Airport News
Below are news items relating to specific airports
BA scraps service to Chengdu, cited by airport expansionists as key, because not enough demand
Heathrow is keen on emphasising the importance of routes to countries like China, or the emerging markets. It likes to give the impression that there is huge pent up demand for these services, and if only Heathrow could be much bigger, there would be numerous flights to all these places. It is just the absence of a 3rd runway holding them back ..... But now the service by BA to Chengdu, about which Heathrow was very proud, is to be cut after just over three years, in January. There is just not enough demand to make it pay. It is not commercially viable, even with smaller planes. So nothing to do with a runway then. Chengdu was where British business would fly to and build trade links if only Heathrow was big enough, according to prominent backers of airport expansion. From September 2013 there were 5 return flights per week, but that was later trimmed down to fewer. BA’s 787 plane and Heathrow slot will be used to fly to New Orleans instead - spare slots are always used for the more lucrative leisure market destinations. The links to China were a key part of Heathrow's submission to the Airports commission in November 2012. Heathrow led the Commission to believe in the need for such links. Time after time, when slots become available at Heathrow, they are used to add capacity on profitable North American or European routes.
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Letter in the Guardian, from climate-aware organisations, on the disastrous impact of a new runway
In an open letter, a large number of environmental and climate-aware organisations have written about the disastrous impacts of allowing the expansion of the UK aviation sector by building a new runway. The letter says: "With the scrapping of vital decarbonisation policies and funding, the UK is already way off-track to meet our climate change commitments. The impacts of any new runway will be devastating to people’s lives and to the planet. ... the biggest tragedy of the government’s failure is a global one. ... The push for more runway space is not about demand from business – that has been dropping for over a decade. Nor is it about people taking one or two annual holidays. Growth is being driven by the frequent leisure flyers taking weekend breaks and shopping trips by plane. Half of the UK population don’t fly in any given year, yet all of us subsidise the holidays of the rich. The UK must not abandon our commitments under the Paris agreement and the Climate Change Act for the convenience of binge flyers. We will not allow our government to ignore the promises they have made to us and to the world." There are also statements by Professor Kevin Anderson and Professor Alice Larkin, on how building a new runway is entirely incompatible with the UK's obligations under the Paris Agreement on climate. Kevin described adding a runway as demonstrating "a palpable disdain for the Paris Agreement."
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“If you think climate change activists like me will take the decision over airport expansion lying down, you’ve got another thing coming”
Leo Murray, who was one of the founders of the activist group, Plane Stupid, has written eloquently in the Independent, about the opposition - for climate change reasons - to a Heathrow 3rd runway. Leo himself took part in numerous actions, against aviation expansion because the UK government had no effective way of limiting the sector's CO2 growth. Now he says, "Here we go again." Heathrow expansion is back, "rising remorselessly like a zombie from the grave. ...Why won’t it stay buried?" Heathrow and Gatwick have reportedly spent over £30m each on PR and lobbying, to conjure up an “airport capacity crisis” for London, for their own ends - making out that a new runway is in the national interest. To meet carbon targets, UK aviation cannot increase its CO2 to more than its 37.5MtCO2 cap. Leo says: "The solution is clear, but horrifies politicians: we will have to have policy to manage the growth in demand. There is simply no other way." Government will have to grasp the nettle of demand management for air travel. In the meantime, people will just have to rise up once more against the green light - if that is given next week. "Heathrow is set to become a lightning rod for radical climate activists all over the country and the old networks from the former alliance are starting to light up again for the first time in years. Once more, dear friends, once more – but let’s make sure it’s really dead this time."
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Theresa May pledged to ‘fight to stop 3rd runway’ at Heathrow in summer 2009 newsletter to constituents
Several old posts on Theresa May's personal website as Maidenhead MP, stating her opposition to a Heathrow runway, were unearthed several months ago. One (May 2010) said she "welcomed the Government’s decision to cancel the third runway project at Heathrow Airport." And she said: “Like many local residents, I strongly welcome to cancellation of the third runway at Heathrow. Expanding Heathrow in this way would have had a detrimental effect on the Maidenhead and Twyford areas by increasing levels of noise and pollution, and today’s announcement is a victory for all those who have campaigned against it.” Now the Telegraph has found a leaflet from Theresa May in summer 2009 that says: "Theresa has opposed the Government's decision to approve a third runway at Heathrow. This would have a major impact on the constituency. A particular concern is a possible earlier increase in night flights over Maidenhead and the surrounding area." And the statement ends: "...I will fight to stop the third runway." She was part of Mr Cameron’s front bench when he made opposition to a third runway a key part of his pitch to get the Tories elected in the 2010 general election. Another leaflet from November 2010 – months after the Tories won power and scrapped plans for the third runway – shows her praising the “victory”.
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Heathrow says it won’t raise landing charges while building 3rd runway – IAG not convinced that’s true
The main customer of Heathrow IAG, which owns British Airways, has been adamant that it will not pay exorbitant landing charges at Heathrow well before a new runway opens. Now in a last ditch attempt to win them over (and anticipating a decision by the government to back their 3rd runway) Heathrow is claiming it can keep landing charges down till the runway opens. Heathrow' CEO John Holland-Kaye says: "Through the planning and build period, we can keep prices flat on average compared to today. ...What that means is that there will be some years where they are going down, some where they are going up." Whatever that means. IAG has feared that landing charges would rise from about £20 now to around £40 per flight. Heathrow already has some of the world's most expensive landing charges. But Mr Holland-Kaye's words did not impress IAG and the company said the average was calculated over a period stretching up to 30 years, and "Their figures cannot deliver their stated aim of making Heathrow and the UK competitive. " Last week, Alex Cruz, chief executive of British Airways, urged Heathrow's shareholders to finance the construction from their own funds, rather than by increasing charges to passengers and airlines. Heathrow's 9 month financial statement showed increasing debt for the company, and a huge hole in the pension scheme.
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Heathrow’s dividends to shareholders grow, but profits have plunged, pension deficit grows, and net debt grows
Heathrow has released financial figures for the first 9 months of 2016, to the end of September. They show a drop in profits compared to a year earlier. There is a pre-tax loss of £293 million, compared to a £552 million profit in the same period in 2015, due to various exceptional items. Its pre-tax profit before these items — which include fair value gains and losses on property revaluations — showed an 11% increase to £202m. Revenue edged up 1.2% to £2.1bn. Heathrow's consolidated net debt grew to £12.016 billion which was an increase of 2.3% from the same period last year, when it was £11.745 billion. Heathrow's pension fund dropped from a surplus of £104 million on December 31st to a deficit of £370 million in just nine months — a £474 million loss. The company attributed this decline to "financial volatility" following the Brexit vote etc. If this size of deficit continues, Heathrow will be required to put more money into its pension scheme. The Sunday Times recently said that Heathrow and Gatwick had each spent about £30 million on advertising and promoting their runway bids. The 9 month accounts show £13 million on "intangible assets" (probably advertising etc) this year, and £11 million in 2015. They also show £32 million of Corporation Tax paid, and Dividends paid of £486 million so far this year; £289 million in the same period of 2015; and £380 million in all of £2015.
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Cameron aide said government was “exposed on Heathrow” over air quality and “did not have the answers”
A memo sent by a Downing Street policy advisor, to David Cameron in September 2015 shows that the government were aware of the air pollution problem at Heathrow. The advisor, Camilla Cavendish, wrote that the air pollution plans by Liz Truss (then Environment Secretary) were inadequate and would not restrict the levels of NO2 around Heathrow. Camilla said: “There are three problems with Liz’s clean air plan as currently written. First it is still very much a draft which quotes initiatives that are likely to be abolished … Second it both over-claims and underwhelms. ... It says we want the cleanest air in the world but does not even begin to tackle the fundamental question of how we might help people to shift away from diesel cars. Third, it leaves us exposed on Heathrow where we don’t yet have an answer on air quality.” Cameron said in December 2015 that the government would undertake more work on the Heathrow air pollution issue. Defra published its national air quality plan in December 2015 with no mention of Heathrow and has not said more on this publicly since. Cavendish, who is now a Conservative peer, has now said she believes "successive governments have failed the public on air quality. Too many people in Whitehall and parliament think they can play it down because it’s invisible."
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Possible timescale for consultations and processes needed for a new runway
If the government makes an announcement that it proposes to build a new runway at its preferred location, on Tuesday 25th October, that is merely the start of a process. And it could be a very long process, that may ultimately not end in a runway being built. Looking at the possible timescale, Patrick McLoughlin set out in evidence (Feb 2015) to the Transport Select Cttee, how he expected the timescale to work. This would all take probably at least two years, if there were not hold-ups at all, and no legal challenges. It is expected that the process could take at least four years in reality - getting past the next election (if that is in May 2020). The steps might be approximately: (1). A draft National Policy Statement published for consultation and laid in Parliament, at least 4 weeks after the announcement. (2). The consultation might be 4 months. (3). A Commons Select Cttee will examine the draft NPS and hold a 3 month public inquiry. (4). The Commons Select Cttee will then submit a report to the Secretary of State for Transport. (5). Once a final NPS is laid, debates and votes must happen within 21 sitting days of the House. (6). There might be more changes needed to the NPS and another vote. (7). The developer submits a development consent order to the planning inspectorate. (8). Then a planning inquiry and examination for 6 months. (9). The planning inspector will report to the Sec of State within 3 months. (10). The Sec of State will consider the report and announce a decision in 3 months. And this is not counting legal challenges, at any stage.
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IATA forecasts UK air passengers by 2030 perhaps 25 million below DfT – so no need for a runway as early as 2030
IATA, the airlines’ trade association, expects that with a "hard Brexit" the number of UK air passengers could be 25 million fewer than government forecasts. 25 million passengers is about the entire annual throughput of Stansted. Though all forecasts are bound to be inaccurate, the problems of the weaker £ and changes to the relationship with the EU are likely to cut demand for air travel in the coming decade. Heathrow etc are keen to claim (having been totally against Brexit before the Referendum) that the UK now needs even more airport capacity. The reality is more than demand may fall, after 4 years of rapid growth before the EU referendum. IATA expect a hard Brexit (more likely) could cause air traffic to be 8-9% lower than with a soft Brexit (less likely). IATA’s forecast of 257 million UK flyers would equate to a total of just over 290 million passengers, including transfers, by 2030. (About 251 million in 2015). The Airports Commission believed, based on DfT forecasts, that a new runway should be constructed in the UK by 2030, predicted an increase to 315 million passengers by 2030. With the lower forecasts, that would not be till 2040. IATA's revised forecasts indicate air passenger demand near the lower limit of the DfT forecasts.
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Runway decision by Cabinet due 25th October, no Commons vote, and NPS consultation for new runway all next year
The Cabinet met today (18th October) and did not come to a formal agreement on backing a Heathrow runway. However it is widely believed to be the preferred option of Mrs May and most of the Cabinet. There will be another meeting of the Cabinet next Tuesday, and after that a statement will be made by Chris Grayling in the House of Commons, on which runway location is chosen. There will not be a vote in Parliament soon afterwards, as had been speculated. Instead - as had always been known - there will be consultation next year on the Airports National Policy Statement, which is needed before a development as large as a runway - a Nationally Significant Infrastructure Project - can be applied for. The government hopes to have the Airports NPS completed, put to Parliament to vote on, and finally published (designated) by around the end of 2017 or early 2018 . She has written to all Cabinet Ministers laying out what they can, and cannot do, in terms of opposing the Cabinet runway decision. Ministers opposed to her decision have to ask her approval first to be permitted not to toe the line .... This is aimed especially at Boris Johnson and Justine Greening. Mrs May says: “…. no Minister will be permitted to campaign actively against the Government’s position, nor publicly criticise, or call into question the decision-making process itself. Ministers will not be permitted to speak against the Government in the House.”