Gatwick has published a 50 page dossier attacking the work and conclusions of the Airports Commission

Sir Howard Davies must have been hoping that after the Airports Commission recommended a Heathrow runway, that would be the end of the matter. However, assessment of the Commission’s conclusions and their analyses has been highly critical. Gatwick airport and its backers have complained vociferously about failings in the Commission’s report – on the economics, the passenger forecasts, the cost and the deliverability. The figures for the economic benefit to the whole country of a Heathrow runway can be looked at in a number of ways, and on some assessments come out little higher than those for Gatwick. Gatwick says the Commission used out of date numbers for Gatwick passengers, and that has seriously undermined the case for Heathrow. Gatwick also argue that the costs of road works and tunnelling the M25 for the Heathrow runway have been considerably underestimated, and this undermines the Commission’s entire case. Gatwick also says the Commission’s interpretation of the law on the Government’s requirement to meet air quality rules is incorrect. Gatwick has sent a full response to the Commission report, setting out their concerns. It can be accessed here.



Sir Howard cannot shake off the airport debate for RBS just yet

Any hopes Sir Howard had of focusing on the RBS chairmanship look set to be dashed

By Ben Marlow

5 Sep 2015  (Telegraph)

Sir Howard Davies must have breathed a huge sigh of relief last week when he finally took over as chairman of Royal Bank of Scotland, having finally delivered his long-awaited but controversial report into airports expansion.

He is taking on one of the City’s most important and most challenging jobs – trying to engineer the rescue of one of Britain’s largest high street lenders from a decade of disaster mired in massive losses and huge misconduct fines.

Ultimately he will be expected to sell off the taxpayer’s stake and return it to public ownership as a healthy, profitable entity. It’s a mammoth undertaking but one that could be seen as less daunting than being the government-appointed airports tsar tasked with solving Britain’s long-standing aviation capacity crisis.

Davies’ Airports Commission was set up in 2012. It took a year to compile a shortlist of options: a third runway at Heathrow; a second at Gatwick; or a new airport in the South-east called the Heathrow Hub; and a further two before the Commission finally published its 342-page dossier in June. Having racked up £20m of costs, the Commission ruled that Heathrow was the “best answer”.

If Sir Howard was hoping his recommendation might mean a quick end to the arduous three-year journey so he could concentrate on his new post at RBS with a clean slate, he is going to be bitterly disappointed.

The Commission’s decision was always going to provoke a long and public battle between Gatwick and Heathrow to win the backing of Government for their respective expansion plans, but it now looks like the people behind Gatwick are going to put up one almighty fight.

Having already published two reports outlining flaws in the findings, Gatwick’s bosses are about to send a third, more comprehensive, set of files to David Cameron. Some of the points have already been made but there are several new revelations that should strengthen Gatwick’s case.

Chief among those is the claim that the Commission’s calculation of the economic benefits of expanding Heathrow included the boost it would deliver to countries such as Germany and the US. If this is the case, then, frankly, Sir Howard’s entire work begins to look a little farcical.

Surely this entire exercise was predicated on which proposal would be most beneficial to the UK economy, not any other country?

Once those figures are stripped out of the Heathrow case then there is very little to choose from between it and Gatwick, according to sources close to Gatwick. This point is further strengthened by Gatwick’s contention that the Commission’s economic analysis was based on Treasury guidelines, which showed that its economic impact was similar to that of Heathrow.

Yet despite this, the Commission chose to rely on separate analysis by PwC, which gave Heathrow a clear advantage, Gatwick claims.

Gatwick will also once again draw attention to the traffic forecasts that the Commission used. And rightly so. The figures forecast that it will hit 40m passengers a year by 2024, when in fact the airport will do so this year.To get such key figures so disastrously wrong is massively embarrassing and risks undermining the Commission’s entire case. No wonder Gatwick is mounting such a fierce fightback.

Another big oversight appears to have been made around the Commission’s estimate of costs to upgrade road and rail links to expand Heathrow, including putting the M4 in a tunnel, and who will foot the bill. Sir Howard’s number crunchers have come up with a figure of £5bn, which is probably far too low, but, more worryingly, the Commission said that Heathrow could pay for this and the boss of Heathrow has already ruled that out.

Gatwick said that its owners, the infrastructure fund Global Infrastructure Partners, which also owns City and Edinburgh airports, can provide a fully financed proposal and is willing to bear the expansion risks.

Gatwick also argues that the Commission’s interpretation of the law on the Government’s requirement to meet air quality rules is incorrect.While Heathrow already breaches EU rules on air pollution in some areas, even before expansion, Gatwick does not and is not forecast to, it claims.

Supporters of Gatwick argue the case for its expansion is overwhelming because it’s cheaper, more deliverable, and would mean a further dent to Heathrow’s monopoly, while the latter’s claim is seriously constrained by cost, air quality, and noise.

As Stewart Wingate, Gatwick’s chief executive, steps up his campaign in the coming weeks, any hopes Sir Howard had of focusing on the RBS chairmanship look set to be dashed.



Gatwick intensifies assault on Airports Commission

The West Sussex airport has published a 50 page dossier attacking the work of the Government-appointed commission

Gatwick has intensified its attack on the Airport Commission by publishing a lengthy dossier of criticisms that it hopes will convince the Government to reject a third runway at Heathrow.

The West Sussex airport issued a 50-page report that outlined its “areas of concern” with the work of the government-appointed commission, which was tasked with deciding on a solution to Britain’s looming aviation capacity crisis.

Gatwick’s plan to build a second runway was last month rejected by the commission in favour of a third landing strip at Heathrow that was proposed by the company that owns the west London airport.

In the dossier, Gatwick claimed that “key elements” of the commission’s final report, which laid out the case for another Heathrow runway and took almost three years to produce, “suffer from omissions or superficial analysis in some critical areas and are not sufficiently thorough in a number of important respects”.

Gatwick believes that the Sir Howard Davies-led commission based its findings on “incorrect” traffic estimates and relied upon economic forecasts made by PwC, which the West Sussex airport argues are unsound.

Gatwick also claims that the commission underestimated the “quantum” of construction work required to build a third Heathrow runway by 2026. Overall, the West Sussex airport believes that the commission did not “set out reasoned or transparent justifications” for its conclusions and that its “rationale is either opaque or completely absent”.

A spokesman for the commission was on Monday forced to defend its work in the face of the Gatwick attack and said: “The evidence in the final report was subject to extensive analysis and consultation and we are confident that it is fit for purpose.”

The dossier marks the second major assault by Gatwick on the work of the commission in the space of the month, and builds upon concerns the airport aired just a fortnight after Sir Howard recommended that the Government supports a Heathrow runway.

David Cameron, the prime minister, has set up a cabinet committee to consider the commission’s final report and has pledged to decide whether to back Heathrow expansion by the end of the year.

Stewart Wingate, the chief executive of Gatwick, plans to use the coming months to lobby MPs and said the airport would be “very active” during the political party conference season, which starts in September.

Prominent Conservatives, including Boris Johnson and Zac Goldsmith are vehemently opposed to Heathrow expansion and some local communities are concerned it will lead to more air pollution and aircraft noise.

Building another runway in west London will cost an estimated £17.6bn and require a further £5bn from the taxpayer to alter road and rail links to Heathrow. Gatwick expansion would be cheaper, costing just £7.1bn and an additional £800m from the government for upgrades to transport infrastructure.




Airports Commission’s findings simply don’t add up

17/08/2015  (Gatwick Airport press release)

A copy of Gatwick’s full response to the Airports Commission report can be accessed here

  • Airports Commission’s findings are inconsistent and flawed
  • Traffic forecasts don’t even take into account its own night flight ban
  • Gatwick today has published a full, detailed, and thorough response

Gatwick Airport today published a full and detailed response to the Airports Commission Final Report pointing out key errors, omissions, and flaws as Sir Howard Davies’s recommendation for Heathrow expansion continues to unravel.

Just one of the key flaws in the report surrounds Sir Howard’s proposed ban on night flights at Heathrow. This would inevitably mean fewer services if applied, but this was not factored in to the Airports Commission’s own traffic forecasts for Heathrow.

The restrictions would impact on the number of long haul flights to and from growth markets in the Far East – the issue at the heart of the decision to recommend Heathrow – further calling into question the robustness of the Commission’s analysis.

Gatwick CEO Stewart Wingate said:

We expected a well-considered examination of all options, but instead the final report contains so many omissions and basic errors that its reliability as the basis of aviation policy must be called into question. The findings of this report simply do not add up.

Britain is in danger of losing out once again if we repeat mistakes of the past – Heathrow has failed time and again and the Airports Commission report and the conditions placed on expansion have not solved the huge obstacles confronting it.

“In recent weeks, it has become abundantly clear that Heathrow won’t meet these conditions, nor will they pay for the £6 billion in surface access improvements needed, and Heathrow’s airlines have shown they don’t want to pay for the runway. The recommendation for Heathrow is unravelling by the day.

I remain confident that when all the risks and benefits are properly considered, Gatwick will still represent the best option for UK airport expansion.”

The Commission used its traffic forecasts to calculate the potential economic benefits each airport would deliver and Gatwick’s response lists several fundamental assumptions that dramatically underplay traffic at Gatwick and overplay predictions for Heathrow, including:

  • expecting Gatwick to reach 40 million passengers in 2024 whereas the airport will reach that number this year
  • estimating that Gatwick will generate only two million passengers in the first year of operating with a second runway; in reality Gatwick grew by 2.7 million passengers last year with a single runway
  • predicting that, after five years with a second runway, Gatwick will have an additional eight million passengers – less than it assumes Heathrow would have after one year with a third
  • between 2025 –2030 Heathrow is assumed to grow by 36 million passengers compared to only 9 million at Gatwick.

In addition to drawing attention to the Commission’s flawed traffic forecasts, Gatwick’s full response highlights a range of other flaws in the Commission’s analysis, including:

Economic benefits: the Commission’s own economic analysis, following Treasury guidelines, shows that the economic value of each scheme is virtually the same. The Commission, however, emphasises and widely quotes the conclusions of PwC analysis, despite the Commission’s own expert panel urging caution about attaching significant weight to these results, stating that care is required in assessing its “robustness and reliability”.

Costs: Heathrow’s costs are multiples of those for Gatwick and yet the Commission assumes airport charges will go up by the same amount for both – from £20 to £31 for Heathrow and £9 to £20 for Gatwick.  The Commission also disregards Gatwick’s commitment to enter into a binding obligation to cap charges at less than £15.

Financing: between 2023 and 2025, Heathrow’s plan requires as much as £6.76 billion to be spent each year on average, an average spend of more than £560 million per month. T5 construction only achieved a maximum spend of £85 million per month. Neither Heathrow nor the Commission present any evidence as to how the expenditure for this unprecedented scale of construction could be managed in practical terms and could actually be delivered.

Deliverability: the Commission confirms that there are no overriding environmental or other reasons to believe that Gatwick’s second runway could not be delivered by 2025. In contrast, while the Commission has outlined a massive quantum of work proposed for Heathrow in general terms, it has not adequately considered the detail, the considerable risks, or the cumulative impact and interdependency of the challenges involved, so is unable to say with any confidence that the work is actually deliverable by the 2026 – the date assumed by the Commission.

For example, the Commission’s assessment of the complex challenges of construction at Heathrow does not accurately portray the scale of construction impacts many of which are outside the control of the promoter and therefore pose serious impediments to obtaining planning consent. The risks to cost and programme are considerable due to the scale, complexity and cumulative effects of construction. Constructions risks arise from:

  • putting the M25 into a tunnel and widening it
  • diverting the A4 and widening the M4
  • constructing the Southern rail link
  • constructing Terminal Six while maintaining access to T5
  • managing the impact over an extended period on M4, M25 and local roads
  • delivering a solution for the potentially toxic landfill on the site and moving and rebuilding the existing Energy from Waste plant, and
  • implementing a Congestion Charging scheme, the implications of which are not known.

Air quality: the Commission’s analysis of air quality issues at Heathrow does not withstand scrutiny as its conclusions are based on an incorrect interpretation of the law. Its analysis is also incomplete and inconsistent in several material ways and relies upon a notional Air Quality Plan that is yet undrafted and so cannot at present be assessed. The Commission’s analysis confirms Gatwick’s assessment that Gatwick’s new runway can be delivered without exceeding the legally binding air quality limits.

Noise: the Commission concludes that a three runway Heathrow will have a lower noise impact than a two runway Heathrow today. It also largely ignores the fact that Gatwick’s noise impacts would be an order of magnitude lower than Heathrow’s and has avoided meaningful assessment of Heathrow communities newly affected by noise.

Notes to Editors:

A copy of Gatwick’s full response to the Airports Commission report can be accessed here.