The point that the article missed is to consider the agenda for the Coalition Government’s policy paper which is scheduled for release later in the year. In my view, the UK’s airline industry is riddled with inefficiency, and the current regulation of airports provides a major opportunity for improvement. Indeed, the challenge extends to all regulated industries, a point picked up recently by Conservative MP, John Redwood in his blog.
Personally, I struggle with Simon Jenkins argument favoring stimulating consumption rather than investment. Most economists argue in favor of the multiplier effect from stimulating investment which gives more “bangs for your buck” of stimulus. Some open public questions that come to mind are:
- Why are UK airports so bad when compared to other major airports throughout the World?
- What are the real constraints on improving effectiveness?
- How do UK airports compare to other major airports in terms of key metrics, like:
- Revenues, passenger numbers, revenue mix and relative profitability from segments
- Customer service
- Throughput effectiveness
- Staff flexibility
- Space utilization
- Outsourcing etc.?
What do you think?