General News
Below are links to stories of general interest in relation to aviation and airports.
Airlines oppose higher landing fee to cut immigration queues at Heathrow
BA, Lufthansa, Scandinavian Airlines and Virgin are - unsurprisingly - totally against landing fees being used to pay for government border agency staff. An increase in landing fees, which are now £19.30 per passenger at Heathrow, must be approved by the CAA. A % is already used by BAA to pay for immigration control infrastructure, such as the new e-passport gates, but the money has not been used before to pay immigration staff. UK Border Force staff numbers have been cut by 800 in the past 2 years and a further 700 jobs will be lost by 2014-15. More than 550 volunteers (many retired and those recently redunded) are reportedly going to be drafted in to help man UK borders during the Olympics. Meanwhile Willie Walsh tried to make out some of the money from APD could be used for this. APD is not for that - it is to compensate for lack of VAT and fuel duty on air travel.
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Delta first airline to buy an oil refinery, to get control of jet fuel costs
Delta Air Lines has agreed to buy a disused oil refinery near Philadelphia from ConocoPhillips to offset the risk of higher jet fuel prices. The airline says it is just a modest investment of $150 million - about the same as buying one Boeing 777. Delta h as received $30 million from the state of Pennsylvania as part of a deal to support job creation, and says it would spend $100 million more to refurbish the plant to increase its output of jet fuel. The company estimated this will cut its annual jet fuel bill by some $300 million, once the refinery was refurbished and operating again. To achieve similar fuel savings, it would have to buy 60 new-generation narrow-body planes like the Boeing 737, a capital investment that would total $2.5 billion. Delta said it had also struck a three-year agreement with BP to supply crude oil to the refinery.
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Olympic Games, despite conventional wisdom, present no large benefit to airlines
The Olympic Games or any sporting event when held in a large city present little increase in overall air passenger numbers, according to industry body, CAPA. While leisure demand increases, corporate traffic tends to reduce. BA and Virgin do not expect much rise in passenger numbers from the Olympics - perhaps even a slight loss. The number of business passengers is likely to fall during the Games. There is likely to be a small reduction in the numbers of Brits going abroad during the Olympics. During the 2008 Olympic Games in Beijing, airlines recorded traffic – and financial – losses as security measures stunted growth. BAA does not expect to get back even as much as 10% of what it has to spend to prepare for a couple of very busy Olympic days, such as 13th August, when an increase of 45% is expected.
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Slowdown in cheap flights gives boost to British economy
New figures published by the Office of National Statistics show that the British are taking almost 20% fewer overseas holidays compared to 3 years ago, whilst the number of foreign tourists visiting the UK is virtually unchanged. This means a major boost for the UK Balance of Payments and shows that the Government’s policy of increasing APD is actually benefiting the UK economy, contrary to the claims made by the UK’s major airlines - and foreign tourists are not being deterred by APD from visiting the UK. The latest statistics show a decrease in overseas leisure trips by UK residents from 60 million to 49 million between 2008 and 2011 leading to a reduction in the UK’s tourism trade deficit from £20 billion to £13 billion. Inbound tourist numbers fell by just 300,000 over the same period. The boom in cheap leisure flights and the generous tax breaks given to the aviation industry actually harm the UK economy and damage traditional UK tourist destinations
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Queues at Heathrow, cuts to UK Border Agency budget and what it costs the taxpayer
Long queues at Heathrow for Border Control are getting a lot of news coverage, and there are fears this is damaging the reputation of Heathrow. Some claim even damaging the reputation of the UK. Fast Track passengers – in many cases business passengers who are considered as vital for the British economy – also often have to queue for up to half an hour. The Border Force has agreed a series of performance targets with Heathrow setting out the maximum acceptable queuing times. Immigration controls are not done by BAA itself, but by the UK Border Agency. The UK Border Agency gets about 35 - 40% of its funds from fees (visa charges, permits etc - not from the airport or port), the rest is paid by the taxpayer. Quite how much border control at UK airports costs is not revealed. Civil service unions have predicted even longer queues if the Border Force presses ahead with plans to cut staff. The Telegraph says the number of Border Agency staff at airports will fall from 8,500 in October 2010 to 7,322 by April 2015. The Immigration Service fears delays could get much worse during the Olympics.
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European Parliament begins scrutiny of EU airport noise rules
IIn December, the EU presented its " Better Airports" legislation package, which it said is "a comprehensive package of measures to help increase the capacity of Europe's airports, reduce delays and improve the quality of services offered to passengers". The European Parliament will soon start scrutinising the draft regulation. The Airports Package aims to replace the airports noise directive with regulations and generally water down protection for residents. But the MEP in charge of the dossier and steering the noise regulations through the Parliament appears sceptical about the Commission's motives. On noise, he feels the Commission has put economic considerations above all else when drafting the regulation, which is not acceptable. The regulation is aiming to have fewer restrictions on airports, so their growth is not jeopardised. There are hopes of banning the noisiest planes, and decide on a timetable following a "cost effectiveness assessment". The worry is that noise reduction that has economic costs will be opposed.
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IAG sees more airline failures, hails Gulf rivals
Willie Walsh expects more airlines to struggle this year, against higher oil prices. Weaker airlines will have dificulty in generating the cash needed to ride out high oil prices. Though IAG cannot sell Bmibaby or Bmi Regional, it is looking for other airlines to buy. About half a dozen European airlines have folded in the past year including Barcelona-based Spanair which stopped trading in January despite a cash injection from the Catalan government. Iberia will be creating a low cost airline, Iberia Express, designed to replace labour rules at the main carrier, and against which Spanish pilots are staging a series of strikes to try to halt the creation of the cheaper sister airline. Heavyweight Gulf carriers like Emirates, Abu Dhabi's Etihad and Qatar Airways are mopping up traffic for fast-growing East-West hubs.
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BAA’s group net debt rose by 3.6% from £10.4bn in 2010 to £10.8bn in 2011
BAA's passenger numbers have recovered since the low point of the credit crunch, but its balance sheet is still in the red. BAA's group net debt rose by 3.6% from £10.4bn in 2010 to £10.8bn in 2011. Their first quarter pre-tax loss was £231.4m. The business owes more than £10bn, and so has a large annual interest bill (it paid out £388m last year), and spends £1bn annually on improving its airports. BAA has not made a quarterly profit since it was acquired in 2006. It has not paid corporation tax in years, has borrowed even more to pay investors who leveraged up to the hilt when they bought the business in the first place. Does paying a sizeable dividend appear wise when you owe £10bn and you haven't made a profit in years?
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Nantes: 20th day of the hunger strike against the airport plan, 4 strikers.
On the 15th day of the Nantes airport hunger strike, one of the farmers has lost 11 kilos and the other 12 kilos. They are determined to continue, and have been joined by two other hunger strikers. They have also been visited by José Bové, the famous campaigner and now an MEP, who will keep them company overnight. He says the presidential contenders, Francois Hollande and Nicolas Sarkozy, must end their silence on the airport protest now the hunger strike is entering its 3rd week. They can no longer ignore it and they need to find a way to suspend the compulsory purchase of land and resume talks. Bové says the politicians have all the means they need to find a way out without losing face.
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China’s emissions trading pilots are starting to take shape as the EU’s flagship climate policy looks increasingly fragile.
There are 7 new pilot carbon emissions trading schemes in China, 5 in municipalities (Beijing, Chongqing, Shanghai, Shenzhen and Tainjin) - and two provinces (Guangdong and Hubei from 2013). These pilot projects will pave the way for a national trading scheme (ETS) to be implemented in 2016. Details are steadily emerging of the pilot schemes and China’s commitment to tackling climate change is growing increasingly clear, making it more difficult for Europe to argue that it is out in front and unable to increase its ambitions. At the same time as developing its own emissions trading schemes China is currently objecting to flights between China and Europe being included in the EU ETS. A new report from Sandbag suggests that China could include flights from the major cities within the emissions trading pilots and thereby enact the equivalent measure clause which would remove them from the EU scheme.