Fri 1 Nov 2013 – A study by the UK’s aviation regulator, the Civil Aviation Authority (CAA), concludes that UK airports should use their landing charges to offer better incentives for airlines to operate cleaner and quieter flights. It found that approaches to the environmental elements of landing charges, those relating to noise and NOx emissions, varied greatly over the six airports reviewed. The CAA therefore calls for charges to be more consistently linked to impact in order to maximise the incentives for more environmentally-friendly operations. Given that landing charge levels are regulated, the study acknowledges that options to increase incentives for airlines will be restricted to increasing differentials within the charges. It adds that airports will need to consider potential trade-offs with economic and consumer choice factors when considering their approach to landing charges.
The report also found that while some airports used differential landing charges to encourage airlines to operate in the day, others applied reduced landing charges for early morning and night flights due to differences in demand. This approach, says the CAA, gives airlines a financial incentive to fly at times when residents are more sensitive to aircraft noise and could actually increase airlines’ environmental impact on local residents.
“We are very clear that the aviation industry needs to do more to tackle its environmental impacts, particularly if the sector wishes to grow. This means adopting innovative approaches, and using landing charges to encourage cleaner, quieter flights is one way we believe the industry can make a difference,” said Dan Edwards, Head of Economic Policy and International Aviation at the CAA.
The study was undertaken to provide information in relation to the Department for Transport’s Aviation Policy Framework and the new Night Noise Restrictions due to come into force next year at Heathrow, Gatwick and Stansted, and also to meet an objective of the CAA’s Environmental Strategy. Noise and NOx related landing charge schemes were reviewed for these three airports, which have been designated by the government for noise management, together with three non-designated airports – Manchester, East Midlands and Birmingham – for comparison.
The main finding is that although differential environmental landing charges have some incentive effects, they are unlikely to be the main financial driver for using quieter and less-polluting aircraft, and more effective charging schemes could be developed along with earlier introduction of higher charges for categories of aircraft that exhibit poor noise and NOx performance relative to emerging standards.
Under the CAA’s current price regulation of Heathrow, Gatwick and Stansted, increases in environmental landing charges would have to be counter-balanced by decreases in other airport charges. However, as noise and emissions-related landing charges are relatively low compared to per-passenger charges there could be scope to do this, suggests the CAA.
To put emissions charges into context, Heathrow forecasts receiving around £47 million ($75m) from such charges for 2013/14. With total revenue from airport charges expected to reach £1.5 billion ($2.4bn), emissions constitute about 3% of total airport charges. In 2011/12, revenue from airport charges was about 57% of Heathrow’s total revenue.
On NOx emissions charges, guidance is provided by ICAO in relation to addressing local air quality (LAQ) problems at or around airports and should only be levied at airports with a defined existing or projected problem. They should be designed to recover no more than the costs of measures applied to the mitigation or prevention of the damage caused by aircraft.
At Heathrow and Gatwick – the other four airports studied do not charge – an emissions charge of £7.76 ($12.40) and £5.26 ($8.40), respectively, per kilo of NOx applies all aircraft over 8,618kg. For example, a twin-engined narrowbody Airbus A319 would incur a charge per rotation of around £150 ($240) at Heathrow and £100 ($160) at Gatwick. For a widebody Boeing 777-200ER the charge would be around £870 ($1490) at Heathrow and £590 ($942) at Gatwick. An Airbus A380 would incur a charge of £1,030 ($1645) at Heathrow and £700 ($1120) at Gatwick.
Whereas NOx emissions are therefore rated for charging purposes on a linear scale, noise charging relates to discrete charging categories according to an aircraft’s compliance with ICAO noise standards and is less clearly defined.
The majority of modern aircraft operating at Heathrow fall within the ICAO Chapter 4 noise categories, defined as High, Base and Minus, and face lower landing charges. Between 2010/11 and 2013/14, the anticipated fleet mix profile moved away from Chapter 3 aircraft towards the quieter Chapter 4, with a stark move towards Chapter 4 Minus aircraft in 2013/14. Considering the relatively small differences between the Chapter 4 category charges, there is only a modest incentive to move towards the quieter end of Chapter 4 at Heathrow, says the study.
By contrast, at Gatwick and Stansted there is no additional landing charge incentive to use an aircraft that is quieter than the Chapter 4 High and Chapter 3 Minus category respectively, which make up the majority of aircraft types operating at these airports.
In this context, the high charges for Chapter 2 and Chapter 3 High, which on face value appear to offer a clear disincentive to use noisy aircraft, have a limited ability to ‘bite’ owing to the relatively low numbers of aircraft to which they apply. The most meaningful charge differentials, where they exist, are therefore between the quieter Chapter 4 categories, concludes the study.
The CAA has compiled a list of a number of principles it considers good practice in the setting of airport noise and emissions charges:
- Noise charging categories should be based on ICAO certification data, namely the margin to Chapter 3, to incentivise best-in-class.
- Noise charging categories should be of equal width, typically 5 EPNdB or narrower, to ensure adequate differentiation of noise performance.
- The noise charging categories used at a given airport should cover the full range of aircraft in operation at the airport. This range should be reviewed periodically and modified as appropriate.
- Noise charges for operations occurring at night should be greater than those that occur during the day.
- Where noise-related charge differentials occur depending on the time of day of an operation, the scheduled time of the operation should be used as opposed to the actual time. Penalties may be used to disincentivise operations scheduled to occur on the cusp of the night period that regularly fall into the night period.
- There should be a clear distinction between noise-related landing charges and any non-noise-related charges, e.g. demand-related charges.
- Charging schemes should ideally be harmonised across airports within the UK. Aircraft should be treated similarly from one airport to another, even if the charges at each airport are different.
“Adopting the principles will lead to a more consistent approach to noise and emissions landing charges across the UK, with better incentives for airlines and ultimately reducing aviation’s environmental impact on residents,” commented Edwards.
CAA study ‘Environmental charging - Review of impact of noise and NOx landing charges’
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