General News
Below are links to stories of general interest in relation to aviation and airports.
Gatwick’s retail income still about 22% of total – around net £3.72 on retail sales + £1.35 on parking per passenger
The Moodie Report has published figures for the retail income of Gatwick airport in the year to 31st March 2014. Gatwick's retail income rose 9.7% on the level in 2013, from £123.2 million to £135.1 million. By contrast their aeronautical income (aircraft landing charges etc) rose by 11.1% from £285.8 million to £317.4 million. There was a 4.8% increase in passengers, to about 36 million. Gatwick's car parking income rose by 12.9%, from £58.1 million to £65.6 million. In the year to March 2014, Gatwick made on average £1.35 per passenger on parking. It made, on average, £3.72 per passenger from retail sales. This was up by 4.2% from the level in 2013, but only up 2.7% on 2011. There is now even more retail space, with even more food and beverage facilities. In the year to March 2011 their retail income was £115.6 million and the net retail income was £3.62 per passenger. ie. barely changed over 3 years, (up 2.7%). And that's a new World Duty Free store opened, and 33 other new stores opened in the past year. Net retail income per passenger at Heathrow was £5.98 in 2011, and about £6.21 in 2012. For both Heathrow and Gatwick, retail income was about 22% or so of income.
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TUI Travel and German parent company TUI AG unveil merger proposals – with tax benefits
TUI Travel and its German parent company, TUI AG look set to unite in a £5.6 billion merger that will create the world’s largest tourism business. Analysts have been speculating about a marriage of the two groups since 2007, when TUI Travel was created through the merger of Britain’s First Choice holidays and the tourism business of TUI AG. TUI AG, which owns 230 hotels, a cruise business and a stake in the Hapag-Lloyd shipping group, retained a 55% holding in the UK company following the 2007 tie-up. They have now reached agreement in principle on the merger. The expanded company will be headquartered in Germany but listed on the London Stock Exchange. The proposed deal will generate recurring cost savings of at least £36m per year through initiatives such as scrapping the UK headquarters (and losing jobs). There would be “certain cash tax benefits” from a long-awaited tie-up. Had the merger been in place in the 2012/13 tax year, it is estimated they would have saved £28m. TUI admitted in December 2013 that it had paid no UK corporation tax in recent years, despite vast profits.
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Air fares could rise by £5 per passenger – if airlines have to compensate people for flight delays
Air fares are set to rise as airlines look to recover costs on payouts to passengers for delays in the wake of the Thomson court ruling. The Mail reports that a senior industry figure suggested fares could rise by as much as £5, with charter prices likely to increase by more than scheduled services. This comes after a passenger appealed to the Court of Appeal to get the compensation he was due for a flight delay 6 years earlier, for £975. Airlines hoped that a delay caused by a "technical fault" would not require compensation, and also that claims can only be brought for 2 years. Now the airlines fear huge compensation payments, and they will pass the costs - naturally - to the passengers. Delays of more than 3 hours affect almost 1% of UK flights which falls within Regulation 261.There are more of these delays on charter flights than scheduled flights. If every eligible passenger claimed, an extra £5 per passenger would cover the costs. Thomson say this will affect the whole airline industry, and that they intend to take this to the Supreme Court.
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Gatwick airport announces first profits for years and returns for its investors … UK tax?
Gatwick airport has announced its results for the year to 31st March 2014. It has made a profit, for the first time in 4 years. Gatwick says its passenger numbers reached 35.9 million in 2013/14 (4.8% up on 2012/13). Their turnover is up 10.2% to £593.7 million and EBITDA is up 14.2% to £259.4 million, with a resulting profit of £57.5 million. This compared to a loss in the financial year ending 31 March 2013 of £29.1 million. The airport has spent a great deal improving the airport, and so made losses - and paid no tax to the UK government for years. Gatwick says their investments and more marketing is being effective in attracting more passengers. It now has more aircraft movements at peak times (a cause of the noise nuisance being caused from new flight paths). Gatwick now claims 20% are travelling on business, largely on EasyJet. The figure was 17.5% in 2012. Gatwick says it will now be paying dividends to its investors, though it has not in recent years. It expects to pay £125m to investors in the current financial year, £65m return in the 2015/16 financial year and £60m in 2016/17. [Maybe also pay some UK tax?]
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Reading University research indicates the extent of non-CO2 aviation emissions on climate
Some research from the University of Reading, published in Environmental Research Letters, indicates just how much of the impact of aircraft is not only from the CO2 they emit, but also from the water vapour they emit. This will form contrails, in some weather conditions. These contrails can then expand and create a layer of high cloud, which has significant climate effects as it traps heat below it. The exact extent of the climate impact of the non-CO2 emissions from planes at high altitude is not established. It is likely to have around double the climate impact of the CO2. The research implies that it may be better for some planes to fly longer distances, burning more fuel and emitting yet more CO2, in order to avoid areas where contrails will form the most, and be the most long lasting. Contrails form where the air is very cold and moist, which is often in the ascending air around high-pressure systems. On average, 7% of the total distance flown by aircraft is in such areas. However, it is hard to compare the climate impacts of contrails and short term warming, and CO2 because the former can last just hours while the latter is irreversible and will last decades.
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EasyJet CEO still has no details of the practical economics of a Heathrow or Gatwick runway
In an interview, by Buying Business Travel, with Caroline McCall, the CEO of EasyJet she said Heathrow is an expensive airport, which is why they do not fly from there. On Gatwick’s and Heathrow’s bids for runway expansion she says: “We’ve seen none of the economics behind either of those visions. Inevitably it will be the airlines and therefore the passengers, that will fund this. Therefore, it’s a very, very big decision for Easyjet – because any increase in passenger fares is something that affects our low-fare proposition"...."We make £7 profit per seat – that’s it. We’ve raised that from £4.50 over the last four years. I think Heathrow are talking around £15 billion, Gatwick are talking around £7-8 billion. If you think about the price per passenger for that, you can see we have to be really, really careful about any capacity going into either airport, and before we take a view on it, we have to understand the economics.” And they want to focus on more business travellers: "because we know we get higher yields.”
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Court rules passengers can claim for flight delays for up to 6 years, not just 2 years
An airline passenger has won his case at at the Court of Appeal over flight delays, despite waiting 6 years to bring a case against the airline. The court rejected an appeal by Thomson Airways against an earlier county court decision to award James Dawson £1,488.73. He was delayed for 6 hours back in December 2006, going from Gatwick to the Dominican Republic. Thomson argued the claim fell outside a 2-year time limit. Legal experts said the ruling could lead to more than 11 million passenger claims and cost airlines up to £4 billion. The judgement means airline passengers now have 6 years to bring a flight delay claim in England and Wales. There are "hundreds of litigated cases which have been stayed pending the outcome of the Dawson case, and thousands more ready to issue proceedings". Mr Dawson sought to recover €600 euros per person from the airline, which is payable as compensation for a flight of that length under EU regulations. These do not stipulate a time limit for compensation to be claimed, leaving it up to national governments to set time limits. It is the 2nd court case in a week over flight delays, after the Court of Appeal found in favour of a passenger over a flight delay due to a technical fault.
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Standard reports that “Lib-Dems ready to drop Gatwick runway ban from election plans”
The Evening Standard reports that the LibDems are set to use their election manifesto to open the door to a 2nd runway at Gatwick while still opposing a 3rd runway at Heathrow. The Standard says the party is moving towards scrapping its blanket ban on airport expansion in the South-East. "It could be replaced with a series of tests on climate change and local pollution, as well as on levels of noise suffered by communities around airports." (Whatever that is meant to mean). The process of writing their election manifesto is being overseen by MP David Laws. It is still at the committee stage of drawing up key policies to be put to members for approval at the LibDem conference in the autumn. A "senior LibDem" is quoted as saying: “We will not endorse an expansion in airport capacity which would increase current noise pollution for the hundreds of thousands of residents living beneath the flight path, or which would break the Committee on Climate Change’s recommendations on aviation, which are needed to meet our carbon reduction targets.” (The CCC targets are rather weak and permit a new runway, with various provisos).
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Scottish government outlines nearly £10m of public funding for failing Prestwick airport
The Scottish government bought Prestwick from Infratil for £1 in November 2013. Now Prestwick is to receive nearly £10 million of investment from the Scottish government. It will go towards operating costs, a repairs and maintenance backlog and to make improvements to the terminal building. The airport has lost nearly £10 million in 2013. It was announced towards the end of May that a taxpayer-funded report on the future viability of Prestwick would not be published, to protect commercially confidential information. This has led to accusations that ministers are expecting “blind faith” from the public and "keeping taxpayers in the dark" on spending public money. Deputy First Minister Nicola Sturgeon said £5.5m had been provided already since acquisition and the Scottish government would be required "to provide a further £3m in operating support". There will be nearly £7m in capital investment - £4.5m for repairs and £2.4m to make improvements to the terminal building.. Future revenue could come from freight and retail development. Future revenue may come from freight and retail development
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Heathrow film competition presents 15 impressive anti-3rd-runway campaigning films
At a packed event held in Richmond Theatre, organised by MP Zac Goldsmith, with some 800 people present (free seats), Hugh Grant, Holly Willoughby and Rachel Johnson were the celebrities judging the competition for short films, of 2 minutes or less, opposing a 3rd Heathrow runway. The evening was ably and entertainingly compered by Giles Brandreth. The first prize was £10,000, the second prize £3,000 and the 3rd prize £2,000. Some 50 short films were entered into the competition. The 15 considered the best were shown at the gala event, for the judges to select the top three. The audience then voted on these three. All the 15 films shown were of a very high quality; any one of the 15 films could have been the winner. They all showed a high level of film expertise; there was a wide range of styles and approaches; all showed great originality and creativity, and put the message across powerfully. Anyone present at the gala event would be left in no doubt about just how determinedly people in the areas badly affected by Heathrow will do whatever it takes to ensure no new Heathrow runway gets built.