Heathrow expansion frozen, with Coronavirus crisis adding further costs, uncertainties and delay
Heathrow contractors have been told to down tools, with work put ‘on hold’ until there is further clarity on any plan for a 3rd runway. It is unlikely to make any progress during the Covid-19 recession, when the number of people flying has been cut to just tiny numbers, and the situation likely to last for at least several months. This comes after the Court of Appeal ruling (27th February) that the Airports NPS is illegal; Heathrow is trying to appeal against this, to the Supreme Court, with a decision on whether to allow the appeal by mid April. Now the delays to the runway plans, if it ever happens, have increased by perhaps another year – due to the Coronavirus. The date when it might be ready has slipped from 2026, to 2029 (due to the CAA decision) to about 2030 (due to the Appeal Court) to about 2031 (due to Coronavirus)…. so it is looking less and less likely. The airport will lose huge amounts of money, due to the virus, unless government bails it out – and that is widely NOT seen as a sensible use of government funds, when millions of people also need financial help, due to Covid-19.
Heathrow expansion ‘frozen’ with hundreds of jobs at risk
Contractors have been told to down tools, with work put ‘on hold’ until there is further clarity
By Oliver Gill
14 March 2020 (Telegraph)
There are fears that the building of the third runway at Heathrow will slip off the public agenda during a coronavirus recession
Heathrow’s controversial expansion is in “deep freeze” with hundreds of jobs at risk amid industry fears that the building of the third runway will slip off the public agenda during a coronavirus recession.
Airlines have been warned that Heathrow is facing a series of hurdles that, at best, require an additional delay of “at least” one or two years and will require costs to be “slashed” in the meantime, according to an internal correspondence from a major trade body.
An email from the Board of Airline Representatives to its members read: “Heathrow expansion is now in the deep freeze until the Government comes forward with when, how, or if it intends to revise the [policy documents] required for Heathrow.
“Given the date for a third runway had already been pushed back to late 2028 or early 2029, then we are now looking at 2030 and beyond should the Government proceed.”
Heathrow has played down a High Court ruling blocking its expansion last month despite. A spokesman for the airport insisted that the judges’ verdict, which ruled the Government’s decision to give the scheme the go-ahead, was unlawful and “an eminently fixable issue”.
The Government has decided not to appeal the ruling, leaving the airport to challenge the ruling in the Supreme Court.
Hundreds of workers have been hired to lay the foundations to Heathrow’s extension, which has already cost the airport hundreds of millions of pounds. [Surely rather foolish of Heathrow, to be so presumptuous. They were well aware of the Court of Appeal process, so were unwise to assume they could start work, well even before the start of the Development Control (DCO) order process. AW comment]
In the email contractors have been told to down tools, with work put “on hold” until there is further clarity on the project’s future.
Meanwhile, Grant Shapps, the Transport Secretary, made no reference to Heathrow during a speech at the Airport Operators Association annual dinner last week, causing speculation that it is was no longer a key priority for ministers.
The Prime Minster once pledged to “lie down in front of the bulldozers” to prevent the building of Heathrow’s third runway.
A Heathrow spokesman for Heathrow said: “The High Court ruling has meant there will be a delay in realising the benefits of Heathrow expansion until the Government remedies an eminently fixable issue.
“Failure to fix it rules out airport growth anywhere in the country and casts doubt on other infrastructure projects, including roads and housing pledges made by the Government.
“Heathrow has already taken a lead in getting the UK aviation sector to commit to a plan to get to Net Zero emissions by 2050, in line with the Paris Agreement and we are ready to work with the Government to help deliver their agenda to level up the country and deliver a Global Britain.”
Heathrow CEO forgoes pay amid coronavirus crisis
John Holland-Kaye and his executive team will forfeit part of their salaries as the crisis deepens, Sky News learns.
By Mark Kleinman – City editor
Tuesday 17 March 2020
Heathrow Airport’s boss is to forgo his salary for the next three months as Britain’s busiest passenger hub tries to navigate the crisis which threatens to bring the global aviation industry to its knees.
Sky News has learnt that John Holland-Kaye, Heathrow’s chief executive, is to work without pay until June – the latest in a string of aviation bosses who have agreed to cut or waive salaries as the coronavirus hammers air travel.
The move means that Mr Holland-Kaye will not receive more than £185,000 of his £751,000 annual basic pay.
A source close to Heathrow confirmed the move on Monday, adding that Mr Holland-Kaye’s senior executive team had agreed to forfeit a month’s salary.
Mr Holland-Kaye’s gesture has emerged days after Heathrow reported a near-5% fall in passenger traffic in February.
Steeper year-on-year falls are anticipated this month, as an increasing number of governments ban inbound international flights and airlines ground vast proportions of their fleets in response.
Heathrow, which has also implemented a recruitment freeze during the crisis, has agreed to waive parking fees to allow airlines to hold grounded aircraft at the airport for the duration of the crisis.
On Monday, Britain’s biggest carriers all announced steep capacity and job cuts as they face their gravest crisis for years – or, according to many analysts, the most serious in the industry’s history.
British Airways is expected to make public details of flight cuts and a first wave of redundancies as soon as Monday afternoon, according to insiders.
Its parent company, International Airlines Group (IAG), told the London Stock Exchange that it would reduce capacity in April and May by 75%, and reduce other operating expenses.
The company added, however, that its balance sheet boasted total liquidity of more than €9bn, placing it among the world’s financially strongest airline groups.
Rival Virgin Atlantic announced that it would ground 80% of its flights before the end of the month, and that staff would be asked to take eight weeks’ unpaid leave.
BA and Virgin depend to a significant extent on their transatlantic traffic, meaning that many of their routes will be inoperable until after the US lifts the travel embargo from the UK that comes into effect on Tuesday.
Sky News revealed at the weekend that Peter Norris, chairman of Virgin Atlantic Airways’ majority shareholder, Virgin Group, was writing to the prime minister to warn that the airline industry needs immediate financial aid to survive.
Insiders said Mr Norris’s letter – which is also understood to be being signed by Shai Weiss, Virgin Atlantic’s chief executive – would ask the government to provide airlines with a credit facility to help them finance themselves through a potentially protracted period of negligible revenue.
That support, which the Virgin chairman estimates would be worth between £5bn and £7.5bn across the industry, would include cash advances and guarantees, as well as other measures to ensure that credit card companies do not continue to hoard revenue from airline bookings.
Under Mr Norris’s blueprint, this emergency financing would be repaid once trading returns to more normal levels.
One source close to the airline, which was founded by Sir Richard Branson in 1984, said that Mr Norris would also ask the PM to extend the timetable for allowing airlines to keep planes grounded without losing their prized take-off and landing slots for the entire summer season.
The latter request is significant because it reflects the growing belief among aviation bosses that the sector may not begin to stage a recovery until the autumn.
If those fears are realised, it will have a substantial impact on Heathrow’s revenues, with the airport also facing a reduction in turnover from the shops and restaurants which trade there.
EasyJet and Ryanair also announced big capacity cuts on Monday, with the latter indicating that its entire fleet is on the verge of being grounded.