General News
Below are links to stories of general interest in relation to aviation and airports.
Heathrow retail revenue in 2015 around 20-21% of total, at £568 million (£7.58 per passenger)
Heathrow Airport reported a retail revenue increase for the year ending 31st December 2016 of +8.4% in 2015 to £568 million. The revenue per passenger rose by +6.2% above the level in 2014, to reach £7.58. (The Moodie report said the figure was about £7.14 in 2014, £6.21 in 2012, £5.95 in 2011, and £5.64 in 2010). Over the year, Heathrow had an overall growth in revenue of +2.7% to £2,765 million in 2015. EBITDA was £1,605 million, up +3.0%. Heathrow also announced a +2.2% increase in passenger traffic in 2015 to 75 million. Then for the figures for the first 6 months of 2016 Heathrow said its retail revenue had risen by 7.7% year-on-year, to £280 million - and retail revenue per passenger rose +7.1% to £7.84. Of this, duty and tax free shops contributed £62 million, a +3.3% increase. Heathrow said that for the first 6 months of 2016, it made £62 million from duty and tax-free; £51 million from airside specialist shops; £24 million from bureaux de change; £22 million from catering; £55 million from car parking - with total retail revenue at £280 million. i.e. of total retail revenue 19 - 20% was car parking. Income from parking was £99 million in 2014 and £107 million in 2015. For the first half of 2016 the retail (including car parking) income was about 21% of total revenue.
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Gatwick income still around 22% from retail, 11.6% from parking, and 52% from aeronautical
Gatwick continues to get around 22 - 23% of its income from retail, as it has in previous years. Moodies' data shows that in the year that ended 31st March 2016 the airport reported a +2.3% increase in retail income to £152.5 million. But the net income per passenger decreased -3.7% to £3.67. Income per passenger from retail has stayed around the same figure as in 2011. Gatwick has added a great many retail shops in previous years (it now has 36 shops and 27 restaurants) and offers “collect on return.” Gatwick has done less well than it hoped on sales which it described as “challenging trading” due to "changes in passenger mix and adverse currency movements against Sterling." Income from food and drink and catering grew by around 2%. Car parking revenue for the year to 31st March 2016 was up +7.6% to £77.9 million and net income per passenger from parking increased by +7.3% to £1.47. So retail + parking is about £5.14 per passenger. Aeronautical revenue rose +5.4% to £350.8 million (so that is around £8.50 approx per passenger) and other income was up +9.7% to £91.9 million. Turnover increased +5.5% to £673.1 million while EBITDA was up +9.7% to £331.0 million. The airport made a profit before tax of £141.0 million.
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TUC and unions write to Theresa May to urge her to make a clear decision for Heathrow runway
The Times reports that the UK's largest trade unions have written to Theresa May, asking her to approve a 3rd Heathrow runway. The unions say they are clear in what they want, despite the Labour party position being unclear, and the Shadow Chancellor, John McDonnell, being very firmly opposed. The letter is from the TUC, BALPA, the GMB and Prospect and says if the Heathrow runway is not built there would not be the extra 70,000 new jobs that Heathrow has promised. [Whether that 70,000 jobs figure is plausible or correct is another matter]. The unions that have signed the letter think getting building would "be a sign of support for a pro-growth, pro-jobs industrial strategy " ... and "Any further delay in the decision will harm the whole of UK PLC.” Frances O’Grady, the TUC general-secretary, said the decision was “a big test for the government. Ministers must show they are prepared to make the right choices so that working people do not pay the price for Brexit.” The TUC letter states wrongly that: "Research for the Airports Commission found that a new third runway at Heathrow could deliver at least £147bn to UK GDP and 70,000 new jobs in the South East, and many more nationwide. [This is incorrect. See link to Airports Commission document. It says it might deliver UP TO £147 billion - and that is over 60 years. And its own experts questioned the £147 bn figure. See link ] .
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US ex-FAA lawyer: Aviation noise is an issue that needs a reasonable solution
A lawyer who used to work for the FAA (Federal Aviation Authority - akin to the CAA) has written about how he believes people affected by aircraft noise should be treated better. He says there are people who buy a home near a small airport, expecting just a small number of flights - and then find the airport is expanded and instead of small general aviation planes, the airport handles huge jets. "Or the homeowner who buys a house in a rural area known for its peace and quiet, miles away from the nearest airport only to find that the FAA has changed the flight path so that a constant stream of large jets are flying under 5000 feet over the house." "Or the homeowner who has lived in a neighborhood near an airport for years. But then, the airport owner and the FAA decide to reconfigure the runways at the large commercial airport to accommodate more traffic and the homeowner finds herself underneath the approach pattern for the airport." Many in the aviation industry blame those affected and say they should not have chosen to live near an airport. But the lawyer says there FAA needs a more reasonable policy, adding: "Reasonable noise standards that should be followed by the airports, aircraft, airlines and the FAA should be instituted. And they must be enforced."
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Windsor councillor concerned about unknown extent of local additional housing demand from Heathrow runway
A Windsor councillor, Malcolm Beer, has written to the government to express his concerns about the impact on local housing demand, if a 3rd Heathrow runway was approved. The Airports Commission gave very unsatisfactory and mixed information on new homes needed. It said in November 2014 that its "modelling suggests that in 2030 the range of additional households associated with the scheme (direct, indirect and induced) falls within the range of 29,800 and 70,800 (dependent on the scenario). The additional housing at the upper end of this range – which equates to an average of some 500 homes per year in each of 14 local authorities – may be challenging to deliver, especially give that many local authorities struggle to meet current housing targets." Then by its final report in July 2015, the Commission said a "high proportion of new jobs may be expected to be taken up by people already living in the area and the additional capacity is not expected to result in an insurmountable requirement for additional housing" and words to the effect that no extra houses would be needed as 100,000 unemployed in West London could fill the additional jobs. Cllr Beer is concerned that the entire area is already far too congested to find land for more housing, schools, offices, road improvements and other needs associated with a hugely enlarged airport.
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Chris Grayling talks to airport proposers – amid speculation Cabinet critics would not resign over Heathrow 3rd runway
The Telegraph reports that the new transport secretary, Chris Grayling, has had meetings at the airports with the bosses of Heathrow and Gatwick, and the Heathrow Hub proposers. He will have been told their arguments for expansion, and is hardly surprising as the government has indicated it intends to make some decision perhaps in October (September 5-15th probably unlikely?). The government had probably intended, before the EU Referendum, to make the announcement on 7th or 8th July. Before the Brexit vote derailed that. The government is being lobbied by sections of the business world to approve a runway. There are hopes in government and in business that building a runway would give the economy a boost, when Brexit may cause economic woes, and that approving a major infrastructure project would "show that the UK is open for business" despite Brexit, especially after Mrs May delayed the Hinkley Point nuclear project. The Telegraph believes that neither of Heathrow's fiercest opponents in Cabinet, Boris Johnson (Foreign Secretary) or Justine Greening (Education) would actually resign if the Cabinet approved a 3rd Heathrow runway. Boris might believe it is "reasonable for different members of Parliament to have different takes on regional policy, which is what this is.”
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Birmingham airport getting some more long haul passengers, making use of its runway extension
Birmingham airport, in common with the majority of other UK airports, has been seeing high rates of growth over the past two years. The UK feels itself to be out of recession, flights are cheap and the price of oil (and jet fuel) is very low. With that combination of circumstances, airports are emerging from the fall in numbers of both passengers and ATMs that started in 2007 and continued till 2010, with a slow recovery. Birmingham opened its runway extension in May 2014, with hopes of many more long haul flights, as the runway was now long enough for heavy aircraft. Local campaigners say the growth in numbers reflects the aggressive marketing by Birmingham airport since then. The airport says it passed the 10 million passenger mark last year, and has now reached the 11 million mark. (If the airports cannot increase their passenger throughput now, after a deep dip, before we get into another recession and the price of jet fuel rises again, when can they?) Birmingham says over the past year their long-haul traffic increased by 26%, with particular growth to the Middle East (+34.1%), North America (+32.6%). That was, of course, what they paid all that money for the runway extension for. It can take flights that otherwise might have gone via Heathrow. Birmingham is keenly against a 3rd Heathrow runway, as it would be a bitter rival.
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Theresa May to personally chair Cabinet sub-committee on possible new runway
The decision by the Cabinet on what to do about a new runway is to be taken by a sub-committee, named the Economic Affairs (Airports) sub-Committee. This was set up in July 2015. Its members then were David Cameron, George Osborne, Sajid Javid, Patrick McLoughlin, Liz Truss, David Mundell, Greg Clark, Amber Rudd, Cabinet Oliver Letwin and Mark Harper. At that time, MPs with possibly compromised positions, or those against a Heathrow runway, were left off it - explained by their departments not being the relevant ones for inclusion. These were Theresa May, Philip Hammond and Justine Greening. Since the arrival of Theresa May, everything has changed. It has been announced that she will personally chair the committee (Cameron chaired it before) and that its new membership will be announced shortly. The constituencies of Theresa May, Philip Hammond and Boris Johnson (PM, Chancellor and Foreign Secretary) are all intensely affected by Heathrow. Theresa May has been very guarded in her comments over the past 6 years. However in May 2010 she welcomed the cancellation of the Heathrow runway and added: “Like many local residents, I strongly welcome the 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."
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RHC Letter to the PM: Contrary to the Airports Commission’s recommendation the Commission’s evidence demonstrates Heathrow should not be expanded
The Richmond Heathrow Campaign (RHC) has done a lot of detailed work, checking through the voluminous details of reports for the Airports Commission. The headline statements by the Commission, with its enthusiasm for a Heathrow northwest runway, are often not in accord with other figures in their documents. The RHC has written both to the Prime Minister and the Transport Secretary, setting out a lot of concerns about a 3rd runway, and facts and figures from the Commission itself that show the case for a runway is very weak. The RHC make the points that adding a new Heathrow runway would be contrary to the Government’s aim for re-balancing the UK economy across the regions, as it can only be done by reducing the market for other UK airports. It would add a very small extra number of long-haul destinations at Heathrow but take these away from regional airports so there is no increase in the number of destinations from the UK, compared to no Heathrow expansion. And it would result in a very high number of international-international transfer passengers using Heathrow, rather than improving air links overall. The RHC say that instead of expanding Heathrow, there is a need to make better use of the capacity of Heathrow and other UK airports and to improve surface access to London’s five airports. The letter is reproduced below and, in support of the evidence in the letter, a schedule linking the letter to the Airports Commission’s evidence is also provided.
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UK coastal regions suffer while Gatwick sucks UK tourists and their money out of the country
Gatwick is well known to be a holiday and leisure trips airport. Its passengers are predominantly going on low cost flights, with about 80% to European destinations. The small number of long haul destinations is about the same as in 2007. The long haul airports it serves are all for UK leisure passengers, to the Caribbean, Florida etc - and are not for the purpose of bringing inbound visitors to the UK. The rise of low cost holiday flights, over the past 20 years or so, has meant the demise of many UK costal towns as very cheap travel (and dependable heat and sunshine) have drained away visitors. The government has put up £90 million of public funding to help boost some of these struggling towns. Yet Transport for London has said a 2nd Gatwick runway would need about £10 billion of public funding to deal with the increase in the number of passengers and all the associated ancillary traffic. This public money would merely facilitate access to Gatwick, in order that more UK money could be exported - as Brits take their holiday money to spend abroad. The excess of the money spent by Brits spending abroad, over that spent by inbound visitors in Britain is called the Tourism Deficit. It reached a total of £16.9 billion in 2015, ably assisted by Gatwick. With unknown impacts of Brexit, a new report from CAGNE questions the wisdom of the government allowing Gatwick to build a new runway, with all the financial questions raised.