BA under fire as it raises long-haul fuel surcharge

Passengers on flights over nine hours will now pay £5   more for a single ( £10
return).     Short-haul charges have been held at £8, or £16 return.   Commercial
director Robert Boyle sought to justify the price rises by saying: “The cost of
fuel has again risen significantly in recent weeks.   Unfortunately, we have little
choice but to pass on some of this extra cost to our customers. Fuel continues
to be our second largest cost and we expect our fuel bill this year to be more
than £2bn.”   Ryanair had guaranteed “never to apply a fuel surcharge, not now,
not ever”.   While Brent crude yesterday slipped by $0.91 to $70.31 a barrel, it
is still not far off the highs attained a month ago. The price rises have been
caused by continuing tensions in the Middle East, increasing attacks on the oil
industry in Nigeria and the advent of the US driving season.   (Independent on



Selling Heathrow won’t pay for a Thames airport



Director of Finance online


How do you pay for a £20bn airport in the Thames estuary? Sell the old one at Heathrow. There’s one snag though: the reason that land round Heathrow is so valuable is because there’s an airport there: close it down and the value collapses.

The advocates of Thames airports – Boris Island (backed by London’s mayor) and the architect Lord Foster’s similar waterbound terminal – have latched on to selling Heathrow to finance their dream projects. A value of £12bn has been put on the existing west London airport.

Certainly property values round Heathrow are high – much higher than elsewhere in the Home Counties. That applies to both residential and commercial buildings. But it is the airport that makes the property valuable. If there is any doubt that Heathrow is the magnet, look how values fall the further away from the terminal they are.

Companies want to be near Heathrow. It means less travel from office to airport for busy international executives and less distance for goods – especially high-value items – imported and exported by air. And contrary to the idea that people don’t want to live near a runway, house values are higher than in other suburbs. That’s hardly surprising: some 77,000 people work at the airport for 320 different companies and more than 200,000 have jobs that depend on Heathrow. They want to live close to their work.

But close the airport and those jobs go. Firms will no longer pay high rents or high land prices to be there: workers won’t need to live near the terminals. So the idea of selling Heathrow for its current value is flawed. Once the planes stop flying, it is just another brown-field site for housing or light industry with no obvious demand to be there.

Of course land values round the Thames islands would rise if workers and companies moved there – except that islands are surrounded by sea. Workers would have to live within commutable distance, but they would be spread over a much wider area of Kent or Essex, producing a less concentrated effect on local values and making it harder for the airport promoter to buy up surrounding land and profit from the increased demand.

And how great would that demand be anyway? Companies like being round Heathrow because it is handy not only for the capital but for the west of England, the Midlands and North, well connected by motorways to them all. An airport in the Thames east of London offers none of those easy connections. Not only is it unlikely to boost local values, it might not be worth the £20bn cost (nevermind the additional £30bn infrastructure spending.)

But selling an unused airport at Heathrow certainly won’t raise the cash. The Thames islands lobby need to find a new source of funding.

georgecrozer says:
December 12th, 2011 at 9:00 pm

Government cannot dictate to which airport customers fly !! Its a market out there!! The proposals for a six runway airport in the estuary would need the traffic from all three London airports .. and some .. to be viable. and probably from day one.. What you quite rightly describe in this article could be the same for all three airports.
The Thames estuary is rich in wildlife and protected by EU law and International Treaty and as such is some of the most valuable property in Europe. Lets be proud of that … cherish it … and save it for future generations to enjoy.. say NO ESTUARY AIRPORT !!