or regional development goals? The importance of securing just one regular flight from Glasgow to New York is evident from a York Aviation study calculating 26,000 new passengers, encouraging £47m of new investment and growing £12m of exports each year. That would certainly make a difference.
Glasgow and its surrounding region has made substantial progress over the last two decades. A persistent decline in population has been reversed, the supply of jobs has been growing faster than the Scottish average and the business base has also been expanding more quickly. It is no longer correct for senior policy makers to doubt the sense of investing in the Glasgow City Region. But that progress will not easily be sustained if every air route development decision that the Government financially supports goes to the East. Inward investors will notice and the Aviation Statement itself quotes Edinburgh Napier University’s research which identified air links as the most influential transport factor influencing where foreign investors choose to locate their operations.
We should celebrate the commitment the Scottish Government is making to the aviation industry and the balance it is aiming to strike between economic growth and delivering on net zero targets. However, it needs to think more about the impact its policies may have on broader economic objectives. It is troubling that every new flight to America it has financially supported in the last two years has gone to Edinburgh Airport. We hear too many business leaders in Glasgow lamenting the current lack of flights from Glasgow across the Atlantic. The Scottish Government has the power to address these concerns.
This article was first published in The Herald on Friday 9 August 2024
