Heathrow push for expansion to beat European rivals, and Stansted wants 8 million more pax annually
Heathrow is trying to push the government into getting the vote on a 3rd runway, as soon as possible. There has to be a vote by MPs in favour of the runway, and this is expected some time in the summer. But increasingly the flaws, deficiencies, uncertainties and environmental damage of the plans are becoming more clear. Now Stansted is also asking for permission to handle 8 million more passengers a year, as it seeks to expand at a time when Heathrow and Gatwick are capacity-constrained. Stansted says it could reach its current cap of 35 million passengers annually by the early 2020s, and while it historically focused on short-haul flights to European holiday destinations, it wants to compete with Heathrow for US and Middle Eastern routes. Heathrow aims to make MPs nervous that, without a 3 runway Heathrow, the UK will fall behind its European rivals, (Paris, Frankfurt and Amsterdam) especially after Brexit – and they like to blur the distinction between what is good for the UK, and what is good for Heathrow. That distinction is important, especially when the finances of the runway project are in doubt, and the taxpayer could be left with a massive bill. Heathrow has not come out very well at Transport Committee hearings recently.
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Heathrow and Stansted push for airports expansion to face down European rivals
Alistair Smout (Reuters)
22.2.2018
LONDON (Reuters) – Britain’s biggest airport Heathrow pressed the government to give the go-ahead to a new runway before the summer on Thursday while rival Stansted said it also wanted to expand as London’s airports position themselves for more competition after Brexit.
Britain backed a $22 billion expansion of Heathrow in 2016, ending 25 years of indecision. It is due to approve a third runway at Heathrow in the first half of 2018 and the airport’s chief executive said he is concerned that any delay would cause it to fall behind its major European rivals.
“The government has said that (the vote) will take place, but of course, you can’t predict anything from a political point of view,” John Holland-Kaye told Reuters.
“We are now in a competition with our European rivals for who is going to be the winner out of Brexit… Pushing for that vote in the summer is absolutely vital if we’re going to keep on track.”
Holland-Kaye said that airports in Paris, Frankfurt and Amsterdam are set to overtake Heathrow in the next five years, and that even if the vote was held in the first half of 2018, the proposed third runway would not be in use before 2025.
Heathrow, Europe’s busiest airport, said passenger numbers were 78 million in 2017, up 3.1 percent compared to 2016, in its full year results for the year ended Dec 31.
Stansted, Britain’s fourth busiest airport, said separately on Thursday it had asked for permission to be able to serve 8 million more passengers a year, as it seeks to expand at a time when Heathrow and the UK’s no.2 airport Gatwick are capacity-constrained.
Stansted said it would reach its current cap of 35 million passengers annually by the early 2020s.
Historically focused on short-haul flights to European holiday destinations, Stansted is increasingly competing with Heathrow with services to the U.S. and Middle East due to start later this year.
Heathrow’s planned expansion has caused concern from local residents about the environmental impact, while airlines have voiced concern over airport charges.
Willie Walsh, the chief executive of British Airways owner IAG (ICAG.L), said on Tuesday that lawmakers should make Heathrow promise not to raise passenger charges before the new runway is approved.
“We’re way too early to make any kind of guarantees about aeronautical charges when we haven’t even come to a single masterplan yet,” Holland-Kaye said.
He said that Heathrow had already agreed to deliver expansion while keeping charges close to current levels, adding that passenger charges fell 2 percent last year.
“We absolutely have to keep Heathrow affordable as we expand. It’s in our commercial interest.”
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Airlines tell Transport Committee of their alarm over ‘blank cheque’ for Heathrow 3rd runway
At the final oral evidence session by the Commons Transport Committee, looking at the Airports NPS (ie. plans for a 3rd Heathrow runway) airline representatives and the CAA were questioned. Key people from British Airways, Virgin and easyJet urged MPs to secure details from Heathrow on costs before voting to approve a runway. Willie Walsh, CEO of IAG, told MPs that the true cost of Heathrow expansion is likely to be “grossly” higher than the £14.3bn the airport has cited, and there is no clarity or transparency on the plans. Airlines do not want higher landing charges, and it is unclear how Heathrow could pay for its expansion without higher charges. The airlines want guarantees on costs. MPs commented that it was hard for MPs to vote for (or against) the runway, when vital details on costs and financing are not available – and even the main airlines don’t know if they back the scheme. Willie Walsh said parliament should not trust Heathrow; he had “zero confidence” that a third runway would be delivered on time and within budget – there were not even any clear plans for what is to be built yet, nor for the M25. Walsh added: “When we’ve asked for disclosure … what they are saying is ‘trust us. Give us your approval and support’. I don’t trust them and you shouldn’t, either.” And higher charges risked making an expanded Heathrow too expensive and a “white elephant”.
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Transport for London may join legal challenge against Heathrow runway, due to lack of clarity on surface transport
Transport for London (TfL) are the expert body on transport issues for London. They have long been very concerned about the surface access problems a 3rd Heathrow runway would cause. They now say the government could face a legal challenge, if there is no better clarity on the matter. TfL would join the legal challenge of the 4 councils. TfL director of city planning, Alex Williams, said he had not seen evidence from the DfT or Heathrow to support the airport’s claim that the public transport mode share of its passengers of 50% by 2030 would be achieved, or how airport traffic could be kept at current levels. By contrast, the analysis by TfL on the matter is completely transparent. Alex said: “If no-one’s prepared to share information or substantiate their case about how you can deliver those mode share targets…then you’re just heading straight for a court hearing, because we’re at loggerheads and no-one’s prepared to share that information or have that technical discussion about the merits of the case.” About 40% of Heathrow passenger trips are now on public transport, and TfL estimates this number would need to rise to 69% by 2030, for Heathrow to meet its pledge of no extra traffic on roads near the airport. TfL says the Southern and Western Rail Access schemes rail schemes are “essential” if there is a 3rd runway.
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Economic advisors, Prof Peter Mackie & Brian Pearce respond to Heathrow questions by Transport Select Cttee
As part of their inquiry into the plans for a Heathrow 3rd runway, in the Airports NPS, the Transport Select Committee wrote on 16th January – with a list of questions – to two economic experts, Professor Peter Mackie, (Institute for Transport Studies, Leeds University) and Brian Pearce (Chief Economist, IATA UK) who advised the Airports Commission (and who were critical of the way the Commission worked out alleged future economic benefits of a Heathrow runway). Mackie & Price have replied in some detail, and some of their comments can be seen below. Asked about the economic impact of the airport not being full in 2 -3 years, but (as John Holland-Kaye has said) over 10 – 15 years, they say: “…that ought to be reflected in the capacity model and profile of shadow costs over time.” Asked about carbon costs, they say: “… we cannot comment either on the probability of a fully effective international carbon trading scheme being in place in the timeframe, nor on the striking price of carbon and its trend over time.” And on Heathrow landing charges they say the DfT’s main case assumes “the benefit of the reduced shadow cost will be fully passed through to travellers while increases in landing charges to fund the infrastructure will be absorbed by airlines. This particular combination seems a bit unlikely.”
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Grayling makes key admissions on serious problems with a 3rd Heathrow runway, at Transport Committee hearing
Chris Grayling, Secretary of State for Transport, made several assertions when he appeared before the inquiry on the Airports National Policy Statement, held by the Transport Select Committee on 7th February. When questioned about Heathrow’s regional connectivity, he confirmed that many of the domestic routes, promised by Heathrow, would not be commercially viable and would require taxpayer funded Public Service Obligation (PSO) subsidy orders, if they were to ever materialise. Grayling also confirmed that, although up to 121,000 residents around the airport would be expected to suffer the impact of the further air pollution concentrations, likely to flow from the extra flights required to meet the DfT’s own recently updated passenger demand forecasts, the government was yet to undertake any work to assess those impacts. Mr Grayling also confirmed that there would be a ‘real risk’ of non-compliance on air quality, were Heathrow to expand, and that the Government’s own analysis expects that risk to be heightened in the years 2026 – 2030. He also confirmed that the 3rd runway would mean a reduction in respite from noise, for adversely impacted residents. Details with extracts on these points from transcripts at the link below. Paul McGuinness, Chair of the No 3rd Runway coalition commented on the NPS that “To proceed on the basis of evidence that unravels, on scrutiny, would simply be unacceptable”.
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John Holland-Kaye appears before Commons Transport Committee for grilling on 3rd runway problems
Heathrow’s chief executive, John Holland-Kaye, appeared before the Commons Transport Select Committee to give evidence for their inquiry into the proposed 3rd runway (the Airports NPS inquiry). He tried to defend claims that the runway, and 50% more flights, would result in a cut in road traffic connected with the airport. He tried to insist the airport’s pledges on air quality levels would be met if a 3rd runway went ahead. The comments came after Tory MP and committee member Huw Merriman said that a number of airport commitments had “somewhat unravelled”. Heathrow are trying to persuade MPs etc that they have a “triple lock” on the problem of air pollution, and it had a “strong plan” to deal with traffic levels. He blames road vehicles, nothing to do with Heathrow, for local air pollution – and gave confusing evidence about whether Heathrow could, or could not, count the number of vehicle journeys associated with the airport. (If they cannot count them, then cannot confirm they have not increased …). Asked if he could make a “firm commitment” that landing charges would not increase, Mr Holland-Kaye told MPs: “At this stage I couldn’t….” And he blathered when asked by Lilian Greenwood about the financial benefits of Heathrow, if it only reached a 50% increase in flights over 10 – 15 years, not just a few.
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TfL Surface Access Analysis of Heathrow possible 3rd runway warns of congestion and over-crowding that would be caused to surface transport
Transport for London (TfL) has raised concerns over the impact Heathrow expansion will have on the capital’s transport network, warning over significant crowding. In its surface access analysis (Jan 2018) TfL says a 3 runway Heathrow is expected to result in an extra 170,000 daily passenger and staff trips compared to now. While Heathrow has “pledged” that there would be no new airport related traffic on the roads compared to today, that can only mean a higher % of passengers using public transport. TfL has raised concerns over the feasibility of this – and what it will mean for London’s public transport. In order to achieve no rise in highway trips, TfL says around 65-70% of trips would need to be on public transport. That would work out as a 210% increase on journeys at present. TfL believes a 3-runway Heathrow would probably generate 90,000 extra vehicle trips along with another 100,000 extra public transport trips each day. That is likely to mean bad over-crowding of roads for non-airport users. In the morning peak for travel, there would be a 3 – 5% rise in average highway journey times across west London as far in as Westminster.For rail passengers it would mean “significant levels of crowding” on the Elizabeth Line, Piccadilly Line and Windsor lines.
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London Stansted Airport commits to long-term growth within approved flight and noise limits
22.2.2018 (Stansted Airport press release)
Summary
Request to raise restrictions on annual passenger numbers from 35m to 43m will enable Stansted to meet demand over the next decade
Airport commits to delivering growth within approved flight and environmental restrictions following extensive consultation with local community
Unlocking further capacity will create more choice and competition for consumers and support 5,000 new jobs at the airport
Businesses across the UK and in the vibrant East of England to benefit from long-haul connectivity to fast-growing markets like China, India and USA.
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London Stansted has today submitted a planning application to Uttlesford District Council to raise the current cap on the number of passengers it is permitted to serve from 35 million passengers per annum (mppa) to 43mppa, while committing to remain within current approved limits on aircraft noise and flight numbers. The application has been shaped by an extensive consultation between the airport and local communities.
The application seeks permission to make best use of the airport’s existing single runway over the next decade, a move which will deliver significant economic benefits to the UK and the vibrant East of England region, create 5,000 new on-site jobs, improve passenger choice and convenience and boost international long-haul routes to fast-growing markets like China, India and the US. The application will also ease pressure on the London airport system by unlocking additional capacity at a time when other airports are full.
Detailed analysis included in the planning application demonstrates how the ongoing introduction of the next generation of new quieter aircraft will ensure that future passenger growth can be achieved without increasing the number of flights or noise footprint already permitted. For example, the new Boeing 737 MAX and Airbus A320 Neo aircraft currently being brought into service by Ryanair and easyJet are up to 50% quieter than the aircraft they are replacing.
In the five years since MAG acquired Stansted, annual passenger numbers have increased by nearly 10 million to 26mppa. This growth has been delivered through a 25% increase in destinations served by the airport (190) and a doubling of the number of airlines using the airport (22). Stansted is the best-connected UK airport for flights to Europe and during 2018 will see a rapid expansion of its long-haul route network with services being added to New York, Boston, Toronto, Washington DC and Dubai and the 150 onward destinations it offers.
Stansted now anticipates reaching its current cap of 35mppa by the early 2020s and in order for the airport to build on its momentum and provide long term clarity to airlines wanting to use its facilities, now is the right time to consider the framework for its growth beyond the current limit.
MAG has also invested heavily in the facilities at Stansted Airport, spending £150m on improving the passenger experience. Recently, work began on the second phase of Stansted’s transformation – a five-year, £600 million construction programme that will see a new arrivals building and conversion of the existing terminal into a dedicated departing passenger-only facility.
Stansted has committed to ensuring that its growth provides long term benefits for its local communities and an on-site educational facility, the Aerozone, has already welcomed nearly 10,000 young people in the two years since it opened. Later this year, an £11 million on-site further education college will also open and provide hundreds of students with a host of skills relevant for careers in the aviation, engineering, and hospitality industries.
“Today, London Stansted Airport is virtually unrecognisable from the one which MAG acquired almost five years ago to the day. During this time, we have spent £150m on upgrading the terminal, added nearly 10 million passengers, more than doubled the number of airlines and developed a short-haul route network which is the best in Europe.
“Looking to the future, demand at Stansted is predicted to remain strong and with constraints on runway capacity in the South-East increasing, we are expecting to reach our current limit on passenger numbers in the early 2020s. We are now at the point where it is right to consider the framework for the airport’s growth beyond the current limit.
“From day one, we have been guided by a belief that when our business prospers, the regions and communities in which we operate also prosper and I am proud of the fact that we have managed to deliver our growth in a phased way and worked hard to closely involve our local communities in this journey.
“Over the past six months we have consulted widely on our future growth plans and based on the feedback from these discussions, we’ve made sure our growth can be achieved within current limits on flight numbers and with no increase in the size of the airport’s noise footprint. This is good news for local residents.
“In addition, thousands more local jobs will be created and our long-haul connectivity to fast-growing markets like China, USA, India will receive a real boost. The recent announcement by Emirates that it will begin daily services to Dubai, in addition to Primera Air launching flights to New York, Boston, Washington and Toronto this year, is a clear statement of what the airport can achieve and we are talking to a range of airlines who are looking to grow their operations at Stansted.
“It is vital for the region that Stansted is able to build on its momentum and the long-term proposals that we have outlined today will enable us to do this and more importantly, provide the local community with confidence that future growth can be delivered in a measured and sustainable way.”
Ken O’ Toole, CEO of London Stansted
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