General News
Below are links to stories of general interest in relation to aviation and airports.
Ryanair to target business travellers in 2014 – to doubt it has the right network of business destinations
Ryanair has announced plans to target business travellers in 2014, with a new “business product” coming in the next few weeks, and the appointment of a dedicated sales leader. They will be adding a new section to their website for groups and corporate travellers, and will offer them flexible tickets, reserved seating and fast-track through selected airports. Ryanair hopes to muscle into this market, offering lower charges to those travelling on business. However, critics in the field of buying business travel say Ryanair must start flying to more business destinations if they’re going to make a “serious dent” in the corporate travel market. At present Ryanair is at a disadvantage because from London it only operates out of Stansted and does not fly to many business destinations. There are not many frequent UK business travellers who will fly from Stansted. Until Ryanair have good networks and business destinations, they are unlikely to make a serious dent in the corporate market. Ryanair has copied easyJet, which got the idea of getting into business travel first. They have been "getting rather jealous” of it. However, a commentator experienced in buying business travel commented that easyJet now have a "good business product, especially with the adding of new routes to Brussels, Paris and Moscow." Ryanair will have a struggle to catch up.
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Birmingham airport hands out £13 million share dividend to Birmingham City Council
Birmingham Airport managed to handle 9,119,709 passengers in 2013, which was the highest since 2008 and up + 2.3% compared to 2012. The 2013 number is still around 4.7% lower than the 2008 peak, but has been growing slowly since 2010. Most passengers continue to be on leisure trips, including long haul leisure, for example to Barbados and Gambia (those "seeking some winter sun over the Christmas break"). The airport hopes its runway extension will open during 2014, enabling flights by larger planes to long haul destinations. More passengers travel out from the area, on holiday trips, than travel in though the airport wants to attract more visitors from South-east Asia. Birmingham City Council, with 6 other West Midlands local authorities, owns 49% of the airport and has been handed a £13 million dividend after the airport had a "successful" year and reappraised its finances after the imminent completion of the runway extension. This will help fund the £5 million budget black hole in Birmingham’s 39 leisure centres and swimming pools. Birmingham and the other councils had earlier agreed to sacrifice dividend payments to help fund the £33 million runway scheme, and are now set to be rewarded for their generosity.
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Spelthorne Council Leader admits Heathrow expansion ‘not an easy issue’ while continuing support for 3rd runway, not in his constituency
Support for the expansion of Heathrow has been reaffirmed by Spelthorne Borough Council. The decision to maintain its stance, held since 2008, when the authority withdrew from the 2M group of councils including Richmond, Hounslow and Hillingdon who opposed Heathrow expansion, was made at an extraordinary council meeting on January 16th. The meeting was called following the publication of the Airports Commission interim report on 17th December, short-listing 2 runway options at Heathrow. for an extended northern runway and the airport’s own plan of demolishing medieval villages to the north to build a third runway. Heathrow's own proposal is for a runway to the north-west, which does not affect Spelthorne (to the south) very much. It would mean demolition of Harmodsworth, or making it near impossible to live in. Spelthorne Council leader Robert Watts said: “Expanding airports is challenging. .... This is not an easy issue.” Spelthorne has always supported Heathrow expansion. In 2012 their own MP even advocated demolishing part of his borough, to build a runway - till he realised it was not a local vote-winner.
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“Cut Tourism VAT” campaign wants tax cut from 20% to 5% on UK tourism to boost tourism jobs and earnings
Caroline Lucas, the Green MP for Brighton Pavilion, is campaigning for a cut in the rate of VAT on UK tourism. She hopes that more tourism for her constituency would be of benefit, and also for the tourism industry across the country. She has had meetings with other MPs and industry leaders, hosted by the "Cut Tourism VAT campaign." Caroline has asked the Treasury to cut the rate of VAT on UK tourism from 20% to 5%, arguing that it would create jobs, and end the competitive disadvantage currently facing the UK tourism industry in the European market. She is also seeking to secure a parliamentary debate on the issue. The UK is one of only four countries in the EU with no reduced rate of VAT on tourism. The others are Slovakia, Lithuania and Denmark. A 2011 report by Deloitte and Touche found that a 5% reduction in VAT would deliver £2.6 billion in extra revenue to the Treasury over a decade, and create 80,000 jobs over two to three years. The "Cut Tourism VAT campaign" is initially calling for a reduction for accommodation and attractions, but would ultimately want to extend the cut to restaurants (excluding alcoholic drinks).
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CAA provisional UK airport data for 2013 shows very small (around 0.4%) rise in ATMs & around 3% rise in air passengers
The CAA has published its provisional airport figures for 2013, but not all have yet been submitted so the final totals are only approximate. NATS said there had been 0.4% more flights in 2013 than there were in 2012. The number of air passengers is around 3% higher than in 2012. At Heathrow passengers were up + 3.4%. At Gatwick passengers were up by + 3.5%. At Manchester they were up + 5.2%; up +2.2% at Stansted (first increase for 5 years); up + 6.3% at Edinburgh; up + 0.8% at Luton; up + 2.3% at Birmingham; up + 2.9% at Glasgow; up + 3.5% at Bristol; up + 1.4% at Newcastle; up + 6.4% at East Midlands; up + 3.4% at Aberdeen; up + 11.6% at Leeds Bradford; up + 13.2% at Belfast City airport; and up + 57.2% at Southend. Almost all airports grew, even most of the small ones. But there were a few declines in the number of passengers. Passengers decreased by - 6.1% at Liverpool; by - 6.7% at Belfast International; and by - 4.5% at Bournemouth. The number of flights grew much less than the number of passengers, as some larger planes were used, and airlines got higher load factors. The number of Air Transport Movements at Heathrow was down - 0.4% compared to 2012; at Gatwick it rose by + 1.6%. ATMs were up + 0.4% at Manchester; up + 0.6% at Stansted; up + 1.1% at Edinburgh; and up + 0.4% at Glasgow.
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Boris Johnson accused by Sir Howard Davies of ‘Vulgar Abuse’ over backing Heathrow not Thames estuary plans
Sir Howard Davies has criticised Boris for his use of "colourful language" and accused him of failing to "illuminate" the debate on airport expansion following the publication of the Airports Commission's interim findings on 17th December. Boris is fiercely opposed to the possibility of increasing capacity at Heathrow and branded the Airports Commission report, which short-listed the option, as "gloopy and tangled", "perplexing" and "biased". Sir Howard dismissed Boris', insisting the criticisms were at odds with transport experts, and said he would "press on with the job". Asked about the comments at the Transport Select Committee, the commission chairman replied: "He would say that wouldn't he?.... Unfortunately, as far as the Mayor is concerned we don't seem to have produced the answer he wants us to produce. We will proceed with our analysis in the way we have been asked to do. "The Mayor has a particular view about hub capacity and a particular view about Heathrow and that's where he starts and that's where he ends. "Anything that is at variance with that is dismissed. Personally I don't think it is at all helpful that he uses this rather colourful language but I guess that is a matter of style." Sir Howard said: "So, I will attempt to rise above this vulgar abuse and press on with the job."
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Scale of taxpayer contribution needed for Heathrow or Gatwick runways shown up in KPMG report for Airports Commission
A report dated December 2013 by accountants, KPMG, for the Airports Commission, says a 3rd runway at Heathrow could require £11.5bn of government support, (ie. money from the taxpayer) while a 2nd runway at Gatwick may need as much as £17.7bn of taxpayer contributions. An airport in the Thames Estuary would need even more from the taxpayer - maybe £64 billion. The report contradict claims by airport operators that an extra runway could be financed either exclusively or predominantly by the private sector. Gatwick has said it could build a 2nd runway for £5bn to £9bn with no government aid. Heathrow has raised the prospect of £4bn to £6bn of taxpayer support to improve rail and road links, but has argued that a 3rd runway, at a cost of £17bn, would be largely funded by the private sector. The KPMG analysis also highlights the potential burden of building a new runway on passengers, who would pay higher ticket prices. KPMG says these would have to rise by 136% at Gatwick to repay the money borrowed. That would mean charges at Gatwick rising by 2.5% above inflation every year from 2019 to 2050. At Heathrow charges would need to rise by 13% initially and then by 2.5% above inflation. Repaying the money takes till 2050. Unless charges for passengers rise enough, the public (many of whom do not fly) will have to stump up the funds.
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Airports Commission has published 4 sets of airport level passenger forecasts 2011 to 2050
The Airports Commission is basing its advice to the government, that a new runway is needed over coming decades (not in the short term) on future passenger forecasts. In its Interim Report, on 17th December, the Commission set out its thinking on forecasts, with and without more runway capacity (no new runways, or one or two more) both with current theoretical constraints like the EU Emissions Trading System, and with more stringent controls to actually attempt to limit UK aviation emissions to their 2005 level, by 2050 - though allowing them to rise higher than that level in the interim. The Commission has now released its forecasts for its 4 scenarios, a matrix of carbon traded and carbon capped, with capacity constrained by no new runway, and with a new runway. They have also published estimates for Paris, Frankfurt, Amsterdam and Schiphol airports, from 2011 to 2050. At the extremes the forecasts range from UK air passengers by 2050 being between 178% to 199% higher in 2050 than in 2013. The figures range, for Heathrow, from passengers being 127% to 195% higher in 2050 than in 2013. For Gatwick the forecasts range from 136% to 153% higher in 2050 than in 2013.
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Airports Commission now consulting on Thames estuary airport options – deadlines 14th February and 23rd May
On 16th January the Airports Commission published its consultations on Thames estuary airport options. It did not short-list an estuary option, in its interim report on 17th December. Now there will be a first consultation, ending on 14th February on four options in the inner estuary. The Commission are asking for comments on its current position on the proposed terms of reference, especially if they contain gaps or weaknesses and whether other specific analyses need to be undertaken. There will be a second deadline date, ending on 23rd May, on an inner Thames proposal in which respondents are invited to submit analysis, evidence, and additional research or comments. The Commission says this will give sufficient time to ensure that appropriate evidence can be considered to inform the final study outputs before the studies are concluded and published. The Commission says it "expects to procure expert assistance from consultants in environmental appraisal and technical support; in the provision of engineering, airport operations and logistics consultancy and in the provision of economic modelling, commercial and financial appraisal." Presumably at public expense (the Commission has a budget of £20.35 million over 4 years, from DfT). "The Commission expects to be in a position to publish many of the study outputs by July 2014, to ensure that any further evidence from interested parties is taken into account before a decision is made in September." Final public consultation on the schemes starts in October.
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TESTRAD questions Airports Commission decision to rule out their “London Britannia” estuary airport
TESTRAD (the Thames Estuary Research and Development Company has appealed to the Airports Commission for more information on how it reached its decision not to short-list a Thames Estuary Airport. The TESTRAD CEO Bridget Rosewell has written to Sir Howard Davies, saying they are "concerned about the adequacy of the assessment upon which the Commission has based its conclusions for the final short-list”. Sir Howard said that seeing merit for potential to boost economic development to the east of London and reduce noise over the Capital, the Commission would undertake further assessment of its own for a potential airport on the Estuary's Isle of Grain. A decision on whether to include it on the short-list will be made by "late summer" in time for the consultation on the chosen options in October. At the RunwaysUK conference, the Grain possibility was discussed and it was clear that arguments against it were hugely stronger than those for it. It makes little practical, economic or environmental sense. Bridget Rosewell and her team want clarification on why TESTRAD's and other Estuary proposals were deemed "not credible". She also says some projects (Heathrow?) were given preferential access to the Commission and wants details of those meetings.