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Aviation: Fuels

Volume 474: debated on Monday 21 April 2008

To ask the Secretary of State for Transport (1) what estimate she has made of the effect on forecast unconstrained demand for airport capacity in 2030 as shown in the Future of Air Travel Progress Report of using the most recent cost of aviation fuel instead of the assumed figure of $42 per barrel; (198185)

(2) what estimate she has made of the effect on forecast unconstrained demand for airport capacity in 2030 as shown in the Future of Air Travel Progress Report of including the recent change in Air Passenger Duty.

The results of updating the forecasts of air passenger demand in ‘The Future of Air Transport Progress Report’ (2006) with the latest data, including the 2007 increase in Air Passenger Duty, were reported in ‘UK Air Passenger Demand and CO2 Forecasts’ (November 2007), which is available at:

http://www.dft.gov.uk/pgr/aviation/environmentalissues/ukairdemandandco2forecasts/

Table 2.9 (p. 37) shows the central forecast is for unconstrained air passenger demand to grow from 228 million passengers per annum (mppa) in 2005 to 495mppa in 2030.

To ask the Secretary of State for Transport what estimate she has made of the effect on forecast unconstrained demand for airport capacity in 2030 as shown in the Future of Air Travel Progress Report of assuming that the cost of aviation fuel will rise until 2030 at half the rate that it has risen in the last four years. (198188)

The latest forecasts of UK air passenger demand were reported in ‘UK Air Passenger Demand and CO2 Forecasts' (November 2007), which is available at:

http://www.dft.gov.uk/pgr/aviation/environmentalissues/ukairdemandandco2forecasts/

Table 2.10 (p.41) reports the effect of a set of sensitivity tests, whereby key inputs are varied within reasonable bounds, on demand. This includes varying the oil price projection in line with the Department for Business, Enterprise and Regulatory Reform's oil price range.

The impact of assuming that the cost of aviation fuel continues to rise until 2030, but at half the rate that it has risen in the last four years, is not available.

To ask the Secretary of State for Transport what the most recent price of aviation fuel in (a) dollars per barrel and in (b) pence per litre was, ignoring any hedging arrangements. (198191)

Aviation fuel price data are not officially collected. However, information on aviation fuel prices is available from sources such as:

www.platts.com

Based on daily wholesale prices reported by Platts, the price of aviation jet fuel in March 2008 averaged $133 per barrel, or 42 pence per litre.

To ask the Secretary of State for Transport what estimate she has made of the average proportion of airline costs fuel represents, calculated on the same basis as the figure given in the Future of Air Transport White Paper. (198251)

Table 2.3 of CAA's ‘Airline Financial Statistics 2006-07' reports a breakdown of operating revenues and expenses for major UK airlines. This is available at:

http://www.caa.co.uk/default.aspx?catid=80&pagetype=88&sglid=13&fld=2006_2007

The data show that aircraft fuel and oil accounted for £4.0 billion (26 per cent.) of the £15.6 billion total operating expenses incurred by major UK airlines in 2006.