The CAA sets the maximum level of passenger charges that Heathrow can charge, generally for a 5 year period. Heathrow had few passenger for two years, due to Covid and the CAA allowed them to raise their passenger charges, while passenger numbers remained low. However, the numbers are now rising, and may be high next year. Back in June, the CAA said the cap would fall from £30.19 then to £26.31 in 2026. When the effects of inflation are removed, that is a 6% reduction every year. Now the CAA has published an interim cap consultation (8th December – for 2 weeks), which raises the cap from £30.19 this year to £31.57. By contrast, the charge was £19.36 pre-pandemic. Airlines believe the higher level of cap is unjustifiable, as based on 2023 traffic forecasts that are too low. Heathrow wants the high charges, in order to recoup its vast debts, pay its shareholders their dividends, and also perhaps for future expansion. . Tweet
Virgin Atlantic boss blasts CAA over Heathrow price cap
By Robin Searle (Travel Weekly)
December 08, 2022
Virgin Atlantic chief executive Shai Weiss has blasted the CAA’s published price cap for Heathrow airport, insisting the £31.57 cap is based on “undercooked and self-serving passenger forecasts”.
The authority published an interim cap consultation on Thursday 8th, which raises the cap from £30.19 this year. The consultation will run for two weeks, to December 22.
Earlier this year, the CAA published a five-year plan to lower the average charge per passenger at Heathrow to £26.31 by 2026
Virgin Atlantic argued the 2023 cap, which sets limits on fees the airport can charge airlines, is based on flawed projections which downplay a likely recovery.
Weiss said: “It is unacceptable that the CAA has published a price cap for 2023 charges based on Heathrow’s undercooked and self-serving passenger forecasts, using airport projections that have proven to be completely flawed this year and are designed to achieve excess returns for its shareholders.
“The regulator, whose primary duty is to protect consumers, is putting the interests of a monopolistic airport and its shareholders ahead of passengers, who have only recently been able to return to the skies freely and face significant cost-of-living pressures.”
He added: “Strong and growing demand for travel means that the UK’s only hub airport, which is already Europe’s most expensive, is materially outperforming its own forecasts.
“By maintaining a pessimistic outlook for 2023 passenger forecasts, not only do customers face excessive charges but potentially also a poorer airport experience. We expect the CAA to use its powers to course correct, so that accurate and realistic forecasts inform both the 2023 cap and the final determination for the regulatory control period ending December 2026.”
A Heathrow spokesperson said: “We will review the CAA’s proposed interim charge for 2023 and provide feedback as requested. We continue to believe in the strong plan we have put forward for investing in passenger services over the coming years. We await the regulator’s final decision on both this interim charge and the rest of the settlement period.”
A spokesperson for Heathrow owner Ferrovial, which holds a 25% stake in the airport, added: “Ferrovial is disappointed that the UK Civil Aviation Authority has yet again delayed its final proposals for the allowed charges at Heathrow Airport over the next five years.
“The uncertainty caused by this delay is undermining our ability to commit capital to fund crucial investments to improve Heathrow’s experience for airlines and passengers. As a long-time investor in the UK, Ferrovial calls on the CAA to finalise its proposals as soon as possible.”
Speaking at the Airlines 2022 conference in London last month, Weiss said Virgin Atlantic had withdrawn “unequivocal support” for a third runway at Heathrow over its stance on charges.
By ALISTAIR OSBORNE – BUSiNESS COMMENTARY (The Times) December 13 2022
Flights to nowhere can keep airlines and airports busy. But who thought they’d become a speciality of the Civil Aviation Authority: a body hellbent on going round in circles, at least when it comes to the regulation of Heathrow?
The CAA is meant to set the maximum price Britain’s premier airport can charge passengers over five-year periods: a timeframe that allows both Heathrow and its airline customers to plan. Instead, late last week it squirrelled out its second successive one-year “holding price control”, justifying it with a plane-load of excuses. Worse, its latest interim regime keeps charges higher than it had suggested with June’s laughably titled “final proposals”: ones that were meant to take effect from January. So passengers must now pay more during a recession.
Yes, a one-year interim settlement post-Covid was justifiable. But, notably, this time round the CAA, whose boss Richard Moriarty steps down next spring, has incensed both the airlines and Heathrow investors. The latest stopgap will raise charges to £31.57, up from £30.19 this year and £19.36 pre-pandemic — even if comparisons are tricky due to the CAA’s infuriating habit of quoting figures in different year prices.
Airlines had been expecting a 6% a year cut en route to £26.31 in 2026. So no surprise Virgin Atlantic’s boss Shai Weiss finds it “unacceptable” that the CAA’s 2023 price cap is “based on Heathrow’s undercooked and self-serving passenger forecasts”. Or that IAG’s chief Luis Gallego is complaining that charges will be “56% higher than in 2021 and three times more expensive” than EU rivals’.
Yet even Heathrow’s biggest investor — Spain’s Ferrovial, with 25% — was “disappointed”. As it put it: “The uncertainty caused by this delay is undermining our ability to commit capital to fund crucial investments to improve Heathrow’s experience for airlines and passengers.” True, it also makes it harder for Ferrovial to sell its stake, what with the rumours it’s been hawking it around. But its point still stands: who would invest in such key UK infrastructure when it’s overseen by an economic regulator incapable of doing its job?
The CAA says it’s “seen a larger increase in passenger numbers” than it expected since June. But so what. It shouldn’t have fallen for the game-playing of Heathrow boss John Holland-Kaye, who forecast lower figures in the hope he’d get higher charges but has now raised his traffic estimates three times this year from 45 million to 62 million.
Similarly, it’s the regulator’s role to assess the economic data, not whinge about the “release date” for forecasts from the Office for Budget Responsibility — re-crunched after the mini-budget fiasco. Neither is it the regulator’s problem that Heathrow has geared itself up to the hilt and that higher interest rates could hurt its credit rating.
No, it’s the CAA’s job to make a decision. Indeed, even Heathrow is now floating the idea of a supra-economic regulator: a body that assumes that role from the likes of the CAA, Ofgem and Ofwat to bring consistency to economic analysis and regulatory verdicts. Expect to hear a lot more about that if all the aviation regulator can come up with is a holding pattern.
CAA confirms it wants Heathrow landing charges to fall from £30.19 to £26.31 for next 5 years
June 28, 2022
The CAA, as expected, has released its Final Proposals for the “H7” price control (5 year) period which runs from January 2022 – December 2026. The CAA is now undertaking a consultation on the proposal to which Heathrow, the airlines that use it, and others will respond. The CAA will consider the feedback it receives during this consultation before making a final decision on the H7 price control, which is expected later this year. The CAA has said that the average maximum price per passenger that airlines will pay Heathrow will fall from £30.19 today to £26.31 in 2026. (Heathrow was allowed an interim increase earlier this year, due to Covid issues). When the effects of inflation are removed, this is equivalent to nearly a 6% reduction every year (ie. down £1.87 in the first year, etc) from today’s level up to 2026. Heathrow has claimed huge losses due to the pandemic, and that it wanted the higher landing charge, to help recovery. But the CAA considers the return of high passenger numbers – that has been faster than anticipated – will bring in sufficient money into Heathrow, for its spending and investment requirements. The higher landing charge is not needed.
Ashley Nunes, a research fellow at Harvard Law School, has looked at the impact of air miles on increasing air travel, and thus aviation carbon emissions. It is possible that trips taken using air miles account for around 10% of overall bookings. Might abolishing these schemes have a significant impact on CO2 emissions? Aviation loyalty programmes are around 40 years old. They have evolved a bit since then, so it is not merely a complementary trip that can be obtained. Today, banking air miles also no longer requires getting in the air. In fact, it is estimated that over half of them are earned through non-flying related activities, as airlines have formed lucrative partnerships with third parties such as credit card companies, car rental agencies and hotel chains. It can sometimes be hard for someone to use the air miles for the flight they want, and many are never claimed. This is called “breakage” in industry parlance, and that might be as much as 30%. Sometimes people use them to upgrade from coach class to a premium seat, and that may not have much carbon impact, if those seats would otherwise have been empty. . Tweet
Frequent flier schemes would seem to encourage flying, and thus greenhouse gas emissions.
But this relationship could be less clear-cut than it appears, argues researcher Ashley Nunes.
Compared with land transport, a plane requires a lot more energy, says Agnes Jocher, a professor at the Technical University of Munich, whose research explores sustainable future mobility. The result is a disproportionate climate impact compared to alternatives (trains and ferries, to name a few).
In a 2019 report on reducing emissions through behaviour change, Richard Carmichael, a social sciences researcher at Imperial College London, observed that flying was a “uniquely high-impact activity” and “the quickest and cheapest way for a consumer to increase their carbon footprint”.
By one estimate, trips taken using air miles account for around 10% of overall bookings. But could axing these schemes curb rising aviation emissions? Or would such a policy be fruitless – and efforts to reduce aviation be better spent elsewhere? The answer is more complicated that it might initially seem.
Aviation loyalty programmes are around 40 years old. Texas International Airlines, a now-defunct carrier, created the first one in 1979. At the time, governments were easing restrictions over which carriers could fly, where they could fly to, and when, so competition between carriers intensified. Airline execs needed new ways to boost their brand. One solution? Offer flyers something extra to secure their loyalty – an IOU that could be cashed in later.
Paying passengers would earn “miles” based on how often and how far they flew, which could then be exchanged for a complementary trip. Although these programmes have since evolved (today’s flyers are also rewarded based on how much they spend), the underlying premise remains the same.
Some climate activists suggest that it’s time to scrap these schemes. “The very last thing we should be doing is reward frequent flyers,” says Herwig Schuster, a transport campaigner for Greenpeace.
“Frequent flyer programmes are not fair to the climate and the majority of people worldwide who almost never fly. We cannot allow airlines to incentivise a lifestyle that’s destroying the planet while they receive major tax cuts and subsidies, and fill their pockets by selling more flight tickets.”
Fare-paying passengers are more valuable to carriers than freeloading flyers
And sell more flight tickets carriers do. Passengers crisscross the globe four billion times annually. Each can pick from over 22,000 routes flown by over 25,000 commercial jets that collectively account for over 42 million flights. That puts total miles travelled in the air globally in the trillions, a potential gold mine for frequent fliers often courted by carriers.
Today, banking air miles also no longer requires getting in the air. In fact, it is estimated that over half of all such miles are earned through non-flying related activities. This is because airlines have formed lucrative partnerships with third parties: credit card companies, car rental agencies and hotel chains, to name a few.
But does earning these miles make people fly more? It turns out that snapping up miles is one thing, using them, another. This disconnect may seem surprising, but “breakage” – industry parlance for miles that go unused – does occur.
North American airline trade body, Airlines for America (A4A), declined to comment on the prevalence of breakage in the industry. However, global consulting firm McKinsey has calculated that up to 30% of all air miles go unused: it estimates that over 30 trillion frequent-flier miles are currently sitting unspent in accounts (enough to give a free one-way flight to almost all of the roughly four billion passengers that fly in a year).
There are several reasons for this breakage. Sometimes miles expire. Sometimes flyers don’t have enough miles to get somewhere they really want to go. And when they do have enough miles, finding “reward space” – airline seats that can be booked using those miles – can be a challenge (more on that later).
Flying first or business class may have a far larger carbon impact than flying economy as it occupies more space on the plane, meaning more emissions per person
Likewise, when miles are used, flyers now have more choice of what types of rewards to splurge on. Rather than only locking in free travel, the sole “go-to” for travellers of yesteryear, other choices now abound. Passengers can opt for hotel nights, electronics, gift cards or even football shirts.
And then of course there’s what many travellers consider the biggest attraction: upgrades to premium cabins on an airplane. With enough miles on hand, you can move from the back of a jet to the front: from a place where cuts, squeezes and exasperation are the norm to a space where courtesy abounds, champagne flows freely and Michelin-starred meals await.
Flying first or business class, however, may have a far larger carbon impact than flying economy as it occupies more space on the plane, meaning more emissions per person. The International Council on Clean Transportation (ICCT) estimates that flying premium leads to emissions per passenger two to three times greater than flying in economy, depending on the type of aircraft.
In sum, though, not all miles are used, not all miles are used to fly, and when they are, they are sometimes used to make flying more comfortable (versus securing a spot onboard).
Airline execs seem content with doling out miles. But how do they feel about people redeeming them?
If each passenger cashed in on their unspent miles, carbon emissions would jump. But those trips can only be taken if miles can be redeemed without restrictions (e.g. for any flight, at any time, without any additional fees). And airline execs make sure that’s almost never the case.
The reason? Fare-paying passengers are more valuable to carriers than freeloading flyers. If an airline thinks a seat can be sold for more than the miles equivalent, it will make trading miles for that seat hard, if not impossible. Data backs up this sentiment. Over time, the share of flights paid in miles has fallen and a recent experiment from CBS News in the US found no seat availability for miles in key markets for 45 days straight.
Carmichael says he supports flights that do fly being full rather than having lots of empty seats, since it’s more efficient. But “how that is achieved fairly without stimulating demand for flying” requires more scrutiny, he says. Work is also needed to see which miles and rewards schemes incentivise extra flying, he adds.
Carmichael and others also stress the need to reduce energy-intensive activities like flying altogether. The International Energy Agency, for example, has pointed to the need to reduce demand for flying through measures such as taxes on flights, as part of reaching net-zero emissions by 2050. Some campaigners and researchers have called for a policy that amounts to the very opposite of frequent flier rewards – a “frequent flier levy” whereby the more someone flies, the higher a tax they have to pay on each flight.
But could air passengers ever go along with measures to reduce flying? Lucia Reisch, a professor of behavioural economics and policy at the University of Cambridge, thinks so. “The past years have seen a general tendency of consumers to be more interested in and engage more in sustainable consumption,” she says. Alongside taxes or regulations, so-called “soft policy tools” – like simply providing people with information or nudges towards flying less – are one way to do this, she says, and “can be very successful, effective, [and] are often highly accepted”.
Frequent flier programmes might seem like an obvious target, but in reality, their contribution to aviation emissions is small compared with the emissions reductions we need.
Ashley Nunes is a research fellow at Harvard Law School.
Air miles should be axed to deter frequent fliers, advises report
UK climate body says policy would target heavy users but not penalise occasional flyers
Air miles schemes should be axed as they encourage jet-setters to take extra flights in a bid to maintain “privileged traveller status”, according to a report commissioned by the government’s climate change advisers.
An “escalating Air Miles Levy” should also be introduced to rein in the number of trips taken by frequent flyers without penalising those taking an annual holiday, with the income raised to be invested into low-carbon aviation technology.
“The norm of unlimited flying being acceptable needs to be challenged and, as a very highly polluting luxury, it is suitable to taxation,” the report read. It adds that those who pollute most “could easily afford to pay more”.
Another policy suggestion calls on aviation companies to advertise their emissions in an easy-to-understand manner, for example as a proportion of an average annual household’s output, so that customers could make informed decisions.
The report, by Dr Richard Carmichael of Imperial College London, goes beyond aviation policies to consider a range of other lifestyle changes the public must make to tackle the climate crisis.
These include reduce meat and diary consumption, trading cars for bikes, and swapping gas boilers at home for electric alternatives.
Surface transport accounts for the biggest proportion of a household’s carbon footprint at 34%, followed by diet (30%), home heating (21%) and aviation (12%).
Regulations should be introduced to require all schools to offer pupils at least one plant-based meal option and food packaging should display a “traffic light” system indicating its carbon footprint.
Domestic travel recommendations include dropping prices on intercity rail services to reduce demand for cars and planes, and re-opening disused rail lines.
The report also recommends VAT on the installation of insulation and low-carbon heating systems be removed.
The UK is the world’s first major economy to legally commit to becoming carbon-neutral by 2050.
Virgin Atlantic, BA and EasyJet have been criticised for making ‘outrageous’ requests for taxpayers to subsidise the attempts to use more lower carbon fuels, and indirectly, subsidise air passengers. Airlines are lobbying the government for £ billions in handouts to help them cover the cost of developing new fuels, called “sustainable aviation fuel” (SAF). Freedom of Information requests by OpenDemocracy found Virgin Atlantic, British Airways and easyJet are among the companies demanding public money to help them meet a requirement to use SAF in future. In any year, about 50% of the UK population do not fly, and the richest fly much more than poorer people. So subsidy for SAF from taxpayer money in inequitable. The airlines claim they pay money to the government, through the ETS and CORSIA. But that small amount of money helps to fund public services. The airlines are trying to claim that boosting SAF production would increase jobs etc … There are not enough genuine sources of waste, that are not doing environmental harm, to produce much SAF – certainly not on the scale they want. The sector also wants “contracts for difference” to pay SAF producers agreed prices, even if the market price fell. Money for that has to be found from somewhere (taxing fossil jet fuel perhaps?) . Tweet
Revealed: Airlines want £2bn handout to cover cost of ‘green’ fuel
Virgin Atlantic, BA and EasyJet blasted over ‘outrageous’ request for taxpayers to subsidise their passengers
Ben Webster (Open Democracy) 15 November 2022, 5.00am
Airlines are lobbying the government for billions of pounds in handouts to help them cover the cost of new ‘greener’ fuel, openDemocracy can reveal.
Freedom of Information requests by this website found Virgin Atlantic, British Airways and easyJet are among the companies demanding public money to help them meet a requirement to use “sustainable aviation fuel” (SAF).
But green campaigners said it was “outrageous” that taxpayers – 50% of whom do not fly at all in any given year – were being asked to stump up for SAF. Under a planned government mandate, 10% of jet fuel will have to be made from ‘sustainable sources’ by 2030.
Documents released to openDemocracy from a Department for Transport consultation last year show Virgin Atlantic demanded a “price support mechanism” to help build the industry needed to produce SAF in the UK. It said the mechanism – which insiders say could cost more than £2bn a year by 2030 – “could be part funded if government were to shift funding and incentives from road to aviation”.
BA’s parent company International Airlines Group (IAG) also sought taxpayers’ money, saying development of the fuel could be funded by revenues from the UK emissions trading scheme. The scheme, under which participants are required to obtain allowances to cover their greenhouse gas emissions, raised more than £1bn last year and revenues currently help fund public services.
EasyJet called for “direct price support for SAFs by the UK government for SAFs produced in the UK”.
And Airlines UK, a trade body, sought “£500m of government support over the forthcoming CSR period to support SAF commercialisation and R&D [research and development]”.
IAG said last month that the recovery of leisure travel since the pandemic had helped produce a surge in operating profits to just over €1.2bn (£1.05bn) in the three months to 30 September.
Airlines have consistently failed since 2007 to meet their own goals for using SAF, which costs three-to-five times as much as fossil jet fuel.
The industry says the fuel is made from waste products such as used cooking oil and claims that it delivers up to 80% emissions savings compared to fossil jet fuel.
But Alethea Warrington, campaigns manager at climate charity Possible, said there were very limited supplies of genuinely waste feedstock to make into alternative fuels, meaning airlines were exaggerating the potential for SAF to help them reduce their emissions.
Airlines already benefit from tax-free jet fuel on airline tickets. [And no VAT].
Green campaigners say passengers, particularly frequent flyers, should pay the costs of decarbonising aviation because their trips are causing the pollution and they tend to be wealthier than the average person.
In the UK, 15% of people take 70% of all flights, according to analysis of ONS travel data.
The poorest 20% of the population fly five times less frequently than the richest 20%.
Airlines want the government to guarantee “contracts for difference” (CFDs), under which SAF producers receive agreed prices for their fuel even if market prices fall below those prices. (A CFD means they would theoretically lose out if the market price moves above the agreed price, though SAF is likely to remain much more expensive than fossil jet fuel.)
An aviation industry source said the cost of funding CFDs could be about £2.1bn a year by 2030.
An internal paper produced last year by aviation and fuel industry trade bodies stated that options for funding SAF production included “general taxation… to avoid overburdening the aviation industry in the post-Covid period” and “a levy that ultimately falls on air passengers (e.g. via a fuel surcharge or other options)”.
The paper, obtained by openDemocracy, added: “The lack of SAF investment in the UK points to a clear market failure, on which it is reasonable to spend taxpayers’ money.”
The industry is now preparing a new proposal for funding SAF due to be published next month.
Fairer funding
Our source said there were differing views within the industry on the question of how to fund CFDs. Some companies want to press the government for subsidies via the emissions trading scheme but others argue that the Treasury is so strapped for cash that the CFDs will have to be funded via a levy on sales of fossil jet fuel which would ultimately be paid by passengers.
Campaign group Transport & Environment said a tax on fossil jet fuel would be a much fairer way of funding SAF use.
It has calculated, in a new study published today, that taxing fuel delivered to aircraft in the UK at the same rate motorists pay for road fuel could raise £6.7bn a year for the Treasury.
The group’s UK policy manager Matt Finch told openDemocracy: “It’s outrageous that the airline industry expects the taxpayer to fully pay for it to decarbonise, especially considering the miniscule levels of tax it currently pays.
“Applying a tax to jet fuel – in exactly the same way as Britain’s drivers are charged when they fill their tanks up – makes sense from an environmental and fairness point of view. This would also provide the government with some funds to invest back into SAF and zero-emission aircraft.”
Warrington from the group Possible added: “With an ongoing cost of living crisis, it would be groundless for even more public money to go to airlines so the wealthiest in our society can continue to pollute while claiming to be going green.
“What we need instead is bold investment in an affordable and accessible rail network, so we can clear the runway in favour of climate-friendly travel.”
Biofuel production has been linked to deforestation by increasing demand for palm oil and some suppliers have been accused of passing off virgin vegetable oil as used because it attracts a higher price.
“The harm caused by the climate crisis is escalating, but the aviation industry is hell-bent on pursuing unlimited growth by claiming to fly ‘sustainably’ using alternative fuels,” said Warrington.
“The reality is that these fuels, made from waste or biomass, offer at best only marginal improvements on the fossil fuels they are substituting for when it comes to their impact on the climate.” [When burned in a jet engine, at altitude, they emit CO2 and cause about the same non-CO2 impacts as from conventional jet fuel, that probably double the overall climate impact. AW comment].
The government has already committed £217m to help develop a SAF production industry in the UK.
Airlines, airports and SAF producers this month sent a joint letter to transport secretary Mark Harper asking the government to provide “price certainty” to enable investment in up to 12 SAF plants in the UK.
The letter, obtained by openDemocracy, said a UK SAF industry “could boost the UK economy by up to £7bn by the end of this decade, through construction and SAF production. More than 20,000 construction jobs would be needed to build UK SAF plants and the industry would directly employ thousands more people in areas from Teesside and Humberside to south Wales and the north-west.”
An Airlines UK spokesperson said: “This decade airlines will be paying hundreds of millions of pounds a year for the carbon they emit through schemes like the UK and EU Emission Trading Schemes and the UN-sponsored global Carbon Offsetting and Reduction Scheme for International Aviation.
“As will happen under the EU ETS, we believe that a proportion of the revenue raised from airlines should be earmarked to support aviation decarbonisation, including support for a UK SAF industry, and zero emission flight technology.”
An easyJet spokesperson said: “Decarbonising aviation is a vital step for the UK to reach net zero while preserving the social and economic benefits of flying.
“It is important there is price stability in SAFs to encourage long-term investment. We believe there is a role for using the funds aviation contributes – for example, of carbon charges or APD – to support the transition.”
A government source said no decisions had been made on a price support mechanism for SAF.
Reduction in flying only way to achieve net zero, warns sustainability expert
December 1, 2022
The only way the aviation sector will reach net zero by 2050 is if there is a reduction in the number of people flying. Cait Hewitt, policy director at Aviation Environment Federation, warned Travel Weekly’s Sustainability Summit that the aviation sector does “not yet have the technologies” required to achieve the target. The industry wants a lot more government financial assistance to produce more SAF, and also perhaps “green” hydrogen. But realistically, there is not going to be a lot of these fuels for many years to come, if ever. There will certainly not be enough for the sector not only to continue at its present size, but also to expand. The industry is desperate to make out that the problem is the need to decarbonise flights, not reduce their number. The sector has to keep growing – that is the universal business model. Cait said “I’ve heard all kinds of promises from the aviation sector about cutting emissions, and while it’s true that emissions are reducing on a per-passenger basis, overall emissions are not.” Every sector, including aviation, must cut its climate impact.
Airbus boss warns of delay in decarbonising airline industry – “green” hydrogen and SAF not available in large amounts
December 1, 2022
Head of Airbus, Guillaume Faury, says there is a shortage of allegedly low carbon fuels, so-called “Sustainable Aviation Fuel” (SAF). He said this is slowing the uptake of SAF. He had concerns about the pace of investment in facilities to produce “green” hydrogen and SAF. “Green” hydrogen, produced from water using zero-carbon electricity, offers one possible solution, while SAF, made from plant or other wastes or using carbon from the air, can be used in existing gas turbine engines. The hope is that, although SAF burns to create CO2, there is less overall CO2 in the fuel lifecycle than using conventional jet kerosene. Airbus wants to fly zero-emissions hydrogen aircraft in commercial service by 2035 but Faury said this may be later, due to the lack of “green” hydrogen. With every other sector aiming to use genuinely low carbon, renewably generated electricity, is there enough to use on producing jet fuel, largely for discretionary leisure trips? Rolls Royce and EasyJet are also making efforts to test engines fuelled by hydrogen. So far it has been burned in a jet engine, on the ground, not on a plane in flight. SAF supplies are likely to remain relatively limited for years.
KLM’s chief executive, Marjan Rintel, has encouraged passengers to take the train rather than fly on some short-haul journeys to help cut carbon emissions, saying the airline sector should stop viewing rail as a competitor. National governments in Europe have been taking action to get people on to high-speed trains instead of short-haul flights, to reduce aviation CO2 emissions. Air France, which comes under the same holding company as KLM, stopped flying domestic routes where there are rail or coach alternatives taking under two and a half hours in 2020, as part of measures it agreed to with the French government in exchange for aid during the Covid-19 pandemic. This was changed last week, when the EU only approved this for 3 routes, Paris-Orly and Bordeaux, Nantes and Lyon – and their connecting flights exempted. In June, the Dutch government announced plans to cut flights from Schiphol by over 10% to 440,000 a year. The move is likely to lead to a sharp reduction in short-haul flights from Schiphol, meaning the KLM boss can advocate rail trips. Rintel said KLM had already block-booked seats on the train service linking Amsterdam to Brussels and Paris . . Tweet
KLM encourages passengers to take the train to cut emissions
Marjan Rintel: ‘If you’re serious on reaching your sustainability goals, the train is not a competitor. We need to work together’
By Robert Wright and Peggy Hollinger (FT)
6.12.2022
KLM’s chief executive has encouraged passengers to take the train rather than fly on some short-haul journeys to help cut carbon emissions, saying the airline sector should stop viewing rail as a competitor.
“If [you] have a good alternative you should really use it,” Marjan Rintel told the Financial Times in an interview. “If you’re serious on reaching your sustainability goals, the train is not a competitor. We need to work together.”
She also said she used the train when she travelled from Amsterdam, where KLM is based, to the Paris headquarters of parent company Air France-KLM.
National governments in Europe have been taking action to get people on to high-speed trains instead of short-haul flights and cut the carbon cost of flying.
Air France, the French carrier which comes under the same holding company as KLM, stopped flying domestic routes where there are rail or coach alternatives taking under two and a half hours in 2020, as part of measures it agreed to with the French government in exchange for aid during the Covid-19 pandemic.
French parliamentarians later passed a bill formalising the ban on short term flights, a measure approved by the EU last week. Effectively, however, the changes only affect three routes from Paris, with connecting flights for instance exempted.
In June, the Dutch government announced plans to slash flights from Schiphol airport by more than 10 per cent to 440,000 a year. The move is likely to lead to a sharp reduction in short-haul flights from the airport and could put a brake on national flag carrier KLM’s future growth.
Rintel said KLM had already block-booked seats on the train service linking Amsterdam to Brussels and Paris in response, and she had urged the business “to develop the relationships with the Dutch railways, to see what we can do at short notice to motivate our customers to go by train to Brussels or Paris”.
KLM was also looking at making it easier to buy flight and train tickets in a single booking and was in discussions with rail companies in the Netherlands and France about making transfers easier, Rintel said.
Baggage services could be integrated, allowing customers to drop off luggage at an airport and collect it at the end of a train journey, for example. “As a customer you always look at the final destination . . . so you must offer a product like this,” she said.
Rintel worked for six years for Nederlandse Spoorwegen (NS), the Netherlands’ state-owned train operator, and was chief executive of the group for nearly two years before leaving for KLM in July this year.
However, she expressed no interest in becoming directly involved in running train services and said the airline would work with NS and the Eurostar Group, owner of the cross-Channel Eurostar service and of the Thalys service linking France, Belgium, Germany and the Netherlands.
Rintel took over as chief after a period of strained relations between KLM and its parent company. Varying performances between the airlines had caused tensions as group chief executive Ben Smith sought to squeeze benefits from closer co-operation. The strains culminated in the Dutch government’s decision to take a 14 per cent stake in Air France-KLM in 2019 to protect KLM’s interests.
Rintel said stability of operations was her priority after airport chaos this summer forced airlines to substantially cut the number of flights to cope with long delays.
“Next to that, building relationships” with stakeholders, including the Dutch government, was a priority. “The enemy is not in the group. There will be consolidation all over Europe. We will be in new exceptional times and we need to be strong together,” she said.
The airline has threatened to take legal action over the Schiphol cuts but Rintel said this was not yet decided. “We have claims on the table. My first objective is Schiphol delivering the capacity we need.”
EU approves France’s short-haul flight ban — but only for 3 routes
The new plan will cancel domestic flights that can be replaced by a short train journey.
BY MARI ECCLES (Politico)
DECEMBER 2, 2022
The European Commission has approved France’s plan to ban short-haul flights when there’s a decent rail alternative — but it will only affect three routes.
French lawmakers in 2021 voted to prohibit short-haul domestic flights when there’s an alternative rail connection of two and a half hours or less. The original proposal, which required the green light from Brussels, was slated to affect eight routes.
Now the Commission has saidthe ban can only take place if there are genuine rail alternatives available for the same route — meaning several direct connections each way every day.
That means only three routes will currently fall under the ban: journeys between Paris-Orly and Bordeaux, Nantes and Lyon.
The EU executive said France was justified to introduce the measure provided it is “non-discriminatory, does not distort competition between air carriers, is not more restrictive than necessary to relieve the problem.”
Three more routes could be added — between Paris Charles de Gaulle and Lyon and Rennes, and between Lyon and Marseille — if rail services improve.
Those routes currently don’t meet the threshold because travelers trying to get to airports in Paris and Lyon don’t have a rail connection that would get them in early enough in the morning or late enough in the evening.
Two other proposed routes — from Paris Charles de Gaulle to Bordeaux and Nantes — were excluded from the measure because the rail journey time falls above the two-and-a-half-hour limit.
The Commission also removed a proposed exemption to the ban that the French government wanted to apply to domestic flights that are part of a multi-stop international journey. The overall measure should last only three years, with a review after two, it said.
“This is a major step forward and I am proud that France is a pioneer in this area,” France’s Transport Minister Clément Beaune said in an emailed statement.
Green groups were also encouraged by the Commission approval, but stressed that the country has to do much more to decarbonize transport.
“The French ban on short-haul flights where quick train connections exist is a baby step, but it’s one in the right direction,” said Thomas Gelin, Greenpeace’s EU climate campaigner.
French Green MEP Karima Delli described the news as a “victory,” but said that the legislation should have been extended to cover flights that could be replaced by a four-hour train journey.
That was the original idea for the flight ban as proposed by France’s Citizens’ Convention on Climate, a citizens’ assembly tasked with making proposals for reducing the country’s carbon emissions. The scope was narrowed following objections by some French regions and by Franco-Dutch airline Air France-KLM.
Delli also argued that private jets should be included within the measure. Beaune said this summer he wanted to see more EU-wide measures against private planes, following popular backlash against them in France.
France: domestic short-haul flights to be banned where train takes under 2.5 hours
April 5, 2022
The French government has become the first large economy to ban short-haul flights where a train or bus alternative of two and a half hours or less exists. This was voted on in 2021 and came into effect in April 2022. The intention is to reduce the country’s aviation CO2 emissions and might have the effect of eliminating 12% of French domestic flights, such as those between Paris to cities such as Bordeaux, Nantes or Lyon. In 2021, the French government bailed out Air France with €7 billion after suffering Covid losses, and it made the condition that the airline become more environmental conscious. The government asked other airlines to do the same, as the absence of Air France flights might offer low-cost carriers an opportunity to move in and offer the same flights. And the French government does not want Air France to be undercut, on international routes from Paris, by other airlines if too many domestic links are removed. Eurocontrol found flights shorter than 311 miles made up 31% of European flights in 2020 yet contributed just over 4% of the EU’s total aviation emissions. And EU flights over 2,485 miles, for which alternative train travel is less feasible, made up 6% of all flights, but produced 52% of emissions. So the French move will have little CO2 impact.
France to ban commercial flights on shortest domestic routes
June 25, 2020
France plans to ban commercial air travel on the country’s shortest domestic routes in a bid to prevent low-cost carriers picking up links Air France-KLM is being forced to abandon as part of the terms of a Government bailout package. The aim of stopping Air France from flying domestic routes, if the trip can be made by train in under 2.5 hours, to cut CO2 emissions, is not to allow in other airlines instead. Austria has also placed constraints on short-haul flights, as part of a state-funding plan for Deutsche Lufthansa. The domestic flights ban would include about 40% of internal French flights. The carbon reductions achieved by this would actually be tiny – about 6-7% of Air France’s total. Ryanair plans to operate 6 French domestic routes this summer, but says they are on longer routes, not included in the ban. Air France-KLM received €7 billion in loans and guarantees from the French government, and the Minister said the airline would be required to become “the most environmentally friendly airline on the planet”. However, the overall bail-out package is flawed, and is unlikely to produce the desired, necessary, reductions in Air France’s CO2 emissions.
EU negotiators have agreed to bring shipping into the EU’s carbon market, the ETS, showing that pricing international emissions is possible. Shipping, (as well as aviation) is one of Europe’s largest CO2 emitters, but so far it has not been fully included in the Emissions Trading System. It means that shipping polluters will have to pay and shows that the EU can regulate emissions beyond its borders. There had been claims in the past that shipping and aviation could not be included, as much of their emissions take place outside the EU’s borders. T&E wants the same equally ambitious scheme for aviation, so it is fully in the ETS. Currently only flights within Europe are included, not those outside it, which make up about 60% of total European aviation CO2 emissions. EU negotiators will be discussing aviation emissions next week, and there is no reason for aviation to not be treated in the same manner as shipping. . Tweet
EU agrees to “watershed” carbon market for shipping, eyes now on aviation
30th November 2022
Transport & Environment (T&E)
EU negotiators agree to bring shipping into the ETS, showing that pricing international emissions is possible.
EU negotiators last night agreed to bring shipping into the EU’s carbon market (ETS) in a “watershed moment” for one of Europe’s heaviest emitters.The landmark deal will ensure shipping polluters pay and shows that the EU can regulate emissions beyond its borders, says T&E. The group calls on negotiators to do the same next week when they discuss an expansion of the ETS for aviation.
Jacob Armstrong, sustainable shipping officer at T&E, said: “The EU’s deal marks a watershed moment for shipping decarbonisation. No longer will shipping be let off the hook for its massive climate impact. No longer will international emissions be ignored by national policymakers. With this ambitious ETS covering all greenhouse gases[1], offshore vessels and ensuring funding for green shipping, the EU has thrown the gauntlet down to other jurisdictions like the US, China, and Japan to make this hugely important first step towards zero-emission shipping.”
The deal shows that Europe can price pollution beyond its borders, says T&E, which has set its sights on the aviation sector. Currently only flights within Europe are included in the ETS meaning 60% of emissions are exempted. Add to this a host of free allowances and airline polluters pay hardly anything. T&E has called on EU negotiators to apply an equally ambitious carbon market to the aviation industry when negotiators come together next week. “With shipping no longer off the hook, there are no excuses for the aviation sector,” concluded Jacob Armstrong.
Notes
[1]The inclusion of methane alongside CO2 and nitrous oxide in the ETS ensures that ships running on LNG are also required to pay for everything they emit. It is a clear signal that LNG is not a clean solution for shipping, says T&E.
EC draft shows EU to propose aviation fuel tax in efforts to cut European CO2 emissions
July 8, 2021
The European Commission has drafted plans to set an EU-wide minimum tax rate for aviation fuels, as it seeks to meet more ambitious targets to fight climate change. The EC is drafting an overhaul of EU energy taxation, as part of a package of measures it will propose on July 14, to meet a target to reduce EU greenhouse gas emissions by 55% by 2030, from 1990 levels. The draft proposes taxing aviation fuel, as its continuing exemption “is not coherent with the present climate challenges and policies.” From 2023, the minimum tax rate for aviation fuel would start at zero and increase gradually over a 10-year period, until the full rate is imposed. The draft proposal did not specify what the final rate would be. A recent survey suggests that Europeans support the taxation of aviation fuel. Even factoring in the impact of the pandemic, aviation emissions are expected to grow between 220-290% by 2050 compared to 2015 levels, which would be disastrous for the climate. Airlines favour carbon offsetting schemes, rather than fuel tax; but these allow them to continue polluting even though offsets have been repeatedly found to be largely ineffective.
Pressure on UK as Germany backs EU ending free carbon permits for airlines
June 7, 2021
The German government is backing an extension of EU carbon pricing that will end free carbon permits for airlines, putting pressure on the UK to put in place a similar package to meet climate targets. The European Commission will propose several climate policies on 14th July, to try to cut greenhouse gases faster in line with an EU goal to cut net emissions by 55% by 2030 from 1990 levels. The package will include reforms to the EU carbon market. Germany has backed the EC’s plan to impose CO2 prices on transport through a separate system to the EU’s existing ETS. Germany said the reforms to the EU’s carbon market should prolong free carbon permits “to an appropriate extent”, but end them soon for aviation. The UK has created its own carbon pricing market since leaving the EU, but it mostly follows the existing EU model and focuses on heavy industries and energy providers. The UK’s pledge to reduce CO2 emissions 78% by 2035 will dramatically force up the cost of fuel for transportation, including flying. Not all MPs are happy with that.
Report for the European Commission shows the CORSIA carbon scheme inadequate – EU ETS more effective in cutting CO2
March 18, 2021
The aviation industry’s carbon offsetting system (Corsia) risks being ineffective and poorly enforced. A report commissioned by the European Commission (EC) is highly critical of Corsia, which it says may do almost nothing to reduce international aviation emissions. The EC is expected to propose in June how aviation industry emissions should be mitigated, including whether to include international flights in the EU Emissions Trading Scheme (ETS) – currently only those within the European Economic Area are included. The ETS has its faults, but would be hugely more effective in cutting European aviation carbon. A key problem with Corsia, apart from it being voluntary, is the use of cheap, ineffective carbon credits. Currently the price of Corsia-eligible offsets is under $2.50 per tonne. The ETS price is up to $43. Many of the credits are dubious, with inadequate certification or quality control of offsets. The rationale of just allowing airlines to compensate for their emissions, rather than encourage reductions, is misguided. The report concludes that the most effective way to cut EU aviation carbon would be to use the ETS, not Corsia, and include all international flights. The UK is considering how to do its own ETS, including aviation.
The only way the aviation sector will reach net zero by 2050 is if there is a reduction in the number of people flying. Cait Hewitt, policy director at Aviation Environment Federation, warned Travel Weekly’s Sustainability Summit that the aviation sector does “not yet have the technologies” required to achieve the target. The industry wants a lot more government financial assistance to produce more SAF, and also perhaps “green” hydrogen. But realistically, there is not going to be a lot of these fuels for many years to come, if ever. There will certainly not be enough for the sector not only to continue at its present size, but also to expand. The industry is desperate to make out that the problem is the need to decarbonise flights, not reduce their number. The sector has to keep growing – that is the universal business model. Cait said “I’ve heard all kinds of promises from the aviation sector about cutting emissions, and while it’s true that emissions are reducing on a per-passenger basis, overall emissions are not.” Every sector, including aviation, must cut its climate impact.
Reduction in flying only way to achieve net zero, warns sustainability expert
By Robin Murray (Travel Weekly)
The only way the aviation sector will reach net zero by 2050 is if there is a reduction in the number of people flying.
That is according to Cait Hewitt, policy director at Aviation Environment Federation, who warned Travel Weekly’s Sustainability Summit the sector does “not yet have the technologies” required to achieve the target, set in October at an assembly of the International Civil Aviation Organisation (ICAO).
Her statement came after Matthew Gorman MBE, Heathrow’s carbon strategy director, said he thought the goal was achievable if the sector acts quickly and has sufficient government support.
“There are four big things we need to do to take the carbon out of flying, but the most important thing to say is we can do it [achieve net zero],” he told delegates.
“A lot of the debate globally centres around the fact it’s really challenging to decarbonise aviation, and we are told we need to take flying out of society rather than take carbon out of flying.
“We have to anchor back to the fact we can do it as we all know about the amazing things international connectivity brings, but we need to move quickly as an industry and we need the government to act fast to scale up the technologies to take the carbon out of flying.”
Gorman said greater efficiency is a “fundamental baseline” for cutting emissions from aviation, adding it is vital the sector adopts the use of SAF as quickly as possible while modernising aircraft to make it compatible with hydrogen technology. [See link ]
“We see SAF as vital because it cuts carbon and it’s a drop-in fuel which means it can be used in today’s pipelines and planes,” added Gorman, adding the research and development of hydrogen technologies must be heavily supported.
However, Hewitt was less optimistic that aviation can achieve carbon neutrality within the next 30 years, labelling the target “almost impossible”.
“I’ve heard all kinds of promises from the aviation sector about cutting emissions, and while it’s true that emissions are reducing on a per-passenger basis, overall emissions are not,” she said, referencing research from before the Covid pandemic that showed aviation emissions in the UK were at their highest-ever level.
“To achieve net zero for the climate, an emissions-intensity metric is not going to get us there; we need to have net zero emissions from every activity in our society,” added Hewitt.
“That’s enormously challenging; it’s almost impossible. Aviation does not yet have the technologies ready to roll out that most other sectors do.
“Our view as an organisation is that it won’t be possible to deliver all the reductions we need to see in aviation within 30 years without cutting the number of people flying.”
Airbus boss warns of delay in decarbonising airline industry – “green” hydrogen and SAF not available in large amounts
December 1, 2022
Head of Airbus, Guillaume Faury, says there is a shortage of allegedly low carbon fuels, so-called “Sustainable Aviation Fuel” (SAF). He said this is slowing the uptake of SAF. He had concerns about the pace of investment in facilities to produce “green” hydrogen and SAF. “Green” hydrogen, produced from water using zero-carbon electricity, offers one possible solution, while SAF, made from plant or other wastes or using carbon from the air, can be used in existing gas turbine engines. The hope is that, although SAF burns to create CO2, there is less overall CO2 in the fuel lifecycle than using conventional jet kerosene. Airbus wants to fly zero-emissions hydrogen aircraft in commercial service by 2035 but Faury said this may be later, due to the lack of “green” hydrogen. With every other sector aiming to use genuinely low carbon, renewably generated electricity, is there enough to use on producing jet fuel, largely for discretionary leisure trips? Rolls Royce and EasyJet are also making efforts to test engines fuelled by hydrogen. So far it has been burned in a jet engine, on the ground, not on a plane in flight. SAF supplies are likely to remain relatively limited for years.
Aviation calls on UK government to subsidise ‘Jet Zero’ push
Sector seeks more support to get fledgling green fuel industry off the ground
By Jim Pickard in London (FT)
NOVEMBER 7 2022
Britain will struggle to create an industry producing sustainable aviation fuel unless the government provides regular subsidies to manufacturers, leading airlines and airports have warned.
The government has set a 2050 “Jet Zero” target for the airline industry to eliminate net carbon emissions, mainly through the use of green fuel produced by household waste such as cooking oil, known as “SAF”.
The government has promised £165mn as seed capital to encourage manufacturers to open at least five plants producing the new fuel and hopes they will be under construction by 2025. It has also set a target under which 10% of aviation fuel must be SAF by 2030.
But leading airports and airlines, including Heathrow, Gatwick, Manchester Airports Group, Virgin Atlantic and British Airways have written to Mark Harper, the new transport secretary, calling for more state intervention to get the fledgling industry off the ground.
The letter, seen by the Financial Times, is also signed by some of the manufacturers with plans for SAF plants in the UK, including Fulcrum, Velocys and Alfanar.
“We believe UK SAF production has the chance to become a domestic success story, but the government needs to act now to ensure manufacturers get the price certainty needed to unlock private investment into this sector,” the groups wrote.
They want the government to create “contracts for difference” (CFDs) to agree a set price for SAF, similar to those the state has used to underwrite nuclear and offshore wind projects.
Under CFDs, when wholesale prices exceed a fixed level producers pay back the difference to the government. When the market rate is below the fixed price, the government tops up the difference.
The letter warns that without this kind of regular subsidy, investors will go elsewhere and airlines will end up importing sustainable fuel from the EU or US.
“To stimulate billions of pounds of investment in UK industry requires targeted action and further direction must be taken to share the current investor risk profile that is a barrier to capital investment in UK production,” the letter says. “The only question is do we make our own SAF, creating jobs and growth for the UK, or do we import it from other countries?”
Flying is one of the hardest industries to decarbonise and technologies such as electricity- or hydrogen-powered aircraft are years away from being able to make long-distance flights.
Aviation accounts for about 2% of global CO₂ emissions and the International Air Transport Association’s (Iata) net zero 2050 target relies heavily on changing fuel mixes to achieve most of its planned reduction in greenhouse gas emissions.
Other countries, including Indonesia, have sought to produce aviation fuel from crops such as palm oil or soyabean oil, prompting concern from environmentalists.
A spokesperson for the Department for Transport said the UK government already had a SAF programme which was one of the most comprehensive in the world.
“We’ve already invested in eight SAF plants, [we] now have a further £165mn available through our Advanced Fuel Fund, and are creating demand by mandating that 10% of jet fuel comes from SAF by 2030,” the spokesperson said.
“This is providing investors with reassurance while helping to deliver our ambition of having five commercial SAF plants under construction in the UK by 2025.”
Head of Airbus, Guillaume Faury, says there is a shortage of allegedly low carbon fuels, so-called “Sustainable Aviation Fuel” (SAF). He said this is slowing the uptake of SAF. He said he had concerns about the pace of investment in facilities to produce “green” hydrogen and SAF. “Green” hydrogen, produced from water using zero-carbon electricity, offers one possible solution, while SAF, made from plant or other wastes or using carbon from the air, can be used in existing gas turbine engines. The hope is that, although SAF burns to create CO2, there is less overall CO2 in the fuel lifecycle than using conventional jet kerosene. Airbus wants to fly zero-emissions hydrogen aircraft in commercial service by 2035 but Faury said this may be later, due to the lack of “green” hydrogen. With every other sector aiming to use genuinely low carbon, renewably generated electricity, is there enough to use on producing jet fuel, largely for discretionary leisure trips? Rolls Royce and EasyJet are also making efforts to test engines fuelled by hydrogen. So far it has been burned in a jet engine, on the ground, not on a plane in flight. SAF supplies are likely to remain relatively limited for years. . Tweet
Airbus boss warns of delay in decarbonising airline industry
Guillaume Faury expresses concern at pace of investment in facilities producing alternatives to fossil fuels
By Jasper Jolly @jjpjolly (The Guardian) Wed 30 Nov 2022
The launch of commercial flights of aircraft designed to reduce aviation’s damaging impact on the climate could be delayed by a shortage of net zero fuels, the chief executive of Airbus has warned.
Speaking at a briefing about the European manufacturer’s emissions-cutting plans on Wednesday, Guillaume Faury said he had concerns about the pace of investment in facilities to produce “green” hydrogen and sustainable aviation fuel (SAF).
Aviation is proving to be one of the hardest industries to decarbonise because battery technology is not yet advanced enough to power aeroplanes beyond relatively short journeys.
Green hydrogen, produced from water using zero-carbon electricity, offers one possible solution, while SAF, made with plant sources or using carbon from the air, can be used in existing gas turbine engines without adding to the total carbon in the atmosphere.
Airbus has said it aims to fly zero-emissions hydrogen aircraft in commercial service by 2035 but Faury said a lack of green production of the gas “could be a reason for delaying the launch of the programme”.
He said: “Availability or lack of availability of clean hydrogen at the right quantity in the right place at the right price in the second half of the decade is a big concern for me. The infrastructure for producing and distributing green hydrogen is still in the early stages of development. But the clock is ticking for it to be in place to fuel commercial aviation by the 2030s, and probably many other sectors much earlier.”
Several companies are trying to develop hydrogen technology. The British engineering company Rolls-Royce and the airline easyJet on Monday announced they had started the world’s first ground tests of an aircraft engine run on hydrogen combustion. Airbus is working with the US multinational GE and the French engine manufacturer Safran to mount a hydrogen combustion engine on an A380 superjumbo. Airbus’s biggest rival, Boeing, has made some tentative steps towards testing hydrogen technologies, although it is more focused on SAF.
Airbus on Wednesday said it was working on an aircraft engine powered by a hydrogen fuel cell, which produces electricity with water as the only emission, to start flight tests in about 2026. The propeller engine could potentially power a 100-passenger aircraft with a range of 1,000 nautical miles, the company said, although it would be unlikely to ever be used for long-haul flights because of the amount of hydrogen storage that would be required.
The manufacturer also said it would work with the French carmaker Renault on battery technology including solid-state batteries. These could store twice the energy in the same weight as the lithium ion batteries used in cars.
The industry’s preferred method for decarbonising long-haul flights is SAF. New Airbus planes are certified to fly using as much as 50% of SAF already but Faury said the company was not pushing to certify them for 100% SAF flights as quickly as possible because it did not foresee enough supply by 2030. Airbus announced it had signed a preliminary agreement with Neste, an oil refining company, to work together to advance SAF production.
“By 2030, SAF will need to be produced at many times the level of today,” Faury said. “Ambition is not yet matched by action. There needs to be more investment in new refineries and production facilities, and more ambitious mandates and objectives for sustainable aviation fuel.
“I believe it is difficult to overstate the scale of the energy challenge.”
Rolls-Royce tests a jet engine running on hydrogen
29.11.2022
By Theo Leggett, Business correspondent, BBC News
In a windswept corner of a military site on Salisbury Plain a small aircraft jet engine is undergoing tests that could one day lead to huge changes within the aviation industry.
The engine itself is almost completely conventional. It is a Rolls-Royce AE-2100A gas turbine, a design used widely on regional aeroplanes around the world.
What is wholly unusual about it is the fuel being used. This is the first time a modern aircraft engine has ever been run on hydrogen.
Devoid of bodywork, with its intricate wiring and pipework exposed, it sits securely fastened to a sturdy test rig, while engineers cluster around an array of screens in the control room, a safe distance away.
The tests are being carried out by Rolls-Royce, after development work in Derby and in partnership with the airline easyJet.
The immediate aim is a simple one – to show that it is possible to run and control a jet engine using hydrogen fuel, rather than conventional aviation fuels.
In the longer term, the plan is for hydrogen power to play a major role in allowing the aviation industry to continue growing, while cutting climate change emissions dramatically.
“The reason we’re looking at hydrogen is really the drive for Net Zero,” explains Alan Newby, director of aerospace technology at Rolls-Royce.
“Normally we would run this thing on kerosene. Kerosene is a hydrocarbon and therefore produces carbon dioxide when it burns.
“The beauty of looking at a fuel like hydrogen is that it doesn’t contain any carbon and, therefore, when it burns it produces no CO2”. [It creates water vapour, which also has impacts on global heating] – one of the components of the non-CO2 impacts of aviation].
The project is being supported by easyJet, which has contributed several million pounds towards the initial trials.
The company believes that hydrogen power offers the best route to reducing emissions from short haul aviation.
“We started a few years ago looking at what might power the aircraft of the future,” explains David Morgan, easyJet’s chief operating officer.
“We looked at battery technology, and it was quite clear that the battery technology was probably not going to do it for the large commercial aircraft that we fly.
“We’ve come to the conclusion that hydrogen is a very exciting proposition for us.”
The advantage of hydrogen over batteries is that it provides much more power per kilogram. Batteries are simply too heavy to power larger planes.
Yet hydrogen aviation remains a very long way off. The tests carried out so far have simply shown that a jet engine using hydrogen can be started up and run at low speed.
Hydrogen requires more elaborate storage and more space than jet fuel
But to go from there to building a wholly new engine, capable of powering a passenger aircraft safely will take a great deal more research – and significant investment.
The aircraft themselves will also need to be redesigned. Hydrogen, even in liquid form, takes up about four times as much space as the kerosene required to fly the same distance.
To make it into a liquid in the first place, it needs to be cooled to -253C. Then, before being burned, it must be turned back into a gas.
“There’s a big change from the aircraft point of view,” says Alan Newby at Rolls-Royce.
“They’re going to have to have a tank containing the hydrogen. You’ve got to keep it at this really, really cold temperature.
“Then there’s the issue of how you feed it through to the engine as well.”
Many engineering problems have to be solved to make hydrogen work as fuel, says Alan Newby from Rolls-Royce.
The other key question is where the hydrogen itself comes from, because that will have a dramatic impact on the environmental benefits it can provide
The fuel used in the tests is so-called green hydrogen produced at the European Marine Energy Centre in the Orkney Islands.
It is made by using an electric current to split water into its components, hydrogen and oxygen. The electricity required is produced using wave and wind power. This makes it a very clean fuel.
But most of the hydrogen produced for industrial use today is obtained from a process which involves mixing high temperature steam with natural gas under high pressure. [Called Blue hydrogen, IF the CO2 is captured and stored permanently. Otherwise it is Grey hydrogen, with the CO2 not captured. See link ].
However, this produces a considerable amount of carbon dioxide, which is then released into the atmosphere. It also requires a considerable amount of energy – which is often provided by burning fossil fuels.
One alternative is what’s known as blue hydrogen. This is produced in the same way, but the carbon dioxide is captured and either stored or reused.
In theory, this should make it a cleaner, low-carbon fuel. But that view was challenged in a paper from researchers at Cornell and Stanford universities last year.
They suggested that in fact, using blue hydrogen could still be more harmful to the planet than burning fossil fuels. See link
“At the moment there’s a lot of hydrogen hype,” says Matt Finch, UK policy director of campaign group Transport and Environment.
“A lot of people are saying ‘we can use hydrogen, we need hydrogen’. You hear it for cars, for trucks, for ships, for planes, for home heating, for chemicals.
“At the moment the UK effectively produces zero green hydrogen. To fulfil all the needs everyone wants is absolutely impossible.”
Mr Finch believes this means supplies of green hydrogen will probably have to be rationed for decades to come, and he says aviation may not be a priority for governments.
All of this means it is likely to be decades before zero-emission hydrogen planes become an everyday reality.
Even then, they are likely to be confined to short haul markets, at least to begin with. On long haul routes, synthetic sustainable fuels are widely expected to offer a more practical solution.
Nevertheless, these first tests on Salisbury Plain may one day be seen as the first, tentative steps towards a technological revolution in the industry.
British Airways is planning to double its operations at Gatwick, instead of more at Heathrow. It is keen to compete against Heathrow. BA is understood to be planning to increase the number of aircraft based at Gatwick from 14 to between 24 and 28 in the next few years. Airlines are annoyed at the high level of landing charges, per passenger, at Heathrow as well as the problems of not having enough staff this summer. BA wants to grow (like all airlines – they have no Plan B) and intends that to be at Gatwick, for the time being. BA was among a number of airlines to decrease its presence at Gatwick, Britain’s second-busiest airport, during the pandemic. Arch-rival Virgin Atlantic moved its operations to Heathrow. BA returned to Gatwick last year with the launch of Euroflyer, a cut-price short-haul subsidiary that would operate independently in a similar vein to Cityflyer, which runs BA flights from London City Airport.
British Airways to double operations at Gatwick Airport
Airline plans to increase planes based at Sussex site from 14 to as many as 28
By Oliver Gill, CHIEF BUSINESS CORRESPONDENT (Telegraph)
27 November 2022
British Airways is planning to double its operations at Gatwick as a long-running row with Heathrow sours relations with bosses at Britain’s busiest airport.
The UK flag carrier is to increase flights from the Sussex airport instead of expanding operations at Heathrow.
BA is understood to be planning to increase the number of aircraft based at Gatwick from 14 to between 24 and 28 in the coming years.
The plans come amid discontentment among airlines operating out of Heathrow. The airport was forced to cap passenger numbers during the summer to prevent a repeat of the chaos that blighted many airports since the Easter holidays.
Heathrow bosses are also lobbying the aviation regulator to increase landing charges – fees that are passed on to customers. One senior source said: “Our growth will be at Gatwick rather than Heathrow for now.”
BA was among a number of airlines to retreat from Gatwick, Britain’s second-busiest airport, during the pandemic. Arch-rival Virgin Atlantic moved its operations to Heathrow, turning its back on the base where Sir Richard Branson’s maiden flight took off in 1984.
BA returned to Gatwick last year with the launch of Euroflyer, a cut-price short-haul subsidiary that would operate independently in a similar vein to Cityflyer, which runs BA flights from London City Airport.
Euroflyer was BA’s plan to avoid racking up big losses running short-haul flights and included similar working practices to budget rivals, meaning some pilots would be paid less than those at EasyJet.
BA bosses, meanwhile, have clashed with Heathrow chief John Holland-Kaye both in public and behind closed doors. Heathrow is waiting on a final decision by the Civil Aviation Authority (CAA) on what it can charge airlines in take-off and landing fees.
Charges are set to fall from £30 per passenger currently to £26 next year under proposals put forward by the CAA.
Heathrow wants to increase the charges to £42 per passenger. Failure to acquiesce to such demands would have a detrimental impact on passengers because the airport would not have the money to invest in vital upgrades and maintenance, Mr Holland-Kaye said.
Airlines disagree. Luis Gallego, the chief executive BA parent IAG, has accused Heathrow of “using its dominant market position to enrich shareholders at the expense of travellers, airlines and the UK’s economy”.
It remains to be seen whether a rubber-stamping of the £26 charge would impact Heathrow’s plans to roll out baggage scanners that will negate the need for passengers to remove liquids and laptops, for instance.
After what sources conceded had been hiccups upon launch, demand for BA’s Euroflyer services is particularly strong with bookings for next year already performing strong, sources said.
BA plan for new low cost “BA Lite” at Gatwick, for short-haul flights, abandoned
September 23, 2021
At the end of August British Airways announced that it hoped to start a new low-cost airline, called “BA Lite” to operate from Gatwick, and compete with Ryanair, EasyJet and Wizz. BA would therefore move short-haul flights back to Gatwick, after deciding to move them to Heathrow because of the pandemic. BA had consultations with trades unions – telling them that change was essential if it was to return to Gatwick. But the contracts for staff were less generous than before. Now the plan to create “BA Lite” has been scrapped, as agreement could not be reached with the pilots’ union, BALPA. The union says the benefits and protections its members would have under the new company are not good enough. So BA has shelved the plan and will now cut the short haul routes it already flies from Gatwick. The news may come as a blow for Gatwick as it looks to grow passengers numbers and bring its emergency runway into regular use to increase its capacity. The loss of BA and its routes means Gatwick has even less need for its costly, climate-wrecking, expansion plans to bring its standby runway into full use, by 2029.
Gatwick in talks with lenders, after losing another £245 million in the first half of 2021
August 14, 2021
Gatwick says it made a loss of £245m in the first half of 2021, as passenger numbers collapsed to 569,000. It expects to have 9 million passengers by December, but that is lower than the 10 million in 2020. In 2019 it had 46.5 million. The airport is now in talks with its lenders to ease the terms of its loans, due to the losses. It lost £465.5 million in 2020. Due to its weak finances and continuing low demand for air travel, Gatwick has asked its lenders to agree to short-term waivers on its loans to avoid it defaulting. This was also done last year, and the same thing happened at Heathrow. Virgin Atlantic, one of Gatwick’s longest-standing airline customers, has ceased its operations at Gatwick for now, while British Airways has moved all of its short-haul flights to Heathrow, due to the low level of demand. However, BA said it will continue with at least long-haul operations from Gatwick. The airport said it had 779m of liquidity at the end of June, which it hopes would last it for the next 12 months, with no more staff being made redundant. It has cancelled or deferred more than £570m of capital spending that had been planned for 2020, 2021 and 2022.
The CEO of Virgin Atlantic, Shai Weiss, has said he does not support the expansion of Heathrow if it continues with its very high landing charges for passengers. Heathrow will be allowed, by the regulator, the CAA, to raise charges by 56% next year, to £30.19 a passenger, but will have to reduce them to 26.31 in 2026. Heathrow claims this will not provide them enough money to invest in a 3rd runway. But the airlines using Heathrow consider the charges too high, and a disincentive to passengers. Weiss said Heathrow’s plan to raise charges was “great for the airport and its mostly foreign shareholders” – including Qatar and China’s sovereign wealth fund – but “a bad deal for consumers, airlines, and the UK economy”. He wants the CAA to reform a “broken” system and “pay closer attention to the abuse of power by a de facto monopolistic airport”. …”Until that happens, it is difficult to see how expansion at Heathrow can be supported.” He ruled out a return to Gatwick, which Virgin left during Covid, saying there was “no connectivity”. Virgin Atlantic had become more efficient since focusing all its operations on one London airport. . Tweet
Virgin Atlantic withdraws support for Heathrow third runway
Airline chief Shai Weiss attacks airport’s proposal to increase landing charges by 120%
By Gwyn Topham, Transport correspondent (The Guardian) @GwynTopham
Mon 21 Nov 2022
Virgin Atlantic has withdrawn its support for Heathrow’s third runway plans amid an ongoing row over the cost of flying from Britain’s biggest airport.
The carrier had been one of the most prominent airline backers of expansion before the pandemic. But on Monday its chief executive, Shai Weiss, hit out at Heathrow’s proposal to increase landing charges by 120% and called on the aviation regulator, the CAA, to reform a “broken” system and “pay closer attention to the abuse of power by a de facto monopolistic airport”.
He added: “Until that happens, it is difficult to see how expansion at Heathrow can be supported.”
The CAA said this summer Heathrow would be allowed to raise charges by 56% next year, to more than £30 a passenger, but would have to trim them by 2026 – a proposal that Heathrow said “underestimated” the need for investment.
Weiss said Heathrow’s plan to raise charges was “great for the airport and its mostly foreign shareholders” – including Qatar and China’s sovereign wealth fund – but “a bad deal for consumers, airlines, and the UK economy”.
Speaking at the Airlines 2022 conference in central London on Monday, Weiss said that, along with other carriers, “we have fought long and hard to ensure the CAA uses its powers to ensure this would not happen and encouraged the UK government to pay closer attention to the abuse of power by a de facto monopolistic airport”.
The row has festered during a difficult summer in which Heathrow forecast lower demand and then blamed airlines for not staffing up sufficiently to accommodate all flights, imposing a 100,000 passengers a day cap.
Weiss added: “This is not just about the next price control period in four years’ time. Everyone in this room will recognise the damage to consumer confidence that summer disruption caused.
“A repeat of this in summer 2023 is completely avoidable if honest and accurate passenger forecasts are used now for resource planning and building resilience.”
Appealing to the CAA and British government, he said: “The regulatory framework and process is simply not working. It is broken and must be reformed.”
Questioned afterwards, Weiss told the Guardian he would still back expansion at the airport, including the controversial third runway, if conditions were met, including lower charges so it “remains competitive consumers are protected”, as well as “massive renovation” of Heathrow’s Terminal 3 where Virgin is based.
While the airline had been one of the runway’s biggest airline cheerleaders, Weiss said there was “no longer unequivocal support”.
He ruled out a return to Gatwick, which Virgin left during Covid, however, saying there was “no connectivity”.Weiss said the carrier had become more efficient since focusing all its operations on one London airport.
John Holland-Kaye, the Heathrow chief executive, told the Guardian he expected to continue to “have a constructive relationship and conversations” with Virgin, and that redevelopment of Terminal 3 or a move to the new Terminal 2 was in the airport’s medium-term plans.
A Heathrow spokesperson said: “To deliver the airport service passengers expect, two things are needed: for our regulator to give us the ability to invest in the airport; and for all the operators at the airport to work together building back capacity. These are our focus right now.”
If Heathrow does not go ahead – which seems unlikely at present – Gatwick Airport will use that as an argument to provide more south east capacity.
However this article gives an argument to challenge the ’need’ aspect of GAL’s plans. Weiss said Virgin ruled out a return to Gatwick partly on improved efficiency but partly due to the lack of connectivity. So that is bad news for the growth aspirations of Gatwick.
See earlier:
CAA confirms it wants Heathrow landing charges to fall from £30.19 to £26.31 for next 5 years
June 28, 2022
The CAA, as expected, has released its Final Proposals for the “H7” price control (5 year) period which runs from January 2022 – December 2026. The CAA is now undertaking a consultation on the proposal to which Heathrow, the airlines that use it, and others will respond. The CAA will consider the feedback it receives during this consultation before making a final decision on the H7 price control, which is expected later this year. The CAA has said that the average maximum price per passenger that airlines will pay Heathrow will fall from £30.19 today to £26.31 in 2026. (Heathrow was allowed an interim increase earlier this year, due to Covid issues). When the effects of inflation are removed, this is equivalent to nearly a 6% reduction every year (ie. down £1.87 in the first year, etc) from today’s level up to 2026. Heathrow has claimed huge losses due to the pandemic, and that it wanted the higher landing charge, to help recovery. But the CAA considers the return of high passenger numbers – that has been faster than anticipated – will bring in sufficient money into Heathrow, for its spending and investment requirements. The higher landing charge is not needed.
Heathrow’s financial problems deepen, especially if it has 15% less passengers in 2022 than forecast
January 31, 2022
Heathrow has been allowed, by its regulator the CAA, to increase its passenger charge from £19.36 to £30.19 this year until the summer. After that the CAA will probably rule on charges for the next 5 years. Heathrow wanted a larger increase, to £43 per passenger, and based some of its profit forecasts on that – and is peeved with the CAA for limiting its charges. Heathrow has net debts of £15.4 billion of net debt. It says that if its number of passengers in 2022 is more than 15% below its forecast of 45.5 million, it will have financial problems – though “no covenant breaches are forecast in 2022” but that is possible. Its forecast aeronautical revenue for 2022 has been revised down to £2.19 billion, and its underlying earnings down to £1.04 billion. If Heathrow has to breach its covenant terms with its lenders, it becomes a less attractive (aka lucrative) investment, and its credit rating eg. by Standard & Poor’s and Fitch. The airlines using Heathrow are, predictably, deeply opposed to yet higher Heathrow charges.
Disagreement between opposing political parties has resumed over whether loans by Luton Borough Council to its airport company, Lution Rising, are secured or unsecured. The latest exchange came during debate on the local authority’s treasury management annual report at a full council meeting on 15th November. The opposition group leader said: “… there’s more than £500m of unsecured loans, which have been given to the airport company. I know I’m about to be told those loans are in fact secured on the assets of the company. But that’s nonsense. You can’t take as security for a loan like this assets which the council already owns. They’re effectively unsecured.” It is unclear whether the loans are secured, as they are to a separate entity, London Luton Airport Limited, trading as Luton Rising, and the council may legally be separate from that. Councillors approved the annual report on treasury management and prudential indicators for the year ending March 31st 2022. . Tweet
Luton councillors in disagreement over £500m loans to airport company
Councillors agree to disagree over whether huge loans are secured or unsecured
By Euan Duncan, Local Democracy Reporter (Luton Today)
18th Nov 2022, 1:54pm
A war of words between councillors from opposing political parties has resumed over whether loans by Luton Borough Council to its airport company are secured or unsecured.
The latest exchange came during debate on the local authority’s treasury management annual report at a full council meeting.
Finance portfolio holder and Labour Limbury councillor Rob Roche warned: “I don’t want people to think we’re going to do something stupid as an unsecured loan against an asset.”
Liberal Democrat Barnfield councillor David Franks disagreed, describing the report as “a reminder how much more difficult dealing with the council’s cash flow is because of the level of debt the council is carrying”.
The opposition group leader said: “And, in particular, there’s more than £500m of unsecured loans, which have been given to the airport company.
“I know I’m about to be told those loans are in fact secured on the assets of the company. But that’s nonsense.
“You can’t take as security for a loan like this assets which the council already owns. They’re effectively unsecured.”
Councillor Roche explained: “We’ve a separate entity as a company, London Luton Airport Limited, trading as Luton Rising. The council is separate from that.
“The asset is secured by debenture in Companies House and we’ve first charge on that asset. So it’s secured against the asset. I don’t want people to think we’re stupid enough to do something like that.”
Councillor Franks added: “In the case of the loans to LLAL, the lender is the council and the council has registered an interest in assets which the council already owns through its ownership of the company.
“There are no ways in which that can be described as a secure loan.”
But councillor Roche replied: “We’ll have to agree to disagree. It’s a secured loan. There’s a debenture in Companies House secured against the airport and the loan is secured.”
The report noted “an increase in the amount of external borrowing, £89m during 2021/22, to finance council approved projects, and that the local authority didn’t breach any of its prudential limits”.
It covers several areas including:
capital activity for the financial year 2021/22;the council’s overall borrowing need or capital financing requirement;the overall treasury position identifying how the council has borrowed relating to its indebtedness, and the impact on investment balances;borrowing strategy and activity;and investment strategy and activity.
“The council has a current policy of maximising internal borrowing, and therefore minimising the need to borrow,” said the report.
“LBC has locked most of the long-term borrowing requirement on fixed rate terms already, a strategy which should mitigate exposure to further interest rate rises.
“The council must ensure it isn’t borrowing to support revenue expenditure. The authorised level is the affordable borrowing limit required by section three of the Local Government Act 2003.
“The local authority doesn’t have the power to borrow above this level. During 2021/22 the council has maintained gross borrowing within its authorised limit.”
Councillors approved the annual report on treasury management and prudential indicators for the year ending March 31st 2022.
Luton airport continuing to be a financial drain (maybe £550 million+) to owners Luton Council
November 25, 2021
In the last few days, the company (owned by Luton Borough Council) that owns Luton Airport, has changed its name from London Luton Airport Ltd, to “Luton Rising”. That will be its trading name. The company that operates the airport is London Luton Airport Operations. London Luton Airport Operations has obtained agreement from Luton Rising that it can retain £45 million over three years. This will support the airport’s recovery from the pandemic. The money would have been paid by the operator to Luton Rising (ie. the council) if it had not been for the impact of Covid reducing passengers and flights. Luton council usually, pre-Covid, made a good profit from the airport, but that has now been reversed. The Council in 2019 receiving a £19.1m, and £15.8m servicing debt. In September 2020 there was a £60m loan by Luton Borough Council to its airport company and it was expected that another £23 million would be paid. Then in June 2021 Luton Council loaned a further £119m to the airport. Now this is another £45 million, over three years. The airport is not looking like a great investment for the council …
Luton scaling back airport expansion plans, delaying 2nd terminal, to save £1 billion
May 20, 2021
Luton Airport, which is owned by Luton council, is planning to scale back its expansion plans in order to save perhaps £1 billion. In 2019 the airport consulted on plans for a new terminal that would enable the annual number of passengers to be increased from 18 million to 21 million by 2039. There will now be a new consultation, later in 2021 or in 2022, for initially improvement of the existing terminal, and then eventually a second terminal, at some future date. The airport’s finances have been seriously hit by Covid. The Council benefited greatly from the airport (before Covid), in 2019 receiving a £19.1m, and £15.8m servicing debt. In 2020 the airport had huge public subsidy, and more will follow for 2021. Local campaigners will be looking very carefully at what might emerge from proposals for further passenger growth using the existing terminal. This might be by creative use of “permitted developments” which Luton Borough Council could approve on its own. If such growth could accommodate more than an additional 5 million passengers per year (taking Luton to 23Mppa) it would then become possible for the declared ambition to reach 32Mppa to be achievable without need for a DCO, as below the 10 Mppa threshold.
Luton Council’s £60m loan to Luton Airport company set for approval ‘in private’
September 5, 2020
A £60m loan by Luton Borough Council to its airport company is set for approval, in private, by the executive later this month. The first of two emergency loans – together totalling £83m – has gained the support of Luton Council’s scrutiny finance review group, at the second attempt. The second loan worth £23m to London Luton Airport Limited (LLAL) is scheduled for the 2021/22 financial year, after the council’s emergency budget in July. The Labour controlled council were forced by the Liberal Democrats to discuss the loan report in public. But officers asked for the council to take legal advice and defer the issue. It seems that 5 five Labour councillors recommended the council’s executive approve the £60m loan deal, with the 3 Liberal Democrats in opposition. The executive will formally decide upon the loan at its meeting on Monday, September 14th. The Liberal Democrats said the almost £400m in loans are secured against the assets of the company. But, the council already owns all of LLAL’s assets by virtue of its 100% ownership of the company. It follows that for all practical and accounting purposes the £400m loans are unsecured.”