General News
Below are links to stories of general interest in relation to aviation and airports.
Heathrow’s Supreme Court case: can it avoid paying for the failed 3rd Runway?
The Supreme Court will, on 7th and 8th October, hear the appeal by Heathrow airport, against the ruling by the Appeal Court, that the Airports NPS is illegal. Rival scheme to build a Heathrow runway (keen to expand the airport), "Heathrow Hub" explains why Heathrow is going ahead with this further expense of the Supreme Court hearing, when it is struggling with huge financial problems and the reduction in demand for flights, due to Covid. The way Heathrow's finances work is that, the more it spends - therefore increasing the size of its Regulated Asset Base (RAB) - the higher the return it can earn, and the more it can charge airlines. So it has a vested interest in keeping its spending high, to the fury of the airlines. Heathrow Hub say: “It is not commonly understood that if Heathrow abandoned its Supreme Court case then the CAA would be unlikely to approve its attempt to recover the £550m it has spent on the failed 3rd Runway, including a provision for its legal costs." If Heathrow did not struggle to the end, to try to get the runway approved, it would have to finance those huge costs itself. Hence the reason for going ahead with the legal process, even though Heathrow admits no new runway is needed for at least 10+ years.
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Unite threatens strikes at Heathrow this autumn over huge pay cuts and “fire & rehire”
Unite, the Union, has been a keen backer of expansion at Heathrow for years. Members have for a long time been told that their jobs are at risk, without a 3rd runway. But their loyal support has been somewhat abused by Heathrow, which has tried to reduce the pay and conditions of workers at the airport, for years. How Unite is angry at the treatment its members are getting, while Heathrow struggles with the dramatic fall in the number of passengers. Unite says its members will strike this autumn, over the company’s attempts to cut the pay of 4,000 workers by up to £8,000 per year, which is around 25% of their pay. They will start balloting for industrial action on Thursday 8 October with the ballot closing on Thursday 5 November with strikes following soon after. Unite has dismisses HAL’s cries of poverty pointing to the vast salaries paid to senior executives - its chief executive was paid £3 million in pay and pensions last year - and asking why the salary sacrifice does not start at the top of the organisation. There were 49 directors at Heathrow who earned over £21 million between them last year (that averages £428,500 per year each).
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IATA now expects full-year 2020 traffic to be down 66% compared to 2019; previous estimate was for a 63% fall
IATA downgraded its traffic forecast for 2020 to reflect a weaker-than-expected recovery, with little demand for air travel. They now expect full-year 2020 traffic to be down 66% compared to 2019. The previous estimate was for a 63% decline. In August demand, expressed as revenue passenger kilometres (RPKs) down 75.3% compared to August 2019. It had been down 79.5% in July. The falls were less for domestic air passengers than international August capacity overall (available seat kilometres or ASKs) was down 63.8% compared to a year ago, and load factor was down -27.2% to an all-time low for August of 58.5%. (ie. planes are much less full). The fall in international passengers in August was down -88.3% compared to August 2019, and it had been - 91.8% in July. The load factor fell 37.0% to 48.7%. In June, IATA was relatively confident of a recovery in air passenger demand by late summer. Due to Covid restrictions by most countries, it did not happen. In June IATA expected airlines to lose $84.3 billion in 2020 for a net profit margin of -20.1%. They expected revenues to fall 50% to $419 billion from $838 billion in 2019. And for 2021, losses were expected to be cut to $15.8 billion with revenues rising to $598 billion. Now it is worse than that.
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Exeter Airport receives huge funding boost from Council to avoid it having to close
A package of funding worth nearly £1million designed to ensure Exeter Airport can avoid the "worst case scenario" of closure has been unanimously backed by East Devon District Council's cabinet. The combination of the collapse of Flybe, as well as the coronavirus pandemic, has led to the airport facing ruin. Passenger numbers in May 2019 were 97,000 and in May 2020 the equivalent figure was just 9. From the beginning of the financial year to the end of the July passenger numbers dropped by 99.5% compared to the same period last year. The Council approved a package of measures including a further deferral of £180,000 of business rate relief, forward-funding the airport’s share of the Long Lane enhancement scheme - nearly £750,000 - and to endorse the concept of a "sustainable aviation cluster" centred on Exeter Airport. It is not clear that the money is enough to keep the airport going, and save the jobs of 96 employees. It might eventually still need to close. East Devon District Council is expected to approve the measures.
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Much acclaimed first hydrogen flight (6 seater plane) used hydrogen generated by high carbon grid electricity
The alleged first test flight of a tiny plane fuelled by hydrogen took place recently. The plane was a little 6 seater, and it flew on a small circuit from Cranfield airport. There was much hype about this supposedly huge technical leap, to a zero carbon fuel. In reality, the New Scientist ascertained that the hydrogen was produced using grid electricity, which therefore caused the emission of carbon dioxide, as most grid electricity is produced from fossil fuels. UK and US-based ZeroAvia flew the plane saying it was the first hydrogen fuel cell flight of a commercial-size aircraft. The company hailed the test as “the first step to realising the transformational possibilities of moving from fossil fuels to zero-emission hydrogen”. UK aviation minister Robert Courts said the flight was a sign of the “commitment of government of ensuring we get to net-zero” emissions and a “historic” moment for aviation. The hydrogen was produced using an electrolyser, which splits water into hydrogen and oxygen. However, ZeroAvia admitted that this was not using low carbon energy (in September around 40% of UK grid electricity was produced from oil or gas). Genuinely low carbon hydrogen on any scale is years away.
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APD to rise on long-haul only (>2,000 miles) from £80 to £82 from April 2021 – no change in short haul £13 APD
Air Passenger Duty (APD) - the UK duty on flights - is set to increase for flights of over 2,000 miles, in April 2021. The APD will rise from £80 now to £82, for a return flight - APD is only charged on departures. For premium class air tickets of over 2,000 miles, the APD will rise by £4 from £176 to £180. There will be no increase in APD for flights under 2,000 miles, which means any flight in Europe, which will continue to pay just £13 for a return trip (£26 premium class). The rate for long-haul private jet etc rises from £528 to £541. (The distance is measured from London to the capital city of the destination country.) This tiny APD rise is not doing to deter anyone flying. The increase come despite calls from the aviation industry to freeze or even scrap APD due to the problems the sector has because of the Covid pandemic. There have been many calls for APD on domestic return flights to be scrapped, (as the APD is £26, not the £13 for a European flight) but there is no mention of those in the government announcement. Perhaps the government appreciates that airlines take money out of the UK, and passengers to foreign leisure trips, o a far greater extent than they bring money in.
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Air France’s bailout ‘climate conditions’ and possible future aviation taxes
The state bail out of Air France by the French government earlier in the year got a lot of publicity. Some of the conditions looked as if they could be effective in cutting emissions. Now the restrictions on air travel look set to continue for many more months, airline finances and state help need to be reassessed. The pandemic has been a unique opportunity to shrink the sector, and insist that it takes effective action in future to significantly cut its carbon emissions. The NGO Transport & Environment (T&E) have assessed the potential effectiveness of the conditions, and are not impressed. They say the Air France conditions included improving fuel efficiency (which it will do anyway, to save money); also removing the shortest flights (which will have minimal impact on the airline's overall emissions). And use of low carbon novel fuels, but if first generation biofuels were used, this would increase - not cut - CO2 emissions. Last T&E says the climate conditions attached to the bailout are not legally binding, leaving it to the good will of Air France. Each condition should be made mandatory, with clear financial penalties for failure to comply. The French government has now proposed reasonably high taxes on flights, of €30 for economy short haul, and €60 economy long haul (>2,000km) but this has to be approved by the political process.
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Reading to Heathrow train line delayed by two years – at least
The Great Western rail link between Reading to Heathrow will be delayed by up to two years. A DCO application to construct the new line was expected this year but has now been delayed until winter 2021/2022 - at the earliest. A spokesman for Network Rail said the Reading to Heathrow line has been delayed due to the court of appeal’s ruling against plans to expand Heathrow and the impact of Covid-19 on the aviation industry. The Supreme Court will hear Heathrow's appeal against the Appeal Court decision, on 7th and 8th October. If Heathrow was to win the case (a massive IF) then the rail link - to speed passengers getting to the airport - a new tunnel would be created connecting Reading to Heathrow in around 20-30 minutes, with passengers from Reading currently having to use the 50-minute Rail Air bus or go into London to get to the airport. Reading Station and Heathrow Airport both already have terminus platforms built for the line in anticipation of the scheme. The Department for Transport (DfT) is looking to fund the project with help from Heathrow Airport on the basis of expansion, apparently. (Though Heathrow is struggling financially to survive now ...)
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Airbus – in dire financial problems – talks of plans for hydrogen fuelled future planes
Airbus has been publicising its hopes to have hydrogen-fuelled passenger planes in service within 20 years. Apart from the technical problems of how to store liquid or compressed hydrogen on a plane, and how to transport it etc, there is the massive problem of the energy it would take to generate the vast amount of hydrogen that would be needed. Currently there is "blue" hydrogen, which is generated from fossil fuels, and the production of which emits carbon (unless and until there is CCS to store that CO2 underground) or "green" hydrogen, which would be produced using low carbon electricity, from wind farms etc. Currently there is almost no "green" hydrogen. There are claims that burning hydrogen at high altitude would not cause the emission of soot particles, so contrails might form less than conventional jet kerosene. It would certainly produce water vapour. The necessary atmospheric research studies probably have not been done, at scale. Hydrogen, like electric planes and wonderful zero carbon fuels, are the hopes of the sector - that their climate problem can be (improbably) solved. Meanwhile Airbus' CEO announced it is in danger of collapse, due to Covid, and it needs to cut 15,000 jobs, or more than 11% of the group’s workforce.
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CAA review finds Heathrow ‘wasted’ money and was “inefficient” as costs of 2 tunnel refurb projects costs spiral
The CAA's economic performance review concludes that Heathrow has “wasted” money on two ongoing tunnel refurbishment schemes and acted inefficiently. The cost overrun of both schemes combined is estimated at £212.4M, although the CAA suggests that those costs could be inflated further by the time work is completed. Costs on the cargo tunnel job between Terminal 4 and the Central Terminal Area have soared by £152M, from its approved £44.9M budget to the current final cost of £197M, the report reveals. The cost of upgrading the main vehicular tunnel to Terminals 1, 2 & 3 has risen by £60.3M from an approved budget of £86M to £146.3M. On the cargo tunnel, the CAA states that “there is clear evidence that the actions of HAL may have directly contributed to wasted spending or lost benefits”. The delays have lead to a loss of benefits to consumers. Heathrow could have been more efficient in managing its work contractors. The CAA will now assess whether to remove costs associated with the tunnel refurbishments from HAL’s Regulated Asset Base (RAB) – which effectively means HAL would have to pay for cost overruns, rather than charging airlines.