General News
Below are links to stories of general interest in relation to aviation and airports.
GIP to put London City airport up for sale this year – might raise £2 billion?
London City airport is to be put up for sale by GIP by the end of the year, who want to capitalise on the rising global demand for air travel. GIP owns 75%, with Oaktree Capital owning the remainder, but both have agreed to the sale. GIP also has the main stake in Gatwick airport, and Edinburgh but say they are not selling these now. It is thought the airport might fetch as much as £2bn, which the FT says would be a multiple of over 60 times the company's EBITDA in 2014. GIP bought the airport for about £750m in 2006 from Dermot Desmond; he had paid £23.5m for it in 1995 from Mowlem. The airport is trying to get planning consent for work to increase the annual number of passengers to 6 million per year by 2023, (4.1 million in 2014) but this has been blocked by Boris, due to noise. London City is appealing against this and may hear the outcome next year. City airport has already been granted permission to increase ATMs from 70,000 to 120,000 per year. It is widely believed that GIP would sell Gatwick soon, after the government makes a decision on if/where there might be a new runway. Last month, GIP said it would be prepared to give a legally binding promise that it will not sell out for a quick profit if the government decides to opt for a runway at Gatwick.
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Independence of Airports Commission questioned over Howard Davies’ role in Prudential, which recently bought more Heathrow property
Campaigners against a 3rd Heathrow runway have questioned the independence of the Airports Commission and its chairman, Howard Davies. It has been revealed that he is a board member of Prudential, an insurance group which invested in property near Heathrow, just months before the Commission recommended a 3rd runway. He chairs its risk committee, which reviews and approves group investment policies as well as advising the board on risks in the company’s “strategic transactions and business plans”. The Guardian reports that Prudential embarked on a £300m spending spree on properties around Heathrow, just as the commission prepared to deliver its final report, on 1st July. Prudential has an asset management business, M&G. In 2013 it bought the Hilton hotel at Terminal 5 for £21m and an earlier investment with planning permission for a large hotel close to where the proposed 3rd runway would be built. In May and June 2015 M&G bought more property including cargo depots and a business park a short distance from Terminal 4. Howard Davies also, till September 2012, advised the GIC (Singapore), which owns 11.2% of Heathrow. The Teddington Action Group say Davies' links with Prudential undermines the impartiality and credibility of the Commission’s recommendations.
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Jeremy Corbyn’s election as Labour leader could scupper plans for Heathrow 3rd runway
The election of Jeremy Corbyn as leader of the Labour Party could scupper plans for a 3rd Heathrow runway, as he has now declared his opposition to it. The three other Labour contenders, Andy Burnham, Yvette Cooper and Liz Kendall, all support the plan to expand Heathrow. Jeremy Corbyn appears most likely to win the leadership contest. If the Conservative party needs to get a Heathrow runway approved in Parliament, he may need Labour to be behind it. When the Airports Commission issued their final report on 1st July, Labour supported a Heathrow runway and wanted a quick decision by the Government to get on with it. But now Mr Corbyn said: “A third runway at Heathrow would mean 4,000 homes demolished and 10,000 people displaced. It would cause massive increases in noise and air pollution and inflict misery on hundreds of thousands of Londoners. UK air pollution is already above EU limits, and 30,000 people are dying every year because of it". He wants better transport links to airports, betteru se of existing capacity, and more even spread to the regions. Of the London Mayoral candidates, Tessa Jowell, Gareth Thomas and David Lammy back Heathrow, and Sadiq Khan, Christian Wolmar and Diane Abbott are against.
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Hounslow Council “positive and productive” and “better working relationship” with Heathrow
Labour led Hounslow council responded to the Airports Commission's final report recommending a 3rd Heathrow runway, by saying that while the council is opposed to a bigger Heathrow, they want "a better and successful Heathrow." They continue say they are against a 3rd runway, or any relaxation on runway alternation, or more than 480,000 flights per year. However, the extent of the council's opposition is much reduced. It says it wants the "very best noise protection and pollution control measures for our residents – and in particular, our schools." But it adds: ..."we welcome the report’s recommendation that the new runway should come with severe restrictions to reduce the environmental and noise effects, including a noise levy, and that night flights would be banned. ... we .... have recently developed a positive and productive relationship with Heathrow, which has resulted in many improvements for local people..." In June the council denied rumours it has withdrawn from the 2M group, which opposes a Heathrow third runway. Hounslow is noticeably on better terms with Heathrow, hoping to get benefits if a runway is permitted. Hounslow teamed up with Hillingdon Council to oppose a planning application which would enable more departures over Cranford.
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Airports Commission report shows fewer, not more, links to regional airports by 2030 with 3rd runway
The Times reports that analysis by Transport for London (TfL) of the Airports Commission’s final report shows that, with a 3rd runway, Heathrow would only serve 4 domestic destinations by 2030, compared to the 7 is now serves. It would serve only 3 with no new runway by 2030. (The Gatwick figures are 7 domestic destinations by 2030 with a 2nd runway, compared to 10 now). Heathrow has been claiming that its runway will be important for better links to the regions, and improved domestic connectivity by air. The Heathrow runway has been backed by Peter Robinson, the first minister of Northern Ireland, Derek Mackay, the Scottish transport minister, and Louise Ellman, the chairwoman of the transport select committee - on the grounds that it would help the regions. The Commission's report says: (Page 313) "15.8 ....without specific measures to support domestic connectivity even an expanded Heathrow may accommodate fewer domestic routes in future...." The Commission cannot see effective ways to ensure domestic links are not cut in future, as less profitable than long haul, but they suggest public subsidy by the taxpayer for these routes. This is by using PSO (Public Service Obligations) which could cost £ millions, is a bad use of public money, and may fall foul of EU law.
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British Airways-owner CEO, Willie Walsh, opposes new Heathrow runway as too expensive to airlines
British Airways-owner IAG does not support the building of a 3rd Heathrow runway, its chief executive said, because the costs of the project does not make sense for the airline. Willie Walsh said: "We think the costs associated with the third runway are outrageous and certainly from an IAG point of view we will not be supporting it and we will not be paying for it. ...We're not going to support something that increases our costs." British Airways is the biggest airline at Heathrow [it has around 50% of the slots]. An expanded Heathrow with a new runway would be partly paid for by higher charges to airlines. In May this year he had said "the cost of all three [runway] options are excessive and would translate into an unacceptable increase in charges at the airports.” Not to mention the problems of politics and unacceptability to the public. The Airports Commission's final report says, with a new runway at Heathrow, "The resulting impact on passenger aeronautical charges across the Commission’s four demand scenarios for Heathrow is an increase from c. £20 per passenger to a weighted average charge of c. £28-30 per passenger and a potential peak of up to c. £31."
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End of the line for European over-night sleep trains, with the relentless rise of low cost air travel
It used to be possible to make a number of longer journeys between cities in Europe by sleeper train. Though not always the most comfortable night's sleep, and with the added interest of sometimes needing to share a couchette, they were a relatively low carbon way to travel a long way, without the need or expense of a hotel for the night. But now more and more of these night services are being terminated, and those that remain don't have enough investment to keep them up to modern standards of comfort. As the price of air travel is so low, due to subsidy (air travel in Europe pays no fuel duty, and no VAT; the highest tax is APD from the UK at €13 per return trip), over-night rail journeys cannot compete on price. In an article in Passenger Transport, Jonathan Bray bemoans the sad decline of these train routes, which made longer trips around Europe possible, by a low carbon route. It is short sighted of governments to cut these routes, and to focus instead on every cheaper air travel, and the more sexy (and higher carbon) high speed rail schemes. The rail routes may be needed in future, as a less carbon intensive form of travel. Governments and the rail companies need to be ambitious about the contribution over-night train services can make to decarbonising travel.
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Ipsos Mori poll across UK shows 33% don’t want airport capacity increased (60% do). Only 13.2% want Heathrow runway.
The Evening Standard commissioned a poll by Ipsos Mori, of attitudes to a new runway - or a new airport. It was a telephone poll, of 1,026 adults across the UK, between 18th and 20th July. It found that 60% thought there should be some airport capacity expansion. 33% though there should be no expansion (and 7% did not know). Of the 60% in favour, 44% (ie. 26% of the total) either wanted a new airport or expansion of an airport other than Heathrow or Gatwick. Only 22% of those wanting expansion wanted a Heathrow runway (ie. 13.2% of the total sample) and only 24% (ie. 14.4% of the total sample) wanted a Gatwick runway. Those figures really are very small. Asking the whole sample, including those who did not think airport expansion was needed, what were the most important issues the Government should consider on where a runway should be built, the very highest number said "impact on the natural environment" (39%) and the second highest was "noise created for local residents" (30%). Other issues like total costs, support of local residents, local air quality and traffic congestion were all important (about 11 - 15%). The message being taken from the poll is not only that backing for a runway at Heathrow or Gatwick is very small, and there is no consensus, but also that there is more backing for a new airport elsewhere - or expanding another airport (regional?)
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Study in the USA by MIT shows air pollution from aircraft ‘responsible for 16,000 deaths per year worldwide
A study by MIT published in the US journal, Environmental Research Letters, has found that air pollution emissions from civil aircraft could be responsible for the premature deaths of 16,000 people around the world every year, with an economic cost of up to £13.5 billion. Of that cost, about £5.8 billion was in Europe. The study looked at aircraft emissions at 968 airports around the world in 2006, and used local air quality dispersion modelling. It found that the majority (87%) of the calculated 16,000 deaths per year from aviation emissions were attributable specifically to PM2.5. The MIT study looked at air quality and human health impacts of aviation at three different scales: - local level (less than 1km from airport); - near-airport level (less than 10km); - global (up to 10,000km from source). It found about a quarter of the premature deaths (4,000) were near airports, from emissions from planes on the ground, landing and taking off. The authors of the study said the societal costs of aviation air pollution “are on the same order of magnitude as global aviation-attributable climate costs, and one order of magnitude larger than aviation-attributable accident and noise costs”. Aviation is expanding each year globally.
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Heathrow boss rules out footing the £5 billion bill for road and rail works – wants taxpayer to pay
The Airports Commission left the matter of who would pay for the approximately £5 billion needed to tunnel a section of the M25, and other surface access improvements, vague. The assumption has been made that the taxpayer would have to fund this, though the Airports Commission suggested that Heathrow would be able to find the funding from its investors for this. Now the CEO of Heathrow has dismissed the suggestion that the airport foots the £5 billion bill for road and rail work if a 3rd runway is built. Huge motorway engineering would be needed, to have the runway going over the motorway. John Holland-Kaye has ruled out paying for the surface access work. Though the government funds road and rail improvements under normal circumstances, tunnelling the M25 and dealing with hugely increased road traffic using an airport 50% larger than at present are not normal circumstances. Especially in times of huge economic savings being necessary in public finances. The Commission's final report said it considered the runway was commercially viable "without a requirement for direct government support. This remains the case even in a situation where the airport is required to fund 100% of the surface access costs." This would be by Heathrow "raising both debt and equity finance. This finance is then serviced through subsequent revenues and refinancing by the airport operator."