General News
Below are links to stories of general interest in relation to aviation and airports.
US Department of Transportation (DOT) denies Norwegian Air UK foreign carrier exemption
The US Department of Transportation (DOT) has dismissed an application by the UK subsidiary - Norwegian Air UK (NUK) - of Norwegian Air Shuttle to operate flights to the United States on “procedural grounds.” NUK applied for an exemption and permit to operate flights to the US from Gatwick in December, and the DOT refusal means a set back for Norwegian flying to the US. The DOT cited overlapping issues with Norwegian’s Ireland subsidiary—Norwegian Air International (NAI) —which also sought an exemption to begin operating to the US. The DOT dismissed the NAI exemption in September 2014, but indicated in April that it was inclined to approve it. Opponents of Norwegian being allowed permits to operate flights in the US say the airline seeks to evade both Norwegian and international labour laws and pay pilots less by establishing “flag of convenience” subsidiary airlines. This is seen as a threat to jobs and pay in US airlines. The US Transportation Trades Department, a coalition of unions representing airline staff, say Norwegian's business model is ‘novel and complex’. They say Norwegian should not be allowed to create shell subsidiaries designed to undermine labour standards etc. Gatwick airport needs Norwegian to be able to fly extensively to the US, to claim it has important long haul (leisure) routes.
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EasyJet in talks with several EU member states on moving main HQ there, from Luton, due to Brexit
EasyJet says it has opened talks with EU member states' aviation regulators about relocating its legal headquarters from the UK, due to the Brexit decision. Sky News believes easyJet's Carolyn McCall has had meetings with several unidentified EU states to explore the possibilities, but details could take months to be ironed out. It is thought that the most likely workable structure would be to be an EU-registered entity with a UK subsidiary". easyJet would need to obtain a air operator's certificate (AOC) that would enable it to base its HQ in an EU country. Some of the states would want an airline with an AOC to move the bulk of their operations there, but it is understood that easyJet is not willing to do that. One insider said moving the HQ could entail relocating just a handful of staff, depending on the regime operated by the individual country's aviation regulator. Moving the AOC to another country would mean the current AOC in the UK would become just a subsidiary. Whether that would mean jobs being lost at easyJet's main UK base, Luton, is not known. British Airways' parent, International Airlines Group, already operates using a similar structure with its AOC. Ryanair, whose main source market is the UK, has also said it will obtain a UK AOC should it need to.
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Biggest destruction of British heritage since the Blitz if Gatwick expands – new report
Campaigners against Gatwick expansion have highlighted the extent of the devastation that a 2nd Gatwick runway would cause to important buildings of great British heritage value, as well as demand to local history and environment. Unveiling a new report, the groups say Gatwick’s own submission to the Airports Commission detailed 17 listed buildings which would be destroyed. These include some of Britain’s finest examples of medieval architecture. The launch of the report was held at Rowley, a former residence of Henry VIII's fifth wife, Catherine Howard, which is among those "requiring removal", according to airport plans. The new runway would require the irreversible loss of the last remnant of the ancient village of Lowfield Heath, which was recorded in the Domesday Book in 1068. The groups behind the new report on the threatened heritage damage are CPRE (Sussex, Surrey and Kent branches), the Woodland Trust, the Gatwick Area Conservation Campaign, and Communities Against Gatwick Noise and Emissions. Brendon Sewil commented: “Gatwick seek to wallpaper over the sheer level of destruction it would cause to our British heritage. This is a major stand against Gatwick on one of the historical sites that its proposal would destroy. It would be far more damaging than HS2.”
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Government announces runway decision is postponed, till at least October, and left to next Prime Minister
The government has announced that the decision on whether to build a new south east runway will be left to Cameron's successor as Prime Minister. It is believed that this means Heathrow will not be getting a 3rd runway, any time in the foreseeable future. Downing Street sources say David Cameron sees no point in making a runway decision that would almost certainly be overturned by a successor. Patrick McLoughlin, the transport secretary, said in the Commons: "Being realistic, given recent events, I cannot now foresee that there will be an announcement until at least October." He and George Osborne wanted David Cameron to take the decision in favour of Heathrow before leaving office. Boris had been expected to stand as a candidate to be Prime Minister, but has not done so. The most likely next PM may be Theresa May, whose position on Heathrow is described as "nuanced." The Times understands that civil servants in the DfT recommended a Heathrow runway, having believed the (flimsy and guarded) promises by Heathrow on noise and NO2. Gatwick may feel it has a slightly better chance, but with Brexit the demand for air travel may be lower in coming years. There will be several years of negotiation to establish arrangements for UK airlines with the EU, and Gatwick deals mainly with cheap European holiday flights. Replies were made in the Commons to MPs' questions, by Patrick McLoughlin.
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Speculation and uncertainty over what Brexit may mean for the US-EU Open Skies agreement in future
The EU–US Open Skies Agreement is an open skies air transport agreement between the European Union and the United States. It became effective in March 2008, and it allows any airline of the EU and any airline of the US to fly between any point in the EU and any point in the US. It allows US airlines to also fly between points in the EU, but EU airlines cannot fly between points in the US. For the UK, the Open Skies agreement opened up transatlantic opportunities to Heathrow, whereas the previous bilateral deal gave access only to American Airlines, British Airways, United Airlines and Virgin Atlantic. But with the UK Brexit vote, the future of the Open Skies Agreement is uncertain. What happens next could take months or years to work out. In theory, if the UK is out of the EU, it would be out of Open Skies and have to renegotiate a bilateral with the US - which could mean airline access limits. In reality, that scenario is highly unlikely, because if the UK decides to join the European Common Aviation Area, like Norway and Iceland, which gives access to the Single Aviation Market. It is likely that the UK will do whatever it takes to continue unfettered access to both the EU aviation market and the US aviation market. However, the attractiveness of increased liberalisation, in many industries, may be reducing. There may be less trust in future of open markets. Uncertainty will continue ...
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easyJet, IAG and Ryanair woes over the UK Brexit vote and hit to their businesses
Shares in easyJet have lost value since the Brexit vote, and the airline said its profits would be hit by Britain’s decision to leave the EU. There would be continuing economic and consumer uncertainty, partly about the membership of UK airlines in the single European aviation market. easyJet expected its profits to be £28 million lower than earlier expected, in the third quarter of 2016, and revenue in the second half of 2016 would be lower. Revenue per seat might be 8.6% down in the third quarter of 2016. easyJet said the weaker £ against the € and the $ would make foreign trips more expensive for Brits, and the low cost airlines would have to cut fares in order to attract them. That means cutting airline profits. Carolyn McCall, easyJet CEO, is urging the European Commission to prioritise British airlines remaining part of the EU aviation area “given its importance to trade and consumers”. (ie. given its importance to airline profits). The value of IAG shares fell on the Brexit result, and they issued a profit warning, as the economic slowdown likely in the UK would reduce air travel demand. Ryanair's share priced also fell. It says it will not deploy new aircraft on routes to and from the UK next year, following the Brexit vote, and will instead focus on the European Union. At present, UK passengers are about 40% of Ryanair's total. They expect the period of "considerable uncertainty" to last for many months.
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Notre-Dame-des-Landes referendum: 55% majority in favour of new airport – ACIPA fights on
There was a referendum in the Loire-Atlantique département on 26th June, with the question whether people backed the moving of the current Nantes-Atlantique airport south of Nantes, to a site north of Nantes, at Notre-Dame-des-Landes. Finally the voting was 55% in favour of the move. The area to be destroyed for the new airport is good farm land and valuable wetland habitat, and there has been fierce, determined opposition to the project for years. The local opposition, focused through ACIPA, was deeply critical of the way the referendum was organised. They believe areas other than just those in Loire-Atlantique should have been consulted. Some of these areas would be opposed to the move, and some have to contribute public funds towards it. The government wanted the poll as early as possible, as there is a “declaration of public utility” lasting till October, so work has to start by then. The prime minister, Manual Valls, made a statement as soon as the referendum result was known, that "the government will implement the verdict." Those backing the new airport want to clear the protesters living illegally on the ZAD, some of the land on which the airport would be built, moved away soon, so clearing work can start. ACIPA said this result was just one step in their long struggle against the airport, and their struggle now continues.
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IATA warns UK air passengers could decline 3% – 5% by 2020 due to airline uncertainties and fall in the £
Following the UK’s June 23 vote to leave the European Union, IATA said preliminary estimates suggest UK air passengers could decline 3%-5% by 2020, following an expected economic downturn and predicted falling £ exchange rates. IATA's evaluation of the impact of Brexit notes that there is considerable uncertainty on details and timescale. A weak £ could make trips to the UK cheaper, but as there are far more outbound trips from the UK than inbound, and foreign trips for Brits going abroad will cost more, the net impact is lower numbers of passengers. A possible future path for the UK aviation sector would be membership in the European Common Aviation Area (ECAA).That would enable the UK to have continued access to the Single Aviation Market. However, it requires acceptance of EU aviation law across all areas, limiting the UK’s policy freedom. IATS says: "The same would apply to regulations more generally if the UK were to join the European Economic Area. For example, the strongest legal impediment to airport expansion comes from EU local air quality rules which would still apply to the UK if EU membership were exchanged for EEA membership.” IAG's share price fell immediately, and easyJet wrote to the UK government and the EC to ask them to prioritise the UK remaining part of the single EU aviation market. BMI said it might "have to review" its bases in the UK.
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Early decision on a new south-east runway thought unlikely, due to Brexit and Cameron resignation
There is much speculation and uncertainty about what will happen on the runway situation, and whether - or how much - it will be delayed. A leak was inadvertently made to PoliticsHome on 22nd (not intended to go out till after a Remain vote) indicating that the government would make a runway announcement on 7th or 8th July. That now seems very unlikely indeed. Heathrow put out a bland statement, realising that the rapid decision in their favour is not looking likely, and making out that their runway is of great national importance. Nobody knows what future role Boris may play, but he promised in May 2015 to "lie down in front of bulldozers" to stop a Heathrow runway. Gatwick is no more likely to succeed. There are also fears for infrastructure projects like HS2,and future investment in other rail services. In short, there is immense uncertainty about almost everything. Many of the UK's rail franchises are controlled and operated by European state-owned companies from Germany, the Netherlands and France. What happens with them? Business likes to plan ahead, and does not like uncertainty or being in limbo. The extent to which air travel will grow in future is now in doubt, with a recession likely - and UK air passenger numbers fall in recessions. The weakness of the currency will make many foreign leisure trips more expensive for Brits.
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Simon Calder: What does Brexit mean for British tourists travelling to Europe?
With Britain, somewhat unexpectedly, voting for Brexit there may be changes in the way airlines operate between the UK and the EU, and there may be other implications for air travel from currency changes. Simon Calder, in the Independent, sets out some of the issues and what might happen. The exchange rate of the £ against the $ or the € may not only make holidays, to the EU or elsewhere, more expensive - but an increase in the price of jet fuel could happen if the £ weakens against the $. Through the “Open skies” agreement, since since 1994, any EU airline has been free to fly between any two points in Europe. This allowed easyJet and Ryanair to flourish, and forced “legacy” carriers such as BA, Air France and Lufthansa to cut fares. The UK may have to negotiates a similar arrangement to Norway, within the European Economic Area (EEA), in which case little would change. But if Britain does not join the EEA, every route between the UK and the EU might need to be renegotiated on a bilateral basis. The bureaucratic logjam would be immense. Similarly, British Airways and Virgin Atlantic have easy access to America because of an EU-US treaty on open skies. The freedom for British airlines such as easyJet to fly within and between EU countries could be curtailed; nations such as France and Italy have in the past been protectionist of their home airlines. And much more .....