General News
Below are links to stories of general interest in relation to aviation and airports.
IATA says airlines unable to cut costs enough to save jobs – even if pay is reduced
IATA says the airline industry cannot cut costs sufficiently to prevent severe "cash burn" to avoid bankruptcies and preserve jobs in 2021. IATA wants governments to provide money for airlines, to keep them going and avoid redundancies. At a time of increasing Covid in many countries, including Europe, IATA is (rather bizarrely, but for self interest of the airlines) asking for relaxed measures on Covid. They want more people flying, with less comprehensive quarantine for passengers, which risks increasing infections. IATA says the airline industry's revenues will be down about 66% this year, compared to 2019, and down perhaps 46% in 2021, compared to 2019. IATA says without additional government financial relief, the median airline has 8.5 months of cash remaining at current burn rates. The airlines are not able to cut fixed costs in line with reduced income. Around 50% of airlines’ costs are fixed or semi-fixed, at least in the short-term. The cost per passenger flown, or per available plane seat, have risen - as planes are not full." It considers cutting labour costs by about 50%, and even then airlines would be making a loss.
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Nine years late and x3 over budget due to problems, Berlin’s Brandenburg Airport finally opens (during a pandemic)
Berlin’s ‘laughing stock’ airport to finally opens, nine years late and three times over budget (nearly €6 billion) - after years of problems. Its timing, during the Covid pandemic, is bad. The opening of Berlin-Brandenburg Willy Brandt Airport (BER) as it is known, was meant to be a moment of triumph for Berlin, as a gleaming new interconnected hub that suited its status as the capital of Europe’s biggest economy. Critics say it now has the look and feel of a costly white elephant, a throwback to a bygone era of mass tourism and global mobility that Covid-19 has ended. With all its design and structural problems, BER had become a “laughing stock”, of which many German engineers were ashamed. There will be no opening party, as the airport will have few passengers. BER has four times more space than the tiny Tegel city airport it replaces. BER was meant to start making a profit from 2025 and pay off its outstanding €3.5bn in loans over 10 years. But now it needs additional financing of over €300m this year, with some €50m-€60m raised from internal cost-cutting measures and €260m from the airport’s shareholders — the German federal government and the authorities in Berlin and Brandenburg.
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ACI estimates that 193 out of Europe’s 740 commercial airports in UK and Europe could go bust due to Covid collapse in air travel
Airports Council International Europe (ACI Europe) has said that due to the decline in demand for air travel caused by Covid, some 193 airports across Europe and the UK face insolvency in the coming months if air passenger traffic does not increase by the year end. The most vulnerable are small regional airports. There are claims for the number of jobs that could be lost, and the amount of GDP (for many European countries, aviation brings in money and tourists - while for the UK it takes both out). The airports and airlines want more government finance, to keep them going. ACI estimates that there were around 1.29 billion fewer air passengers, using European airports in the first 9 months of this year. It does not appear likely that winter tourism will provide much airline demand, with Covid restrictions in so many countries. Many airlines have slashed their capacity plans for the reminder of the year and into 2021. The larger airports have been cutting costs to the bone and resorted to the financial markets to shore up balance sheets. Airports are burning through cash to remain open. The increase in debt - an additional €16 billion for the top 20 European airports - is equivalent to nearly 60% of their revenues in a normal year.
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After decades, Heathrow no longer Europe’s busiest airport; now it’s Paris Charles de Gaulle
Heathrow has lost its place as Europe’s busiest airport for the first time after being overtaken by Paris’s Charles de Gaulle. In the 9 months to September, Heathrow had about 18.976 million passengers; Charles de Gaulle had 19.27m; Amsterdam’s Schiphol had 17.6m and Frankfurt had 16.16m, according to Heathrow. Heathrow said it lost £1.5 billion in the first 9 months of 2020. While Heathrow has for decades boasted about being the busiest airport in Europe, it is now trying to put pressure on the government, to relax Covid testing and quarantine restrictions, to allow Heathrow to make money again. Heathrow wants people to be able to avoid 14 days quarantine, on arrival in the UK - at a time when Covid is rising again, rapidly, across Europe and elsewhere. Heathrow makes out that increasing its number of air passengers is for the good of the UK; it often conflates what is good for Heathrow (and some jobs locally) with what is good for the UK. Heathrow’s revenue in the third quarter of the year fell 72% compared with 2019, to £239m. Now, with Covid returning for a second wave, Heathrow anticipates 22.6m passengers in 2020 and 37.1m in 2021, compared to 81m in 2019.
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Heathrow with £17bn debts wants to raise £1.7bn from higher airport charges
Heathrow’s attempt to increase airport charges by £1.7bn sparked anger recently, and were rejected by its regulator, the CAA. British Airways’ owner IAG said it was “staggered” by the demand, as Heathrow has very rich wealth fund owners, who could help the airport with funding. Heathrow is claiming they are within their rights to ask for the price rise. They say their regulatory framework allows it to pass on “exceptional costs” to airlines, and ultimately customers. Many in the airline industry, which does not want higher costs for its passengers, were surprised and impressed by the CAA decision, against Heathrow. One said: “In the past, the CAA has rolled over. For once they have shown their teeth.” Heathrow is immensely in debt, owing banks and bondholder £17 billion. In September, its passenger number was under 20% of its 2019 level. The cost of its 3rd runway plans (now postponed indefinitely?) could be over £30 billion. It is estimated that Heathrow needs 43 million annual passengers, just to cover its interest bill of around £500m. Heathrow at risk of breaching its banking covenants, which when tested in December, will require it to keep debt below 95% of the regulated value of its assets.
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CAA tells Heathrow’s owners to invest more in the company, or risk state takeover
The CAA has warned the foreign funds behind Heathrow that the airport is threatened with nationalisation if they do not inject new money to help it cope with the pandemic. They said that without emergency funding from shareholders including several sovereign wealth funds, Heathrow faces a similar fate to Railtrack, the former FTSE 100 company that collapsed in 2001 with debts of £3.5billion; then taxpayers took back control of the rail network. The CAA has rejected Heathrow's demand for permission to increase its airline and passenger charges, and the airport has paid out £4 billion in dividends since 2012. It has paid £2.1bn in dividends over just the past 4 years. Heathrow has threatened court action if the CAA does not allow it to set higher charges, which it claims it is entitled to. Heathrow has massive debts, owing over £17 billion to banks and bondholders, but it claims it has enough cash to see it through till 2023. However, it has been handling at best 30% as many passengers in recent months, compared to the same time in 2019. Shareholders “need to be fully aware of the projected liabilities of the companies in which they invest and the performance risks they face”. The CAA is now consulting the industry on its proposed rejection of Heathrow’s call for higher charges.
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AEF’s excellent “Airports Expansions Guide” updated – useful summaries of all UK airport expansion plans
The Aviation Environment Federation (AEF) has produced a very useful webpage of information, to show - at a glance - which English airports are planning to expand, which have already submitted applications, and what stage they have reached so far. Surprisingly, with the dramatic fall in the demand for flights due to Covid, airports still seem to be hoping to - not only get back to 2019 levels of flying - but expand further. AEF lists those with formal applications to expand: Bristol, Heathrow, Leeds Bradford, Manston, Southampton and Stansted. The airports also planning for significant growth in future: Gatwick, London City and Luton airports. All these expansion plans would cause increased noise problems for people living under or near flight paths in future, and other negative local impacts. But all would add significantly to the UK's aviation carbon emissions. The judgement by the Supreme Court on the Airports NPS (especially affecting Heathrow) is expected, perhaps by January 2021, which will give clarity on whether UK aviation could expand, if the country is to meet obligations to cut carbon emissions.
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New arrival routes for Luton Airport could see noisy flights over other parts of Beds, Bucks and Cambs
A consultation by Luton airport and NATS was launched on 19th October, to change the arrival routes for the airport, which could see aircraft flying closer to some towns in Beds, Bucks and Cambs. Luton Airport currently shares arrival routes and 2 holds with Stansted, a situation which has been described as "unsustainable" due to both airports' size (pre-Covid). A delay at one airport can impact the other. It is now proposed that a new aircraft hold for Luton is formed above the St Neots and Huntingdon area, along with separate routes "further out and higher up". This is to ensure its operations don’t clash with Stansted. There are two options. Local campaign LADACAN says: "As far as people on the ground are concerned, this consultation and its hundreds of pages of technical documentation boils down to a simple question: are concentrated tracks or randomly dispersed flights the best solution when aircraft are passing closely spaced communities at low altitudes?" Luton's aim, of course, is to fit in more flights so airport traffic can grow ... The consultation runs until February 5th 2021. There are maps at https://consultations.airspacechange.co.uk/london-luton-airport/ad6_luton_arrivals/ which show the location of two new proposed PBN arrival routes, and more detail from LADACAN at https://ladacan.org/consultation-on-arrivals-flight-paths/
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Tory councillors want an end to Southend night flights, largely bringing in Amazon packages
Conservative councillors have criticised Southend Airport’s night flights, pledging to “explore every avenue possible” to have them removed. They have made it clear they back “further controlled expansion” but want night flights removed. Some residents say they are being forced to take sleeping tablets because of the sleep disruption caused by night flights. The Conservative councillors said: “We will continue to explore every avenue possible to have the night flight quota removed from the Airport’s Section 106 Licence Agreement.” Other councillors worry there will be a loss of jobs, and they dare not risk losing them, with so many jobs being lost due to Covid. There are residential roads very close to the airport boundary, with houses must too near the runway. The airport is permitted on average 4 flights per night, but sometimes has fewer. The airport has cargo flights, bringing in Amazon goods. There are generally 3 per night between 1am and 5.30am, though there had been an earlier agreement not to have flights between midnight and 6am. This agreement has been abandoned.
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Manston airport judicial review: permission granted for legal challenge
A judge has granted permission for a legal challenge against the government's decision to reopen Manston airport. The crowdfunder set up to help pay for a judicial review has now reached more than £80,000. Now the application for the review has been granted, the Secretary of State's decision in July to approve a development consent order to open Manston as a freight cargo air hub will be challenged in court. The legal battle was launched by Jenny Dawes, the chair of Ramsgate Coastal Community Team. Solicitors Kate Harrison and Susan Ring of Harrison Grant are acting for her, and instructing barristers Richard Wald QC and Gethin Thomas. The reasons for opposing the reopening of the airport for freight are partly due to the noise, as the arrival flight path is directly over Ramsgate, near the airport. There are also strong arguments on air pollution and the UK's climate targets. The advice of the Planning Inspectorate was to refuse permission for DCO. Jenny said: "According to the government’s own experts, re-opening the airport will damage the local economy and impact negatively on the UK’s carbon budget and our commitments to the Paris climate agreement."