General News
Below are links to stories of general interest in relation to aviation and airports.
15 routes to small airports short-listed to apply for taxpayer subsidy over three years
The Government invited airports and airlines to bid for state funding to set up routes, which would not otherwise be profitable. This is only permitted under EU law under certain conditions. In March the DfT published the details of 19 bids it had received during the initial application stage for funding from the Regional Air Connectivity Fund. The funding is available for new routes for regional airports which handle fewer than 5 million passengers a year, and they have to demonstrate that the route would be commercially viable after 3 years. The government hopes that smaller airports will improve connectivity, increase trade and help to create new jobs in their regions. Bids from 15 smaller airports across the "Northern Powerhouse," of England, Scotland and Northern Ireland are now to be considered on the short-list for the state funding. Patrick McLoughlin said aviation is one of the UK’s economic success stories and our investment ensures it is shared out across the whole country. The shortlisted routes include Dundee-Amsterdam, Doncaster Sheffield-Frankfurt and Newquay-Leeds. The government expects to spend £56 million of taxpayers' money on this over three years.
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Group of London councils say Airports Commission buried economic evidence
The AEF has analysed the Airports Commission's economic claims, of £147 billion of benefit to the UK (over 60 years) of a Heathrow runway. Now council leaders of London boroughs, opposed to a Heathrow runway (but unfortunately keen on a Gatwick runway instead) have also criticised the Commission's figures. They have unearthed a letter by Professor Peter Mackie and Mr Brian Pearce, the Commission’s own expert advisors, which questions the reliability of growth forecasts used to justify the Heathrow recommendation. Instead of the £147 billion estimate by PwC, the the Government’s established approach to economic modelling predicts growth in the region of £33.6 - 54.8 billion for Heathrow expansion, versus £27.2 - 47.1 billion for Gatwick. In a letter to the Commission Mackie and Pearce warn that the figures include “a high degree of overlap between the direct and wider impacts… double counting … and rely on economic growth and other assumptions which are at the extreme end of the range.” They warn that “qualifiers such as ‘up to’ do not give a flavour of the likely median or mean outcome across the economic scenarios.” The methodology used by PWC is experimental and has never been tested against a live project.
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Gatwick has published a 50 page dossier attacking the work and conclusions of the Airports Commission
Sir Howard Davies must have been hoping that after the Airports Commission recommended a Heathrow runway, that would be the end of the matter. However, assessment of the Commission's conclusions and their analyses has been highly critical. Gatwick airport and its backers have complained vociferously about failings in the Commission's report - on the economics, the passenger forecasts, the cost and the deliverability. The figures for the economic benefit to the whole country of a Heathrow runway can be looked at in a number of ways, and on some assessments come out little higher than those for Gatwick. Gatwick says the Commission used out of date numbers for Gatwick passengers, and that has seriously undermined the case for Heathrow. Gatwick also argue that the costs of road works and tunnelling the M25 for the Heathrow runway have been considerably underestimated, and this undermines the Commission's entire case. Gatwick also says the Commission’s interpretation of the law on the Government’s requirement to meet air quality rules is incorrect. Gatwick has sent a full response to the Commission report, setting out their concerns. It can be accessed here.
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Tom Burke article exposes the fallacy of hoping carbon pricing will lower CO2 emissions
The aviation industry is reluctantly realising it needs to cut its carbon emissions, and work is under way, through ICAO, on a "market based measure" by which the industry could pay for carbon emissions. This, like the EU ETS, would be by being able to buy carbon permits from other sectors which had managed to make actual carbon cuts. A hard-hitting article from Tom Burke casts serious doubt on whether this sort of carbon pricing and trading could ever work effectively. He fears many high carbon industries pay lip-service to the concept, in the full knowledge that it will never work sufficiently well to curtail their activities, and it delays the need for any real action. He says: "The intent is to create the impression of an industry in favour of urgent action whilst actually slowing that action down".... [with the carbon price remaining too low] ... "If only governments were brave enough to put the carbon price up higher and faster, they will lament, we would get there sooner. This is hocus-pocus. They know full well governments will be deeply reluctant to put up consumers' bills." ... "There is no chance that the world will agree on a global price for carbon in the forty years we have to keep the climate safe.... Their purpose is clear, to set a trap for unwary policy makers and environmentalists. Shame on those who fall into it."
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Analysis by AEF shows economic impact of Heathrow runway likely to be minimal, or negative. Not £147 billion (over 60 years)
The Airports Commission has claimed,in its final report (1st July) and the media has uncritically repeated, that a new north-west runway at Heathrow would deliver up to £147 billion benefit for the UK (over 60 years). Now the AEF (Aviation Environment Federation) has done some critical analysis of the Commission's various documents and figures, to elucidate what the actual economic impact on the UK economy might be. This is complex stuff, and making sense of the various facts (often in different documents at different dates) is not for the faint hearted. However, AEF shows that claims of £147 billion do not take into account the environmental or surface access costs associated with a new runway. The Commission’s own economic advisers have criticised the analysis (not done with the usual "WebTAG" model used by government) for double counting and questionable assumptions in relation to the indirect benefits associated with increased seat capacity. Using WebTAG, it appears - using the Commission's own data - that there could be a net cost to the UK economy of - £9 billion over 60 years. Not a benefit at all, once all environmental and surface access costs are factored in. With some ‘wider economic benefits’ included, the benefit over 60 years would still be only £1.4 billion (not £147 billion), as quoted in the Commission’s own final report.
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Boeing 757 escape slide fell from plane at around 3,000 feet, approaching Gatwick (Oct 2014)
A Thomas Cook Boeing 757-300 that took off from Gatwick on 31st October 2014 dropped an emergency escape chute [about 25 kg weight?] as it approached Gatwick, for an emergency unscheduled landing. The plane’s escape slide fell off at 3,000 ft as it was approaching the airport, and was later found stuck in a tree (location not specified). A report by the AAIB said several minor issues combined to loosen the slide release mechanism of the slide as the plane was taking off. A crank handle had not been in the right place. During the take off the cockpit instruments showed that the right over-wing escape slide container was not secure. With no sign that the slide had actually come loose, the crew continued with their take-off. The pilot circled around for 40 minutes, with landing gear, flaps and airbrakes deployed to burn off excess fuel and get the plane down to a normal landing weight before returning to Gatwick. As the plane descended to 3,000 ft, some of the cabin crew and passengers heard a number of bangs or felt the airframe shuddering. Two passengers reported seeing a white object falling from the right hand side of the aircraft. It was later discovered that the emergency slide had struck the body of the plane and one window before it fell.
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Airport shops cheating passengers out of £ millions in VAT fiddle
The Financial Secretary to the Treasury, David Gauke said he was concerned and disappointed that airport retailers were pocketing millions of pounds in VAT discounts without passing the savings to customers. And that this should stop. Stores at airports demand that passengers present their boarding cards at checkouts before paying for any goods,in order to avoid paying 20% VAT on everything they sell to customers who are travelling outside the EU. Most of these stores, including Boots and W H Smith, do not pass on the savings to passengers. The Independent says this ruse is also used by so-called “duty-free” shops to boost their profits on alcohol sales, thereby making profits of up to 100% on each alcohol sale they make to travellers leaving Europe. UKinbound chief executive said visitors to the UK already have the impression that the UK is an expensive destination - and this is not helping. The airports charge retailers huge rent, to have the privilege of a store in the captive market that is the airport departure lounge. Exact figures are hard to come by and not publicly available, but Heathrow alone last year made around £400m in rental income from its airport 345 concessions and stores. Unlike on the high street Heathrow does not charge its stores a set flat rent – but rather a % of their net sales. On average each retailer is paying over £1m a year in rent.
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Airlines save themselves £ millions per year by not paying passengers compensation for delays of over 3 hours
Delayed airline passengers are potentially missing out on millions of pounds of compensation, according to an investigation by Which? It found more than 9,000 flights are delayed for 3 hours or more each year, with an average of 97 passengers on each flight. Passengers travelling within the EU who are delayed for more than 3 hours could be entitled to compensation up to €250 (£217) for flights up to 923 miles, and €400 (£347) for trips between 932 and 2,175 miles, and €600 (£521) if the journey is over 2,175 miles. Those protected by the Denied Boarding Regulation have to be flying with an EU-based airline or flying from an EU airport. Which? director of campaigns Alex Neill said people should assert their rights, hold their airline to account for those delays and claim the compensation that they are owed. Only 38% of the 7,000 Which? members surveyed had made a claim. Travel expert Simon Calder said the rules on compensation were "very, very complicated", with the process of claiming not always being straight forward. He also said airlines generally did "everything to fight it if they believe there's a chance they're not responsible" and many who claim just give up. At Gatwick 0.8% of flights (2,134 in total) were delayed last year by 3 hours or more. At Heathrow it was 0.5% (2,192 in total). All those claims could dent the airlines' profits.
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Slough’s £1.5 million deal with Heathrow “unlocked funding denied to other councils” like Hillingdon
Slough Council has backed Heathrow's runway plans, and entered into a deal with Heathrow to try and get the maximum benefits. Slough Council says its deal will "unlock £1.5 million in direct financial support denied to neighbouring councils." Slough’s Deputy Leader James Swindlehurst has refuted suggestions that its partnership with Heathrow is anything less than the strong package he promised in January to mitigate the worst impact of airport expansion for communities closest to Heathrow. This has meant that Slough has secured funds for mitigation while neighbouring councils have been left with nothing. “Councils like Hillingdon, who have not negotiated with the airport, have no funds being allocated to them." Cllr Swindlehurst says the agreement provides a guaranteed minimum of £100,000 per year for 15 years where Heathrow and the Council will allocate the money to fund specific improvement projects in selected wards. That would only follow approval of the Development Consent Order for a 3rd runway, but Cllr Swindelhurst says additional funding pledges specifically mentioned in the agreement are in addition. Hounslow is now in talks with Heathrow, to get a financial deal. Hilliingdon has refused to enter into financial negotiations.
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Scottish Government to consult on impact of halving, and then removing, APD
The Scottish government intends to remove Air Passenger Duty (APD) from flights departing from Scottish airports, in the hope of attracting more flights. Scottish ministers hope cutting APD would encourage more direct flights from Scotland and reduce the need for connecting flights via Heathrow and Amsterdam. Air travel is already very under-taxed, paying no VAT and no fuel duty. The Scottish Government says it will halve APD during the Scottish Parliament’s next term, which will run until around 2020. That will mean about £200 million in lost tax to the government, and the Scottish government has to reimburse the UK Treasury. Scottish ministers want APD cut completely "when public finances permit." There is to be a new policy forum to look into the implications of removing or reducing APD, and a policy consultation this autumn. The forum will include some environmental groups, as well as aviation lobbies. There would be increased CO2 emissions from Scottish aviation if there was a 50% cut in APD, and even more so with no APD. The Scottish government will have to explain "which other sectors of society will pick up the shortfall and at what cost.” More cheap holiday flights for Scottish people is likely to increase the tourism deficit, with more money flowing out than is brought in by in-bound tourists.