Airport News
Below are news items relating to specific airports
Tax-free sales by airports, ports etc for overseas visitors to end by 1st Jan 2021, with lower duty-free import allowances
The UK government is set to end tax-free sales at airports, ports and Eurostar stations from 1 January 2021. As the Brexit transition period comes to an end, the UK government cited “concerns over how the benefit is passed on to passengers and in some instances, the relief is not consistent with international tax principles.” The VAT retail export scheme, which currently enables EU visitors to claim refunds on goods purchased in the UK, will also be withdrawn from the same date. The airports are unhappy about this, as it will cut their income, and some jobs would be lost. The Treasury said: "Overseas visitors - including in the EU - will still be able to buy items VAT-free in store and have them sent direct to their overseas addresses, while the costly system of claiming VAT refunds on items they take home in their luggage will be ended.” It described the scheme as “a costly relief, which does not benefit the whole of Britain equally”, adding that the current use is mostly centred in London. Visitors arriving from EU and non-EU countries will be allowed 42 litres of beer, 18 litres of still wine and 9 litres of sparkling wine duty free from 1.1.2021 (much lower than currently).
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Heathrow area risks fate of 1980s mining towns, says airport boss – area too dependent on the airport
Perhaps even more than other airports like Gatwick and Luton, a large part of the economy around Heathrow has become over-dependent on the airport. Now the CEO of Heathrow, John Holland-Kaye has said boroughs like Hounslow risk becoming like “a mining town in the 1980s” with the collapse in air traffic putting tens of thousands of jobs at risk. Many more people work in businesses associated with Heathrow, than directly for the airport itself. In August, Heathrow had around 1.4 million passengers, which is less than 20% of its "normal" amount. People are not flying for leisure, due to the risk of Covid itself, or the need to quarantine. There are few business trips, as they are being replaced by Zoom etc. Many in the aviation sector do not think levels of flying will return to their 2019 levels for 2-3 years, or more - if ever. Heathrow had losses of £1.1bn in the first half of 2020. Recently Heathrow issued formal section 188 notices, allowing it to potentially fire and rehire some 4,700 employees, after months of negotiations with unions representing its directly employed ground staff failed to produce an agreement. Section 188 means the airport can bypass negotiations after a 45-day period has elapsed. There might overall be 25,000 Heathrow-related job losses.
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Heathrow saddled with £504 million bill from thwarted expansion
Heathrow has been left with a £500M bill from its thwarted 3rd runway expansion. The airport chose to spend a lot up-front, in its plans to get a new runway, even before waiting for the legal challenges and approval of its DCO (Development Consent Order). Heathrow hoped it could charge airlines using the airport for these costs. It was always a risk that the runway would not happen, and the money spent in promoting it and planning for it would be sunk. The Court of Appeal ruled against the Airports NPS in February, on grounds of the carbon emissions the 3rd runway would generate. The appeal by Heathrow will be heard on 7th and 8th October. Meanwhile the CAA has restricted the amount Heathrow can charge airlines - and now there has been a massive reduction in Heathrow air traffic, and income, due to Covid. The New Civil Engineer gives a breakdown of what Heathrow (unwisely) spent, in the expectation the runway would definitely go ahead. According to the CAA’s Economic regulation of Heathrow: policy update and consultation, the costs are broken down into £394M of planning (category B) and £110M of early construction (category C) costs. These include ground investigations, all sorts of advisors, and designers.
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BA hits out over £500m bill (Category B costs) for Heathrow failed 3rd runway plans that it wants to pass on to airlines
A row has erupted between Heathrow and British Airways, its largest airline, over the plans to get airlines to pay the £500m bill relating to the airport’s third runway expenses so far. A regulatory consultation by the CAA recommends allowing Heathrow to charge carriers for expansion costs incurred until February this year. These are called "Category B" (£500m) and early "Category C" costs, associated with getting planning consent. CAA regulations allow Heathrow to increase charges in line with costs incurred. Willie Walsh, the outgoing boss of IAG, that owns BA, has repeatedly clashed with Heathrow over the framework, which he has said encourages the airport to “spend recklessly." IAG has never wanted to pay for Heathrow's costs in developing the runway (partly as the extra capacity at Heathrow would increase competition with BA by other airlines). CAA director Richard Stephenson said it was reviewing responses to the consultation (held in summer 2019) and had yet to make a decision. Heathrow has pressed ahead, spending a great deal on its runway plans, even before legal obstacles had been cleared. The restriction of early spending by the CAA meant a delay in the runway timetable of 2-3 years.
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Luton Council’s £60m loan to Luton Airport company set for approval ‘in private’
A £60m loan by Luton Borough Council to its airport company is set for approval, in private, by the executive later this month. The first of two emergency loans - together totalling £83m - has gained the support of Luton Council’s scrutiny finance review group, at the second attempt. The second loan worth £23m to London Luton Airport Limited (LLAL) is scheduled for the 2021/22 financial year, after the council’s emergency budget in July. The Labour controlled council were forced by the Liberal Democrats to discuss the loan report in public. But officers asked for the council to take legal advice and defer the issue. It seems that 5 five Labour councillors recommended the council's executive approve the £60m loan deal, with the 3 Liberal Democrats in opposition. The executive will formally decide upon the loan at its meeting on Monday, September 14th. The Liberal Democrats said the almost £400m in loans are secured against the assets of the company. "But, the council already owns all of LLAL’s assets by virtue of its 100% ownership of the company. It follows that for all practical and accounting purposes the £400m loans are unsecured.”
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Heathrow has lost £1 billion since start of March, is cutting staff pay, and could cut 1,200 jobs
Heathrow says that it has lost £1 billion since the start of March, due to the Covid pandemic. There could be 1,200 Heathrow jobs lost. The airport served a formal notice to staff yesterday, triggering a 45-day consultation period over compulsory job losses. The airport and unions have failed to agree to a deal over the future of its frontline workforce after months of talks. Heathrow is proposing salary cuts of between 15-20% for some affected staff, with a phased reduction in salaries over 2 years. A voluntary redundancy scheme has been offered. The airport claims there might be few compulsorily redundancies, but only if the unions agree a deal. About 4,700 frontline staff are affected, including engineers, security and airside operations. Heathrow has already lost 450 out of 1,000 head-office managerial staff. The airport had indicated previously that as many as a quarter of staff could be made redundant, so up to 1,200 jobs may go. Heathrow said its proposals "guarantee a job" for anyone who wants to remain with the business. The Unite union is not happy with the airport's offers. Gatwick is losing about 600 jobs, a quarter of its workforce.
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Protest by opponents of Southampton airport, against the “madness” of its expansion plans
Opponents of expansion of Southampton airport took part in a protest on Saturday 29th, as did many other groups at airports across the UK. The group say the airport should not be expanding, at a time of climate crisis, and the impact would be a needless increase in carbon emissions, from the extra flights using the airport. They said 1. The economic case does not stack up, in jobs, house prices or health impacts. 2. The noise impacts of expansion, with many more local people negatively affected. 3. More air pollution will affect local health and mortality rates, from an increase (the airport's own figures) of 272% in NOx emissions. 4. No figures have been provided for ultrafine particles, which could be even worse than NOx for human health. 5. The expansion will contribute to climate change and a ‘carbon-neutral’ airport is a myth; the expansion would roughly double current carbon emissions, and the airport is only looking to offset the relatively small ground emissions, not those from flights.
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Bristol Airport Action Network crowdfunding to challenge airport’s appeal against North Somerset Council rejection
BAAN (Bristol Airport Action Network) Committee Coordinators are crowdfunding, to raise £6,000 for their attempt to challenge the airport's appeal against the refusal, by North Somerset Council, of its expansion plans. BAAN says: the airport's plans "would mean an extra 23,600 flights and two million passengers a year (as well as an extra 10,000 car movements a day). They would also mean a further million tonnes of carbon to be emitted a year at this time of climate and ecological emergency. Our position is that this airport expansion (and others that are planned) is not legally compliant with the Climate Change Act, The Paris Agreement and the Government's commitment to be carbon neutral by 2050 and MUST BE STOPPED." They are doing all they can to stop the expansion. BAAN say: "We have been given a very favourable fee quote from a specialist planning barrister and are talking to a number of top experts who are likely to give their time pro-bono or at much reduced rates to represent us at the appeal. We are also being helped by Greenpeace and other environmental organisations." Donations would be greatly appreciated.
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Bristol protests against the airport appealing against North Somerset Council rejection of expansion plans
Extinction Rebellion and local groups held a number of protest on Saturday 29th August, at UK airports. A large event was held at Bristol Airport, in protest against the decision by the airport to appeal against the rejection of their expansion plans, by North Somerset Council. Extinction Rebellion held a "mourning procession" and hundreds of people marched to the airport, observing Covid social distancing, and in silence, to follow a death theme. One of the protest organisers commented: “When the refusal of Bristol International Airport (BIA) expansion plans became international news in February this year, everyone thought we’d seen the death of the terrifying fantasy of an expanded airport in this time of ecological and climate emergency. We were wrong." Another said the "democratic process, underpinned by massive public objection, is being threatened, whilst lies about economic benefits and carbon-neutrality are spread with flagrant disregard to the truth." And it is crazy that precious council funds have to be wasted on this unnecessary appeal, when the money is need to deal with Covid-related issues, among many others.
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Gatwick could lose 600 jobs, and it could take 4-5 years for passengers to return to 2019 levels
Gawick plans to cut a quarter of its workforce due to the impact of coronavirus. So about 600 jobs could be lost following an 80% reduction in the 2019 number of passengers in August. It only has the North Terminal working. CEO Stewart Wingate said the cuts were a result of the "devastating impacts" coronavirus had on the airline and travel industries. In March, Gatwick announced 200 jobs would be lost, and it later took out a £300m bank loan. With the collapse in passenger numbers, the company said it was looking to further reduce costs. About 75% of staff are currently on the government's furlough scheme, which is due to end in October. The DfT says: "If people need financial support quickly they may be able to claim Universal Credit and new style Jobseekers Allowance." Many staff belong to the union, Unite, which will fight to minimise redundancies. The airport has said it will take "four to five years" for passenger numbers to return to pre-pandemic levels. Its revenue fell by 61% in the half year, January to June, compared to 2019. While Covid remains a very real issue, and levels are slowly rising in many countries, air passengers have no certainty about from which countries they would need to quarantine themselves for 14 days, on their return.