Airport News
Below are news items relating to specific airports
Blog: Broke Heathrow should not receive any taxpayer cash
The issue of whether Heathrow could ever pay for a 3rd runway is one that has become even more pressing, now the airport has been hit very hard by Covid-19. Its finances have been shaky for a long time. In an analysis, by Chair of the No 3rd Runway Coalition, Paul McGuinness, sets out the facts. Heathrow has claimed that it "can survive with no passengers for the next 12 months, so our’s is a very good position to be in”. But in fact Heathrow admitted to its staff (email of 6 April) that the publicised “£3.2 billion war chest” is merely the liquidity that can be mustered when “we have drawn down all the cash and credit facilities at our disposal”. So, yet more borrowing to be repaid in the future — presumably by passengers. Looking into Heathrow finances, it is clear that it has sold assets and borrowed against those that remain, in order to finance enormous dividend payments to shareholders (92% of which do not pay UK tax), while avoiding corporate taxes. It has an eye watering level of debt. By the end of 2019, its borrowing against its assets was £15.449 billion, so it had reached a leverage ratio of 97% — higher than any comparable UK infrastructure or utility operation. Read the whole blog for details.
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Leeds Bradford Airport CEO says the plan is about modernising not expanding
Leeds Bradford Airport (LBA) has been planning to expand, building a new terminal that would allow more annual flights and passengers - and thus more CO2 and more noise. The plans have been fiercely opposed. Now, with the airport effectively closed for months, due to the Covid-19 pandemic, the chief executive has written that the plans are not about expanding. He says the building plans are to improve and modernise the terminal, and "LBA is not expanding because we are not proposing to grow beyond the airport’s existing consented capacity limit of 7 million passengers. Our present limit is already 7m passengers and LBA is not proposing to increase that limit." He claims planes are now so (allegedly) "quiet" that tight noise restrictions are not as relevant as years ago. There is the usual stuff about the airport aiming to be carbon net zero by 2023 - which is lovely, though it excludes the carbon from flights, making it somewhat irrelevant. The CEO comes out with all the usual industry platitudes about "clean" planes, and "sustainable" fuels, and future electric planes ... none of which mean much. And cycle routes to the airport ...
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Luton airport delays expansion plans, due to Covid and stated intention to be “greener”
In 2019 Luton airport put out plans to expand, from 18 million passenger per year, (mppa) up to 32 million. This expansion, being over 10 mppa, needs to go through the Development Consent Order (DCO) route, rather than a normal planning application. The airport is owned by Luton Borough Council which is also the local authority that should regulate it. Now with a massive decline in air travel demand, due to Covid, Luton airport has decided to delay the process, and not submit its DCO this summer, as originally intended, but in 2021. It claims it wants to be more "green" with less environmental impact, etc etc (tricky with so many more passengers and flights, and thus more noise, more CO2, more air pollution and more congested surface transport). Local opposition groups are pleased about the delay, as is Hertfordshire County Council, which is against the plans due to the adverse noise impact. Luton is too dependant on the airport, and so has suffered from the loss of jobs, and income from the airport, due to the pandemic. It would be wiser to delay until there is clarity on the government policy on aviation carbon, in its ambition of aiming for zero carbon by 2050.
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Many BA flights for July moved from Gatwick to Heathrow, to rationalise operations there
British Airways is switching many short-haul flights from its second-biggest base, Gatwick, to Heathrow in July. BA has already warned that it may abandon Gatwick permanently, or drastically cut its operations there. For 30 years, Gatwick has been the base for BA’s leisure routes, including Mediterranean, Caribbean, Latin American and Indian Ocean destinations. BA Airways has a majority of the slots at Heathrow, but this summer it will use only a small fraction of them, for its much-reduced international network. The move may help the airline to cut costs, by increasing the efficiency of the operation at its main base, Heathrow. A daytime short haul holiday flight to the Mediterranean can be slotted in between early and late long haul trips, making better use of aircraft and crew. It will also remove some key BA routes from direct competition with easyJet, which is the dominant airline at Gatwick potentially enabling both airlines to increase fares. There may be more BA routes from Gatwick later in the summer, depending on how the Covid pandemic is being dealt with. BA has been described, by the Transport Select Committee, as a “national disgrace” for the way it has treated its staff, forcing them to leave, and then being re-employed on much worse contracts.
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GACC asks Gatwick to build back better – less noise, no night flights
Flights using Gatwick will slowly restart from 15th June, so noise, air pollution and CO2 emissions are set to increase again. Local campaigners, GACC (Gatwick Area Conservation Campaign) are asking Gatwick to embed noise and other environmental improvements into their recovery plans. During Covid lockdown, Gatwick was only open for a period each afternoon and evening with no night flights. People normally adversely affected by plane noise have benefited hugely from the welcome break from plane intrusion. GACC wants a continuing ban on night flights, especially as air traffic will not return to pre-Covid levels for an unknown time. The Covid pandemic is a unique opportunity for the airport to re-establish a pattern of working that is less environmentally damaging, in terms of noise and carbon. GACC is asking that as well as a night ban, airlines should prioritise flying their least noisy aircraft in their fleets - and provide incentives that encourage airlines permanently to retire older, noisier and more polluting aircraft. Also to use air traffic control to disperse noise, minimise arrival noise impact, and achieve higher, quicker, departures.
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Wandsworth Council, and the other councils, to challenge latest efforts by Heathrow to revive plans for 3rd runway
Wandsworth Council is poised to support fresh legal efforts to cement its recent victory over plans to expand Heathrow Airport. The airport’s owners and the construction company involved are trying and rescue the plans with an appeal to the Supreme Court. So Wandsworth has indicated it wishes to join other councils and environmental groups in guaranteeing the Supreme Court judges hear both sides of the argument. The council is seeking permission to intervene as “an interested party” due to the importance it attaches to the outcome - and the negative impact a 3rd runway would have on tens of thousands of Wandsworth residents. Being represented at the hearing would mean the council and its allies can ensure that the strong arguments against Heathrow expansion are fully aired. The government has not sought to overturn the Appeal Court ruling. The councils that brought the case – Hillingdon, Wandsworth, Richmond upon Thames, Hammersmith & Fulham and Windsor & Maidenhead, together with the Mayor of London and Greenpeace - are working together on the Supreme Court case.
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Heathrow launches voluntary severance scheme to staff on more generous earlier contracts – and can’t rule out further job cuts
Heathrow has about 7,000 directly employed staff, and has experienced a reduction in flights of around 97% due to Covid. It has It has already cut a third of its managerial roles - people on relatively high pay. It is now trying to encourage staff who were employed before 2014 to offer to take voluntary severance (which is different to redundancy). Any payments over £30,000 are subject to tax. If someone is redunded, that post cannot be legally filled for several months. With severance, the job can then be refilled. Heathrow is trying to get rid of those on more generous contracts, with better terms and conditions, and employ staff on worse contracts. That is what British Airways has done, to the fury of the unions. The Unite union is a staunch supporter of Heathrow, and seems to have agreed to go along with Heathrow's severance offers. It is likely there will also be many redundancies, as air travel demand is unlikely to pick up to earlier levels for several years. A total of 76,000 people are employed across 400 different companies at Heathrow. About 25,000 of those jobs might be at risk.
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Airports no longer looking like a great investment – crazily high prices were paid in the past
The pandemic and the resulting cut in demand for air travel has left many airport deals, such as the sale of London’s City airport in 2016, and Gatwick in 2018, looking very expensive. French giant Vinci bought a 50.01% stake in Gatwick to become the world’s second-biggest airport operator, in December 2018. It paid investors, led by GIP, £2.9bn for the stake. GIP had bought the whole airport for just £1.5bn in 2009. Investors thought airports were a safe bet for predictable cashflow and high returns. In 2016, GIP sold London City airport in London’s Docklands to a Canadian-led consortium of pension funds for £2bn, more than 40 times its earnings, having bought it for £750m in 2006. But now investments in airports do not look good. "Airports have gone from cash generators to drains as flights are grounded", shops are closed and there are tiny numbers of passengers. By 2019 Gatwick paid its shareholders £1.5 billion since 2009. It is not at all clear if or when air passenger numbers will return to anything like previous levels. London City had about 50% business travel, which has now been drastically cut, as firms lose money, or close down, and internet meetings have substantially replaced face-to-face. Airlines are losing money fast, and laying off staff.
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Heathrow trying to get out of paying its business rates bill (£113 million) to councils and government
Heathrow is trying to get out of paying its £113.2 m business rates bill, The airport's business rates are the largest in England and Wales. They are split between Hillingdon Council – the local authority, which receives £16.3m, with the rest going to the Greater London Authority and central Government. The rates are calculated, in accordance with an estimation of Heathrow’s rental value, as at 1 April 2015 - not on the success of the company. Heathrow say their rates bill should be cut because it was “based on a world in which people flew”, but campaigners believe that they should be paying the full £113 million bill on the basis that the money goes towards the community and a failure to pay could jeopardise many local projects that are funded through the rates. Paul McGuinness, Chair of the No 3rd Runway Coalition, said: "A responsible company is expected to set aside (preferably in a separate account) all its anticipated tax liabilities. Lest we forget, the rates bill that they owe to the community is broadly the same size as the £100m dividends payment that they made, so willingly, to their foreign shareholders just a few weeks ago”.
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Portugal’s proposed new airport would threaten thousands of protected birds – ClientEarth is taking action
The government is gearing up to build a new airport - Montijo Airport - on Portugal's most important wetland – the Tagus Estuary. The area is on the path of hundreds of thousands of migratory wetland birds that congregate there for the winter or on their journey between Northern Europe and Africa. It is also protected under numerous international treaties due to its importance for these protected species. Attempts to go ahead with the project show a disregard for important EU laws and a lack of consideration of the severe impacts of building the airport on an internationally protected nature site. ClientEarth are taking action to try to prevent this. With 7 national NGOs, they have filed a court action against the government, aiming to annul Montijo Airport’s Environmental Impact Statement (EIS), because the airport plans have not properly considered the impact on the nature reserve and its wildlife. The Portuguese authorities failed to carry out the necessary tests and have simply proposed to ‘relocate’ the habitats and birds. In the Netherlands, thousands of people have signed a petition against the construction, as it would seriously threaten the migratory Black-tailed Godwit, the Dutch national bird.