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Welsh government buying Cardiff airport from Abertis in £50m cash deal by the end of March

The Welsh Government is expected to complete its acquisition of Cardiff Airport by the end of March in a straight cash deal understood to be around £50m with current owner Abertis. A due diligence process is being undertaken on behalf of the Welsh Government. The deal will not see the Welsh Government taking on any debt at the airport – which posted pre-tax losses of just over £300,000 in 2011. In the short to medium term the Welsh Government would need to inject about £6m a year in capital expenditure and airline route development support – including agreeing to underwrite any losses in the first few years accrued by airlines establishing new routes out of Cardiff.  ie public subsidy.  It is understood that representatives of the Welsh Government have already sounded out a number of low cost airlines over setting up operations, including Ryanair – which was asking too much. Discussions are continuing. It is unlikely that the airport, post deal, would be directly owned by the Welsh Government but by some special purpose vehicle instead.

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£50m cash deal for Cardiff Airport expected by the end of March

20.2.2013  (Wales online)

The Welsh Government is expected to complete its acquisition of Cardiff Airport next month in a deal understood to be around £50m with current owner Abertis.

A due diligence process is being undertaken by a team of advisers on behalf of the Welsh Government that includes law firm Eversheds and professional advisory firm KPMG – using personnel at the firms’ respective Cardiff offices.

It is understood that it will be a straight cash deal, with no earn-outs for listed Spanish infrastructure group Abertis.

Earn out clauses could have seen Abertis being entitled, for example, to payments based on the future performance of the airport – such as reaching an annual passenger number of three million a year (it is currently languishing at around one million).

The deal will not see the Welsh Government taking on any debt at the airport – which posted pre-tax losses of just over £300,000 in 2011.

The Welsh Government is keen to conclude a deal before the end of its current financial year at the ends of March.

In the short to medium term the Welsh Government would need to inject about £6m a year in capital expenditure and airline route development support – including agreeing to underwrite any losses in the first few years accrued by airlines establishing new routes out of Cardiff.

It is understood that representatives of the Welsh Government have already sounded out a number of low cost airlines over setting up operations at the airport post deal, including Ryanair.

However, Ryanair’s wish list of support is understood to have been too high for the Welsh Government – although discussions are continuing.

It is unlikely that the airport, post deal, would be an asset directly owned by the Welsh Government. It has been looking at establishing a special purpose vehicle to acquire the asset.

However, one option could be for it for it to come under the ownership of the Welsh Government’s banking subsidiary Finance Wales.

Such a move could potentially provide a financial bonus in that its enterprise value on Finance Wales’ balance sheet, could offset what was originally £97m charged to the Welsh Government’s accounts as result of its [Finance Wales’] £150m Jeremie Fund – which includes £75m of repayable finance with interest with the European Investment Bank.

The Treasury ruled back in 2010 that the non EU structural funding element to the fund should be seen as part of the Welsh Government’s block grant and not, as was anticipated by Finance Wales and the Welsh Government, additional to it.

As a result the amount was charged against the capital budget of the Department for Business, Enterprise, Technology and Science (Bets).

The published Welsh Government accounts for its last financial year show that Finance Wales borrowings had reduced to £73.9m. Further repayments of £15.5m are planned for 2012-13 as reflected in the second supplementary budget for this financial year.

If Cardiff Airport appeared on the balance sheet of Finance Wales, could its enterprise value effectively release all or part of the charge of £73.9m – which will be less than £60m at year end at the end of next month – from the capital budget?

With some 40 acres of land around the airport its enterprise value over time should be significantly higher than the amount it pays Abertis.

However, it would need Treasury approval. The Welsh Government and Finance Wales had unsuccessfully argued that the funding should not ever have been allocated as a charge on the Welsh Government’s balance sheet as the money was only intended to be lent to be invested in businesses, for which there is an element of security. It is unlikely that the Treasury would take a favourable view now on the enterprise value of the airport of the balance sheet of Finance Wales offsetting the charge allocated to the capital budget of BETS.

It could also argue that as Finance Wales is a wholly- owned subsidiary of the Welsh Government it would therefore have ultimate ownership of the airport.

Moreover, the Welsh Government has enough financial fire-power to use money from exiting funding resources – including making use of the £227m capital consequential as a result of George Osborne’s Autumn Statement – to pay for the airport.

A Welsh Government spokesman said: “The Welsh Government has appointed a core team of specialist advisers and contractors, which includes KPMG and Eversheds, to assist us through the period of due diligence. As we have said repeatedly, it would not be appropriate to make any further comments on the proposed purchase while we undertake that due diligence work.”

Having acquired the airport, the Welsh Government would put out to tender a contract for a company to run the airport.

This could potentially see the operator – having committed to capital investment at the airport – taking a minority equity stake in a public-private partnership ownership arrangement with the Welsh Government.

Cardiff Airport first moved into the private sector when it was acquired by TBI from the local authorities of West, Mid and South Glamorgan in 1995 for £37.65m.

TBI sold Cardiff, along with its other airports owned and managed in its portfolio – including Belfast and Luton – in a just over £750m deal with Abertis in 2004, of which £553m was in cash and the rest in debt.
http://www.walesonline.co.uk/news/wales-news/2013/02/20/50m-cash-deal-for-airport-expected-by-end-of-march-91466-32841310

 

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Earlier:

Cardiff Airport: Carwyn Jones tells Assembly Members ‘no concerns’ over deal

The First Minister of Wales, Carwyn Jones, has said the Welsh government is close to signing a deal to buy Cardiff Airport from its current owners, Abertis.   He has told Welsh Assembly Members that checks on the airport’s finances had revealed “no concerns” though some experts had told him its commercial future as an airport was limited to a few years.  The deal would be subject to a final price being agreed and  due diligence being carried out on the finances of the airport. Cardiff had just over one million passengers in 2012, which is a drop of some 16% compared to 2011, which was itself some 14% lower than in 2010. The airport had two million passengers in 2007, and has been in decline ever since.  It has hopes of growing its passenger number by 5 – 8% this year, which appears unlikely with a continuing recession.  Ministers are considering a range of options on how to run the airport.  Assembly Members are concerned the airport does not become a drain on taxpayers. 

31.1.2013 (BBC)

Cardiff airport
The airport says it expects 5% – 8% growth during 2013

The Welsh government is close to signing a deal to buy Cardiff Airport with the two sides “not too far apart” on a price, the first minister says.

Carwyn Jones told AMs that checks on the airport’s finances had revealed “no concerns” though some experts had told him its commercial future was limited.

Figures this month showed it saw just over a million passengers in 2012, a drop of 16.1% or about 200,000.

Ministers are considering a range of options on how to run the airport.

The airport was hit by the withdrawal of flights by budget airline bmibaby in 2011, but says it expects 5% – 8% growth during 2013.

Just before Christmas, the Welsh government confirmed it wanted to buy Cardiff Airport from the Spanish-owned Abertis group after a slump in passenger numbers from a peak of two million in 2007.

In an update on negotiations on Wednesday, Mr Jones said a deal would be subject to a final price being agreed and various checks and balances being carried out on the finances of the airport, in a process called due diligence.

AMs on the assembly’s business and enterprise committee were given more details about the talks that went on behind the scenes and what is likely to happen if the deal goes ahead.

Mr Jones told them: “We are not going to purchase something that is going to cause a problem to the people of Wales and in looking at the due diligence it appears that there are no major problems with the airport.”

He also revealed that no final price had been confirmed with the current owners except to say that the two sides were “not too far apart”.

Joint venture

The first minister set out a broad timetable of events should the deal be completed.

He said an interim team would be installed to run the airport while the Welsh government considered the best model for its ownership and operation.

The options include leasing it to a private company or entering into some kind of joint venture, possibly even shared ownership.

Once a decision is made on the model, a tendering process would get underway to choose a private sector operator to run the airport on a day-to-day basis.

Mr Jones said the current owners were not interested in a sale at first but changed their minds and approached the Welsh government a month or two before the pre-Christmas announcement.

He also said his initial priority would be getting new routes in and out of the airport, adding that during talks with the airlines they had shown no interest in the quality of road and rail links to the airport.

The first minister was also pressed on his claim that the proposed deal was being done as a way to secure the future of the airport.

In his response, Mr Jones said in talks with the airport owners he was left with the impression that it was in trouble.

He also said that several different sources, including aviation experts, had told him they believed the airport only had a few years left as a commercial operation.

http://www.bbc.co.uk/news/uk-wales-21268542

 

Related BBC Stories

The number of  ATMs at Cardiff in 2012 was 13,966, down – 13.1% compared to 2011. And the number of passengers was 1,013,380 – which was down – 16.1% on 2011.

CAA data on number of passengers at Cardiff airport in recent years   link 

2001  - 1 524
2002  - 1 416
2003  - 1 900
2004  - 1 873
2005  - 1 765
2006  - 1 993
2007  - 2 094
2008  - 1 979
2009  - 1 625
2010  - 1 398
2011  - 1 208  (which was down -14% compared to 2010)

 

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see earlier

Bristol Airport flies more Welsh passengers than Cardiff

February 16, 2013      Provisional figures for 2012 indicate that more passengers from Wales use Bristol Airport than Cardiff. Over 1 million passengers used Cardiff in 2012, down about 200,000 in a year, with nearly 6 million at Bristol. The statistics suggest the scale of the task facing the Welsh government in improving Cardiff Airport’s fortunes as ministers finalise a deal to buy it. It is estimated that it amounts to the equivalent of about 1.1m passengers over a year flying from Bristol, having come from or going to places in Wales. The Welsh government is expected to take over Cardiff Airport over the next few months after a slump in passenger numbers from a peak of 2m in 2007. It is negotiating a price with Spanish owners Abertis and carrying out various checks and balances on the airport’s finances. The Mayor of Bristol says both airports have their problems, and it would be better if they could work together.    Click here to view full story…

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Cardiff Airport buyout by Welsh government: Conservatives’ question if it’s value for money

January 10, 2013     On 18th December the Welsh First Minister, Carwyn Jones announced that the Welsh government wanted to buy Cardiff Airport from its current owners, TBI. He said they would be working towards a purchase over the next few months. and hoped the airport would be run on a commercial basis by an independent commercial operator on behalf of the government. Conservatives are calling on the Welsh government to prove that buying Cardiff Airport would be good value for the taxpayer, and see it as Labour’s attempt to “nationalise” the airport. Cardiff airport has had declining passenger numbers, down 13% in 2011 to a little over 1.2m, while passengers at Bristol increased by 1%. There was a further fall in the first half of 2012 to 440,000 from 558,000 – partly due to the departure of bmibaby. Despite assurances that it will not receive subsidies or burden the taxpayer, there have been questions about whether public ownership will succeed in turning around the airport’s fortunes.     Click here to view full story…

 

Read more »

Plan revealed to dismantle planes at Durham Tees Valley Airport

Durham Tees Valley Airport is set to become a centre for the storage and dismantling of unused planes, and recycling parts. Sycamore Aviation has set up its base at the struggling airport and has already begun work on taking apart a number of airliners. The airport has a long runway, enabling it to handle larger planes, and plenty of hangar space. There are apparently “huge numbers” of aircraft retiring across Europe. A Sycamore Aviation spokesman said one airline alone is likely to need to dispose of 20 jumbo jets and 20 Boeing 737 aircraft in the next 3 -4 years – an illustration of the potential scale of demand. They say that across Europe between 500 to 700 aircraft a year need to be decommissioned and currently there are just not enough facilities to meet the demand.  The number of passengers using Durham Tees Valley airport has fallen steadily from around 912,000 in 2006 to 165,000 in 2012.

Plan revealed to dismantle planes at Durham Tees Valley Airport

(Evening Gazette) Feb 19 2013

Durham Tees Valley Airport

Durham Tees Valley Airport

DURHAM Tees Valley Airport is set to become a centre for the storage and dismantling of unused aeroplanes, it was announced this afternoon.

Sycamore Aviation has set up its base at the struggling airport and has already begun work on taking apart a number of airliners.

The airport was pinpointed after by the firm because of its ability to handle any kind of aircraft. It is equipped with a long runway, enabling it to handle larger planes.

Spokesman Kevin O’Hare said that, having worked as pilot for many years – much of it flying out of the North-east, including Durham Tees Valley – he had wanted to set up the business because of the “huge numbers” of aircraft which are retiring across Europe.

He wanted to develop facilities where aircraft can be decommissioned in the most efficient and environmentally friendly way – while recycling as much as possible.

“I looked at virtually every airport and airfield across the country when developing my plans and came to the conclusion that Durham Tees Valley offered the best potential, including its ability to handle any kind of aircraft and the hangar space required,” he said.

“We have worked very closely with the airport and the statutory agencies in setting up the operation, which we believe can be real winner for ourselves and the airport.”

Mr O’Hare said one major carrier alone is likely to need to dispose of 20 jumbo jets and 20 Boeing 737 aircraft in the next three to four years – an illustration of the potential scale of demand.

“It’s been estimated that across Europe between 500 to 700 aircraft a year need to be decommissioned and currently there are just not enough facilities to meet the demand,” he added.

The company has taken over a 45,000 sq ft hangar at the airport where a team of experienced aircraft engineers are able to decommission aircraft and recover many high value spares which are wanted by clients across the world.

“Aircraft are expensive pieces of equipment and the value of recycled and recertificated spares can run into literally millions of pounds,” said Mr O’Hare.

” We can recover around a thousand different parts from an aircraft and the history of them can be traced back to the day they were first fitted.

“In addition we are working with local universities on the potential for developing new ‘green’ methods for recycling items such as interior fittings.”

The target for the first year is to handle an average of one aircraft a month. The business hopes to offer maintenance and storage facilities.

Airport commercial director Andy Foulds said: “This is good news for the airport and, we believe the local area as a whole, exploiting the potential of the facilities we can offer at the same time as establishing a high-value and expanding new industry.

“We believe that one of the keys to securing the future of the airport is making full use of the business opportunities for the whole site and this development is, we hope, a pointer to attracting other companies who are involved in all aspects of the air transport industry.”

In December, Mr Foulds told the Gazette that there was more to the future of the airport- which has had a well-publicised reduction in tourist destinations in recent years – than simply passenger numbers.

http://www.gazettelive.co.uk/news/teesside-news/2013/02/19/plan-revealed-to-dismantle-planes-at-durham-tees-valley-airport-84229-32839581/

 


 

 

The number of passengers using Durham Tees Valley airport has fallen massively over recent years:  (CAA data)

 

2004     795,000
2005     902,000
2006     912,000
2007     735,000
2008     647,000
2009     288,000
2010     225,000
2011     190,000

2012     165,000

 


 

Some recent news about  Durham Tees Valley Airport:

 

Bosses at Durham Tees Valley Airport express “acute disappointment” at bid failure

19.10.2012     AIRPORT bosses  expressed their “acute disappointment” at the Government’s decision to reject a bid for regeneration cash. However, Durham they said they remained committed to the Southside freight terminal development – despite the failure of the £5.9m Regional Growth Fund (RGF) application. DTVA chairman Robert Hough said the company would be demanding an explanation from ministers after the RGF bid was turned down. “It was hoped the £5.9m scheme, which would take ten years to complete and create up to 1,500 jobs, could breathe new life into the airport, which was close to going out of business last year amid falling passenger numbers.”   Click here to view full story …

 

Government orders research into regional rate for air passenger duty

June 20, 2012    Chloe Smith, Economic Secretary to the Treasury, has said – at a meeting with the Sedgefield MP and Newcastle airport and Durham Tees Valley airport – that the Government has commissioned research into varying APD on a regional basis. The research, planned to be published this summer, will consider the potential impact of a regional APD rate as well as devolving the power to set the tax north of the border to the Scottish Government. There has been a campaign in the region, by the Journal newspaper, to get APD changed, claiming it has adverse economic consequences. Newcastle Airport wants APD to be charged at a higher rate at the biggest, most congested airports (south east), and a lower rate from uncongested regional airports.    Click here to view full story…

 

Durham Tees Valley airport applying to Regional Growth Fund for freight distribution centre

May 26, 2012     An expansion plan is being drawn up for loss-making Durham Tees Valley Airport and will be handed to the Government within weeks. The airport is preparing a bid to the regional growth fund to develop a 250-acre south side of the airport, for freight services/distribution (does not say whether any air freight is included). The application will include a new internal road, installing gas, electricity and drainage connection, and perhaps new buildings. Peel Holdings Ltd, the airport’s owner (owns 80%), has to submit the bid to the £1bn fund by the deadline of June 13th. There has been an 80% fall in the number of passengers since 2006, from 912,000 down to 190,000 in 2011. The focus on freight confirms the expectation the airport will find it difficult to increase passenger numbers. However, their airport’s air freight tonnage has plummeted to almost nothing in the past two years      Click here to view full story…

 

Durham Tees Valley campaign to ship travellers over to Amsterdam for connections

5.5.2012   Durham Tees Valley airport is running a publicity campaign with KLM, to let people know “The World’s on Your Doorstep”. The local authority, Hartlepool Borough Council is also backing it. The aim is to promote the KLM flights (3 per day) to Amsterdam, and then all the other destinations that can be reached from Amsterdam. The Air France/KLM group operates flights from 14 cities in the UK to their hubs in Paris and Amsterdam.  There are flights each day to Heathrow from Newcastle airport, which is only about 35 miles from Durham Tees Valley airport.    http://www.hartlepoolmail.co.uk/news/local/airport-campaign-1-4518265

 

Read more »

Cheaper BA flights if you only have hand luggage as airline takes on budget rivals

British Airways is to follow budget airline rivals by charging less if passengers travel with just hand luggage.  BA said the cheaper fares – which will initially be on flights from Gatwick Airport to 5 European destinations (Amsterdam, Dubrovnik, Jersey, Tunis and Turin) – will give passengers ‘more choice’.  The size of discounts will vary depending on the route but will range from £9 to £15.And BA said that holidaymakers who travel with luggage they wish to check in will not pay more to compensate for the lower ‘hand baggage only’ fares.  BA is doing this in order to try to compete with Ryanair and Easyjet that charge more for passengers to check in baggage, effectively charging less for those who don’t.   The director of Gatwick for BA said many holidaymakers already use the two-bag hand luggage policy. BA is looking at pleasing price-sensitive customers.

 


Cheaper BA flights if you only have hand luggage as airline takes on budget rivals

  • BA plan to take on budget airlines who have been offering the service
  • Holidaymakers will be rewarded with a discount if they opt out of hold luggage
  • It will be available at first on five short haul journeys from Gatwick

By LARISA BROWN (Daily Mail)

20 February 2013

British Airways is to follow budget airline rivals by charging less if passengers travel with just hand luggage. 

The airline said the cheaper fares – which will initially be offered on flights from Gatwick Airport to five European destinations – will give passengers ‘more choice’.

Holidaymakers who travel with luggage they wish to check in will not pay more to compensate for the lower ‘hand baggage only’ fares, the airline said.

It is a move likely to be viewed as an attempt by BA to compete with low-cost airlines such as Ryanair and Easyjet that charge more for passengers to check in baggage, effctively charging less for those who don’t.

Peter Simpson, director of Gatwick for British Airways, said: ‘The introduction of our hand baggage only fare is all about giving our customers more freedom to choose the kind of flying they want.

‘Many British Airways customers on Gatwick short-haul breaks choose not to check in a bag as they’re already taking advantage of our generous two-bag hand luggage policy. 

BA plan on taking on their budget rivals, such as Easyjet, that encourage only taking hand luggage

‘Those who still want to check in a bag will simply pay the same price they do now.’

The flag-carrier said it will initially offer a discount for those travelling with just hand luggage from Gatwick to five short-haul destinations including Amsterdam, Dubrovnik, Jersey, Tunis and Turin in Europe.

The size of discounts will vary depending on the route but will range from £9 to £15.

Passengers can start benefitting from the lower fares from Tuesday (February 26), with starting prices ranging from £39 one-way to Amsterdam to £69 one-way to Turin.

Bob Atkinson, a travel expert at Travelsupermarket.com, said it was a great opportunity for passengers to have the full ‘BA offering’ of food and reward points while being handed a ‘generous hand luggage allowance’. 

He said: ‘This is an interesting move for BA which is clearly looking at other ways to position its offering to price-sensitive customers.

‘However passengers who take up the offer to travel without checked luggage will still benefit from a generous hand luggage allowance plus free on board food and drink.’

The move comes after Dutch airline KLM decided to begin charging customers who check in luggage on short-haul flights.

http://www.dailymail.co.uk/news/article-2281449/Cheaper-BA-flights-hand-luggage-airline-takes-budget-rivals.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

 

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British Airways Is Using Cheaper Fares To Compete With Budget Airlines

| Feb. 19, 2013

British Airways is to offer cheaper fares on selected routes to passengers who travel without checked luggage.

The airline says the fares – which will initially be offered on flights from Gatwick to Amsterdam, Dubrovnik, Jersey, Tunis and Turin – will give its passengers “more choice”, and is likely to be viewed as an attempt to compete with low-cost airlines such as Ryanair and Easyjet.

“The surprise is not so much that BA has made this move, but that it has taken so long to do so,” said Nick Trend, Telegraph Travel’s Consumer Editor. “It appears to be a reaction to commercial pressure from its no-frills rivals, which quote lower headline fares because they don’t include the cost of checked bags. This can make BA’s fares look expensive and so less attractive by contrast.

“BA says that the new fares are about giving it customers ‘more freedom to choose the kind of flying they want’, but they are also about giving British Airways the freedom to make its fares look cheaper.”

He added that those passengers who do check a bag into the hold could eventually end up paying more.

“Airfares are so variable that, within a few weeks, it will be impossible to know whether BA passengers without hold luggage are getting a better deal, or whether those who check in their bags are being charged extra,” he said.

But Peter Simpson, director of Gatwick for British Airways, claimed that passengers who check in a bag will not be expected to pay extra to make up for those who choose the cheaper fares.

“It is all about giving our customers more freedom to choose the kind of flying they want,” he said. “Many British Airways customers at Gatwick choose not to check in a bag as they’re already taking advantage of our generous two-bag hand luggage policy. Those who still want to check in a bag will simply pay the same price they do now.”

The new “hand baggage only fares” go on sale next Tuesday (February 26), with starting prices ranging from £39 (one-way to Amsterdam) to £69 (one-way to Turin). BA said that, depending on the route, the fares are between £9 and £15 cheaper than usual.

The announcement by BA — which axed free meals on some flights in 2009 in a bid to cut costs — follows KLM‘s decision to begin charging customers who check in luggage on short-haul flights. KLM’s policy will be effective from April 22.

http://www.businessinsider.com/how-british-airways-competes-with-budget-airlines-2013-2#ixzz2LWednJYh

 

Read more »

Colin Matthews defends steep rise in Heathrow landing charges despite revenue increase – to pay shareholders

Colin Matthews has defended steep rises in landing charges that will push up air fares by saying returns to investors now have to come first, despite a leap in revenues at Heathrow in 2012, due to record passenger numbers in 2012 and higher retail sales per passenger than in 2011.  Spending on the airport facilities is to slow over the next 5 years while charges rise. Colin Matthews wants to “make a fair and market return to shareholders.” It s largest shareholder is the consortium led by the Spanish Ferrovial group, which bought BAA for £10bn in 2006, although it has sold down its former majority holding to just over a third of shares. The sovereign wealth funds of Qatar, Singapore and China own a total of over 40%, with the rest held by Canadian pension fund CPDQ and private investment firm Alinda Capital Partners. Investors had spent £11bn on Heathrow since 2003 and would go elsewhere without returns. The airport paid a dividend of £240m last year, its first since the 2006 takeover.

Heathrow chief defends steep rise in landing charges despite revenue leap

Heathrow boss Colin Matthews says investors, who have spent £11bn on the airport since 2003, need to see ‘a fair and market return’

  • by , transport correspondent (Guardian)
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The boss of Heathrow has defended steep rises in landing charges that will push up air fares by saying returns to investors now have to come first, despite a leap in revenues at the airport on the back of record passenger numbers in 2012.

Spending on the airport facilities is to slow over the next five years while charges rise, but chief executive Colin Matthews said: “What we need to do now is to make a fair and market return to shareholders.”

The largest shareholder remains the consortium led by the Spanish Ferrovial group, which bought BAA for £10bn in 2006, although it has sold down its former majority holding to just over a third of shares. The sovereign wealth funds of Qatar, Singapore and China own a total of over 40%, with the rest held by Canadian pension fund CPDQ and private investment firm Alinda Capital Partners.

Matthews warned that investors, who he said had spent £11bn on Heathrow since 2003, would go elsewhere without returns. The airport paid a dividend of £240m last year, its first since the 2006 takeover.

The airport has set out plans to raise charges by 40% in real terms over the next five years – a proposal attacked by airlines which have demanded significant cuts after steep rises in recent years, including a 12.7% rise last April that contributed to an extra £130m in levies. Around £3bn is earmarked for investment in its infrastructure and services.

Matthews said that there was “a very good level of agreement” with airlines over the vision for an improved Heathrow, and insisted the higher charges – which will spell higher fares – were necessary. “The balancing item is how quickly we get there. The faster we invest, the faster the short-term increase in prices. We do have a good agreement over investment priorities – the balancing act is affordability with the rate of progress.

“Airlines put pressure quite rightly on every single line of their costs. We’ve made that upfront investment which is then paid down through landing charges over decades. We have to make a fair return to debt and equity to sustain the investment in Heathrow.”

The sale of Stansted, for a higher than expected £1.5bn, should complete within the next two weeks, he said, but would not impact on the equation. “Stansted is an asset that the shareholders owned – and the price was a good price. But that’s separate from Heathrow.”

The decision on charges lies with the regulator, the CAA, which will give an indication in April of where charges are likely to be set before its final ruling later this year.

Heathrow’s revenues rose 8% to £2.5bn while pre-tax losses were cut from £255.8m in 2011 to £32.8m. Interest payments on Heathrow’s debt wiped out operating profits of over £570m, meaning the airport paid £8m in tax, after a £64m tax credit received in 2011. Matthews said the tax figure categorically did not represent any kind of subsidy for Heathrow’s investors. “People pay tax when they make profit.”

Matthews said 2012 had been a good year for the airport: “We had record passenger scores for assessing the quality of their journey in Heathrow – partly down to the Olympics.”

He said record passenger numbers of 70 million were likely to rise again slightly in 2013, although the airport was at capacity in terms of flights numbers. Additional A380 planes – which have around 100 seats more than 747s – would be the biggest driver of any increase.

Matthews has recently been joined on the board of Heathrow by Akbar al-Baker, the outspoken chief executive of Qatar Airways, after the state’s sovereign wealth fund took a 20% stake in the airport. Matthews said that al-Baker had not yet attended a board meeting, but was just one voice of many who supported the demand for greater hub capacity in the UK.

Despite the capacity crunch, the Heathrow boss said he did not hold with calls made last week to bring forward the verdict of the Davies Commission to before the election. “My view is that whatever decision is taken has to stick. The last two decisions have been promptly undone. That does no good whatsoever to the country. If in order to win broad enough political support that takes until 2015, then I’d rather that than have a decision in 2013-14 which is undone at the next election, because that is just wasteful.”

http://www.guardian.co.uk/business/2013/feb/18/heathrow-chief-defends-steep-rise-charges

 

 


 

Mr Matthews was speaking as Heathrow Airport Holdings said 2012 revenues rose 8% year-on-year, helped by a 10.5 % increase in the user fees it charges airlines.

Although big-ticket events such as the London Olympics and Paralympics boosted passenger numbers at Heathrow by 0.9% to 70m during the year, this was offset by a 3.2% decrease at Stansted to 17.5m passengers.

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Heathrow’s net retail income per passenger was £5,82 in 2012, cf. £5.58 in 2011. Up 4.4%

Heathrow full year results:

http://t.co/zVm3cUV9   and   http://t.co/fMPNAJQR

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Earlier:

Heathrow Airport produces its 5 year business plan with large rise in landing charges to pay for £3 billion investment

Date added: February 12, 2013

Heathrow Airport has produced its business plan for Q6 (which is the 6th period of 5 years, from April 2014 -2019). It plans to spend some £3 billion on infrastructure, like work on Terminal 2. As Heathrow and the CAA over-estimated the number of passengers using Heathrow over the past 3 years, their income has been lower. Therefore Heathrow plans to raise its landing charges per passenger, by as much as 30 -40% by 2019 – much more than inflation. It said its prices “inevitably” had to rise in order to ensure a “fair return” to its investors. The CAA will publish its final decision on whether it has approved Heathrow’s proposals in January 2014. Launching the investment plans, Colin Matthews said the airport envisaged passenger numbers increasing from just under 70m now to around 72.6m by 2018-19. Heathrow’s 5-year plan is separate from any decision on whether a 3rd runway is built. Maximum airport charges allowed by the CAA are calculated using a complex formula taking into account the total value of Heathrow’s assets, return on capital invested and forecast number of passengers.

Click here to view full story…

 

 

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Heathrow to delay 2nd phase of work on Terminal 2 till around 2019 or later

Date added: February 13, 2013

Heathrow will seek to complete and open the first phase of Terminal 2 by 2014, enabling it to close Terminal 1. But Heathrow Airport has confirmed it is delaying the construction of the £2.5bn 2nd phase of its Terminal 2 building in its latest 5 year business plan (Q6). This means building work starting at the end of the 2014 – 2019 period. The business plan says Heathrow does not now expect to complete the project until “late in Q7” – meaning it could be as late as 2024 before the building is complete. In 2010 BAA said the building, which will add capacity for a further 10 million passengers a year, would be complete by 2019. Heathrow Airport still expects to spend £3bn over the Q6 period, with investment reducing year on year over the period, from £660m in 2014/15 to £464m in 2018/19. “The next quinquennium at BAA will largely be about asset replacement rather than major new projects.” Launching the investment plans, Colin Matthews said Heathrow envisaged passenger numbers increasing from just under 70m now to around 72.6m by 2018-19 (compared with DfT forecasts of 75m by 2020 – see below). So no rapid need for space for 10 million more passengers.

Click here to view full story…

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Bed protest. Hertfordshire & Bedfordshire residents call for a cut in Luton airport night flights

A group of protesters arrived at Luton Borough Council on 15th February to deliver a bed signed by people who are fed up with night noise from Luton Airport. The BANN (Beds Against Night Noise) protest was given good media coverage and made the point that it’s not only Hertfordshire which suffers noise and disturbance – plenty of residents in Bedfordshire are also woken up by late night arrivals, cargo planes and early morning departures. One of the protesters said the PR spin in Luton airport’s Master Plan claimed they would ”consult” the public, and they were taking noise seriously by adding 6 new noise mitigations. However, those so-called mitigations would only affect a fraction of 1% of the total flights – and Luton plans to double night flights between 10pm and midnight and start the morning departure rush at 5am, which is utterly unacceptable. Local people are now  demanding that there is legislation to control night flights at Luton in the same way as at other London airports. There is currently a petition to significantly reduce night flights at Luton, not increase them.

 

Beds as in Bedfordshire !   (where Luton airport is located)

Beds Against Night Noise !

Posted on 

A group of protestors arrived at Luton Borough Council yesterday to deliver a bed signed by people who are fed up with night noise from Luton Airport. The BANN protest was given good media coverage and made the point that it’s not only Hertfordshire which suffers noise and disturbance – plenty of residents in Bedfordshire are also woken up by late night arrivals, cargo planes and early morning departures.

Bed_protest_HALE_Feb_2013

One of the protestors, Chris Nickolay, said “When the Airport stops listening and just rides roughshod over local communities, we have to make our point loud and clear. The PR spin in their Master Plan claimed they would ”consult” the public, and said they were taking noise seriously by adding 6 new noise mitigations. Well now we know the truth. Those so-called mitigations would only affect a fraction of a percent of the total flights – and they plan to double night flights between 10pm and midnight and start the morning departure rush at 5am. That’s utterly unacceptable, and hundreds of local people are now demanding that there is legislation to control night flights at Luton in the same way as at other London airports. Just letting market greed cause sleep disruption to thousands of people is simply not an adequate control: we want a night noise curfew backed up by strict planning restrictions.”

The petition launched by local campaign groups calling for a significant reduction in night flights from Luton Airport can be accessed by clicking here >> Night flights

http://www.hale.uk.net/category/news/

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The petition to the Managing Director of Luton Airport, Eric Pickles, and the Luton Borough Council Planning officer states:

Luton Airport: Significantly reduce night flights 

Petition by HALE, LADACAN, LANAG, SoS 

Night flights at Luton Airport are currently unregulated and affect far more people than at London City Airport, which has a night movements curfew. Planes from Luton Airport are much bigger, and there are plans to almost double the existing 8,500 night flights per annum. There are more night movements at Luton than at Heathrow. The World Health Organisation links noise disturbance at night to serious health problems. We are calling for a significant reduction in night flights at Luton Airport instead of the further increase which is being proposed.

To:

Glyn Jones, Managing Director, Luton Airport
Eric Pickles, Secretary of State
Planning Officer 12/01400/FUL, Luton Borough Council

 

Luton Airport: Significantly reduce night flights

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Noise mitigations “affect less than 1% of flights”

Posted on 

An official response by Terence O’Rourke [Terence O'Rourke is a planning, design and environmental practice, which prepared the application summary for Luton Airport] to questions raised by the Hitchin Forum proves that the so-called noise mitigations proposed by Luton Airport are so feeble as to be almost worthless. The much-vaunted commitments to take seriously the noise concerns of local people have been exposed as hollow by the Airport’s own planning consultants.

Just look at what the Airport said in its September 2012 Master Plan – we have added emphasis to show the commitments which the Airport told us it would be making:

“10.13 The current national aviation policy is the Future of Air Transport White Paper 2003 (FATWP). In this White Paper, the government supports development at
the Airport which makes full use of its single runway on condition that the overall environmental impacts of such development will be carefully controlled and adequate mitigation provided.” (Master Plan Sep 2012)

“10.17 Regarding land use planning and management, paragraph 4.34 states that ‘planning policies and decisions should aim to avoid noise from giving rise to significant adverse impacts on health and quality of life as a result of new development, and mitigate and reduce to a minimum other adverse impacts … including through the use of conditions’. As demonstrated in section 9, we are incorporating a robust package of noise mitigation as part of the proposed development, which aligns fully with the APF.”

Now look at Terence O’Rourke’s responses to the questions raised by Hitchin Forum:

Q: How many flights would have been affected in 2011 by the Chapter 2 ban?
A: Less than 1% of night flights would have been banned in 2012.

Q: How many aircraft in 2012 exceeded the 82dB(A) night noise violation limit and would have exceeded the proposed 80bd(A) night noise violation limit?
A: In 2012, less than 1% of aircraft (3) exceeded the 82 dB(A) night time noise limit.
In 2012, less than 1% of aircraft (14) would have exceeded an 80 dB(A) night time noise limit.

Q: How many aircraft in 2012 were vectored out of the NPR swathes below 4,000ft?
A: LLAOL estimates that less than 1% of flights are currently vectored off NPR swathes between 3,000 and 4,000 ft.

Q: How many flights in 2012 would have exceeded the proposed daytime noise limits?
A: The total number and percentage of aircraft that would have exceeded each of the three proposed daytime noise limits in 2012 is summarised below. • 85 dB(A): 29 (less than 1%) • 82 dB(A): 62 (less than 1%) • 80 dB(A): 138 (less than 1%)

And in case you’re wondering, “less than 1%” is developer-speak for miniscule fractions of a percent: for example 138 aircraft per year in 2012 is about 0.1% of the total. And as a further insult to our intelligence, they describe the above as “a robust response”…

You can read the full set of questions and answers by clicking here >> Hitchin Forum Q&A

http://www.hale.uk.net/category/news/

 

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Earlier:

Luton local residents say “Enough is Enough” on aircraft noise – and do not accept the planned expansion

February 15, 2013 Luton airport has a consultation – that ends on 18th February – into their planning application, to almost double the number of passenger, from around 10 mppa now to 18mppa before 2030. The extra flights would mean a lot more noise for those living locally under flight paths. One of the local residents’ groups, LANAG, has now submitted its response to the consultation, and say that while local residents support the desire for Luton to have a top quality airport, the airport already has twice the number of people affected by noise than there were in 2002 and 4 times the number of aircraft movements at night. They therefore say, “Enough is Enough” and do not accept the increases in aircraft movements and noise that would result from expansion. LANAG wants no more people affected by noise than currently , and say there must be a plan to take 2,800 people out of an environment that, according to the WHO is deleterious to health – due to noise levels. Click here to view full story…

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Luton airport planning application would increase night flights (11pm to 7am) by 50%

January 29, 2013    Local campaign group HALE (Hertfordshire Against Luton Expansion) says that Luton Airport’s expansion plans are based on projections to increase flights at night by 50%. This is based on information in the airport’s planning application which shows that the number of take-offs and landings between 11pm and 7am is projected to rise to 52 by 2028, compared to 34 in 2011. HALE points out that this is just the average figure – during the summer peak there could be as many as 80 flights each night. There is a public consultation on the application until 18th February. HALE is urging people to respond to this planning application by demanding that Luton Borough Council forces its Airport to reduce, not increase, night flights; to monitor and fine night arrivals as well as night departures; and to install a noise monitor on the approach to runway 08 for the purpose.    Click here to view full story…

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Colin Matthews bothered Heathrow might be eclipsed by Dubai and Istanbul

Colin Matthews, head of Heathrow, believes the number of hub airports in Europe will in due course reduce from its current 5 down to 3.  This will happen as long-haul air traffic moves to hubs in the Middle East, which are better geographically located than the UK.  Airports in Dubai and Istanbul have huge projects to increase capacity, as they are in the right locations.   These emerging hub airports will “over time” divert traffic from Europe. Colin Matthew says this will intensify competition between Heathrow, Amsterdam Schiphol, Frankfurt, Paris Charles de Gaulle and Madrid. For some reason, instead of logically therefore not needing larger airports here, he implies that it means the UK has to compete fiercely to remain a huge European hub. He does say “The question at some stage will be not so much shall we have two [hubs] but how on earth are we going to be sure we have one at all? There are 27 member states in the EU, most of them do not have a hub. “It is not a birthright that we have this connectivity.”


 

 

Europeans threaten Heathrow hub

Heathrow will face a battle for survival against Europe’s four other hub airports as countries such as Turkey and Dubai build up their aviation capacity, according to its chief executive.

 By   (Telegraph)

 17 Feb 2013

Colin Matthews, head of Heathrow, warned that airports in Dubai and Istanbul have huge projects to increase capacity while Britain procrastinates over where to build extra runways.

These emerging hub airports will “over time” divert traffic from Europe, intensifying competition between Heathrow, Amsterdam Schiphol, Frankfurt, Paris Charles de Gaulle and Madrid, he said.

The aviation veteran believes the number of hub airports in Europe will eventually slim down from five to three as more long-haul traffic passes through emerging hubs in geographically advantageous regions such as the Middle East.

Britain, in the grip of a major debate over airport capacity, should not to let its competitive advantage in aviation “slip away” through “disinterest”, he said in an interview with The Sunday Telegraph, on the eve of the group’s full-year results.

“Dubai and Istanbul, if you read their intentions to build a hub, are putting in big hub capacity. That will over time shift the flows of international traffic away from Europe and the competitive pressure between Heathrow and other European hubs will increase,” said Mr Matthews.

“The question at some stage will be not so much shall we have two [hubs] but how on earth are we going to be sure we have one at all? There are 27 member states in the EU, most of them do not have a hub. “It is not a birthright that we have this connectivity.”

Heathrow’s principal rival will be Amsterdam, the airport boss said. And the UK must not allow its aviation industry to go the same way as shipping, which withered in the face of competition from Holland.

“There was a time when shipping in the UK had a similar position and that went to Holland. It would be a pity if aviation went the same way and it could because Schiphol would like to do that,” he said

 

http://www.telegraph.co.uk/finance/newsbysector/transport/9875444/Europeans-threaten-Heathrow-hub.html

 

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He also said, in an interview with the Sunday Telegraph

Sunday Interview: Heathrow boss Colin Matthews

http://www.telegraph.co.uk/finance/newsbysector/transport/9875119/Sunday-Interview-Heathrow-boss-Colin-Matthews.html

16.2.2013

…….

Heathrow has justified its price increases by arguing that its shareholders, who are still led by the Spanish conglomerate Ferrovial, have invested money upfront to fund improvements to the airport.

Since 2003, £11bn has been ploughed into Europe’s busiest airport, on projects including Terminal 5 and a new Terminal 2, which will open next year. The group is proposing to invest a further £3bn between 2014 and 2019.

Shareholders reap the rewards of those investments retrospectively through higher revenues, Matthews argues. And so far, those shareholders have “scarcely” made a return on the billions they have ploughed into improving facilities at Europe’s busiest airport.

About 8m fewer passengers than forecast by the Civil Aviation Authority have passed through Heathrow’s doors over the past five years, which has resulted in lost revenue of £650m. “We haven’t yet started making a return to shareholders anything like in proportion to their investment,” says Matthews.

He acknowledges why the airlines have balked at another 6pc increase above inflation after already shouldering a jump of 7.5pc above the retail prices index (RPI) over the past five years – a formula that has pushed percentage rises into the double digits.

But he stands firm on the point that Heathrow can’t be diverted from its long-term course of repaying investors, just because airlines have hit some economic turbulence.

“I understand that airlines put huge pressure on every single line item of their costs, and an increase of double digits [in charges] is a big amount, but that’s what is required to invest in Heathrow. We simply have to earn the return in order to pay back, over a long period of time, investment that has been made,” he says.

The poor returns could explain why Ferrovial, which led a £10.3bn takeover of BAA in 2006, has been systematically selling down its stake in the group, which now presides over a dramatically reduced empire of four airports after being forced by the Competition Commission to sell off Gatwick, Edinburgh and, most recently, Stansted.

In October, Ferrovial struck a deal with the China Investment Corporation, which allowed the Spanish group to reduce its holding in Heathrow to 33.65pc. The move followed less than three months after Qatar’s sovereign wealth fund took a 20pc stake in the business.

From the outside, it would appear as though Ferrovial is taxiing towards the take-off runway. “You’re going to have to ask them,” says Matthews. “I’ve had absolutely no indication of that – quite the contrary.

“The other way I’d put it . . . is I think it’s pretty encouraging that well-known, big sources of equity, be it in China, be it in the Middle East, the Gulf, from around the world, are interested in investing in Heathrow.”

The influx of sovereign wealth is a vote of confidence for Heathrow at a time when its long-term fate is wrapped up in the outcome of the Government-appointed Davies Commission on aviation.

Matthews is conscious of not wanting to sound too “bombastic” when promoting Heathrow’s cause to the commission, led by Sir Howard Davies, the former Financial Services Authority chief.

While his adversaries such as Boris Johnson, the Mayor of London, have been loudly banging the drum about building an alternative hub airport elsewhere in the South East, Heathrow is following what can only be described as a “gently, gently” approach.

The first stage in Matthews’ chess game is to promote awareness of why it is important for Britain to have a hub airport, rather than a network of point-to-point airports, or even a dual hub, such as “Heathwick”, linking Heathrow with a rival via high-speed train.

Other groups, including the Institute of Directors and the Conservative Free Enterprise Group of MPs, have published reports arguing for Heathrow to be expanded into a four-runway “super hub”.

But, so far, Matthews has been coy about the full extent of his ambition for Heathrow, preferring, for now, to back the hub argument. He insists the group has not yet commissioned detailed studies into building a third, fourth or even fifth runway.

“Some of the options people talk about [for a new hub airport] will turn out not to be practical or realistic so they will fall away and I imagine it will come down to a small number of options and we are willing to see what comes out of that,” he says.

The Davies Commission, which reports in 2015, has been dismissed by a number of senior aviation figures, including Willie Walsh, the head of British Airways’ parent company.

Matthews believes it represents Britain’s “best shot” at finally resolving the that has been raging for decades – as long as the outcome receives cross-party support. But he insists his willingness to let the commissioners do their job shouldn’t be confused with a “relaxed” attitude to how the UK’s competitive edge in aviation is ebbing away.

Read more »

Bristol Airport flies more Welsh passengers than Cardiff

Provisional figures for 2012 indicate that more passengers from Wales use Bristol Airport than Cardiff.  Over 1 million passengers used Cardiff in 2012, down about 200,000 in a year, with nearly 6 million at Bristol.  The statistics suggest the scale of the task facing the Welsh government in improving Cardiff Airport’s fortunes as ministers finalise a deal to buy it.  It is estimated that it amounts to the equivalent of about 1.1m passengers over a year flying from Bristol, having come from or going to places in Wales. The Welsh government is expected to take over Cardiff Airport over the next few months after a slump in passenger numbers from a peak of 2m in 2007. It is negotiating a price with Spanish owners Abertis and carrying out various checks and balances on the airport’s finances. The Mayor of Bristol says both airports have their problems, and it would be better if they could work together.


 

15 February 2013 (BBC)

Bristol Airport flies more Welsh passengers than Cardiff

The figures reveal the scale of the challenge facing the Welsh government as it finalises a deal to buy Cardiff airport from its Spanish owners

More passengers from Wales use Bristol Airport than Cardiff, provisional figures for 2012′s first half indicate.

Figures previously published also showed just over 1m passengers used Cardiff in 2012, down about 200,000 in a year, with nearly 6m at Bristol.

The statistics suggest the scale of the task facing the Welsh government in improving Cardiff Airport’s fortunes as ministers finalise a deal to buy it.

The figures are based on a Civil Aviation Authority survey of Bristol.

The newer, provisional figures indicate that slightly more passengers on their way to or from Wales used Bristol than Cardiff in the first six months of 2012.

It is estimated that it amounts to the equivalent of about 1.1m passengers over a year flying from Bristol, having come from or going to places in Wales.

The CAA statistics have been provided to members of the Welsh assembly by Bristol Airport.

The Welsh government is expected to take over Cardiff Airport over the next few months after a slump in passenger numbers from a peak of 2m in 2007.

It is negotiating a price with Spanish owners Abertis and carrying out various checks and balances on the airport’s finances.

But despite the stronger position of Bristol Airport, the city’s first directly-elected mayor is concerned the takeover will create unfair competition.

In an interview for BBC Wales’ Sunday Politics Wales, George Ferguson [Mayor of Bristol] said both airports have their problems, and it would be better if they could work together.

Mr Ferguson said he supported competition, but added: “The danger is that Wales gives special deals on taxation and what have you, and it won’t be on a level playing field. So I think that’s the fear of Bristol Airport.

“But nevertheless we’ve got two unsatisfactory airports to my mind. Neither of them are well positioned.

“It would be great – I’m not proposing a [London mayor] Boris [Johnson]-style estuary airport yet but i think it would be great if we combine forces.

“But the problem is that we’ve got one in private ownership and one that’s going to be in public ownership that probably makes that combination more difficult.”

The Welsh government said it has appointed a core team of specialist advisors and contractors to assist through the period of due diligence.

A spokesman added: “As we have said repeatedly, it would not be appropriate to make any further comments on the proposed purchase while we undertake that due diligence work.

“If the opportunity arose in the future, we would be happy to explore how the two airports could work together.”

Robert Sinclair, chief executive officer at Bristol Airport, said they welcomed the mayor’s support for fair competition on a level playing field and his comments on the dangers of “special deals on taxation”.

However, he added: “We have also made significant investment to improve public transport access from across the south west and south Wales, and rank as one of the most noise efficient airports in the UK.

“So we take issue with the mayor’s view that Bristol Airport is somehow ‘unsatisfactory’ and badly positioned, neither of which is borne out by analysis of our passenger figures or consideration of environmental impacts.”

Cardiff airport has been asked to respond.

http://www.bbc.co.uk/news/uk-wales-21473968

 

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See earlier:

Cardiff Airport: Carwyn Jones tells Assembly Members ‘no concerns’ over deal

January 31, 2013     The First Minister of Wales, Carwyn Jones, has said the Welsh government is close to signing a deal to buy Cardiff Airport from its current owners, Abertis. He has told Welsh Assembly Members that checks on the airport’s finances had revealed “no concerns” though some experts had told him its commercial future as an airport was limited to a few years. The deal would be subject to a final price being agreed and due diligence being carried out on the finances of the airport. Cardiff had just over one million passengers in 2012, which is a drop of some 16% compared to 2011, which was itself some 14% lower than in 2010. The airport had two million passengers in 2007, and has been in decline ever since. It has hopes of growing its passenger number by 5 – 8% this year, which appears unlikely with a continuing recession. Ministers are considering a range of options on how to run the airport. Assembly Members are concerned the airport does not become a drain on taxpayers.     Click here to view full story…

 

Cardiff Airport buyout by Welsh government: Conservatives’ question if it’s value for money

January 10, 2013     On 18th December the Welsh First Minister, Carwyn Jones announced that the Welsh government wanted to buy Cardiff Airport from its current owners, TBI. He said they would be working towards a purchase over the next few months. and hoped the airport would be run on a commercial basis by an independent commercial operator on behalf of the government. Conservatives are calling on the Welsh government to prove that buying Cardiff Airport would be good value for the taxpayer, and see it as Labour’s attempt to “nationalise” the airport. Cardiff airport has had declining passenger numbers, down 13% in 2011 to a little over 1.2m, while passengers at Bristol increased by 1%. There was a further fall in the first half of 2012 to 440,000 from 558,000 – partly due to the departure of bmibaby. Despite assurances that it will not receive subsidies or burden the taxpayer, there have been questions about whether public ownership will succeed in turning around the airport’s fortunes.     Click here to view full story…

 

Cardiff airport losing money and losing passengers to Bristol

September 11, 2012    Cardiff airport has not been doing well over recent years, with passenger numbers in 2011 down by 43% compared to the peak in 2007. Now Swiss airline, Helvetic, will move its service to Bristol. Budget airline Vueling, which operates services to Barcelona, Alicante and Palma through the summer, will not run any flights from Cardiff through the winter period either. Passengers decreased 14% year-on-year in 2011, largely due to the withdrawal of budget airline bmibaby last October. The airport made a £319,000 loss in 2011, compared with a profit of more than £1m in 2010, £333,000 profit in 2009, £4m profit in 2008 and £7.2m profit in 2007.. First Minister Carwyn Jones has set up a taskforce, which met for the first time in June, to look at securing the airport’s future. Bristol airport seems to be expanding while Cardiff shrinks, with more Welsh travellers choosing Bristol instead. [Contains several recent Cardiff news items]  Click here to view full story…

 

 

Read more »

Luton local residents say “Enough is Enough” on aircraft noise – and do not accept the planned expansion

Luton airport has a consultation – that ends on 18th February – into their planning application, to almost double the number of passenger, from around 10 mppa now to 18mppa before 2030. The extra flights would mean a lot more noise for those living locally under flight paths. One of the local residents’ groups, LANAG, has now submitted its response to the consultation, and say that while local residents support the desire for Luton to have a top quality airport, the airport already has twice the number of people affected by noise than there were in 2002 and 4 times the number of aircraft movements at night. They therefore say, “Enough is Enough” and do not accept the increases in aircraft movements and noise that would result from expansion. LANAG wants no more people affected by noise than currently , and say there must be a plan to take 2,800 people out of an environment that, according to the WHO is deleterious to health – due to noise levels.

ENOUGH IS ENOUGH SAY LOCAL RESIDENTS

15.2.2013 (LANAG – Luton Airport Noise Action Group)

LANAG, the local resident’s group who want to control the noise impact of Luton Airport have issued their objection to the airport’s planning application that could see the airport double in size.

Peter Hunt, Chairman of LANAG said:  “Local residents support the desire for Luton to have a top quality airport. However, the airport is already twice as big as it was last given planning permission for in 1997, with twice the number of people affected by noise since 2002 and 4 times the number of movements at night. They therefore say, “Enough is Enough” and do not accept the increases in aircraft movements and noise resulting from expansion.”

He went on to say, “If planning permission is granted, then no more people should be affected by noise than currently and Luton Borough Council should make this a condition. At the same time there must be a plan to take 2,800 people out of an environment that, according to the World Health Organisation, is deleterious to health.”

 

A full copy of the LANAG submission – will be added here shortly.

 

LANAG is a residents action group dealing with aircraft noise to the west of the airport.

 

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Earlier

Luton airport planning application would increase night flights (11pm to 7am) by 50%

January 29, 2013    Local campaign group HALE (Hertfordshire Against Luton Expansion) says that Luton Airport’s expansion plans are based on projections to increase flights at night by 50%. This is based on information in the airport’s planning application which shows that the number of take-offs and landings between 11pm and 7am is projected to rise to 52 by 2028, compared to 34 in 2011. HALE points out that this is just the average figure – during the summer peak there could be as many as 80 flights each night. There is a public consultation on the application until 18th February. HALE is urging people to respond to this planning application by demanding that Luton Borough Council forces its Airport to reduce, not increase, night flights; to monitor and fine night arrivals as well as night departures; and to install a noise monitor on the approach to runway 08 for the purpose.    Click here to view full story…

 

Luton airport planning application submitted – to demands that it should be called in

January 9, 2013      Luton airport has submitted its planning application for expansion up to 18 million passengers, to its local authority, Luton Borough Council. However, Luton Borough Council is also the owner of the airport, and so local people are asking that the application should be called in. The application does not include a runway extension, but does include changes to taxiways, access roads, parking aprons, car parks and changes and extensions to terminal buildings. The work proposed is focused primarily on removing the bottlenecks which affect throughput of passengers and planes at peak times. By dualling the access roads and increasing the security check lanes, passengers can arrive and be processed more quickly. By extending the taxiways and adding more piers, planes can be filled up can get into position for takeoff more quickly. And by adding more customs and baggage reclaim facilities, arriving passengers can be moved more rapidly through the terminal. There are 250 documents in the application, making it difficult for local people to assess. The consultation period ends on 18th February. There is local concern about the amount of extra aircraft noise there will be, if Luton is allowed such significant expansion. There are also serious concerns about road congestion – currently about 80% of the airport’s passengers travel to it by road.     Click here to view full story…

Luton Airport expansion master plan consultation ‘flawed and misleading’

January 15, 2013     London Luton Airport Operations Ltd submitted its planning application to expand the airport, to the local authority (which is also the airport’s owner) Luton Borough Council, on 7th January. The deadline for comment is the 18th February. Luton Airport released its assessment of the recent Master Plan consultation, in which is gave the impression that some 65% of those consulted were in favour of the airport expansion. In reality, 612 votes were from airport employees, airlines, airport union members and businesses associated with the airport who, unsurprisingly, were 100% in favour of expansion. Only 450 responses came from the public, and those were 73% opposed. There were 94 from responses that were undecided. The fact that 29 of the 47 responses from stakeholder organisations, a group which included local councils, were ‘undecided’ indicated that the plans “didn’t have enough information” as the master plan did not include an environmental statement or details of where the aircraft would be flying. It simply proposed they would be doubling the capacity of the airport from about 9.5 million passengers and increase the number of flights by 60%.   Click here to view full story…

 

 

 

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Gatwick Airport wants freedom from regulation on prices by the CAA

With Heathrow and Stansted, Gatwick is one of only 3 UK airports that is subject to a price regime set by the CAA. It is arguing that should be allowed to negotiate landing charges directly with airlines, rather than being regulated, through entering into individual commercial agreements with airlines. Gatwick says such deals, which would be struck under a legally-binding framework, could incentivise airlines to offer more routes.  Gatwick says even for airlines that didn’t strike commercial agreements, charges would still be lower, increasing by 1.3% above the RPI over the next 7 years. By comparison, under continued regulation, charges would increase 3.3% above RPI over 5 years – which would mean landing charges rising from £8.80 per passenger in 2014, to £11.45 by 2018/19. But Virgin Atlantic is not keen on the idea, and nor is easyJet.  Virgin says “The CAA must continue to regulate to ensure that Gatwick delivers services our passengers need at a price which is good value for money.” 


 

Gatwick Airport pleads for freedom from regulation

Gatwick Airport has pledged a better deal for passengers and airlines if it is freed from price regulation.

Delays at Gatwick airport

Gatwick wants to negotiate commercial agreements directly with airlines Photo: REX

14 Feb 2013 (Telegraph)

The London airport, which is one of only three in the country that is subject to a price regime set by the Civil Aviation Authority, has argued that it should be allowed to negotiate landing charges directly with airlines.

Stewart Wingate, Gatwick’s chief executive, claimed the airport could offer airlines much better deals if it was able to enter into individual commercial agreements.

Such deals, which would be struck under a legally-binding framework, could incentivize carriers to offer more routes out of Gatwick, the airport said.

For those airlines that didn’t strike commercial agreements, charges would still be lower, Gatwick claimed, rising by 1.3% above the retail prices index (RPI) measure of inflation over the next seven years.

Under continued regulation, charges would increase 3.3% above RPI over five years, the airport said, taking charges from £8.80 per passenger in 2014, to £11.45 by 2018/19.

However, the plan was met with scepticism by Virgin Atlantic, which warned the airport continues to hold “significant market power”.

“The CAA must continue to regulate to ensure that Gatwick delivers services our passengers need at a price which is good value for money,” a spokesperson for the airline said.

“Around £1bn has been invested in the airport experience at Gatwick in recent years. Instead of repeating that level of expenditure, the airport should be looking at making smart investment decisions to further improve passenger services in a cost effective way.”

Low cost airline easyJet also urged the CAA to keep Gatwick within the regulatory system to protect passengers.

“All the evidence shows that Gatwick is a monopoly airport and therefore should continue to be regulated. Without regulation passengers face the risk of higher charges,” the carrier said, adding that it believed there was scope for cutting charges by 9pc below the rate of inflation.

Gatwick’s proposals, revealed as part of a business plan that will see it invest £1bn over five years, will likely heap further pressure on rival Heathrow, which earlier this week faced a backlash from airlines after it set out plans to raise prices by almost 6pc above RPI.

The rivalry between the two airports has increased after Gatwick said it wanted to build a second runway that would allow it to better compete with Heathrow.

Currently Gatwick, Heathrow and Stansted negotiate with the CAA over charges every five years before the regulator sets a maximum fee they are permitted to charge per passenger.

Charges are paid by the airlines but are usually passed on to passengers through higher ticket prices.

Gatwick, which was bought in 2009 by Global Infrastructure Partners (GIP), said it would be able to offer lower charges after a one-off 10.7pc price increase due to a passenger numbers undershooting CAA forecasts over the last five years.

The CAA had forecast 37.7m passengers would pass through Gatwick’s doors by April 2014 but traffic is more likely to be in the region of 33.8m.

A CAA spokesperson said: “We will carefully consider Gatwick’s proposal, alongside their customers’ responses, as we go through the process of setting our regulatory approach for the period after April 2014.”

The regulator will publish its own proposals in April.

 

http://www.telegraph.co.uk/finance/newsbysector/transport/9870345/Gatwick-Airport-pleads-for-freedom-from-regulation.html

 

 

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See also

 

Gatwick Airport produces new Business Plan to 2024 with prices based on customer contracts

Date added: February 14, 2013

Gatwick Airport has produced its Revised Business Plan to 2024 (the last one went to 2020) which sets out their proposals for the coming years. They are putting forward a new deal that would allow Gatwick and its airline customers to develop bilateral, tailored contracts to replace the current system of regulation. The CAA invited Gatwick to propose such a framework in October 2012. Gatwick says this would give better levels of quality, price and service to airlines and passengers. Gatwick says this will promote competition between airports, and mean lower charges for airlines and passengers. Under the deal, passenger fees will rise from £8.80 in 2014 to a maximum of £10.68 in 2020/21. This means an increase of RPI+1.3% over a 7 year period rather than RPI +.3.3%. Gatwick claimed that if it stays within the current regulatory framework, the maximum per passenger fee would rise to £11.45 in 5 years. The CAA will come to a decision on the initial proposal on the airline contracts framework on 30 April 2013 and make a final decision in January 2014. Gatwick is planning to invest a further £1 billion in the airport between 2014 and 2019.

Click here to view full story…

 

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Airlines object to Gatwick pricing proposals

easyJet, British Airways and Virgin Atlantic have all issued statements urging the Civil Aviation Authority to continue regulating Gatwick Airport’s charges.

The carriers were responding to Gatwick’s business plan for 2014-2019, published yesterday, in which the airport called to be taken outside the regulatory framework, whereby a price cap is set by the CAA on a five-yearly basis.

Gatwick’s ‘new deal’ proposes that, following a one-off price adjustment, the maximum average price level would rise by the retail price index (RPI) +1.3% over a seven-year period. This equates to an increase in its per passenger fee from £8.80 in 2014 to a maximum of £10.68 in 2020/21.

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BA said: ‘We believe that Gatwick Airport should remain a regulated business due to its substantial market power.

‘The airport’s charges over the past five years have risen by 56% and such relentlessly rising fees cannot continue in the coming years.

‘The charges should be reduced significantly and we hope that the Civil Aviation Authority ensures a fair settlement that works in the best interests of passengers using Gatwick Airport.’

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Virgin Atlantic said it believed the airport continued ‘to hold significant market power and the CAA must continue to regulate to ensure that Gatwick delivers services our passengers need at a price which is good value for money’.

………. and it continues ….

http://www.e-tid.com/airlines-object-to-gatwick-pricing-proposals/72831/

Read more »

Cross-Party letter sent to Transport Secretary – asking for final report of the Davies Commission to be published earlier

A sizeable group of MPs, peers and campaigns have joined with the leaders of nine local authorities to call on the Government to bring forward the publication date of the final report of the Airports Commission, headed by Sir Howard Davies.  They have written to Transport Secretary, Patrick McLoughlin, asking for the report to be published well before the 2015 General Election.  The scheduled date for publication is currently July 2015, two months after the Election.  They are also calling on Sir Howard Davies to “lay out very clearly the direction of his thinking” in his interim report which is due at the end of this year. In the letter they argue that such a lengthy period of uncertainty is not at all helpful to businesses seeking to make investment decisions or indeed the wider economy of the UK. Also that the residents of West London deserve to know what implications the Commission’s recommendations will have on their lives. 


Speed up Davies Commission: Cross-Party Letter sent to Transport Secretary

13th February 2013   (Hacan press release)

MPs, peers and campaign groups have joined with the leaders of nine local authorities to call on the Government to bring forward the publication date of the final report of the Airports Commission, headed by Sir Howard Davies.

They have written a joint letter (copied below) to Transport Secretary, Patrick McLoughlin, asking for the report to be published well before the 2015 General Election.  The scheduled date for publication is currently July 2015, two months after the Election.  They are also calling on Sir Howard Davies in his interim report, due by the end of this year, to “lay out very clearly the direction of his thinking.”

The letter, delivered to the Department for Transport today, has been signed by MPs and peers from all three main political parties as well as the leaders of Labour and Conservative local authorities.

John Stewart, chair of HACAN, one of the signatories of the letter, said, “There is unity across the political spectrum that the publication of the Davies Report should be brought forward.  There is support for what Sir Howard Davies is doing but a strong feeling that the electorate should know what his proposals are well before the next General Election.”

ENDS

Notes for Editors:

The Davies Commission was set up last year by the Government to examine whether extra airport capacity might be needed over the coming decades in London and the South East and, if so, where it should be.


 

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The Letter:

To:

Rt. Hon. Patrick McLoughlin MP

Secretary of State for Transport

Department for Transport

Great Minster House

33 Horseferry Road

London SW1P 4DR

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Wednesday 13th February 2013

Dear Mr McLoughlin,

We welcome the broad thrust of the Davies Commission and the desire to achieve a political consensus that will result in an enduring long-term decision about the UK’s aviation infrastructure.

We are particularly pleased that the Davies Commission will be adopting a sensible approach by looking at wider topics such as future demand, climate change and noise issues and not just selecting airports where expansion should take place.

It is vital that the Commission takes a view of the wider economic and environmental costs and benefits of aviation and we will be seeking to provide the Commission with robust evidence on these issues. We look forward to constructive engagement with Sir Howard Davies, his commissioners and staff over the coming months.

However, we do have concerns around the length of time before the Commission makes their final report. We argue that such a lengthy period of uncertainty is not at all helpful to businesses seeking to make investment decisions or indeed the wider economy of the UK.

Whilst we recognise the political sensitivities surrounding aviation policy, we believe that the electorate and particularly the residents of West London deserve to know what implications the Commission’s recommendations will have on their lives. Consequently, we the undersigned call upon the Government to bring forward the final report of the Davies Commission to a date before the General Election in 2015 and to ask Sir Howard to lay out very clearly the direction of his thinking in his interim report at the end of this year.

Yours sincerely,

Zac Goldsmith MP

Baroness Sally Hamwee

Baroness Susan Kramer

Mary Macleod MP

Seema Malhotra MP

John McDonnell MP

Andy Slaughter MP

Cllr Nicholas Botterill (Leader, Hammersmith & Fulham)
Cllr Steve Bullock (Leader, Lewisham)

Cllr Ravi Govindia (Leader, Wandsworth)

Cllr Jo Lovelock (Leader, Reading)

Cllr Lib Peck (Leader, Lambeth)

Cllr Raymond Puddifoot (Leader, Hillingdon)

Cllr Roger Reed (Deputy Leader, South Bucks)

Cllr Jagdish Sharma (Leader, Hounslow)

Cllr Lord Nicholas True (Leader, Richmond)

John Stewart (Chair HACAN)

Christine Taylor (Vice-Chair NoTRAG)

Peter Willan (Chair Richmond Heathrow Campaign)

Read more »