“I started out cleaning Freddie Laker’s planes”

Simon Calder, the Independent’s travel correspondent, talks capacity myths, his first job in travel and a love of Singapore’s Changi airport.

Where do you stand on the aviation capacity debate? 
I’d politely suggest predictions of the imminent demise of British aviation have been exaggerated. Listening to parts of the debate it’s interesting how it’s described as a terrible capacity crunch when in fact we’ve actually got a bit too much capacity – it’s just in the wrong places. And I joyfully celebrate every time I board a plane how lucky we are to have such a competitive, low-cost aviation sector. And because everybody wants to fly into London we have better fares than one would predict. To take a brief example, London to Melbourne (just about the longest journey you can make from the UK) costs £900 direct which is about 40 per cent, sometimes 50 per cent, less than a Melbourne resident would pay. Things will get even better once you begin to erode the market distortion caused by having Heathrow at effectively its declared capacity.
 
Are you saying that the capacity crunch is overstated? That it doesn’t exist?
Heathrow has no spare capacity under its current rules and operating regime. The only way to get proper competition in 
a meaningful way is to have spare capacity in parts of the system that do not have spare capacity at the moment. 
 
And where are those parts?
So Gatwick has bits [of capacity] around the edges which is fine. Heathrow has plenty of spare capacity; it is currently about 80 per cent of its ATC [air traffic control] potential capacity within the hours of operation. So when [Heathrow] says they are 98 per cent full what they mean is that “we use 98 per cent of the slots that we are allowed to use”, which is a completely different metric. 
 
So given that competition will only flourish where there is spare capacity, we do need some spare capacity and that might involve building a third runway at Heathrow. It might involve building a second runway at Gatwick; it could conceivably involve building a second runway at Stansted but I think we’re looking at another twenty, thirty, forty years for that.
 
Might that involve building no new runways at all?
Only with the sorts of command economy decisions that we are not going to see. 
So we’ve got plenty of capacity but we haven’t really got it where people really need it. And it’s difficult to see where Gatwick can begin meaningfully to compete with Heathrow while we have the 
current alignment of runways. 
 
When people talk about connectivity they tend to elide this with talk of a single hub airport…
But these people who talk about connectivity tend to be politicians – who have their own reasons to do all sorts of things – and Heathrow airport.
 
Are they wrong to talk in those terms?
Let’s just take a step back. London is the biggest aviation market in the world and rather more than half that capacity is at Heathrow. So Heathrow is important. But  the figures suggest (or one set of figures suggest) that 37 per cent of people at Heathrow are connecting. Let’s call it a third roughly. But they are not doing that every single day because nine out of ten of people flying in and out of London are origin and destination passengers.
 
Now British Airways would much rather fly everybody between Heathrow and Miami point-to-point because it will get a premium for that. It would rather fly everybody from Heathrow to Moscow point-to-point because it can get a premium for that too. But on a wet Tuesday in November, it’s never going to do that. So therefore they have this great power to turn on capacity, to say to travellers in Moscow and Miami, “Hey, if you work around our schedules, our availability, we will give you a great price.” And that helps fill up spare capacity and aviation has very high fixed costs and very low marginal costs. So that’s a fantastic thing to have and it’s not something Air France or Lufthansa has because they do not have sufficient capacity at their hubs to offer that origin and destination traffic. 
 
British Airways wants lots of point-to-point traffic but it also wants to have the right to lots of connecting traffic and I’m not sure the extent to which of the other airline alliances apart from oneworld really sees London as a potential lone hub rather than just simply a rich source of traffic. 
 
So we’re not talking about the need for a hub, we’re talking about the needs of British Airways. Or is that unfair?
If you want a traditional 20th century hub then the best shot Britain and London has is Heathrow and British Airways. But I’m just not sure whether that’s the right question to ask. You need to be aware of what the 787 might do, of what the Airbus A350 might do in terms of point-to-point. Look at what Norwegian – by far the most radical low-cost airline, far more so than Ryanair or EasyJet – is doing buying 787s and flying them to New York. To say, “Here’s how air traffic works, it’s all hubs and spokes” is not correct. And neither is it correct to say it’s all going to be direct. It’s going to be messy. 
 
What’s your favourite airport in the world?
I’m going to be quite conventional and say Amsterdam Schiphol. I don’t love it just because it has somehow managed to compress a hub into an area where you can actually have simple terminal connections but because they put a bit of the Rijksmuseum in there too. They really thought, “Okay, what do we do in Holland. Well, we do lots of trading; we’re very good at that. Oh, and we had the golden age and produced the world’s greatest art. So let’s put some of that in.”
 
Any others?
[Singapore’s] Changi airport because it’s got a swimming pool on the roof and a cactus garden. And furthermore you can get from Jumbo Seafood on the East Coast Parkway to Changi in about ten minutes in a cab which means you can have the best feast ever and then fly home to London. 
 
And your least favourite airport?
[New York’s John F] Kennedy used to be but not anymore. Sheremetyevo in Moscow is probably top of the list. On the other hand, airports are a means to an end like prisons, like hospitals. [You want to] get in and get out as fast as possible. It doesn’t matter if they are Amsterdam or Changi or Sheremetyevo, you just want to get out.
 
If you could change one thing about air travel what would it be?
Security. 
 
To make it more efficient?
To make it more human. You, and everyone reading this, has no evil intent in their heart but if they fly they will be treated as if they are international terrorists. Ensuring that they don’t have any sharp objects or guns is a forty year old paradigm of how we make the skies safe. 
 
You should be looking at people for their behaviour – and absolutely not their race or religion – to spot some reason to want to enquire a bit further as opposed to frisking people even though they are clearly not going to cause any trouble. You might one day have lounge marshals much like sky marshals: they won’t have guns, they’ll sit around and look around. 
 
Is it true that your first job was as a cleaner at Gatwick?
It was my first job in travel. I’d had a paper round before that. But yes, I started cleaning out Freddie Laker’s planes. And then I started frisking people. 
 
So is that where the love affair with travel began?­­
No, no. That began when I realised I was living in Crawley and I thought there must be better places in the world than this. 
 
Interview by Jon Bernstein

 

Schiphol Airport. Photograph: Getty.

Jon Bernstein, former deputy editor of New Statesman, is a digital strategist and editor. He tweets @Jon_Bernstein. 

Getty
Show Hide image

What is the EU customs union and will Brexit make us leave?

International trade secretary Liam Fox's job makes more sense if we leave the customs union. 

Brexiteers and Remoaners alike have spent the winter months talking of leaving the "customs union", and how this should be weighed up against the benefits of controlling immigration. But what does it actually mean, and how is it different from the EU single market?

Imagine a medieval town, with a busy marketplace where traders are buying and selling wares. Now imagine that the town is also protected by a city wall, with guards ready to slap charges on any outside traders who want to come in. That's how the customs union works.  

In essence, a customs union is an agreement between countries not to impose tariffs on imports from within the club, and at the same time impose common tariffs on goods coming in from outsiders. In other words, the countries decide to trade collectively with each other, and bargain collectively with everyone else. 

The EU isn't the only customs union, or even the first in Europe. In the 19th century, German-speaking states organised the Zollverein, or German Customs Union, which in turn paved the way for the unification of Germany. Other customs unions today include the Eurasian Economic Union of central Asian states and Russia. The EU also has a customs union with Turkey.

What is special about the EU customs union is the level of co-operation, with member states sharing commercial policies, and the size. So how would leaving it affect the UK post-Brexit?

The EU customs union in practice

The EU, acting on behalf of the UK and other member states, has negotiated trade deals with countries around the world which take years to complete. The EU is still mired in talks to try to pull off the controversial Transatlantic Trade and Investment Partnership (TTIP) with the US, and a similar EU-Japan trade deal. These two deals alone would cover a third of all EU trade.

The point of these deals is to make it easier for the EU's exporters to sell abroad, keep imports relatively cheap and at the same time protect the member states' own businesses and consumers as much as possible. 

The rules of the customs union require member states to let the EU negotiate on their behalf, rather than trying to cut their own deals. In theory, if the UK walks away from the customs union, we walk away from all these trade deals, but we also get a chance to strike our own. 

What are the UK's options?

The UK could perhaps come to an agreement with the EU where it continues to remain inside the customs union. But some analysts believe that door has already shut. 

One of Theresa May’s first acts as Prime Minister was to appoint Liam Fox, the Brexiteer, as the secretary of state for international trade. Why would she appoint him, so the logic goes, if there were no international trade deals to talk about? And Fox can only do this if the UK is outside the customs union. 

(Conversely, former Lib Dem leader Nick Clegg argues May will realise the customs union is too valuable and Fox will be gone within two years).

Fox has himself said the UK should leave the customs union but later seemed to backtrack, saying it is "important to have continuity in trade".

If the UK does leave the customs union, it will have the freedom to negotiate, but will it fare better or worse than the EU bloc?

On the one hand, the UK, as a single voice, can make speedy decisions, whereas the EU has a lengthy consultative process (the Belgian region of Wallonia recently blocked the entire EU-Canada trade deal). Incoming US President Donald Trump has already said he will try to come to a deal quickly

On the other, the UK economy is far smaller, and trade negotiators may discover they have far less leverage acting alone. 

Unintended consequences

There is also the question of the UK’s membership of the World Trade Organisation, which is currently governed by its membership of the customs union. According to the Institute for Government: “Many countries will want to be clear about the UK’s membership of the WTO before they open negotiations.”

And then there is the question of policing trade outside of the customs union. For example, if it was significantly cheaper to import goods from China into Ireland, a customs union member, than Northern Ireland, a smuggling network might emerge.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.