Wingate again “prepared to give assurances” (ie. but not yet) on GIP not selling Gatwick soon
The Times – which actively supports a Gatwick runway – has a feature on Stewart Wingate. This repeats (uncritically) Gatwick’s claim that it can build a 2nd runway without public subsidy. The reality is that at least £12 billion of public money would be needed to upgrade surface access, which struggles now, let along with 35 million more passengers. The Times repeats Wingate’s claims (very dubious) that the runway can be added while capping airport charges. He blames “Treasury orthodoxy” by the Airports Commission, stemming from George Osborne, which favoured Heathrow “from the very beginning” for not backing Gatwick. Wingate admits he has spent almost £40 million on advertising, planning for the 2nd runway and trying to undermine Heathrow. If Gatwick got a 2nd runway, he would personally get up to £5 million for a sale of the airport (there would be a total of £10m for senior managers, and he gets half of that). Mind you, he has a “£475,000 salary plus up to 100% bonus.” GIP only paid £1.5 million for Gatwick, but gave big dividends, of £48m in 2015 and £133m in 2014. Wingate says GIP is “prepared to give the government reassurances that it would not sell out immediately should it get the green light for a second runway.” ie. no assurances yet. And “The shareholders are very much open to having a discussion on structures that satisfy the government.”
The cost to the taxpayer of the surface access improvements for Gatwick
TfL estimated that comparable “optimal” investment level of investment needed – the total package of transport schemes required to deliver an optimal level of surface transport access – for Heathrow was £17.6bn, Gatwick £12.4bn. 10.6.2014 https://www.airportwatch.org.uk/2014/06/level-playing-field-on-transport-costs-vital-to-proper-assessment-of-runway-options-says-tfl/
(Times is a very enthusiastic backer of Gatwick, advertising their runway every day for months on their Red Box daily emails, and using the word “Obviously” liberally, to help boost the Gatwick advert slogan)
We must have a second runway, says Gatwick’s chief — obviously
With a new cabinet sifting the evidence, Gatwick boss Stewart Wingate hopes former ‘foregone conclusions’ will be jettisoned
September 11 2016, 12:01am,
Comment under the article, from GACC (Gatwick Area Conservation Campaign) member Peter Jordan:
- Wingate is not saying what really matters: the number of flights using Gatwick has hardly changed in recent years. That’s because more passengers are being fitted more efficiently into larger planes.
- Confusing passenger numbers with flight numbers just adds to the list of misleading “facts” coming from the Gatwick press office.
- We’ve had the idiotic statistic that Gatwick Airport connects to hundreds of rail stations, which doesn’t mention that all rail links use the overloaded London-Brighton line.
- We’ve had the offers to pay for infrastructure that sound so impressive until you add up all the infrastucture that would be needed that he won’t pay for.
- We’ve had the “Gatwick obviously” campaign which ignores the fact that airlines want a hub at Heathrow where they can pick up transfer passengers, not an airport south of London with poor transport connections.
- He’s not mentioned that most passengers arriving at Gatwick by car have to drive past Heathrow to get there.
- He’s not mentioning that Britain makes a net loss on leisure travel (because we spend more abroad than incoming tourists spend in Britain), and Gatwick has 70% leisure travellers.
New GACC research paper indicates higher Gatwick charges for runway could lead to airlines moving to other airports
There is a problem about how Gatwick would pay for a 2nd runway, bearing in mind the airlines that use it are not keen on extra charges. Local campaign GACC (Gatwick Area Conservation Campaign) has produced a short research paper looking into the issue. “Paying for a new Gatwick runway.” They conclude that the steep rise in airport charges at Gatwick which would be needed to pay for a new runway could cause airlines to decamp to other airports such as Stansted or Luton. The GACC study is based on the estimates made by the Airports Commission that the cost of a new Gatwick runway would mean a rise in airport charges from the current £9 per passenger to £15 to £18, rising to £23 at the peak. Chairman of GACC, Brendon Sewill pointed out: “That is a rise of over 100% and would be serious shock for airlines. easyJet and BA have already expressed anxiety about higher charges, and their unwillingness to pay them. Stansted is at present half full and would be overjoyed to attract business from Gatwick.” Manchester airport is a salutary reminder of the risk; its new runway opened in 2000 but was followed by a fall in passenger numbers. Manchester airport is still only at about 60% of the capacity of a single runway. Competitive pressure from other airports could make the financing of a new Gatwick runway challenging.
Road and rail chaos, with congestion and over-crowding, predicted if new Gatwick runway built
A new research paper prepared by author and environmental expert Jeremy Early, on Surface access to Gatwick Airport predicts that a new runway at Gatwick would bring road and rail chaos. He points out that the existing road structure is nearly full, with serious delays occurring on many routes, especially on the M23 and A23 into London. Planned improvements will only be sufficient to deal with the forecast growth in traffic – without a new runway. A new runway, operating at full capacity of 95 million passengers a year, would mean an a massive increase in road traffic movements each day. It would probably reduce the M25 and M23 to a standstill – all day not just occasionally. On rail, the report shows that already between 2010 and 2014 rail journeys in the South-East increased more than 20%. The extra trains that Gatwick airport boasts of are in reality already just to cope with the expected increase in demand – with no new runway. With a new runway Gatwick predict a three-fold increase in the number of air passengers using Gatwick station. It could be standing room only, with no spare capacity on parts of the network.
Gatwick “promises” to cap landing charges to £15 + inflation for 30 years (if it gets an unspecified non-existent 30 year “contract” from Government)
Gatwick airport, in frenetic publicity in the months before the Airports Commission runway recommendation has made various pledges – in the hope of currying favour. It says it will “bear all the main risks” of a new runway. Sir Roy McNulty, chairman of Gatwick, has written to Sir Howard Davies saying – among other things – that the landing charge will be kept at £15 (plus inflation) for 30 years. As long as there is no new Heathrow runway. (It is currently £9). Sir Roy said it is “in return for Government agreeing a 30 year contract” though exactly what that means is not explained. Presumably a contract that there will be no other runway? [Government has not made any such deal with Gatwick, and would be unlikely to]. Gatwick also says it will “bear all the main risks of the expansion programme . . . including long-term risks related to traffic levels, market pricing, construction and operating costs”. How exactly? Gatwick’s main airline, EasyJet, is not happy with charges rising to £15. The Airports Commission consultation documents considered Gatwick’s estimate of £15 to be too low, and instead considered “average charges rising to between £15 and £18, with peak charges of up to £23.” These higher levels were due to lower estimated levels of air passenger demand than Gatwick’s optimistic figures, and higher infrastructure costs. [ Airports Commission’s consultation document Page 47].
EasyJet CEO, Carolyn McCall, again says there is no economic case for a Gatwick runway
Carolyn McCall, the CEO of EasyJet – the largest airline using Gatwick airport – has again said that there is no “economic reason” to build a 2nd runway at Gatwick. She believes it does not need to expand, because of a lack of demand from passengers. She would prefer a runway at Heathrow, as EasyJet and other airlines are “queuing up to get in”. They could make more profit there. Though the airlines want a new Heathrow runway, it is both physically, geographically, environmentally and politically very, very difficult indeed. Gatwick is also geographically and environmentally very, very difficult. For Gatwick to build a new runway, the cost would have to be paid by the airlines, which means flights costing more for passengers. As the budget airlines make thin profits (perhaps £7 per passenger after tax), adding on an extra £30 + to a return trip is utterly contrary to the low cost airline business plan. On dirt cheap flights, £30 extra is enough to matter. Even though easyJet is currently Gatwick’s biggest customer, Ms McCall said it had “never proved it can really be the kind of airport that Heathrow is.” Heathrow slot pairs can cost £25 million, but EasyJet got their Gatwick pairs for about £1 million.