Glasgow Prestwick Airport may be given to the Scottish Government for nothing

The owners of Glasgow Prestwick, New Zealand company Infratil, have suggested they may give away the airport for nothing. The Scottish government has announced it is negotiating to buy the unprofitable airport, and hopes to conclude detailed negotiations with the company by 20 November. Scottish government said it was the “only realistic alternative to closure”.  In a statement on its website, the company said it did not expect any transaction “to give rise to material proceeds”. Prestwick was put up for sale last March after heavy annual losses. Several investors expressed interest but no offers were made. Infratil has also been trying to sell its other unprofitable UK airport, Manston. In May 2013, Infratil announced that it had written down the value of both airports to £11m. Infratil has agreed to ensure the airport is kept fully open and operational during the negotiation process. In 2012 Prestwick had around 1 million passengers, compared to 2.4 million at its peak in 2005.

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Glasgow Prestwick Airport ‘may be given away for nothing’

9 October 2013 (BBC)

Glasgow Prestwick AirportPrestwick has been making a loss of nearly £2m a year

The owners of Glasgow Prestwick have suggested they may give away the airport for nothing.

The Scottish government announced on Tuesday it was negotiating to buy the unprofitable airport from New Zealand owners Infratil.

But in a statement on its website, the company said it did not expect any transaction “to give rise to material proceeds”.

Prestwick was put up for sale last March after heavy annual losses.

Several investors expressed interest but no offers were made.

Infratil has also been trying to sell its other UK airport, Manston Kent.

The airport operator said: “In March 2012 Infratil announced its intention to sell its two UK airports, Glasgow Prestwick Airport and Manston Kent Airport.

“On 15 May 2013, Infratil announced that it had written down the value of both airports to £11m.

“Infratil does not now expect any transaction completed for Glasgow Prestwick Airport or Manston Kent Airport to give rise to material proceeds.”

Negotiations

The Scottish government hopes to conclude detailed negotiations with the company by 20 November.

Infratil has agreed to ensure the airport is kept fully open and operational during the negotiation process.

On Wednesday, Deputy First Minister Nicola Sturgeon argued that Prestwick Airport could be profitable if the right approach was taken.

Ms Sturgeon said she believed that “over time” Prestwick could go “back to profit”.

She told BBC Radio Scotland’s Good Morning Scotland programme: “We are embarking on commercial negotiations with the current owners of the airport so things like purchase price for the airport will require to be resolved in terms of the negotiation.”

‘Only realistic alternative’

The minister defended the government’s decision to step in to buy the airport, saying it was the “only realistic alternative to closure”.

She explained that, once the airport was in public ownership, there would be a detailed business case made which would include levels of investment and a timescale on turning around its fortunes.

Ms Sturgeon added: “With the right financial investment, with the right commercial management, the right marketing over a period of time, Prestwick can be brought back into profit.”

The Scottish government’s bid to buy Prestwick comes just months after struggling Cardiff Airport was sold to the Welsh government for £52m.

Although publicly owned, Cardiff Airport is being managed by an “arm’s length” body rather than by the government, and “on a commercial basis”.

http://www.bbc.co.uk/news/uk-scotland-scotland-business-24469447.

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Related BBC stories about Prestwick:

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 CAA statistics  

Prestwick  – Number of Terminal passengers (thousands)

CAA – Terminal Passengers 1998 – 2008

UK Airport Statistics: 2012 – annual  (Table 10.3)  Terminal Passengers  2002 – 2012

2012    1,066,917  (down – 17.6% on 2011)
2011    1,295,512  (down – 22%  on 2010)
2010    1,660,000  (down – 9% on 2009)  link to 2010 data
2009   1,817,274  (down – 27.4% compared to 2008)
2008    2,414  (thousand)
2007    2,421
2006    2,395
2005    2,405
2000       905
1997       567

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Éarlier:

Ryanair’s new routes help lift the gloom at Prestwick

5.12.2012    Prestwick  – currently up for sale – has welcomed the extra Ryanair flights, which will launch next year. As Ryanair announced the services to 2 Polish airports, it said a move to Glasgow International Airport had been ruled out. The airline also unveiled six new routes from Edinburgh. Tom Wilson, chief executive of Prestwick’s owners, Infratil Airports Europe, said it would help reassure potential investors about the future of the airport.  Ryanair is planning to increase the frequency of its existing services at both Edinburgh and Prestwick and reverse two years of decline in which passenger numbers have fallen by 18%. Prestwick will see new routes to Rzeszow and Warsaw Modlin, taking the total to 27 routes and increasing the number of weekly flights from 86 to 95.  Click here to view full story …..

Price of Prestwick and Manston slashed to just over one fifth the price Infratil paid for them in 2003 and 2005

November 10, 2012    The value of Prestwick Airport has fallen to under a quarter of its level 2 years ago as owner Infratil struggles to find a buyer. The New Zealand-based company yesterday put the value of Prestwick and Manston Airport in Kent at £10.5 million. They had been valued at £32m earlier this year. Infratil bought it for £33.4m in 2003. A valuation carried out at the end of the financial year in March 2011 said the airports were worth £44m. Both airports were put on the market in January when Infratil said they were under-performing. It had been hoped a sale would be completed by early next year but no buyer is forthcoming. Passenger numbers at Prestwick have dropped to just under 1.1 million a year – less than half the level of 3 years ago – as Ryanair, which provides the bulk of passenger flights, has relocated many services to Edinburgh. The lack of investment has left Prestwick looking tired and off-putting to potential buyers.   Click here to view full story…

 

MP raises Prestwick Airport investment fears

September 25, 2012  Local MP, Brian Donohue, has complained that a lack of investment in Prestwick Airport by its New Zealand-based owner Infratil is damaging prospects of a sale and jeopardising its future. Upkeep at the airport had suffered following Infratil’s decision to put it on the market in March 2012 – and there is no progress yet on selling it. Numbers of passengers and freight at Prestwick have fallen markedly in recent years. Infratil said: “The reality is that when a business is for sale, the current shareholder is unlikely to spend any more than they need to.” Passengers were down 47% in 2011 compared to the peak in 2007, and freight was 71% down in 2011 compared to its peak in 2000.    Click here to view full story…

 

Passenger downturn prompts slump in Prestwick airport’s valuation

May 17, 2012    Passenger numbers at Prestwick in 2011 half the level of 2007. There were 1.2 million passengers in 2011. This fall in passengers has greatly reduced the price of the airport, which Infratil is trying to sell. Financial figures put the value of Prestwick and Kent Manston airports at £33 million ($64.7 million), down from £44m a year ago. Prestwick and Manston contributed an after-tax loss of $37.4 million (£17.9 million) in the year. Both airports were put on the market in March after Infratil said they were not performing. A buyer has yet to be identified for Prestwick. One reason for the slump of passenger numbers to the lowest level in a decade is the decision by Ryanair to focus growth at Edinburgh airport. Aviation analysts have questioned whether Prestwick would be able to recover from the decline that began late in 2008. It has long been reliant almost entirely on services offered by Ryanair.     Click here to view full story…

 

Warning Prestwick will find it difficult to expand

15.3.2012  The airport will find it difficult to attract new airlines to boost passenger services after being sold, according to the man who oversaw its sale. John Baillie, operations director at aviation consultancy MPD Group, said the Ayrshire airport needed to expand its route network and become less dependent on Ryanair to reverse the decline that has seen it lose a million passengers over the past four years.  But he said any bidders interested in buying the airport after it was put on the market last week would recognise this would be “extremely difficult”.

“There are many more airports than airlines. The airport is likely to fetch less than £10m, http://www.heraldscotland.com/news/transport/warning-prestwick-will-find-it-difficult-to-expand.17023644

 

Prestwick airport is to be sold by New Zealand owners

March 9, 2012     Prestwick has relied heavily on Ryanair flights, which have been cut back sharply in the past two years, as the airline moved business to Edinburgh. New Zealand-based Infratil said the sales are the result of a decision to refocus where it plans to invest. It has also decided to sell Manston. Prestwick Chief Executive Iain Cochrane said “Prestwick is a great airport with a great team and a great future. I believe this is an excellent opportunity for us to attract new investment into the airport to provide the stimulus for future growth.” In reality Prestwick saw a drop of nearly 20% in passenger numbers in July 2011, compared with the same month last year. Passengers for all of 2011 were around 1,295,600, down -21.9% on 2010. This is down hugely from the 1,817,200 or so in 2009.    Click here to view full story…

Confirmed: Manston Airport up for sale, as Infratil also sheds Prestwick

March 8, 2012     Manston Airport has been put up for sale by its New Zealand based owners, Infratil.  At Infratil’s Investor Day it announced that it intends to sell its two UK airports Manston and Prestwick because of a refocusing of its investment profile.  Infratil will prioritise its other business interests – which include electricity generation and retailing and natural gas as well as transport provision in New Zealand. Click here to view full story…

 

 

Read more »

Residents near Belfast City Airport alarmed at research linking strokes and heart disease to aircraft noise

Residents affected by aircraft noise in Belfast and north Down, in Northern Ireland, have expressed concern at the findings of a new study – published in the BMJ. The study found the risk of being admitted to hospital because of a stroke or heart disease was linked to the level of aircraft noise to which an individual was exposed; the higher the level of noise, the more likely it was that they would be admitted to hospital with one of those conditions. Likewise with the risk of dying from heart disease.  Dr Liz Fawcett, Chair of the Belfast City Airport Watch Steering Group, said the findings raise serious questions about the damage which aircraft noise may be inflicting on the health of people living under the flight paths. In Belfast the City Airport’s own figures show that more than 8,500 local people are impacted by aircraft noise at a level which the UK government considers likely to cause significant annoyance. These people may also be suffering effects on their health, which is unfair on them.  Liz said: “It’s also unfair on the taxpayer footing the bill for hospital admissions which, in some cases, may be avoidable.”
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Residents’ alarm at research linking strokes and heart disease to aircraft noise

9th October 2013  (Belfast City Airport Watch)

Residents affected by aircraft noise in Belfast and north Down have expressed concern at the findings of a new study which links the incidence of strokes and heart disease to aircraft noise.

The study, which has just been published in the British Medical Journal, found that the risk of being admitted to hospital because of a stroke or heart disease was linked to the level of aircraft noise to which an individual was exposed; the higher the level of noise, the more likely it was that they would be admitted to hospital with one of those conditions.

The researchers also found a significant link between the risk of dying of heart disease and daytime exposure to aircraft noise; again, the greater the level of noise, the greater was the risk of dying from the condition. The results were adjusted to allow for other factors, such as deprivation and the existing risk of dying from lung cancer.

The study has prompted an editorial in the British Medical Journal which says that planners need to take into account the results of this and other similar research when deciding whether to permit airports to expand their operations in heavily populated areas.

The research, which was carried out in a number of areas near Heathrow Airport, has prompted concern among residents living under the flight paths near George Best Belfast City Airport.

Dr Liz Fawcett, Chair of the Belfast City Airport Watch Steering Group, says:

“These findings raise serious questions about the damage which aircraft noise may well be inflicting on the health of people living under the flight paths.

“The City Airport’s own figures show that more than 8,500 local people are impacted by aircraft noise at a level which the UK government considers likely to cause significant annoyance.

“This study confirms that there could well be significant health impacts, regardless of residents’ views on the noise issue.

“That’s entirely unfair on the people who live under the flight paths, and it’s also unfair on the taxpayer footing the bill for hospital admissions which, in some cases, may be avoidable.”

One east Belfast pensioner who is concerned about the impact of aircraft noise on her own quality of life and health is Elizabeth Bennett (72).

Elizabeth has lived in her home in Sydenham for the past 40 years, and she says her retirement is being ruined by the noise of planes flying over her.

“They start at 6.30am and go on all day, every day – it’s just relentless,” she says.

“You sit down to try to relax and read a newspaper, and then another one goes over you.

“You can’t concentrate and it affects your sleep – I’m at my wit’s end to be honest, and I am concerned about the effect which the stress may be having on my health.”

Belfast City Airport Watch says it is especially concerned about this latest research in the light of the City Airport’s current request to amend its planning agreement.

“In its editorial on this research, the British Medical Journal states that the study is of particular relevance where an airport is expanding its operations in a heavily populated area,” says Dr Fawcett.

“That’s exactly the situation which we have at the moment with the City Airport’s application to change its planning agreement.

“The proposals which the airport has submitted would massively increase the number of people who could be subjected to serious levels of noise.

“We hope the forthcoming public inquiry on the airport’s application will take full account of the mounting international evidence which shows a link between aircraft noise and public health.”

 

  1. Belfast City AirportWatch comprises 18 residents’ and community groups across affected areas within east and south Belfast, and north Down, one trade union branch and one schools’ project. It also has approximately 680 individual associate members. For more information on the campaign, visit:  www.belfastcityairportwatch.co.uk
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The paper is:

A. Hansell et al. ‘Aircraft noise and cardiovascular disease near Heathrow airport in London: small area study.’ British Medical Journal, 2013.

Link to research paper: http://press.psprings.co.uk/bmj/october/aircraft1.pdf

Public link to paper: http://www.bmj.com/cgi/doi/10.1136/bmj.f5432


See also

New study links aircraft noise from Heathrow to increased risk of heart disease and strokes

October 9, 2013     A new study by researchers at Imperial College and King’s College in London – and published in the BMJ – has found that deaths from stroke, heart and circulatory disease are 20% higher in areas with high levels of aircraft noise than in places with the least noise. The research compared on day- and night-time aircraft noise with hospital admissions and mortality rates among a population of 3.6 million people living near Heathrow airport. Their study covered 12 London boroughs and 9 districts outside London where aircraft noise exceeds 50 decibels – about the volume of a normal conversation in a quiet room. The researchers made every effort to eliminate other factors that might have a relationship with stroke and heart disease, such as deprivation, South Asian ethnicity and smoking-related illness. This new study confirms the findings of the 2008 “HYENA” study, also by Imperial College, which looked at people living near Heathrow and 5 other European airports. The research is clear that living with a lot of aircraft noise damages health, though this needs further work. The study indicates that planners need to take the health impacts of aircraft noise into account when expanding airports in heavily populated areas or planning new airports.

Click here to view full story…

 

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See also

UK and American studies both show aircraft noise may increase risk of heart disease

Date added: October 9, 2013

People who live close to an airport and are exposed to constant loud aircraft noise may face an increased risk of cardiovascular disease, according to new studies from the UK and the US. The aircraft noise is not merely an irritation, and does not just reduce people’s quality of life. It also causes actual harm to health, especially for older people. This should be factored in to future planning decisions about new airports and runways. The UK study published in the BMJ looked at admissions and mortality rates for 3.6 million people living near Heathrow in the noisiest areas. The linked American study looked at over 6 million Americans over the age of 65 living around 89 US airports. It found that, on average, their risk went up 3.5% for every extra 10 decibels of noise they experienced. Simon Calder said that 2 days ago, Sir Howard Davies gave a meticulous exposition of the factors concerning his commission, and its decision on new UK airport capacity. “He paid due regard to the concerns of local residents about noise and traffic. But 48 hours ago a correlation between airport proximity and the risk of heart attacks or strokes was not in the public domain. Now that it is, the spectrum of harm from airports has extended from nuisance to a serious public health threat.”

Click here to view full story…

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Read more »

Stop Stansted Expansion says of the Airports Commission: A tainted process – a dubious conclusion

Stop Stansted Expansion (SSE) is disappointed that the Airports Commission has formed the preliminary view that extra runway capacity is needed in the south east of England.  In his speech on 7th October 2013, the chairman of the Airports Commission, Sir Howard Davies said that his Commission had not been persuaded by the arguments against expansion. In SSE’s view, the arguments for more runway capacity in the south east are dangerously weak and they will be taking up Sir Howard’s invitation to comment on his preliminary conclusions. SSE believes the UK, as a whole, already has more than enough runway capacity to meet the DfT forecasts to 2050, and well beyond. Regarding the recent resignation of Geoff Muirhead from the Commission, due to ties with MAG, SSE said they are mounting a legal challenge on bias  – due to Mr Muirhead’s influence – in formulating the “sift criteria” and there will be more information on that next week.
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Airports Commission: A tainted process – a dubious conclusion

8.10.2013  (Stop Stansted Expansion)
Stop Stansted Expansion (SSE) is disappointed that the Airports Commission has formed the preliminary view that extra runway capacity is needed in the south east of England.

In his speech on 7th October 2013, the chairman of the Airports Commission, Sir Howard Davies said that his Commission had not been persuaded by the arguments against expansion.

In SSE’s view, the arguments for more runway capacity in the south east are dangerously weak and we will be taking up Sir Howard’s invitation to comment on his preliminary conclusions in the course of the coming month.

SSE will continue to argue the case that the UK, as a whole, already has more than enough runway capacity to meet the Department for Transport forecasts to 2050, and well beyond.

In the meantime SSE notes that the only member of Sir Howard’s Commission with first-hand knowledge and experience of the aviation industry, Geoff Muirhead, continued to work for the Manchester Airport Group (MAG), the owners of Stansted Airport, right up to the time when he was appointed as a Commissioner and indeed beyond that.  Mr Muirhead, who has long been a keen advocate of airport expansion, resigned from the Commission less than three weeks ago ‘by mutual consent’ with the Secretary of State when the issue of apparent bias was raised.

SSE Chairman, Peter Sanders, commented: “In view of Mr Muirhead’s position we can have no confidence that the work of the Commission has been free from bias. We had already decided to mount a legal challenge relating to the sift criteria – i.e. the selection criteria which the Commission would use if and when it considers the comparative merits of different options for expansion. We shall be continuing with this challenge and expect to be able to say more about this next week.”

ENDS

 

NOTES TO EDITORS

· Apart from Manchester, MAG owns three other UK airports, including Stansted, and after retiring as chief executive of MAG, three years ago, Mr Muirhead was appointed as an ambassador to the Group and seemingly paid £164,000 per annum – a position he held until earlier this year. In addition he was in receipt of a MAG pension of £95,000 per annum.

· As the former chief executive of MAG, Mr Muirhead was a strong advocate for building new airport capacity. Indeed, one of his main achievements was the development of a second runway at Manchester Airport.

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· See also SSE press releases of 19 August and 20 September (copied below) at http://www.stopstanstedexpansion.com/media.html 

 



 

A Fight for Fairness

19.8.2013 (SSE)

Earlier today, lawyers acting for Stop Stansted Expansion (SSE) served formal notice on the Secretary of State for Transport requiring the removal of Mr Geoff Muirhead from the Airports Commission on the grounds of apparent bias.

This is the first formal legal step towards judicial review proceedings which will commence with an application to the High Court in early September if Mr Muirhead continues to serve on the Airports Commission.

Mr Muirhead is the former Chief Executive of the Manchester Airports Group (MAG) the company which now owns Stansted Airport. His biography as published by the Airports Commission states that he retired from his role as Chief Executive of MAG in October 2010, after 22 years with the Group. However, it fails to point out that, after retiring as Group Chief Executive, and indeed, after being appointed to the Airports Commission, Mr Muirhead continued to work for MAG in a highly paid role until January 2013.

SSE discovered these facts only after its own investigations, including a review of the MAG financial accounts for the year ending 31 March 2011, which showed that Mr Muirhead was paid £82,000 by MAG during the six months from October 2010 to March 2011 inclusive for acting as an ‘ambassador’ to the Group. [see notes below] The accounts also show that, as at 31 March 2011, Mr Muirhead had accumulated a pension lump sum of £450,000 and had an accrued MAG pension of £95,000.

Up until last month, SSE was pursuing this matter quietly, behind the scenes, with Sir Howard Davies, the Chairman of the Airports Commission, and the Secretary of State for Transport. We had hoped that Mr Muirhead would have by now voluntarily stood down from the Commission so as to avoid bringing into question the Commission’s independence and impartiality. However, that has not been the case and so we are now seeking legal redress.

SSE Chairman Peter Sanders commented: “Now that MAG is directly lobbying the Airports Commission for major expansion at Stansted, we believe there is far too much at stake to allow Mr Muirhead’s role as a Commissioner to go unchallenged.”

Mr Sanders continued: “It is only after the most careful consideration that we have decided to initiate legal proceedings but we believe we have a duty to the community that we represent to ensure that the issues regarding potential airport expansion are examined fairly, impartially and independently – and that this is seen to be the case.”

Mr Sanders concluded: “Legal proceedings are, of course, very expensive and we need to fund this from donations from our members and the general public. However, the initial response has been very encouraging, indicating that the community shares our concern about Mr Muirhead’s role and agrees that this needs to be challenged.”

ENDS

NOTE TO EDITORS
The solicitors acting for SSE are Leigh Day & Co of 25 St John’s Lane, London and SSE’s barristers are from ‘Thirtynine Essex Street’ chambers, 39 Essex Street, London, led by senior counsel Paul Stinchcombe QC.

The formal legal document served today on the Secretary of State and Airports Commission is a Pre-Action Protocol Letter (‘PAPL’), which is a pre-requisite before an application for judicial review can be considered by the High Court.

We have so far been unable to establish the level of remuneration/fees paid to Mr Muirhead during the years ending 31 March 2012 and 31 March 2013 because this is not disclosed in the MAG financial accounts. There is in fact no legal obligation to disclose during these two years because the Companies Act only requires disclosure in respect of directors. Mr Muirhead ceased to be a director of MAG during the financial year ending 31 March 2011.

http://www.stopstanstedexpansion.com/press461.html

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Airports Commission

20.9.2013 (SSE)

Stop Stansted Expansion (SSE) has welcomed the announcement today [20 September] that Geoff Muirhead, the former chief executive of Manchester Airports Group (MAG) is stepping down from the Airports Commission.

The Airports Commission, led by Sir Howard Davies, is currently examining the need for additional UK airport capacity and is due to report with a shortlist of options in December.

Geoff Muirhead’s role on the Commission was called into question by SSE because of his links with MAG who could be beneficiaries of any decision to expand Stansted Airport which MAG now owns.

The campaign group first raised the issue of a potential conflict of interest with Mr Muirhead last November on the day his appointment to the Commission was announced. Subsequent correspondence with Sir Howard Davies and the Secretary of State for Transport, then led SSE last month to issue a formal notice of judicial review proceedings unless Mr Muirhead resigned.

SSE is however disappointed that it has taken so long for Sir Howard Davies and the Secretary of State to recognise that it was untenable for Mr Muirhead to remain in post.

Peter Sanders, Chairman of SSE, said: “By ignoring our concerns and allowing the matter to drag on, Sir Howard Davies and the Secretary of State have potentially compromised the work of the Commission already and created the possibility of considerable extra delay, which is in nobody’s interests.”

“Given that Mr Muirhead has been actively involved as a member of the Commission for almost a year we now need to know to what extent the work of the Commission may already have been tainted,” he continued. “It is only when we have answers to the questions sent to the Secretary of State and Commission by our legal advisers that we will be able to ascertain how much of the Commission’s work to date may need to be revisited.”

Mr Sanders concluded: “It is important to make clear that SSE’s purpose in pursuing this action has always been – and will continue to be – to ensure that the issues regarding potential airport expansion are examined fairly, impartially and independently, and that this is seen to be the case.”

http://www.stopstanstedexpansion.com/press464.html

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Read more »

New study links aircraft noise from Heathrow to increased risk of heart disease and strokes

new study by researchers at Imperial College and King’s College in London – and published in the BMJ – has found that deaths from stroke, heart and circulatory disease are 20% higher in areas with high levels of aircraft noise than in places with the least noise. The research compared on day- and night-time aircraft noise with hospital admissions and mortality rates among a population of 3.6 million people living near Heathrow airport. Their study covered 12 London boroughs and 9 districts outside London where aircraft noise exceeds 50 decibels – about the volume of a normal conversation in a quiet room.  The researchers made every effort to eliminate other factors that might have a relationship with stroke and heart disease, such as deprivation, South Asian ethnicity and smoking-related illness. This new study confirms the findings of the 2008 “HYENA” study, also by Imperial College, which looked at people living near Heathrow and 5 other European airports. The research is clear that living with a lot of aircraft noise damages health, though this needs further work. The study indicates that planners need to take the health impacts of aircraft noise into account when expanding airports in heavily populated areas or planning new airports.
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New study links aircraft noise from Heathrow to increased risk of heart disease and strokes

8.10.2013 (Hacan)

A new study has found that deaths from stroke, heart and circulatory disease are 20% higher in areas with high levels of aircraft noise than in places with the least noise.

Researchers at Imperial College London and King’s College London compared data on day- and night-time aircraft noise with hospital admissions and mortality rates among a population of 3.6 million people living near Heathrow airport. The findings are published in the British Medical Journal.

The study covered 12 London boroughs and 9 districts outside of London where aircraft noise exceeds 50 decibels – about the volume of a normal conversation in a quiet room.

The new research backs up the findings of earlier work published by Imperial College. The 2008 HYENA Study discovered a 14% increase in the risk of high blood pressure (hypertension) for each 10 decibel increase in night-time aircraft noise. The HYENA study looked at 4,861 people aged between 45 and 70 who had lived near Heathrow, Berlin Tegel, Amsterdam Schiphol, Stockholm Arlanda, Milan Malpensa and Athens Elephterios Venizelos airports for at least five years.

John Stewart, chair of HACAN said, “This latest study highlights once again that living under a flight path can damage your health. More people are affected by noise from Heathrow than by any other airport in Europe. It is yet another reason not to build a third runway.”

The paper is:

A. Hansell et al. ‘Aircraft noise and cardiovascular disease near Heathrow airport in London: small area study.’ British Medical Journal, 2013.
Link to research paper: http://press.psprings.co.uk/bmj/october/aircraft1.pdf
Public link to paper: http://www.bmj.com/cgi/doi/10.1136/bmj.f5432

The area included in the study comprised the London boroughs of Hillingdon, Hounslow, Ealing, Brent, Hammersmith and Fulham, Kensington and Chelsea, Westminster, Richmond upon Thames, Kingston upon Thames, Wandsworth, Lambeth and Southwark; and nine districts to the west of London: Windsor and Maidenhead, Slough, Spelthorne, Wokingham, Elmbridge, Bracknell Forest, Wycombe, Runnymede and South Bucks.

The HYENA study:

“Hypertension and exposure to noise near airports”, Jarup et al, 2008 http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2265027

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See also

UK and American studies both show aircraft noise may increase risk of heart disease

Date added: October 9, 2013

People who live close to an airport and are exposed to constant loud aircraft noise may face an increased risk of cardiovascular disease, according to new studies from the UK and the US. The aircraft noise is not merely an irritation, and does not just reduce people’s quality of life. It also causes actual harm to health, especially for older people. This should be factored in to future planning decisions about new airports and runways. The UK study published in the BMJ looked at admissions and mortality rates for 3.6 million people living near Heathrow in the noisiest areas. The linked American study looked at over 6 million Americans over the age of 65 living around 89 US airports. It found that, on average, their risk went up 3.5% for every extra 10 decibels of noise they experienced. Simon Calder said that 2 days ago, Sir Howard Davies gave a meticulous exposition of the factors concerning his commission, and its decision on new UK airport capacity. “He paid due regard to the concerns of local residents about noise and traffic. But 48 hours ago a correlation between airport proximity and the risk of heart attacks or strokes was not in the public domain. Now that it is, the spectrum of harm from airports has extended from nuisance to a serious public health threat.”

Click here to view full story…

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Details of the American study are at

Residential exposure to aircraft noise and hospital admissions for cardiovascular diseases: multi-airport retrospective study

http://www.bmj.com/content/347/bmj.f5561:

Conclusions

Despite limitations related to potential misclassification of exposure, we found a statistically significant association between exposure to aircraft noise and risk of hospitalization for cardiovascular diseases among older people living near airports.

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This story is covered in most of the UK papers today.  Below are the articles from the BBC,  from the Independent, and also by Simon Calder, of the Independent:

 

Aircraft noise ‘link’ to stroke and heart disease deaths

By Jane Dreaper, Health correspondent, BBC News

9 October 2013

low-flying aircraft
The noise of low-flying aircraft can be stressful

The risks of stroke, heart and circulatory disease are higher in areas with a lot of aircraft noise, researchers say.

Their study of 3.6 million residents near Heathrow Airport suggested the risks were 10-20% higher in areas with the highest levels of aircraft noise.

The team’s findings are published in the British Medical Journal.

They agreed with other experts that noise was not necessarily to blame and more work was needed.

Their work suggests a higher risk for both hospital admissions and deaths from stroke, heart and circulatory disease for the 2% of the study – about 70,000 people – who lived where the aircraft noise was loudest.

The lead author, Dr Anna Hansell, from Imperial College London, said: “The exact role that noise exposure may play in ill health is not well established.

“However, it is plausible that it might be contributing – for example, by raising blood pressure or by disturbing people’s sleep.”

“There’s a ‘startle reaction’ to loud noise – if you’re suddenly exposed to it, the heart rate and blood pressure increase.

“And aircraft noise can be annoying for some people, which can also affect their blood pressure, leading to illness.

“The relative importance of daytime and night-time noise from aircraft also needs to be investigated further.”

The study used data about noise levels in 2001 from the Civil Aviation Authority, covering 12 London boroughs and nine districts outside of London where aircraft noise exceeds 50 decibels – about the volume of a normal conversation in a quiet room.

The authors say fewer people are now affected by the highest levels of noise (above 63 decibels) – despite more planes being in the skies – because of changes in aircraft design and flight plans.

The researchers – from Imperial and also King’s College London – adjusted their work in an effort to eliminate other factors that might have a relationship with stroke and heart disease, such as deprivation, South Asian ethnicity and smoking-related illness.

They stressed that the higher risk of illness related to aircraft noise remained much less significant than the risks from lifestyle factors – including smoking, a lack of exercise or poor diet.

In an accompanying editorial, Prof Stephen Stansfeld, from Queen Mary University of London, said: “These results imply that the siting of airports and consequent exposure to aircraft noise may have direct effects on the health of the surrounding population.

“Planners need to take this into account when expanding airports in heavily populated areas or planning new airports.”

Noise ‘has fallen’

The study covered 12 London boroughs in the centre and west of the capital – and nine council districts beyond London, including Windsor and Maidenhead, Slough and Wokingham.

Heathrow Airport’s director of sustainability, Matt Gorman, said: “We are already taking significant steps to tackle the issue of noise.

“We are charging airlines more for noisier aircraft, offering insulation and double glazing to local residents and are working with noise campaigners to give people predictable periods of respite from noise.

“Together these measures have meant that the number of people affected by noise has fallen by 90% since the 1970s, despite the number of flights almost doubling.”

A government spokesman said: “The number of people affected by high levels of noise around Heathrow has been falling for years due to improvements in aviation technology, better planning of flight paths and other factors. We would expect to see this trend continue.”

A separate study, also published on Wednesday in the BMJ, demonstrates a higher rate of admission to hospital with cardiovascular problems for people living near 89 airports in the US.

Prof Kevin McConway, from the Open University, said: “Both of these studies are thorough and well-conducted. But, even taken together, they don’t prove that aircraft noise actually causes heart disease and strokes.

“A major difficulty in interpreting what these studies tell us is that they are based on data for geographical areas, not for individual people.”

Over the coming months, Public Health England will recruit experts to further examine the public health issues around exposure to noise.

http://www.bbc.co.uk/news/health-24432162

 

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Why living near an airport could be bad for your health

 

Studies reveal link between areas with high noise pollution and an increased risk of heart disease and stroke among residents

8 OCTOBER 2013

Related articles

Anyone who has ever lived under a flight path will tell you that the constant din of jet engines is more than enough to raise your blood pressure.

But now researchers are warning for the first time that there may be a real health risk associated with aircraft noise. Two studies, published today in the British Medical Journal, found evidence that people living in areas with high levels of noise pollution from passing aeroplanes had a higher risk of heart disease and stroke.

The first study compared Civil Aviation Authority data on aircraft sound levels with hospital admissions and mortality rates for 3.6 million people living near Heathrow Airport, in areas where aircraft noise exceeded 50 decibels – the level of normal conversation in a quiet room.

Researchers from Imperial College London and King’s College London found that the risks of cardiovascular disease were greater for those living in neighbourhoods with highest noise levels and closest to the airport, such as Slough and Hounslow. Around 72,000 people living in the noisiest areas had a 10 to 20 per cent greater risk than people living in the quietest areas, researchers estimated.

A second investigation carried out in the US looked at heart disease among 6 million people living close to 89 airports. More than two per cent of hospitalisations for cardiovascular diseases could be attributed to aircraft noise, the researchers from the Harvard School for Public Health and the Boston University School of Public Health said.

Previous studies have suggested a link between a noisy environment and high blood pressure. Loud noise can lead to short-term increases in blood pressure, and sustained exposure could lead to more long-term risk. Scientists also proposed that night-time aircraft noise could be disturbing people’s sleep, which is another risk factor for heart disease.

Although health leaders in the UK stopped short of confirming a causal link between aircraft noise and heart problems, the studies show a strong association, which they said should be taken into account in future plans to expand airport capacity.

The findings come just days after the chairman of the Airports Commission Sir Howard Davies, the man tasked with solving the problem of the South East of England’s airport capacity, said that he would consider adding a third runway at Heathrow and a second runway at Gatwick.

Professor Paul Elliott, from the Centre for Environment and Health said: “The issue here is particularly with areas with the highest levels of aircraft noise. How can you design your future airports and airport capacity [while] trying to keep the exposure to the population below those highest levels? That’s [a question] the policymakers have to take into account. They’re already well aware of the annoyance levels. What we’re adding into the mix is that there may also be an effect on risk of heart disease.”

The Heathrow study covered 12 London boroughs and nine districts outside London. The study area was divided into 12,110 zones with a population of around 300 people each. Data on the noise levels for each small area in 2001, provided by the Civil Aviation Authority, was compared with information from the Office for National Statistics and the Department of Health on hospital admissions and deaths from cardiovascular disease between 2001 and 2005.

The results were adjusted to account for other heart disease risk factors, such as social deprivation and air pollution – although the area-based analysis made separating risks associated with factors such as smoking and ethnicity difficult.

In an editorial for the BMJ, Stephen Stansfeld, professor of psychiatry at Barts and London School of Medicine, said that the results “imply that the siting of airports and consequent exposure to aircraft noise may have direct effects on the health of the surrounding population. Planners need to take this into account when expanding airports in heavily populated areas or planning new airports,” he said.

Matt Gorman, Heathrow’s director of sustainability, said that the airport was already taking “significant steps” to reduce noise pollution by charging airlines more for louder aircraft and offering insulation and double glazing to local residents.

“Together these measures have meant that the number of people affected by noise has fallen by 90 per cent since the 1970s, despite the number of flights almost doubling. We are committed to ensuring this reduction continues,” he said. [The 90% figure is, of couse, not true. For a statement like that to be plausible, it would need to be qualified, indicating just what is 90% reduced.  Sadly it is just a Heathrow public relations statement. AW].

A spokesman for the Airports Commission said: “We are aware of this report and will consider its findings. Environmental impacts, including levels of noise, are within the scope of our considerations and are something we are already looking at.”

Case study: ‘I can hear a plane every 90 seconds’

Margaret Thorburn, 59, lives in Osterley, London, under the Heathrow flight path

“These findings are alarming. Yet they reinforce what many of us living here have suspected for a long time. I have lived in Osterley for 30 years and have been diagnosed with high blood pressure.

“What people don’t realise is that it’s not just the sound of the aircraft – but how you have to adapt your entire audio environment. Everything in the house has to be louder to block out the noise; while your subconcious thought patterns are continuously interrupted.

“Over the years I have no doubt this has taken its toll on my anxiety levels.

“For all you hear about more advanced and quieter planes, the frequency of take-offs and landings are more than I ever remember. It’s not unusual for my day to be interrupted every 90 seconds. At the age of 59, I may well consider moving. But there are many of us that simply don’t have that option.”

http://www.independent.co.uk/life-style/health-and-families/health-news/why-living-near-an-airport-could-be-bad-for-your-health-8867387.html.

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A health warning that could stall debate on expansion of our airports

For those keen to see expansion, the report is more than an unwelcome irritation

SIMON CALDER  (Independent)

Tuesday 8 October 2013

Passengers aboard the first wave of flights descending over west London into Heathrow this morning may have health concerns – but only about their own well-being. They could fret about the short-term impact of a 14-hour flight from Singapore or Hong Kong to Britain, and the longer-term effects of disrupting circadian rhythms by crossing time zones faster than the speed of sunlight. They are, though, unlikely to think about the millions of people over whose homes and lives their Airbus or Boeing is rumbling.

Today’s findings in the British Medical Journal add another important dimension to the question of our age: how damaging is air travel? As every long-haul airline passenger knows, sleep deprivation is an unwelcome irritation. Now researchers say they have identified something much more serious: a “significant association between exposure  to aircraft noise and  cardiovascular health”. The risks appear to rise sharply for people living very close to a busy airport.

For those keen to see expansion, particularly at Heathrow, the report will prove more than an unwelcome irritation; if the findings are sustained and augmented,  the airport expansion debate takes on a new character. Sir Howard Davies is the chairman of the body charged with solving the aviation capacity crunch in south-east England.

Two days ago, he revealed the Airport Commission’s work thus far. Sir Howard gave a meticulous exposition of the factors concerning his commission, from maintaining Britain’s global competitiveness to meeting the UK’s carbon emissions targets. He paid due regard to the concerns of local residents about noise and traffic.

But 48 hours ago a correlation between airport proximity and the risk of heart attacks or strokes was not in the public domain. Now that it is, the spectrum of harm from airports has extended from nuisance to a serious public health threat.

http://www.independent.co.uk/voices/commentators/a-health-warning-that-could-stall-debate-on-expansion-of-our-airports-8867388.html

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EasyJet to fly Newquay to Southend 4 times per week in summer, after it ends Gatwick to Newquay route

EasyJet is to increase its weekly flights between Southend to Newquay from 3 to 4 over the summer period only. This comes after EasyJet recently announced it would not continue its flights from Gatwick to Newquay.  Almost 8,000 passengers flew from Southend to Newquay this summer by EasyJet.  EasyJet – which took over the Gatwick route from Flybe – said there is not enough demand to run a year-round service between Newquay and Southend, and these route from Gatwick was not financially viable for them.  A  Cornwall MP said the loss of the link to Gatwick would be a “blow to businesses across Cornwall”. EasyJet said : “Following Flybe’s decision to cease operating from London Gatwick to Newquay, Easyjet carefully and thoroughly examined the commercial viability of offering year-round services on the route. Unfortunately, after much consideration, all of the evidence clearly shows that there is insufficient demand to sustain a service using an A319 aircraft with 156 seats.”
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Airline adds extra flight to Southend-Cornwall route

Tuesday 8th October 2013

By David Trayner  (ECHO

Airline adds extra flight to Southend-Cornwall route

AN airline is to increase flights from Southend to Cornwall next summer after the route proved popular.

Budget airline easyJet is to lay on four flights a week instead of three after almost 8,000 passengers flew from Southend to Newquay this summer.

Southend Airport will be the only London airport flying to the surfers’ paradise as Flybe is dropping its flights from Gatwick in March.

Hugh Aitken, easyJet’s UK commercial manager, said: “Due to the success of easyJet’s new service to Newquay, we’re delighted to be increasing our flights to Newquay from Southend from three flights to four each week, for August 2014 – the most popular period of the summer.

“We’ll be increasing capacity by 28 per cent for August 2014.”

Easy access to popular Cornish holiday highlights, including Lands End, eco-tourist attraction the Eden Project and miles of stunning beaches in Falmouth, St Ives and Penzance for £30 per person each way has proved a big draw for south Essex travellers.

Meanwhile, Southend Airport was advertised to Cornish residents as the “easy and affordable”

option for business trips and long weekends in London.

Driving from Newquay to the capital takes five hours, but the flight takes just 55 minutes – shorter than a train from Southend to London

Steve Hawkins, 60, from Falmouth, said: “I used the route a couple of times over the summer and thought it was brilliant.

“I only hope they extend it further and make it available throughout the year and not just in the summer.

“It makes it so much easier for me and my wife to come and up see our family in Essex and London.

“It’s a lot better and far more convenient than a car journey, that’s for sure.

“I also think Southend Airport is easier to use than Gatwick. It’s a smaller airport for a start, so you spend far less time walking through corridors to get your bag.

“Then all you have to do is walk across the road and you’re on the train platform.

“Now the Gatwick route has been taken away, I can see people down here really taking advantage of this route.”

EasyJet acquired 26 UK routes into Gatwick from Flybe, which operates three daily return flights on smaller planes than used by easyJet between the airport and Newquay, in a £20million deal in August.

But easyJet has said there was “insufficient demand” to fill its bigger jets to allow it to continue with the schedule when it takes over the landing slots from Exeter-based Flybe on March 30.

Derek Jarvis, Southend councillor for tourism, said: “When easyJet introduced the route, I felt it would be popular with local people in south east England because many have connections and second homes and holiday in that part of the world.

“It’s good easyJet has come to the decision to reintroduce and increase the number of flights.”

No one was available from Southend Airport for comment.

http://www.echo-news.co.uk/news/10722877.Airline_adds_extra_flight_to_Southend_Cornwall_route/

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Newquay-Gatwick flights to end

Newquay airport
1.10.2013 (BBC)
The Newquay-Gatwick route has been regarded as a regional economic lifeline

Flights between Newquay and Gatwick are to end after Easyjet said it would not run the service next year.

The move will end the far south west’s only year-round air link to London.

Easyjet, which has blamed insufficient demand, took over the Gatwick slots from Flybe, but will now run summer-only flights to London Southend.

Newquay Liberal Democrat MP Stephen Gilberttweeted that he was “gutted” and it would be a “blow to businesses across Cornwall”.

In a statement, the firm said: “Following Flybe’s decision to cease operating from London Gatwick to Newquay, Easyjet carefully and thoroughly examined the commercial viability of offering year-round services on the route.

“Unfortunately, after much consideration, all of the evidence clearly shows that there is insufficient demand to sustain a service using an A319 aircraft with 156 seats.”

It said newly announced routes to London Southend and Liverpool will “fly thousands of people into the region providing vital support for the local economy over the summer peak”.

But one businessman, Chris Ingram from Cornwall-based Continental Underfloor Heating, said he was “pretty devastated” about Easyjet’s decision.

The Newquay-Gatwick route has been regarded as a regional economic lifeline, especially since flights to and from Plymouth Airport stopped in July 2011.

Mr Ingram said: “This is going to make it very difficult. It creates a big question for us, whether to invest money in Cornwall or do we need to seriously think about locating some core functions outside the county.”

Cornwall Council, which owns Newquay Airport, said it was “disappointed” that the Gatwick route would end.

It said in a statement: “Providing a regular air link to London is very important to the economy of Cornwall and we remain in discussions with a number of other airlines to maintain this vital link.”

The airline plans to operate four flights per week to and from London Southend from 14 July until 7 September 2014.

The airline will also fly two services per week between Newquay and Liverpool starting on 3 July until 7 September 2014.

 

http://www.bbc.co.uk/news/uk-england-cornwall-24349088

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Gatwick campaign questions Sir Howard’s claim that a new runway is needed

At a meeting on 7th October, Sir Howard Davies, chairman of the Airports Commission, gave a speech concluding that ‘we will need some additional runway capacity in the south east of England in the coming decades.’  The Chairman of GACC (the Gatwick Area Conservation Campaign, Brendon Sewill said:  “That was not surprising – if he had said that no new runway was needed he would have done himself out of a job!  What was significant was that he felt the need to answer the growing volume of opinion against any new runway.  But his statement is bound to add to the worry of people around Gatwick, [and other possible new runway sites] and to the misery caused by blight.” In his speech, Sir Howard ignored the impact that a new runway would have on the local infrastructure – the need for more houses (in the case of Gatwick around 40,000), great pressure on local schools, on the health service and social services, and overcrowding/congestion on roads. GACC does not find convincing the case Sir Howard made for rejecting strong arguments against a new runway, and will be taking up his invitation to submit comments by the end of October.

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Is a runway really necessary?

 8.10.2013  (GACC – Gatwick Area Conservation Campaign – press release)

GACC chairman, Brendon Sewill, attended the meeting in London on 7 October at which Sir Howard Davies, chairman of the Airports Commission, gave a speech concluding that ‘we will need some additional runway capacity in the south east of England in the coming decades.’

Sewill commented: ‘That was not surprising – if he had said that no new runway was needed he would have done himself out of a job!  What was significant was that he felt the need to answer the growing volume of opinion against any new runway.  But his statement is bound to add to the worry of people around Gatwick, and to the misery caused by blight.

Speaking at the meeting, Sewill suggested to Sir Howard that he had appeared to disregard the environmental damage that would be caused wherever a runway was proposed.  Indeed Sir Howard, in his speech, ignored the impact that a new runway would have on the local infrastructure – the need for more houses (in the case of Gatwick around 40,000), great pressure on local schools, on the health service and social services, overcrowding on road and rail.

Sir Howard set out the reasons why many believe a new runway would not be needed:  over-optimistic forecasts; the trend towards more passengers per aircraft; the constraint imposed by climate change targets; and the need to lessen the north-south airport divide.  GACC, however, does not find convincing the case he made for rejecting these arguments, and will be taking up his invitation to submit comments by the end of October.

Making Gatwick bigger than Heathrow today would draw in more airlines and more flights from airports to the north of London.  That would make the north-south divide  worse – it is the north that needs the jobs not the London area.  Indeed it would be a nonsense to attract more people from the north to fly from Gatwick – the M25 would be stationary, not just sometimes, but all day!

www.gacc.org.uk 

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See also

 

Sir Howard Davies speech gives provisional support for a new south east runway – but shows how borderline the decision would be

October 7, 2013        In a speech in central London Sir Howard Davies set out what he described as the Airports Commission’s “emerging thinking” after their first 11 months of work. He said it ” it would be helpful at this stage to set out some of our early thinking on the issue of overall capacity.” He said: “Our provisional view…. is that additional capacity will need to be provided, alongside an overall framework for managing emissions growth, if we are to deliver the best outcomes in both environmental and connectivity terms.” Also that: “…our provisional conclusion from this analysis …is that we will need some net additional runway capacity in the south east of England in the coming decades.” He first went through 4 sets of arguments against a new runway (less future demand for air travel than anticipated; future demand can be met by existing capacity; carbon emissions from growing aviation could breach UK climate commitments; regional airports could take the extra demand). He then gave explanations for each why he believed the optimal solution would be more runway capacity. He said, on the guidance from the CCC on aviation CO2 emissions needing to be restricted that: “We are in the process of updating the Committee on Climate Change’s analysis and will present our findings in our Interim Report”. Comments on the speech are welcomed by the Commission until 31st October.    Click here to view full story…

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The speech is at 

https://www.gov.uk/government/speeches/aviation-capacity-in-the-uk

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and some of the many media stories reporting on Sir Howard’s speech, such as the report from the Telegraph:

Sir Howard Davies backs more runways in Britain

Britain must build new runways for the good of the economy and passengers, the government’s airports commissioner has said for the first time.

By , Leisure and Transport Correspondent (Telegraph)

7 Oct 2013

In his first major public speech, Sir Howard Davies over-ruled arguments from environmentalists and community campaigners against expanding the UK’s aviation market and backed new runways in the South East of England.

Sir Howard gave no hint as to which airports were in the running for new runways but he on Monday drew a line under questions over whether Britain could manage in future using only the capacity that currently exists.

“An attempt to rely only on runways currently in operation would be likely to produce a distinctly sub-optimal solution for passengers, connectivity and the economy,” the former chairman of the Financial Services Authority said.

“Our provisional view…is that additional capacity will need to be provided alongside an overall framework for managing emissions growth, if we are to deliver the best outcomes in both environmental and connectivity concerns.”

While airlines, industry groups and airport operators have long argued that there is a looming “capacity crisis” in the London area, which is driving business abroad, the strong statement from Sir Howard will potentially avoid a long clash with environmental groups over whether Britain needs more runways.

He argued that relying on Britain’s existing capacity may not actually be the best way of reducing the carbon impact of flights, as airlines may start operating more smaller aircraft from airports where there is space rather than flying larger jets from hubs where there is most demand for flights.

“More point-to-point flights in smaller aircraft, together with long passenger movements to airports remote from them, bring significant disadvantages,” he said.

Anti-expansion campaigners have also argued that forecasts of future aviation demand have turned out to be wildly optimistic in the past.

Sir Howard said the UK market has been hit by the recession over the past few years but there is little sign the global aviation market is “saturated”.

The Airports Commission will publish a short-list in December of potential sites that should be considered for extra runway capacity or a whole new hub airport.

Sir Howard has pledged to come up with one single option, although that could potentially involve additional runways at more than one airport, such as Heathrow and Gatwick.

In the short-term, the commission is also looking at how to improve rail and other surface transport links to existing airports.

http://www.telegraph.co.uk/finance/newsbysector/transport/10361657/Sir-Howard-Davies-backs-more-runways-in-Britain.html

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Sir Howard Davies speech gives provisional support for a new south east runway – but shows how borderline the decision would be

In a speech in central London Sir Howard Davies set out what he described as the Airports Commission’s “emerging thinking” after their first 11 months of work. He said it ” it would be helpful at this stage to set out some of our early thinking on the issue of overall capacity.” He said: “Our provisional view…. is that additional capacity will need to be provided, alongside an overall framework for managing emissions growth, if we are to deliver the best outcomes in both environmental and connectivity terms.” Also that: “…our provisional conclusion from this analysis …is that we will need some net additional runway capacity in the south east of England in the coming decades.” He first went through 4 sets of arguments against a new runway (less future demand for air travel than anticipated; future demand can be met by existing capacity; carbon emissions from growing aviation could breach UK climate commitments; regional airports could take the extra demand). He then gave explanations for each why he believed the optimal solution would be more runway capacity. He said, on the guidance from the CCC on aviation CO2 emissions needing to be restricted that: “We are in the process of updating the Committee on Climate Change’s analysis and will present our findings in our Interim Report”. Comments on the speech are welcomed by the Commission until 31st October.
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Sir Howard Davies

 

Aviation capacity in the UK: emerging thinking

7.10.2013 (Airports Commission press release)

In a speech today (7 October 2013) at the Centre for London, Sir Howard Davies, Chair of the Airports Commission, set out the commission’s developing views on the UK’s future airport capacity needs.

The Airports Commission’s emerging thinking, on which it is inviting comments, includes:

– pressure on the UK’s busiest airports is likely to continue to grow even if we take a more conservative view of future aviation demand than the DfT has in the past. This is likely to see levels of future demand in excess of capacity in the south east of England airport system.

– importantly, this appears to be the case even if future aviation demand is constrained in order to meet the government’s legislated climate change objectives.

– it is difficult to see how the market alone could resolve the capacity / demand imbalance in the south east. Regional airports are already serving their local markets effectively but it is difficult to see how they can absorb all the excess demand. The tools available to government to influence the location of flights are also very limited.
Taken together, these considerations point to the need for new runway infrastructure in the south east of England in the coming decades.

In his speech Sir Howard said:

“Our provisional conclusion is that we will need some net additional runway capacity in the south east of England in the coming decades. To rely only on runways currently in operation would be likely to produce a distinctly sub-optimal solution for passengers, connectivity and the economy and would also almost certainly not be the best solution in terms of minimising the overall carbon impact of flights and travel to and from airports.

“A mechanism for managing the carbon impacts of aviation will be needed if the UK is to achieve its statutory carbon targets – just as it will in other countries. This is the case whether new runway capacity is provided in the south east or not.

“I would be interested in comments on the analysis I have set out today.”

The Airports Commission was launched on 2 November 2012. Its terms of reference require that it should report no later than the end of 2013 on:

–  its assessment of the evidence on the nature, scale and timing of the steps needed to maintain the UK’s global hub status

– its recommendation(s) for immediate actions to improve the use of existing runway capacity in the next 5 years – consistent with credible long term options
Its terms of reference also require that it should report no later than summer 2015 on:

– its assessment of the options for meeting the UK’s international connectivity needs, including their economic, social and environmental impact

– its recommendation(s) for the optimum approach to meeting any needs

– its recommendation(s) for ensuring that the need is met as expeditiously as practicable within the required timescale

The commission has indicated that it would welcome responses commenting on the emerging thinking and analysis set out in the speech.

Responses should be sent to emerging.thinking@airports.gsi.gov.uk by 31 October 2013.

The speech is at 

https://www.gov.uk/government/speeches/aviation-capacity-in-the-uk

Link to Commission press release

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There is a great deal of media coverage of  Sir Howard Davies’ speech.
Links to some of the coverage is below: 

ITV

http://www.itv.com/news/meridian/story/2013-10-07/airports-in-the-south-future/

http://www.itv.com/news/anglia/2013-10-07/south-east-needs-new-runway-in-coming-decades/

Independent

http://www.independent.co.uk/travel/news-and-advice/we-need-additional-capacity-airports-chief-sir-howard-davies-clears-the-fog-a-little-over-airport-expansion-for-south-east-england-8864760.html

Evening Standard
http://www.standard.co.uk/news/transport/southeast-needs-new-runway-insists-no10s-aviation-chief-8864460.html 

Daily Mail

http://www.dailymail.co.uk/news/article-2448699/New-runways-WILL-built-South-East-England-warns-Britains-airports-tsar.html# 

Guardian
http://www.theguardian.com/uk-news/2013/oct/07/britain-new-runways-airports-south-east-england

Reuters

http://uk.reuters.com/article/2013/10/07/uk-britain-airports-idUKBRE9960JW20131007

 

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Mentions of climate and carbon emissions in Sir Howard’s speech:

“Others have made similar points [that no new runway capacity is needed] in response to our papers on forecasting and on climate change. They say we should rule out any expansion of capacity for the foreseeable future.”

“But we need to ask whether growth in aviation is consistent with other obligations, for example to play our part in tackling climate change, and – if so – whether any significant expansion in airport or runway capacity is needed to accommodate future demand”

“In particular, it is argued that the UK’s legislated climate change commitments – to reduce UK emissions by 80% by 2050, relative to 1990 – impose a severe limitation on the amount of air travel we can allow. While only 6% of UK carbon emissions today are associated with air travel, that proportion could rise sharply as other sectors reduce their emissions. If we allowed unlimited growth in air traffic, that would impose high costs on the rest of the economy if the overall target is to be met, for example, pushing up domestic heating bills as the energy sector has to decarbonise more quickly. And in some sectors, additional emissions reductions over and above what is already proposed may prove technically infeasible. So, in the absence of a comprehensive emissions trading scheme, the best way to control air travel may, on this argument, be to constrain the growth of airport capacity.”

“The third point, on climate change, is complex. We had hoped, as had many EU governments, that it would be possible to situate aviation in a new and comprehensive European Emissions Trading Scheme. But that scheme has been suspended in the face of opposition from non-EU governments and airlines. Work is under way to prepare a global agreement on containing aircraft emissions, and there are some encouraging signs from the latest round of negotiations at ICAO, but success on that front is still not guaranteed. That uncertainty has brought airport capacity into sharper focus. Some argue that, in the absence of any other agreed constraint, it is appropriate to hold down aviation growth by not building new airports and runways. That may be a second best solution, but it is one which is available.

The best outcome would clearly be a global deal on aviation. But the achievement of such a deal may be some time off and in any case we should not ignore the UK’s own obligations, which are enshrined in the Climate Change Act of 2008.

Here we take our cue from the Committee on Climate Change. In its report on aviation in December 2009 the committee agreed that further growth in aviation could be reconciled with the government’s climate change objectives, as long as planned emissions reductions were delivered elsewhere in the economy, and the industry played its part with increased fuel efficiency and better operating efficiency. Specifically, it suggested that UK-sourced demand could grow by roughly 60% to 2050, relative to a 2005 baseline.

Growth beyond that, unless current assumptions about fuel efficiency and the use of alternative fuels prove to have been overly pessimistic, would put great pressure on the rest of the economy to achieve further carbon reductions, which could be very costly. At present, aviation accounts for only 6 per cent of UK carbon emissions, but on the CCC’s projections by 2050 it would account for 25 per cent.

We are very alive to the climate change problem. We do not believe it would be responsible for any government to accept a massive expansion of aviation with no reasonable expectation of being able to deliver commensurate carbon emission reductions. We are in the process of updating the Committee on Climate Change’s analysis and will present our findings in our Interim Report. However, it seems unlikely that things have changed so much in the last four years that the fundamental message will be different.

The question is whether the growth that the CCC has said is compatible with the UK’s climate objectives implies an expansion in runway capacity. Some argue that it does not – that there is sufficient runway capacity in the UK to accommodate that level of growth and more besides.

The challenge, however, is to deliver the best solution for the UK overall, which has to be one that both achieves our carbon targets and delivers the connections that our economy and society demand. These are not irreconcilable goals. But they mean that, alongside looking at carbon emissions, we need also to consider what our future aviation needs are likely to be and where passengers are going to want to fly to and from over the coming decades, in order to identify what configuration of airport capacity is most likely to facilitate those journeys. In short, how do we deliver the maximum connectivity bang for each of our carbon bucks?”


 

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See earlier:

Committee on Climate Change reminds Airports Commission of carbon restriction on aviation growth

3.7.2013

Lord Deben (John Gummer), who is the Chairman of the Committee on Climate Change, has written to Sir Howard Davies and the Airports Commission on the issue of UK aviation and climate change. He reminds the Commission that UK aviation emissions are included in the UK’s target to reduce economy wide CO2 emissions by 80% in 2050 on 1990 levels. This implies a trade off between emissions from aviation and from other sectors: the higher the level of aviation emissions, the deeper the emissions cuts required in other  sectors to meet the economy-wide target. The CCC has illustrated how the 80% target could be achieved through reducing aviation emissions to 2005 levels in 2050 and reducing emissions in other sectors by 85% on 1990 levels. That would mean limiting demand growth to around 60% in 2050 compared to 2005. Unless the rest of the UK economy can cut emissions by over 85% (unlikely) then aviation demand cannot grow by more than 60%. Lord Deben recommends that this should be reflected in the Commission’s economic analysis of alternative investments in airport infrastructure. Each should be assessed in terms of whether it would make sense if demand growth were to be limited to 60% by 2050.
http://www.airportwatch.org.uk/?p=1959

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The Committee on Climate Change’s 

“Meeting the UK aviation target – options for reducing emissions to 2050″

Executive Summary, December 2009  and Full Report (9MB.pdf)  

In this they said:

Given prudent assumptions on likely improvements in fleet fuel efficiency and biofuels penetration, demand growth of around 60% would be compatible with keeping CO2
emissions in 2050 no higher than in 2005

and

Future technological progress may make more rapid demand growth than 60% compatible with the target, but it is not prudent to plan on the assumption that such progress will be achieved:

and

A 60% increase in total UK demand could be consistent with a range of policies as regards capacity expansion at specific airports

and

In our Likely scenario we assume annual improvements in fleet fuel efficiency of 0.8% together with 10% biofuels penetration in 2050. This combination of improvement in fleet fuel efficiency and biofuels penetration implies a carbon intensity reduction of around 35% in 2050 relative to the reference projection (Figure ES.6). As a result an increase in ATMs of around 55% relative to 2005 levels would be compatible with the target of ensuring that 2050 CO2 emissions did not exceed the 2005 level of 37.5 MtCO2.  Given increasing load
factors over time, an increase in passengers of around 60% on 2005 levels by 2050 would be possible, taking total annual passenger numbers from 230 million to around 370 million. This would be equivalent to taking total passenger trips (one departure plus one arrival) from 115 million in 2005 to around 185 million in 2050.

and

The key implication from our analysis is that future airport policy should be designed to be in line with the assumption that total ATMs should not increase by more than about 55% between 2005 and 2050, i.e. from today’s level of 2.2 million to no more than around 3.4 million in 2050

CCC airport capacity and utilisation 2009

 

http://downloads.theccc.org.uk/Aviation%20Report%2009/21667B%20CCC%20Exec%20Summary%20AW%20v2.pdf

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AirportWatch comment:
This illustrates that if the spare capacity at all these airports was used, it would take up the entire future growth potential of 55% more ATMs, without any new runway.
The current number of ATMs is approximately 2,160,000 per year (from the CCC table).
The CCC says this could rise by 55% which means an extra 1,188,000 ATMs per year.
That means a total of 3,348,000 ATMs per year permitted by 2050 – to perhaps keep within UK climate targets.
If each of the airports listed was at full capacity, that would be a total of 5,577,000 ATMs, which is far above the 3,348,000 ATM limit.
If another runway was allowed, with some additional 230,000 ATMs per year above the current level (a bit less than either Gatwick or Heathrow’s runways at present) that would mean the current level plus 230,000 which is 2,390,000 ATMs.
With the 3,348,000 ATMs limit, the 2,390,000 ATMs would only leave around 958,000 ATMs for growth at all the other airports. That figure compares to the 3,417,000 figure given by the Committee on Climate Change for all the spare capacity at the UK’s airports.
It is much less than a third of it.
So keeping within the CCC recommendation, that might translate into 7 other airports that are not now full (Manchester with a whole spare runway that could take 230,000 more ATMs; Birmingham, Luton, Stansted, Edinburgh, Glasgow, or Bristol which could take at least another 40,000 more ATMs on their single runways – out to 2050.  Leaving only some 500,000 for all the other airports, like Leeds Bradford, Newcastle, Belfast, Cardiff, Bournemouth, Blackpool etc.
Would they accept this?
Surely regional airports are not likely to be willing to sacrifice growth, so that a new runway can be used to full capacity in the south east.
Of course, the number of ATMs or passengers is only a proxy for the carbon emissions. A new runway in the London area, or in the south east, would be likely to be providing flights to a higher proportion of long haul destinations than most regional airports. The European holiday  flights are what most regional airports largely deal with.
So the new long haul airport would take up a higher proportion of the total aviation carbon that could be emitted, leaving even less for expansion at other airports around the UK.
If, that is, the UK sticks to its target of not allowing the international aviation sector to be the only one (with international shipping) that gets preferential and lenient treatment, in terms of its carbon emissions.
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Reigate & Banstead Council urges Airports Commission not to rule out 2nd runway at Gatwick for more detailed consideration

The Leader of Reigate and Banstead Borough Council has written to the Airports Commission, to ask the Gatwick runway scheme to be on the shortlist. Cllr Joan Spiers said in her letter to Sir Howard Davies that the airport is locally important for the local economy and local jobs. But she stopped short of declaring her outright support for a 2nd runway. Council chief executive John Jory said: “This council has not got a formal view yet on a 2nd runway and in no way are we trying to say to the Davies Commission we are giving this the green light and being supportive.” The letter to the Commission mentions “concern about adverse and consequential impacts such as noise, air pollution, additional traffic and pressure to provide more housing” from a 2nd runway and says: “… we believe that Gatwick’s proposals should be included in the Commission’s shortlisted options. This will ensure the fullest possible consideration of the benefits and impacts of a second runway and will allow the Borough Council, on behalf of our local communities, to reach an informed conclusion about the proposals based on robust and comprehensive evidence.” 
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Reigate & Banstead Council urges Airports Commission not to rule out second runway at Gatwick

Friday, October 04, 2013

Leatherhead Advertiser

THE leader of Reigate and Banstead Borough Council has written to the man tasked with recommending how airports should grow in the South East.

Joan Spiers wrote to Sir Howard Davies, who is chairing the Airports Commission, on Friday, to outline the importance of a thriving Gatwick Airport to the local economy and local jobs.

But she stopped short of declaring her outright support for the airport’s proposed second runway.

However, the letter does refer to the “possible negative impacts of a recommendation by the commission to support growth elsewhere”, and urges Sir Howard that Gatwick’s proposals should be included in the commission’s shortlist of options.

That would “ensure the fullest possible consideration of the benefits and impacts of a second runway”, wrote Mrs Spiers, and enable the council to “reach an informed conclusion about the proposals”.

But when the council’s executive debated the letter at a meeting last Thursday, the value of sitting on the fence was questioned.

Redhill West councillor Julian Ellacott said: “I am not convinced what it adds to the debate and believe it can be construed in any which way the reader wants to construe it.

“Gatwick Airport would construe it as a letter of support and I don’t think that is what is intended.”

Council chief executive John Jory said: “This council has not got a formal view yet on a second runway and in no way are we trying to say to the Davies Commission we are giving this the green light and being supportive. The intention is purely to make clear to the commission we think there is merit in taking this project forward for proper full evaluation and consideration.”

However, Green Party members, who are opposed to the second runway proposal, say they felt the letter did appear to “endorse” the expansion.

http://www.thisissurreytoday.co.uk/Council-urges-Airports-Commission-rule-second/story-19877408-detail/story.html#axzz2gtQ0TUW1

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The letter says:

“Gatwick Airport is central to the local and national economy in terms of attracting and retaining global businesses, promoting business growth and providing jobs. Many of the Borough’s residents are employed in jobs directly or indirectly related to the airport. Gatwick Airport itself is one of the major businesses in the area, and as such we believe it should be supported to thrive and be successful. It is understandable that proposals to expand the capacity of any airport, including Gatwick, give rise to concern about adverse and consequential impacts such as noise, air pollution, additional traffic and pressure to provide more housing.

Given the importance of the airport to our local economy, and the possible negative impacts of a recommendation by the Commission to support growth elsewhere, we believe that Gatwick’s proposals should be included in the Commission’s shortlisted options. This will ensure the fullest possible consideration of the benefits and impacts of a second runway and will allow the Borough Council, on behalf of our local communities, to reach an informed conclusion about the proposals based on robust and comprehensive evidence.

We also consider it important that the sponsors of shortlised proposals are required to engage closely and constructively with the local authorities whose communities will be affected by those proposals, and would ask that you ensure that this happens. We aim to work constructively with Gatwick, if their scheme is sleected to go forward so that we can fully understand the benefits and impacts of their proposals.”

Reigate runway statement Sept 2013

 

 

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British Airways considers transferring its hub to Madrid, as CAA lets Heathrow raise charges at rate of inflation

British Airways has warned that it will consider a future outside Heathrow after the CAA revised its proposals to cut landing charges – despite agreeing that the airport was badly managed and staff overpaid. Airlines are annoyed as the CAA ruled that charges will rise at the rate of inflation over the next 5 years instead of the RPI minus 1.3% rate it had proposed in the spring – and well above the real terms cut demanded by airlines. Heathrow has argued for higher charges, so it can give increasing returns to shareholders to ensure foreign investment continues. The airport claims if it cannot raise its charges, it will not be able to invest to make the airport better for its passengers. British Airways accounts for just over half Heathrow’s traffic and now threatens making its hub at Madrid as that would be cheaper and more “realistic”.  The CAA said that its decision to freeze rather than cut landing charges at Heathrow reflected the increasing cost of raising capital for investment. It has allowed Gatwick to increase landing charges by RPI plus 0.5% annually for 7 years and deferred its ruling on Stansted.
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BA considers life outside Heathrow as CAA backtracks on charges

Regulator rules charges will rise at faster rate than first proposed – despite agreeing airport is badly managed and staff overpaid

British Airways has warned that it will consider a future outside Heathrow after the regulator revised its proposals to cut landing charges – despite agreeing that the airport was badly managed and staff overpaid.

Airlines cried foul as the Civil Aviation Authority (CAA) ruled that charges will rise at the rate of inflation over the next five years instead of the RPI minus 1.3% rate it had proposed in the spring – and well above the real terms cut demanded by airlines.

Heathrow, which has argued for increasing returns to shareholders to ensure foreign investment continued, said the settlement would be “the toughest [it] has ever faced” and claimed it could have “serious and far-reaching consequences for passengers”.

British Airways, which accounts for just over half of the traffic at the London hub, said it was a “bad day” for its customers. Willie Walsh, chief executive of the airline’s parent company IAG, said the CAA had let down its passengers by ignoring calls for cuts. He said: “As the only hub airport in the UK, Heathrow exerts monopoly power over its users. Like other airlines at Heathrow, we cannot move to a better-run UK hub that offers customers real value for money.”

But, Walsh added, the cost of Heathrow meant alternative hubs were “more attractive and realistic”. The IAG boss has previously mooted the idea of focusing on Madrid, the base of BA’s sister airline Iberia. Walsh recently said he no longer backs a third runway at Heathrow, at a time when the government’s Airports Commission is considering expanding capacity in the south-east.

Walsh said: “No such alternative exists today but these excessive charges combined with a complacent management team at Heathrow make an alternative hub look more attractive and more realistic. We will carefully consider our next steps.”

The CAA said that its decision to freeze rather than cut landing charges at Heathrow reflected the increasing cost of raising capital for investment. But while it had accepted some of Heathrow’s arguments, the regulator claimed that it had toughened up on operating costs – and concurred with BA’s view that the airport needed better management.

Iain Osborne, group director of regulatory policy at the CAA, said: “We think that with the right management focus they can do a lot to increase operating efficiency. Pay is too high; too much overtime being worked. Throughput rates for security are lower than other airports.”

However, Heathrow’s chief executive, Colin Matthews, who has argued that its shareholders needed rewarding to continue the investment that has transformed the airport over the last five years, said: “This proposal is the toughest Heathrow has ever faced. The CAA’s proposed cost of capital of 5.6% is below the level at which Heathrow’s shareholders have said they are willing to invest. The CAA’s settlement could have serious and far-reaching consequences for passengers and airlines at Heathrow.

“We want to continue to improve Heathrow for passengers. Instead, the CAA’s proposals risk not only Heathrow’s competitive position but the attractiveness of the UK as a centre for international investment.”

But Osborne said the owners – largely foreign sovereign wealth funds – were getting a fair return for a low-risk business. “There’s no reason that passengers should pay more to meet the ambitions of its shareholders.”

However, other airlines accused the CAA of caving in to Britain’s largest airport. Virgin Atlantic said it was “deeply disappointing to see the CAA has bowed to pressure from Heathrow Airport Limited and its shareholders” and said that higher charges were “another hammer blow for both UK consumers and overseas visitors”. It called on the CAA to “urgently review its recommendations”.

Osborne insisted: “We’re not balancing airlines against airports but the passenger interest in lower charges against the passenger interest in better services.”

The CAA meanwhile said Gatwick airport could increase landing charges by RPI plus 0.5% annually for seven years, under a more flexible arrangement. Gatwick gave a “cautious welcome” to the proposals.

However, easyJet, the airport’s largest customer, said it was disappointed with the increase in proposed average charges and warned that leeway given to Gatwick over a possible second runway was a “licence to print money”. It claimed it could lead to passengers paying £28 more per flight.

The CAA has deferred a ruling on Stansted regulation after the airport, under the new ownership of MAG, struck deals with its largest customer Ryanair in recent weeks.

http://www.theguardian.com/business/2013/oct/03/british-airways-heathrow-airport-caa-charges?CMP=twt_gu

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HACAN tweeted:  If BA is seriously looking at life outside Heathrow, it would be a game-changer: 3rd runway would be history


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A day earlier:

 

CAA proposes Heathrow charges rise in line with inflation

Britain’s aviation regulator has proposed that Heathrow cap its landing charges so that they rise in line with inflation, but the country’s busiest airport has hit back and said the cap could have “serious and far-reaching consequences” for passengers.

3 Oct 2013

Britain’s aviation regulator has proposed that Heathrow cap its landing charges so that they rise in line with inflation, but the country’s busiest airport said the cap could have “serious and far-reaching consequences” for passengers.

London’s Heathrow airport had submitted a plan to the UK’s Civil Aviation Authority (CAA) seeking to raise tariffs for airlines by 4.6pc above inflation, as measured by the retail prices index (RPI), for the five years from April 2014.

“Tackling the upward drift in Heathrow’s prices is essential to safeguard its globally competitive position,” CAA chairman Deirdre Hutton said in a statement as the agency published its final proposals for consultation.

The regulator had initially proposed that the annual increase at Heathrow should be RPI minus 1.3pc, but said a key reason for today’s proposal inline with inflation was “due to an increase in the cost of capital driven by higher debt costs, offset to some degree by more challenging targets for operating efficiency”.

Today’s announcement from the regulator was not welcomed by Colin Matthews, boss of Heathrow, who said the “proposal is the toughest Heathrow has ever faced” and warned that the group will “now carefully consider our investment plans”.

He said the cap could have “serious and far-reaching consequences for passengers and airlines at Heathrow”. Plus the proposals “risk not only Heathrow’s competitive position but the attractiveness of the UK as a centre of international investment”.

If the proposals are accepted it will put an end to over a decade of prices rising faster than inflation at Heathrow.

Airlines at the UK’s busiest airport had asked for a 9.8pc a year cut over the five years and a statement from the Board of Airline Representatives in the UK (BAR UK) said the CAA’s decision for Heathrow was “bad news for the UK’s international competitiveness”.

“Airline CEO’s will be reaching for their oxygen masks in the knowledge that they will be forced to pass on excessive airport charges to their customers for the next five years,” said Dale Keller, chief executive of BAR UK.

“Following increases exceeding 300pc over the past 11 years, the latest settlement allowing further RPI [inflation] increases escalates costs to consumers and weakens the international competitiveness of the UK’s only hub airport.”

Sir Richard Branson’s airline Virgin Atlantic issued a statement to say it was “deeply disappointing to see the CAA has bowed to pressure from Heathrow Airport Limited and its shareholders”.

It added that the decision to increase charges was a “hammer blow for both UK consumers and overseas visitors wanting to travel to this country”.

At Gatwick, the CAA said it was satisfied with London’s second biggest airport’s plans to to raise average prices by 0.5pc above RPI for seven years.

Gatwick said it “cautiously welcomes” the CAA’s endorsement of its proposed increase in charges.

“We will now re-double our efforts to work with our airlines partners to make this work in the best interests of all parties, and in particular for passengers,” said Stewart Wingate, CEO of London Gatwick.

The price rises at Gatwick mean core airport charges will increase from £8.80 per passenger in April 2014 to £9.11 in 2020/21, Gatwick said.

http://www.telegraph.co.uk/finance/newsbysector/transport/10351950/CAA-proposes-Heathrow-charges-rise-in-line-with-inflation.html#

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Earlier:

British Airways chief attacks Heathrow boss for ‘ripping off passengers’

Willie Walsh calls on ‘pathetic’ Heathrow chief to resign in row over planned rise in landing fees and cuts in airport spending

The boss of Britain’s biggest airline has accused Heathrow of ripping off passengers and employing too many overpaid staff, calling for the airport’s chief executive to be replaced.

Willie Walsh, chief executive of British Airways‘ parent company IAG, said the airport was planning to raise prices by £600m over five years while cutting spending on facilities.

In a strident denunciation of the London airport’s “abusive monopoly”, Walsh said that Heathrow’s boss, Colin Matthews, had been “pathetic” in trying to make a political argument linking higher airport charges to Britain’s need for more overseas investment.

With the Civil Aviation Authority (CAA) scheduled to rule on the fees that Heathrow can charge airlines, Walsh warned the regulator not to be “hoodwinked” again, and to correct its mistakes of the recent past which Walsh said involved Heathrow being “grossly over-rewarded”.

Walsh said Heathrow’s management seemed “incapable of running their business efficiently within a routine cost-control environment”. He added: “What we see is an airport that has too many people; those people are paid too much.”

The CAA is due on October 3 to set fees that the airport can charge from 2014. It has proposed raising charges below inflation, at RPI -1.3%, over the next five years – a level some way below Heathrow’s demands. Airlines led by BA, the airport’s biggest customer, have demanded a real-terms cut of almost 10% after five years in which charges rose by RPI +7.5%.

Walsh insisted the CAA was “not being robust enough”. He added: “If the CAA does not take a stronger line on this it will continue to be inefficient and that will be at the expense of passengers.”

According to BA’s calculations, increased landing fees will mean every passenger journey costs £7 more than the airline believes is reasonable.

Matthews had provoked Walsh’s ire by saying that lower charges gave no incentive for shareholders to invest and that Britain would not be able to attract foreign capital.

Heathrow’s major shareholders are the sovereign wealth funds of Qatar, Singapore and China, as well as a Canadian pension fund and Spanish construction giant Ferrovial.

Walsh said: “Passengers are paying more than they should and the benefits of that are going to higher-than-average rewards for the shareholders.

“If Colin Matthews is incapable of running the airport and making the investment that’s necessary, and requires an excessive return to justify that investment, then he should be replaced.

“If he was the CEO at a listed entity and came out with the statements he’s come out with, I suspect shareholders would take a completely different view because of the impact on the share price.”

Walsh feared the regulator was succumbing to external pressure to adjust its proposal in Heathrow’s favour. “It makes London, certainly Heathrow, less competitive than the rest of Europe.”

He admitted BA could not leave Heathrow, but vowed to appeal if the CAA did not cut its charges.

Heathrow has said that the CAA’s current proposed charges would mean less maintenance of the airport, and the curbing of planned improvements to baggage facilities and other aspects affecting passengers.

A Heathrow official said: “We have put forward plans for more than £400m of cost savings over the next five years. We want to continue the investment that has been improving Heathrow for passengers.

“Airlines’ proposals for 40% price cuts can’t be achieved without risking under-investment and a return to the out-dated Heathrow of the past.”

http://www.theguardian.com/business/2013/sep/24/british-airways-chief-attacks-heathrow-boss

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CAA proposes Heathrow charges rise in line with inflation over next 5 years

The airport regulator, the Civil Aviation Authority, has proposed that Heathrow should cap its landing charges so that they rise in line with inflation for the 5 years 2014 – 2019. Heathrow is complaining about this, as it wants a much larger increase in its charges and says this price cap would have “serious and far-reaching consequences” for passengers. Heathrow had submitted its request to the CAA for charges to be allowed to rise by 4.6% above the Retail Price Index (RPI), which is a measure of UK inflation. The CAA had initially proposed that the annual increase at Heathrow should be RPI minus 1.3% but said a key reason for its proposal to allow rises in line with inflation was “due to an increase in the cost of capital driven by higher debt costs”. If the proposals are accepted it will put an end to over a decade of prices rising faster than inflation at Heathrow. Airlines like BA at Heathrow had asked for a 9.8% a year cut in landing charges over the 5 years. The CAA propose allowing charges at Gatwick to rise by 0.5% above RPI for 5 years, and is yet to decide on charges at Stansted.  The CAA’s final proposals for all 3 airports would take effect if the CAA makes a final decision in January.

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CAA proposes Heathrow charges rise in line with inflation

Britain’s aviation regulator has proposed that Heathrow cap its landing charges so that they rise in line with inflation, but the country’s busiest airport has hit back and said the cap could have “serious and far-reaching consequences” for passengers.

3 Oct 2013

Britain’s aviation regulator has proposed that Heathrow cap its landing charges so that they rise in line with inflation, but the country’s busiest airport said the cap could have “serious and far-reaching consequences” for passengers.

London’s Heathrow airport had submitted a plan to the UK’s Civil Aviation Authority (CAA) seeking to raise tariffs for airlines by 4.6pc above inflation, as measured by the retail prices index (RPI), for the five years from April 2014.

“Tackling the upward drift in Heathrow’s prices is essential to safeguard its globally competitive position,” CAA chairman Deirdre Hutton said in a statement as the agency published its final proposals for consultation.

The regulator had initially proposed that the annual increase at Heathrow should be RPI minus 1.3pc, but said a key reason for today’s proposal inline with inflation was “due to an increase in the cost of capital driven by higher debt costs, offset to some degree by more challenging targets for operating efficiency”.

Today’s announcement from the regulator was not welcomed by Colin Matthews, boss of Heathrow, who said the “proposal is the toughest Heathrow has ever faced” and warned that the group will “now carefully consider our investment plans”.

He said the cap could have “serious and far-reaching consequences for passengers and airlines at Heathrow”. Plus the proposals “risk not only Heathrow’s competitive position but the attractiveness of the UK as a centre of international investment”.

If the proposals are accepted it will put an end to over a decade of prices rising faster than inflation at Heathrow.

Airlines at the UK’s busiest airport had asked for a 9.8pc a year cut over the five years and a statement from the Board of Airline Representatives in the UK (BAR UK) said the CAA’s decision for Heathrow was “bad news for the UK’s international competitiveness”.

“Airline CEO’s will be reaching for their oxygen masks in the knowledge that they will be forced to pass on excessive airport charges to their customers for the next five years,” said Dale Keller, chief executive of BAR UK.

“Following increases exceeding 300pc over the past 11 years, the latest settlement allowing further RPI [inflation] increases escalates costs to consumers and weakens the international competitiveness of the UK’s only hub airport.”

Sir Richard Branson’s airline Virgin Atlantic issued a statement to say it was “deeply disappointing to see the CAA has bowed to pressure from Heathrow Airport Limited and its shareholders”.

It added that the decision to increase charges was a “hammer blow for both UK consumers and overseas visitors wanting to travel to this country”.

At Gatwick, the CAA said it was satisfied with London’s second biggest airport’s plans to to raise average prices by 0.5pc above RPI for seven years.

Gatwick said it “cautiously welcomes” the CAA’s endorsement of its proposed increase in charges.

“We will now re-double our efforts to work with our airlines partners to make this work in the best interests of all parties, and in particular for passengers,” said Stewart Wingate, CEO of London Gatwick.

The price rises at Gatwick mean core airport charges will increase from £8.80 per passenger in April 2014 to £9.11 in 2020/21, Gatwick said.

http://www.telegraph.co.uk/finance/newsbysector/transport/10351950/CAA-proposes-Heathrow-charges-rise-in-line-with-inflation.html#

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The CAA website says: 

Regulation in the passenger interest, supporting investment and driving competition

3.10.2013

The UK Civil Aviation Authority (CAA) has today published for consultation its final proposals for the economic regulation of Heathrow and Gatwick airports to protect passengers after April 2014.

The proposals are tailored so each airport remains globally competitive and can deliver the customer experience that passengers expect of airports in the 21st century. They challenge airports to operate more efficiently, and to work more closely with airlines to develop competitive offerings for travellers.

Heathrow
Heathrow has called for a 4.6% annual real-terms increase in its charges over five years. Its airlines have asked for a 9.8% per year cut. We propose a price control that will not allow prices to rise by more than inflation (measured by RPI). That compares to our initial proposals for RPI minus 1.3%. A key reason for this is due to an increase in the cost of capital driven by higher debt costs, offset to some degree by more challenging targets for operating efficiency.

The proposals will put an end to over a decade of prices rising faster than inflation at Heathrow. This has supported significant investment in Heathrow over the last decade and our current proposals will also create a supportive environment for further capital expenditure.

Gatwick
Gatwick has set out a series of price commitments to its users, with the average price to grow by RPI + 0.5% per year for seven years. The CAA has today published its detailed analysis that suggests that this is a fair price. In addition, we believe that the airport’s commitments are in passengers’ interests, so they are the basis of our final proposals. They will be backed by a licence to ensure that they are honoured. The licence will also ensure the CAA can continue to act where appropriate to protect users, for instance if there are reductions in service quality that are against the passenger interest.

Stansted
Since taking over ownership of Stansted in April, Manchester Airport Group (MAG), has reached long-term commercial agreements with its two principal customers, easyJet and Ryanair. We announced on 17 September that we would consult on how these may affect the market power assessment before making a final decision on whether Stansted should be regulated and if so, on the appropriate regulatory approach for the airport.

Our final proposals for all three airports would take effect if the CAA makes a final decision in January that they have substantial market power that requires regulation.

Commenting on the final proposals, Dame Deirdre Hutton, CAA Chair, said: “Our proposals demonstrate how we can regulate airports more flexibly where this seems best for passengers, but also setting a tough efficiency challenge. We expect the airports to work closely with airlines to provide high-quality services to passengers.

“Tackling the upward drift in Heathrow’s prices is essential to safeguard its globally competitive position. The challenge for Heathrow is to maintain high levels of customer service while reducing costs. We are confident this is possible and that our proposals create a positive climate for further capital investment, in the passenger interest.

“Gatwick has tabled a revised price offer to airlines that we consider fair, and its new commitments framework offers a chance for a more commercially driven and tailored approach. To protect the diverse interests of passengers, we propose a licence based on the commitments. We would monitor the success of such a new approach and adjust our regulation over time to ensure it remains proportionate.”

The proposals are made using powers set out in the Civil Aviation Act 2012, which allows more flexibility than in the past, so the CAA’s current regulatory proposals reflect the unique circumstances of each airport. The CAA is required to assess the level of market dominance at airports it proposes to regulate, explaining clearly why regulation will achieve better outcomes for consumers than the market and then set out its proposals. To qualify for regulation, an airport must have, or be likely to get, substantial market power, and economic regulation must be likely to improve outcomes for passengers. CAA will publish its decision on market power for both Gatwick and Heathrow and, where appropriate, its final decision on the necessary form of regulation in January.

An overview of the CAA’s consultations for the airports can be seen here, with links through to the separate documents: Preparing for a future with passengers at its heart.

The consultation documents for each airport along with several associated documents can be found here: Economic Regulation of Heathrow, Gatwick and Stansted

A briefing about airport economic regulation, setting out why regulation is necessary and the CAA’s approach is available here: CAA Briefing Note.

Notes to Editors
1. The CAA’s consultation on its final proposals for regulation and draft licences for each airport will run until 04 November 2013.
2. Final decisions on market power, economic regulation and final licences for those airports found to have market power will be published in early 2014.
3. The CAA is the UK’s specialist aviation regulator. Its activities include: making sure that the aviation industry meets the highest technical and operational safety standards; preventing holidaymakers from being stranded abroad or losing money because of tour operator insolvency; planning and regulating all UK airspace; and regulating airports, air traffic services and airlines and providing advice on aviation policy from an economic standpoint.

http://www.caa.co.uk/application.aspx?catid=14&pagetype=65&appid=7&mode=detail&nid=2291

 

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Comments from AirportWatch members:
Seems to me that ONLY by charging nearer to a market rate that reflects the restricted supply of landing slots at Heathrow can we hope that:
1) flights that do not need to be at LHR would move elsewhere, hence reducing the supply problem
2) that flights overall might reduce
3) that the owners would be able to profit without having to push the UK into another runway or two i.e. they could stop making the false arguments about needing an extra runway for the good of the country when in fact it would only be for the good of BAA (= Heathrow airport).

It strikes me as quite reasonable that market forces should be allowed to come to bear in this case – i.e. there is a restricted supply, charges that reflect this would cause redistribution and possibly curtailing of demand. If there is so much demand for Heathrow, the airlines and passengers will bear the cost.  That is how markets are meant to work.

In addition the premium at LHR might reasonably reflect the premium that users receive there in terms of choice of airline and route, travel time to reach the airport, and other costs that they save versus using Gatwick etc and having to change at another hub etc

What is the argument against this?

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The main argument against this would, of course, come from the Heathrow airlines, especially British Airways (‘BA’) because if Heathrow Airport Limited (‘HAL’) were to be deregulated and able to charge whatever the market would bear (i.e. a market clearing price), its airport charges would soar.  This would cost the airlines a great deal of money because they already try to charge whatever the market can bear.  It would in fact be a ‘double whammy for the airlines because it would also decimate the value of their Heathrow slots because the secondary market in slots would collapse.  Indeed this would be the evidence that a market clearing price had been reached.
It is questionable whether passengers would end up paying higher fares because airlines operating out of Heathrow already charge whatever the market will bear.  This is what gives them the so-called ‘Heathrow premium’, and it is the Heathrow premium which explains why Heathow slots change hands for such high prices. It arises because local market demand outstrips capacity, and the existence of the Heathrow premium helps explain why Willie Walsh is not desperately lobbying for extra capacity at Heathrow.
So, increasing Heathrow’s airport charges would simply transfer profits from the airlines – especially BA – to the airport operator, HAL.  Using an example of a £10 (i.e. about 50%) increase in airport charges, this would generate an extra £700m a year profit for HAL at the expense of the airlines using Heathrow.  This would be a huge profit transfer and obviously the airlines would fight like terriers to oppose it.  
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Heathrow Airport attacks regulator’s price-control plan

3 October 2013  (BBC)

 

Plans to cap Heathrow landing fees are a “good deal” for passengers, says Richard Moriarty from the Civil Aviation Authority

Heathrow Airport has criticised proposed new price controls on the annual fees it can charge airlines.

The Civil Aviation Authority (CAA) on Thursday said that Heathrow’s yearly rise between 2014-18 should not be more than the retail price index (RPI).

But the airport’s chief executive Colin Matthews said this could restrict investment and have major consequences for passengers and airlines.

The CAA also proposed capping rises at Gatwick airport to RPI plus 0.5%.

Heathrow airport has been more expensive than others, says travel expert Simon Calder, due to “arcane” charges

Airports charge airlines for use of their facilities, including landing fees, security and use of terminals.

Heathrow had submitted a plan, rejected by the CAA, seeking to raise annual tariffs for airlines by 4.6% above RPI inflation.

Dame Deirdre Hutton, chairwoman of the CAA, said in a statement: “The proposals will put an end to over a decade of prices rising faster than inflation at Heathrow.

“Tackling the upward drift in Heathrow’s prices is essential to safeguard its globally competitive position. The challenge for Heathrow is to maintain high levels of customer service while reducing costs. We are confident this is possible and that our proposals create a positive climate for further capital investment, in the passenger interest.”

But Mr Matthews said: “This proposal is the toughest Heathrow has ever faced. The CAA’s settlement could have serious and far-reaching consequences for passengers and airlines at Heathrow.

“We want to continue to improve Heathrow for passengers. Instead, the CAA’s proposals risk not only Heathrow’s competitive position but the attractiveness of the UK as a centre for international investment. We will now carefully consider our investment plans before responding fully to the CAA.”

Despite the criticism, the CAA’s price control is an improvement on a draft proposal earlier this year that Heathrow’s five-year cap should be RPI minus 1.3%.

‘Disappointing’Airlines said that the CAA’s final proposals on Thursday were too lenient and that it had bowed to pressure from Heathrow and its shareholders.

Willie Walsh, head of British Airways’ parent group IAG, said: “With this settlement, Heathrow will continue to levy charges well above other major hub airports.

“We want a Heathrow that is efficiently run, fairly rewarded and priced comparably with other airports. We will carefully consider our next steps,” he said.

Virgin Atlantic said in a statement that the CAA’s proposal was “deeply disappointing”.

For Gatwick, the CAA’s price control will cover seven years from April 2014. The owners of the West Sussex airport gave the proposal a “a cautious welcome”.

Gatwick chief executive Stewart Wingate said: “The CAA’s proposal to take forward our commitments framework would deliver an improved future outcome for passengers in terms of service quality, facilities and price.

“We will now redouble our efforts to work with our airlines partners to make this work in the best interests of all parties, and in particular for passengers.”

A CAA proposal on a charging regime at Stansted for 2014-19 is expected next week, with a final ruling on all three airports due in January.

http://www.bbc.co.uk/news/business-24377802

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