Gatwick is well known to be a holiday and leisure trips airport. Its passengers are predominantly going on low cost flights, with about 80% to European destinations. The small number of long haul destinations is about the same as in 2007. The long haul airports it serves are all for UK leisure passengers, to the Caribbean, Florida etc – and are not for the purpose of bringing inbound visitors to the UK. The rise of low cost holiday flights, over the past 20 years or so, has meant the demise of many UK costal towns as very cheap travel (and dependable heat and sunshine) have drained away visitors. The government has put up £90 million of public funding to help boost some of these struggling towns. Yet Transport for London has said a 2nd Gatwick runway would need about £10 billion of public funding to deal with the increase in the number of passengers and all the associated ancillary traffic. This public money would merely facilitate access to Gatwick, in order that more UK money could be exported – as Brits take their holiday money to spend abroad. The excess of the money spent by Brits spending abroad, over that spent by inbound visitors in Britain is called the Tourism Deficit. It reached a total of £16.9 billion in 2015, ably assisted by Gatwick. With unknown impacts of Brexit, a new report from CAGNE questions the wisdom of the government allowing Gatwick to build a new runway, with all the financial questions raised.
Cheap ‘bucket and spade’ holidays impact coastal areas
23.8.2016 (CAGNE press release)
CAGNE = Communities Against Gatwick Noise and Emissions
Campaigners on Brighton beach
Should the Government be considering selecting Gatwick for expansion when its principal business model is to export UK citizens to Europe for low cost holidays, via budget airlines?
The 1960’s saw the first package holidays to Spain and there started the decline of our coastal regions, so why is the Government considering expanding Gatwick Airport which is dependent upon package holiday business? This brings, according to the Airports Commission final report, the least into the UK economy and is potentially badly affected by recession?
The UK coastal regions are crying out for investment, for rejuvenation. Only recently the Government shared £90m amongst the coastal regions of the UK and yet Gatwick expansion will cost the taxpayer £10bn alone just for the essential surface access according to Transport for London.*** [TfL show how badly the Commission underestimated the costs to the public purse of either the Heathrow or the Gatwick runway scheme. AW note].
The Southeast coastal regions are some of the most attractive in the world. Brighton is listed as one of the top beach destinations in the world, [ranked 27th by TripAdvisor of all global great beaches. Link AW note]. Yet the Government seeks to spend billions on surface transport infrastructure the primary aim of which will be to deliver UK citizens to Gatwick in order to fly overseas on holiday.
Jonathan Essex, Green Party County Councillor for Surrey added:
“The aviation industry benefits from tax breaks but doesn’t pay for the detrimental impact it has on the climate or the quality of the air we all breathe. We have amazing countryside and beautiful beaches in the South East, yet holiday-makers are continually drawn away by artificially cheap short haul flights. Holidaying in the UK benefits local people and local economies. Jetting off abroad sends our money flying out of our pockets and into the hands of Gatwick Airport Limited’s foreign shareholders.”
Terrorism, health fears, air traffic control strikes, the refugee crisis and the exchange rates have all raised concerns for the travelling public and the airlines, and so it should sound alarm bells for the Government to think again about expanding an airport that could become a white elephant (see CAGNE Report White Elephant at www.cagne.org) as the leisure market is impacted, and potentially the UK dips into recession.
A report released today by CAGNE – Communities Against Gatwick Noise and Emissions – Bucket n Spade Airport impact Coastal Regions clearly shows how Gatwick is reliant upon European travel and package holidays and how it therefore suffers the most during recession. Facts and figures provided by the Civil Aviaiton Authority and other references can be found on the back page of the report.
The report details how, post Brexit, low cost airlines are suffering in the downturn of overseas travel by families, and the drop in the value of the pound.
Gatwick’s number one customer, EasyJet, is due to relocate to the North Terminal in January 2017 at great expense. Yet it has seen a drop in share value and has made profit warnings to shareholders, and has even suggested moving operations overseas, commented Aviation Weekly, on July 26th
“From our point of view, this is, for airlines, one of the most difficult periods we have seen in a long time,” EasyJet Chief Executive Carolyn McCall says. “Advance bookings, especially in long-haul routes to Europe, have declined significantly, in particular due to the repeated terrorist attacks in Europe and to a greater political and economic uncertainty.”
The Airport Commission detailed connecting with developing countries as the future for UK growth, as did the recent KMPG and Let Britain Fly report. The new CAGNE report clearly shows Gatwick has had no success in this area either.
“It would seem total madness for the Government to be considering spending billions of taxpayer money on an airport that financially impacts our coastal regions. To encourage more people to fly to Europe for low cost holidays by expanding Gatwick would seem to work totally against our holiday resorts who are crying out for custom.
Tom Druitt, Green Party City Councillor and Economic Development spokesperson for Brighton and Hove said:
“The government must recognise there is no case for expansion. It is, and always has been, a myth that the UK faces an airport capacity crisis; we already fly more than any other country. It is the huge budgets of the airport and pro-expansion lobbies that have been deployed to convince us otherwise. All but one UK airport is under-capacity and demand is predicted to fall, rather than rise, following the decision to leave the EU.
Existing rail services could offer workable alternatives to short-haul flights, freeing up capacity at airports and thus releasing landing slots for longer haul flights. Instead of spending billions of pounds of taxpayers’ money on unnecessary expansion, Theresa May could be investing in the home grown tourism industry that is vital to our coastal communities.
With climate experts warning that Britain is on course to miss key climate targets, it’s important to note that meeting our climate change commitments while building any major new runways is impossible – the two policies are wholly incompatible. I am calling on Theresa May to be bold, to stand up to big business propaganda, and reject the environmentally detrimental expansion proposals, not just at Gatwick, but at Heathrow too.”
The report is at Bucket n Spade Airport impact Coastal Regions
* New long haul destinations 2050 Heathrow 75: Gatwick 21.
Airports Commission final report page 21.
** GDP increase Heathrow (carbon traded) £137-147 billion: Gatwick
£89 billion. Heathrow (carbon capped) £103-129 billion: Gatwick
£44 billion. Airports Commission final report page 26.
New long haul destinations 2050 Heathrow 75: Gatwick 21.
Airports Commission final report page 21.
*** TfL Mayor Surface Access Supplementary Note 04 February 2015
CAGNE sent buckets and spades, by post, to senior relevant Cabinet members and MPs, to remind them that Gatwick is largely a “Bucket and Spade” airport
Below are some extracts from the report:
…”Holidays and package holidays have evolved and the low prices (and the sunshine) have made going abroad a more tantalising option than holidaying in the UK. This has been to the detriment to our coastal regions and many UK seaside towns’ economies were badly affected by the advent of cheaper foreign travel in the 1970s.
This led to a depleted economy in these communities, low skills base and “dangerously high levels of family breakdown”.*** Since then our own UK-based holiday industry has suffered and continues to decline, and now it faces the possibility of a massive new ‘bucket and spade’ airport at Gatwick 2 eating up resources and taking travellers and their money out of the country by the plane load.
A Centre for Social Justice ‘think tank’ report commented on coastal regions saying: ‘living standards in some of the UK’s best-known coastal towns have declined “beyond recognition” and locals were now “bearing the brunt of severe levels of social breakdown…………We must ramp up efforts to revive Britain’s coastal towns, not just for visitors but for the people who live there”.”
…. “Transport for London estimates £10bn is needed for infrastructure to connect to a second runway airport alone. So surely the question this Government should be asking is should they be looking to spend billions of pounds of public money to support the privately-owned holiday airport, Gatwick, which is reliant upon exporting UK citizens overseas to spend money outside of the UK?
Meanwhile, our coastal regions are screaming out for Government funding and regeneration of their facilities to attract holiday makers once more. Since 2012, the government has invested £120 million in coastal projects through a dedicated Coastal Communities Fund, and yet it is apparently considering taking custom away from these UK communities by subsidising Gatwick’s expansion.”
… “In 2014, the Government undertook a campaign to promote our coastal holiday areas to UK residents, and also heritage sites, National Parks and Areas of Outstanding Natural Beauty. “Stay at home and enjoy the natural richness of our country”, was the slogan. While facilitating just the opposite, Gatwick 2 would also desecrate a National Parks, Areas of Outstanding Natural Beauty that lie on three sides of the airport, as well as heritage sites and Listed Buildings.”
… “The historical pattern of business for Gatwick paints a picture of an airport that is vulnerable to recession, since it is reliant upon the holiday trade. The airport’s reduction in flights in the winter echoes this, and Gatwick is at its busiest during the school holidays.
In fact, the 2014 increase in passenger numbers at Gatwick was unusual. The previous year, for example, passenger numbers increased by just 1.2 million and average growth between 2004 and 2014, even with spare capacity available, was less than 0.7 million a year. In the 13 years between 2000 and 2013, passenger numbers grew by an average of just 260,000 per year, less than one percent.
Only in 2014 and 2015 did traffic growth increase significantly at Gatwick, but this is more likely a result of other factors such as low fuel prices and strong UK economic growth.”
… “In the last recession, passenger numbers at Gatwick dipped by 11% and took 6 years to recover. By contrast, Heathrow’s numbers dipped by 3% and took 4 years to recover.
Gatwick is not recession proof and is the risky option given the uncertain economic times ahead as it is reliant upon spare money the consumer has to spend on holidays.”
… Even Gatwick’s limited long-haul routes are, to a large extent, holiday traffic exporting people and money. Almost half of all Gatwick’s long-haul flights go to pure leisure destinations and are operated by package companies – it is very unlikely that a single business passenger will use these routes, nor any inbound tourist. ”
…”Gatwick is simply a EU airport, dependent on short-haul, low-cost ‘bucket and spade’ traffic. 80% of all Gatwick flights go to the EU (compared to 50% at Heathrow), and it has totally inadequate infrastructure (the UK’s nightmare M25 motorway and an even worse railway line, the infamous Brighton Line), for which there are no plans to improve. There is no underground connection within twenty miles, no Crossrail of course, and no HS2 connection. This is not the airport capable of securing the UK’s economic future outside of the EU.”
… “Thus, should the taxpayer be massively supporting a privately-owned airport with an enormous requirement for public expenditure to build new offsite infrastructure to enable it to function? An airport that principally facilitates the spending of hard earned UK currency effectively exporting wealth via UK holiday tourists travelling to Spain, Europe, Dubai and Florida, rather than investing in our coastal regions and the UK economy?”
… “Results from GBTS (Great Britain Tourism Survey) reveal that 93 million domestic overnight trips were taken within England in 2014, a decrease of 9% compared with 2013. The value of domestic overnight trips fell by 3%, from £18.7 billion in 2013 to £18 billion in 2014. Reflecting the national trend, the volume of domestic overnight trips fell by 9% in the South East in 2014 compared to 2013 (from 17.9 million to 16.2 million). According to the national survey results, domestic overnight trips spend in the South East saw a greater drop than seen at national level; down by 8% compared to national level of 3%. ”
… “Moody’s (Financial Services) assessed that Gatwick’s plans for a second runway are “credit negative” and that “financial risks associated with the scheme are high”. Gatwick’s performance in the “uncertain times” of the past would give any investor substantial cause for concern – passenger numbers dipped by 11% during the 2007 recession and took until 2013 to recover (Heathrow’s dipped by 3% and recovered by 2011).”
… “Could we see a decline in holiday air travel due to terrorism?
The recent terrorist-related incidents in Sousse, Nice, Paris, and Germany; the Turkey civil unrest; heavily armed soldiers on the beaches of Greece with refugees washing and sleeping on the shores; armed military guards on the beaches of St Tropez, as well as strikes by French and Spanish air traffic controllers, could all deter UK families from venturing abroad. Gatwick now has the added burden of Zika spreading into Florida, and pregnant women warned to postpone travel to infected areas”
…. and there is much more
Read more »
East Midlands Airport has announced that it will undertake a full length runway refurbishment project from 5th November till 19th December 2016. Therefore the airport will be closed to all traffic for 48 hours (8pm Saturday to 8pm Monday) each weekend, on 7 consecutive weekends. The airport hopes this will cause the least disruption to its airlines, and not affect the imports for Christmas. The timing avoids the busy summer holiday season when the airport makes a lot of money out the low cost leisure travel. The plan is for around 360 workers (Galliford Try is the principle contractor) every weekend laying 50,000 tonnes of specially formulated material across 150,000 square metres of runway etc n total. While the runway is closed, the airport is also replacing over 1,200 lights on and around the area with LED lighting, which uses less electricity than the previous lighting, cutting airport energy costs. East Midlands’ runway was last refurbished in 1999, and has a natural lifespan of around 12-17 years. They are all hoping the work will be done on time and within the weekend periods. The airport hoped, in its forecasts around 2005, to have 4 times as much freight in 2016 as it had in 2004. The level has actually risen by just a few %. They also then hoped for a doubling of flights and passengers. The number of flights has barely risen and the number of passengers has slightly fallen. So much for forecasts.
East Midlands Airport announces first UK runway refurbishment project
18 August 2016
By Roy Manuell (International Airport Review)
East Midlands Airport has today announced that it will undertake a full length runway refurbishment project during November and December 2016.
The refurbishment will be completed over seven consecutive weekends, a UK first for an airport runway refurbishment project, meaning that the airport will be closed to all traffic for 48 hours each weekend. The closures will begin at 20:00 on each Saturday and end at 20:00 on each Monday, except the final weekend, which will end at 13:00.
Andy Cliffe Managing Director East Midlands Airport said: “After an in-depth consultation with our airlines and cargo operators, we came to the decision that completing the project in this way was the best way to avoid major disruption in the lead up to Christmas. The timing for us is crucial and we had to look to do this in the winter season, when we naturally aren’t as busy.”
Beginning on 5th November 2016 and concluding on 19th December 2016, the project will see around 360 workers every weekend laying 50,000 tonnes of specially formulated material across 150,000m2 in total.
Whilst the runway is not operational, the airport is also replacing over 1,200 lights on and around the area with LED lighting, which is more environmentally friendly.
The airport’s runway was last refurbished in 1999, and has a natural lifespan of around 12-17 years. Galliford Try is the principle contractor and has worked together with the management and operations team at the airport to ensure that the airport’s operation has minimal disruption.
Galliford Try is a leading construction company carrying out building and infrastructure works across the UK including a variety of civils and building schemes for Manchester, East Midlands, Stansted and Bournemouth Airports, all part of the Manchester Airports Group. The company also works in the rail, environmental, highways, water and waste sectors.
Colin Abbott, Aviation Director for Galliford Try said: “We are delighted to be working with the East Midlands Airport team on the refurbishment of their Runway. Logistics make this an exceptionally challenging project and due to the hard work of all involved scoping out every possible scenario, we have every confidence that the scheme will be delivered safely and on time.”
Andy Cliffe continued: “We’re delighted to be working with Galliford Try; they are a leading construction company and have a great deal of experience in managing a large scale project like this.
“We are very much looking forward to seeing the work taking place in this exceptional way and then seeing the finished product in December.”
The number of air passengers at East Midlands airport in recent years:
2015 4,446,000 down – 1% on 2014
2014 4,506,457 up + 4.1% on 2013
2013 4,328,229 up + 6.4% on 2012
2012 4,067,915 (down – 3.3% on 2011)
2011 4,208,000 (up + 2% on 2010)
2009 4,653,017 (down – 17.2% on 2008)
2008 5,616 (up 4% on 2007)
2007 5,407 (up 15%)
The number of ATMs (air transport movements = commercial flights) at East Midlands airport in recent years:
2015 56,378 down – 1.4% on 2014
2014 57,217 up + 0.3% on 2013
2013 57,204 up + 4.7% on 2012
2012 54,643 (up + 0.4% on 2011)
2011 54,000 (up 4% on 2010)
2009 57,528 (down – 13% on 2008)
2008 66 thousand (up 8% on 2007)
2007 61 thousand (up 9%)
2006 56 thousand
2005 54 thousand
The airport forecast that the number of ATMs would double by 2016 from their 2004 level of 57,400. They have actually remained at the same level approximately. Hence no need for a ruwnay extension.)
Back in 2009 there were plans for a runway extension – which never happened
East Midlands runway extension plans approved
3rd November 2009
The runway at East Midlands Airport will be extended by 190 metres after councillors approved plans. Officers at North West Leicestershire Council have said there are no grounds for blocking the development. The aim is to allow heavier planes to take off and make the UK’s 3rd-biggest freight airport more attractive to long-haul cargo carriers, especially across the Atlantic. Opponents know it will lead to more noise, especially at night, and more air pollution.
Read more »
Richmond Council leader Lord True has laughed off Heathrow’s suggestion there is support for the airport’s expansion in neighbouring boroughs as “nothing more than PR spin.” Heathrow has recently claimed that in a new poll the majority of residents living in the 12 neighbouring constituencies support its 3rd runway. Heathrow’s line is to ignore the serious environmental (noise, air pollution, CO2) impacts and the local congestion and social impacts, and focus on claims about jobs etc. Heathrow hopes to persuade government that the runway will provide huge numbers of jobs in building and related to the airport, apprenticeships and also benefits to the regions. Heathrow also constantly repeats the mantra that it has “met or exceeded” the environmental conditions set by the Airports Commission – which it actually has not. Heathrow’s sound bite is that “people living nearby can feel confident that Heathrow can be bigger and better.” Lord True says only 34% in Richmond and 38% in Twickenham favour a 3rd runway. Both Heathrow and Gatwick have been polling, with each producing results claiming to show support for their runway in London. Both are trying to capitalise on the uncertainty caused by the Brexit vote, and the UK’s future international links with EU and Non-EU countries.
Richmond Council leader dismisses Heathrow’s claims that neighbouring boroughs support airport’s expansion
By Seb Humphreys (Richmond and Twickenham Times)
Richmond Council leader Lord True has laughed off Heathrow’s suggestion there is support for the airport’s expansion in neighbouring boroughs as “nothing more than PR spin.”
The airport claimed this week that the majority of residents living in the 12 neighbouring constituencies support expansion according to a new poll.
Back Heathrow campaign director Rob Gray said: “It’s not surprising that most people living in the communities near Heathrow support expansion when you consider all the jobs, investment, apprenticeships and other benefits that will come from building a new runway at the UK’s only hub airport.”
He added: “These poll results reflect the important work Heathrow has carried out over the last few months to engage with local residents. The commitment to meet or exceed the environmental conditions set by the Airports Commission means that people living nearby can feel confident that Heathrow can be bigger and better.”
However, the leader of Richmond Council, Lord True, has said the release and its headline are completely misleading.
Referring to the breakdown of boroughs, which show that only 34 percent in the Richmond constituency and 38 percent in Twickenham said that they favoured an additional runway, he said: “Despite Bigger Heathrow’s suspect use of ‘facts’, the polling shows that the majority of both Richmond and Twickenham residents are actually against expansion at Heathrow.”
As well as Lord True’s comments, the proposed expansion faces further campaign opposition this week.
The campaign group HACAN have planned a protest at Ravenscourt Park in Hammersmith on Thursday August 18 in the form of a ‘Noise Olympics’.
HACAN chairman John Stewart said: “Heathrow is the overwhelming favourite to win [the Noise Olympics]. Its planes fly over at least 725,000 people.”
He added: “That is three times second place Frankfurt. And 60 times more than Gatwick who has just been asked to join the race because it is a candidate for expansion.”
Gatwick’s expansion, meanwhile, has received the support of 63 percent of London councillors, compared to the 44 percent support for Heathrow according to a You Gov poll published Tuesday August 16.
The polls come after leaders of 11 London councils wrote to Prime Minister Theresa May urging her to expand Gatwick, with 50 percent of councillors saying that the certainty a runway scheme can be delivered has become more important since Brexit.
Gatwick chief executive Stewart Wingate said: “Crucially Gatwick expansion is the only plan that can actually be delivered and – unlike Heathrow – it does not need £5 billion of taxpayer funding.”
Lord True, Richmond Council leader and Conservative peer, describes Heathrow promises as ‘worthless’ and asks David Cameron to deny expansion immediately
The leader of Richmond Council, Lord True, has called Heathrow’s pledge to ban night flights a “feeble attempt to bribe London.” He described Heathrow’s promises as “worthless” and said on the ending of night flights: “This so-called pledge falls short of what the Davies Commission requests and the Heathrow PR men simply cannot be believed. If they can stop pre-5.30am flights, why don’t they do it now? Rather than spending billions of pounds doing it?” On Heathrow’s claims about air quality improvements, Lord True commented:: “They cannot comply with EU air quality limits and their ‘jam’ promises are worthless…..if people’s health comes first – big Heathrow is dead in the water.” He said Heathrow had just made some token alterations to their original proposals. Richmond Council, along with Wandsworth, Hillingdon and Windsor & Maidenhead councils, have already made it clear that should the Government give a 3rd Heathrow runway the go-ahead – they would together launch legal action opposing the plans. Lord True: “I say to Mr Cameron – hundreds of thousands of Londoners remember your promise – “no ifs, no buts,” ….We expect our Prime Minister to keep his promise….”
Richmond, Wandsworth and Hillingdon council leaders write to Chris Grayling to warn legal action threatened if Heathrow expansion is approved
Three Conservative local authorities – Richmond, Wandsworth and Hillingdon – have written to the Transport Secretary, Chris Grayling, warning that court proceedings will be launched if a Heathrow 3rd runway is approved. The 3 council leaders, Lord True, Ravi Govindia and Ray Puddifoot, say any approval given to Heathrow would create “severe political and social rupture” at a time when unity is needed. It is also undeliverable and unlawful. They are already preparing a “substantial and strong legal challenge” and say “We must also be very clear that we intend to launch a legal challenge against the government in the unfortunate event that it resolves to support Heathrow expansion or to carry out any further investigatory works into these projects,” The reasons for the challenge are that bad air quality around the airport already breaches legal limits, and with a 3rd runway, the extra planes and cars in west London would “blight the lives” of millions of people. The council leaders say, in their letter to Chris Grayling, that the runway “would be an environmental disaster for our communities”. Unfortunately they also urge government to back a 2nd Gatwick runway instead, content to push the misery that they are keen to avoid for their own residents onto others.
Legal action on Heathrow will happen warn council leaders
Monday 25th July 2016
Richmond, Hillingdon and Wandsworth Councils
The leaders of three London councils have written to the new Secretary of State for Transport threatening legal action if the new cabinet gives Heathrow expansion the green light.
The Leaders of Richmond, Hillingdon and Wandsworth Councils wrote to Chris Grayling MP following reports that a decision on aviation capacity could be made in early September.
After years of delays ministers are expect to choose between two options for expanding Heathrow and one for expanding Gatwick.
The Leader of Hillingdon Council, Cllr Ray Puddifoot, said:
“I’m glad that the Secretary of State has made it clear that the government will make this decision and not duck the responsibility for this issue any longer. Having been promised by the last Prime Minister that Heathrow would not be expanded and that the environment and the health and wellbeing of the people would take precedent over profit, I have every faith in Chris Grayling and Theresa May opposing expansion for the same reasons.
“There is a realistic and viable alternative in Gatwick, which could be delivered faster and with less damage to our environment and our people. However, Hillingdon along with other councils has prepared a substantial and strong legal challenge to any proposed expansion at Heathrow should the government renege on its promise.”
The Leader of Richmond Council, Lord True, said:
“Heathrow expansion – in either the form of the new north-west runway or the extension of the existing northern runway – would be an environmental disaster for our communities. Under both scenarios the costs far outweigh the benefits and we urge the Government to dismiss the inflated and implausible case made by the slick PR promoters of these schemes.
“The Prime Minister has spoken of her concern to protect communities and listen to the concerns of ordinary people. I have no doubt she will be true to her word.”
The Leader of Wandsworth Council, Ravi Govindia, said:
“We have made it perfectly clear that we intend to launch a legal challenge if the Government resolves to support Heathrow expansion or to carry out any further investigatory works into these projects. Our residents have lived with this treat hanging over them for far too long.
“Heathrow expansion is unlawful, undeliverable and would create a severe political and social rupture at a time when our country desperately needs unity. Gatwick is a far better option on every level.”
The full letter is below:
Dear Secretary of State,
Congratulations on your appointment and we wish you every success in your new role.
We understand that aviation expansion will be one of the first major policy decisions before the cabinet and, as the Leaders of Hillingdon, Richmond and Wandsworth Councils we are writing to make our position on this issue entirely clear.
The Prime Minister has spoken of her concern to protect communities and listen to the concerns of ordinary people. Heathrow expansion – in either the form of the new north-west runway or the extension of the existing northern runway – would be an environmental disaster for our communities. Heathrow expansion of all the solutions ever suggested does the most to hurt communities and would blight the lives of more people than any other. Under both scenarios the costs far outweigh the benefits and we urge you to dismiss the inflated and implausible case made by the promoters of these schemes. We hope this will be an early example of Mrs May’s commitment to protect both communities and the rights of ordinary people.
We all agree that after six years of dithering since a conservative Prime Minister rightly scrapped the 3rd Runway plan, we need a swift outcome. Heathrow expansion would be the slowest, as well as the most costly solution. Gatwick is far ahead in most respects.
We must also be very clear that we intend to launch a legal challenge against the Government in the unfortunate event that it resolves to support Heathrow expansion or to carry out any further investigatory works into these projects. Our arguments are set out in earlier correspondence (attached) and centre on the severe environmental damage that comes with a new or lengthened runway, and on the clear promises and policy commitments made to our communities by successive Governments.
Your commitment to rule on this issue in early September is very welcome indeed as the threat of Heathrow expansion has been held over our communities for far too long and it is high time they were granted the certainty they need to get on with their lives.
We hope you recognise that Heathrow expansion is unlawful, undeliverable and would create a severe political and social rupture at a time when our country desperately needs unity. Councils, MPs, environmental groups, the London Mayor and millions of ordinary Londoners will fight the Government every step of the way if it favours this option and we urge you again to choose the deliverable, lowest cost, safer option of Gatwick
Councillor Ravi Govindia, Leader of Wandsworth Council
Councillor Ray Puddifoot, Leader of Hillingdon Council
Councillor Lord Nicholas True, Leader of Richmond Council
Heathrow has been working very hard, up and down the country, making presentations to Chambers of Commerce and talking to local authorities. They have made the case that Heathrow expansion is of huge benefit to the regions, with a load of promises about jobs (related to the building of the larger airport) and jobs from businesses that will (magically) now find they need to export much more than they do now.
One such council, Worcestershire, has expressed its support – below:
BREXIT: County Hall’s leader writes to Chris Grayling backing Heathrow expansion
26 July 2016 (Worcester News)
THE leader of Worcestershire County Council has written to Chris Grayling to back a third runway at Heathrow Airport, it has emerged. [This council leader is one of the many signatories to the letter – but AirportWatch has discovered that not one of the councils contacted had had any sort of council meeting, or any form of official minuted decision to back Heathrow. The council leaders all apparently acted on their own authority. More details later].
Councillor Simon Geraghty says the post-Brexit “uncertainty” would be handed a significant boost if the new-look Government is prepared to sink billions into expanding Britain’s largest airport.
The Conservative also says better aviation links would help Worcestershire attract more inward investment, and has invited Mr Grayling to the county for talks.
Councillor Geraghty’s intervention comes at a time when the airport has become a hot topic post-Brexit, after Boris Johnson landed a new job as Foreign Secretary.
In his letter, Councillor Geraghty said: “Britain’s network of airports is the backbone of the aviation industry – a success story contributing £50 billion a year in growth and supporting one million jobs.
“We should be building on that success and future-proofing it by delivering the recommendations made clear by The Airports Commission.”
He then asks Mr Grayling to ensure “skilled jobs are created across the country” during its construction to benefit this county.
In the letter he also calls for “a new western rail link” to plug Heathrow into the trains network, and asks him to draw up a plan “to secure regular, frequent flights from our regions and nations”.
Councillor Geraghty then points to the Brexit uncertainty, saying: “In the current uncertain times, investment in Britain’s infrastructure is even more important to support growth across the country.
“Even during construction, infrastructure development creates skilled jobs and an economic boost for improvements to local economies.
“The continued investment in Heathrow is an essential decision to make.”
The third runway at Heathrow is in some doubt under Mrs May’s premiership, but last week Mr Grayling said he would aim to make a swift decision either way.
Mr Grayling, who was Commons Leader before the promotion, will ensure High Speed Two (HS2) is rolled out over the coming years despite criticism in some Tory heartlands.
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Gatwick has announced the formation of the new “Gatwick Growth Board” (the GGB) under Co-Chairs Tessa Jowell and Steve Norris. The GGB will “examine the wider economic and social impacts of Gatwick Airport’s future growth and expansion plans on the local area, the South East region, and on the economy of the UK as a whole.” Gatwick hopes the GGB will ensure “the benefits of Gatwick expansion are properly distributed across the region and the rest of the UK, such that areas most in need of regeneration benefit appropriately from its plans.” Quite how it will do this is not revealed, nor why it is only at this late stage that Gatwick has felt it necessary to try to demonstrate benefit of a 2nd runway for the UK as a whole. The board will have no official powers or authority. Gatwick realises it carries very little air freight, and deals largely with leisure low cost, point to point travel. Most of its flights are to one or other European holiday destination. They hope their new runway would be open by 2025. The GGB is to work for two years, and it will produce “regular reports and studies” for Gatwick, with the first starting this September. These will look at how Gatwick fits with Britain’s withdrawal from the EU, employment impacts on the regions from sucking more low cost travel to the south east, and how it can have an impact on the regions. Gatwick must be worried by the public realisation that it contributes little to the UK economy as a whole.
Gatwick Airport establishes Growth Board: Baroness Jowell and Steve Norris to develop benefits of growth and expansion
15.8.2016 (Gatwick airport press release)
- Former London and Transport Ministers join Gatwick Growth Board
- New board will study economic benefits and effect of growth and expansion in the context of Brexit
- Work to take place over 24 months, first study to start in September
Gatwick Airport announced today the formation of the new Gatwick Growth Board (the GGB) under Co-Chairs Tessa Jowell and Steve Norris. The GGB will examine the wider economic and social impacts of Gatwick Airport’s future growth and expansion plans on the local area, the South East region, and on the economy of the UK as a whole.
Reporting to Chairman, Sir Roy McNulty, it will have a particular emphasis on ensuring that the benefits of Gatwick expansion are properly distributed across the region and the rest of the UK, such that areas most in need of regeneration benefit appropriately from its plans.
The GGB’s purpose is to help Gatwick Airport Limited and its management team address the wider issues associated with Gatwick’s recent and future growth. The airport is now recognised as one of the most important infrastructure assets in the country and its growth carries implications for the country as a whole, as well as for its local region.
The GGB will examine the implications of Gatwick’s national status in the context of both one runway and two. A natural focus of the Board’s inquiry will be the impacts associated with a second runway but it will also examine the impacts of Gatwick’s place in the economy and its expansion in the context of a single runway, recognising that a new runway will not be open until 2025.
As former Minister for the Olympics and for London, and former Minister for Transport respectively, Baroness Jowell and Steve Norris bring great experience, expertise, and authority in the field of government, infrastructure, and economic and social analysis.
This will allow the GGB to develop independent analysis of the impacts of Gatwick’s future growth and expansion plans to provide insight and advice to the airport on how these plans might best be taken forward.
The GGB’s work will extend across an initial two year period and will deliver regular reports and studies to Gatwick. Amongst other things it will address:
- the economic impact of Gatwick expansion for the UK, in the context of Britain’s withdrawal from the EU
- the distribution of that economic impact across the country – incorporating an analysis of the social benefits of a competitive network of airports in the UK. This might also include an analysis of the employment/ stimulus effects of introducing a more competitive dynamic to the freight market
- the economic and social effects of Gatwick expansion in the neighbouring region (both positive and negative), how the positive effects might be maximised, and how the negative impacts, including environmental impacts, might be further contained
- how growth at Gatwick might be configured so as to provide a best fit with the economic and social needs and requirements of the nation and of communities around London and down to the South Coast, and
- how growth at Gatwick can contribute to the regeneration of less developed parts of the UK and its local area, and enhance the social and community benefits associated with expansion, in the context of a second runway or in the context of expansion with only a single runway.
The first of these reports is planned to commence in September.
Baroness Jowell said:
“London and the South East are crucial economic engines that drive growth in the rest of Britain. This is a great opportunity to build on the experience of the Olympics – commissioning the park and staging the games – to bring economic and social benefit across the UK. It is important that the continued growth of success stories like Gatwick is seen through a national lens.
“The Gatwick Growth Board will look closely at how investment and growth here can better benefit not only the region but also the country as a whole and I am delighted to have the opportunity to help deliver a plan to make this happen.”
Steve Norris said:
“Gatwick is a very significant part of the UK’s national infrastructure and plays a crucial role in the economic prosperity of the local area, the South East, and the country as a whole.
“The investment and growth that Gatwick has brought to the UK since coming into independent ownership has been remarkable. Particularly in light of the Brexit, Britain needs the certainty that Gatwick’s future growth and expansion plans bring and I look forward to helping take this forward to help maximise the real benefits that Gatwick offers for the region, and for the nation.”
Gatwick Airport CEO Stewart Wingate said:
“I am delighted that Baroness Jowell and Steve Norris have come together to establish our Growth Board – they bring with them immeasurable knowledge, experience and expertise and will help us to ensure that the benefits and impacts of our growth and expansion plans, and how they can deliver for Britain, are properly assessed and effectively implemented.
“Gatwick has invested billions to realise our transformation to this point. We have great plans for further growth in the future and it is now clear that only Gatwick can deliver the runway that the UK needs.”.
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Mr Crausby, MP for Bolton North East, has criticised the government after new figures showed it is spending six times more on transport projects in London than in the North West. The Institute Public Policy Research (IPPR) reported that over the next 5 years the Conservative government will spend £290 per person on transport for Bolton. That compares to £1,870 that London will be given per person for the same period. The IPPR study found the £4.6 billion to be spent on completing Crossrail during 2016-21 will exceed spending on all transport projects in the North (£4.3 billion). Mr Crausby said this was “a slap in the face” and that the “government should be investing in our future.” He added that “The current government’s behaviour towards northern transport is worrying and they don’t seem to be listening.” Ed Cox, Director of IPPR North, urged the new Secretary of State for Transport, Chris Grayling, to adopt a ‘North First’ approach, and make the most of low interest rates to create a £50bn “catch-up cash fund” to be invested in northern road and rail priorities. . Mr Cox’s proposal is supported by the IPPR North’s statement that the North’s “£300bn economy is worth more than those of Scotland, Wales and Northern Ireland combined.” IPPR director Tom Kibasi said: “Given the Brexit result, the North of England must urgently see growing prosperity.” The transport infrastructure need to enable a 3rd Heathrow runway is estimated by Transport for London to be about £15 billion or more. See link. Possibly £10 billion for Gatwick. See link.
MP slams Government for spending 6 times more on transport in London than in North West
CAMPAIGN: Bolton MP David Crausby has regularly campaigned about the state of trains in Bolton.
By Liam Thorp, politics reporter (Bolton News)
A CAMPAIGNING Bolton MP has slammed the government after new figures showed the Tories are spending six times more on transport projects in London than in the North West.
The Institute Public Policy Research (IPPR) reported that over the next five years the Conservative government will spend £290 per person on transport for Bolton.
This figure pales in comparison to the £1,870 that London will be given per person for the same period.
The total amount of spending for Northern transport is half the amount allotted to London’s Crossrail project.
Mr Crausby, MP for Bolton North East, condemned the government’s decision as ‘a slap in the face’.
He said: “Areas like Bolton need huge investment in public transport and the government should be investing in our future.”
Mr Crausby has often championed the need for more investment in Bolton’s transport system. He also previously criticised the state of overcrowding on Bolton’s trains, denouncing attempts by former Prime Minister David Cameron to solve the issue as ‘broken promises’.
Ed Cox, Director of IPPR North, urged the new Secretary of State to adapt a ‘North First’ approach, committing ‘£50 billion’ to ‘both road and rail priorities in the North’. Mr Cox’s proposal is supported by the IPPR North’s statement that the North’s ‘£300bn economy is worth more than those of Scotland, Wales and Northern Ireland combined.’
Mr Crausby shared the point of view proposed by IPPR, saying that for the North West’s economy to flower, it will ‘need the infrastructure in place.’
Two years ago, Bolton News launched the ‘Let’s Get Back on Track’ campaign, in response to the frustration of local commuters to cuts to Bolton railway, which was already in deemed to be in a dire state.
Faced by the figures produced by IPPR, Mr Crausby argued that Bolton’s transport needs are yet to be heard by Westminster. He said the regional differences in transport investment did ‘reflect a problem between Westminster and the North.’
He added: “I think that nothing sums up the Northern powerhouse better than investment in Northern Transport.
“The current government’s behaviour towards northern transport is worrying and they don’t seem to be listening.”
Think tank calls on government to build HS3 before HS2
Construction of the HS3 rail line in the North of England should take priority over High Speed 2, an influential think tank has urged.
The Institute for Public Policy Research called on new transport secretary Chris Grayling to adopt a “North first” agenda on infrastructure spending to close the funding gap between the North and London.
Research showed the North will receive six times less funding per person for infrastructure projects compared with London.
Infrastructure spending per capita, 2016-2021
On average, infrastructure spending per person between 2016 and 2020 will be £1,869 in London, compared with £277 across the North.
The study also found that the £4.6bn to be spent on completing Crossrail during 2016-21 will exceed spending on all transport projects in the North (£4.3bn).
The IPPR said the funding discrepancies needed to be addressed, with the North taking control of its own funding decisions to ensure the money was spent where it was most needed.
It also called on the government to make the most of record low interest rates to create a £50bn “catch-up cash fund” that could be invested in northern road and rail priorities.
The IPPR joins a growing list of groups calling for extra borrowing for infrastructure investment.
Last month a report from the UK’s biggest contractor Balfour Beatty said the post-Brexit climate was the ideal time for the government to borrow money to ensure major infrastructure projects were not delayed or scrapped.
Director of IPPR North Ed Cox said: “To build Theresa May’s ‘Better Britain’, we must focus on a better North.
“The North of England’s £300bn economy is worth more than those of Scotland, Wales and Northern Ireland combined.
“Focusing on this is going to be critical in creating the prosperity our country is going to need over the coming years.
“The North must also take control of its own funding decisions.
“The evidence shows that this would help boost growth, ditching the Treasury’s outdated and ineffective model, better suited to mitigating congestion than driving new economic growth.”
IPPR director Tom Kibasi added: “Given the Brexit result, the North of England must urgently see growing prosperity.
“A proper east-west crossing would boost northern and UK growth, and must now take priority above all other major transport projects, including Crossrail 2 and HS2.”
Why we need a North-first approach to infrastructure
With a population of 15 million and an economy worth £300bn – twice the size of Scotland – the North of England is too big to be ignored. If the North was able to halve the gap between its own economic output per head and the national level, then its economy would be £34bn bigger.
Infrastructure investment oils the wheels of economic productivity. To this extent, it is no surprise that the most productive region of the country – London and the South-east – is also the region that has received the lion’s share of infrastructure expenditure in recent decades.
Souht-east spending dwarfing North
The amounts spent on Heathrow Terminal 5, tube upgrades and Crossrail all dwarf infrastructure spending everywhere else in the country. Despite the rhetoric of the previous chancellor, this looks set to continue.
Analysis of the current National Infrastructure Pipeline shows that we are planning to spend nearly £1,900 per person on transport infrastructure in London, compared with just £270 per person in the North. The £4.6bn left to spend on Crossrail is more than the total expenditure planned for the Northern Powerhouse.
This is not to begrudge London of this important investment. The nation needs a strong London and there is merit in the argument that we cannot afford it to grind to a halt.
“Commuter travel between Manchester and Leeds is 40 per cent less than might be expected between two similarly sized locations in Europe”
But where investment in the capital does little more than mitigate congestion, investment in the North could fire up a new era of Northern prosperity.
There is a compelling argument that the success of big cities like London or city-regions like the Rhine-Ruhr in Germany are built upon large, well-connected labour markets.
But commuter travel between Manchester and Leeds is 40 per cent less than might be expected between two similarly sized locations in the rest of Europe. And unlike in London, for most people in the North, moving jobs requires moving home, creating a big drag on labour mobility.
Thankfully, this is now well recognised and in the past two years Transport for the North has made rapid progress in developing a Northern Transport Strategy that will soon publish its key investment priorities, expected to total more than £50bn.
With various spending rounds on the horizon, the government has a unique opportunity to realise the North’s latent potential.
By upgrading its appraisal processes and adopting a ‘North First’ approach to investment, the UK economy could be firing on all cylinders rather than constantly propping up an ailing economy with massively expensive mitigation schemes in the capital.
Ed Cox is a director of IPPR North and member of the Business North steering group
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Claims have been made about how important it is for the government to make a runway decision fast, and how massive amounts of money are being (allegedly !) lost to the UK economy every single day of delay. A new grouping – the “British Infrastructure Group” – BIG – led by Tory MP Grant Shapps suggests the sum is “up to £6 million per day”. Full Fact has looked into this, and how the claims are calculated, and they find them to be very dodgy indeed. It’s complicated economics, but at heart they looked at the possible maximum benefits that the Airports Commission said a Heathrow might generate, over 60 YEARS. Then they worked out that, backwards, to a sum per day. There are various assumptions that should, and should not, be made when working out that sort of calculation and assessing possible future values. Their sum of “£6 million per day” depends on Heathrow producing a national benefit of £147 billion over 60 years. But the Airports Commission’s own figures show that if the costs of carbon in the carbon capped scenarios reduce the possible national benefit of a Heathrow runway to around (amazingly tiny) just £1.4 billion over 60 years. That, divided up by day, is an insignificant amount (up to £64,000). Full Fact says: “Any precise figure will be uncertain.”
Does delaying airport expansion cost us £6 million a day?
In brief – from Full Fact, the UK’s independent fact checking charity. https://fullfact.org/
“Delaying a decision about which runway to build costs the UK economy £6 million every day.”
Whether or not you agree that a delay in the decision is imposing unnecessary costs on the UK economy, this probably isn’t the best estimate of what those costs are. Any precise figure will be uncertain.
An article making this claim:
“Delay over Heathrow third runway decision costing UK up to £6m a day, say MPs”
Get West London, 24 July 2016 (copied below)
The idea behind this kind of assessment is to suggest how much all the future benefits from an investment project are worth at the time of the decision. Benefits that come further away in the future are treated as if they’re worth less. The point is to decide, in financial terms, which project gives the most benefit for the smallest investment.
The report suggested that the future benefits over 60 years from a new runway at Gatwick were worth £89 billion to us at present, an extended runway at Heathrow was worth more at £131 billion and a new northwest runway at Heathrow was worth the most, at £147 billion. This was one of the reasons why the report favoured a new runway at Heathrow. [In fact the Airports Commission’s own economic advisors were very sceptical about this level of economic benefit, and warned against such a high figure. See Link AW note ]
A peer review of the findings, also commissioned by the Airport Commission, emphasised the difficulties in predicting the impact of a new runway on the UK economy, and cautioned against attaching ‘significant weight’ to the report’s final figures
The British Infrastructure Group, a cross-party group of MPs, has taken the Airport Commission’s valuations and used them for a different purpose.
They’ve divided each figure up to suggest a ‘lost value for each day’s delay’ on a decision about which project to choose. So between £2 million and £4 million ‘cost per day’ for a new runway at Gatwick, £5 million and £6 million for a runway extension at Heathrow, and £6 million and £7 million for a new runway at Heathrow.
The figures suggested by the British Infrastructure Group aren’t so much ‘costs’. This isn’t money that has to be paid every day until a decision is made.
They’re based on predictions which include all the opportunities the UK could miss out on in the future if it doesn’t have a new runway, and judgments about what those missed opportunities will be worth.
So it’s better to treat the estimates as judgements caveated with a reasonable degree of uncertainty, rather than facts.
By focusing only on the economic benefits, the British Infrastructure Group has also ignored the predicted costs of each airport expansion proposal.
When these are factored in, the Airport Commission suggests that the overall social benefit balances out to between about £5.5 billion and £10.8 billion for a new runway at Gatwick, depending on how strictly carbon emissions are controlled. They suggest a net benefit of between £1 billion and £10.2 billion for an extended runway at Heathrow and between £1.4 billion £11.8 billion for a new runway at Heathrow. So it suggests the net benefits from expanding Heathrow would be more sensitive to how carbon emissions are controlled than expanding Gatwick.
Arguably, these bottom-line figures don’t give the full picture either.
First, looking at the net benefit to the economy overall won’t tell you who wins and who loses. For example, the report suggests that passengers would enjoy cheaper travel and a better service if any of the projects went ahead, whilst aviation businesses would suffer lower profits. Particular places or industries would also do better or worse from each proposal.
Second, a range of opponents of the third runway at Heathrow have questioned whether certain negative consequences had been given enough consideration, such as environmental costs, noise pollution and public health concerns.
Arguably, the report is using the Airport Commission’s original estimates in a way they aren’t meant to be used anyway.
The Commission gave a figure for the present value of each investment. This is a way to compare options – to make a judgement about all the benefits that will stem from an investment and sum up what those future benefits are worth to us right now, at the time of the decision. The British Infrastructure Group have treated the same valuations as if they show the value added to the UK economy by each investment, which isn’t the same thing.
Dividing up present value calculations may not give you a good idea of the costs that come from putting off an investment project. To start with, the value assigned to benefits in the far future are reduced down in present value calculations. If the British Infrastructure Group had used figures for the value added by each project as their starting point, they might actually have suggested a higher number.
This still might not have been a very good estimate for the cost of delay. Investment projects often have one-off benefits that won’t be reduced by a year’s delay, as the British Infrastructure Group acknowledges. Delaying building-work also delays the costs of future repair-work – a runway built one year later, for example, might be expected to last one year longer. The strategic benefits of increasing capacity ahead of the UK’s rivals may matter more, but these considerations aren’t included in the figures.
Because there are three possible projects, there are three starting points for suggesting how much a new runway is worth to us right now.
The Airport Commission has said that it also depends on whether the UK tries to meet its carbon emissions targets by strict ‘carbon-capping’ or more flexible ‘carbon-trading’ systems, which they think would restrict the growth of businesses less.
That means there are at least six alternative suggestions for how much the future benefits from a new runway are worth to us right now, looking forward over 60 years. These are considerably reduced if we factor in the costs as well.
You can’t account for everything
The estimates don’t account for every effect that comes from building a new runway. For example, the Airport Commission didn’t factor in how construction work on the runways will affect GDP, because they think it’s too hard to judge how much investment spending will be drawn away from other places in the economy, or exactly how the aviation industry will grow.
The British Infrastructure Group agreed that you could debate the costs of a delayed decision up or down, depending on which factors you considered.
The Airport Commission’s peer reviewers concluded that although the report was useful for considering the strategic reasons behind airport expansion, it shouldn’tbe assumed that the final figures for the economic impact are reliable.
No decision has been made
The Airport Commission recommended the Heathrow Airport northwest runway proposal as the best option, although this wasn’t an uncontroversial decision.
The government has said that the decision will now need to be reviewed in light of the EU referendum result and that they will continue looking at the different options.
This article was updated on 8 August 2015 to incorporate a discussion about the Airport Commission’s suggestions for the net present value of each project, and a note from the Commission’s expert advisors on the findings.
We aim for our factchecks to be as accurate and up-to-date as possible. If you think we’ve made an error or missed some relevant information, please firstname.lastname@example.org.
In their report for the Airports Commission, two of the economic advisors,
A Note from Expert Advisors, Prof. Peter Mackie and Mr Brian Pearce, on key issues considering the Airports Commission Economic Case
This is one of the most ambitious attempts to prepare a quantified Economic Impact Assessment. There are few comparators available. While the content of the model itself has been well-tested, the same cannot be said of the front end, where an increase in capacity is converted into an increase in trip-making, trade, tourism and finally productivity. Furthermore the interpretation of the result— what exactly do they mean and is their basis transparent— is an issue. Overall, therefore, we counsel caution in attaching significant weight either to the absolute or relative results of the GDP/GVA SCGE approach (PwC report) within the Economic Case. We would accept that there is some useful indicative material for the Strategic Case but care is required in assessing its robustness and reliability.”
Delay over Heathrow third runway decision costing UK up to £6m a day, say MPs
24 JULY 2016
BY ROBERT CUMBER (Get West London)Theresa May urged to show her ‘mettle’ and end speculation over airport expansion ‘immediately’MPs from across the political divide have demanded an “urgent” decision on whether to expand Heathrow or Gatwick airport.The delay in making a decision over where to build a new runway is costing the UK up to £6m a day, a report by a cross-party Commons body claims.The British Infrastructure Group (BIG), headed by Conservative MP Grant Shapps,
urged new prime minister Theresa May to show her “mettle” by ending the speculation. [BIG seems to be a bit of a one-man band. No website. No membership? Its only web presence is Grant Shapps own website. http://www.shapps.com/category/big/big-big/ ]
Its report entitled Gate Now Closing
, which was published on Sunday (July 24), calls for an “urgent and immediate decision on hub airport expansion”.
The report does not state where group thinks a new runway should be built, but it argues that the indecision is having a deleterious effect on Britain’s businesses, the economy and jobs.
‘Problem of capacity… causing substantial damage’
“The problem of capacity at the current hub, Heathrow, is causing substantial damage to the industry as a whole,” the report says.
“It erodes confidence in the Government’s stated ambition of growing the economy and our international trade.
This computer-generated image shows how a third runway at Heathrow would look
“The evidence has been gathered by the Airports Commission. Now a decision is needed, to show the new leadership’s mettle.”
The Airports Commission last summer recommended building a third runway at Heathrow over a second landing strip at Gatwick.
The Government’s decision was initially delayed last year when further environmental studies were commissioned , and then in June following the outcome of the EU referendum.
The Department for Transport has not indicated when a decision is likely, following Chris Grayling’s appointment as the new transport secretary.
Theresa May’s election as prime minister, and the appointment to her cabinet of a number of Heathrow opponents , saw one bookmaker slash the odds on Gatwick winning the battle for a new runway.
Heathrow recently unveiled new images and video footage showing how an expanded airport would look , which it said showed it was ready to begin work as soon as it got the go-ahead.
Grant Shapps’ BIG report
Gate Now Closing report The report’s executive summary.
- Make an urgent and immediate decision on hub airport expansion. The problem of capacity at the current hub, Heathrow, is causing substantial damage to the industry as a whole. It erodes confidence in the Government’s stated ambition of growing the economy and our international trade. The evidence has been gathered by the Airport Commission. Now a decision is needed, to show the new leadership’s mettle.
- Expand our regional airports. Demand for flights is soaring and regional airports have begun to offer credible long-haul services. For the sake of UK PLC, regional airports must be allowed to expand. Only their expansion can address the coming ‘capacity crunch’ and deliver sustained growth, underlining the concepts of the Northern Powerhouse and the Midlands Engine and sharing the proceeds of growth across Britain.
- Progressively Lower Airport Passenger Duty (APD). Britain’s major aviation tax, APD is many times the rate of similar taxes in European competitors and trading partners such as the USA. APD hinders exports, distorts the market, and hits small carriers hard. BIG believes that a lowered rate, by boosting the wider economy, would eventually be cost-neutral for the Treasury. Bringing forward hub airport expansion could allay the cost in the interim – around a third of APD could be waived with the proceeds of bringing construction forward a year.
- Join up infrastructure to regional airports. Even airports as large as Bristol and Luton suffer from congested roads and delay-prone rail links. Planning improvements should be a priority of the National Infrastructure Commission (NIC).
- Make regulation small-airport-friendly. Existing regulation is often suited to large airports. Smaller airports cannot enjoy the same economies of scale. We should lower the burden by giving the main regulator, the Civil Aviation Authority (CAA), a ‘regional connectivity’ brief.
- Improve funding for local start-up routes. The Government uses Public Service Obligations (PSOs) fund outlying routes; they could form a more coherent network in outlying areas. The Government uses the Regional Air Connectivity Fund (RACF) to pay start-up costs for new, commercially viable routes; this fund needs more streamlined, airport-friendly management.
- Fast-track enterprise zone development around airports. In a competitive industry, airports rely on commercial activity around them to support their services. Enterprise zones should be fast-tracked through the planning system.
The report has the support of over 40 cross-party MPs:
- Gavin Robinson
- Adrian Bailey
- Maria Caulfield
- Oliver Colville
- Angela Watkinson
- Laurence Robertson
- Catherine McKinnell
- Greg Knight
- Nigel Evans
- Graham Brady
- Mary Glindon
- Gerald Howarth
- Andrew Rosindell
- Philip Davies
- Bob Neill
- Caroline Spelman
- James Davies
- Kevin Hollinrake
- Pauline Latham
- Karen Lumley
- Mike Wood
- Daniel Poulter
- Ben Howlett
- Jonathan Djanogly
- Nigel Huddleston
- Crispin Blunt
- Justin Tomlinson
- Anne-Marie Morris
- Cheryl Gillan
- Scott Mann
- Alex Shelbrook
- David Warburton
- Derek Thomas
- Nigel Mills
- Nick Boles
- Henry Bellingham
- Charlie Elphicke
- Richard Drax
- Andrew Bingham
- Mike Kane
- Hugo Squire
- Grant Shapps
Airport runway delay ‘could cost UK £5bn’
‘We need this decision on airport capacity to be taken quickly. It is urgent and not optional’
Russell Lynch (Independent)
Tuesday 8 December 2015
Delaying the hugely controversial decision on expansion of UK airport capacity could cost the economy more than £5bn, the head of the Confederation of British Industry (CBI) warned.
The business lobby group’s new director-general, Carolyn Fairbairn, accused the Government of “a real failure of leadership” because ministers are poised to postpone their decision on airport growth – which was originally due by the end of this year – for at least six months.
The Airports Commission, led by Sir Howard Davies, said in July that it preferred a plan for a new runway at Heathrow over the extension of Heathrow’s existing northern runway, or building a second runway at Gatwick.
But any decision to go with Heathrow will be a political embarrassment for David Cameron, who pledged before the 2010 election to oppose a third Heathrow runway with “no ifs, no buts”. It will also undermine the Conservative Zac Goldsmith’s bid to succeed Boris Johnson as Mayor of London next May. Mr Goldsmith, the MP for Richmond Park, has been a consistent opponent of Heathrow expansion.
The Government is also understood to be concerned by potential legal challenges about the environmental impact of a third runway at the west London airport, because pollution levels in the area already breach European safety limits. Ms Fairbairn said: “A failure to have new a new runway up and running by 2030 will cost the UK as much as £5.3bn a year in lost trade to the Bric countries [Brazil, Russia, India and China] alone.”
She told the BBC: “It feels like a real failure of leadership. We need this decision to be taken quickly. We really need a decision on airport capacity, it’s urgent and not optional.”
Her comments come after the CBI’s president, Paul Drechsler, urged ministers to “get on with it” and “not duck infrastructure decisions”.
Heathrow, which is running at full capacity, claims that a third runway would add £100bn to the economy and create 120,000 jobs.
The commission’s report on the new £23bn runway is calling for further night flight restrictions, a noise levy and a legal commitment to protect air quality.
Read more »
A blog in Aviation Week, by Antoine Gelain who works for an investment company, provides some cutting insights into demand for air travel. He says: “When it comes to sustainability of air travel, the aviation community is lying to itself. There is an elephant in the room and nobody wants to see it. Without more significant efforts—some would call them sacrifices—air travel will continue to be a huge contributor to this planet’s pollution and global warming, with dire consequences for future generations” … and … “The bottom line is that with all the talk about the aviation community being committed to action on climate change … and about how various supply-driven measures will improve air travel’s sustainability, everybody knows that serious progress will not be achieved unless we address the other part of the equation, aviation’s “sacred cow”—demand.” … and … “Air travel has essentially doubled in the past 15 years (and so have related CO2 emissions) and is expected to double again over the next 15 years. There is just no way supply-based measures such as technology and infrastructure improvements will come close to offsetting such rapid growth and its impact on the environment.” … and … If we in the aviation community are really serious about addressing climate change, we first need to accept that the current and forecasted demand for air travel is unsustainable and therefore must be dampened.” … and more ….
Opinion: The Uncomfortable Truth About Aviation Emissions
The aviation community must face the truth about CO2
Aug 10, 2016
by Antoine Gelain | Aviation Week & Space Technology
When it comes to sustainability of air travel, the aviation community is lying to itself. There is an elephant in the room and nobody wants to see it. Without more significant efforts—some would call them sacrifices—air travel will continue to be a huge contributor to this planet’s pollution and global warming, with dire consequences for future generations, whether they are air travelers or not.
Last month, the U.S. Environmental Protection Agency (EPA) for the first time officially acknowledged its duty to promulgate standards applicable to greenhouse gas (GHG) emissions from commercial aircraft. Indeed, aircraft remain the single largest GHG-emitting transportation source not yet subject to GHG standards in the U.S.
Air travel and related emissions have doubled in the past 15 years
Aircraft is the largest transportation source not subjected to U.S. greenhouse gas standards
Forecasted growth in air travel is unsustainable if climate change is to be tackled
The uptake of sustainable alternative fuels, which are meant to be a large part of the solution by 2050, has been extremely slow, with only two airports in the world—Oslo and Los Angeles—offering biofuels to airlines.
As for the International Civil Aviation Organization’s (ICAO) progress on setting a CO2emissions standard, it is as slow as it can get. Having set some “aspirational” goals in 2010 for global net carbon emissions, it is only now getting to the point of recommending that new aircraft models entering service after 2020 and existing aircraft models coming off the production line after 2023 meet the new technical standard—which has yet to be introduced.
The bottom line is that with all the talk about the aviation community being committed to action on climate change (see, for example, the Air Transport Action Group’s position paper signed by aviation industry leaders in 2012) and about how various supply-driven measures will improve air travel’s sustainability, everybody knows that serious progress will not be achieved unless we address the other part of the equation, aviation’s “sacred cow”—demand.
Air travel has essentially doubled in the past 15 years (and so have related CO2 emissions) and is expected to double again over the next 15 years. There is just no way supply-based measures such as technology and infrastructure improvements will come close to offsetting such rapid growth and its impact on the environment.
As for the so-called “market-based measures,” such as the European Union’s Emissions Trading System or other carbon-offsetting schemes, they are just gap-filling measures that make people feel good without really changing the fundamental dynamics of the industry.
These dynamics are essentially about convincing as many people as possible to fly as often as possible. This is achieved in two ways: First, by making air travel affordable for mass consumption and second, by enticing business travelers with all sorts of bells and whistles.
The low-fare airline model has certainly made air travel more accessible to many, but in that process it has contributed to its excessive commoditization. And while it may be “low-fare,” it certainly is not “low-cost” as far as the environment is concerned. In that respect, air travel is very much akin to fast food: It may seem to be a bargain, but it passes the true cost on to the public health and purse and pushes it into the future.
As for major airlines, they are just milking the top of the market by catering to the desires of an international business community that is self-important enough to believe it deserves nothing less than increasingly dedicated and expensive services such as all-business-class flights, upscale cabins, exclusive lounges and loyalty rewards. Yet frequent-flier programs themselves create the wrong incentives, as they encourage business customers—most of which do not pay for their tickets themselves—to fly more and spend more on flights than may be necessary.
If we in the aviation community are really serious about addressing climate change, we first need to accept that the current and forecasted demand for air travel is unsustainable and therefore must be dampened. We as air travelers must become wiser customers: Do we actually need to fly to all these business conferences? Is it worth paying 10 times the price of an economy ticket for better wine, free lounge food and a more comfortable seat? Do we really believe a €20 ($22) trip from London to Copenhagen covers its true cost and true value?
Traveling to different countries can be one of the most enriching experiences in life. Let’s not trivialize it to the point where we do not think twice before buying a cheap air ticket. Let’s be honest with ourselves and accept the basic but uncomfortable truth that to make air travel sustainable, we first need to change our individual behaviors and become more discerning consumers. In the must-win fight for sustainability, there cannot be gain without pain.
Antoine Gelain is the managing director of Paragon European Partners. He is based in London.
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A new report for the Campaign for Better Transport (CBT) has analysed the Airports Commission’s backing for new runway in relation to carbon emissions, and says the necessary carbon pricing would end low-cost flights by 2050. The Commission was aware that UK aviation is expected to far exceed the cap set for the sector’s CO2 emissions (37.5MtCO2) before 2050. Adding another runway only makes the situation far worse, by exacerbating the problem. The only way to keep aviation emissions down, with a new runway, is greatly increased cost of flights, trying to reduce the demand that has been increased by adding capacity. This means a carbon price massively higher than today – at several hundred £s. The report, by Leo Barasi and Leo Murray, say that as well as making flights expensive (perhaps pricing out those on low pay) the addition of a new SE runway means growth at regional airports would have to be restricted to allow expanded London capacity. Dame Julia King, who was on the Airports Commission and is on the Committee on Climate Change, admits that regional airports would need to be restricted in order to allow growth in the south east. There has been far too little assessment and acknowledgement of the CO2 implications of a runway. The government should not rush into approving a runway until this has been fully accepted.
Third Heathrow runway would push up air fares, say campaigners
By Gwyn Topham (Guardian)
The report here
Analysis of Airports Commission’s backing for new runway claims carbon pricing would end low-cost flights by 2050
Passengers would be forced to pay substantially higher air fares if a new runway was built in the south-east and Britain kept to its carbon targets, according to an analysis of the Airports Commission’s backing for a third runway at Heathrow.
A report “air-traffic-controls: the hidden costs of a new london runway” published by the Campaign for Better Transport claims that carbon pricing, a measure the Commission suggested could be needed to ensure British aviation emissions remain on target, would add hundreds of pounds to air fares by 2050, spelling the end of low-cost flights.
Another consequence of the Airports Commission’s analysis is that growth at regional airports would have to be restricted to allow expanded capacity at Heathrow.
A member of the government-appointed commission said that prohibitive pricing or other measures to curb demand for air travel would be needed whether or not a new runway was built in the south-east.
The CBT report, Air Traffic Controls, claims that the additional carbon price to offset the growing demand in air travel from a new runway could amount to more than the cost of the ticket itself on some flights. The extra costs, implied by the commission’s data but not previously calculated, would be up to £127 for return flights from Manchester to Tenerife, £148 from Newcastle to Sharm el-Sheikh or £221 from London to Florida.
Leo Murray, one of the report’s authors, said: “There has been far too little scrutiny of the Airports Commission’s proposals for squaring airport expansion in the south-east with the UK’s climate change targets, with the details hidden deep inside hundreds of pages of technical reports. Building a new runway, while still meeting our climate change commitments, is expected to add hundreds of pounds to the cost of flights from all of the UK’s airports if the commission’s proposals are enacted.”
Stephen Joseph, chief executive of the Campaign for Better Transport, said: “If the government approves a new runway in the south-east, it risks either breaking the national carbon budget, or pricing those on lower incomes out of the sky entirely. The Airports Commission uses heroic assumptions about technology and efficiency improvements which are at odds with the government’s own analysis. Worse, the huge sums the commission proposes adding to the cost of plane tickets to allow a new runway to be built have so far gone almost unnoticed.”
However, Julia King, who was on the commission and is a member of the Committee on Climate Change, said it was impossible to make accurate fare predictions for 2050, but that the level was irrelevant to the commission’s verdict on runways. “We already have enough runway capacity in Britain to exceed carbon emissions as it is,” she said. “The reality is that independently of whether we build a new runway or not, we will have to control the increase in flights.”
The CBT report shows price rises are likely to see regional airports decline while London’s grow. King said that while it could seem “a harsh message”, the commission’s analysis of catchment areas and hub activity meant only expansion in the south-east would make longhaul flights to key destinations economically viable for airlines.
“Clearly there would need to be slower growth at regional airports generally if you have additional capacity in London. All the indications were that the big demand is in the south-east.”
She added: “If we are to have to compensate for reduced trade with the EU post-Brexit, the longhaul requirements become even more critical – and our conclusion that the need is best fulfilled from Heathrow becomes even stronger.”
[And some vacuous and disingenuous comments from Heathrow and Gatwick are added to the article:]
A Heathrow spokesperson said: “Heathrow supports the international aviation industry’s commitment to carbon-neutral growth from 2020 and the UN’s international civil aviation organisation, which plans to introduce a mandatory carbon offset system to achieve this goal.”
A spokesperson for Gatwick airport said: “Our analysis shows that expansion at Heathrow would be significantly less carbon-efficient than expansion at Gatwick.” He added that Gatwick had pledged to cap landing charges, meaning fares would stay lower.
47 MtCO2 by 2050. See reference http://www.airportwatch.org.uk/wp-content/uploads/Richmond-Heathrow-Campaign-Climate-Change.pdf
In a climate-constrained world, could London airport expansion price other cities out of the market?
By Jocelyn Timperley (Business Green)
8 August 2016
Campaign for Better Transport analysis finds Heathrow expansion relies on higher carbon prices that could reduce demand in other parts of the country
Theresa May last week talked up plans to bolster the government’s push to reduce the divide between the economies of London and other British cities, even if she is loath to deploy George Osborne’s “northern powerhouse” rhetoric.
But a new report released today has highlighted one little spoken of, but potentially huge hiccup in the drive to balance the British economy more evenly – namely that a large-scale expansion in London’s air capacity, as would occur with the expansion of Heathrow of Gatwick airport, would necessitate a future reduction in the capacity of airports elsewhere in the country if the UK is to keep within its carbon budgets.
The analysis, published by the Campaign for Better Transport (CBT), scrutinises the assumptions and conclusions made in the final report of the Airports Commission, an independent body set up by the government in 2012 to look at how the UK should maintain its global aviation hub status. Published last July, the report recommended a third runway be built at Heathrow. When challenged on whether this would be compatible with the UK’s already generous allocation for the aviation sector in its 2050 climate target, the commission reassured those concerned that it was.
But by looking deeper into the Airports Commission’s figures, the new CBT analysis has highlighted a potential flaw behind that reassurance: the commission’s projections for keeping within the aviation climate budget rely on soaring carbon prices that would reduce the number of UK flights taken elsewhere.
A return flight from London to New York, for example, would have a £68 carbon price added to the cost of the ticket, the new report highlights. The assumption goes that this price hike would keep overall demand within the level needed to hit the sector’s carbon target – a return to 2005-level emissions by 2050, which is already an extremely generous allowance compared to other sectors that allows for a 60 per cent increase in flight demand assuming fuel efficiency improvements and the wider use of biofuels materialise as planned.
But the Airport Commission also found that expansion at Heathrow (or Gatwick for that matter) would still be justified, because even with the hike in carbon prices it expects all new London capacity to be used – an assumption which inherently means it will be those airports outside London where people are less able to pay the increased cost of flying where the number of flights will be curbed.
In addition, the report argues that under the Commission’s carbon pricing vision if a new runway is built and assumptions about demand and technology-delivered emissions-reductions prove too optimistic, prices will have to rise even further to ensure aviation remains within its carbon cap. Examples given in the report include an increase in prices of £108 by 2050 for a return ticket from Edinburgh to Malaga, a £116 increase on the cost of a flight from London to Athens, and a price hike of £140 for flights from Manchester to Tenerife. The cost for a family of four to fly from London to New York and back would be bumped up by up to £855 – a price hike with significant implications for those on a tighter budget in a country where an estimated 15 per cent of the population already take over 70 per cent of flights, and over half of people do not take any flights at all in a given year.
“They’re using carbon pricing to reduce demand, and that both means that ticket prices would be really quite a lot higher and even if we accept all their assumptions they’re quite a bit higher,” Leo Barasi, climate policy specialist and co-author of the analysis, tells BusinessGreen. “But if we start questioning whether every single one of their assumptions about technology and biofuels – which are all at the upper end of optimistic – if any of those don’t happen then the carbon pricing that they suggest would have to be higher still.”
It is important to note the expected increased in flights over the next few decades means flight numbers are still likely to increase everywhere, so that other areas will only be hit relative to the increase in flights they could have expected if no London airport expansion was delivered.
But the report echoes a warning made in June last year by the Aviation Environment Federation (AEF) that by 2050, an extra runway at Heathrow would result in 55 per cent fewer passengers per year flying in and out of airports in the West Midlands, alongside a 14 per cent cut in the North West, a 36 per cent reduction in the South West, and a 11 per cent cut in Scotland compared to business-as-usual.
The new report argues the Airports Commission are likely already aware of the potentially huge impact of aviation carbon prices and have in fact concluded there would still be enough extra demand in London for a new runway to be economically worthwhile despite the assumed carbon price. However, while there are certainly reasons to believe London flight numbers will keep climbing, it is also important to note that Office for National Statistics data shows that the number of overseas business flights by UK residents has actually flatlined for the past 20 years, making up a smaller proportion of overall flights each year. Meanwhile, holidays abroad and family visits are the main growth areas for the UK aviation industry – a fact that also likely contributed to the UK’s rising tourism deficit this year reaching £17bn.
“I think they’ve applied a very narrowly economic lens to the question and I have no reason to doubt their view that the most economically efficient thing to do might well be to continue to prioritise growth in the richest part of the country and the place where most immigrants and businesses want to be,” says Barasi. “But then it’s a question for the country as a whole about where we want to put our investment in infrastructure and where we want to pursue growth.”
It’s also important to note says Barasi, that fears that London could lose out competitively compared to other European airports such as Amsterdam when it comes to being a global flight hub could be misplaced. “What’s always missed in that is that all of our European competitors that might build an alternative hub have in fact the same challenges that we do, so it’s not like we’re the only one struggling with this,” he argues.
With Department for Transport’s own projections showing the UK is currently set to exceed its aviation emissions target by 25 per cent even without increased airport capacity in London, Theresa May and her transport ministers face what should be a very tough decision on Heathrow. However, while local environmental impacts were cited as one of the main reasons for the most recent delay to the decision in December, the government has so far given little indication it would consider shelving plans for London airport expansion. Either Heathrow or Gatwick are set to be expanded, with all the implications that has for aviation emissions, carbon pricing scenarios, aircraft fuel efficiency, and regional airports.
When asked about the findings of the new report, a spokeswoman for the Department for Transport told BusinessGreen the government is fully committed to delivering runway capacity on the timetable set out in the Airports Commission’s report. “The Secretary of State and his ministerial team will consider all of the evidence very carefully before the government reaches a view on its preferred scheme,” she added.
But the CBT analysis shows if expansion goes ahead, the implications on an already tight carbon budget could be severe, while the question will also be raised as to whether people who can less afford it will accept the potentially huge rises in the costs of flights, even if such price hikes are deemed environmentally necessary.
“It feels like this is the first really difficult climate decision that the UK’s had to face, that so far it’s either been relatively small scale decisions that aren’t that expensive or things that you can present as a win-win,” says Barasi. “It’s perhaps a sign of some of the challenges that we’ll have to confront in the future.”
With aviation only representing six per cent of the UK’s carbon emissions, a failure to reach the allocated budget wouldn’t necessarily mean we breach the Climate Change Act, assuming even deeper emissions cuts are delivered elsewhere. But considering the challenges already facing the country as it strives to decarbonise other sectors of the economy on schedule, giving aviation a free pass would certainly make complying with the Climate Change Act considerably more difficult.
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The European Commission has approved financial support for Berlin’s long-delayed airport project, deciding that German government funding aimed at completing the facility is in line with EU state aid rules. The EU said the planned investment is “made on market terms and will thus involve no state aid to airport operator FBB.” FBB is co-owned by the Berlin city authority, the surrounding region of Brandenburg and the German federal government. In January 2016, Germany notified plans by the airport’s public shareholders to grant a €1.1 billion shareholder loan and a shareholder guarantee covering additional debt financing of up to €1.1 billion to FBB. The financing to be covered by the shareholder guarantee will be provided by commercial banks. Part of the investment is to address technical issues (for example, with the fire protection system), and to enhance noise protection. The rest will be used to increase capacity, as traffic growth will exceed the previous forecasts on which the initial project was based. Interventions by public authorities in companies can be considered free of state aid when they are carried out at conditions that a private investor would have accepted (according to the so-called “market economy investor principle” – even if no private investor had considered the investment attractive. The airport was initially meant to open in 2011 but has had a succession of show-stopping problems.
Berlin’s airport gets a €2.2bn bailout – maybe German airlines should stop complaining about their modest ticket tax now?
The European Commission on Wednesday approved financial support for Berlin’s long-delayed airport project, deciding that German government funding aimed at completing the facility is in line with EU state aid rules.
Brussels concluded that the planned investment is “made on market terms and will thus involve no state aid to airport operator FBB.”
Completing work on the troubled construction project would be the most profitable option even if further delays occur or costs balloon further, the Commission added.
Work began at the site in 2006 with the aim of having the airport online as a major international hub starting in 2011. But the timeline repeatedly slipped over technical and other challenges. It’s still unclear when commercial services can begin.
In January, Germany told the Commission that it would provide a shareholder loan of €1.1 billion and guarantees for an additional €1.1 billion in bank loans to the operator of the airport, Flughafen Berlin Brandenburg. FBB is co-owned by the Berlin city authority, the surrounding region of Brandenburg and the German federal government.
The so-called Berlin Brandenburg Willy Brandt Airport has been built next to the existing facility at Schönefeld in the city’s southeast.
The city’s second existing airport at Tegel in the northwest will be closed once the new site is up and running.
State aid: Commission clears public investment package to complete Berlin Brandenburg airport
Brussels, 3 August 2016 (European Commission press release)
The European Commission has found a German public investment package to complete the construction of Berlin Brandenburg airport Willy Brandt to be in line with EU state aid rules. The investment will be made on market terms and will thus involve no State aid to airport operator FBB.
In January 2016, Germany notified plans by the airport’s public shareholders to grant a €1.1 billion shareholder loan and a shareholder guarantee covering additional debt financing of up to €1.1 billion to the developer and future operator of the airport, Flughafen Berlin Brandenburg (FBB).
The financing to be covered by the shareholder guarantee will be provided by commercial banks. Part of the investment is to address technical issues (for example, with the fire protection system), and to enhance noise protection. The rest will be used to increase capacity, as traffic growth will exceed the previous forecasts on which the initial project was based.
Interventions by public authorities in companies can be considered free of state aid when they are carried out at conditions that a private investor would have accepted (according to the so-called “market economy investor principle” – MEIP).
In this context, the Commission carried out a detailed economic analysis, assessing FBB’s long-term business plans and market forecasts. The Commission then compared the planned investment project with various alternative scenarios. This assessment found that expanding and completing the airport was the most profitable option, especially taking account of steadily increasing passenger numbers, as forecast by independent market studies. In addition, the Commission carried out a stress-test to determine whether the investment scenario was robust enough to overcome a number of risks, such as a further delay of the airport opening, or higher costs. Even in the worst-case-scenario, the investment would remain profitable.
The Commission therefore concluded that a private investor seeking long-term profitability would have been ready to provide the same funding package on similar terms, to finally ensure that the airport is completed and made operational. Moreover, the terms of the shareholder guarantee are commensurate with market practice and thus confer no unfair advantage on the airport operator.
For historical reasons, Berlin originally had 3 airports: Tegel and Schönefeld, both still operating, and Tempelhof, which was closed in 2008. Tegel and Schönefeld are operated by FBB. The new airport, ‘Berlin Brandenburg Airport Willy Brandt’, is being developed and will also be operated by FBB. Once the new airport is operating, the Tegel airport will be closed down.
FBB is owned by the Länder of Berlin and Brandenburg, holding 37% of the shares each, and the Federal Republic of Germany, holding 26 %. In the mid-1990s, these public shareholders decided to build a single airport for Berlin and its surrounding area. The airport project incorporates and develops part of the Schönefeld site.
In 2009, when it looked at public financing for the project, the Commission found that one single airport at this location would have a positive impact on the entire region and would in particular improve access to the Berlin-Brandenburg region and increase its attractiveness for new investment.
Construction of Berlin Brandenburg airport started in 2006. The opening of the airport was initially scheduled for 2011 but has been repeatedly postponed, mainly due to technical problems.
In this context, in 2009, the Commission initially approved state aid in the form of a €224 million debt-for-equity swap, a €430 million capital injection and a €2.4 billion state guarantee. In 2012, the Commission found that an additional €1.2 billion equity injection, provided by FBB’s shareholders, was carried out on market terms and thus involved no state aid.
State financing for companies carrying out economic activities such as building or operating airports can be considered free of state aid if, in similar circumstances, a private investor operating under normal market conditions would have acted in the same way. If this is the case, the public intervention does not provide the company with an undue economic advantage which could distort competition.
The non-confidential version of the decision will be made available under the case number SA.41342 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.
Some earlier news stories about the airport:
Speculation that Berlin Brandenburg might never open, as its problems are so expensive
The man in charge of planning Berlin’s Brandenburg airport, which has had a catalogue of major problems, says it now may never open. It might be pulled down. It was meant to open in 2010, but had real problems with the fire extinguisher system, which did not work. Every year, the date of possible opening is pushed further back. Now it seems the myth of German national efficiency is under threat. The airport is already £5 billion over budget and a national disgrace for a country that prides itself on technical excellence. The chief planner, until 1999, doubted if it would ever open. After the fire issue, which required the removal of hundreds of defective firewalls, there were also hundreds of miles of wiring that had to be ripped out of leaking underground conduits. The luggage relay systems did not work, and the computer system was so complex that for years nobody could work out how to turn off the lights. They blazed 24/7. Every month, the delay costs about £15 million, including cleaning costs and lighting to prevent vandalism. The Times says the airport’s PR chief “who, rather too truthfully, told journalists that claims of the project going well were “bullshit”.” If it does ever open (2018, 2019?) it will already be too small, and another runway may be added ….
Click here to view full story…
Berlin Brandenburg airport problem of terminal ceiling being too heavy ….. already years late, hugely over budget
Berlin’s long-delayed Brandenburg airport has suffered another setback after structural flaws were found in the terminal roof. It appears that the ceiling in the terminal building is too heavy. The airport, which was originally due to open in 2010, is still under construction and has run billions of Euros over budget. It was expected to open in 2017 but that could be postponed even further. The local building authority said it had told the construction firm to “immediately stop building works for the area underneath the entire terminal roof of the BER airport” until security checks could be carried out by engineers. The airport’s CEO has left the company. Earlier this year Air Berlin, which is currently running at a loss, reached a settlement with the airport over the delays as it had planned on making BER its main hub airport. The first problems noted were to do with the smoke and fire detection problem. The proposed solution, (which was not surprisingly rejected) was (paraphrased) for 800 low-paid workers armed with cell phones, sitting on camping stools, armed with thermos flasks, who would take up positions throughout the terminal. If anyone smelled smoke or saw a fire, they would alert the airport fire station and direct passengers toward the exits” The airport’s cost, borne by taxpayers, has tripled to €5.4 billion.
Troubled Berlin Brandenburg airport, due to open in June 2012, could be shut down in late summer unless €1.1 billion is raised
Berlin Brandenburg (BER) airport was intended to be a huge new airport for Berlin, so Berlin-Schönefeld and Tegel airports could close. The BER was initially due to open in June 2012. It had a catalogue of problems with fire safety, smoke extraction system, and fresh air supply in the event of fire. The launch has been delayed and delayed …. last year it was hoped it might open this year. Now the airport’s CEO has announced that it is possible the construction of the airport may need to be shut down this summer, if a further €1.1 billion cannot be raised. Some €4.3 billion has already been spent, but that only lasts till this summer. Extra costs have been incurred due to the late opening, as well as the extra construction costs. A decision on how €1.1 billion can be raised is needed urgently, perhaps through bank loans, government grants or from an investor. The money has to not only be agreed by Berlin, Brandenburg and the federal government, but also needs approval from the EU Commission. Current total costs amount to €5.4 billion. Additional plans suggest additional costs amounting to an extra €2.19 billion. Although the airport has yet to open, officials are planning a possible third runway for approximately €1 billion and other new projects such as an additional terminal, expanded baggage system and another freight facility. The total additional spending would amount to €3.2 billion.
Click here to view full story…
Berlin’s Schönefeld airport ‘to stay open’ as Brandenburg airport (at huge expense) not ready till 2015 at the earliest
February 25, 2014
Berlin’s old Schönefeld airport is likely to remain open as a destination for budget airlines despite a multi-billion airport being built next to it, at Berlin Brandenburg (BER), as the new international hub is too small. It is the latest in a long line of setbacks to hit the BER, which is over budget and behind time. It will have two runways. It is expected to open in 2015 at the earliest. Officially the cost of the airport is €4.3 billion, though initial cost estimates were €1.2 and it could cost up to €6 billion. Despite the huge cost, the airport will only have a capacity of 27 million passengers a year, so its ageing neighbour, Schönefeld, will need to stay open. The original plan had been for Schönefeld, which caters for budget airlines, to merge with BER. Keeping Schönefeld in operation would increase capacity by 7.5 million passengers a year and avoid further costs of building a new terminal. Earlier it had been expected that BER could be partly in use in 2014, with 10 planes per day, but that will not happen. The airport was initially intended to open in 2010 but the multiple delays have been due to difficulties concerning fire safety, the smoke exhaust systems and construction errors. Air Berlin is suing BER for damages due to the much delayed opening.
Click here to view full story…
and more earlier stories here
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Local Gatwick community group, CAGNE (Communities Against Gatwick Noise and Emissions) had produced a new short report on the extent of the noise impact a 2nd Gatwick runway would have. CAGNE says Gatwick’s local communities have been side-lined as the airport has failed to develop a proper strategy to deal with aircraft noise with expansion. A second runway would mean double the number of people impacted by night flights and create 24-hour “noise ghetto from hell.” CAGNE says Gatwick’s expansion proposals contravene Government policy on aircraft noise by failing to incorporate measures which would reduce noise. This is especially unsatisfactory as the Government is likely to make a runway decision, or at least a statement of preference between Heathrow and Gatwick, in early September or in October. The unacceptable noise burden from Heathrow is well known. Gatwick has tried to make out that its noise problem is small by comparison. However, CAGNE shows that Gatwick (with a 2nd runway it would be the size of Heathrow now) plans to use both runways in segregated mode, so both are used all day for both landings and take offs. This does not allow the half day respite from which those under Heathrow flights benefit. Gatwick also plans to continue night flights all night, which Heathrow has been told it cannot do.
Gatwick 2 would create a “noise ghetto from hell” for Tory heartlands with expansion
§ Gatwick’s local communities side-lined as airport fails to develop strategy to deal with aircraft noise with expansion
§ Gatwick’s expansion plan will double the number of people impacted by night flights and create 24-hour “noise ghetto from hell”
§ Government decision to approve Gatwick expansion would act against all local councils and conservative MPs who stridently oppose Gatwick expansion plans
New research released today by CAGNE – Communities Against Gatwick Noise Emissions – has revealed that Gatwick’s expansion proposals violates Government policy on airport noise by failing to incorporate measures, which would reduce noise.
The shocking revelation comes as the Government prepares to make a final decision on airport expansion in the South East in September or October.
The Government’s aviation policy framework (see flight path document for policy details) requires that airports that expand to implement strategies to mitigate noise impacts on local communities. The new research shows that Gatwick’s expansion proposal ignores this requirement, and seeks to create a noise ghetto from hell for local communities in a 30 mile radius by:
§ Operating mixed-mode runways (ie. both take offs and landings on both runways) which offer no respite for overflown communities
§ Operating with no night flight ban, doubling number of people exposed to night noise with noise during every hour of the night
§ Operating without steeper approaches or displaced landing thresholds (to reduce noise not to increase runway capacity as used at present by Gatwick) which are easy to implement and have reduced noise at other airports
Gatwick’s lack of a noise mitigation strategy is in total contrast to the proposals submitted by Heathrow, that detail an apparently comprehensive plan to minimise aircraft noise for local communities by banning night flights, guaranteeing respite through runway alternation and working to change aircraft operating procedures.
If this can be done at one of the world’s busiest airports, Gatwick’s local communities are left wondering why these changes did not factor in the airport’s own expansion plans.
Sally Pavey, Chair of CAGNE said:
“No community in the UK is subject to constant aircraft noise but that’s exactly what Gatwick are proposing with their expansion plans which offer no noise respite for overflown communities and would create a 24-hour noise ghetto from hell by operating flights every hour of the night.
“I would remind the Prime Minister Theresa May that not a single local council or local MP – all of whom are members of her slim Conservative majority – supports Gatwick expansion. If her Government is serious about making big corporations behave responsibly, they must be decisive and kick Gatwick’s ludicrous back-of-an-envelope proposal into the long grass.”
To name a few areas to be hit by Gatwick 2 flight paths, (full details can be found on Page 6 onwards and proposals and a map of flight paths can be found on page 12 plus of the report below)
Seeking a fair and equitable distribution of arrivals and departures to the east and west for West Sussex and Surrey
Image from the CAGNE report
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