See also Hillingdon Times on Heathrow, for a local perspective
Minutes of the Heathrow Consultative Committee HACC
Heathrow new CEO likely to want expansion in numbers, but no new runway
Thomas Woldbye, Heathrow’s new chief executive, is understood to have begun disbanding the 3rd runway team, and the airport’s runway plans have been shelved, as leaked details of the airport’s “better not bigger” strategy can be revealed. Woldbye is instead understood to be exploring how to squeeze millions more passengers through the airport without expanding its footprint. This comes with Heathrow’s Spanish owner Ferrovial facing a protracted process to sell its stake to a Saudi-backed consortium for £2.4 billion. It is believed that a new Heathrow team is pulling together plans under the internal strapline of “better not bigger”, which was originally coined by anti-expansion campaigners. Leaked details of the plans reveal that annual passenger numbers could hit 96 million by 2036, up from the record 80.9 million in 2019, if all of its initiatives can be realised. A “core” case is understood to forecast a rise to 86 million passengers. One way to increase passenger numbers is to make more efficient use of the runway so that planes could take off and land closer together. They will also want to increase Heathrow’s annual flight cap from 480,000 to 505,000, though this would require government consent.
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Some possible changes at Heathrow, to persuade ever more passengers to use it
People already badly affected by Heathrow are concerned about what might happen, with new Saudi ownership, after Ferrovial. The Saudi-backed consortium is poised to seize control of the airport, but it is far from a done deal. However, plans are already underway that could have ramifications for those living nearby. According to sources close to the bid, they have a multi-pronged strategy to broadly increase the number of passengers, even without — for the foreseeable future, at least — the construction of a third runway. Updating Heathrow’s technology is key in the strategy, with things like scrapping airline-specific check-in desks. There could be an App to get passengers to the shortest queue to drop off their luggage. Luggage tags could also be scrapped in favour of computer chips or QR codes linked to passenger booking information. And other changes. The thinking is that if the new owners can improve life for passengers, making it less stressful and decreasing waiting times, airlines will be able to persuade more people to fly. And more passengers mean more revenue for Heathrow, which currently gets £26.77 per person from its airline customers.
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More Heathrow shareholders plan to sell stakes alongside Ferrovial
Ferrovial agreed to sell its 25% stake in Heathrow in November for £2.4bn to French private equity company Ardian (15%) and the Saudi Public Investment Fund (10%). Now 3 other Heathrow shareholders that together own 35% of the airport, have said they want to sell out too, as part of £2.4bn Ferrovial deal agreed. It has been suggested, by someone in the know, that Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), Singapore sovereign wealth fund GIC and the UK’s Universities Superannuation Scheme all intend to exit. So with 25% and 35%, that is 60% of Heathrow’s ownership. As part of the Ferrovial deal, the airport’s other shareholders were given the option to sell their own stakes at the same valuation, with the Saudis and Ardian offered first refusal. This could be a problem for the Ferrovial sale, and the £2.4bn deal could collapse if all the shareholders cannot find buyers. Ferrovial said it was a “condition” of the transaction that the “tagged shares” were also sold. Neither Ardian nor the Saudis are compelled to buy the new shares on offer. The Saudis don’t want more than 10%. They might be able to find a 3rd investor to come in and buy the 35%.
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Heathrow considering smaller ways to increase flights, rather than a 3rd runway
Heathrow is exploring options for expansion that would prioritise smaller improvements before considering if it could go for a 3rd runway. New Chief Executive, Thomas Woldbye, who joined in October, has apparently launched an internal review into the options to increase its capacity. No decisions have yet been made. One option under consideration is a new plan to initially focus on easier and cheaper improvements within the airport boundary, as there are serious concerns about the feasibility of a 3rd runway. The world has moved on since Heathrow got consent for a new runway, with travel demand altered since Covid, and a different political and regulatory environment, as well as far higher construction and financing costs than before. The cost estimate was £24 billion in 2019. Heathrow is also in the middle of a change in ownership, as Ferrovial agreed to sell their 25% stake to a consortium lead by Saudi Arabia’s sovereign wealth fund (PIF). One major problem for a 3rd runway is having to put a section of the M25 into a tunnel (very costly) and demolishing local homes. The Climate Change Committee says there should be no airport expansion, unless the sector has a way to genuinely cut CO2 emissions.
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Ferrovial to sell its 25% stake in Heathrow for $3 billion to Ardian (15%) and Saudi Arabia’s PIF (10%)
Infrastructure giant Ferrovial has reached an agreement with two different buyers to sell its entire 25% stake in Britain’s busiest airport, Heathrow, for £2.37 billion ($3.01 billion) the company said in a statement on Tuesday. Ferrovial said the buyers for the stake in FGP Topco – the parent company of Heathrow Airport Holdings Ltd – were private equity fund Ardian and Saudi Arabia’s Public Investment Fund (PIF). Ardian would acquire a 15% stake and PIF a 10% stake. The transaction is subject to regulatory conditions and must comply with the right of first offer and full tag-along rights, which may be exercised by the other FGP Topco shareholders, Ferrovial added. Ferrovial expects to complete the sale by mid-2024. Ferrovial also has a 50% stake in three other British hubs: Aberdeen, Glasgow and Southampton. It also has a 49% stake in the new Terminal One at New York City’s JFK airport.
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Heathrow owner Ferrovial (25%) probably keen to sell its stake
The Heathrow owner with the largest share (25%), Ferrovial, has opened the door to selling its stake, as it is unclear if it will ever be able to build a 3rd runway. A top executive at Spanish infrastructure giant Ferrovial said it would look at the merits of bidders if there are offers. It is likely that buyers are being informally sounded out about buying the 25% stake. Recently the regulator, the CAA, ruled that Heathrow will have to cut its passenger charge from £31.57 to £25.43 next year, so the airport will be less profitable. One exit option could be for Ferrovial to sell up to one of its fellow shareholders. Heathrow has proved a lucrative investment for its shareholders, giving them £4 billion in dividends between 2012 and 2020. Though in 2020 the Supreme Court gave permission a 3rd runway, Heathrow got rid of its expansion team, and would have to do a lot of work to reinstate the now outdated plans – against fierce opposition.
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Motion passed by London Assembly to protect Richmond Park from increased Heathrow flight paths
A motion has been passed by the London Assembly to protect Richmond Park from increased Heathrow flight paths. The airport submitted proposals for “airspace modernisation” with the aim of making journeys quicker, saving a bit of time. The Friends of Richmond Park has said these proposals could see up to 60,000 arrival flights passing over the park per year. Currently there are no arrival flights, just departures. The Liberal Democrats who put the motion forward have also urged Heathrow to “go back to the drawing board”. A Heathrow spokesperson said: “No decisions have been made on which flight path options could be adopted from the recently published shortlist.” The Liberal Democrat’s transport spokesperson and London Assembly member, Caroline Pidgeon pointed out that thousands of Londoners make their decisions about where to live, based on knowing where flight paths are – and have been for decades – so they can avoid them. “We also know that noise pollution from aircraft can contribute to a range of mental and physical health problems, most often linked to disturbances in our sleep cycles.”
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Thomas Woldbye has taken over from Holland-Kaye as CEO of Heathrow
Thomas Woldbye has officially taken over as Heathrow CEO, from John Holland-Kaye. The airport hopes it will improve and grow under his leadership, and says he will “oversee the airport’s multi-billion £ plans to upgrade existing facilities over the next three years to provide an even better service for passengers, including the next generation security programme and new baggage system for Terminal 2.” John Holland-Kaye was CEO for over 9 years, and pushed for a third runway, getting parliamentary approval for it, before Covid struck. Thomas Wooldbye was previously CEO of Copenhagen Airport from May 2011 – September 2023, and recently pushed through terminal expansion plans there. Previously, he worked for A.P. Møller-Maersk for 27 years.
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CMA supports CAA decision that Heathrow price cap must fall to £25.43 by 2024
The UK’s Competition and Markets Authority (CMA) has issued a verdict largely supporting the Civil Aviation Authority’s (CAA) pricing decision concerning Heathrow Airport. The CAA had previously mandated that Heathrow reduce average passenger charges from the current £31.57 per passenger to £25.43 by 2024, maintaining this sort of price until the end of 2026. Heathrow had sought to increase these charges to £40 per passenger, while British Airways, Delta Air Lines, and Virgin Atlantic Airways lobbied for charges below £20 per passenger. In its announcement last month, the CMA endorsed the CAA’s pricing strategy but highlighted the need for further consideration of minor pricing-related issues. The CMA’s final verdict was officially confirmed on October 17th. It was seen as a fair level, enabling Heathrow to encourage investors, but not over-charge passengers. Neither Heathrow nor the airlines are happy with the decision. There may be inadequacies in the regulatory framework, including the formula used to set fees at Heathrow.
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Could Heathrow ever afford to build a 3rd runway?
The possibility of more airport expansion, and growth in the number of flights and passengers, is a serious problem of increasing carbon emissions. Heathrow is to have a new chief executive, Thomas Woldbye, from Copenhagen airport in October – replacing John Holland-Kaye. He has to decide whether to try to get a 3rd runway. As well as the increased CO2, Heathrow has the problem of paying for its expansion. Could it ever afford it? Since it got final approval for expansion in February 2020 (Appeal Court), costing about £14 billion, the costs of construction and financing will have hugely increased. Heathrow has vast debts, which it has increased to raise the regulatory value of their assets. Heathrow now has £16bn of borrowings and posted a loss this year largely due to the rising cost of its inflation-linked loans. The team working on the expansion was disbanded a few years ago, and there are no current estimates of the cost. The forecast for the demand for flying, oblivious of the climate destabilisation now underway, is for over 50% more passengers by 2050. The airport’s shareholders and board are yet to decide whether to push forward with a 3rd runway, and over what timeframe.
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Heathrow asks airlines to carry excess fuel despite carbon impact
Airlines flying to Heathrow have been told to carry as much fuel as possible in their tanks because of supply problems at the airport, between Sunday 23 July to Monday 31 July. Also to take off without too much fuel, loaded from Heathrow. For planes to fly to Heathrow with more fuel than necessary means they are heavier, and therefore burn more jet fuel. That increases CO2 emissions. Fuel tankering, ie. buying more fuel than needed at an airport where it is cheaper, should be discouraged due to the higher CO2 footprint. The airport declined to comment on the cause of the supply issue. It does not have day-to-day control over fuel supply, which is handled instead by Heathrow Hydrant Operating Company and Heathrow Airport Fuel Company, which are both owned by consortiums of oil companies. So large is the demand for fuel for Heathrow that it requires a constant supply transported via pipeline from ExxonMobil’s Fawley refinery near Southampton. ExxonMobil is also building a replacement pipeline to the airport.
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Heathrow, consultation on Noise Action Plan, called to act on noise disturbance
People around Heathrow are being asked to respond to a public consultation on how to limit noise disturbance coming from the Airport. Its Noise Action Plan 2024-28 is, in theory, trying to devise a strategy for how it aims to limit disturbance caused to those living nearby. The strategy is required by law, and the Airport administration is currently running a consultation on its proposals. It aims to develop a preferential night route trial for planes aimed at providing predictable periods of respite from night operations. It also proposes work on a Noise Insulation Scheme (NIS), which provides noise insulation for households and community buildings, with first beneficiaries set to be contacted this October. The West Windsor Residents Association (WWRA) which has concerns about the health impacts of the noise and sleep disturbance caused, which cause more illness, earlier death, reduced work performance, and impaired learning. WWRA councillor, Wisdom Da Costa, has encouraged people to report noise disturbances at night directly to Heathrow, which can be made using an online form, by email to noise@heathrow.com or by calling 0800 344844.
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Ruth Cadbury, MP for Brentford & Isleworth, reaffirms her opposition to Heathrow expansion
Ruth Cadbury, MP for Brentford & Isleworth, used a speech in a Westminster Hall debate in Parliament to reaffirm her opposition to a third runway at Heathrow, while also raising a number of other constituency issues relating to Heathrow expansion. In her speech Ruth warned that even without a third runway at Heathrow there could still be a large increase in the number of flights arriving at Heathrow if runway alternation is ended. She also mentioned the need for adequate noise insulation schemes to ensure residents locally could get double glazing and other improvements to reduce noise pollution in their homes. She said: ‘‘Whether you live in Brentford, Isleworth, Osterley or North Chiswick the excessive noise from the existing two runways is already having a huge impact. A third runway or an expansion in the number of existing flights would only make noise pollution worse….‘‘I will continue to work with campaigners, local community groups and residents across west London to protect our local community from expansion.”
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MPs warn against Heathrow Airport expansion: ‘Put the planet first’
Fleur Anderson, the Labour MP for Putney, led a parliamentary debate on 24th May, in which she said plans to expand Heathrow would subject Londoners to unacceptable levels of noise and air pollution. That would be “a serious health issue” for her constituents. She called for the Government to block the project. Fleur said to the incoming Heathrow CEO: “There is no version of an expanded Heathrow which is compatible with climate targets. There is no version of an expanded Heathrow that does not reduce the quality of the lives of 650,000 people in my constituency and beyond, who live under the flight path. And there is no version of an expanded Heathrow that does not make the air our children breathe even more polluted. I implore you, put the quality of life and the planet first, and the profits of your shareholders second.” A coalition of MPs came together for the debate, to protest against any expansion of Heathrow. They included former Shadow Chancellor John McDonnell, MP for Hayes and Harlington; Munira Wilson; Fleur Anderson; Ruth Cadbury; Andy Slaughter; Rupa Huq and John Randall.
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Heathrow vs airlines – dispute continues as parties given permission to appeal price cap
Heathrow Airport and separately 3 major airlines (Virgin Atlantic, British Airways and Delta Air Lines) have been granted permission to appeal the Civil Aviation Authority (CAA)’s decision on the Heathrow price cap. The airlines have been locked in a fierce dispute with Heathrow over the amount the airport can charge per passenger. Both sides launched rival appeals in April against the CAA’s decision to lower the cap; the appeal process was then passed to the Competition and Markets Authority (CMA). The appeals followed the CAA’s confirmation in March that the levy would remain fixed at the same rate as set out earlier in the year – not allowing Heathrow to charge a higher rate. The CAA had announced in January that the 2023 cap would be raised to £31.57 per passenger, up from £30.19. It will then fall about 20% to £25.43 per passenger in 2024 and will remain there until 2026. The airlines argue that Heathrow has played down its recovery from Covid, and used “knowingly undercooked and self-serving passenger forecasts,” to attempt to keep the cap, which is set based on passenger numbers, higher. Heathrow argue that the rate should be greater, to boost investment in the airport.
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Likelihood of Heathrow’s 3rd runway even lower, after CAA charges decision
The CAA has refused Heathrow’s demand for a big increase in the fees it charges airlines. It had wanted up to £43 per passenger. But its regulator, the CAA, allowed it £27.49 on average. The present charge is higher, which means that fees will have to come down over the next few years. Heathrow can appeal to the Competition and Markets Authority (CMA). It looks increasingly unlikely that Heathrow will be able to build a 3rd runway. There was little mention of it in the CAA’s recent analysis. The 242 page ruling on charges just says: “We [the CAA] have said we will deal with these matters separately and in a way consistent with our statutory duties if Heathrow were to reintroduce proposals for capacity expansion.” Heathrow will say only that the plan is under review. There is some evidence in the CAA’s prices ruling that the runway will be a long way off, if ever. The CAA said the charges they are allowing would give Heathrow sufficient financial headroom to pay investors £1.5 billion over the next few years, a rate of return in line with other utility investments. But Heathrow has a level of gearing – the ratio of borrowing to equity base — of over 82%, making even that rate of return unlikely. And the negative impact of the CO2 from an expanded Heathrow make the project ever more improbable.
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CAA rules that Heathrow average maximum price per passenger will fall from £31.57 in 2023 to £25.43 in 2024
The UK Civil Aviation Authority has published its Final Decision for the annual caps that will apply to the charges that Heathrow levies on airlines for using the airport, until the end of 2026. The CAA confirmed that charges for 2023 will remain fixed at the level set out in its interim decision issued earlier this year. The average maximum price per passenger will then fall by about 20% from £31.57* per passenger in 2023 to £25.43** per passenger in 2024 and will remain broadly flat at that level until the end of 2026. This means the average charge over the five years will be £27.49 compared to £28.39 for Final Proposals, a reduction of £0.90 (all in nominal prices). This lower level of charges from 2024 recognises that passenger volumes are expected to return to pre-pandemic levels, and should allow Heathrow to continue “investing in the airport for the benefit of consumers and supporting the airport’s ability to finance its operations.” The CAA hopes passengers will benefit from slightly cheaper fares, and better systems when they travel. The current passenger forecasts are higher than in earlier assessments.
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How are Heathrow’s plans for a 3rd runway coming along? (They are not)
There are still “a number of serious hurdles to overcome” before Heathrow could consider a 3rd runway. Heathrow director of communities and sustainability Becky Coffin confirmed that the project remains paused and under internal review. There are the inevitable impacts on the UK’s net zero, noise, air quality and road congestion, which remain serious and although surface transport decarbonisation is advancing, so-called ‘jet zero’ is some way behind (or probably impossible). The Airports National Policy Statement (ANPS) approving the policy of Heathrow expansion (eventually cleared by the Supreme Court) is nearly 5 years old and calls to revisit it are growing. Meanwhile, other airports are getting on with their expansion plans which mean that any carbon allocation for airports is getting used up at Heathrow’s expense, so it will get left behind. ie. Bristol, Southampton, Stansted, Luton, Gatwick, Manston. Despite the ANP win, the £14bn expansion plans have remained frozen due to Covid, and Heathrow’s lack of available funds. In March 2021 the airport put its £900M T5 rail link on “controlled pause”, citing lack of funds. But in May 2022, Heathrow resumed purchasing houses in proximity to the proposed site.
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John Holland-Kaye to step down from his role as Heathrow CEO
Heathrow’s chief executive, John Holland-Kaye, has announced his resignation and will leave his £1.5m role at some point in 2023 after 9 years in charge. He has been trying to get a 3rd runway for years, so far without success – and with a new range of problems that make it unlikely. Holland-Kaye took over in 2014, being promoted from development director when he oversaw the building of Terminal 2. Speaking at an aviation conference earlier this week, Holland-Kaye said that more details of renewed plans for a possible 3rd runway would be unveiled later this year. He has overseen several years of rows with the Heathrow regulator, the CAA, about landing charges – with opposition from airlines to any increases. There is speculation about who might be the next CEO. One possibility is Emma Gilthorpe, the chief operations officer, who was previously a director overseeing strategy and planning, including the expansion plans. Chief financial officer Javier Echafe is also a possible contender. Holland-Kaye will remain in post to ensure a smooth handover later in 2023
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Heathrow local opponents ready to fight the airport’s expansion plans – again!
Writing in the Uxbridge Gazette, the Stop Heathrow Expansion group comment on the anticipated statement from Heathrow about its finances and outlook, and intentions on a 3rd runway. Stop Heathrow Expansion group says Heathrow has a lot of hurdles, if it wants to build a 3rd runway. “Stricter climate change and environmental laws have been in force since the last proposal was put forward; they will be a major stumbling block for another doomed attempt at R3”. They also say spending so much money on what would probably end up as a bit of a “white elephant” would not be great for the airport’s foreign shareholders, who want high dividends in the coming decade. And the local borough council, Hillingdon, remains totally opposed to the expansion plans, which would have overwhelmingly negative impacts on the area and its residents. Heathrow’s full financial results will be released on 23rd February.
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CAA new 2-week consultation about keeping Heathrow charge at £31.57
The CAA sets the maximum level of passenger charges that Heathrow can charge, generally for a 5 year period. Heathrow had few passenger for two years, due to Covid and the CAA allowed them to raise their passenger charges, while passenger numbers remained low. However, the numbers are now rising, and may be high next year. Back in June, the CAA said the cap would fall from £30.19 then to £26.31 in 2026. When the effects of inflation are removed, that is a 6% reduction every year. Now the CAA has published an interim cap consultation (8th December – for 2 weeks), which raises the cap from £30.19 this year to £31.57. By contrast, the charge was £19.36 pre-pandemic. Airlines believe the higher level of cap is unjustifiable, as based on 2023 traffic forecasts that are too low. Heathrow wants the high charges, in order to recoup its vast debts, pay its shareholders their dividends, and also perhaps for future expansion.
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Virgin Atlantic withdraws support for Heathrow 3rd runway, due to its high landing costs
The CEO of Virgin Atlantic, Shai Weiss, has said he does not support the expansion of Heathrow if it continues with its very high landing charges for passengers. Heathrow will be allowed, by the regulator, the CAA, to raise charges by 56% next year, to £30.19 a passenger, but will have to reduce them to £26.31 in 2026. Heathrow claims this will not provide them enough money to invest in a 3rd runway. But the airlines using Heathrow consider the charges too high, and a disincentive to passengers. Weiss said Heathrow’s plan to raise charges was “great for the airport and its mostly foreign shareholders” – including Qatar and China’s sovereign wealth fund – but “a bad deal for consumers, airlines, and the UK economy”. He wants the CAA to reform a “broken” system and “pay closer attention to the abuse of power by a de facto monopolistic airport”. …”Until that happens, it is difficult to see how expansion at Heathrow can be supported.” He ruled out a return to Gatwick, which Virgin left during Covid, saying there was “no connectivity”. Virgin Atlantic had become more efficient since focusing all its operations on one London airport.
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Truss backs Heathrow 3rd runway, hoping aviation will become “environmentally friendly”!
Liz Truss has reiterated her support for a third runway at Heathrow, as did her new Transport Secretary, Anne-Marie Trevelyan, a week earlier. Ms Truss was asked in the Commons, at PM’s questions, by Lib Dem MP Sarah Olney, about her support for a larger Heathrow. She parotted that standard answer about aviation being important for the UK’s economic growth blah blah. Sarah Olney said, as well as extra CO2 emissions of perhaps 6 million tonnes per year, from a 3rd runway, its impact would be seriously more noise for perhaps 2 million households in areas where Heathrow flights are audible. Truss etc hope (presumably without any proper research into the matter) that air travel can, amazingly, be expanded while at the same time become more [sic] more “environmentally friendly.” That means a vast, implausibly large and rapid expansion in production and use of alternative jet fuels, (SAF) that are genuinely low carbon. Paul McGuinness, chairman of the No 3rd Runway Coalition, said Heathrow expansion should only considered within a national UK aviation strategy, looking at all the regions, which so far does not exist.
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Heathrow passengers still well below 2019 level, with demand uncertainties this autumn
Heathrow says it had 5.8 million passengers in September, which was 15% below its level in 2019. Its passenger numbers went up in the summer, though below 2019 levels, and because of a lack of staff, it limited the number of passengers to 100,000 per day during July September and October – that ends on 29th October, after half-term for most schools. The airport hopes, as ever, for a bumper Christmas season with loads of passengers, despite the various UK economic problems. Demand may not be as much as it hopes if there is a winter resurgence of Covid, a worsening situation in Ukraine, more economic gloom in the UK, and continuing high energy prices, giving many people less disposable income. Heathrow said it would spend the next year working on bringing its capacity and service back to pre-pandemic levels. It has claimed it is back as the busiest large airport in Europe, after being knocked off its perch for that by Schiphol. But Schiphol now will have some flight number limitations, from 2023, when the annual number is to be cut from 500,000 to 400,000 flights to limit noise, carbon emissions and air pollution.
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Truss’ new Transport Secretary, Anne-Marie Trevelyan, backs a 3rd Heathrow runway
With the arrival of the Truss government in September, Grant Shapps (a big aviation enthusiast) was removed from the job of Transport Secretary, and replaced by Anne-Marie Trevelyan. She has now said, at the (somewhat fractious!) Tory party conference that she is supports building a 3rd Heathrow runway, and is an ‘absolute believer’ in aviation expansion’s potential benefits, with it being “a really important part of our growth.” Boris Johnson opposed the 3rd runway. The main focus of the Truss government is economic growth, at any cost, with desperation to get more economic activity and more money for those earning. She believes a growing airport will increase UK exports by air. After years of wrangling, Heathrow’s plan to build a third runway was originally given the green light in 2018 by Chris Grayling, under Theresa May. It cannot go ahead until a DCO has been applied for and allowed, and the airport can find the necessary money. Ms Trevelyan said concerns about increasing aviation CO2 are no longer valid because of the development of Sustainable Aviation Fuels.
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Heathrow airport passenger cap extended until 29th October – after autumn half term
Heathrow has extended its 100,000 passenger a day cap for another six weeks, until the 29th October. It had been due to end on 11th September. The new date will include the autumn half-term, when a lot of people fly abroad. The reason for the reduction to 100,000 departing passengers is continuing staff shortages. Reducing the number per day slightly means fewer delays and last-minute cancellations. Heathrow reported a £321m adjusted pretax loss for the first half of 2022 in July. It could not cope with passengers’ baggage. The airport said it remained loss-making and did not expect to pay any dividends to its shareholders for the rest of the year, but it was offsetting increased costs through higher charges. People are anxious about their flights. Perhaps some might decide not to fly this year. Earlier in August, Ferrovial said it was considering selling its stake in Heathrow, as it was not making enough money out of it. Finding enough money to build a (white elephant) 3rd runway seems an ever more distant, or impossible, aspiration by Heathrow’s owners.
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How companies like Heathrow may be misguidedly covering farmland in trees, as “carbon offsets”
Many companies are attempting to claim they are “offsetting” their current carbon emissions, by paying for ways in which the carbon can be removed from the atmosphere, or future carbon emissions by others can be prevented. What is actually needed, to prevent an increase in global atmospheric CO2 in the next few years, is NOT to emit the carbon. Hoping it can be removed in future is deeply unsatisfactory. But companies like Heathrow have been buying up “offsets” from planting trees, in the hope that – in 3 or more decades – they will have removed some CO2 from the air. But the problem is that many of these tree planting schemes are buying up existing farmland, or land with other uses, in order to plant these “offset” plantations. Many farmers and those with agricultural land are dismayed and angry. The land should be used to produce food. Sometimes other land then has to be used for agriculture, to replace the land taken by offset companies – so little overall benefit. Heathrow said (Feb 2020) it will offset “the remaining 7% of infrastructure emissions through tree-planting projects in Indonesia and Mexico that will be certified through the Verified Carbon Standard.” And in 2020 it would “funnel £1.8m of new investment on nature-based carbon capture solutions in the UK. ” eg. 87.4 hectares in Ullapool in Scotland, “will benefit from a native woodland creation project part-funded by Heathrow. In partnership with Forest Carbon.”
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Heathrow’s Spanish owner Ferrovial considers selling stake if airport does not make enough money
Ferrovial, which owns 25% of Heathrow, is considering selling its stake. A French investor, Ardian – which has other airport interests – might buy it. Ferrovial considers it has not made, and is not making, enough money from Heathrow. It is displeased by the CAA ruling, that Heathrow cannot hugely increase its landing fees charged per passenger at Heathrow. Heathrow wanted to put this up to over £40 per person, but recently the CAA ruled that it will have to fall from £30.19 to £26.31 by 2026, despite a furious lobbying effort by the airport. Ferrovial is understood to have been approached by Ardian, a Paris-based private equity firm, about a possible joint deal with Saudi Arabia’s Public Investment Fund. Ardian held a 49% stake in Luton airport between 2013 and 2018. Ferrovial has said it would be sceptical about committing further funding to Heathrow if the airport cannot get CAA agreement on charges. The lower landing charges are a disincentive to new investors, who fear low profits. Experts consider that any decision to cut off funding was likely to scupper plans for a 3rd runway, with progress already disrupted by a sharp fall in air travel during the pandemic and huge debts.
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Heathrow makes a loss in first half of 2022; debt increases; RAB increases
Heathrow airport has reported a £321m adjusted pretax loss for the first half of the year after weeks of lengthy queues and flight cancellations, with passenger numbers back at near pre-pandemic levels. It recently had to announce a daily cap of 100,000 passengers until early September. It estimated that airlines were lacking about 30% of ground handling staff compared with before Covid. The airport said it did not expect to pay any dividends to its shareholders for the rest of the year. Heathrow’s revenue in the 6 months to 30th June was £1,280 million, compared to £348 million in 2021, and £712m in 2020, and £1,461m in 2019. The £231 million loss in 2022 compares with a loss of £787m in 2021, a loss of £471m in 2020, and a £153m profit in 2019. Heathrow’s Regulated Asset Base (RAB), on the size of which it can levy passenger charges, was £18,425m in 2022, compared to £17,474m in 2021, £16,516m in 2020 and £16,598m in 2019. Heathrow Finance plc consolidated nominal net debt was £15,561 million in 2022, compared to £15,440m in 2021, £14,932m in 2020 and £14,361m in 2019. ie. it has risen a lot.
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Letter: “We hope Heathrow will cut early-hours, disruptive, flights”
Friday, 22nd July
‘Heathrow’s summer of discontent cannot be allowed to continue to hit such large swathes of the population’. Now that Heathrow has announced a curtailing of passenger numbers as it struggles to cope with demand, residents around the airport are wondering when a reduction in night flights will occur. The past few weeks have seen too many flights operating past midnight, with some even past 1am. This is unacceptable, particularly as flights begin to arrive again over some parts of London from as early at 4.15am.
The many hundreds of thousands of people under Heathrow’s flight paths must not continue paying the price for Heathrow’s recruitment backlog; staff they were keen to fire at the beginning of the Covid-19 pandemic but have struggled to rehire and train quickly enough to cope with demand. As London and the Thames valley suffer record-breaking temperatures, we hope the airport will reduce flights at these disruptive times, when the heat means we’re already having difficulty getting a decent night’s sleep – and need to open bedroom windows.
Heathrow’s summer of discontent cannot be allowed to continue to hit such large swathes of the population.
JUSTINE BAYLEY
Chair, Stop Heathrow Expansion
https://www.westminsterextra.co.uk/article/we-hope-heathrow-will-cut-early-hours-disruptive-flights
Fresh call to review Heathrow expansion plan in light of new Jet Zero Strategy
25.7.2022
A call to review plans to build a third runway at Heathrow Airport has been made by a group of campaigners, Stop Heathrow Expansion (SHE). Last week, the government published its Jet Zero Strategy, with the claimed intention of reducing carbon emissions from the aviation industry. But SHE says the third runway would generate additional megatonnes of carbon dioxide each year. Justine Bayley, Chair of Stop Heathrow Expansion, said: “We cannot have a third runway at Heathrow and expect the 260,000 additional flights per year to be running off vegetable oils or electric batteries: it’s just not realistic. The best thing the Government can do to decarbonise aviation is to abandon plans for a third runway at Heathrow. Heathrow is the single largest polluter in the UK … if a third runway is allowed then approximately seven extra megatonnes of carbon dioxide would be added to the 20 megatonnes it already emits annually. It would be unconscionable, not to mention illegal, to allow this.”
https://rdg.today/fresh-call-to-review-heathrow-expansion-plan-in-light-of-new-jet-zero-strategy/
Travel chaos won’t bother Heathrow, “the ATM with runways attached”
Heathrow has been highly profitable for its owners, which include Ferrovial, the Qatari sovereign wealth fund, and USS, the British academics’ pension scheme. Since 2012, the owners have taken £4 billion in dividends (but nothing in 2021 and only £100m in 2020)— and Heathrow is still valued at more than £17 billion. But it has £16 billion of debt to boost the returns. These amazing economics are due to the antiquated way Heathrow is regulated. Because it’s a monopoly, for long haul flights, the CAA sets its returns, using the “regulated asset base” (RAB), and decides what it can charge airlines on the back of that. But this encourages the owners to throw as many costs as they can on to the RAB. Inflating Heathrow’s value means they get paid more. So wherever it can, Heathrow gold-plates spending – with everything costing as much as possible. Much of Heathrow’s income comes from passenger charges, which were £19 pre-Covid; the CAA allowed a temporary increase to £30; and they now have to fall back to £26 by 2026. Heathrow has been described as “a cash machine with a couple of runways attached.” At least it now seems the 3rd runway is unlikely to be built.
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CAA confirms it wants Heathrow landing charges to fall from £30.19 to £26.31 for next 5 years
The CAA, as expected, has released its Final Proposals for the “H7” price control (5 year) period which runs from January 2022 – December 2026. The CAA is now undertaking a consultation on the proposal to which Heathrow, the airlines that use it, and others will respond. The CAA will consider the feedback it receives during this consultation before making a final decision on the H7 price control, which is expected later this year. The CAA has said that the average maximum price per passenger that airlines will pay Heathrow will fall from £30.19 today to £26.31 in 2026. (Heathrow was allowed an interim increase earlier this year, due to Covid issues). When the effects of inflation are removed, this is equivalent to nearly a 6% reduction every year (ie. down £1.87 in the first year, etc) from today’s level up to 2026. Heathrow has claimed huge losses due to the pandemic, and that it wanted the higher landing charge, to help recovery. But the CAA considers the return of high passenger numbers – that has been faster than anticipated – will bring in sufficient money into Heathrow, for its spending and investment requirements. The higher landing charge is not needed.
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Heathrow hopes 54.4 million passengers, or 67% of 2019 levels, will now use the airport this year,
Heathrow is now forecasting that 54.4 million passengers, or 67% of 2019 levels, will now use the airport this year, up from the 52.8 million it predicted in April. Heathrow expects its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to rise 257% from 2021 to £1.37bn. Revenue is forecast to double to £2.6bn. In general, staffing and energy costs are about 45% of an airport’s operating costs, and Heathrow has said higher energy prices will drive up its operating costs by almost half to £1.2bn this year. In January it forecast its underlying earnings would be £1.04 billion. But the airport is aware of many factors that may reduce air passenger demand this year, including the cost of jet fuel, the cost of living crisis, the UK inflation rate (currently over 9%), the war in Ukraine and Covid perhaps returning. Airlines continue to have staffing problems, and now BA staff are intending to strike. Heathrow’s finances remain very fragile.
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Heathrow fears drop in air travel demand this winter after summer travel ‘bubble’
In July 2021, Heathrow had £2.9 billion of losses due to the Covid pandemic. By the end of March 2022, the losses were £4 billion. The total consolidated net debt of Heathrow Finance plc was £15.4 billion in January 2022 and £15.576 in March 2022. Heathrow is hoping for a huge increase in its passenger number this year, compared to last year – though it will still be below the number in 2019. It 2022 passenger forecast has risen from 45.5 million to 52.8 million, but that is still just 65% of the 2019 pre-pandemic level. But Heathrow is till expecting to remain in the red in 2022. There is a current bubble of air travel demand, as people want to go abroad after being in the UK during the pandemic. But it seems likely that with the high price of oil, the considerable cost of living increase, lower GDP growth, continuing Covid around the world, and uncertainties with the Ukraine war, demand for flights will fall after the summer. Heathrow is anticipating a “winter freeze” in demand. It is possible there will be another Covid variant of concern later this year, that could see the return of UK travel restrictions, deterring people from flying.
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Surinder Arora is rekindling his rival bid to build a new terminal at Heathrow
Hotels tycoon Surinder Arora wants to build a rival terminal at Heathrow. He is understood to have held talks with the Department for Transport and the Civil Aviation Authority about his plans to a new terminal, that might be dedicated (or may not) to Virgin Atlantic, Air France and Delta flights, on Heathrow-owned land. Mr Arora wants to expand Heathrow’s capacity using the new terminal by up to 18 mppa more, without building a new runway – so there would be more planes on the existing runways. Heathrow airport has plans for a third runway, that have been held up for years and look increasingly unlikely after the financial losses caused by the Covid pandemic, and the change in flying behaviour of many companies and individuals. There are also serious climate concerns, so no government should allow airport expansion when aviation carbon emissions are meant to be reducing.
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Heathrow traffic struggles at 50% of pre-pandemic levels as fuel costs and the outbreak of the Ukraine war add to its problems
Low levels of overseas business travel and tourists coming to Britain have kept Heathrow’s passenger numbers at just over half of pre-pandemic volumes. Only 2.9 million people went through Heathrow in February, compared to 5.4 million in February 2019 – the month before the World Health Organisation declared the Covid-19 outbreak to be a pandemic. This was despite the US lifting a 20-month international travel ban on non-US residents and citizens flying to the country, which lead to a surge in travel between the UK and the US. But traveller numbers on Middle Eastern and EU routes rose by over 600%, while the cargo tonnage rose to within 7% of its pre-pandemic levels. Flight bookings continue to be significantly reduced by the continuing strict testing and quarantine rules in multiple countries. Business travel is significantly lower, as companies have cut back expenditure on flights and largely turned to videoconferencing meetings and hybrid working practices. The cost of jet fuel has risen sharply, due to the war in Ukraine. There is also concern about new Covid variants, and some American travellers worry about the behaviour of Russia in Ukraine.
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SNP accused of ‘greenwashing backroom deal’ over higher Scottish aviation CO2 if Heathrow expands
Documents have shown that the Scottish Government has adopted aviation industry claims that expanding Heathrow would not lead to increased CO2 emissions from Scotland. Logically, if there are many more flights between Scottish airports and Heathrow, that would increase Scotland’s aviation carbon emissions. A memo prepared for Scotland’s First Minister last October, obtained by The Ferret, claims that “there is nothing to suggest that LHR [Heathrow] expansion will have a negative impact on emissions attributable to Scotland”. Environmental groups say it is “worrying to see how closely aligned the Scottish Government appears to be with the aviation lobby,” and argue that the document “casts doubt on how serious the Scottish Government is about reaching its climate targets”. Claims that emissions would not rise are based on the aviation sector’s over-optimistic hopes that remarkable novel fuels will soon be produced (or electric planes will fly using zero-carbon electricity ….) that will mean flying will no longer emit so much carbon. The AEF said the claim that Scotland’s emissions wouldn’t increase as a result of a third runway “suggest[s] some very odd carbon accounting somewhere along the line”.
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Holland-Kaye quits civil service recruitment panel for new DfT aviation lead, after backlash from airlines
Recently it was learned that John Holland-Kaye, CEO of Heathrow airport, had been included in the 6-person panel to select the next incumbent of the role of most senior DfT aviation official. There had been outcry, fury and condemnation from the airlines, due to the fear of bias and the threat to impartiality if Holland-Kaye was involved. Now he has stepped down from the panel, following a backlash from airlines. Nigel Wicking, chief executive of the Heathrow Airline Operating Committee, a body that represents the carriers serving the airport, said: “We note and support the Civil Service values of ‘impartiality, objectivity, integrity and honesty’ and would question how the panel can be impartial when it contains the chief executive of Heathrow Airport, the regulated monopoly that the new director general will oversee … Whether any bias is real or just perceived, it will cast shade on any future Government decisions involving Heathrow.”
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Wandsworth to help support the coalition against Heathrow’s 3rd runway
Wandsworth Council has provided the No Third Runway Coalition with much needed funds , £5,781, to help continue to campaign and provide effective and influential opposition to the Heathrow’s 3rd runway plan and the airport’s negative impact on local communities. Wandsworth has long argued against the case for a third runway and the huge impact it would have on the local environment, noise levels and residents’ overall health and well-being. It joined forces with five local councils, Greenpeace and others to legally challenge the Government’s decision to allow the runway and in 2020 the Court of Appeal ruled that this decision was unlawful, as it was at odds with commitments to limit rises in global temperatures. However this ruling has since been overturned by the Supreme Court meaning the campaign to stop the runway continues. As well as the noise impacts of Heathrow, Wandsworth also has significant concerns about the air quality and climate impacts of allowing any expansion. Council leader, Ravi Govindia said “Wandsworth will work with the No Third Runway Coalition to do everything we can as a council to stop this happening.”
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Campaigners label Heathrow’s new “Sustainability” strategy as “patently underwhelming” in its ambitions, or plans for action
Heathrow has announced its updated environmental “sustainability” strategy, called “Heathrow 2.0: Connecting People and Planet”. It wants to do a bit to encourage wildlife near the airport (not birds of course, as they get killed or deterred for safety …) and get airlines to use allegedly “sustainable aviation fuel” (SAF). Lots of hope …. The “elephant in the room” of their rising carbon emissions from flights, is not properly addressed. Local campaign, the No 3rd Runway Coalition, consider the strategy to be “patently underwhelming” and the “goals to reduce emissions are pifflingly small…” Heathrow has unrealistic hopes of “decarbonising” flights, and also “improving the area around the airport for those who live and work in it’. Heathrow wants to cut “at least 45% of on the ground emissions” which make up about 5% of the total. The increased use of SAF, which is only available in tiny amounts, would need government assistance, says Heathrow. Stop Heathrow Expansion says the plan ‘does not deliver for communities around the airport’ and does not offer any real commitments to end ‘highly disruptive night flights’ , instead of better restrictions on flights between 11pm and 7am.
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DfT post of Director General for Aviation advertised – panel of 6 to select, includes John Holland-Kaye
The role of Director General for Aviation, Maritime and Security at the DfT is currently being advertised, at a salary of about £130,000. Applications can be submitted until 28th February. The previous incumbent was Gareth Davis, who was replaced by an interim director, Dr Rannia Leontaridi, in January 2022. There will be a panel of 6 people to select the new director; 5 of the 6 are civil servants. But the 6th person is John Holland-Kaye, the CEO of Heathrow airport. Details of the panel, how John Holland-Kaye could be on it, and the proper process of selecting the applicant for one of the most influential roles in aviation in the UK, are still unclear. It is hoped that this will be clarified soon. Airlines are very unhappy about John’s choice to be on the panel, and the possibility of undue influence.
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Heathrow’s financial problems deepen, especially if it has 15% less passengers in 2022 than forecast
Heathrow has been allowed, by its regulator the CAA, to increase its passenger charge from £19.36 to £30.19 this year until the summer. After that the CAA will probably rule on charges for the next 5 years. Heathrow wanted a larger increase, to £43 per passenger, and based some of its profit forecasts on that – and is peeved with the CAA for limiting its charges. Heathrow has net debts of £15.4 billion of net debt. It says that if its number of passengers in 2022 is more than 15% below its forecast of 45.5 million, it will have financial problems – though “no covenant breaches are forecast in 2022” but that is possible. Its forecast aeronautical revenue for 2022 has been revised down to £2.19 billion, and its underlying earnings down to £1.04 billion. If Heathrow has to breach its covenant terms with its lenders, it becomes a less attractive (aka lucrative) investment, and its credit rating eg. by Standard & Poor’s and Fitch. The airlines using Heathrow are, predictably, deeply opposed to yet higher Heathrow charges.
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Heathrow will not return to “normal” (ie. 2019 levels) of passengers for several years (if ever)
Due to restrictions to try to avoid Omicron spreading, or more being introduced into the UK (it initially probably arrived due to air travel, from Africa) many people who had booked flights over Christmas cancelled. Heathrow said about 600,000 passengers due to use the airport had cancelled. This continued a bad year for the airport. It had only about 19.4 million passengers in 2021 compared to around 80 million in 2019 – ie. 24% of the 2019 number. It had a bit over 22 million in 2020 (so 2021 was 12.3% below 2020). CEO John Holland-Kaye did not expect a return to the level of passengers in 2019 for many years, perhaps by 2026. Even that is very uncertain.
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CAA allows Heathrow to increase passenger charge from £22 to £31.19 from January 2022 – to be reviewed again
The UK Civil Aviation Authority (CAA) has allowed Heathrow to charge its airline customers more in the period from 1 January 2022, as an interim measure, for six months. Heathrow’s current price control expires on 31 December 2021 and the final decision and licence modifications for a new 5-year control period (H7) will not be made and take effect until the summer of 2022. At present the airport can charge up to £22 per passenger, and it wanted to increase that to £43 in January 2022. The CAA now says Heathrow can charge £30.19 per passenger. The CAA says: “Once we have set the final price control for the H7 period, any difference between it and the holding price cap will be trued up or down.” The rise to £31.19 is an increase of 37%, (depending how it is measured) compared to the current inflation rate of 5.1%. Shareholders have received more than £4bn in dividends since 2012. Airlines are deeply opposed.
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SNP’s stance on Heathrow expansion threatens green targets
Letter in The Scotsman.
1st November 2021
Just as COP26 begins, the Scottish Government missed a golden opportunity to show bold environmental leadership by withdrawing its deal to support Heathrow Airport in its expansion.
A motion put forward by Lib Dem MSP Liam McArthur invited them to do so last week. But the SNP chose to abstain; a weak response that some have observed does not to bode well for a Scottish government which likes to boast that it has set stricter climate laws than the rest of the UK.
Even the Scottish Government’s own analysis confirms that Heathrow expansion would create an additional 600,000 tonnes of CO2 emissions in Scotland by 2040, through more than 5,000 additional flights per year – or an additional 605,000 return trips between Scottish airports and Heathrow.
The Scottish Government is not only ignoring its own analysis, it is undermining the credibility of its climate targets – and doing so at the very time that the world’s environmental movement descends on Glasgow.
Paul McGuinness, Chair, No 3rd Runway Coalition, Teddington. Middlesex
Death knell for Heathrow’s 3rd runway as Ferrovial cuts off funding – and CAA blocks high passenger charge rise
Heathrow has been told by its regulator, the CAA, that it cannot raise its passenger charges for airlines by as much as it wanted. At present the airport can charge up to £22 per passenger, and it wanted to increase that to £43 in January 2022. But the CAA has said it will be capped at £24.50 to £34.40 for five years. – with an interim figure of £30 set for 2022. The CAA also reconfirmed its decision earlier this year on Heathrow’s regulated asset base, (RAB) which determines how much money the airport can recover from its customers through charges. This will now rise by £300m, rather than the £2.3bn requested by Heathrow, which wanted to recoup its pandemic losses from consumers, but the CAA had refused. A final decision will be made in January. So Heathrow’s finances are not looking healthy, and now their main shareholder, Ferrovial, has said it will not invest further in the airport, and is not happy about getting low returns. The withdrawal of support by Ferrovial could be the final straw for 3rd runway plans. Heathrow passenger numbers now are about 45% of the 2019 level, and the airport does not expect numbers to return to those levels until 2026.
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Report finds Heathrow is world’s 2nd most polluting airport (after Dubai)
London’s 6 airports make it the most polluting city by aviation emissions, according to a new interactive tool and accompanying report. The tool allows users to explore emissions data for the world’s airports. It shows Heathrow is the 2nd highest-emitting airport in the world, (after Dubai) and accounts for two thirds of the aviation carbon from the London area. It is (2019) the single biggest polluter in the UK. The authors of the report, by Transport & Environment, ODI and the International Council on Clean Transportation (ICCT), said they hoped its findings would support challenges to airport expansion and force a “focus on the infrastructure that enables air travel and leads to more CO2 emissions in future decades”. The report shows that 86 of the 100 most polluting airports are located in the Global North – and that about 1% of the global population responsible for over 50% of all aviation-related CO2 emissions. But the climate impact of air travel is not only from the fuel burned, but also the non-CO2 warming impacts, including the insulating effect of contrails. The report says the global aviation sector was responsible for 2.5% of global CO2 emissions in 2018, with total emissions increasing by 5% annually in the 5 years before that.
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Turbulence at Heathrow as third of top team exit
1st August 2021
Three members, out of the eight, of the executive committee quit as the airport struggles with Covid travel restrictions. Carol Hui, Andrew Macmillan and Chris Garton, chief of staff, chief strategy officer, and chief solutions officer, have left. The executive committee is responsible for the day-to-day business of the airport and also includes finance chief Javier Echave and Emma Gilthorpe, the airport’s operating head that industry insiders believe is best-placed to take over from Mr Holland-Kaye at some point in the future. Three Heathrow insiders will take their place as the executive team is broadened to nine people. Heathrow has launched a search for the airport’s legal counsel – a position as it decides whether or not to press ahead with the building of the third runway. Mr Holland-Kaye said that Ms Carol Hui had been instrumental in “leading us to success with the Airports Commission recommendation for expansion and the subsequent legal appeals …Carol is probably the best in-house lawyer in the UK, and has been a trusted advisor to me and the board. We will take a little time to choose the right person to succeed her as general counsel.”
https://www.telegraph.co.uk/business/2021/08/01/heathrow-rocked-executive-exodus/
Heathrow losses now £2.9bn and consolidated net debt £15.2 bn
Heathrow has announced that its cumulative losses from the Covid-19 pandemic have hit £2.9 billion. In its results for the first half of 2021, Heathrow’s revenue dropped from £712 million in the first six months of 2020 to £348 million in the first half of 2021, which is 51.1% less than in the first half of 2020, and 76.2% less than the first half of 2019. Its pre-tax loss widened 18% to a little over £1 billion. It had 3.85m passengers, which is 75.1% less than the same period in 2020, and 90.1% less than the first half of 2019. Heathrow (it has a complex structure of numerous companies and levels) had consolidated net debt of £15.2 billion — not much less than the airport’s £16.9 billion regulated asset base (RAB), or the CAA’s proxy for its value. Heathrow had been allowed, by the CAA, to increase its RAB by £300 million, to £16.9 billion. Its chief executive John Holland-Kaye is using the half-year figures to warn about a covenant waiver on its various loans. The group of Heathrow companies has £4.8 billion of liquidity, (ie. ability to borrow) with average cost of debt just 1.64%.
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Taxpayers face near £900m bill for Heathrow western rail link, if airport won’t pay
It was announced in September 2020 that the Great Western rail link between Reading and Heathrow would be delayed by up to two years. It was first proposed in 2012. A DCO application to construct the new line is not expected for some time. Heathrow was set to pay for much of the cost, as the link would benefit its passengers. But in April Heathrow withdrew its funding, because of the crisis in its finances due to the pandemic. Other funding from the private sector will be “much smaller” than previously envisaged. So it looks as if taxpayers may have to fund most of a £900m bill. The rail minister, Chris Heaton-Harris, told a parliamentary committee last week that he would recommend that taxpayers pay instead, as part of Chancellor Rishi Sunak’s spending review this autumn. Network Rail said that the Department for Transport had asked it to delay beginning the project by a year until the winter of 2022. It said it would not progress until there was a satisfactory financial arrangement, “including an appropriate financial contribution from Heathrow Airport Limited (HAL); this requires endorsement by the Civil Aviation Authority (CAA) as the relevant regulator.”
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DfT decides to roll over the night flights regime for 3 more years (not 2) for Heathrow, Gatwick and Stansted
The government consulted, in December 2020, on its night flights regime (closed 3rd March 2021). Part of the consultation was whether to “roll over” the current regime for the three designated airports, (Heathrow, Gatwick and Stansted) for another 3 years, and it closed on 3rd March 2021. The second part is about wider night flights issues for all issues, and that closes on 3rd September 2021. The DfT has now published its “Decision Document” on the night flights regime and the designated airports. It has decided – despite pleas from numerous groups and individuals for change – not only to roll over the existing scheme, but to set this for THREE years more, rather than the two years originally proposed. The DfT says: “The restrictions will be reassessed in time for a new regime to commence in October 2025…” Airport groups at the designated airports are upset and furious. Night flight noise is probably the most hated, and the most damaging element of aircraft noise. The justifications given for night flights, about their economic necessity, are unconvincing. Sadly, people living with night flight noise from Heathrow, Gatwick and Stansted will be stuck with the problem, at least until 2025
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No 3rd Runway Coalition: “Heathrow expansion stopping UK from jet zero dreams”
The government hopes all international flights from the UK can be made “net zero” for carbon emissions by 2050. Its new consultation, called “Jet Zero” sets out what the DfT is hoping for, with the remarkable reduction in carbon emissions largely being brought about by “sustainable aviation fuels.” The DfT is not keen on doing anything that would deliberately restrict air travel demand. Campaigners at Heathrow, the No 3rd Runway Coalition, point out that it would be hard enough to get anywhere near net zero for aviation emissions, even without airport expansion plans being allowed. And it would be completely impossible, if a 3rd Heathrow runway was allowed, adding perhaps up to another 9 million more tons of CO2 per year to be emitted. Paul McGuinness, Chair of the No 3rd Runway Coalition, said: “It has long been clear that Heathrow’s 3rd runway is incompatible with the UK climate targets and would take up the vast majority of aviation’s residual emissions in 2050.”
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Howard Davies, whose “Airports Commission” decided a Heathrow 3rd runway was needed and justified, now says it no longer is
Back in 2015, Sir Howard Davies chaired the Airports Commission, which had been given the task – by George Osborne – of making the case for a 3rd runway at Heathrow, so the Conservative government could press ahead with it, once they were out of coalition with the LibDems, who opposed it. Sir Howard had financial connections which might be considered to make him biased towards the airport. In July 2015 the Commission produced its report, recommending Heathrow’s 3rd runway, as a way to meet anticipated air travel demand in the south east. Now, with the impact of the Covid pandemic, and Heathrow struggling with 72% fewer passengers in 2020 than in 2019, Sir Howard has admitted that no extra runway is now needed, nor will it be for some time. In 2015 he believed there was an economic case for it, and spending up to £18 billion on the expansion. Now, even with the cheaper planned scheme at about £14 billion, he has said: “I would have to redo the numbers to see if the economics made sense.” The whole Airports National Policy Statement was based on building a 3rd Heathrow runway, on the recommendation of Sir Howard Davies, before deciding on airport policy for the whole of the UK.
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Shapps supports decision by the CAA to revoke Flybe’s operating licence – losing its Heathrow slots
Flybe collapsed into administration in March 2020. It had some slots at Heathrow because it was given them under “remedy” procedures aimed at preventing British Airways from dominating the market. The (how many) pairs of slots, which prior to the pandemic changed hands for up to £52 million each are still believed to be worth about £10m despite the impact of coronavirus. When Flybe failed, the slots were allocated back to BA last summer. Flybe still had the right to access them – but only if the airline had an operating licence after June 3. But now Grant Shapps has supported a decision by the Civil Aviation Authority to revoke Flybe’s operating licence. The slots therefore remain with BA. Had Flybe been granted the licence, it could have meant a lot of money of hedge fund manager, Lucien Farrell of Cyrus Capital. Flybe has been bought by a new company called Thyme Opco, now called Flybe Limited. It hopes to resurrect the brand (though it has always made a loss) and wanted those valuable slots, but has been awarded separate but less valuable slots at Manchester and Birmingham airports.
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Heathrow re-starts hardship house purchasing programme, for blighted homes
11 MAY, 2021 (New Civil Engineer)
Heathrow has resuming (after a Covid break) the purchasing of houses close to the proposed runway, or on land they may want for non-runway expansion. The airport has reopened a property hardship scheme through which it buys homes from owners who are otherwise unable to sell them due to the prospect of the third runway. The houses can then be let to airport workers, in the same way they were in Sipson. It helps reduce opposition to the expansion scheme, from badly affected local residents. Stop Heathrow Expansion representative Geraldine Nicholson said that it is “clear Heathrow has not given up yet and that their overseas shareholders are becoming impatient”. She emphasised that giving “this level of uncertainty to thousands of people around Heathrow is wrong” and called for the airport to realise “the game is up” on the third runway and focus on “rebuilding the airport as a better neighbour”.
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Environment lawyer, Tim Crosland of Plan B Earth fined £5k for contempt of court in Heathrow case
Environmental lawyer Tim Crosland (of Plan B Earth) was fined £5,000 for criminal contempt of court after deliberately making public the Supreme Court ruling related to Heathrow airport before the result was officially announced, in December 2020. The judges could have jailed him for two years. The Supreme Court had ruled that a planned 3rd runway at Heathrow would be legal, as the Airports National Policy Statement (ANPS) was legal, and had dealt adequately with the issue of climate change. Tim and others had argued that the increased CO2 emissions it would cause are incompatible with the UK’s obligations to fight the climate crisis. The judges said there was “no such thing as a justifiable contempt of court” and the fine was needed to protect the integrity of the judiciary. In court on Monday, Tim said “The attorney general prosecutes me for highlighting the government’s dishonesty and climate hypocrisy in the year of [UN climate summit] Cop26. It’s the classic case of retribution against the whistleblower by those attempting to conceal their own guilt.” Acceptance that climate must be a key factor in government planning policies is important – not only for aviation, by other sectors such as road building and other large carbon infrastructure.
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CAA rules that Heathrow can only raise £300m out of £2.6bn through higher charges, plus another £500 m
Heathrow’s bid to increase airport charges to recover £2.6 billion lost during the coronavirus pandemic has been rejected by the aviation regulator, the CAA – which said its expenditure had been “disproportionate and not in the interests of consumers”. The CAA is allowing Heathrow to initially raise only an additional £300 million through higher charges, out of the £2.6 billion it asked for. “The CAA has agreed to a limited, early adjustment to HAL’s RAB of £300m and will consider this issue further as part of the next price control (H7)” which starts on 1st January 2022. The CAA has agreed to allow Heathrow to raise charges to recover the £500 million “it incurred efficiently” on its plans for a 3rd runway, between 2017 and 1st March 2020. Heathrow said it faces loses of around £3 billion due to the Covid pandemic. IAG, which owns British Airways, the largest airline at Heathrow, said it is “extremely disappointed” with the CAA decision, which means more expensive tickets for its consumers from 2022. Heathrow wants concessions by the CAA, though its shareholders have earned nearly £4 billion in dividends in recent years.
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Western Rail Link to Heathrow mothballed – won’t be revived until airport’s finances improve
Network Rail has now confirmed that staff working on the Western Rail Link to Heathrow have been moved on to other projects, as there isn’t enough money to keep building it. The proposed link goes from the Great Western Main Line at Langley to Terminal 5. Plans to build a £900M western rail link have been brought to a “controlled pause”, or mothballed, by Network Rail due to the impact of Covid-19 on the aviation industry and Heathrow’s finances. Heathrow is currently unable to commit any funding to the project due to its precarious financial position, with a £2 billion loss announced in February. The indefinite delay to the rail link was disclosed in the minutes of the Network Rail board meeting on 20 and 21 January 2021, published in March. It is possible that the scheme could be resumed at some future. The DfT would periodically update its business case for the Western Rail Link to Heathrow, in the light of significant changes to both the aviation and rail sectors as a result of Covid. The delay will continue, if Heathrow does not get passengers – and earnings – back. The scheme will be pushed further down the priority list.
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Good Law project, Dale Vince and George Monbiot start legal proceedings to force Government to suspend & review ANPS
In just months, a Government policy – the Airports National Policy Statement (ANPS) – that pre-dates the Net Zero commitments in the Climate Change Act. could form the basis for a decision to expand Manston Airport in Kent. Government has refused to say whether a decision on Heathrow expansion will be made under the ANPS but, with an application for a development consent order (DCO) on Manston imminent, the Good Law project hopes it can force its hand – on Manston and on Heathrow. The ANPS is inconsistent with government commitment to tackle the climate crisis. Though the Supreme Court, in December 2020, ruled that the ANPS was legal, it is necessary for the government to suspend and review it. Now the Good Law project, with Dale Vince and George Monbiot, have issued a pre-action protocol letter to the government legal department, asking for the ANPS to be suspended and reviewed. Not only would proper updating of the ANPS prevent expansion of Manston and Heathrow, it would do the same for others in the pipeline – Southampton, Leeds Bradford, Bristol, Stansted and Gatwick. Now government has agreed to include international aviation in carbon budgets, and a 78% cut in UK CO2 emissions by 2035, there is even greater urgency for correct UK aviation policy.
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Heathrow’s 3rd runway plans are ‘dead’, say campaigners, as government tightens UK CO2 targets
Plans for a 3rd runway at Heathrow have been struck a massive blow by the government’s new emission targets. The government announced the new climate change target on April 20th, with an aim to cut carbon dioxide equivalent emissions by 78% by 2035 when compared to 1990 levels. For the first time, the Sixth Carbon Budget, covering the period 2033 to 2037, will include international aviation emissions (and also shipping emissions). Previously these had just been “taken account of” in setting the budget. The total emissions cap for the 2033-37 period is set at 965 MtCO2, which is far lower than the cap for the 5th carbon budget. Heathrow vies with Drax power station to be the UK’s largest source of CO2, emitting (in 2019) about 19 – 20 MtCO2 per year. That is around 52 – 55% of total UK aviation emissions (37Mt CO2 in 2019). A 3rd runway, adding another 7 MtCO2 or more per year, would mean that – in order to meet the new legally binding targets – most other UK airports would be required to close. Paul McGuinness, chair of the No 3rd Runway Coalition, said: “Heathrow expansion is dead. It is simply not compatible with the UK government’s commitment to do our part in protecting the climate.”
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London Mayor candidates speak out against Heathrow expansion
19.4.2021 (Enfield Independent)
By Joe Talora @jtalora
The four leading candidates running to be Mayor of London have unanimously opposed the expansion of Heathrow Airport. Sadiq Khan, Shaun Bailey, Sian Berry and Luisa Porritt have all spoken out against plans to add a third runway.
Speaking to the No 3rd Runway Coalition, current mayor Sadiq Khan said that a third runway at Heathrow would have “disastrous consequences” for the environment and “would be worse for those who live near the airport”.
Conservative candidate Shaun Bailey said that Heathrow expansion is “never the answer” and that a third runway is “incompatible” with his plans for clean air, while Liberal Democrat candidate Luisa Porritt said she will “fight it all the way”.
Green Party candidate Sian Berry said that her party has “been at the heart of campaigning against Heathrow expansion for decades” and that “we need to cut down air pollution”.
Paul McGuinness, chair of the No 3rd Runway Coalition, said: “There’s no truer barometer of London’s view on Heathrow expansion than the city’s mayoral candidates. And it’s because they have their ears close to the ground, across the whole metropolis, that they are all vehemently opposed to any expansion at Heathrow.”
The London Assembly, which both Sian Berry and Shaun Bailey are currently members of, last year unanimously passed a motion that demonstrated cross-party opposition to a third runway at Heathrow.
Despite a legal battle, the Government’s plans to go ahead with the expansion of Heathrow Airport were given the go-ahead in December after the Supreme Court ruled that they were lawful and “did take the Paris Agreement into account”.
https://www.enfieldindependent.co.uk/news/19243645.london-mayor-candidates-speak-heathrow-expansion/
Heathrow owners divided about plan to raise £2.8bn by higher charges (due to Covid losses)
Heathrow is facing the spectre of a divided boardroom over its plan to raise billions of pounds from airlines and customers by increasing airport prices. State-backed Qatar Airways, whose owner is Heathrow’s 2nd-biggest shareholder, said Heathrow’s plans to recoup £2.8bn is “unreasonable, not in the consumer interest and should be rejected”. Qatar Airways’ boss, Akbar Al Baker, is a representative for the state of Qatar on Heathrow’s board of directors. Despite huge cuts in traffic, Heathrow claims it has enough cash reserves to cope with this year, even if there are low passenger numbers. There was recently a consultation about how much the CAA will let Heathrow charge airlines, in order to recoup cash lost due to the pandemic. Heathrow has threatened legal action if the CAA does not allow this.
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UK government and Supreme Court criticised by prominent scientists and lawyers, for ignoring Paris climate goals in infrastructure decisions (eg. Heathrow decision)
Prominent scientists and lawyers (including Jim Hansen, Sir David King and Prof Jeffrey Sachs) have written to ministers and the Supreme Court, to say the UK government’s decision to ignore the Paris climate agreement when deciding on major infrastructure projects undermines its presidency of UN climate talks this year. The Heathrow case is a key example, when a 3rd runway was approved in principle by government (2019) and the Supreme Court finally ruled in December 2020 that the government had not needed to take the Paris climate goals into account. The UK is due to host the Cop26 summit in Glasgow in November, regarded as one of the last chances to put the world on track to meet the Paris goals. It is dangerous for the highest court in the land to set a bad precedent. The letter, signed by over 130 scientists, legal and environmental experts, says that the Supreme Court “set a precedent that major national projects can proceed even where they are inconsistent with maintaining the temperature limit on which our collective survival depends.” And “Indeed, the precedent goes further still. It says that the government is not bound even to consider the goals of an agreement that is near universally agreed.”
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UK government criticised by prominent scientists and lawyers, for ignoring Paris climate goals in infrastructure decisions
Prominent scientists and lawyers (including Jim Hansen, Sir David King and Prof Jeffrey Sachs) have written to ministers and the Supreme Court, to say the UK government’s decision to ignore the Paris climate agreement when deciding on major infrastructure projects undermines its presidency of UN climate talks this year. The Heathrow case is a key example, when a 3rd runway was approved in principle by government (2019) and the Supreme Court finally ruled in December 2020 that the government had not needed to take the Paris climate goals into account. The UK is due to host the Cop26 summit in Glasgow in November, regarded as one of the last chances to put the world on track to meet the Paris goals. It is dangerous for the highest court in the land to set a bad precedent. The letter, signed by over 130 scientists, legal and environmental experts, says that the Supreme Court “set a precedent that major national projects can proceed even where they are inconsistent with maintaining the temperature limit on which our collective survival depends.” And “Indeed, the precedent goes further still. It says that the government is not bound even to consider the goals of an agreement that is near universally agreed.”
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Government First-Tier Tribunal to hear Heathrow appeal against having to disclose environmental information
Heathrow is trying to overturn a ruling in February 2020 that it must disclose environmental information. The Information Commissioner’s decision that Heathrow counts as a public authority and must disclose the information will be subject to an appeal next week. The ruling last year followed a similar one concerning energy producers and suppliers, extending a duty that the water industry has been subject to since 2015. They all resulted from the ambiguity of the Environmental Information Regulations 2004, which states that any organisation that “that carries out functions of public administration”, or has public responsibilities, functions or provides services related to the environment, is subject to the law. Heathrow does not want to have to answer demands for information about planning applications, aircraft noise or environmental impacts of the airport. The appeal comes as the Good Law Project, which is pursuing a legal challenge against government policy approving the third runway, said that it was making “a focussed request for documents and communications between Heathrow Airport and the DfT, for a Development Consent Order, for a 3rd runway.
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British Airways to continue work-from-home plan after Covid – possible they might sell huge Heathrow HQ building
18.3.2021 (BBC)
British Airways will let staff split their working lives between the head office and home in another example of big firms offering flexible employment. The airline is also exploring the sale of its huge Waterside HQ near Heathrow Airport, where 2,000 people worked before the coronavirus lockdown. “It’s not clear if such a large office will play a part in our future,” BA said in a message to staff. The firm is in a race to cut costs after the virus led travel to collapse. BA, part of the IAG airline group that also owns Iberia and Aer Lingus, has shed more than 10,000 jobs and is raising billions of pounds of extra cash from shareholders to shore up its finances. Less office working saves companies money. It might, or might not, have lower environmental impact. That of course depends how far people travelled to work, how they travelled, how much energy the office building used, how much extra energy people use at home when home-working, what they choose to get for lunch and snacks etc.
https://www.bbc.co.uk/news/business-56451641
People overflown by Heathrow dreading the resumption of increased plane noise, when flight restrictions are eased
While for many people lockdown has been a really difficult and isolating time, for those living under the Heathrow flight paths it’s given them the respite from noise that they have really wanted and needed. One resident in Windsor said: “The worst thing for me is the night flights. I worked in a pressurised full time job and we had done as much insulation as possible. But when you wake up at 4.30am – when the first arrivals start – you start thinking about work and you can’t get back to sleep and it almost drove me round the bend. For your mental health the night flights are an absolute nightmare.” The problem can be worse in summer, in warm weather, when people want the window open – the noise is then far worse, and people get woken up. One resident said, about the prospect of high numbers of planes returning, when restrictions on air travel are lifted: “I am absolutely dreading it, in fact I am thinking about moving away which is a shame because I love this area and I love where I live.” The campaign group No 3rd Runway Coalition ran a noise survey during lockdown which received 3,419 responses. It showed a high number noticed a beneficial impact on their sleep, from fewer planes.
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Campaigners tell Heathrow to accept reality, and give up on plans for a 3rd runway
Campaigners say Heathrow should accept what is now financial reality and give up on its plans for a 3rd runway. Heathrow made a £2bn loss in 2020, and is asking for more government finance in the form of extending the furlough scheme – and also full relief from business rates. Heathrow’s financial frailty is obvious; it has net debt of £15.2bn as of September 2020. It is now so highly geared with debt, that it has reached a leverage ratio of 97% — higher than any comparable UK infrastructure or utility operation. In June last year the ratings agency, Standards & Poor’s, put Heathrow on “credit watch with negative implications” — a 2nd credit downgrade in just 2 months. Then Heathrow sought waivers on covenants from holders of £1.1 billion of bonds. Any further downgrade would render these bonds junk, making the airport an extremely unattractive asset for investment. Its shareholders have not contributed more cash. John Holland-Kaye has told staff that the publicised “£3.2bn war chest” is merely the liquidity that can be mustered when “we have drawn down all the cash and credit facilities at our disposal”. ie. more future borrowing. With its precarious finances, it is no longer appropriate for Heathrow to be pursuing a 3rd runway.
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Heathrow adding a new £8.90 per passenger pandemic tax from April
Heathrow has added a new charge on all outbound flights from April. It will charge £8.90 extra in what the airport is calling a United Kingdom Exceptional Regulatory Charge. It may only last for a year, and Heathrow says the CAA has approved it. Other major UK airports have said they will not be implementing a similar fee. Paul McGuinness, chair of the No Third Runway Coalition, criticised the airport for adding on the extra charge. “Yes, aviation has dipped during the pandemic, but it’s the shambolic financial management of Heathrow – the massive borrowing, the large dividends payments to its foreign owners and the total lack of reserves – that is forcing the airport’s management into trying, by stealth, to raise these passenger tariffs.” A Heathrow spokesperson said: “Heathrow makes absolutely zero profit from these services [sic]. The price is calculated purely to cover the cost of operating and maintaining the infrastructure that supports them.” Airlines say the reason for the increase is the amount it charges them for baggage handling, water, electricity and other services. It is possible the tiny extra charge will make some people choose another airport to fly from (but it is probably too low to do that).
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British Airways owner IAG hit made a record loss of – €7.4bn in 2020 (cf. +€2.6bn profit in 2019)
International Airlines Group, owner of BA, has reported a record annual operating loss of €7.4bn (£6.4 billion) for 2020. Its passenger capacity last year was only a third of 2019 and in the first quarter of this year is running at only a fifth of pre-Covid levels. The loss included exceptional items relating to fuel and currency hedges, early fleet retirement and restructuring costs. The loss compares with a €2.6bn profit in 2019. IAG is trying to cut its cost base and increase the proportion of variable costs to better match market demand. IAG’s passenger revenues fell 75% from €22.4bn to €5.5bn last year but its cargo business had “helped to make long-haul passenger flights viable” during the pandemic. Cargo revenues increased by almost €200m to €1.3bn and IAG also operated more than 4,000 cargo-only flights in 2020. It is not providing guidance on its finances for 2021. Airlines do seem to understand, at last, that for acceptable Covid safety of air travel, people need to be vaccinated or have proper proof they are not able to spread the virus. IAG spent €4.1bn in cash last year – almost €80m a week (£11.4 million per day). IAG’s market value has halved to £9.6bn since the start of the pandemic. When Covid is less of a threat, low-cost carriers may emerge in stronger shape than airlines like BA.
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Heathrow makes £2bn loss in 2020 due to the pandemic – warning on continuing to be a “going concern”
Heathrow lost £2 billion in 2020 because of the fall in passenger numbers due to the Covid pandemic. The numbers are lower than for perhaps 50 years, and the airport is issuing a warning about its future. Its pre-tax loss was £2.01bn for its full-year compared to a £546m profit in 2019. Revenues fell 62% £1.18bn, with passenger were at 22.1 million, 73% less than in 2019. This led the airport to issue a warning, that the “existence of a material uncertainty… could cast significant doubt upon the group and the company’s ability to continue as a going concern”. Nobody knows how much air travel will happen this year. Heathrow desperately wants relief on all its business rates, an extended furlough scheme for its staff, and a revival of VAT-free airport shopping for tourists to the UK. John Holland-Kaye makes his usual statements about how vital Heathrow is to Britain … Since the start of the pandemic, the airport has cut operating costs by nearly £400m, reduced capital expenditure by £700m and raised £2.5bn in funding. And it says it ended 2020 with £3.9bn of liquidity, which it says is enough to last until April 2033 even if there is no recovery in passenger numbers. Which begs the question of why it needs more government support now.
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Heathrow, Gatwick and East Midlands apply for UK Freeport status
Heathrow, Gatwick, East Midlands and Bournemouth airports have applied to the government for Freeport status. The period for applications closed on 5th February. There are 33 applicants, and the government is expected to announce 10 – for all the UK – by “the spring” (ie. probably by June). The scheme comes following Brexit and as the government looks to create new trade links. Freeports are sites where normal tax and customs rules do not apply. They can be airports or maritime ports, and can be made up of a consortium of both as long as all sites are within a similar geographic location. Companies using Freeports will be able to import goods without paying tariffs, process them into a final good and then either pay a tariff on goods sold into the domestic market, or export the final goods without paying UK tariffs. Areas given Freeport status will also benefit from a wide package of tax reliefs, including on purchasing land, constructing or renovating buildings, investing in new plant and machinery assets and on Employer National Insurance Contributions. There were 7 freeports between 1984 and 2012 (eg. Liverpool and Southampton ports), after which UK legislation changed and their use was not renewed.
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Heathrow may be able to persuade the CAA to let it get back some money, in higher charges, due to huge Covid losses
The Civil Aviation Authority has been considering whether to allow Heathrow to increase its airport charges, in order to recoup the £2.8 billion that it says it had lost due to Covid (a few months ago). The CAA had rejected Heathrow’s revised request to hike charges by £2.8bn, labelling it “disproportionate”. But it now concedes that there has been “a further material deterioration in the outlook for the aviation industry” – due to further Covid travel restrictions – since it launched a consultation on the rises in October 2020. CAA director Paul Smith said: “In these exceptional circumstances we are persuaded that there are real issues we need to address to protect Heathrow’s consumers. However, in our view Heathrow’s proposals are not in the best interests of consumers.” Heathrow has been threatening legal action against the CAA. The airport already has over £15bn of debts. The CAA has added two new options, for the H7 period, which starts on 1 January 2022, and will consult on them until 5th March. They are: Package 1 No intervention before H7, but consider interventions at H7 and Package 2 Targeted intervention now and consider further intervention at H7. The largest airline at Heathrow, IAG, has always opposed the CAA allowing higher charges.
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CAA may very soon announce its decision on whether Heathrow can charge £1.7 bn more
The Telegraph believes the CAA may announce this week that it will reject Heathrow’s demand to be allowed to raise £1.7bn in increased future passenger and airline levies. The airport wants to be get back some of its losses caused by the pandemic. But the CAA is expected to confirm the rejection that it consulted on in October – the consultation ended on 5th November. The CAA said in October that Heathrow had not “demonstrated its request is a proportionate measure” and was seeking further evidence. Heathrow finance chief Javier Echave threatened legal action unless the CAA backed down and accused the regulator of sending a “terrible” message to foreign investors (who have made immense profits out of Heathrow in recent years). Industry insiders cautioned that the CAA is “playing its cards very close to its chest” over its decision and “could offer concessions to break the deadlock.” Heathrow claims it will have to raise consumer prices, after the immense losses caused by having very few passengers over the past year.
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Crowding, no social distancing, potential “superspreader” events at Heathrow terminal
Passengers at Heathrow have been publicising just how much risk there is of spreading Covid at the airport. There are huge queues, with hundreds of people waiting for considerable times, close together in areas with inadequate ventilation. Heathrow says the additional Covid checks for arriving passengers have resulted in the long queues. It is possible these crowded times in Heathrow terminals are “superspreading” events. An image of a packed queue at Terminal 2 shared on social media went viral, with many questioning where the passengers have been travelling from (far too many on inessential leisure trips) and why they did not appear to be following social distancing rules. A spokesperson for Heathrow said the airport has always maintained that social distancing is not possible at the airport and face coverings were mandated for all passengers aged 11 and above. One passenger said: “Isn’t the UK in lockdown? Seeing this I would say not, as it looks like everybody is off on their essential travel!” All international arrivals, including UK nationals, have to show proof of a negative Covid-19 test taken within 72 hours before departure (ie. wholly inadequate protection for the UK).
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Hillingdon Council’s new leader, Ian Edwards, pledges to continue fight against Heathrow 3rd runway and HS2
Hillingdon Council (15th January) has appointed Councillor Ian Edwards as new leader of the local authority. He replaces London and Hillingdon’s longest serving council leader, Cllr Ray Puddifoot, who announced he was stepping down in October last year after 20 years of service. Sir Ray said: “As I step down tonight I do so in the knowledge that that Hillingdon Council has the administration, resources and first class staff which will see this council and our residents through the current pandemic and beyond.” Cllr Edwards, who also replaced Cllr Puddifoot as Conservative group leader, pledged to continue defending the borough’s environment and residents against a 3rd runway at Heathrow, and mitigate the impact of HS2.
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Heathrow passengers down 72.7% in 2020 (cf. 2019). ATMs down 57.8%. Cargo down 28.2%
Heathrow has published its figures for 2020, which was a year made completely abnormal, by the Covid pandemic. Heathrow’s number of passengers was 72.7% lower than in 2019, with 22.1 million passengers, compared to 80.9 million in 2019 (ie. 58.8 million fewer). As planes were less full than usual, with lower load factor, the number of flights (ATMs) was down by 57.8% for the year, compared to 2019 .The amount of cargo carried was down by 28.2%, which Heathrow blames partly on the limited number of passenger planes, the holds of which normally contain cargo. The largest reduction in air passengers was to North America (79.5% down). Until Covid, the number of Heathrow passengers rose relentlessly, even though the airport claims it is “full” (it always had extra terminal capacity). In 2009 it had 65.9 million passengers; in 2016 it had 75.7 million; in 2017 it had 78.0 million; in 2018 it had 80.0 million; and in 2019 it had 80.9 million. The number of flights (ATMs) in 2020 was 200,905; in 2018 was 480,339 and the number in 2019 was 479,811 (the figure is capped at 480,000 per year).
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Letter to DfT: The Airports National Policy Statement should now be withdrawn, as it is out of date
The Supreme Court ruled, on December 16th, that the Airports National Policy Statement (NPS) was legal. The ANPS is the policy document necessary to Heathrow to proceed with plans for a 3rd runway. But the Court ruling does NOT give the runway consent. The government did not challenge the earlier ruling, in February, by the Appeal Court. The ANPS was written around 2017-18 and approved in Parliament in June 2018. Since then, life has moved on, and it is very out of date. The economics of the situation have changed; awareness of the climate implications of a runway is hugely greater; the Committee on Climate Change has given its advice on the Sixth Carbon Budget, and that aviation growth has to be constrained; knowledge has increased about the health impacts of air pollution from aircraft; and now Covid has reduced demand for air travel, which may never recover to its 2019 level. Neil Spurrier, from the Teddington Action Group (TAG) has written to the DfT to ask that the ANPS is now withdrawn. He says the ANPS “is now completely out of date and should be withdrawn. I request that this is done pursuant to a review under section 6 of the Planning Act 2008 …” See Neil’s full letter.
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Letter in Maidenhead Advertiser: Heathrow leaders are pursuing a dead horse
In a letter, published in the Maidenhead Advertiser, a local resident explains the actual effect of the Supreme Court Judgement in December. The Court ruled that the Airports NPS was legal. But rather than this being a dreadful result for those opposed to a 3rd Heathrow runway, or badly affected by the airport’s noise, it is in fact quite a positive result. The judgement does NOT give the runway permission to go ahead. There is ever more awareness of the need for urgent action on climate change, including by the aviation industry. The government also needs to do more on “levelling up” the country, avoiding putting ever more investment and infrastructure into the south-east. Heathrow expansion would not help with that, and would require constraints on regional airports, or even the closure of some. The Court also confirmed that any Heathrow planning application (a Development Consent Order, DCO) would need to meet current policies, on issues such as carbon emissions. Financially Heathrow has serious problems with building a 3rd runway. It has worked over recent years to provide immense dividends to its shareholders – about £4 billion over 8 years. Future air travel demand is uncertain, especially demand for business travel. It should use the post-Covid period to “build back better” and scrap expansion plans.
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The problem of a Heathrow 3rd runway for regional airports – it means they cannot expand.
Letter from No 3rd Runway Coalition Chair, Paul McGuinness
Since the UK Parliament gave the go-ahead for Heathrow expansion in 2018 (by endorsing the Airports National Policy Statement), quite a lot has changed. The UK’s Net Zero Carbon target has famously been incorporated into law. And – just this month – the Westminster Government has announced we shall increase the speed of progress towards that target (by achieving 68% of the reductions in emissions by 2030). Moreover, the Climate Change Committee (the UK Government’s statutory adviser on the implementation of carbon commitments) has stated there is no room in the next “carbon budget” for any expansion in the UK’s net aviation capacity. This consolidated advice from 2019 that, were Heathrow to expand, restrictions would need to be applied to aviation activity across the UK. This could include the reduction of flights and, potentially, closures of regional airports across the UK, with reduced aviation connectivity for people the UK regions. We should be interested to know if any readers would like to see aviation activity reduced at their local airport (or possibly see it forcibly closed) in order to afford Heathrow the opportunity of expanding, in the already prosperous south east of England.
Western Rail Link to Heathrow pushed back again
18 DEC, 2020
BY ROB HORGAN (New Civil Engineer)
Proposals to build a £900M western rail link to Heathrow Airport have been delayed by several years. Network Rail was originally preparing to submit its planning application for the Western Rail Link to Heathrow at the end this year. However, it was instructed to delay its application until the end of 2021 earlier this year. The DfT has now told Network Rail to delay its DCO submission for at least another year, until winter 2022, to ensure a funding agreement is worked out. So construction is now unlikely to get underway until 2024 at the earliest. It had originally been earmarked to open in 2021. The scheme will provide direct rail access from the west, from the Great Western Mail Line (GWML) to Heathrow Terminal 5. The line could enable passengers to travel to the airport from the South Coast, South West, South Wales and West Midlands without going into Paddington. The link would leave the Main Line between Langley and Iver; then go under he main railway line into a cutting before entering a 5km tunnel; that would pass under Richings Park and Colnbrook before merging with existing rail lines underground at T5.
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What does the Supreme Court judgement on Heathrow’s runway plans mean for the campaign to stop the 3rd runway?
A briefing note from the No 3rd Runway Coalition on what comes next, after the Supreme Court judgement (16th December) sets out some key issues. The Coalition says the judgement does NOT give Heathrow the green light; it us simply one hurdle cleared. Expansion faces: 1. Legal challenges. Plan B Earth intends to take proceedings to the European Court of Human Rights, on the danger to future generations from climate change. 2. Government can commit to reviewing the ANPS under Section 6 of the Planning Act 2008. This can refer to all or part of the statement. The Act enables the Secretary of State to consider any significant change in any circumstances on the basis of which any policy in the statement was decided. It can be argued that the Net Zero commitments, noise, air pollution, assessment of health impacts, and the impact of the COVID-19 pandemic on the economics provide legitimate reasons for review. The ANPS could be withdrawn. 3. The DCO process. Though Heathrow can now proceed to submit an application for a Development Consent Order (DCO) to the Planning Inspectorate, this has to consider current climate obligations, including the UK’s net zero by 2050 target. And Heathrow has been seriously damaged financially by Covid. See the full briefing note.
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Heathrow expansion decision highlights jobs paradox – PCS union comment
The PCS union, which has workers at Heathrow, has commented on the Supreme Court decision, and on the future of airport workers. They say that contrary to the assumption from some quarters that this means a jobs bonanza for workers, PCS remains sceptical about the real benefit for our members. As a union committed to protecting and supporting their workers, they have had to fight against jobs being reduced – even before Covid – by automation of roles, and new grading structures. Now this has been happening even faster, as cost cutting steps are taken in response to the pandemic. PCS is trying to save as many jobs as possible. But with the need for the UK, and the aviation sector, to decarbonise, some job losses are inevitable. There need to be plans to retrain workers, and find alternative employment, in order to protect the continued livelihoods of workers. It is now generally accepted that combatting climate change is the richest source of future employment, and plans to do so need to be implemented urgently. While air travel demand may return in several years time, jobs need to be found now. While it is a remote possibility Heathrow would build a 3rd runway many years ahead, that does not provide employment for its workers now. Alternatives need to sought for them – now.
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Boris on Heathrow after Supreme Court judgement: any expansion must meet strict air quality and climate criteria
Boris Johnson, with a constituency near Heathrow, was always a vociferous critic of the plans for a 3rd runway. When Heathrow took their appeal, against the ruling of the Appeal Court against the ANPS in February, the government did not join them. Now the Supreme Court has ruled that the ANPS is legal, Boris has not said anything in favour of it. Allegra Stratton, his press secretary, said Heathrow still needed to convince the Planning Inspectorate that it met rigorous environmental benchmarks before being allowed to proceed through the DCO process. She said the “point the PM would make now” was that “any expansion must meet strict criteria on air quality noise and climate change and the government will come forward with a response shortly”. Heathrow may not be able to raise the necessary funds for the runway. Boris and Grant Shapps, the Transport Secretary, will be under pressure to redraft the ANPS, as it was written in 2018 and is woefully out of date on carbon. Life has moved on since then; the UK now has to cut CO2 emissions by 100% by 2050 (from 1990 level), not the 80% target of 2018. There are now new UK targets – advised by the Committee on Climate Change – for a 68% cut in CO2 by 2030, and a 78% cut by 2035. Expanding Heathrow cannot be squared with that.
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Supreme Court rules that the Airports NPS is legal; climate issues of a Heathrow runway would have to be decided at the DCO stage
The Supreme Court has ruled that the Airports NPS is lawful. In February 2020 the Appeal Court had ruled that it was not, on climate grounds. The ANPS is the national policy framework which governs the construction of a Heathrow 3rd runway. Any future application for development consent to build this runway will be considered against the policy framework in the ANPS. The ANPS does not grant development consent in its own right. The Supreme Court rejected the legal challenges by Friends of the Earth, and Plan B Earth, that the then Secretary of State, Chris Grayling, had not taken climate properly into account, nor the UK’s commitments under the Paris Agreement. These are tricky points of law, and definition of the term “government policy” rather than the reality of climate policy. Heathrow is now able to continue with plans to apply for a Development Consent Order (DCO) which is the planning stage of the runway scheme.The Supreme Court said at the DCO stage, Heathrow would have to show “that the development would be compatible with the up-to-date requirements under the Paris Agreement and the CCA 2008 measures as revised to take account of those requirements” and “The Court further holds that future applications [for the runway] will be assessed against the emissions targets and environmental policies in force at that later date rather than those set out in the ANPS.”
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Councils that legally challenged Heathrow expansion say Supreme Court Heathrow ruling ‘changes nothing’
The group of Councils deeply opposed to Heathrow expansion said the Supreme Court ruling, that the ANPS is legal, changes nothing and called on the airport to abandon once and for all its bid for a 3rd runway. Residents in all these boroughs are badly affected by noise of Heathrow planes. Wandsworth Council urged Heathrow to concentrate on working with the aviation industry to achieve zero carbon emissions and an end to night flights. The Leader of Wandsworth Council, Cllr Ravi Govindia, said: “The ruling does not give Heathrow a green light for a third runway. It says nothing about how expansion could be delivered in the face of legally binding emissions targets. The world has changed since Chris Grayling’s decision in 2018. Heathrow will never be able to build a third runway. It’s time for the airport to admit defeat and put all its energy into working with the aviation industry to achieve the net zero goal. The Government must now as a matter of urgency produce a new aviation strategy for the UK which properly takes account of its legal commitment on emissions reductions. And Heathrow could put an end to the early morning arrivals, the noise of which causes so much upset, disturbing the sleep of thousands, putting their health at risk.
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Heathrow appeal upheld … but reprieve disguises impossibility of 3rd runway plan
Commenting on the judgement by the Supreme Court today, upholding Heathrow’s appeal that the Airports NPS is legal, the Richmond Heathrow Campaign said the world has changed a lot since 2018. This is not least because of Covid-19. Climate change is the greatest risk to demand and last week the Climate Change Committee’s advice on the 6th Carbon Budget emphasised no net increase in UK airport capacity and that an increase at one airport means a reduction elsewhere – in other words levelling down (not up) the regions. If Heathrow Airport Limited still wants a 3rd runway it will have to restart the already delayed planning process with diminishing chance of success. The pandemic has highlighted Heathrow’s lack of financial resilience and the improbability of raising finance for very expensive expansion in the face of demand constrained by climate risk. Heathrow should not waste billions of pounds on ill-judged expansion. Surely shareholders don’t want to replace a steady cash flow with the enormous project and financial risk from expansion under the evolving circumstances?
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“Heathrow expansion remains very far from certain”: Friends of the Earth reacts as Supreme Court rules on policy allowing third runway
Friends of the Earth UK (FoE) was one of the organisations that took their challenge of the High Court decision on Heathrow expansion, and the Airports NPS (ANPS), to the Court of Appeal. Heathrow took that judgement, that the ANPS was illegal (of no legal effect) to the Supreme Court, which has now ruled that the ANPS is valid and legal. Friends of the Earth say the judgement is “not a ‘green light’ for a 3rd Heathrow runway. It makes clear that full climate considerations remain to be addressed and resolved at the planning stage, where Friends of the Earth will continue the challenge against a 3rd runway. In addition, the Government has been recently warned by its own advisers (the CCC) against net airport expansion.” FoE also say green jobs, low-carbon travel and the health and wellbeing of everyone must be government priority for 2021 and beyond. A 3rd runway is far from certain, with many chances to block it in the planning stages. The UK’s obligations and targets have become much more challenging since the ANPS was designated and are only expected to get tougher, especially in light of the advice last week by the Committee on Climate Change that, in order to meet Net Zero Target, there should be no net increase in airport capacity.
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Heathrow to shut Terminal 4 for a year as passenger numbers drop 88%
13.12.2020
Heathrow, which during the pandemic has lost its crown as the busiest airport in Europe, posted an 88% fall in passenger numbers in November and said Terminal 4 would stay shut until the end of 2021. The pandemic has choked air travel and ongoing restrictions across the world along with England’s second lockdown in November pushed passenger numbers at the airport down by more than October’s 82% decline.
The airport group has started legal action against Britain’s decision to end tax-free shopping for tourists from Jan. 1, which it said will result in retail job losses at the airport, and further harm a business already suffering from COVID-19.
https://uk.reuters.com/article/uk-britain-airports-heathrow-idUKKBN28L1D7
Heathrow hopes to charge cars £5 and increase passenger charge by £1.20 (then pay dividend again in 2022)
It seems Heathrow will lose around £1.5 billion this year, due to Covid and a drop of around 80% in passenger numbers. The airport is hoping to impose a £5 “drop off” charge on any car coming into the airport to deposit or collect passengers, from the end of 2021 (blue badges and emergency vehicles excluded). There is a consultation about this. Heathrow says it will “save jobs in the short term” while allowing the airport to hit its “long-term goals of providing safe, sustainable and affordable transport options”. (!) A much more effective way to boost its income is to increase its passenger charge, which is currently £21 per person. The intention is to increase it by £1.20, which could add £2.7bn to the airport’s regulated asset base (RAB), allowing it to increase charges (already, at £21 per head, among the highest in Europe). The airlines are vociferously opposed to this, understandably. Heathrow is leveraged, with its consolidated net debt at £15.2bn in September 2020. But a key reason for all the borrowing is it has paid out £4 billion of dividends to its investors since 2012. There was a £500 payment announced in February 2020, and a £100m payment in April. Heathrow has now said it will not pay dividends for the rest of 2020, or 2021 but hopes to pay out £400 million in 2022.
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Heathrow says it will cut dividend payouts – and pay them in 2022, after getting public funds in Covid
By John Collingridge (The Sunday Times)
Sunday December 6 2020,
Heathrow has suggested that it could resume paying dividends of about £400m a year from 2022 — while also increasing its demand for a Covid bailout to £2.7bn. …The Civil Aviation Authority (CAA) rejected its request for a bailout. Airlines have also balked at the request to hike charges, which have risen from £1.7bn in the summer. British Airways insisted that Heathrow’s shareholders, which include the sovereign wealth funds of China, Qatar and Singapore, should pump in cash instead of trying to charge passengers extra. Heathrow has paid out about £4bn of dividends since 2012, while piling up debt. In a submission to the CAA, Heathrow said it would not pay dividends this year or next in return for leniency from its lenders. But it said after that, “the airport should no longer be in a crisis mode and a normal business would expect dividends to resume during this period”. It suggested these could be about £400m a year, down from an expected £600m a year. It insisted this would be “aggressive forbearance”, depriving shareholders of a cumulative £1bn of dividends. Heathrow claimed that without the bailout it would have to curtail investment and would face an increase in the cost of its borrowing.
https://www.thetimes.co.uk/article/heathrow-airport-vows-to-cut-dividend-payouts-rddjczls6
DfT publishes night flights consultation (the 3 designated airports) – no concessions to airport groups for another 4 years…?
Historically, the DfT has set the night flight regime – for the “designated” airports, Heathrow, Gatwick and Stansted – for periods of 5 years. The last regime was in 2017, for the period from October 2017 to October 2022. The DfT says: “The aim of the regime was to maintain the status quo and ensure that communities do not experience any overall increase in the noise created by night flights.” It has allowed a high level of night flights, with no reductions on earlier numbers, despite significant community opposition. Seventeen airport groups wrote to the Aviation Minister on 10th November, asking that night flights should be limited in future, with a proper night period in which no flights are permitted (other than genuine emergencies). The aim was to make their point before the DfT consultation (by which time the DfT has decided what it intends to do …). The government has now published its new night flights consultation, for the period 2022 to 2024. The DfT intends there to be no change to the current regime (no concessions to suffering from being overflown at night) other than phasing out the noisiest planes, which airlines are getting rid of anyway, due to Covid. DfT says: “… we are also seeking early views and evidence on policy options for the government’s future night flight policy at the designated airports beyond 2024, and nationally.”
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Unite GS Len McCluskey: “Heathrow boss clinches corona rogue crown”
1.12.2020
He says: “It’s been a bumper year for bad bosses but the corona rogue crown has to go to the CEO of Heathrow airport. John Holland-Kaye enjoys an eye-wateringly huge salary and benefits. He’s never going to be kept awake at night worrying how he is going to pay the mortgage. But he doesn’t care for those who do, demanding that thousands of workers employed at Heathrow Airport Limited (HAL) hand over a quarter of their salary. For some, such as Baljit, that means losing £8000 a year. That’s right, a year. They’ll go from earning a salary that they can just about get by on in one of the most expensive cities in the world to earning below the national average wage. For Baljit, she won’t be able to pay her mortgage. She’ll have to uproot her kids and move miles away from her workplace. She’s not alone. Nearly five thousand HAL workers have been told to sign away their salaries – or be sacked. John Holland-Kaye … boasted that HAL’s cash mountain was so vast that the airport could happily function for 15 months without a single passenger.
Chancellor’s business rates subsidy of £8 million covers just 7% of Heathrow’s £120m bill
Heathrow is angry that it is having to pay most of its business rates, while supermarkets and many other businesses are given a 100% waiver. The government has given airports a subsidy of up to £8 million each this year, to pay their business rates. That is enough to cover the whole amount, for small airports. But Heathrow says it only covers 7% of their rates bill, of almost £120 million, part of which it pays to Hillingdon Borough Council. Heathrow is struggling with a drop of around 82% in its passenger number. It is having to furlough its entire senior management team except its chief executive, to cut costs. Gatwick is probably due to pay £29m in business rates this year, while Manchester and Stansted face bills of £14m and £12m respectively, so the £8 million will not cover their rates bills either. Supermarkets have been given around £1.9 billion in rates help, because initially it was feared there could be problems with food supply. In fact supermarkets have done very well out of Covid, with less food eaten out of the home. Chancellor Rishi Sunak said: “… we have supported them throughout this crisis through the job retention scheme, loans and tax deferrals.”
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To save money, Heathrow to put all its staff onto furlough for a month each, between 1st December and 31st March 2021
Heathrow is now to furlough its entire senior management team apart from its chief executive, John Holland-Kaye. It will also pave the way for more permanent job losses, as it is very unlikely that the 2019 level of demand for air travel will return for years, if ever. Sky News reports that it has seen emails sent by Heathrow executives which detail plans for a new voluntary redundancy scheme and a requirement for staff to be placed on furlough for at least four weeks between 1st December and 31st March. Sky says: “Sources said the furlough requirement would apply to every Heathrow employee other than John Holland-Kaye.” Not only senior management. The airport is estimated to have lost £1.5bn since the start of the Covid pandemic. It is losing about £5m every day while it remains open, with so few passengers or flights. The number of passengers was down 82% in October, compared to a year earlier. There have been talks with the trade unions, about job cuts, big pay cuts, worse pension terms and worse employment terms for many of the 5,700 people who work for the airport. There will be a 4 day strike in December, and unions say Heathrow “will grind to a halt”.
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Heathrow workers plan four-day December strike
16.11.2020
Heathrow workers plan a four-day strike in December in protest at wage cuts. The airport says it will keep operating despite the walk-out by workers including firefighters and baggage handlers. Heathrow warned in September it wants pay cuts of 15% to 20%, affecting about half of the 4,700 staff in engineering, air-side operations and security. But the Unite union says the airport has enough cash to survive without demanding cuts. Staff are being asked for cuts of as much as £8,000, Unite says. The coronavirus crisis has cost Heathrow more than £1bn. Unite says: “The airport is using the Covid-19 pandemic as a smokescreen to permanently cut workers’ pay,” said Unite regional coordinating officer Wayne King. “Unite has put forward several alternative suggestions to reduce staffing costs on a temporary basis, all of which have been summarily rejected by management.”
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Heathrow catering company plans to make 1,068 workers redundant – there’s not enough demand for airline meals
The Heathrow catering company DO & CO is planning to make 1,068 workers redundant, as there is not enough work for them – with so few flights. The Austrian-owned company’s biggest customer is British Airways, with a 10 year BA contract. The total in the company to have lost their jobs will be 1,377, including voluntary redundancies, since the coronavirus pandemic started in March. Just 507 staff will be left. DO & CO has decided not to use the furlough scheme, which would have seen staff be paid 80% of their wages until at least March 2021. The Unite trade union said DO & CO was the only Heathrow catering company not to engage constructively with the union over furlough. It wants talks and the company not to agree to make the staff redundant before Christmas. Unite says: “We are naming and shaming DO &CO as an example of corporate callousness … and pointing out the indirect reputational damage to British Airways…” If there is going to be a contraction of the aviation sector, with fewer people flying than in 2019 for several years to come, how are staff to continue to be employed, in a company that has no work for them? It is likely that air travel demand will never return to its 2019 level. It shows how vulnerable an area is if too dependent on an airport.
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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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‘SNP must review policy and reject Heathrow expansion’, former minister says – need SNP conference debate on it
The SNP has been asked to change its policy, to now oppose the expansion of Heathrow Airport, due to carbon emissions. Marco Biagi was communities minister until he stood down from the Scottish Parliament in 2016. He wants the SNP to adopt “a presumption against any major airport expansion” at next month’s SNP Conference, which is to be held virtually on 28th to 30th November. After intense lobbying from Heathrow, and suggestions of more routes and more jobs for Scotland if there was a 3rd runway, since 2016 the Scottish Government has officially backed the runway plans. But the SNP finally abstained in the Commons from voting for the Airports National Policy Statement (ANPS) in June 2018. Mr Biagi said the SNP’s support for the 3rd runway had never been debated at a SNP conference. Aviation CO2 emissions are rising, this is against Scottish policies on climate. He said: “Across Europe there is a growing realisation of the need for alternatives to ever-expanding air travel, especially on short-haul routes like those between Scotland and London. On this issue, do we want to follow the climate-wrecking Conservatives or be part of the European mainstream?”
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CAA likely to prevent Heathrow increasing its airport charges to cover Covid losses of £1.7bn
Heathrow wanted to increase charges to compensate for the economic fallout of the coronavirus pandemic. But its regulators, the CAA, have rejected its request to increase airport charges by £1.7bn to Covid losses. The CAA said Heathrow’s demands were not “proportionate”. Heathrow operates under a regulatory mechanism that allows it to increase airport charges based on the costs it incurs, but this has to be agreed by the CAA. Separately, Heathrow is waiting on a final decision from the CAA on whether it can recharge airlines £500m for costs it has built up, prematurely, in (unwise)preparation for the building of a 3rd runway – even before all legal and planning hurdles were overcome. Heathrow said revenue losses in 2020 and 2021 would be more than £2.2bn – ie. the £1.7billion + the £500 million. The CAA now has a consultation (ends 5th Nov) on Heathrow’s request for RAB adjustment. IAG, said “Heathrow is a wealthy, privately owned company which should seek funds from its shareholders as many other businesses in our industry have done to weather this pandemic. We look forward to participating in the CAA’s consultation process.”
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Heathrow Airport expansion: Supreme Court Appeal hearing on the ANPS. Briefing by Friends of the Earth
The hearing at the Supreme Court of the appeal by Heathrow against the judgement of the Appeal Court, in February took place on 7th and 8th October. The case is whether the Airports NPS (ANPS) is illegal, because it did not properly consider carbon emissions and the UK’s commitments under the Paris Agreement. Friends of the Earth have explained their arguments, against those of Heathrow. (It is complicated legal stuff …) There is no onward appeal from the Supreme Court. If any one of the grounds that won in the Court of Appeal remains, and the Supreme Court agrees that the Order made by the Appeal Court should still stand, then the ANPS will remain of no legal effect [ie. not valid or legal] until reviewed. [So the runway cannot go ahead]. The Secretary of State (SoS) for Transport must then consider if the government wish to leave it at that, or review the ANPS policy framework, to amend it. If the SoS does that, s/he will probably need to make changes that materially alter what the ANPS says. Such changes will need to be approved by Parliament following consultation, before the new ANPS can come into force. And if the FoE Strategic Environmental Assessment (SEA) challenge wins, there would need to be a new SEA and a new public consultation.
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Weds 7th and Thurs 8th October – Supreme Court Heathrow hearing
Supreme Court hearing of the appeal by Heathrow against the ruling by the Appeal Court in February, that the Airports National Policy Statement (ANPS) was illegal, because it did not take the UK’s commitments under the Paris Agreement properly into account.
Case details from the Supreme Court: https://www.supremecourt.uk/cases/uksc-2020-0042.html
The Appellant is Heathrow Airport Ltd.
The Respondents are (1) Friends of the Earth Ltd, (2) Plan B Earth
The hearing will take place online, not in person. It can be followed online at https://supremecourt.uk/live/court-01.html The recording should be available for several days, and a transcript will perhaps be produced in due course.
Tune in from 10.30am on Wednesday 7th to hear Heathrow’s case and from 3.30pm to hear the response by Friends of the Earth. Plan B Earth will respond on Thursday.
The ruling is not anticipated for several months.
Plan B Earth info document (2 pages) about the Supreme Court hearing is here
The Plan B Earth case for the hearing is set out here
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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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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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.
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Plan B Earth case for Supreme Court appeal by Heathrow, against Appeal Court ruling that ANPS was illegal, due to Paris Agreement
Date added: September 16, 2020
On 7th and 8th October, there will be a Supreme Court hearing of the appeal, by Heathrow airport, against the ruling by the Appeal Court in February 2020 that the Government’s Airports National Policy Statement (ANPS) was illegal. Heathrow cannot proceed with plans for a 3rd runway, without a legal ANPS. The government itself decided not to challenge the Appeal Court decision – it is only Heathrow. Friends of the Earth and Plan B Earth are defending the case. The decision of the Appeal Court was due to the failure of the ANPS to properly take into account the UK’s commitment to the Paris Agreement (aiming to keep global climate warming to 1.5C) and thus its duty to keep carbon emissions from rising. Plan B Earth has published its response, challenging the Heathrow claim that the Paris Agreement is “not” government policy. It is a 29 page document, but the conclusion is copied here. It states that: “At the time of the designation of the ANPS in June 2018, the Secretary of State (SST) [Chris Grayling] knew, or ought to have known, that the Government had: a) rejected the 2˚C temperature limit as creating intolerable risks, in the UK and beyond b) committed instead to the Paris Agreement and the Paris Temperature Limit, and that it had c) committed to introducing a new net zero target in accordance with the Paris Agreement. These matters were fundamental to Government policy relating to climate change and it was irrational for the SST to treat them as irrelevant.
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Heathrow urged by 5 councils to end 3rd runway ‘fantasy’ – instead focus on cutting CO2 and noise
Councils have called on Heathrow to abandon once and for all its bid for a third runway and concentrate instead on working with the aviation industry to achieve zero carbon emissions and reduce noise impacts for overflown communities. Heathrow is due to challenge February’s Court of Appeal ruling against the expansion plan in October (7th and 8th) at the Supreme Court. The 5 councils, (Hillingdon, Wandsworth, Richmond upon Thames, Hammersmith and Fulham, and Windsor and Maidenhead) say there is no logic in the airport persisting with its runway fantasy. Cllr Gareth Roberts, Leader of Richmond Council, said: “COVID-19 has changed everything. This is a unique period when we are all rethinking traditional assumptions about how we work, travel and grow our economies. As local councils we want the industry to get back on its feet. But this won’t work without a fundamental rethink about the place of aviation in our society – and indeed where future capacity is most needed. Even Heathrow’s chief executive has admitted that a new runway would not be needed for years due to the pandemic. Yet still the airport and its shareholders press on with the process and the prize of a planning permission for a runway that will never be built.”
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Heathrow area risks fate of 1980s mining towns, says airport boss – area too dependent on the airport
Perhaps even more than other airports like Gatwick and Luton, a large part of the economy around Heathrow has become over-dependent on the airport. Now the CEO of Heathrow, John Holland-Kaye has said boroughs like Hounslow risk becoming like “a mining town in the 1980s” with the collapse in air traffic putting tens of thousands of jobs at risk. Many more people work in businesses associated with Heathrow, than directly for the airport itself. In August, Heathrow had around 1.4 million passengers, which is less than 20% of its “normal” amount. People are not flying for leisure, due to the risk of Covid itself, or the need to quarantine. There are few business trips, as they are being replaced by Zoom etc. Many in the aviation sector do not think levels of flying will return to their 2019 levels for 2-3 years, or more – if ever. Heathrow had losses of £1.1bn in the first half of 2020. Recently Heathrow issued formal section 188 notices, allowing it to potentially fire and rehire some 4,700 employees, after months of negotiations with unions representing its directly employed ground staff failed to produce an agreement. Section 188 means the airport can bypass negotiations after a 45-day period has elapsed. There might overall be 25,000 Heathrow-related job losses.
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BA hits out over £500m bill for Heathrow failed 3rd runway plans that it wants to pass on to airlines
A row has erupted between Heathrow and British Airways, its largest airline, over the plans to get airlines to pay the £500m bill relating to the airport’s third runway expenses so far. A regulatory consultation by the CAA recommends allowing Heathrow to charge carriers for expansion costs incurred until February this year. These are called “Category B” (£500m) and early “Category C” costs, associated with getting planning consent. CAA regulations allow Heathrow to increase charges in line with costs incurred. Willie Walsh, the outgoing boss of IAG, that owns BA, has repeatedly clashed with Heathrow over the framework, which he has said encourages the airport to “spend recklessly.” IAG has never wanted to pay for Heathrow’s costs in developing the runway (partly as the extra capacity at Heathrow would increase competition with BA by other airlines). CAA director Richard Stephenson said it was reviewing responses to the consultation (held in summer 2019) and had yet to make a decision. Heathrow has pressed ahead, spending a great deal on its runway plans, even before legal obstacles had been cleared. The restriction of early spending by the CAA meant a delay in the runway timetable of 2-3 years.
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Heathrow has lost £1 billion since start of March, is cutting staff pay, and could cut 1,200 jobs
Heathrow says that it has lost £1 billion since the start of March, due to the Covid pandemic. There could be 1,200 Heathrow jobs lost. The airport served a formal notice to staff yesterday, triggering a 45-day consultation period over compulsory job losses. The airport and unions have failed to agree to a deal over the future of its frontline workforce after months of talks. Heathrow is proposing salary cuts of between 15-20% for some affected staff, with a phased reduction in salaries over 2 years. A voluntary redundancy scheme has been offered. The airport claims there might be few compulsorily redundancies, but only if the unions agree a deal. About 4,700 frontline staff are affected, including engineers, security and airside operations. Heathrow has already lost 450 out of 1,000 head-office managerial staff. The airport had indicated previously that as many as a quarter of staff could be made redundant, so up to 1,200 jobs may go. Heathrow said its proposals “guarantee a job” for anyone who wants to remain with the business. The Unite union is not happy with the airport’s offers. Gatwick is losing about 600 jobs, a quarter of its workforce.
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Heathrow “to slash staff pay by up to a third” becoming a “low cost employer”after collapse in air travel
Heathrow staff are being asked to accept pay cuts of up to 37% and will lose their final salary pension scheme. It will also end paid breaks and allowances, worsen redundancy terms, and refuse to honour a pay rise. The airport wants to slash pay and conditions for its 7,000 workers in a bid to become a low-cost employer, according to union chiefs – an allegation denied by management. Air travel demand is currently low, (88% lower in July 2020 than in July 2019) and not expected to rise much in the short term. The aviation sector cannot afford to pay so many staff, when it has little income. Heathrow said it has been forced to take action now to protect jobs. But the union Unite (which has always been an enthusiastic backer of Heathrow and its expansion plans) has told its members that the airport is acting out of “greed, not need” and said it was using the pandemic as a smokescreen to cut pay and conditions. It added that Heathrow paid £100m in dividends in April. Unite says John Holland-Kaye told unions that he wanted to make the business a “low-cost employer” during a meeting on July 30th. Many staff working around Heathrow are not directly employed by the airport, but associated businesses. There could be over 20,000 job losses in these companies.
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APPG on Heathrow Expansion and Regional Connectivity launches inquiry into Building Aviation Back Better
The All-Party Parliamentary Group on Heathrow Expansion and Regional Connectivity has launched an inquiry into how the aviation industry can build back in a post Covid-19 world. The APPG is keen to receive evidence from a range of organisations on how to build a more sustainable aviation policy that supports both workers and the environment. People have till 14th September to respond. The sector is unlikely to recover to levels of flying in 2019 till perhaps 2023. This presents an opportunity to reset the UK’s aviation strategy and initiate a green recovery. This should set aviation on a fairer and more sustainable course, while providing any support necessary for workers to shift to green jobs. Aviation policy which must strike an equitable balance between the benefits aviation brings and its adverse environmental, economic and health costs. The issues on which the APPG is seeking comment include the Aviation White Paper, taxation, regional balance, bailouts, the UK policy framework for decarbonisation, and community impacts, such as noise, night flights and air pollution.
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BA is retiring its whole fleet of 747s (lots used to use Heathrow) due to the Covid fall in air travel
British Airways has said it will retire, with immediate effect, all of its Boeing 747s as air travel demand has fallen so much due to Covid – and it may never recover to be how it was before. BA has 31 jumbo jets, which make up about 10% of the BA fleet. It had planned on retiring the planes in 2024 but has brought forward the date. There are about 500 747s still in service, of which 30 are still flying passengers. More than 300 fly cargo. The rest are in storage. The four-engined 747s are not fuel efficient, so cost a lot to run – and emit a lot of carbon. They are very noisy, causing noise nuisance to millions living under fight paths near airports. Even before Covid, Air France, Delta and United had already retired their 747 fleets. With expected lower air travel for years, even if a vaccine is found fairly soon, airlines need to save money, and 747s are more expensive to run than 2-engined planes. It will also be difficult to fill them up. They depend on the hub model of airports, and are less suited to the more popular point to point sort of air travel. With the end of 747s and A380s, much of the rationale for Heathrow expansion ends. Unfortunately, it is due to the 747s in the 1970s making air travel cheaper, that brought in the era of cheap, readily available air travel – with its environmental costs.
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Heathrow to close southern runway for several weeks, then use it for daytime only, till October
Heathrow has announced, with no warning, that it will be only using the northern runway from 13th July to 2nd August. It is doing extensive repairs (probably in fact resurfacing) on the southern runway, that means it cannot be opened even part of the day. So people living under the approach path to the northern runway, or under the departure flight paths, will not get the respite period they are used to. Normally flights are switched at 3pm each day. The disruption is planned to last until early October. After 2nd August, there will be flights on both runways, but the southern runway will be closed from 7pm to 7am. Therefore those under flight paths for the northern runway will get all the noise. Campaigners fear that the use of “mixed mode” (ie. landings and take-offs using the same runway) could become the “new norm” if Heathrow seek to use this method of operating permanently, post-pandemic, as a way of increasing the current flight cap of 480,000, to an estimated 565,000 flights per year. Mixed mode would allow that increase in flights without building a 3rd runway, which Heathrow probably can no longer afford.
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Heathrow future in spotlight, and battle lines drawn up, as lockdown eases
1st July 2020 (Hillingdon Times)
Public enjoying peace and tranquillity from absence of Heathrow flights
Almost 3,500 people took part in a survey organised by the No 3rd Runway Coalition on aircraft noise during Covid lockdown. The aim was to see what impact the absence (or near absence) of aircraft noise had on people who are usually overflown. 80% of respondents found the experience of fewer flights to be positive. 49% noticed the reduction in flights all day long. 52% said there had been an impact on their sleep. The most common themes in responses were the beneficial effect of fewer flights on mental and physical health, through a reduction in noise, and (from postcodes close to roads providing access to the airport) an appreciable improvement of air quality. Health impacts mentioned included improved sleeping patterns, greater use of gardens, and greater enjoyment of green spaces. The survey also included responses from around airports other than Heathrow (Gatwick, Stansted, Birmingham, Aberdeen, Leeds Bradford). Paul McGuinness, Chair of the Coalition, said: “With powerful clarity this survey presents a picture of just what will be lost, in quality of life terms, when flights resume at Heathrow.” The absence of flights has been a unique opportunity to appreciate how great the impact of the noise normally is, with Heathrow working at full capacity.
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BA shifts short-haul operations from Gatwick to Heathrow
Jun 30th 2020
British Airways is to move all its short-haul and domestic operations at Gatwick to Heathrow until September. A “small number” of long-haul BA services will fly from Gatwick from mid-July as outbound UK air travel begins to resume, but the bulk of its ex-London programme will fly from Heathrow. BA said the move would cut costs “at a time when demand is yet to return” and travel restrictions remain in place. They say that throughout July and August, we’ll be consolidating our Gatwick and Heathrow short haul flying to operate from our Heathrow base.