General News
Below are links to stories of general interest in relation to aviation and airports.
New Air traffic forecasts: Government expects growth in air travel to slow down considerably
The Department for Transport expects the rate of growth in air travel to slow down considerably over the coming decades. Their passenger forecasts published late yesterday expect demand for air travel to increase by just 1%-3% a year up to 2050 compared to historical growth rates of 5% a year over the last 40 years. The DfT lists 4 reasons for the slow down in growth for air travel: - higher oil prices; - an end to the decline in average fares seen in the last two decades; - the maturity of the air travel market to and from the UK; - and the availability of alternative modes of travel. The Department estimates that the major South East airports will be full by 2030 but recognizes there is some uncertainty about this: “ there is a range around this projection and they could be full as soon as 2025 or as late as 2040”. The central forecast, taking into account the impact of capacity constraints, is for passenger numbers at UK airports to increase from 219 million passengers in 2011 to 315 million in 2030 and 445 million by 2050. Compared to the DfT forecasts in August 2011, these forecasts are 6% lower for 2030 and 5% lower for 2050. Any proposals for airport expansion must be seen in this light.
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Heathrow spur from HS2 put on hold, causing continuing uncertainty and blight
Phase 2 of High Speed 2 has been announced, and the planned spur taking HS2 to Heathrow has been put on hold until after the Davies Commission’s review of Britain’s hub capacity is completed in 2015. The HS2 document says: “there would still be the opportunity to consult separately at a later point and include the Heathrow spur in legislation for Phase Two without any impact on the delivery time if that fits with the recommendations of the Commission.” This leaves uncertainty for local communities that could be blighted by the Heathrow link, and people want to know if local areas still be safeguarded and eligible for compensation. Nobody knows yet if Phase 1 will continue to be built as proposed, in order to keep options open – causing uncertainty, blight, and suffering to residents and businesses whilst leaving them ineligible for compensation. The Government has also launched a consultation on an Exceptional Hardship Scheme for Leeds, Manchester and the proposed Heathrow spur, to assist people who need to urgency sell their home or business.
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Phase 2 of HS2 announced, with no spur to Heathrow – though that could be added later
The government has announced details of the 2nd phase of High Speed 2, from Birmingham north to Leeds and to Manchester. The Chancellor, George Osborne, predicted the investment would become “the engine of growth” in the north of England and the Midlands. The government is due to finalise the precise route of HS2 next year in advance of legislation in 2015 - though it is likely to be delayed by a flood of judicial reviews and court actions over the legality of the consultation process. These could delay planning authorisation, and ultimately require routes to be heavily redrafted. Instead of work on the first phase, to Birmingham, starting in 2017, it could be delayed till 2022. A planned spur taking HS2 to Heathrow has been put on hold until after the Davies review of Britain’s hub capacity is completed in 2015. The HS2 document says: "there would still be the opportunity to consult separately at a later point and include the Heathrow spur in legislation for Phase Two without any impact on the delivery time if that fits with the recommendations of the Commission." Meanwhile, a useful piece by Christian Wolmar sets out the main reasons by HS2 is not a wise plan, and not value for money, or even of environmental benefit.
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Architects, Grimshaw, with complicated London Hub City proposal, for future airport capacity. Bit of an unrealistic muddle.
Grimshaw, a firm of architects that have offices in London, have put forward their own idea for what should happen about airport capacity in the south east. Their idea is to focus on London, the city, as the hub rather than any one airport. They want to have a 3rd runway at Heathrow, so it can deal with problems like snow, and then link London from Stansted, Gatwick, Luton and an airport in the Thames estuary, by high speed rail to London No one airport would be the main hub. They rather unrealistically anticipate that many transit passengers would want to break their journey at Heathrow, then travel into London on a special ticket on fast rail, to do a bit of tourism and spending, before getting their return flight. This scheme needs to have very efficient immigration and baggage transfer facilities to avoid being a nightmare. The report questions whether the view of the airlines, on the need for a hub airport, should dominate the planning of capacity for London. It also says that: “It is extremely difficult to predict what will happen to aviation beyond the next few years. Recent decades have demonstrated this” And it cites Stansted’s decline. However, they say “Looking ahead, we might confidently predict growth in aviation”.
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New research suggests a hub airport (eg. Thames estuary) for London cannot be built without public subsidy
A report by the economic consultants, Oxera, commissioned by the Commons Transport Committee has shown that a massive hub airport in the Thames estuary would only be viable if it had a subsidy, from UK taxpayers, of some £10 - 30 billion (in today's money). Oxera looked at various scenarios, and found that otherwise such an airport would not be viable or provide the sorts of returns that a private investor would require. Depending on the airport's design, it could cost £20 - £50 billion. The potential impact on Heathrow and other airports - and necessary compensation - were had to be taken into account, and would have an impact on a new hub airport's commercial viability. Transport committee inquiry chairman Louise Ellman said: "The results suggest a new airport would require public investment and have considerable impact on Heathrow and other London airports. The research findings also shed significant light on the scale of investment required to deliver essential related surface transport links for any new airport. "We hope this work delivers something new to a crucial debate."
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easyJet had 10 million business passengers in 2012, up from 9 million in 2011
Easyjet carried more than 10 million business travellers during 2012. That is compared to around 9 million in 2011 and some 8 million in 2010. The total number of passengers is around 50 million per year, so business is some 18% or so. Easyjet added that it expected to benefit from a deal signed in November to provide flights to employees working in the Scottish public sector for trips between London and Scotland. In September, a year after offering free flights to MPs returning to deal with the summer riots, easyJet was added to the list of preferred airlines for both Houses of Parliament. A deal for one year allows cheaper flights than flag carriers for European flights, and works through the Parliament travel management company Hillgate Travel.
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Turkey plans to build a 6-runway mega airport near Istanbul to be one of the world’s largest
Turkey is planning to build one of the world’s biggest airports, and one larger than anything in Europe, costing some $5bn. It wants to make Istanbul a global hub and boost its chances of getting the Olympics in 2020. Turkey is well situated geographically for traffic between the USA and Europe, and the Far East. It is therefore in competition with other Middle East and Gulf countries, which are also building mega-sized airports, such as Dubai and Doha (capital of Qatar). A tender will be held in may for the Turkish airport. This would be the third airport for Istanbul, which already has Ataturk airport, and Sabiha airport - which handle around 45 million and 15 million passengers respectively per year. The new airport will be near the Black Sea, and is anticipated to be able to cope with 150 million passengers per year. By contrast, Heathrow deals with some 69 million, and Atlanta - the world's busiest airport - handles some 90 million per year. The plans are for the new 6 runway airport to be open by 2017.
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Flybe plans 300 job cuts in revamp programme
Regional airline Flybe is planning to cut about 300 jobs as part of a programme to return the carrier to profitability in 2013-14. The Exeter-based airline said the cuts would lower UK staff numbers by 10%, reducing costs by £35m. Flybe , which reported a loss of £1.3m in the 6 months to 30 September., said it did not expect "significant" changes to the number of its UK bases or routes, but said it would be reviewing its network. Flybe will reorganise itself into two divisions, with one to cover all UK-based scheduled flight services, and the other to cover all outsourced services such as contract flying and training. The job losses will be seen in the Flybe UK business, with 20% of management posts going and 10% of support and production roles being cut. As well as job cuts, Flybe said it would be seeking to cut costs with suppliers, start a fuel efficiency programme and introduce more automated check-ins.
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Gateway Associates produces report on UK hub airport capacity
A small organisation called Gateway Associates, set up by former MP Paul Clark, has today launched its report on future UK hub airport capacity, to the aviation interest group in Parliament . Gateway Associates sent out questions to an unknown number of organisations to assess their views,and have now produced their report compiling the responses. 67 organisations replied, including some such as Hong Kong airports. There is no information in the report on those who did not respond - and no indication of whether any attempt was made to find a balanced mix of organisations to reflect a realistic mix of opinion. Gateway are opposed to an airport in the Thames estuary. They stress that climate and environmental issues need to be considered by the Davies Commission. The report is strangely keen that Heathrow should not be overlooked (where the funding for the report came from is not disclosed). It says: "Regardless of what decisions are made about a Thames Estuary Airport, a phased plan for the long term future of Heathrow must be developed which meets the needs of business and the aviation sector in London and the South East." It also recommends that a decision on airport capacity needs to be made quickly.
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Manchester Council to cut share in MAG from 55% to 35.5% and 9 other councils cut theirs from 45% to 29%
The Manchester Evening News looked at the recent purchase of Stansted airport, by MAG, and assessed what this means for Manchester taxpayer, Manchester airport and the region. 10 councils currently own MAG and they have not had to pay anything towards the deal. The cash has been raised through a combination of MAG selling a 35.5% stake in itself to IFM and agreeing a new debt package with its banks. The deal will see Manchester Council reduce its stake in MAG from 55% to 35.5%. The other 9 councils, which currently have a 5% stake each, will share equally the remaining 29% of MAG. After buying Stansted, MAG will control nearly 19% of the UK aviation market, and this may strengthen its bargaining power when negotiating with airlines. The 10 councils hope to get a larger annual dividend now. In 2012, £20m was paid out, of which £11m went to Manchester and £1m each to the other 9 councils. MAG hopes to increase profits at Stansted, which is operating now at 47% of capacity, by increasing income from shops, restaurants and bars.