General News
Below are links to stories of general interest in relation to aviation and airports.
Huge protest in centre of Nantes against new airport – forceful police resistance; some rioting, violence and injuries
A huge protest took place in Nantes on 22nd February, against the planned new replacement airport to be built at Notre Dame des Landes, some miles to the north. The organisers estimated some 50 - 60,000 protesters, who came in from supportive groups from regions all across France. There are reported to have been 65 coach loads of protesters who travelled to Nantes to take part, and 520 tractors, brought by supportive farmers from surrounding areas. The protests were put down with considerable force by the police, using water canon, rubber bullets and tear gas. The issue has become very political in France. With elections coming up this year, the Prime Minister (and former Mayor of Nantes and ardent backer of the new airport) is thought unlikely to back down from pressing for the airport. However, it is not thought likely that there will be forceful evictions of the farmers and activists who are occupying the land allocated for the airport, called the ZAD - Zone à Défendre as it would be unpopular. An opinion poll found 56% of those surveyed were against the new airport. The courts have ruled it can go ahead, but there are appeals on ground of the law on water and on biodiversity.
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Partners Group including Strathclyde Pension Fund also bidding to buy Glasgow airport
Ferrovial has recently made a bid to buy Glasgow airport as well as Southampton and Aberdeen airports. Now Glasgow city council's pension fund - the Strathclyde Pension Fund (the wealthiest council pension fund in the UK) - is part of a bid consortium that is also bidding for Glasgow airport. The consortium includes Partners Group and Zurich Airport. Partners Group is a global private markets investment management firm. A decision by the Strathclyde Pension Fund group to try and buy Glasgow could spark a bidding war. The bid is supported by the Glasgow city council leader and the Renfrewshire council leader. If their bid was successful, public involvement in a takeover for Glasgow would place it in direct competition with Prestwick, which was bought by the Scottish Government last year. That could mean a political conflict between Labour-run Glasgow and the SNP administration at Holyrood. The Strathclyde Pension Fund has spread its investments across a wide range of areas and has a stake in Samsung and Apple, as well as property portfolio which includes a Wolverhampton shopping centre and an office block in Hong Kong.
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FT reports that uncertain privatisation of AENA casts doubt over its stalled Luton expansion plans
Spanish airport operator, AENA, bought Luton airport in summer 2013 from Abertis. AENA is one of the world’s biggest airport operators in terms of passenger numbers, and manages Spain’s major airports. It also owns minority stakes in 15 more airports around the world. The FT says that now their plans are in doubt and Luton has a question mark over its future. Luton is the UK's 5th largest airport in terms of passengers, and is the base for easyJet. AENA had plans to expand Luton, taking its annual number of passengers from around 9 million to 18 million - plans that have been fiercely opposed locally. AENA had plans to compete with French airport operator ADP, Germany’s Fraport and Singapore’s Changi. The FT says now AENA's future is unclear and whether government will allow it to be largely privatised. This is having an impact on its Luton plans. The Luton expansion is being held up, or is on a back burner. The privatisation is a political matter within the Spanish government, and whether it has to sell assets to rescue the nation's economy. The government hope to avoid selling much of AENA, and if it stays under state control, its Luton expansion plans may be scrapped.
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Sandbag blog: Aviation in the ETS – still no deal
If EU governments have kept their word, letters should now be landing on the doormats of the airlines across the world who haven’t complied with the ETS. This last minute notice of penalties for non-compliant airlines is a desperate last minute attempt to show that EU laws will be applied when airlines operate in Europe. Sandbag say that though the EU data is sketchy, a number of airlines, including China Eastern and Air India, were missing from EU records, despite the law saying they should pay for their CO2 when they flew from one EU airport to another (the UK won't currently confirm who isn't compliant). Now the proposals for a change to the scheme are in trialogue discussion between the three pillars of the EU government, the Commission, the Parliament and the Council. MEP Peter Liese, who is leading the ETS proposals, has said he is willing to compromise further, and allow the current limited scheme to continue for 2 more years. This unsatisfactory and weak position suits EU member states afraid of confrontation or trade wars with China, India etc. Peter Liese wants EU member states to agree that the ETS should revert to full coverage (not only within Europe as at present) in 2016.
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European Commission launches legal action against UK over failure to reduce air pollution
The European Commission has launched legal proceedings over levels of nitrogen dioxide (NO2) in many British cities. There has been a long-running legal battle between London and Brussels over the 16 urban centres in the UK that will not be able to meet binding air quality standards by 2015, despite being granted a 5-year extension following the original 2010 deadline for compliance with the rules. 15 of the affected zones will not meet the standards until 2020 and parts of London are unlikely to meet NO2 standards until 2025, a full 15 years later than the original deadline. The EC has now started the legal case, which is likely to result in hefty fines of many millions of ££s which should have the effect of accelerating efforts to tackle air pollution. The zones included Greater London and the South East. The legal case has been precipitated by the environmental campaign group ClientEarth. The UK has some of the highest levels of NO2 in Europe. The UK government now has 2 months to respond to the EC's legal action. The Heathrow area has bad air quality levels, due partly to the planes but with an even higher proportion from the intense road traffic, especially diesel vehicles, that the airport attracts.
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European Commission opens the floodgates to public aid for airports and low-cost airlines
Responding to the announcement of the new EC guidelines on state aid allowed to airports and airlines in the EU, the European transport NGO "Transport & Environment" said it was outraged at the increase in subsidies to be allowed. The guidelines will allow regional airports and the airlines serving them to keep receiving subsidies worth an estimated €2-3 billion a year. This means an increased flow of taxpayers’ money towards regional airports for at least the next decade, and allow infrastructure aid for expanding airport facilities to continue permanently - regrettably including no meaningful checks on duplication of airports within a few hundred kilometres of each other. The guidelines also declare that past operating aid, which up till now has been illegal, will retroactively be made legal. T&E says this "gives a new blank cheque to airports and airlines that fail to boost local economies. Why must everybody pay so that the better off can fly more often and for cheaper?" Operating aid is designed to cover the cost of running small airports, such as personnel and maintenance. Instead, operating aid has been used to lower airport fees to attract low-cost carriers, distorting competition and fuelling artificial demand for flying.
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European Commission Commission adopts new guidelines for state aid to airports and airlines
The European Commission has now adopted new guidelines on how Member States can financially support airports and airlines in line with EU state aid rules. The EC says the guidelines are "aimed at ensuring good connections between regions and the mobility of European citizens, while minimising distortions of competition in the Single Market." The aim is to ensure fair competition for flag carriers down to low-cost airlines, from regional airports to major hub airports and avoid overcapacity and the duplication of unprofitable airports. Aid is allowed if there is seen to be a genuine need for accessibility by air to a region. Operating aid to regional airports (with less than 3 million passengers a year) will be allowed for a transitional period of 10 years under certain conditions, in order to give airports time to adjust their business model. Airports will less than 700 000 passengers a year get more favourable treatment. Start-up aid to airlines to launch a new air route is permitted provided it remains limited in time. The formal adoption of the new guidelines in is expected by March 2014.
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Bavarian Administrative Court rules that building a 3rd runway at Munich airport is lawful
The Bavarian government in southern Germany have been trying for some time to get consent for a 3rd runway at Munich airport, to the north of the existing airport. The 300 or so runway opponents in the court greeted the news with boos and by singing the Bavaria national anthem. On 19th February the Bavarian Administrative Court (VGH) ruled that the runway can go ahead, when they rejected the 17 lawsuits against the project. The project was halted by a referendum in June 2012, when by a majority vote the people of Munich expressed their opposition to the runway, which would demolish the village of Attaching. However the legal judgement is not the end to the story, and the fight is expected to continue. Those opposed to the runway point out that a runway is not needed as the number of flights has fallen over recent years and the current runways have plenty of spare capacity, with the advent of larger aircraft. Though the result of the 2012 referendum was only valid for one year, the political parties in Munich are very aware if local opposition to the runway, and they need their votes. It is the state government and economic lobbies that want the runway. Opponents.will fight on.
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Ferrovial makes bid to buy Aberdeen, Glasgow & Southampton airports – hoping to make more profit than at Heathrow
Ferrovial had made an offer - for an undisclosed amount - to buy Aberdeen, Glasgow and Southampton airports from its partners in Heathrow Airport Holdings. The price might be as much as £800 million. Ferrovial is the largest shareholder in Heathrow, with 25%. Heathrow Holdings has made it clear for sometime that it is eager to sell its other remaining airports. It is understood that Ferrovial is not making the offer in partnership with any other company, though some reports suggest that Australian infrastructure companies Macquarie and Industry Funds Management are also involved. It is not known if Ferrovial's bid will be accepted. A Portuguese bank has valued the 3 airports at £952m using an equity value/earnings before interest, tax, depreciation and amortisation of 12.3 times for Aberdeen and Glasgow and 10.7 times for Southampton. Ferrovial bought BAA in 2006 for £10.3bn. It has since offloaded Gatwick, Stansted and Edinburgh in order to lower its debt. Now it is keen to buy again. Ferrovial hopes UK regional airports will grow strongly for the next few years, if the UK economy starts to grow, as they have a large amount of unused capacity. By contrast, the CAA has limited the amount Heathrow can charge airlines for landing charges, so decreasing the return available from Heathrow.
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The truth behind (not so) cheap flights – the immense annual state subsidies to small airports & cheap airlines
In a recent blog, Jacek Krawczyk, who is the president of the Employers' Group of the European Economic & Social Committee, describes how the current system of state subsidies to European airports and airlines works - and how damaging its effects are. He says aviation needs to be treated like any other business, a "level playing field" without financial help given to some airlines, and the sector should have less subsidy. In response to the question how Ryanair flights can be so cheap, the answer is that they get subsidies for flying into small regional airports. This artificially boosts demand for flights. As much as 20% of Ryanair's revenues are from subsidies, from reduced taxes, preferential ground handling rates and marketing funds. These subsidies could be as much as €10 per passenger to the airline. Krawczyk says almost half of European airports (of which there are too many) generate losses, and more than half if state aid is subtracted from their revenues. The low cost carriers say they get cheap deals with airports by standard business negotiations, while regular airlines get huge amounts of subside direct from governments, from being out-competed by the low cost carriers. "There is a great opportunity here to prepare the first in-depth, complete and PUBLIC report showing how much public aid is pumped into the aviation sector and how those resources are spent."