Friday 30 March 2018

The return of Air Wales?

I referred yesterday to my scepticism about the proposal put forward by Plaid that Wales should have its own national airline, along with a network of regional airports across Wales.  There are a number of issues with this proposal, to my mind.
The first concerns general trends in the aviation industry.  It’s an industry which has certainly seen a great deal of growth in recent years, and that growth has been accompanied by falling prices.  And there is clearly scope for continuing growth into the future.  But that combination of growth and falling prices has been achieved by a mixture of consolidation of national airlines into multinational groups and the rise of cheap low-cost airlines.   There is a history of specifically Welsh airlines - we did, of course, have Cambrian Airways which was moderately successful, and which operated for almost 40 years before being swallowed up by BA in an earlier period of consolidation in 1974.  And we had Air Wales, in two different guises, both of which hit financial problems and eventually ceased operations, in the later instance citing spiralling costs and aggressive competition.  As a means of boosting the range of flights from Cardiff Wales airport, setting up a new state-run airline in a small country like Wales would be going against the flow, to say the least.  That isn’t a cast-iron reason for not doing it, but it’s a pretty good reason for exercising a great deal of caution.
Added to that is that the proposal seems to be based on a supply-led, rather than a demand-led, approach to increasing air traffic.  I don’t doubt that there are people in Wales who would like to be able to fly to an increased range of destinations from Cardiff airport, but at what point does that demand become sufficient to justify the prior expenditure on providing the capacity?  The experience of commercial operators who’ve tried starting new services from Cardiff Wales does not augur well.  A national airline looks like a potential way of diverting a large amount of government expenditure to a loss-making enterprise.  And that is in the context of a government which has little control over its own revenue streams and is legally obliged to balance its budget, meaning that significant investment in an airline would inevitably impact other services.
Underlying those problems is the question of the catchment area from which the demand arises.  I remember a comment on a previous post about expanding Cardiff Wales airport which came close to suggesting that I was being unpatriotic by not enthusiastically supporting expansion; but we need to have a degree of realism about the airport’s prospects.  The population in the catchment area which it is uniquely placed to serve is comparatively small, and is restricted to Cardiff, the Valleys and points west thereof (and we need to remember that parts of that catchment area are among the poorest parts of the UK, a factor which inevitably constrains the current demand for air travel).  For the North, the Canolbarth, and Gwent, there are equally accessible (or even more accessible) competitor airports, and that will remain true even after constructing improved communications routes between north and south.  Choice of airport isn’t just about having a wider range of destinations, or about price (let alone just about being patriotic); it’s also about convenience and ease of access.  The answer to the question ‘why haven’t we got direct regular flights from Cardiff to destination X?’ is because there is currently insufficient demand from within the unique catchment area to make such flights commercially viable (unless they are replacements for, rather than supplements to, existing flights to the same destinations from competing airports, and therefore able to draw on a wider catchment area).  Setting up a loss-making state-run airline is not the solution to that problem.
I don’t know what to make of the proposal for a network of regional airports across Wales as well as expanding the role of Cardiff.  If such airports are going to have their own short or medium haul flights, then they will be direct competitors to Cardiff, and if they’re seen as primarily the origin of ‘feeder’ flights into Cardiff, then they are just about the least efficient and most environmentally damaging method of transporting a (comparatively) small number of people around our country that I can think of.  This is exactly the problem with the current north-south air link – it benefits few and is viable only by the payment of a subsidy for each and every traveller.  Better by far to improve Wales’ internal surface transport (and especially rail), which was another of Plaid’s proposals and one which I would entirely endorse.
And that brings me on to my last, but far from least, point which is whether encouraging the growth of air traffic is a good thing anyway.  I don’t want to stop people enjoying foreign holidays (that would be hypocritical to say the least), nor do I want to create obstacles to foreign trade (although I do want to try and re-localise business as far as possible).  Both of those are likely to lead to slow organic growth in the number and range of flights available from Cardiff.  But actively encouraging the growth of air traffic goes beyond either of those objectives, and seems a strange policy to be coming from a party parading its environmental credentials.  Part of my support for the building of HS2 (which I know appears perverse to many independentistas) is that I see it as part of a high-speed pan-Europe rail network, and as an environmentally preferable alternative to increasing short haul air travel.  I want to see Wales benefitting from that alternative as well, rather than trying to block its development.
Setting up a national airline for Wales looks to me like a project aimed at boosting the semblance of statehood, at what is likely to be a high cost.  I’m more interested in attaining the substance of statehood.


Anonymous said...

Wales is small in area size, so instead of using fixed wing aircraft to service our towns, helicopters could be the answer bearing in mind our road/rail system!

John Dixon said...

Yes, of course that's possible. But it does emphasise two things as well. The first is that this form of transport is only ever going to be for a small minority (and the most well-off minority at that). And the second is that it is viewed as a means of overcoming the inadequacies of road and rail transport, but only for that minority. Whereas improving surface transport benefits a lot more people.

Spirit of BME said...

Excellent post, which sums up the sad history of Welsh aviation very well, except you made the mistake of believing that the most recent cases were “civil aviation” when in fact they were simply air taxi service for civil servants and a past deputy leader of HMG in Wales and at a large cost to the tax payer.
It begs the question – What is Adam Price on, dreaming of flying through the clouds in a red, green and white aeroplane? Especially under the current regime.
Aviation on anything below three hour flying time is the most difficult sector of the business, as profit is only made from the business tickets and most companies today do not allow their staff business tickets on flights that are three hours or less.
Air routes follow business growth and the most successful countries ensure that to achieve this you have to decentralise government powers and allow various parts of your country to compete by having the power over business taxation.