Airline industry expansion plans will be the first test of the UK Goverment’s committment to takling climate change following the announcement of the Stern report last week, according to a lead article in todays Independent newspaper.
It has come to light that UK airport expansion plans are set to treble the number of flights by 2030. But surely these projections took account of climate change concerns and the likely impact of green-taxes on the industry. So, what does the airline industry know that we don’t? Will the government give in to pressure from the industry? This seems unlikely, especially following the publication of the Stern Report.
Perhaps the power of certain business and cultural trends have more
to do with these predictions, as indicated in comments by Ken
Livingstone after reviewing plans for the future growth of London that
will restrict future runway expansions.
He says that to tackle the problem his target is not business
travelers because tickets would need to be massively more expensive
to reduce the number of flights they take. His target is the frequent
leisure flier who he says are not the poor
getting on the plane
for the first time, but it’s not that at all. "Half the population
never gets on a plane. What’s happening is that relatively few people,
instead of going away once a year on holiday, are going three or four
times a year to Barcelona or Prague or wherever. That’s all very nice,
but not at the cost of the continuation of life on planet Earth."
These comments are based on two trends: Globalization and it’s value
to business being far higher than any levy on flights. And, the number
of frequent leisure travelers taking short breaks of commuting to their
second homes abroad, made easy by the low cost airline carriers.
The number of people of frequent leisure travelers is also set to grow massively. Read this months trend called Transumers from www.trendwatching.com to understand the drivers of this trend.
"Transumers
are consumers driven by experiences" and intangibles rather than the
tangibles. They seek entertainment and discovery. They live transient
lifestyles and want to collect as many experiences and stories as
possible.
Sited as evidence of this trend is research by Pam Danzinger of
Unity Marketing who says, “Luxury consumers are spending more, in many
cases lots more, on
life-changing experiences, while their need for luxury goods is waning.
Spending on luxury experiences in the US, including travel, dining,
entertainment, spas and beauty services and home services, nearly
doubled, from an average of USD 11,632 in 2004 to USD 22,746 in 2005: a
95.5 percent increase" Note that travel is the first experience in this
list.
Of course these two trends are often combined as one in the form of successful professionals who travel widely and divide their time between several cities. The target market of the new Magazine Monocole from the founder of Wallpaper Magazine, Tyler Brule.
These trends are strong indeed, so will taxes on air fairs solve the
problem? Airport expansion plans would suggest that those in the know
do not think so. They are probably right. If demand is so strong higher
prices for flights will not have a significant impact on demand. A
report by the Environmental Change Institute
of Oxford University already suggests that consumers would be prepared
to pay the environmental taxes imposed. As strong indication that it
would not reduce their demand.
The only solution then is to restrict supply it seems, so the
governments response to growth plans by the industry should be watched
closely. Will the government give in to the industry lobby or will it
act in the interests of the planet?
Perhaps solutions to the problem should also be sought by looking
into the trends that are causing the demand, but any change is likely
to bring medium to long-term solutions rather than quick ones it would
seem.
Contributed by Paul Barnett
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