| SSE NEWS ARCHIVE - June to July 2004
31 July 2004
WHO WOULD PAY FOR STANSTED EXPANSION?
Leisure Airlines Oppose Stansted Runway Subsidy
Press Release - The Charter Airline Group of the UK - 30 July 2004
Britannia, Thomas Cook, First Choice, My Travel and Monarch Airlines who together form the Charter Airline Group of the UK and who fly over 31 million passengers a year, have raised serious doubts over the viability of a new runway at BAA Stansted Airport.
The concern centres on the proposed funding for the new runway. In a joint letter to British Airport Authority, who own Stansted Airport, the Department for Transport and the Civil Aviation Authority, the CAG have objected to paying higher fees at London Gatwick and Heathrow in order for the proposed £4b new runway at Stansted to be constructed.
Recent events at Stansted involving Ryanair and their refusal to pay landing fees to the BAA have raised serious doubts within the industry that BAA will be able to fund the development of the new runway without cross subsidisation from other London airports.
Peter Brown, Managing Director of Monarch Airlines, said "We believe Stansted should only be developed if the users are willing to pay for it. We see no evidence that BAA can pay for this runway without cross subsidisation and we are left to make the conclusion that cross subsidy is the only way left to raise the money. Until this can be otherwise adequately demonstrated, work should continue on the case for a third runway at Heathrow and a second runway at Gatwick, the latter option being unconstrained by the environmental problems that plague Heathrow."
Kevin Hatton, MD of Britannia, added, "If Ryanair, who make up 63% of the traffic at Stansted, won't pay their current landing fees then what hope have the BAA got of raising the cash through increasing charges to fund a £4b pound development? We don't want to see our fees increased at other BAA airports to fund a white elephant that has little industry support. We support the Government's decision to expand airport capacity in the south east but firmly believe development should only go ahead if the BAA can show that Stansted users are willing to pay for the new runway and they will not have to resort to cross subsidy. The White Paper clearly states that new capacity should be paid for by airport users".
29 July 2004
BAA'S ANNUAL GENERAL MEETING
A number of SSE members are also shareholders of BAA. Some of them attended the AGM yesterday (July 27th).
The audience at the AGM included about 500 BAA shareholders (including many of the major institutional investors); the Chairman, Chief Executive and rest of the BAA main board; Terry Morgan and his senior team from Stansted Airport; journalists from the FT, Times, Telegraph etc; and some of the key City analysts - and BBC TV. Shareholders raised several important questions including the financial hazards of making a major investment in the expansion of Stansted airport.
Two of the many Reports on the AGM:
Unhappy landing for MPs' parking perk
Ben Webster, Transport Correspondent - The Times - 28 July 2004
BRITAIN'S biggest airport operator is preparing to strip MPs of their free parking passes after protests by shareholders. BAA gives a pass worth £1,300 a year to 847 MPs, peers and MEPs. They can be used at its seven British airports, including Heathrow, Gatwick and Stansted.
BAA has previously attempted to justify providing the passes on the ground that politicians of all parties can claim them. It has also claimed that the passes, collectively worth more than £1.1 million, are a "gesture of support for our parliamentary democracy".
The passes are meant to be used only when the holders are flying on parliamentary business. But BAA admitted yesterday that it did not carry out checks to prevent politicians from using the passes when going on holiday. The company has previously said that it was aware that some politicians had abused the passes in this way. BAA's directors faced a barrage of angry questions from shareholders about the passes at yesterday's annual general meeting of the company. BAA had blocked an attempt to raise the issue at last year's meeting.
A group of 150 small shareholders, led by campaigners against a second runway at Stansted, forced the company to debate a resolution on political donations. Brian Ross, a member of Stop Stansted Expansion, who drafted the resolution, said: "It is an absolute outrage that BAA is gifting over £1 million a year to curry favour with politicians. These are the very people who will ultimately make decisions about whether BAA can expand its airports or preserve its monopoly. If a company wants to make political donations it should get shareholders' approval and publish full details in its annual report, including the names of every politician who accepts."
Mr Ross proposed a resolution designed to force BAA to acknowledge that the passes were political donations. It did not call for the scrapping of the passes, but sought shareholders' authorisation for BAA "to make political donations of £1.25 million in the coming year".
The resolution was defeated, but a substantial minority of shareholders voted in favour. However, a BAA source said: "We will be reviewing our policy on the passes and the result is likely to be that we will get rid of them."
BAA reviews free car parking passes
Kevin Done, Aerospace Correspondent - Financial Times - 28 July 2004
The board of BAA, the UK airports group, is expected to review its policy of granting free airport car parking passes to MPs, MEPs and members of the House of Lords in the face of a significant shareholder revolt.
At least 17.3 per cent of shareholders voting, including several institutional investors, went against the BAA board recommendation to leave its present policy unchanged.
A significant minority of shareholders at yesterday's annual meeting voted against the board on a show of hands, with several speakers expressing opposition to a private company offering such concessions to politicians.
Marcus Agius, BAA chairman, blocked a vote on the issue at last year's AGM but was forced by shareholder pressure to accept a resolution this year.
He said: "We are listening to shareholders and will need to take account of what has been said."
The battle over the free passes has been led by Brian Ross, economics adviser to the Stop Stansted Expansion campaign, which is fighting BAA plans to build a second runway at Stansted and is using the parking issue to gain publicity for its fight against increasing capacity at Stansted.
The row has arisen because BAA resolutely refuses to recognise the free car parking passes as political donations. Mr Agius said it was a matter of legal interpretation and said advice from leading counsel had consistently backed the board's stance.
"These concessions, because they are given to parliamentarians of all parties for use in connection with parliamentary business, do not constitute political donations for which shareholder approval is required," he insisted.
He admitted that the board "did not know it was a cause of concern" and said he had not allowed the resolution a year ago because "we did not think there was any interest . . . This is not central to our policy of running airports".
Currently 847 of the 1,412 eligible politicians hold such passes, worth £5,245.20 for four-year concessions.
29 July 2004
COUNCILLOR MURPHY COMMENTS ON BAA v. RYANAIR
Readers' Letters - Financial Times - 26 July 2004
As a resident of North West Essex, can I just say how delighted I am to see
Ryanair and BAA squabbling over landing and pipeline charges. We are being
told that these two companies are going to be partners in a capital
investment of up to £3 billion building a second runway at Stansted Airport.
It seems they cannot even agree how to split a round of drinks.
Of course when it comes to the billions of pounds in supporting
infrastructure, such as surface access, housing and social
infrastructure for those who will work at the airport they are both
remarkably silent at the moment. Like most major civil engineering
projects, if the final cost were known at the beginning of the exercise they
would never have bothered. And of course the taxpayer can always be relied
upon to chip in a few billion to help companies the government likes.
The fact is that aviation is an expensive business. They always say that
the only way to make a small fortune from aviation is to start with a large
fortune. The recent boom in "low fares" airlines is simply a bubble
exploiting underused assets, mostly - like Stansted Airport - built at
The government casually brushes aside the environmental damage that this
explosion in aviation will cause, but one day someone will have to pick up
the tab. Is Gordon Brown going to tax the rest of us to subsidise a few
people so they can visit their holiday homes in the sun more often? I hope
not, and I don't believe he is that stupid. But then it looks like BAA is
going to have problems getting its airline "partners" to stump up.
Councillor John Murphy
Member for Great Dunmow (North)
Uttlesford District Council
28 July 2004
WHAT ABOUT AVIATION FUEL COSTS?
Fuel costs are much in the news these days and the cost of aviation fuel, although tax free and VAT free, is still a significant element of an airline's costs - especially for the budget carriers
SSE have made some calculations:
Information given in the easyJet Trading Statement in May tells us :
"For the second half of this financial year, easyJet has approximately 55%
of its fuel capped at US$301/tonne. For the first two months of the second
half, the average fuel price was $360/tonne (before hedging). If this price
continues, our results would be adversely affected by approximately £4m at
current exchange rates."
For the statistically-minded, there are 1246 litres of aviation fuel per
tonne and the current exchange rate is about $1.84 = £1. Hence, $301/tonne =
13.1p/litre and $360/tonne = 15.7p/litre. (Most of us would like to fill
up our cars at that price!)
By studying the easyJet and Ryanair fuel costs for the 12 months to
31 March 2004 we can calculate some interesting figures.
For easyJet, fuel costs were £128.7m and for Ryanair £116.4m. Per passenger this
was £5.90 and £5.04, respectively.
As a percentage of total costs the difference is much more stark. This is 13.9% for easyJet
and 21.8% for Ryanair. This is because Ryanair's cost base elsewhere is much lower than easyJet and so
fuel is a more significant item for Ryanair.
A 20% increase in the price of fuel would take fuel costs to about 16% of total costs
in the case of easyJet and to about 25% in the case of Ryanair.
It is clear from these numbers that an emissions charge set at a level broadly equivalent
to the price of fuel - as suggested by DfT - would be a major problem for low-cost carriers,
On the topical subject of airport charges, overall, easyJet pays £15.52 per
passenger round trip and Ryanair pays £8.48. This is a major difference, no
doubt linked to Ryanair's big discount at Stansted and its use of remote
'airstrips' in Europe.
Profit per passenger round trip is £6.78 for easyJet and £15.60 for Ryanair and so,
it's actually easyJet who should be most nervous about increased landing charges -
although Stansted is a smaller component of their business.
These statistics are fundamental to the future prospects for Ryanair, easyJet and for a
second Stansted runway.
They also suggest that it is impossible for any low cost carrier to pay their proper environmental costs
and offer such low fares. It raises the whole question of a viable sustainable aviation policy without realistic costings.
26 July 2004
MORE COMMENTS ON BAA v. RYANAIR
BAA issues O'Leary with writ over Stansted landing charges
James Daley - The Independent - 22 July 2004
Ryanair, the low-cost airline headed by the outspoken Michael O'Leary, yesterday headed for a major battle with BAA, the owner of London's three major airports, over landing fees.
BAA said yesterday it would issue a writ against the airline after it failed to pay £1m in landing fees for Stansted airport in time to meet a 4pm deadline set by the airports operator.
The flashpoint follows weeks of fighting between the two parties, it was revealed yesterday, after Ryanair took issue with a number of charges which it feels it is unfairly being forced to pay, either directly to BAA or as a result of BAA policy. In protest, it ignored yesterday's deadline to come up with its latest landing fees bill of £1m, and said it planned to counter-sue the authority for overcharging on fuel levies at Stansted.
Whilst Ryanair will be allowedto use the airport as the dispute unfolds, BAA said it would withdraw the discounts it currently extends to the airline for all future landing fee bills - a move which could cost the budget carrier as much as £50m over the next two years.
The subsidies are granted by BAA to new airlines and for new routes, to ease start-up costs during the first few years. It is thought Ryanair qualified for the discounts at Stansted until 2007.
BAA, which is headed by chief executive Mike Clasper, said it was unable to provide specific details as to how much it charges Ryanair because the information is commercially sensitive. However, the average fee which it levies to airlines at Stansted is about £2.80 per passenger - more than £2 a head below the maximum it is permitted to charge according to UK regulations. With 12.5 million Ryanair passengers passing through Stansted every year, an increase to the maximum levy would set back the company about £25m a year.
A spokesman for BAA said: "They have repudiated their contract, which means they will no longer enjoy the current discounts on landing fees."
Ryanair disputes that BAA will be able to withdraw its discounts, arguing it has a binding contract with the authority until 2007, which means it cannot alter the airline's prearranged landing fees. However, BAA said the terms of the contract had been broken by Ryanair's failure to pay its landing fees. As a result, it said its agreement over subsidies no longer applied.
The Irish airline said its protest against BAA centred on fuel levies, which it charges to the principal supplier of fuel at its airports, and which are consequently being passed on directly to the airlines. BAA said this is a standard policy which it operates at all its airports. It said that fuel charges were an issue which airlines should take-up with the oil companies rather than the authority.
BAA added that Ryanair had also expressed dissatisfaction over other issues, but that it was unable to discuss details ahead of a potential court clash.
A statement issued for Ryanair yesterday evening read simply: "We are issuing our own proceedings against BAA for overcharging on fuel levies at Stansted over a 12-year period. As BAA is already aware, our agreement on charges is very specific and expires in 2007."
The feud is not Ryanair's first battle over fees this year. The European Commission ruled earlier this year that cheap fees which the airline had negotiated with Charleroi airport in Belgium had been illegal. The airline eventually came to an agreement with Charleroi which allowed it to continue paying the same levy, within the boundaries of European Union guidelines. However, it is still pursuing an appeal against the Commission's decision, and is refusing to pay back several million euros of European subsidies which are being demanded.
Ryanair chief calls Stansted's owners 'overcharging rapists'
Katherine Griffiths - The Independent - 23 July 2004
In the competitive world of budget air travel, cut-throat behaviour is not uncommon. But yesterday, Michael O'Leary, the outspoken chief executive of Ryanair, took the battle to another level, accusing the company that runs Stansted airport of being "a bunch of overcharging rapists".
The boss of Europe's largest low-cost flight operator added that BAA, which also runs Heathrow and Gatwick airports, was "scamming" the airlines using Stansted by overcharging them on fuel costs.
Mr O'Leary also accused BAA of abusing its allegedly monopolistic position by wasting hundreds of millions of pounds on "Taj Mahal palaces" and "Noddy trains" to upgrade its airports.
The stream of vitriol from Mr O'Leary came after the dispute over airport charges between Ryanair and BAA Britain's largest airports operator exploded into open war. Yesterday both sides followed through on threats voiced on Wednesday evening to take their disagreement to court. Ryanair issued a claim in the High Court accusing BAA of "abusing its dominant position" at Stansted and of breaching its contract with the Irish airline operator.
BAA countered with its own claim, demanding £1m in fees it says Ryanair has refused to pay for its 12.5 million passengers who use the Irish operator to fly to and from Stansted each year. The case could cost tens of millions of pounds in legal fees. Yet neither side is planning to blink first. Mr O'Leary made it clear he was already relishing his day in court. "Let the fucking games commence." he said.
BAA said it was reluctant to sue one of its most important customers, but had no choice because Ryanair was refusing to pay its full landing charges. At the heart of the dispute are the fuel charges BAA imposes on airlines flying in and out of Stansted. The operator, which is regulated by the Civil Aviation Authority, is allowed to recoup over 25 years the cost of building a state-of-the-art underground refuelling system.
According to Ryanair, not only is BAA on course to recoup the £12.5m it spent on the system, but it is making a profit because the charge is levied per customer, and Stansted gets more than previously forecast. BAA denies recouping more than the 8 per cent it is allowed under CAA rules.
The row could prove to be a sideshow to another dispute between Ryanair and BAA, which must renegotiate the range of fees the airline pays to use its airport by 2007.As an opening salvo in that battle, Mr O'Leary said he could take his business elsewhere, announcing Ryanair would beef up its flights going out of Luton, adding nine new European routes to the airport, which is run by BAA's rival TBI.
O'LEARY'S HOT AIR
* "This isn't an airline, it's like a drug baron's business."
* "We don't fall over ourselves if [customers wanting refunds] say, 'My granny fell ill.' What part of
no refund don't you understand? You are not getting a refund so fuck off."
* "No, we shouldn't give you a cup of coffee. We only charge €19 for the ticket."
* "It is much more fun when the world is falling apart than when it is going boringly well."
* "Please don't ask me to feel sorry for rich people with second homes in France."
* "I am not a cloud bunny. I am not an aerosexual. I don't like airplanes. I never wanted to be a pilot
like those other platoons of goons who populate the air industry."
* Bolloxology - definition (given on the Ryanair website); any procedure that other airlines claim is
Jeremy Warner's Outlook:
O'Leary in Stansted dogfight over landing fees
The Independent - 22 July 2004
There's a difference in business between driving a hard bargain and not paying your bills, yet it is not a distinction which Michael O'Leary, the swashbuckling chief executive of Ryanair, seems willing to recognise. For months now, BAA has been trying to persuade him to give up at least a part of the discount he has been receiving for using London's Stansted Airport, his main UK hub. Mr O'Leary claims that his contracts with BAA see the discount through to at least 2007. BAA insists that he is already in breach of contract in not paying the higher rates sanctioned by the Civil Aviation Authority.
Mr O'Leary would like to portray his latest dogfight with BAA, now heading for the courts, as champion of low cost air travel versus big bad monopolist, with its stranglehold on London's airports. That's not the reality.
Mr O'Leary has got himself into an immensely powerful position at Stansted, accounting for something approaching 60 per cent of all the airport's business. As an early and substantial supporter of the airport, he was able to negotiate some big discounts for take-off and landing charges. In Mr O'Leary's eyes, he's made Stansted as much as Stansted has made him, so he's entitled to a little slack in return.
Ryanair's grip on Stansted was further strengthened by the company's acquisition last year of Buzz, bought not for the brand or its aircraft, but for its Stansted landing slots and the discounts they then commanded.
With Stansted now approaching full capacity, the discounts have come to an end. Mr O'Leary, on the other hand, seems to think his all-powerful position at the airport gives him the right to dictate the terms of trade, never mind the fact that all other airlines at the airport have accepted the new charges with relatively little argument.
For Mr O'Leary, the stakes are high. If charges were to rise to the maximum level mandated by the regulator, it would increase his costs at Stansted by £25m a year. At a time when passenger yields are falling and other costs, such as aviation fuel, are rising that's not an expense he's willing to tolerate. See you in court, is therefore his attitude and, by the way, we'll be counter suing for overcharging on fuel levies over a 12 year period.
In some respects, this is a similar dispute to the one Mr O'Leary was involved in over landing charges at Charleroi, near Brussels, where low landing charges subsidised by the local authority were successfully challenged through the European courts.
The key difference is that in the Charleroi case the airport authority wanted to persist with the discounts, whereas in the Stansted instance, the operator does not. Yet the principle is much the same. It is plainly unfair on other airlines that they be made to comply with contractually higher charges while Ryanair continues at a rate which is way below the cost of providing the runways and associated facilities.
Mr O'Leary will no doubt be rebutting BAA's writ in characteristically robust and belligerent manner when it is served on him today, but a contract is a contract. It is an extreme step for an organisation as conservatively run and image conscious as BAA to sue one of its major customers. Yet if there is a criticism to be made of BAA, it is perhaps that it didn't act sooner. Ryanair is not BAA's only customer. It should be forced to pay its fair share of Stansted's costs along with everyone else.
Winter low-cost fare war
Rebecca Matthews - The Independent - 24 July 2004
A fierce fares war among no-frills airlines seems inevitable this winter, with announcements of expansions at Birmingham, Coventry and Luton airports.
BMI's offshoot Bmibaby is to start flights from Birmingham, just 40 miles from its main hub at Nottingham East Midlands airport. From January, the airline will base three aircraft at Birmingham, which is already home to MyTravelLite and FlyBE.
Bmibaby has yet to announce routes, but there is certain to be duplication in destinations already served from Nottingham. Belfast, Cork and Edinburgh appear to be likely candidates in the UK and Ireland. A strong case can be made for Nice and Toulouse in France, not least because of the ski options these destinations open up. Routes to Iberian destinations such as Faro, Malaga, Murcia, Alicante and Barcelona will be tempting - though these would compete directly with MyTravelLite. Prague is another possibility, but it is already served 10 times each week from Birmingham by Czech Airlines.
Tony Davis, chief executive of Bmibaby, says he is not worried by existing competition: "We have been competing head to head since day one with Go, easyJet or Ryanair."
Twelve miles away at Coventry airport, a second airline is moving in to share with Thomsonfly. From 1 November, Hapag-Lloyd Express will connect the Warwickshire airport with Cologne. This replaces the Birmingham-Cologne link flown by Duo, which went bust earlier this year.
Ryanair is to step up competition at Luton against its arch-rival easyJet. At present Ryanair has one ageing Boeing 737 based at Luton. This will be replaced by four newer, bigger jets. Over the winter, five routes - to Dinard, Murcia, Vasteras, Esbjerg and Nîmes - will be transferred from Stansted, and four new destinations will be introduced in January: Rome and Treviso in Italy; Girona and Reus in Spain.
None of the new routes is currently served by easyJet. But Girona and Reus are being marketed by Ryanair as "Barcelona", whose main airport is served up to four times a day from Luton by easyJet.
24 July 2004
MORE ON THE NEW STANSTED BATTLE
O'Leary locks horns with BAA in fight to end
Kevin Done - Financial Times - 23 July 2004
Michael O'Leary is going to war again. With the mud of the campaigns against the "communist" officials of the European Commission and the iniquitous "high-fare" Air France at Strasbourg airport barely dried - the actions are currently locked in appeals - he is moving back into the field against a new target. And this time it is BAA, the UK airports group and operator of his main base at London Stansted airport.
Fresh from filing a writ at the High Court in London yesterday against BAA for alleged "monopoly abuse" at Stansted, he warned that the action was only the first skirmish in what would become "the mother and father of a war".
His record in the courts of Europe to date is patchy at best - although he can justifiably argue that few of the most notable actions have yet run their course, and that he has only suffered defeats along the way towards the hoped-for glorious victories in the final appeals.
The fight against the European Commission over alleged illegal subsidies at Charleroi airport is currently waiting a hearing before the European Court of First Instance. The battle over illegal subsidies at Strasbourg airport, started by Brit Air, a subsidiary of Air France, is being contested in France, with a later move to the European courts not ruled out.
The latest locking of horns with BAA is focused on the apparently innocuous issue of fuel levies, imposed years ago by BAA at Stansted to pay for aircraft fuelling systems, and neither removed nor reduced since.
Ryanair's unpaid bills are running to nearly £1m. The airline is withholding some payments to try to force BAA to honour what it claims were undertakings to reduce the levies. Ryanair alleged yesterday that BAA had already recovered £34m through the levies during 14 years for a facility that cost £12.5m.
BAA also yesterday filed a debt claim against Ryanair for £988,283 and £19,014.83 of interest - with the meter still ticking on the interest total. Ryanair issued its own claim against BAA, "alleging monopoly abuse of fuel levies".
Mr O'Leary made clear yesterday, however, that there is much more at stake. "This is just the start of it, get used to it. There is going to be lots more."
At stake later in the campaign are two big-ticket items for both companies. First is the renegotiation of Ryanair's deal on landing and passenger charges at Stansted, which is due to run out at the end of March 2007. And second is the huge issue of the expansion of Stansted airport, the building of a second runway and all the associated facilities.
The question is how much the bill will be for Stansted Generation 2 - and who will pay? Ryanair is BAA's most important customer at Stansted. It accounts for 63 per cent or 12.5m of the airport's total of 20m passengers a year. It has a share of 52 per cent of all the used take-off and landing slots at Stansted. This is more than double its closest rival EasyJet, which accounts for 25 per cent of the passengers and 20 per cent of the slots.
By the same token, Stansted is by far the most important base in Ryanair's European network. It is its main access to the south-east of England, the richest aviation market in Europe. Ryanair will fight to the end to keep its airport costs at Stansted to the lowest possible level. But as its routes and operations mature, the early wins from highly discounted deals are going to be more and more difficult to find.
At Stansted, Ryanair is believed to be paying about half the full tariff of £4.89 per passenger. But this is already rising in steps as part of its present six-year deal. And BAA has made clear that it intends to be charging airlines up to the full regulatory cap when the present low-cost deals unwind.
Mr O'Leary was on top form yesterday as he railed against BAA, describing them as "a bunch of overcharging rapists", and accusing them of building "marble palaces" at their airports and of installing an expensive "Noddy train set" at Stansted to move people instead of letting the passengers walk to the aircraft.
In the first fog of battle, investors took fright yesterday, with the Ryanair share price dropping by 5.1 per cent, or 25 cents, to close at €4.70. They are going to face many testing months ahead.
WILL BAA LOOSE CUSTOM TO TBI IN LUTON?
Irish Airline's Expansion at Home of EasyJet Increases Competition
with Low-Cost Rival
Kevin Done - Financial Times - 23 July 2004
Ryanair took the first step yesterday towards reducing its dependence on BAA's London Stansted airport by announcing the expansion of operations at London Luton airport, the headquarters of EasyJet, its arch-rival.
It has reached an agreement with TBI, the UK regional airports group that operates Luton, to locate another three aircraft and open nine more routes from Luton in addition to its existing services to Dublin and Milan/Bergamo. The Irish airline said the expansion at Luton would "create and sustain" more than 1,000 jobs in the area as it opened routes to Barcelona/Gerona and Barcelona/Reus and Murcia in Spain, Dinard and Nimes in France, Rome and Venice/Treviso in Italy, Esbjerg in Denmark, and Stockholm/Skavsta in Sweden.
On some of the routes, it will be in head-to-head competition with EasyJet or will be operating to airports outside the main city. Mr O'Leary denied that Ryanair had any intention of pulling out of Stansted, its main London base, but said that its business there was "fully-grown" and that Stansted was already approaching capacity at peak hours.
Confirmation that the low-cost airline expansion in Europe still has a long way to run came yesterday with BMIBaby's announcement that it would open a base at Birmingham airport with the launch of up to 20 routes, initially with three aircraft, starting from January. Investors are still backing the sector. SkyEurope Airlines, a recent entrant based in eastern Europe, said it had raised a further €10m (£8.2m) in a placing with institutional investors in the UK and continental Europe. EasyJet is also adding more aircraft to its Luton and Berlin bases this winter.
More court battles for the low-cost airline. Will those low charges be saved ? Maybe air travel at Stansted will at last begin to pay the full costs, both for airport services and for environmental damage?
Lex Column - Financial Times - 23 July 2004
Another day, another enemy. Michael O'leary's latest foe is BAA which operates British airports including Heathrow and Stansted. Ryanair is suing BAA over monopoly abuse of fuel levies which cost the airline £5m per year. BAA has countered by threatening to sue over £1.1m of increases it says
Ryanair has refused to pay. BAA says contracts that give Ryanair a 50 per cent discount to published charges per passenger are no longer valid. This is, of course, countered by Mr O'Leary. He says contracts are watertight until 2007 with charges fixed according to how long Ryanair has been operating a particular route.
The spats are a proxy for a broader battle. Mr O'Leary does not want to pay for an expensive expansion of Stansted. Ryanair is BAA's biggest customer at the airport bringing it over 60 per cent of its passengers. But Stansted is also Ryanair's most important base - 40 per cent of all Ryanair's passengers travel through it, although the Irish carrier is working to reduce this to 20 per cent by 2007.
Whatever the legal outcome of these first rounds, a mudslinging match will do more damage to Ryanair than BAA in the short term. A tough year is forecast in the European low-cost sector as price wars precede consolidation and investors are already worried about Ryanair's ability to keep cutting costs. Mr O'Leary's case against expensive expansion is a compelling one. But by taking a characteristically aggressive stance, he risks not being heard in the din.
23 July 2004
ANOTHER STANSTED BATTLE?
BAA to sue Ryanair over debt
Airports group claims carrier owes £1.1m for charges at Stansted -
Airline counter-suing over fuel levy
Kevin Done - Financial Times - 22 July 2004
BAA, the UK airports group, is today expected to sue Ryanair - Europe's leading low-cost airline and one of its most important customers - over the alleged non-payment of part of its aeronautical charges at London Stansted airport.
BAA is expected to issue a writ today in the High Court in London suing for the repayment of £1.1m that it alleges Ryanair has refused to pay, with some of the debt outstanding since the first half of last year.
Ryanair said last night that it was issuing its own proceedings against BAA for overcharging on fuel levies at Stansted for the past 12 years.
BAA's recourse to legal action follows Ryanair's failure to settle the debt by 4.0 p.m. yesterday, a deadline that had been set by the airports group.
BAA has further raised the stakes by informing Ryanair that it regards the airline's failure to settle the debt as a repudiation of its present contract with Stansted. As a result it maintains that Ryuanair will still be able to use the airport but will forfeit its discount of about 50% and will have to pay the airport's full tariff rate, in effect doubling its charges at the most important base in its European network.
Ryanair is by far the most important operator at Stansted, accounting for about 63% or 12.5m of the 20m passengers who use the airport each year. It has about 52% of all used take-off and landing slots at Stansted - more than double its closest rival EasyJet.
The Irish carrier countered the threat of losing its discounts by declaring last night: "BAA is already aware our agreement is very specific and expires in 2007".
The row with BAA is the latest in a spate of legal actions involving Ryanair, including its dispute with the European Commission over illegal subsidies received at Charleroi airport in Belgium, and a disability discrimination suit over the level of wheel chair charges in Stansted.
The seriousness of the dispute underlines the scale of the problems that could be ahead for BAA in dealing with its main customer at Stansted, where it has ambitious plans for expansion. This includes the controversial building of a second runway.
BAA have already made it clear that landing and passenger charges will have to rise sharply to pay for the new infrastructure which has been estimated to cost about £2bn. BAA said Ryanair had been refusing to pay the increase of 50p per departing passenger that fell due from April 1st this year under the terms of its 6 year agreement which was due to run until March 2008.
BAA said Ryanair was refusing to pay debts until the airports group reduced the levy on fuel that it charged the oil companies at Stansted, which they passed on to airlines.
OUR COMMENT: One can sympathise with any company faced with non-payment of charges (allegedly) owed by its major customer. BUT, in the world of low-cost flying the sharpest operator wins and Ryanair has not succeeded in achieving its position without driving hard bargains all over Europe. Those who agree to cut price deals have to take the risk that the returns may not be sufficient to meet the costs.
What is clear is that BAA Stansted cannot afford to expand - (and who suggested it would only cost £2bn? Figures up to £12bn have been suggested when the costs of rail and road improvements are included, much of which would have to be met by BAA) - without raising the present charges, which we are told are subsidised by Heathrow, and such cross subsidies will soon be forbidden by the CAA. So, there is a real dilemma both for BAA and for the low-cost carriers who rely on finding airports who will award them the biggest discounts.
We can suggest part of the answer - don't expand! Make the most of the present limits. There is still space for better paying airlines such as an interested airline from California - the local press has reported that a business group from San Jose are visiting Stansted to see what the facilities are. It is suggested that they are interested because Stansted may be expanding. Since Stansted has permission for another 5 mppa and another 70,000 flights there should be an immediate welcome available.
22 July 2004
STANSTED - FIRST MOVE TO EXPAND
BAA Publishes their Scoping Report
This is a consultation on studies proposed by BAA to consider the environmental effects of Stansted, within its single runway capacity. It is required for most proposed major developments under the Town and Country Planning (Environmental Assessment Impact Assessment) Regulations 1999.
As BAA inform us in the introduction, they anticipate that the present limit of 25 mppa will be reached by 2006, so, as "the fastest growing major airport in Europe" they need to be able to expand to utilise the full capacity of the existing runway, which they estimate as 35 mppa, though many would suggest that this figure might later rise to 40 mppa and, when the likely number of flights are considered, cargo planes have to be added.
BAA's estimate is that this new capacity would be reached by 2012, and that it would involve 280,000 ATMs annually including 21,000 cargo movements - a rise from the present 172,000 ATMs of which 12,000 are cargo.
They say that they will have "extensive consultations" with key stakeholders during the preparation of the Planning application. A Consultation document will be prepared and an exhibition will tour local towns and villages.
The Scoping Report is sent out for comments to the statutory consultees, the most important being the Local Authority in which the airport is situated, Uttlesford District Council. Other groups are invited to make their views known but, if sent to BAA, will be forwarded to the District Council.
Since the impact of any further expansion is of immediate concern to all local, and not so local residents, and businesses, the quality of the impact assessment is not only of direct interest to all but also will form the basis of any decision by the Planning authority. We will be back in the business of defining "sustainable development". We already know that the economic aspects have a habit of becoming vital national needs whereas the disbenefits, notably the environmental effects, tend to be regarded as "local" problems requiring plans for mitigation, rather than avoiding the problems in the first place.
Mitigation is a dangerous concept because it demolishes the precautionary principle - it implies that the problems can be avoided if certain specified steps are taken, or may be possible in the future. It is then assumed that the problems will be dealt with and the claimed economic benefits will justify the development and enable the magic word "sustainable development" to be used . The truth is that it is very doubtful if any of the adverse environmental effects can ever be neutralised and that it would be better if all parties accepted this and the many disadvantages were fairly set against the claimed advantages.
These are prefaced with a brief account of the present situation in relation to the permission given for the facilities required for the expansion to 25 mppa. We are reminded that BAA agreed to 169 conditions and obligations, of which 29 have been met. They included a (generous) limit on ATMs of 241,000 and a CAP on air noise (a limit on the area within the 57dBA noise contour).
The new application will not require further satellite developments or another terminal building and any additional facilities will be accommodated within the existing boundary. These are not specified. More ATMs will be needed to meet the increase to 35 mppa.
BAA will appoint studies by specialists to identify and analyse the effects of the additional passengers and flights and the as yet unlisted extra facilities, and to recommend mitigation measures. The list of proposed studies is the same as that produced for the application to 25 mppa. Some details of what might be included are given in an Appendix.
New predicted noise contours for a 16 hour (day) LAeq will be produced at 57dBA, and at 3 dBA intervals up to 72 dBA using mid-June to mid-September (the busiest part of the year). Sensitive buildings will be identified.
Obviously a lot depends on the future fleet mix and the choice of the consultants as to what planes the airlines are likely to be using in 2012.
Data will be provided on night flights, at present controlled by the official quota system and under review at the moment.
BAA's expectation is that the present CAP will not be exceeded. This may be very dependent on the future fleet mix and therefore on how much the airlines are able/prepared to invest in planes with improved technology. This will need clarification.
Much has already been said and agreed in relation to the 25 mppa negotiations. There is much more that needs doing and this is listed out - APUs, taxiing behaviour, ground running of engines and noise from airside vehicles. Much of this requires very strict rules to secure a significant reduction in noise and should have been improved before.
Reference is made to PPG24 (which contains very little on airport noise) and WHO guidance. However, there are also new EU Directives that need to be considered, and the possibility of using Lden instead of Leq (this takes account of the greater annoyance of noise in the evenings and at night) or even of including direct measurements under flight paths (LAmax). WHO guidelines are lower than 57dB - 54dB or even 50dB. Can BAA be thinking of adopting a new improved standard?
Predictions will be calculated to establish future ground levels of the main pollutants, mainly nitrogen oxides, PM10, benzene and 1,3 – butadiene. (No mention of PM 2.5, the more damaging finer particles.) Again, much depends on the choice of the future fleet mix and the policies of airlines both in relation to the purchase of less polluting aircraft and the operational behaviour of pilots on take-off and landing. Airside vehicles must be included and also local traffic that is airport related as well as the effects of local weather patterns.
Nothing is said about the effects on vegetation generally, although Hatfield Forest and Eastend Wood are to be considered.
The effects will be compared with the targets set out in the National Air Quality Strategy. No mention of the EU Directive on Air Quality which cannot be by-passed simply by producing a strategy. The government has already admitted that new developments that breach the Directive would not be acceptable.
This is NATS responsibility but BAA will endeavour to find out if increased traffic will mean that flight paths have to be changed. This is very basic information since so much depends on the position of the flight paths. It is rather surprising that such information has not been clarified before an expansion is even considered!
New Public Safety Zones will have to be established.
A rather inadequate promise is made to explore existing data and information. No mention of the existing requirement to carry out a proper Health Impact Assessment. This is a serious defect in the proposals.
A repetition of much of what has been said in many reports in the past. It includes the reference to Hatfield Forest.
This is a key question and a full traffic impact analysis is proposed but it would appear to concentrate mostly on road traffic when the effects on the rail network are likely to be considerable.
The last comment says "Consideration will be given to the need for improvements to surface access as mitigation for the proposed development". This is a big understatement. "Mitigation" could involve major improvements to both rail and road, with costs far exceeding those extra facilities required within the airport. Other agencies are involved and an apportionment of costs. Who pays? The other agencies should be actively involved in the assessment and not presented with a fait accompli from BAA's consultants.
Landscape and Visual Impacts
Again, much repetition from past reports. There is/was a Master Plan and this has already been impaired by the new A120 and the associated earthworks as well as the new car park and the plans for the new hotel and multi-storey short stay car park. Action to mediate the visual effects is already overdue.
Employment and Housing Effects
The process carried out for 25 mppa and reflected in the White Paper will be repeated with all the figures for direct, indirect, and induced employment possibly reproduced, together with estimates of where they will be living and whether local people will change their present job to work in the larger Stansted or whether more will have to be recruited from North London.
We need to remember that these figures have been slowly reduced once it became clear that employees would either want local houses or would have to add to the traffic congestion when travelling to work. Predicted figures in the past have been massaged down with the excuse of "productivity increase".
A study will be commissioned to review the importance of air transport to economic activity. It will also involve reviewing the Regional Economic Strategy in the emerging Regional Plan and identifying how an expanding airport fits in with this Plan and can attract more economic activity to the area.
This study could be a key study, but economic reviews often tend to reflect the desires of those that commission the exercise. The remit and content of this study needs very careful consideration.
Nothing new. BAA have honoured such obligations in the past. As they claim not to be providing many new facilities such activities will be minimal anyway.
This is a vital question and it is dismissed in a few words. There is already a possible water shortage in the Region and we read of desalination plants in the Thames and grey water policies in new housing estates. It is essential that a proper estimate of needs and available resources are matched up, remembering that there will be additional houses in the area and that other industries, notably agriculture, require water as well.
BAA Stansted has lagged behind Uttlesford Council in provision for recycling and also behind Essex County Council targets. If there is to be a serious study to improve the situation rather than handing over the problem to a Waste company that needs mixed waste to supply an incinerator, there may be one benefit arising from the impact assessment.
This is also dismissed in a few words and should merit a full study especially considering the part that could be played by renewable energy, biofuels, changes in airside vehicles, etc - all of which serve to reduce emissions as well.
Nearly a whole page is devoted to listing the ways in which the effects of construction can be mitigated. Yet we are told that there will be very little new building.
The Report finishes with three maps of the existing airport. Copies can be obtained from the Business Development and Planning Department of Stansted Air port at 01279 663104.
10 July 2004
RYANAIR IS NOT GOING UPMARKET!
Luggage will cost extra, says Ryanair
Andrew Clark - The Guardian - 9 July 2004
Ryanair is to take its "no frills" travel philosophy to a new level by banning passengers from stowing luggage in the hold of its aircraft, a move it claims will eliminate the need for check-in desks.
The Irish budget airline's chief executive, Michael O'Leary, said yesterday he hoped to introduce charges of up to £50 a bag next year, with a view to phasing out hold luggage.
"The purpose is not to make money from checked-in luggage - the purpose is to get rid of it altogether," Mr O'Leary said.
In future, he said he wanted passengers to print out boarding passes when they booked tickets on the internet, allowing them to go directly to their departure gate on arrival at the airport.
Ryanair believes the change could cut €50m (£33m) from its €150m annual airport costs. It wants to work towards reducing its costs per passenger by £5.
Mr O'Leary said the need for luggage was simply a "state of mind" for many passengers. "Will it piss off people who are going on a two-week holiday to Ibiza? Yes, it probably will. But we don't fly to those charter holiday destinations anyway."
The flamboyant millionaire revealed his intentions as he donned a snowman outfit in London to launch a "winter sale" of a million tickets, which will be available from today at 99p for flights between September and January.
In preparation for scrapping checked-in bags, Ryanair recently doubled its charge for excess baggage to €7 per kilogramme and increased the permitted weight of bags in aircraft cabins from seven to 10kgs.
The airline said less than half its 27 million passengers a year checked in luggage. Most were going on trips with a stay of less than two days.
Consumer representatives criticised Ryanair's plans. James Freemantle of the Air Transport Users Council said: "It's disappointing that an airline would want to introduce a policy restricting who could fly on its planes. This reduces passengers' choice - especially for families with children and lots of bags who wouldn't be able to travel without checking in their luggage."
In a separate initiative, Ryanair intends to introduce in-flight entertainment next summer.
But the airline's strained relationship with trade unions looks set to take a turn for the worse after reports of a letter to pilots from a senior executive. Warwick Brady, one of Ryanair's managers at Stansted airport, is alleged to have told cockpit crew that they "might just as well join the Taliban" as sign up to the British Airline Pilots' Association (Balpa).
Ryanair has always refused to negotiate with unions and has no obligation to do so in its native Ireland. A recognition vote by Balpa among British-based pilots failed three years ago, but the union is canvassing for support for a second attempt once a statutory time limit expires this autumn.
10 July 2004
IS BAA COUNTING THEIR CHICKENS BEFORE THEY'RE HATCHED?
Unemployed to benefit from Stansted expansion
Suzi Muston, Essex Network - 8 July 2004
JOBLESS people across east London will now be able to share in the benefits from the expansion of Stansted Airport.
A new £1.3million scheme, launched yesterday will give unemployed people in Barking and Dagenham, Tower Hamlets, Newham and many surrounding areas the chance to get one of the 5,000 jobs being created at the airport over the next five years.
Extra baggage and freight handlers, check-in staff, flight attendants, security, shop workers, bar staff and cleaners are needed to cope with growing passenger numbers, which are expected to rise from around 20million per year currently to more than 31million per year by 2010.
Under the scheme, which has been set up by the Thames Gateway London Stansted Partnership, participants will undergo a free four-week training course to work on interview techniques, CV writing and various other job-hunting skills.
All those taking part are guaranteed a job interview at the end of the course and successful candidates will be given a year's free transport to Stansted from Stratford station with National Express coaches using the Airport Travel Card.
Thirty training places are available each month over the two-year life of the project that aims to place at least 200 participants into work at Stansted or close to the airport. Trial training courses have been running since March and have proved to be a great success as 16 trainees have already been offered jobs at the airport and another seven have secured jobs with local firms.
Terry Morgan, managing director of Stansted Airport, said: "BAA Stansted is delighted to have such an active involvement and we very much look forward to welcoming successful new members of staff and helping them to continue to further develop their skills and experience."
Those interested should apply through their local job centre.
OUR COMMENT: In an area of full employment extra jobs can only be filled by people travelling in from outside the area or by building extra houses so more can live in the area. This has happened already as Stansted has already attracted jobseekers from London and the allowance of airport related houses are still being built. Travelling such a distance to work is not the best way to live and it is a pity that the Thames Gateway partnership is not doing what we thought its remit was, establishing a new sustainable community along the north side of the Thames.
John Prescott has been very clear on this point - new sustainable communities means jobs near home, so why are they promoting Stansted as a job opportunity? The money and effort should be put in at Dagenham and Barking. Free travel passes by public transport are an excellent idea BUT they will first have to get to Stratford - it's a long journey to travel, especially as much of the work will be shift and not in the higher pay range.
Nevertheless job opportunities for the long term unemployed, even if unsustainable, must be welcomed. 200 jobs will help fill vacancies if passengers continue to rise up to the permitted 25 mppa. Beyond that, BAA should not assume they have won the battle!
10 July 2004
Innovative and bold low-cost carriers have transformed the airline industry on both sides of the Atlantic. But are they now doomed to lose their momentum?
The Economist - 8 July 2004
EVER since its creation nearly a century ago, the commercial-airline industry has been prone to abrupt ups and downs. Changing aircraft technology, big capital investments and the shifting priorities of governments have repeatedly forced airline operators to scramble to stay aloft. Yet few of these periods of change have promised to transform air travel as thoroughly as the wave of increased competition, new entrants and aggressive price cutting now sweeping through the airline business in both Europe and America. A slew of new low-cost airlines is attacking big incumbent network carriers, some of whom will probably not survive. What shape the industry will take after this shake-out remains unclear, but one thing seems certain: passengers are already being offered more choice and better prices.
When low-cost airlines were first launched in Europe after the liberalisation of Europe's domestic airline market was completed in 1997, Ryanair and easyJet, the pioneers, explicitly and expertly mimicked American budget airlines such as Southwest and ValuJet (now AirTran). The essential elements of the business model were: a single-type fleet of planes; fast turn-rounds; use of cheap secondary airports; no frills - definitely no moisturiser in the toilets; and enticingly low fares that rose only as a flight filled up.
But today the American and European budget-airline sectors have somewhat diverged. Partly this reflects the relative maturity of the concept in America and its youth in Europe. But intriguingly, the differences go deeper than that. America's budget airlines are starting to move upmarket in service quality, whereas Europe's give every impression of moving relentlessly downmarket. They emphasise dirt-cheap tickets, yet they are also expanding as they try to fend off start-up competitors. At the same time, both of Europe's leading low-cost airlines have blurred the simplicity of the original business model they adopted from their American predecessors.
A generation after deregulation of America's airlines in 1978, low-cost carriers have seized control of the domestic market. It was not always thus. Of the 34 newcomers created after deregulation, 32 soon went bust. Those were the days when the strong, incumbent firms such as American Airlines could simply unleash even lower fares whenever a low-cost upstart invaded its market. Before the antitrust authorities could do anything about it, the competitor was crushed.
Low-cost airlines may now be mature as a concept in America, but the market remains in flux. Since September 11th 2001, the six largest network carriers have slashed costs and reduced capacity by one-fifth as they have struggled to stay financially solvent. Even before the terrorist attacks, however, budget airlines were on a roll. Since 2000 they have expanded capacity by 44%. Low-cost carriers currently have 400 orders out for new planes, whereas the old network carriers have only 150 planes on order.
Most of the expansion has come from JetBlue, Frontier and AirTran; Southwest, which accounts for nearly half the sector, has been obliged by the wider air-travel recession to check its expansion, although it is now returning to its former growth path of 10% a year. Southwest is the fourth-largest American airline by passenger numbers, and so was bound to suffer more than younger budget carriers.
Behind the current recovery there lies a bitter truth for network carriers. Though their passenger numbers are rising, revenues remain flat because they cannot raise prices. As the cost of jet fuel soared in the spring, some network carriers tried to compensate by raising ticket prices, only to give up within days. Budget airlines control pricing in the market.
The cost advantages enjoyed by low-cost carriers are striking. Flexible workforces mean that airlines such as Southwest need only 80 workers to fly and support each aircraft, compared with 115 or more at a traditional network carrier. For passengers, the clearest evidence of the rival cost structures is the way the cabin staff of low-cost carriers parade rubbish bags before and after each landing, performing the task assigned by the network carriers to an expensive, standby cleaning crew.
Some big carriers have tried to mimic the low-cost airlines' business model. Song and Ted are owned respectively by Delta Air Lines and United Airlines. Even Hooters, a chain of restaurants that features buxom waitresses, has joined the fray with a niche airline of the same name. And yet until recently, there had only been one highly successful low-cost start-up, JetBlue. That is now changing.
Last month Independence Air was relaunched, having transformed itself from Atlantic Coast Airlines, which had previously run sub-contracted feeder services for United. Sir Richard Branson, a British entrepreneur, then formally announced the launch next year of Virgin America. His Virgin group will own half the airline. American private-equity investors will own the rest (federal law restricts foreigners to owning no more than 49% of the economic equity and 24.9% of the voting shares in any American carrier).
The business model for low-cost carriers is becoming increasingly varied. Song and Ted are following in the flight path of failed network-carrier offshoots in the past, such as Shuttle by United (beaten by Southwest in the west-coast market in the 1990s) and Continental Lite. Song's debut is still dogged by the ongoing labour and financial problems of its parent, while Ted is a highly specialised airline running mainly on holiday routes from United's hubs, such as Chicago.
A nice, cheap package
Meanwhile, the transformation of charter airlines (which run flights tied exclusively to holiday packages) into leisure-market low-cost scheduled carriers is mirroring what has been happening to charter airlines in Europe. The traditional market for package holidays has been undermined by the sheer variety of destinations now served by low-cost carriers and by customers' ability to book accommodation over the internet. People can create their own packages now. In Europe, 99% of low-cost booking are made through the internet, compared with 75% in America.
Another category of low-cost carrier in America is the regional airline that has converted itself, often while also extending its range: Frontier and America West are the best examples. A result is that few local or regional markets are now free of a low-cost competitor. It is estimated that low-cost competition exists on 70% of American routes. Low-cost carriers have seen their market share in recent years grow to around 30% nationally. Competition is thus increasingly between the low-cost carriers themselves.
In response, leading budget airlines have altered their image. Southwest and JetBlue have developed strong brands, offering a well-defined service rather than just low prices. They are attracting business passengers, and sometimes they even offer a separate business cabin. The emphasis at JetBlue is on slick and stylish service and an enviable punctuality record.
But the bigger these carriers grow, and the more they offer such features, the less distinguishable they become from network carriers. Southwest's coverage of the nation is now so complete that 20% of its passengers actually make transfers between its own flights, while at JetBlue 10% similarly transfer. Imagine watching a time-exposure photograph that shows a budget carrier transforming itself into a kind of network carrier, albeit one inherently leaner and more economical.
Another clue as to how America's low-cost carriers are evolving comes from the role played by hub airports. Once anathema to the budget airlines, and the major feature of their network rivals, hubs have increasingly become part of the business model for some low-cost carriers as well. AirTran and Frontier run what amount to hub-based services out of their respective bases in Atlanta and Denver. The deeper the low-cost carriers have delved into out-of-the-way point-to-point routes, the more they are starting to find themselves developing hubs - albeit of a sort.
For instance, JetBlue is now buying 100-seater regional jets from Embraer, a Brazilian manufacturer, to add to its fleet of Airbus A320s. This will enable it to run new routes to smaller markets and to add flights on routes to bigger ones. But the combination of small and larger jets could lead to a situation in which JetBlue is feeding traffic into bigger airports, then transferring passengers to its Airbuses from the little regional jets.
The most radical approach has been adopted by Independence Air, a new low-cost carrier operating from Washington's Dulles airport. From September it will have 300 daily flights to 35 destinations, with more services to follow. But this is a new kind of low-cost carrier, operating from one hub, rather than a string of point-to-point routes across the country. Despite scepticism in the industry, some think the airline is so focused that it can succeed.
But perhaps the biggest change in the business model is that some of America's low-cost carriers are moving upmarket. In the process they clash with the beleaguered network carriers (never very customer-friendly at the best of times) moving downmarket as they desperately seek to cut costs. For some years, in-flight food on a domestic network-carrier has been a shrink-wrapped disaster lobbed from several rows away by a sullen and stressed cabin attendant. Low-cost airlines such as Southwest and JetBlue have studiously avoided the problem: where they do offer food, it is with style and smiles.
Nevertheless, the headlong growth of America's low-cost carriers will almost inevitably face problems. Southwest has excellent labour relations and a cheery, family-style culture, reinforced by lots of company events. But recently its cabin attendants have been seeking new contracts that, if granted, would include some of the conditions that their counterparts enjoy on network carriers.
What would happen if these employees start to take a bigger slice of the corporate cake? The sheer pace of the low-cost sector's expansion is enough to induce vertigo. JetBlue, for instance, doubled in 2002, grew by 66% last year and will grow by around one-third this year. AirTran has also been growing at more than 20% in successive years. It cannot last.
The biggest difference between low-cost carriers in America and Europe is that they have existed in Europe for less than ten years. No surprise then: Europe is in the shake-out phase. Loads of new carriers have sprung up. But most of these will disappear rapidly, just as their American equivalents did. The splurge of new carriers explains the over-capacity, but not the price war that is going on in Europe. Intense competition is taking its toll not just among the doomed newcomers, but on the industry leaders as well.
The shares of Europe's two leading budget airlines, Ryanair and easyJet, have fallen steeply in recent months, after both companies issued profit warnings. Michael O'Leary, Ryanair's vocal and aggressive boss, has warned of a "bloodbath" in the low-cost market. Both he and the bosses of easyJet have complained about crazy pricing by start-up budget carriers that have no hope of surviving. EasyJet confirmed this week that one option its founder and biggest shareholder, Stelios Haji-Ioannou, might consider is to take the group private with the aid of a private-equity investor.
The trouble is that the low-cost-carrier sector in Europe faces serious challenges. At present an all-out war rages between airlines in general. Europe has around 50 low-cost carriers, although that total changes from week to week as new ones are launched and others go bust. Low interest rates, a glut of second-hand airplanes, off-the-shelf software and the example of the successful market leaders have lured others into the market.
Another factor has been this year's expansion of the European Union to include ten more countries. In joining the EU, these countries also joined its deregulated domestic aviation market, giving entrepreneurs their first chance to fly in and out of them. As a bonus, the market leaders have so far shown remarkably little interest in central Europe. But they have responded to competition with their own crazy fares - off-peak return flights from London to Rome or Malaga are sometimes less than the £10 ($18) airport tax levied in London.
Nor is the war entirely among low-cost carriers. Network carriers such as bmi and British Airways (as well as one formerly stodgy flag carrier, Aer Lingus, that has re-made itself as a sort of low-cost carrier), have successfully adopted the internet-selling and yield-management techniques of low-cost rivals. They are not always as cheap as the likes of easyJet and Ryanair, but often at busy periods their fares to holiday resorts compare well. The traditional airlines also offer business travellers a wider range of flights to helpful destinations at prices from London Heathrow that are competitive with low-cost carriers flying from London's more distant airports, Stansted and Luton.
There is, however, something slightly disingenuous about Ryanair and easyJet moaning about over-capacity. Both carriers have ordered huge quantities of aircraft, tempted by fantastically low prices offered by Boeing and Airbus when orders were scarce. Ryanair has about 100 Boeing 737s on order, while easyJet has ordered 107 A319s from Airbus.
Keith McMullan of Aviation Economics, a London consultancy, has calculated that each of these aircraft would have to carry 250,000 passengers a year to earn their keep. In 2003 easyJet carried 21.1m passengers, while in the year ending in March 2004 Ryanair carried 23.1m. In order to fill up all the new planes, already arriving in their fleets at the rate of one every fortnight from now until the end of 2008, Ryanair and easyJet will need between them to attract 52m new passengers a year, more than double their current numbers.
Finding those extra passengers could prove difficult for two reasons. The first is that the current pattern of low-cost carrier traffic in Europe is essentially a British/Irish phenomenon. Ryanair first expanded by flying Irish expatriates and their kin between England and Ireland. This is what airlines called "VFR" (visiting friends and relatives) traffic. Much of it widens the market to people who had never flown before, or did so very seldom because of the high cost of tickets. But VFR travel is much more prevalent in a big homogeneous market such as America than in a fragmented one such as Europe.
Chart 2 in the report shows the obstacles to low-cost carriers expanding across Europe. The comparison illustrates how the London airports are dominated by low-cost traffic, with the sector's share at almost 40%, against only 12% in Paris and less than 20% in Frankfurt's airports. EasyJet and Ryanair have a measly 7% of intra-European flights at Paris Charles de Gaulle, Orly and Beauvais combined. EasyJet has complained about discrimination at Charles de Gaulle, where it pays the same landing fees as Air France, but is relegated to Terminal Three, a bus ride away from the main airport.
Ray Webster, easyJet's chief executive, is also trying to challenge the way slots are allocated at Orly, the second Paris airport. He contracted to buy his Airbuses around the time that Air Lib, a failed French carrier, was going under, and he assumed that he could pick up many of its landing slots. Indeed, some sources suggest the collapse of Air Lib was a condition in the Airbus contract. But when that duly came about, French airport officials handed most of the slots to Air France. Mr Webster's message to the French government for the past year or so has been blunt: "We bought your bloody aircraft, now give us somewhere to land them."
New routes wanted
Most of the bases operated by easyJet and Ryanair are in Ireland or Britain. Unless they can gain greater access to airports in France and Germany (where they are making some progress) and so tap new markets, both will struggle to maintain their growth. It is not much use having open skies without open airports. To cope with this impasse, Mr McMullan suggests that the leading pair will have to continue their bitter price war against upstarts.
Other strategies that dilute the purity of the original American model have already been tried, with the takeover of Buzz by Ryanair and of Go by easyJet; easyJet's use of London Gatwick as a base; and Ryanair's decision to fly to Rome's Ciampino airport despite the expense. Perhaps it is also time for them to consider joint-ventures with local airlines of the kind successfully undertaken in Asia by Tony Fernandes of AirAsia.
Bosses of Europe's leading low-cost carriers are also still trying to customise their formats. Ryanair, for instance, is considering two initiatives that would differentiate its service. At the same time as it is stopping its seats from reclining (fixed seats are cheaper and need less maintenance) it might also equip the seats with high-tech backs that allow customers with credit cards to watch movies or gamble during their journey (an upmarket move?). And, more ambitiously, it might try to slash costs again, perhaps by making planes more like trains and allowing only cabin baggage (seriously downmarket).
Whatever strategies the budget airlines choose, it is clear that the original business model is evolving on both sides of the Atlantic. As they move upmarket in America to fill the void left by big network carriers, and as they move to more expensive airports in Europe, the risk is that low-cost carriers everywhere will start to acquire the very same high costs that made their network competitors so vulnerable.
10 July 2004
SCHEDULED AIRLINE INDUSTRY HEADS
FOURTH YEAR OF LOSSES
Kevin Done - Financial Times - 7 July 2004
The global scheduled airline industry has made total net losses of $30.9bn in the last 3 years, according to estimates by the International Civil Aviation Organisation (Icao).
The airline industry has only begun to emerge in recent months from the deepest recession in its history, and the high oil price is threatening to leave the industry in loss again in 2004 for a fourth year in succession despite a gradual recovery in traffic levels.
According to Icao, an agency of the UN, scheduled airlines from its 1288 member states suffered a net loss of $6.6bn down from $11.3bn in 2002 and $13bn in 2001.
The report goes on to list the various causes of the losses, the terrorist attack on 9/11, the war in Iraq and the Sars epidemic.
"The recovery in 2003 would have been stronger, said Icao, but demand for air travel was adversely affected by continuing security concerns, as well as by the Sars outbreak and the conflict in the middle east."
"Passenger traffic reached its lowest level last year in May, after which it started a steady recovery."
The report concludes by analysing the losses according to the world's regions, the biggest losses were suffered in North America. The Director General of Icao warned that the financial recovery of the airline industry was also in jeopardy for 2004.
Comment in the Financial Times Leader - 8 July 2004
Long-haul task - Airline restructuring is a turbulent but vital process
The world aviation industry is in profitless recovery. Traffic is sharply up as the sector rebounds from the effects of Sars and the war on Iraq. But this increase is not leading through into any broad rise in yields, because oil prices are raising costs and the established legacy airlines are under growing challenge from low-cost carriers in the US, Europe and even parts of Asia. Clearly there is overcapacity and a need for a radical shake-ouy, in spite of certain features of the industry that make restructuring particularly difficult.
One of these is low barriers to entry, at least in the deregulated US and European markets. Start-ups can lease aircraft and entire crews. But the burden of operating is considerable, especially for the legacy carriers which have inherited expensive in-house servicing operations and pension costs. They find this inheritance difficult to shed because of opposition from unions of pilots and mechanics. Nor can they lightly take on strikes from their employees because, like newspapers, flights are a perishable commodity that, once lost, cannot be regained.
These factors produce many lame ducks – more than in many other industries. One reason special to the US is chapter 11 bankruptcy legislation, enabling airlines to stagger on under court protection from creditors. But common to airlines the world over is the fact that they have some unusually compliant creditors. Aircraft manufacturers are ready to offer credit, while banks are often less troubled at lending on aircraft than on other less moblie assets. Airlines have another source of credit: their passengers, in contrast to many other service sectors, they get paid by their customers before they have to deliver the service. Barriers to exit in the airline industry may not be high, but the compulsion to exit is certainly low.
The US shows how slow airline restructuring can be. Deregulation began there in the late 1970s. Since then some airlines were allowed to go bust, but not so far in the downturn following September 2001. This may now change, given that United has had its second request for a federal loan guarantee refused.
In Europe there is, arguably, even greater overcapacity and even greater need for restructuring. Yet deregulation there started more than a decade later than in the US. Brussels has recently tried to accelerate restructuring by being tough on public money to airlines. But it now faces a test case on Alitalia's request for state aid. Established airlines in Asia's largely regulated skies are more complacent about their ability to withstand low-cost competition. But the latter is beginning to emerge in south-east Asia, and China talks of opening up to budget airlines.
The lesson is that government intervention to help lame ducks only damages the health of other airlines. The sooner governments forswear further aid to airlines the better.
OUR COMMENT: After this bruising analysis one wonders how anyone could contemplate investing billions in expanding airports to meet the needs of a questionable predicted massive expansion of air travel?
10 July 2004
BAA STANSTED NOISE SEMINAR
This was the 4th annual noise seminar and was held on July 2nd. For this seminar, no doubt in order to try and damp down fears of the proposed expansion, BAA had invited a panel of experts to speak and to answer questions. The seminar was very well attended, notably by local Councillors as well as others representing local groups and businesses.
The Managing Director, Terry Morgan, welcomed everyone and presented the image of a successful airport dominating the local news, the 50th busiest in the world and the fastest growing in Europe. It dominated the UK leisure market and was important for the Eastern Region. The plans for expansion were ambitious and controversial but had been presented to BAA by the government as a firm policy directive. It was necessary to talk to the local community and to make the best of the airport for the benefit of all. Noise would feature large in discussions.
He referred to the Home Owners' Support Scheme and said that the many representations were still being analysed but it was hoped to make an announcement within the next month or so.
He reminded all that noise becomes less as planes become more efficient! Stansted wants to work with the community!
John Williams, the chair of the Noise and Track Keeping Working Group presented the Annual Report for 2003: The record for the last year was good. Stansted airlines were using the most modern aircraft and this had helped reduce noise, as well as the ban on chapter 2 aircraft. Noise was of great concern to the community. Only 2% of aircraft taking off were outside the NPRs and this year's target of 98% aircraft on track at 3000 feet had been achieved. This year's target was 98% at 4000 feet. Flagrant deviations were fined £500. He favoured constant persuasion rather than higher fines. This policy was leading to the dramatic fall in noise, though flights had increased in number. Noise levels are measured at various points round the airport, but not further away.
In answer to a question he said that it was not practical to impose noise limits on arrivals. Neither was it BAA's responsibility to measure noise at Dedham Vale, an area that suffered from aircraft noise. Planes flying over Dedham were all arrivals. (This was disputed by a local resident.) The local Council should be asked to monitor noise in the Vale.
Ground noise was being measured at the moment and progress was being made to improving the situation in accordance with the section 106 agreement made with the planning permission for expansion to 25 mppa.
The Flight Evaluation Unit had done great work. The criteria of breaking the NPR "code" was straying outside the buffer zone (a 3Kms swathe) without good reason.
Roberta McWatt, from the Aviation Environment Division, DfT, spoke on the Consultation on Night Noise: The result of the Consultation was still not published so she was unable to say what was in it, except that it will be different. The present regime, which was extended, will finish in October 2005.
She believed it would be helpful to consider what had happened in relation to noise regulation during the last two years. In July 2003 the judgement of the European Court of Human Rights was given which ruled, on Appeal, that noise from night flights did not contravene the human rights of local residents.
There have been two European Directives on noise. The first 2002/30/EC is concerned with noise related operating restrictions and the second, 2002/49/EC on the Assessment and Management of Environmental Noise.
The Aviation White Paper itself says very little about controls on noise except that there must be a fair balance between the economic requirements and the effects on the community.
What do the Directives require? 2002/30 has 4 main elements:
Reduce noise at source
Consider noise in land-use planning
Noise abatement measures
Directive 2002/49 covers all sources of noise and includes airports. It requires noise contour maps to be produced by 30th June 2007. The noise should be measured using the Lden measuring system, which weights night and evening noise, covering the whole 24 hours. Other measuring techniques will, though, be allowed.
Annex 11 of the 2002/30 Directive requires a full inventory of the present situation, the objectives, noise contours and measurements together with forecasts for the future with and without suggested new measures which, in turn, have to be assessed including a cost benefit analysis and an overview of the environmental; effects.
In answer to a question about Lden she described it as providing contours that rose at 5 decibel intervals from 55dB with weightings of plus 5 decibels in the evening and 10 decibels at night. This meant that the total area included in the contour map would be larger than when using the traditional 57Leq system.
There will be a consultation on these new measures - it will probably be published at the end of July.
Andrew Burke, Head of Terminal Control Operational Support, London Terminal Control Centre, spoke on Continuous Descent Approaches (CDA): He explained the reason for advocating a smooth controlled descent - the noise emitted was much reduced. It had been decided that it was not practicable to set noise limits, but a working group was set up in 2000 to devise a Code of Practice and to give advice to pilots. This applies to all airports. The ideal approach is to descend by 3° from 6000 feet. There should be no level flight of over 50 feet in any 2 miles. Pilots are given ATC assistance over the minimum use of flap, which also reduces noise.
He accepted that CDA was not possible at Stansted when planes were landing from the south as the descent crossed a major east west "highway" used by Heathrow and the City airport. This meant that 30% of arrivals could not use the Code of Practice to reduce noise.
Richard Currie, Head of Communications, UPS Express Ltd. Cargo flights: He described the work of this freight company which specialises in express deliveries between America, the UK and Europe. Their main European airports are the East Midlands airport, and Frankfurt, followed by Stansted and Edinburgh. The main connecting flight from Frankfurt to Stansted has to arrive at 3.0 a.m. in order to reach customers at the start of the working day. Deliveries are trucked into sub depots and then delivered locally. The company has 4 movements at Stansted including the night flight. All the planes are chapter 4. If there is too much freight for one plane then a larger plane is used rather than two planes, which would mean two flights. The company is well aware of the problems of noise, especially at night and they take great care to conform to all the best operating practices.
Dr Darren Rhodes, Environmental Research Consultancy Division, CAA - Alternative ways of mapping noise: Dr Rhodes recalled the history of noise contour maps. They came into being after the Wilson Committee in 1961 and were introduced at Heathrow in 1972, at Gatwick in '74 . In 1994 the Leq system of measurement was introduced after various investigations and surveys. The previous12 hour index was upped to 16 hours.
Various alternatives have been proposed the problem being to relate the meaning of average noise exposures to the individual's experience. Much work has been done in Australia in developing a Personal Events Index. Noise measurements are taken at various points round the airport and the individual noise events from overflying aircraft that are recorded as being over 70 dB are counted. 70 dB is chosen because this is the level of noise that interferes with normal conversation. The number of events can then be plotted as a map which can also be related to the time of the year. It is then possible to see at any one site how many such noise events would be experienced during the course of the year.
Another index is used in the USA, a Time Above measurement, how many minutes does the noise of the plane overhead last?
The seminar finished with a series of questions, many concerning the local experiences of residents, such as the number of flights arriving in the late evening hour of 10 to 11 pm.
Unfortunately this is a feature of a low cost airline. Quick turn-arounds allow as many as four trips to and from the destinations and the last arrival will inevitably be just before the night period.
There was a request for a similar seminar on air quality - Terry Morgan agreed that one would be arranged.
OUR COMMENT: This kind of conference/discussion does help to clarify the issues and it becomes clear what is possible, and what is not possible, however well intentioned the airport management. The business of flying cannot be conducted without disturbing local residents. The question that is left wide open is what should the limits be to development? Future technological developments will reduce noise even further but, as was commented on during the question and answer session, not only is there a limit when improvements are overtaken by more flights creating more noise, there is also no guarantee that airlines will purchase technically improved aircraft. Such aircraft are likely to be much more expensive.
Is more banning of noisier aircraft an answer? Most of us would say limit the number of flights! No more expansion! We have reached the limits of reasonable (and sustainable) development at Stansted!
9 July 2004
THE BOEING DREAMLINER - HOW MUCH FUEL DOES IT SAVE?
OR IS IT ALL JUST APPEARANCE?
Dreamliner's fuel nightmare for Boeing
Ben Webster, Transport Correspondent - The Times - 8 July 2004
BOEING is being forced to rethink the design of its new jet after admitting
that its distinctive shape would waste fuel.
The company had claimed that the 7E7 Dreamliner, expected to make its maiden
flight in 2007, would be the most eye-catching aircraft in the skies. But
First Choice, the holiday company that yesterday revealed it was ordering
six Dreamliners, said that it would be pressing Boeing to redesign the
Chris Browne, managing director of First Choice, said that passengers did
not care what the plane looked like as long as fares were cheap and the
interior was comfortable.
She added: "Aerodynamics are far more important than the appearance. While
it might be nice to look different, the key issue is to reduce fuel
As a launch customer, First Choice has the right to negotiate with Boeing
over the design of the Dreamliner.
The present design has an elongated nose and a tail fin that curves out of
the fuselage rather than jutting upwards. It looks sleeker than existing
snub-nosed aircraft, but tests by Boeing's engineers have shown that it
causes more drag and therefore increases fuel consumption.
Boeing has already been criticised by environmental groups for sacrificing
efficiency for the sake of appearance.
Lord Faulkner of Worcester, chairman of the Parliamentary Sustainable
Aviation Group, has written to Sir Michael Jenkins, Boeing's UK president.
In the letter, he accused Boeing of "deliberately and calculatedly
manufacturing an aircraft with less than optimum fuel consumption".
He added: "Do you not agree that we need new aircraft that reduce exhaust
emissions to an absolute minimum if we are ever to get air transport's
climate change contribution under control?" Jeff Hawk, Boeing's director of
environment, said: "There is a trade-off in the design, in which we lose a
little in terms of overall efficiency. We wanted people to recognise the
plane so they could identify with the brand."
But Randy Baseler, Boeing's head of marketing, said that the manufacturer
would be prepared to reconsider the design if airlines raised concerns.
"Airlines are saying to us - We want to bring back the magic of flight.
They want something recognisable, but we realise they don't want to pay a
big fuel penalty for it," he said. "The tail is being studied very carefully
and it could have some changes."
Mr Baseler said that aspects of the Dreamliner's design, including extensive
use of composite materials, would make it 20 per cent more efficient than
Boeing also claims that the Dreamliner, which will have between 200 and 300
seats, will be more fuel-efficient than a 550-seat Airbus A380.
8 July 2004
AVIATION AND SUSTAINABILITY
Another Report from a prestigious environmental institute - more concerns about pollution from an excessive expansion of air traffic. This latest Report has been written by Professor John Whitelegg and Howard Cambridge of the Stockholm Environment Institute at York University.
The Stockholm Environment Institute (SEI) is an independent international research organisation committed to the implementation of practices supportive of global sustainable development. SEI conducts a comprehensive research, consulting and training programme which focuses on the links between the ecological, social and economic systems at global, regional, national and local levels.
The Institute was established in 1989 following an initiative by the Swedish government to develop an international environment and development research organisation. It is overseen by an international board and an executive committee. Its headquarters is in Stockholm with centres in Boston, York and Tallinn.
Its mission is to support decision-making and induce change towards sustainable development around the world.
Professor Whitelegg was the author of one of the first reports to draw attention to the environmental dangers of encouraging air transport expansion. "The Plane Truth, Aviation and the Environment" was commissioned and published by the Ashden Trust and Transport 2000. Nick Williams, an environmental housing consultant also contributed and Chris Evans was the editor.
Over the past 50 years global demand for air travel has risen by 9 per cent per annum
(pa) and growth (at a reduced rate of 3-7 per cent) is predicted for the next 20 years.
The world's airlines currently carry about 1.6 billion people and 30 million tonnes of
freight each year. The number of kilometres flown is expected to triple and aircraft
numbers double over the next 20 years.
The structure of the aviation industry is changing with the advent of low cost
"no-frill" carriers, the growth of short-haul flights, the growth of airfreight and the
decline of military aviation as a proportion of total aviation.
On a regional level, the market for air travel is growing strongly in Europe and
the Asia Pacific region, as is the market for air travel between these two regions.
Aviation demand in China is growing at 10 per cent pa compared to 2 per cent pa
in the USA. Flying is still strongly entrenched in North America with 80 per cent
of trips accounted for on domestic routes. Growth rates as high as 15 per cent pa
have been reported (e.g. Vietnam). Africa currently has a very low level of aviation
demand with most activity concentrated in South Africa and linked to tourism or the
shipment of perishable food products to Europe.
The world's airlines burn 205 million tonnes of aviation fuel (kerosene) a year
and produce 300 million tonnes of greenhouse gases.
The environmental impact of aviation is wide-ranging and significant at the local,
regional and global levels, with most attention focusing on noise (local) and climate
change (global). These impacts are severe, and because growth rates in aviation
are so great technological progress cannot keep up with the growth in demand.
Consumption cancels out technological gain.
Aviation is responsible for 1-2 per cent of anthropogenic greenhouse gas emissions
but these gases are injected at relatively high levels in the atmosphere and have
a radiative forcing impact of 3. This means that the emissions are approximately
three times more damaging in terms of climate change than if they had been emitted
at ground level. Aviation is expected to account for up to 15 per cent of the total
contribution to climate change by 2050.
Greenhouse gases from international aviation are excluded from national
inventories and from the Kyoto process.
Local air pollution around airports is also an environmental and public health
problem. Expansion plans for London's Heathrow Airport have been made
conditional on reducing nitrogen oxide (NOx) levels. NOx at levels above World
Health Organisation threshold values is associated with respiratory disease.
Noise is still a significant problem around the world's airports and under flight
paths. It is associated with a number of health problems and also with damage to
the cognitive development of children. Noise levels from individual aircraft and
engines have reduced as a result of technological change and regulation, but the
growth in numbers of aircraft and flights has ensured that noise levels above WHO
recommended values still affect millions of people. In the UK, one in eight people is
affected by aircraft noise.
The environmental and wider sustainable development impacts of aviation have
largely been supported and encouraged by supportive governments through taxation
advantages and through the planning system. In the UK, aviation receives an annual
subsidy of £9 billion pa, and globally it benefits from no taxation on fuel, spin-off
R&D from military developments and generous assistance with new airports and
surface transport infrastructure. This is at odds with the principles of sustainable
development, for example, the polluter pays principle, the requirement to improve
public health and the requirement to reduce greenhouse gases by 60 per cent by
Managing the growth in demand for aviation, reducing growth rates and reducing
absolute levels of flying have been excluded from policy debate. This is not compatible
with the policy commitment to sustainable development. Demand management is
a well-established part of the overall approach to dealing with the growth of car
and lorry traffic and dealing with energy consumption (e.g. energy conservation and
least cost planning). Demand management in aviation could embrace three main
"pillars": the internalisation of external costs to make "prices tell the ecological
truth"; the transfer of passengers from air trips to rail trips for those journeys where
this is appropriate (45 per cent of all flights in the EU are less than 500km in length);
electronic substitution and the use of videoconferencing and related technologies as
a substitute for physical travel.
This report makes nine recommendations all of which are aimed at recognising the
sustainable development agenda and ensuring that aviation plays its full proportionate
part in delivering sustainability.
1. The establishment of a wide-ranging dialogue that brings together regulators,
government, the industry, citizens and NGOs.
2. The implementation of the internalisation of external costs.
3. The adoption of World Health Organisation recommended values on noise
thresholds and implementing polices to deliver a healthy noise environment.
4. The implementation of surface access strategies that can deliver at least 50 per
cent of all passengers to and from airports by non-car modes of transport.
5. The adoption of the "environmental bubble" concept to give airports clear
quantitative limits for a small set of pollutants.
6. A ban on night-time flights (2300-0700 hrs) to protect human health.
7. Air tickets subject to VAT (in Europe) and its equivalent in non-European
8. Governmentally supported strategies delivered by clearly defined partnerships
to shift passengers from air transport to rail for journeys of up to 500km in
9. Improved methods for recording and monitoring the greenhouse gas emissions
from aviation globally, and the incorporation of aviation's emissions in national
and international reduction strategies to achieve a 60 per cent reduction in
greenhouse gases from aviation by 2050.
Full "Aviation and Sustainability" Report
Michael Meacher and John Gummer join forces
to press for action on climate change
Time to tackle industrial emissions
Letter in The Guardian - 7 July 2004
We write as former environment ministers to call upon the government to take tough measures to tackle the increasing threat of global climate change. The alarm bells are ringing loud and clear, and cannot be ignored.
Over recent months a panel of leading scientists have predicted that climate change may lead to extinction of a quarter of the world's species by 2050; the World Health Organisation has warned that the health of millions of people will be damaged if world temperatures continue to rise; and the government's chief scientific adviser, Sir David King, says that climate change is a far greater threat to the world than international terrorism.
The Prime Minister says that climate change is the most important environmental issue facing the world, but must back his words with firm action. One important area is industrial emissions. The government's proposals under the EU emissions trading regime could result in an increase in climate changing emissions from industry.
This is unacceptable, and sets a dangerous precedent.
Failure to tackle industrial emissions will require much bigger cuts from other sectors to meet our climate targets. This will include transport and domestic sectors, both of which have seen carbon dioxide emissions rise over the past 10 years.
We applaud the Prime Minister for continuing the UK's leading international role on climate change, but a failure to take decisive action will undermine the UK's credibility. The EU emissions trading scheme is his big test, and he must not fail it.
OUR COMMENT: A welcome intervention from two experienced politicians. They could though have also asked that emissions from air transport be included in the EU trading scheme.
WHAT IS TONY BLAIR'S LATEST PRONOUNCEMENT?
The Prime Minister was giving evidence before a committee of senior MPs, the chairs of the Select Committees, (July 6th). He is reported as saying that the evidence was now overwhelming that climate change was the single biggest long-term problem facing the country, and conceded that the world was nowhere near finding a mechanism to cut carbon dioxide emissions by the government's target of 60% by 2050.
What did he suggest might be the answer? No suggestions that everyone might have to change a few habits, have fewer holidays abroad, walk further, use public transport, support wind farms, pay a little more for electricity to help reduce pollution from power stations, and of course, stop expanding airports.
He is going to reconsider the question of building more nuclear power stations, in spite of their excessive costs and the continued failure to solve the problem of the disposal of nuclear waste. He still believes we can have our cakes and eat them as well!
Comment by Friends of the Earth
Action needed not more words says Friends of the Earth
Press Notice - 6 July 2004
Tony Blair's warning to the House of Commons Liaison Committee today
that "Climate change is the biggest problem facing the world" was
welcomed by Friends of the Earth. But the environmental campaign group
warned that Government ministers‚ policies are actually making the
situation worse. Carbon dioxide levels have not fallen since Tony
Blair came to power in 1997, despite Government promises to make
significant cuts in greenhouse gas pollution.
Government policies which will increase climate change emissions
* Weak targets on emissions from industry (including the power
sector). Under the EU Emission Trading Scheme the UK is proposing to
allow industry to increase its emissions from current levels.
* Increased spending on roads, including reported widening of the M6
motorway. Research has repeatedly shown that extra road capacity will
lead to rises in traffic levels. Increases in traffic are outstripping
improvements in car efficiency, causing more CO2 emissions from
* Giving the green light to more airport runways. It is estimated that
Government agreement to allow a huge increase in air travel will
result in a 250 per cent increase in emissions from this sector by
Friends of the Earth has repeatedly welcomed Tony Blair's efforts on
the international stage on climate change, but is concerned that
without decisive action at home his words will be increasingly ignored
by foreign governments. The government has promised a 20 per cent
reduction in carbon dioxide by 2010 (based on 1990 levels).
Friends of the Earth's Campaigns Director Mike Childs said:
"The Prime Minister may be genuinely concerned about climate change,
but unless his Government starts delivering policies that will tackle
the problem, people will doubt his sincerity. Allowing industry to
increase emissions, building more roads and allowing a massive
expansion in air travel and are not the way forward. Unless Tony Blair
and his ministers put the long-term future of the planet ahead of
short-termism the situation will only get worse, and seriously
undermine our ability to persuade other world leaders to take action
on climate change."
Friends of the Earth has also warned that reverting to nuclear power
would be a huge mistake. Nuclear power is not only extremely expensive
it also poses a unique security threat and leaves a radioactive waste
nightmare for future generations.
5 July 2004
PARLIAMENT DEBATES AIR QUALITY -
ALL ABOUT LIFE NEAR AN AIRPORT WITH TWO RUNWAYS
This debate was arranged at short notice by two MPs who represent constituencies that are affected by Heathrow. Time allowed was limited and many other issues concerning air quality were raised besides pollution from aircraft. Our local MPs did not contribute but some of the issues raised apply equally well to Stansted even now, and certainly will apply if another runway is ever built. The following extracts have relevance to Stansted. They are taken from Hansard, April 30th, column 107WH
Mr. John Randall (Uxbridge) (Con): "I am grateful to have the opportunity of airing this subject this afternoon. We should all be concerned about air quality, but because it is something that we cannot immediately see, or even feel, it has not been at the top of many people's lists of priorities over the years. I am just about old enough to remember my father coming home from work in the smogs of the late '50s and early '60s. At that time, pollutants in the air were visible - they formed smog - and their nature meant that they caused deaths, which would have been headline news. We can be proud of our record over the years of removing the smoke from our city centres and of the fact that, after restoration work, our buildings are no longer covered in ash and other pollutants. Today's air pollution is of a different nature, which in many ways makes it more dangerous.
We see many media articles about the problem, and the House of Commons Library has produced a good debate pack - well up to its usual high standards - which outlines many of the problems caused by increasing air pollution, such as climate change. Recently, my elder son saw the film "The Day After Tomorrow." Although it shows a worst-case scenario, when I showed him some of the information that I had received about climate change he was rather shocked to see that the fantasy was not so far removed from the reality revealed by the figures. We would all do ourselves a lot of good to realise that the situation is serious and cannot be lightly put aside.
However important it is, I want to concentrate today not on climate change in relation to air quality, but on the problems of air quality affecting those of us who live in west London, especially my Uxbridge constituency. Not so many years ago, relatively speaking, Uxbridge, West Drayton, Hayes and Harlington were almost in the country; they would have been regarded as semi-rural only 60 or 70 years ago. People came to our area from central London because they wanted fresh air. That was one of the area's big selling points and the reason why people started using the Metropolitan line to go to Uxbridge - incidentally, the line celebrates 100 years of going to Uxbridge this weekend. Metroland was an oasis for people escaping the smoke of central London.
Over the years, however, the area has changed. Perhaps because I am getting older or becoming more cynical - in the seven years since I have been an MP, the latter has become more and more true - but I believe that I can now tell the difference in the air quality around my home and those of my constituents and neighbours. Like many people, I suffer minor symptoms of such pollution - I find myself increasingly bothered by nasal congestion, for example. In the local area, the incidence of respiratory disease and asthma seems to have increased. Some of the evidence may be anecdotal, and some of it - perhaps in the case of asthma - might have emerged because more is known these days; inhalers and so forth were not around a while ago. However, when I go around schools, I see that more and more of our young people are suffering from such conditions, and I think that air quality has a large part to play in that. When I escape to a rural area - perhaps not one in this country - I can taste fresh air much more than I did before. It concerns me that a lot of people in and around our cities have to put up with air that, if they knew what was in it, they would be unhappy about."
He went on to say that understandable information on local air quality was very important but not easily available. In west London ever increasing traffic was a major problem but the biggest and most immediate problem was Heathrow. There was a very real threat of a third runway.
"Suffice it to say that my constituents, the hon. Gentleman's and others are unhappy about how air quality is monitored. The issue is one of confidence. DEFRA is monitoring air quality, but locally we have our worries about whether the monitoring is rigorous enough and done properly. I am not accusing the Department of doing anything underhand, but the process is of such importance to our constituents that we must have confidence in it.
I recently wrote to the Under-Secretary of State for Health, the hon. Member for Welwyn Hatfield (Miss Johnson), because I found it strange that the Department of Health did not have any input into the monitoring of air pollution - after all, it has to pick up the bill in the end. Although I understand that officials from the Department's health protection, toxicology and radiation branch are in regular contact with the air and environment quality division of DEFRA, I would prefer the Department of Health to have a larger role.
At the moment, there seems to be one monitoring site at Harlington. The hon. Member for Hayes and Harlington might have something to say about that, but I am beginning to wonder whether the site is big enough for the job. I also want to be reassured that the monitoring work does not have any link to the aviation industry. Again, it is a question of confidence. It is not that I necessarily distrust the monitoring, but I need to be convinced as a local resident that the air quality figures for Heathrow are not being produced to help a particular case. We all know how statistics can be used. That is all I have to say on the matter."
Norman Baker (Lewes) (LD): "I have sympathy with the hon. Gentleman's comments. Does he agree that the important question is not simply whether the air quality is monitored properly, but what the real results are? Does he share my concern that the number of flights touching down at Heathrow will increase far beyond the aviation industry's capacity to reduce aircraft emissions by efficiency measures? Air quality is likely to get worse in the next few years."
Mr. Randall: "The hon. Gentleman is absolutely right. There are some serious questions and it would be good if we could have a more joined-up debate with other Departments. I would not lumber the poor old Minister with transport matters, as I am sure that the Departments involved have enough discussions.
The hon. Gentleman and I recently attended a launch of a paper by the Sustainable Development Commission. It contained some alarming facts and some interesting solutions. At it, the hon. Gentleman mentioned something that I did not know. We are always told that we cannot tax flights, but internal flights in the United States are taxed, so there may be some merit in the proposal. That strays into the transport aspect of the debate, and although it is important I will not go down that line, particularly bearing in mind the number of hon. Members who want to speak."
He then spoke a third concern, a plan for an incinerator at Colnbrook and described the local situation with reference to problems of dealing with waste, recycling the ever increasing mountain of packaging waste all of which led to a demand for the simplest solution, burn it, which had dangers for air quality and health.
He finished: "We have to persuade people using the real facts about air quality, and we have to do something to improve it. After all - I was about to add, 'without being too dramatic', but it does sound dramatic - if we are not careful, air pollution will be a silent killer."
David Taylor (North-West Leicestershire) (Lab/Co-op): "Several hon. Members present are here because of aviation, and that is the topic on which I shall focus. We recently received the air transport White Paper, which anticipates a growth in airports until 2030 and in the allocation to airports in the United Kingdom. It does that using a fairly straightforward econometric model, which shows that the growth will lead to significant increases in emissions from all airport-related sources. That will diminish local air quality around those airports, particularly those that are set to expand rapidly. Airport growth means more flights and more car and truck movements. Where increases in volume outpace technological improvements that could control and reduce pollutants, we have a serious problem. The hon. Member for Uxbridge (Mr. Randall) referred to that.
It would be unfair to say that all airports will have poorer air quality to the extent of breaching legal limits. We are saying that, in terms of tonnes per year of NOx and particulate matter of all sizes - the two pollutants that have the greatest health impact - and where there are tough legal limits, the volumes emitted will increase. Ground level ozone will also be a problem, although pollutants such as carbon monoxide will probably decrease, as will sulphur dioxide, because of better combustion from vehicles and clean fuels.
Modelling exercises estimate the quantities of pollutants from all sources. At airports, those sources are: aircraft during take off, landing, taxiing, holding and so on; airport operations; airside vehicles; staff transportation; airport-related traffic - passenger vehicles, public transport and so on - and internal operations, such as combined heat and power plants and standby generators. I realise that the Minister here today is not heavily involved in those matters, but I am sure that he will write to me after consulting his ministerial colleagues. One of the difficulties with environmental issues is that they are, by their very nature, cross-cutting, and so are difficult to handle.
At most airports the hot spots for air quality problems - focused, as I said, on NOx and particulate matter - occur in the immediate vicinity of runway ends and the terminal road access interface. That is particularly true of what I must now, reluctantly, call Nottingham East Midlands airport in the northern part of my constituency. The area around the airport is straddled by the M1, the M42, which links Birmingham to Nottingham, and the Derby southern bypass; it is very much the transport nexus of the east midlands, focused in a small area, and a quantifiable human health impact is occurring. Domestic properties and the people who live in them are being affected.
I ask the Minister either to respond to the following point or write to me about it. When pollutants breach limits, residents and their houses are affected. Schools are also affected and there are schools fairly close to airports in all parts of the country. There are other at-risk groups: elderly people in care homes, for example. Where the mix of residents and the land-use patterns are as I have described, surely a local authority has a duty of care to invoke an air quality management zone? Will the Minister say where responsibility for that lies? Only by the use of air quality management zones can we begin to address the methods of controlling and reducing pollution, whatever the source.
The air transport White Paper and the associated background paper state that some airports could have significant air quality problems in future. The hon. Member for Uxbridge and my hon. Friend the Member for Hayes and Harlington (John McDonnell) know more about it than I, but I believe that there is an air quality management zone in force at Heathrow. Fairly horrific air quality is possible if and when end-of-runway alternations happen, and it would be even worse if there was a third runway.
At the moment, Manchester airport has a small problem, which arises from the fact that there is development right up to the boundary, a closely spaced two-runway layout with very tightly packed terminal buildings, and a significant road network. At the moment, it does not have an air quality management zone, but many believe that it ought to. There might be political problems with that, given that Manchester airport is owned by local authorities in the Greater Manchester area.
Birmingham airport is close to where I live. I believe that its management will proceed with great care when considering the possible second runway. The air transport White Paper indicates that there could be air quality problems owing to factors not dissimilar to those affecting Manchester. The site is confined and closely spaced and a second runway has been proposed. There is poor dispersal, with dwellings in fairly close proximity. If the second runway went ahead, an air quality management zone would be needed without doubt.
Finally, I turn to my own airport, if I may refer to it in that proprietorial fashion. I have described the geographical setting of Nottingham East Midlands airport. Its likely growth, as envisaged by the air transport White Paper, will - or could; I have to be fair - have a serious effect on the surrounding settlements and villages, such as Kegworth, Castle Donington and the smaller villages around. If so, North West Leicestershire district council, the local authority with responsibility, will have to rack up the air quality monitoring and management. It does that work now, but much more is necessary.
I conclude with a couple of broad themes to put things into perspective. I think that we all agree that generally dumping more known pollutants on to people is not a sparkling idea, but that will be one of the outcomes of airport expansion on the scale envisaged in the White Paper. I am not sure that the research on the impact on air quality that was carried out in parallel with the production of the White Paper was adequate. Recent background papers have made me feel uneasy. The trouble is that although the campaigning organisations - local community groups, the Campaign to Protect Rural England, Greenpeace, Friends of the Earth and others - have some resources, they do not have enough to undertake the scale of research that is necessary to analyse, predict and tackle some of the air quality problems.
There is an absence of technological solutions to reduce air pollution from fossil fuel sources that cause problems around airports. If that continues, the only way to control the huge increases in NOx and particulate matter is to remove or reduce the road traffic contribution to the problem, stop or restrain the increase in flights, or introduce a contribution of both measures. It is important that the Government and airport operators commit to major public transport access to the facilities that airports and aviation provide.
The hon. Member for Uxbridge did not want to be labelled a swivel-eyed right winger blaming everything on the EU; nor do I. I am sceptical about things European from time to time, but not about the positive impact of the EU in terms of driving up environmental standards in western Europe. I welcome that, and I predict that today's EU air quality standards are likely to become much tougher over the next 30 years, which is the period covered by the air transport White Paper.
In the light of that, I hope that all Ministers who have an influence on how aviation is developed in the United Kingdom will take the fabled precautionary approach. We are talking about a period of three decades and the likelihood of minimum standards of air quality rising significantly. Let us not take decisions or sanction development now that will make it impossible to hit those targets in the years to come."
John McDonnell (Hayes and Harlington) (Lab): "I congratulate my friend and near neighbour the hon. Member for Uxbridge (Mr. Randall) on securing the debate.
I come to the debate in desperation, because I am not sure where else to go. A few weeks ago we had a debate on aviation during which I raised a number of points about air pollution and urged a ministerial response. Today, I am asking again. I plead at an early stage in my speech for a meeting with the Minister, his advisers and perhaps some of his colleagues in other Departments to examine the specific problems with air pollution that are occurring in my constituency, because they exemplify the potential problems throughout the country.
We in my constituency suffer from the worst air pollution in the country, comparable only with inner City area of London itself. My constituents endure the prospect of that situation worsening and being poisoned by the air that they breathe, a continuous process from now until the prospects of runway development are clear, and forever afterward. I am here in desperation. I want someone to talk to me about the potential Government solutions, because I do not know where else to go.
My constituents live in an area with a lethal cocktail of air polluters. There are three sources: industry, the airport and the aviation industry, and motor vehicles that go along our local roads, in particular, the combination of the M4, M25 and M40 and the minor roads associated with them. They combine to pollute the atmosphere in such a way that certain parts of my constituency will soon be rendered unliveable in - not just by definitions of quality of life, but on health grounds as set by the standards of the European Union and the present Government. I come here asking questions, because I am now desperate for solutions to my constituents' problems."
He then described the situation with local industry and a number of pollution problems to which no answer had been found. He also referred to the threatened incinerator and was concerned about an increase in the number of birth defects in his area which should be investigated and could be linked with the existing methods of burning of hazardous waste. He continued:
"Industry is the first source of pollution in my constituency. The second, obviously, is Heathrow airport. At present, based on the Government's own statistics and assuming the most aggressive use of abatement measures that the Government can identify, and without any further development at Heathrow - terminal 5 is already under construction, and the cap of 480,000 air traffic movements remains - it is predicted that in the next 11 years, 5,000 of my constituents will be poisoned by nitrogen dioxide at levels above the EU's legal limits. If we said that we were going to poison 5,000 people elsewhere in the world, particularly in the developing world it would sound like Halabja to me. People lost their homes to flooding in the Ilisu dam project; if thousands of people were going to die, we would be campaigning and up in arms against a barbaric Government risking the lives of their electorate and civilians. We would be on the streets demanding action, yet in 11 years' time, 5,000 of my constituents will be poisoned and we are part of the conspiracy to implement that policy."
Norman Baker: "Is not part of the problem that when there is a sudden incident, for example a train accident in which 100 people are killed, we can understand the need to take action, but it is difficult for society and Governments to respond to a chronic problem over a number of years when there is no immediate headline or spur for people to take action?"
John McDonnell: "I agree, and that is why I am almost in despair, because I raise the figures time and again but get only a limited response. That is due not to a lack of good will, but to inertia because of the scale of the problem and because for many other constituencies it is a problem for the future. However, for my constituents, it is a problem now. We are already predicting the number of people who will be poisoned by air pollution in 2005. As the hon. Member for Uxbridge said, those people are often economically unable to move away from the area - they are trapped.
If the third runway goes ahead, it is predicted that 35,000 of my constituents will suffer poisoning from nitrogen dioxide. If the runway does not go ahead and the Government consult about alternation of existing runways at Heathrow over the next couple of years, according to even the best air pollution estimates, 14,000 people will be poisoned by nitrogen dioxide. Those figures are unacceptable in a civilised society. The figures impact on aviation policy, but also on dependence on health services, GP facilities, and even, tragically, hospice facilities for people dying as a result of air pollution. The problem is not only lung disease, but associated cancers, as discovered in the American studies on the development of airports.
Another way in which the lethal cocktail of air pollution affects my constituency is through motor vehicles, often linked to either the airport or motorways going through my constituency. Having campaigned for nearly 30 years against the development of further motorways and roads because they would increase traffic, I am astounded that the recent response has been to widen the M4 and the M25 and to return to a retrograde policy of further road development. I thought that we won the argument 10 years ago about control of motor vehicles and investment in public transport.
We had a meeting yesterday about the introduction a stopping service at Hayes and Harlington station that could run to the airport. That would probably double the number of people able to get to Heathrow airport using public transport rather than cars or motor vehicles. However, we cannot even afford the development of the station for that purpose because we are £1.2 million short. We are grubbing around to find that money from the Strategic Rail Authority, which may not exist in six weeks' time, from Transport for London, or from the London borough of Hillingdon - I will not go into the levels of incompetence of long-term capital investment by the local authority. The failure to invest in public transport, even in my area where there is recognised need, means that the polluters combine to poison my constituents.
Let me illustrate what that means. At school, large numbers of the children in my constituency are given a box with their name on it to put their puffer in because of the high rates of asthma and respiratory problems. Our local education authority provides a good service, but the hon. Member for Uxbridge will know that it has to give teachers special training on how to deal with children who have an asthma attack at school, because that is so common. That is the point that we have reached.
I just ask the Government for help. Will someone please give us a solution? An air quality management area was declared three years ago. It has been so effective that air quality has worsened over that period. We have applied Government policy at a local level and it has failed. I ask for a ministerial meeting: I want a discussion about the way forward. In addition, I want some assistance for my area and the constituencies of Uxbridge and Ruislip-Northwood.
First, I want adequate investment in full, independent monitoring around the airport. We should work with local community organisations, the primary care trust and the local authority so that we get an accurate picture of what is going on. Secondly, I plead again—for the sixth time, I think—for funding for local research into the health implications of air pollution in my area. That research would monitor what is happening and its effects in detail. At the moment, our local primary care trust bears a financial burden from Heathrow airport. We are not compensated for that, nor do we get any additional money for air pollution monitoring.
I would also like a thorough discussion on preventive techniques and some long-term planning to deal with the specific problem that the area faces. If there were an asbestos factory in my constituency, we would all be piling in with policy after policy. There would be enforcement and action on health, benefits and support. However, because we are talking about the slow erosion of air quality over time, limited action has taken place. In addition, I ask for treatment for my constituents who are suffering from health problems."
Norman Baker: "I congratulate the hon. Member for Uxbridge (Mr. Randall) on securing the debate. I am sure that his constituents appreciate the way in which he regularly and quite rightly nags away at the issue. I welcome the other contributions, which have been useful to the debate. In particular, the speech from the hon. Member for Hayes and Harlington (John McDonnell) was very powerful and delivered with sincerity and conviction.
I am only sorry that the Minister, for whom I have a lot of time, is in some ways the wrong Minister to answer the debate: we need a Transport Minister, because many of the issues that have been raised are Department for Transport matters. That shows the folly of splitting up the Department of the Environment, Transport and the Regions. The Government were right to bring the environment and transport together after the 1997 election, but we now have separate Departments, which is not helpful when dealing with an issue such as air quality."
The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): "The Government's aim is to provide a Minister to reply to the topic that is being debated, and this is a debate on air quality rather than on transport. There are many similar issues that have implications for a variety of Departments, and we try to join up our response to such debates. It is for the Member who initiates the debate to make clear the topic to be discussed."
Norman Baker: "I fully accept that, and I am sure that the Minister will do his best to respond. I often come to debates when DEFRA Ministers end up defending the indefensible as a consequence of the actions of other Departments; I suspect this afternoon will be no different. I add, mischievously, that the Minister is nodding at that point.
We have heard a lot about airports and Heathrow in particular, and rightly so. There are issues of air capacity and the effect on air quality of the Government's policy on expansion of the aviation industry. I am concerned that the predict-and-provide policy in aviation will lead to a dramatic increase in the number of flights and in emissions of carbon dioxide - those were not really touched on, although the aviation industry will double its CO2 emissions between 1990 and 2010 - and air pollutants. That will directly affect those living near Heathrow and other airports, as we graphically heard from the hon. Member for Hayes and Harlington.
The Government must recognise that there is a level of air pollution beyond which it is not sensible to go. If extra flights generate that pollution, they should be stopped. In some places around the world, local authorities are able to stop traffic coming in if the air pollution in a town goes beyond a certain level. It seems to me that there ought to be similar monitoring capacity at our airports: if the pollution reaches a certain level, flights should be stopped until the air pollution is cleared. Obviously, one cannot stop flights landing, but one could stop them taking off.
That might seem a drastic solution, but the alternative is simply to accept that the number of flights will increase exponentially, and the technological improvements that the aviation industry is no doubt working on to make planes cleaner will not be sufficient to offset the massive increase projected over the next 20 or 30 years. Air pollution, with all the accompanying problems that Members from constituencies around Heathrow have described, will sadly get worse. That is an unacceptable message to give to the constituents of the hon. Members for Hayes and Harlington and for Uxbridge, and those elsewhere. We cannot continue to gamble with people's health in the way we currently do just because the aviation industry wants to demonstrate that it has an economic benefit for the country. It undoubtedly does, but that cannot outweigh the health impact it has on those who are directly affected.
The Government's answer is to promote an emissions trading scheme for airlines in order to reduce emissions. I am not quite clear whether that will relate simply to CO2 or to other pollutants as well; perhaps the Minister will respond to that point. I notice that in the Transport Council the other day, which was reported in Hansard, there was no mention of the emissions trading scheme or any other steps to reduce air pollution, although plenty of other issues relating to airlines were discussed. I am concerned that the Government are adopting the emissions trading policy as a sort of 'one golf club' option when they should consider other options to reduce pollution and control emissions of carbon dioxide.
The Minister may be aware of the figures that I have showing that pollutants at Heathrow in particular are reaching unacceptably high levels. In 2000, 8,949 tonnes of nitrogen dioxide, 414 tonnes of sulphur dioxide, 1,000,400 tonnes of carbon dioxide and 102 tonnes of particulates were emitted around Heathrow, and those figures will have since become worse. Studies in the United States have shown that particulates are particularly damaging to health. They are micro-particles that can get into your body and do great damage. The figures for particulates are much too high - roughly double - if not slightly more - the levels experienced at Gatwick, which is of more concern to me with my constituency hat on, as I represent Lewes. I have great sympathy for those who live in the conurbation near Heathrow. We need to do everything possible to limit such pollutants and if technology cannot provide the solution, there should be a cap on the expansion of air flights from Heathrow until that solution is achieved. Predict and provide is simply not an option for Heathrow."
He continued by protesting over further plans to spend more money on roads, a return to predicting and providing. He quoted statistics showing that the costs of motoring had actually fallen, compared with bus and train fares that had risen in the past 30 years by 68% and 86%.
Norman Baker: "We all owe it to the environment to be honest about the fact that the cost of motoring has gone down. The sooner we in Parliament agree on that and take appropriate measures through economic instruments the better. The Treasury is beginning to understand how economic instruments can help the environment - the Economic Secretary to the Treasury, in particular, understands that - but we must go further. That will require courage from the Government, but if they show some, the Liberal Democrats will support them.
I am concerned about the inadequate monitoring of air pollution. In a parliamentary answer on 26 December 2002 to my question about how much the Government were spending on monitoring, the Minister said that £4.79 million was spent on monitoring ambient air quality and £2.4 million on regulated industrial processors. That might sound a lot, but it is not; there is an inadequate network of sites for monitoring air pollution. I gently point out to the Minister that those sums combined amount to less than the Government spend on cars for Ministers and others to rove around London quite unnecessarily. That is not a statistic of which I would be proud were I a Minister.
The Minister also knows that although there have been many welcome improvements in air quality in this country during the past 10, 20, 30 years, we sometimes see statistics that demonstrate a worrying reversal. For example, he will be aware that nitrogen dioxide in London has increased by an average 15 per cent. during the past two years. Only one of the 19 monitoring sites recorded a decrease in the level and there have been some horrific increases. The monitoring station in Marylebone road, which is not that far from here, recorded a 32.1 per cent. increase in such emissions during that time. Things are going wrong in London, in our other cities and in the countryside. The right hon. Gentleman will be aware of a number of occasions when the ozone-monitoring site in my constituency - at Lullington heath in Sussex - recorded levels that exceeded the maximum advisory limit. Therefore, there is an additional problem with low-level ozone in rural areas.
The Government have more to do. I know that the Minister takes those matters seriously and that he is concerned about them, but I do not see the results. The Government as a whole do not give dealing with air pollution the weight that they should. Sometimes these important matters get swept aside when people make economic cases for further transport infrastructure development.
Lastly, I will say something about trees and forests and the effects that they suffer as a result of air pollution. It is not simply a matter involving people, although they are the most important things. A parliamentary answer demonstrated that in the UK there are 22 million dead trees and more than 900 million that are suffering from moderate to severe defoliation. That puts us 26th out of 33 in the 2002 Europe table. There is clearly a big problem with the effect of air pollution on the natural environment. I hope that the Minister will be able answer the questions that other hon. Members and I have put today. This is a serious issue."
Miss Anne McIntosh (Vale of York) (Con) contributed a wide ranging commentary on air quality and the causes of pollution, giving some statistics about rural pollution.
The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): "I start by welcoming the last remarks of the hon. Member for Vale of York (Miss McIntosh) and her references to reconciliation - not a word that is always used in our debates. When dealing with air quality, one of the first challenges is to ensure that we make an incremental improvement year on year, which is how to deal with environmental issues. We must properly reconcile often conflicting interests, or balance priorities."
The minister continued with a series of generalities starting by describing his own memories of past smogs and how things had changed for the better. He continued:
"Smog was headline news in those times, whereas good air quality is not news. 'Man breathes clean air' is not as potent a headline for the average journalist as 'Man chokes in smog'.
The environmental changes that have occurred during the past 50 years have not all been in a negative direction. River water, air quality and the state of our buildings have seen major improvements, but the hon. Gentleman was right to say that much remains to be done. We have to meet new challenges all the time. I am sympathetic to his references to the technical language, the detail and figures that scientists and technicians offer us. What has struck me since becoming a Minister at DEFRA is the gap in the language between the simple statement, 'We want clean air' and the language of emissions and particulates, percentage improvements and deterioration, which must be measured year-on-year to make sure that the quality of our environment is protected and improved. Those targets and thresholds, boring though they seem, are essential to achieving improvement. In addition, it takes time to influence aspects of air quality. Decisions that were taken 10, 15 or 20 years ago about emissions from vehicles are only now having an impact on the quality of our environment.
The complexity of the issue is illustrated by the points raised by hon. Members. One or two speakers, including my hon. Friend the Member for North-West Leicestershire (David Taylor), invited me to write to them with the specifics. That is the only way to deal with some of the complex issues that have been raised. We have covered a great deal of ground, and if I am not able to cover all the points adequately today, I shall try to address them in writing for each of the Members who have contributed.
My hon. Friend the Member for Hayes and Harlington (John McDonnell) sought a ministerial meeting. I am sure that we can arrange one, either with me or with my noble Friend Lord Whitty, who takes the lead on some of these issues. We simply need to identify the specific issues on which he would like to concentrate.
The hon. Member for Lewes (Norman Baker) was entirely in order - occasionally, even complimentary - in some of his remarks. However, he made several sweeping generalisations to which I would respond vigorously if there were time. It is important to consider each of the issues and deal with them properly. On many matters, concerns are raised by a particular study, but when the study and its implications are examined in context and set against monitoring and other evidence, it produces slightly different results.
The hon. Member for Vale of York was kind enough to acknowledge some of the work that the Government have done. She referred to my responsibility for rural affairs but, of course, local environmental quality is the other half of my brief. One of the strengths of DEFRA, which makes life as a Minister there interesting, is the way in which we cover a range of issues from the international aspects of pollution and global warming down to the local environment issues of air quality, chewing gum and so on. It is therefore appropriate in a debate such as this to deal with issues that impinge on one another.
It is important to note that air quality has improved considerably over the past decade. However, as the hon. Lady said, in 2003 there was a significant increase in the number of days of poor air quality compared with 2002.
Miss McIntosh: Will the Minister give way?
Alun Michael: Given the number of topics that I must get through, I ought to gallop on.
The increase was mainly due to exceptional hot, sunny weather, which resulted in high levels of ozone. In addition, as the hon. Lady acknowledged, a significant amount of poor air quality was caused by pollution blown into the UK from abroad. It has always been recognised that the headline indicator can show significant yearly fluctuations because of variations in weather conditions, so we need to concentrate on long-term trends. Despite last year's overall increase, the average number of poor air quality days in urban areas in 2003 was about 15 per cent. lower than in 1993.
Several Members referred to asthma, which is clearly a growing problem. We must consider the other contributory factors, such as air conditioning and other environmental conditions that have both advantages and downsides for us. We accept that asthma can be aggravated by air pollution, but that is not, in general, a cause. It should be underlined that we are reducing air pollution levels, and that will continue.
A number of hon. Members referred to the overlap between different governmental responsibilities. We work very closely indeed with colleagues at the Department of Health and the Department for Transport. We are in almost daily contact with them about air quality and health issues.
The issue of monitoring and its adequacy was raised, and my hon. Friend the Member for Hayes and Harlington made some specific points in that respect. The monitoring of the Harlington site, which was mentioned, is done by the contractors who do DEFRA's own monitoring. Much of the monitoring around Heathrow is undertaken on behalf of DEFRA. There is a specific Harlington site where monitoring is done for BAA plc, but evidence from that site is incorporated into the DEFRA monitoring network and the data are published on the web. The new work to be done at Heathrow following the aviation White Paper will involve scrutinising the monitoring at that site and others in the area.
Is the monitoring adequate? We believe that it is. Moreover, it will be supplemented by modelling. All that work will be scrutinised by a steering group of academics and by local authorities to ensure independence. Monitoring around Heathrow is also done by local authorities and DEFRA. It is worth underlining that monitoring is undertaken by and for DEFRA, but in addition to the finances that we commit, about £5 million a year is made available to local authorities for monitoring and for their other air quality obligations. The Government provide funding to local authorities for their air quality duties through the annual revenue support grant and supplementary credit approvals, and partly via the local transport plan. Hillingdon and Hounslow have applied for supplementary credit approval for the financial year 2004-05: Hillingdon has been awarded £178,500 and Hounslow £132,500.
The Government are fully aware of the concerns about air quality around Heathrow airport. That was a significant part of our debate and a significant issue affecting the decisions announced in the air transport White Paper. The Government have said that another runway at Heathrow could not be supported unless there was confidence that levels of all relevant pollutants could be consistently contained within EU limits. It is important to underline that. As promised in the White Paper, the Government have commenced the package of work on how to make the most of Heathrow's existing runways and on adding a new runway there after the Stansted runway while complying with air quality and other environmental conditions.
The Government are committed to reporting progress on White Paper commitments generally in 2006. Work is under way to improve technical understanding of air quality issues and modelling capabilities, so that further assessments of air quality impact at Heathrow can be made within that time scale".
He then took up question of incinerator and other such contributors to poor air quality - trying to explain away the complaints about industrial pollution and to add reassurance about the excellence of the monitoring processes.
He finished: "I am not complacent about any of the issues raised in this debate. Hon. Members from all parties have rightly pointed to the implications of air quality for local communities and people. They have also spoken about people's fears, whether or not those are always justified. Air quality is therefore an important issue to tackle. We at DEFRA wish to engage with colleagues in the House on the issues that affect their constituencies directly. We also seek to lead in the air quality issues debated across Government."
OUR COMMENT: Not many signs from the Minister of action-led concern! He obviously wants us to accept that all will be well if we all continue with the same policies! The trouble is that "the same" is based on monitoring surveys and computer predictions that never seem to end up with either a comprehensive set of real time results or with a firm policy to deal with not only the faults of the present but also the prevention of the very real fears for the future.
The situation at Stansted illustrates this - there has never been a comprehensive real time survey of air quality throughout and around the airport. The Uttlesford Council monitors Takeley village and other roadside positions in the District but the Stansted situation has been presented by BAA consultant's computer estimations and predictions. In the past three years there have been a limited three months monitoring programme at two sites on the boundary designed to disprove the computerised predictions and, more recently, the results of 4 months of monitoring of nitrogen dioxide, PM10 and carbon monoxide, apparently at the airport boundary. This latter exercise is being carried out as a result of the section 106 agreement when planning permission was given for expansion to 25 mppa. A tardy beginning to a comprehensive survey!
It is unfortunate that the recent consultant report on the present situation in Uttlesford, carried out under the Air Quality Regulations, when considering the airport, simply accepted the 3 month's monitoring results as satisfactory and noted that BAA would be monitoring the situation. Representations were made at the time for a full up to date survey but the situation has changed since the White Paper. Now BAA will have to produce a full report on Air Quality as part of the Environmental and Health Impact Assessments, and this time should not be allowed to rely on limited periods of monitoring, especially when the official Guidance notes expect a minimum of 6 months figures and ideally a year's results.
3 July 2004
A GLOBAL TAX ON AIRCRAFT FUEL
United Nations Association - UK Policy Statement 2004 - 8.33
We accept that aircraft fuel is the least energy efficient and a huge contributor to global warming and call on:
(a) the United Nations Secretary-General
(i) to initiate discussions on the introduction of a worldwide tax on aircraft fuel;
(ii) to make proposals whereby the cost of air travel would become realistic in relation to the damage caused;
(b) the European Union Council of Ministers and Parliament to develop and implement a scheme for taxing aircraft fuel adequately within the Union pending the introduction of a worldwide tax.
2 July 2004
WILL GERMANY LEAD THE WAY?
Airlines dismiss German flight ticket tax plan
Environment Daily 1698 - 30 June 2004
European airlines have angrily dismissed a German plan to impose VAT
(sales tax) on aircraft tickets to and from other EU countries as
"totally illegal". The Association of European airlines was responding
to new signs that the proposal could be reactivated this autumn.
Germany's co-governing SPD and Green parties agreed the policy
following their election victory in 2002
(ED 15/10/02 -
According to a Green party official, concrete proposals were included
in this year's budget by finance minister Hans Eichel before being
deleted by the opposition-controlled upper parliamentary house.
Deputy leader of the Greens Reinhard Loske described his party's
ambitions for taxing intra-EU flight tickets at a conference in Berlin
last week. Talks with the majority SPD party should start this autumn,
he said. The initiative would expand Germany's ecological tax reform,
which so far has included only energy taxes.
Mr Loske said that Germany's standard VAT rate of 16% would be applied
to flight tickets to and from other EU countries. Flights within
Germany are already subject to VAT.
The expected €500m revenues would be used to finance a cut in VAT on
long-distance rail travel from 16% now to 7%. The idea is to
strengthen the competitiveness of more climate-friendly rail transport,
which has been undermined by the proliferation of low-cost airlines
European airlines association official Le Thi Mai insisted that
Germany had no right to introduce the tax unilaterally. It would have
to seek support in the EU council of ministers, she said. Under EU
rules on tax measures this would have to be unanimous, the chances of
which, she suggested, were extremely low.
See Reinhard Loske website -
Association of European airlines -
1 July 2004
MARGARET BECKETT WARNS AGAIN – IN ENGLISH THIS TIME – SHE "SEES CLIMATE CHANGE AS RIGHTEOUS WAR
BLAIR COULD WIN"
Jackie Ashley - The Guardian - 30 June 2004
This is a report of an interview with our Environment Minister, and we are reminded that she has often been the spokesperson put forward for the government when something goes wrong. Now she has an idea "for saving the prime minister's skin".
"If Tony Blair's legacy seems forever bound up with Iraq, well, here's a way out. How about Blair saves the world? This is a slight exaggeration, not a dramatic one."
As environment secretary, Beckett has been at the centre of international talks about climate change, and believes next year will be pivotal. Eighteen months ago, Blair told her climate change would be the priority for Britain's presidency of the G8 next year. Since then there have been intensive, unreported, discussions between cabinet ministers.
In the US and Australia, politicians have been saying to Beckett, "Tony Blair is a world leader, and everyone looks to him on this: he's really got to push this forward in the coming year." Pressure is piling on from developing countries even more intensively, as what Beckett calls the grim realities of climate change sink home.
Here is where Britain could play a historic role. "We're seen as people who really care about this; if people expect us to create a greater momentum, and then if we are unable to do so, that would cause a lot of alarm". So the stakes could not be higher for Blair's diplomatic skills: his environment secretary quotes Klaus Töpfler, head of the UN environment programme, who says halting climate change is "The peace process of the 21st century".
Beckett believes that the tangible results of climate change have pushed it "pretty high up the agenda" for the Cabinet. As a result, lifestyle and tax changes are made a big part of the environmental change: there is a hint of dryness and a meaningful pause when Beckett says, "We're always talking to Gordon about the things he'd be prepared to do this time round… He does a bit more for the environment every budget". She believes it will be a major election issue.
The problem, of course, is that so many believe climate change is just too big to stop. Beckett does not agree. The enthusiasts outside government believe the target of reducing emissions to 60% of today's by about 2050, with a peak in global emissions in the next 10 years, can be done – "They think it is doable with technologies that we're either using, or within sight of using… We think they may be a bit optimistic, but that is their view". The other excuse cited by fatalists is that the huge growth of the Chinese, Indian and other fast-developing economies means there is little point in the west cutting back on margins.
Fresh from a visit to China Beckett suggests it is almost the other way around. The Chinese, she says, realise that if they continue to grow unsustainably, and then try to match the US level of car use, for instance, they would start to run out of useable agricultural land. As a result China is trying to achieve its growth with a less-than-proportional increase in emissions: "The Chinese are saying. Bring it all on, whatever your thoughts on renewable energy, we're interested".
As to ministers at home, the message is stark. Colleagues have been aware, but tended to think that "This is something we will address over the decades ahead". She's been ramming home uncomfortable statistics on the urgency of the job. "This is a security issue. A lack of water, lack of opportunity to grow food, these are the things that have made human populations move throughout human history. You've only got to look at the archaeological record, never mind the geological record, to see how whole communities have shifted".
The report finishes by commenting that Iraq has so dominated the last two year's news that a transformation would be needed. Perhaps Margaret Beckett can help bring it about.
1 July 2004
SMALL STEPS TO LIMIT CLIMATE CHANGE
Another Oil Executive joins in with his concerns – and solutions
Lord Browne - Financial Times - 30 June 2004
Lord Browne is Chief Executive of BP, he joins the Chairman of Shell – and Margaret Beckett – in urging action to prevent further climate change.
Energy security is high on the agenda of governments and policy-makers. Concern is driven by the combination of growing demand, war, terrorism, rising prices and the growing dependence of the world's energy importing regions on a tiny number of exporters, many of which are politically unstable.
These concerns are serious. But they are not the only energy security issues we face. Equally worrying is the risk that the growing consumption of hydrocarbons will impose an unsustainable burden on the earth's climate. If that threat becomes a reality, drastic action could become necessary, imposing crippling costs on the whole world.
With the Kyoto protocol stalled people concerned about climate sustainability could be forgiven for feeling depressed. But dismay is the wrong reaction. Experience is showing us that the problem of how to reduce carbon dioxide emissions can be solved and that the mechanisms for arriving at the solution are within reach.
Lord Browne goes on to record that his own and other companies have succeeded in reducing emissions without destroying competitiveness and jobs. Technology has advanced as has public awareness of the situation. "It is time to move beyond the Kyoto debate and focus on the incremental actions required to ensure that any climatic warming over the next half century is limited to about 2°C."
He calculates that the concentration of CO2 in the atmosphere must be limited to under 550 parts per million. As it is 380 ppm today this means we must reduce our CO2 emissions by half the amount projected to be produced in future years - if we continue as we are doing at the moment.
He then lists all the measures that could be introduced, some of which have already been planned, and all are capable of being achieved with existing technological knowledge.
He wants to see the emissions trading scheme develop and believes that by making carbon emissions more expensive renewable energy technologies will be able to compete in a "free market". He suggests that vehicle emissions can be contained by using hybrid cars that will run at 60 miles to the gallon. He does not mention aircraft, but the message should be clear, if the technological improvements do not drastically cut the level of emissions, then, no expansion!
His arguments for a steady incremental approach which can achieve the necessary target are ones that the government should be promoting now. Some progress has been made but it is slow and patchy and the target of a 60% reduction will not be reached unless Margaret Beckett's words are heeded.
1 July 2004
WHAT ABOUT AVIATION'S CONTRIBUTION?
IATA Says World Air Traffic Soaring
29 June 2004
International air passenger traffic rose by 19.4 percent between January and May this year compared with the same period last year, the global airlines body IATA said on Monday.
Freight traffic over the same five months was up 12.2 percent, according to figures released by the Geneva-based grouping, the International Air Transport Association.
"Not only have we recovered from the impact of SARS and war in Iraq, all major regions of the world are reporting traffic levels above those of 2000, the last normal year for our industry," said Director-General Giovanni Bisignani.
In May alone, passengers on all international routes were up 38 percent on May last year when the industry was suffering from the impact of the SARS epidemic that swept across Asia and reached Canada, and fallout from the invasion of Iraq.
For Asian airlines, IATA said, the recovery was even more dramatic. Traffic there in May was up by 108 percent on that of the same month last year, indicating that the "SARS effect" was well and truly overcome.
IATA said the January-May figures showed passenger traffic up 8.8 percent over the same period in 2000, just before the onset of a global economic downturn which set the industry on a steep downward path.
That decline was sharpened by growing global political instability after the September 2001 hijacking attacks in the United States, the US-led assaults on Afghanistan and Iraq, global terrorism, and the SARS crisis.
Earlier this year airline chiefs feared that steep rises in oil prices would hit the industry's overall global bottom line, but Bisignani, in a statement on the figures, said a recent decline had helped improve the situation.
But efficiency gains and cost-cutting would have to remain priorities for airlines if the industry was to return to full health, he declared.
IATA said that despite the shocks that had rocked the industry over the past four years, its underlying growth rate was 3.6 percent a year. However, this is still only half the rate achieved during the later 1990s.
Of the major regions apart from Asia, North America saw a passenger growth of 32.8 percent in the first five months of this year over January-May 2003 and Europe saw an increase of 19.1 percent, according to IATA.
In the Middle East, traffic was up by 43.9 percent, and in Latin America by 11.5 percent January-May. In Africa the increase was 8.3 percent.
OUR COMMENT: There is no way that this rate of expansion can be ignored. Neither can aviation claim that it has any right to special privileges when all other sections of industry and society are being and will be asked to contribute not only to containing rises in CO2 emissions but also to reducing them. Aircraft contrails also add to the problem.
Margaret Beckett puts her hopes on Tony Blair. He should be listening to her and setting out a long term incremental plan involving all in his own area of responsibility – the UK - to set an example and fulfil his desire to "lead" the rest of the world. Aviation should be part of such a plan. No more promotion of air traffic expansion!
28 June 2004
POINT DE VUE
Réchauffement climatique: trop tard?, par
Michel Barnier, Margaret Beckett, Serge Lepeltier et Jack Straw
Le Monde - 24 June 2004
"Il faut avoir le courage de le dire à nos concitoyens: l'accélération du réchauffement climatique est devenue une donnée structurelle de l' évolution de notre planète".
The statement by Margaret Beckett and Jack Straw, jointly with their colleagues in the French government, on the dangers of climate change and the need to act together as a matter of urgency is reported in full in Le Monde. It can be accessed in French on Le Monde website (see below).
The need for effective action NOW is expressed much more dramatically in this statement as reported in French - have our Ministers concealed from us talents of persuasive publicity? Or are they learning from the French ?
The statement finished with a rallying call:
"Nos deux gouvernments sont fermement engagés, avec leurs partenaires de l'UE, à relever ce défi crucial. Solidaires, ils sont pleinement conscients de l'urgence de l'action et résolus à mobiliser autour d'eux la communauté internationale. Ensemble, relevons ce défi. Convainquons nos partenaires et amis. Il est aujourd'hui grand temps d'agir. Faisons vite!"
OUR COMMENT: Will Margaret Beckett now urge her fellow Ministers: "Make Haste. There is no time to loose!" Alistair Darling can make a start without having to order any reductions of any kind. All he has to do is to make sure that enough genuinely green aircraft are actually being manufactured and purchased by the airlines and do his emissions calculations before he encourages more airport capacity.
The British announcement below is very low key.
Franco-British alarm call on climate change
Environment Daily 1695 - 25 June 2004
France and Britain's foreign and environment ministers have made a joint call for urgent action to respond to climate change: "unquestioningly the major challenge facing humanity".
In an article published in French daily Le Monde, the four ministers stress that Britain and France will respect their Kyoto protocol greenhouse gas targets "despite the reluctance of some states". They reject claims that environmental protection is incompatible with economic growth and call for mobilisation of the international community to meet the global
See Le Monde article http://www.lemonde.fr/web/recherche_articleweb/1,13-0,36-370214,0.html
28 June 2004
BAA WANTS TO JOIN THE CLUB!
Jeremy Warner's Outlook - Aviation/Pollution
News Environment - 24 June 2004
Slowly but surely, a consensus is developing among European governments and airlines over the need to include aviation in the proposed European Union emissions trading scheme. Led from the front by BAA, owner of Britain's five biggest airports, aviation wants in as soon as possible. This is an interesting example of an industry lobbying for something which, in the short term at least,will quite plainly damage its economic interest, for as things stand aviation isn't part of the Kyoto protocol and technically cannot be included until 2013 at the earliest. It is, therefore, free to grow and pollute all it likes, without the constraints that emission trading will impose on other industries.
This is despite the fact that aircraft are among the world's biggest contributors to global warming. Aviation collectively accounts for about 1 per cent of global CO2 emissions, which in itself doesn't sound that much. Yet because the greenhouse gases produced by aircraft are distributed at altitude, as it were, the effect on global warming is about three times that amount. There's not much point in forcing industry to cut its emissions if aviation is only going to fill the gap.
Aviation wasn't included in Kyoto because the Americans vetoed it, and then didn't sign up to the treaty anyway. Including aviation in proposals to reduce greenhouse gases is in any case highly problematic. Where, for instance, is the burden of enforcement meant to fall? With the airline's country of origin, or its destination? It all seemed just too complicated to think about on top of everything else, and was, therefore, shelved.
As a result, aviation has also been omitted from the European emissions trading scheme, which comes into effect at the beginning of next year. Early inclusion would require a quite considerable degree of co-operation between EU member states. Again, there's the problem of enforcement on a source of emissions which of its nature is largely international. Those nations that place a lesser burden on aviation than others would gain a competitive advantage in a key growth industry. Yet it's not impossible.
So why on earth is an industry which seems to have had a lucky escape so keen to take its punishment? Under the emissions trading scheme, industries are allocated the right to produce a specified quantity of carbon emissions, which is reduced as the years pass. Those that cannot achieve the required efficiencies must buy the right to pollute from those who can. Inclusion in this system would force airlines progressively to replace older fleets with more efficient aircraft. This is not obviously an appealing prospect to an industry already struggling with over capacity and poor rates of return.
Yet it is a lot better than the alternatives, such as nationally imposed taxes designed to reduce the overall level of airline travel. The fear is that unless the airline industry moves voluntarily to set its own house in order, eventually it will be forced to in a manner which is a good deal more unpalatable. It's also, of course, the right thing for airlines to be doing. Companies that ignore their social and environmental obligations will increasingly do so at their peril.
OUR COMMENT: Well, we can't complain about this news! The sooner the better. Are any airlines included? They are the main polluters - BAA would presumably only be assessed on their own business activities. The level of the carbon cap that might be imposed is the vital figure and the calculations leading to that figure. Will the airlines agree to a 2.5 multiplier for contrails? Will they do some calculations in the immediate future? Will BAA consider postponing any application for another runway until the full financial and commercial effects can be estimated?
24 June 2004
CLIMATE CHANGE - WHAT ABOUT THE
OF MORE AIR TRAFFIC?
Charles Kennedy asks the Prime Minister the question in the House of Commons we keep asking, highlighted by the House of Commons Environmental Audit Committee and the Sustainable Development Commission
Hansard 16 Jun 2004 : Column 768
Mr. Charles Kennedy (Ross, Skye and Inverness, West) (LD): In the House on Monday the Prime Minister acknowledged that he has
little expectation that this United States Government will sign up to
the Kyoto treaty on climate change. Does he agree that that further
emphasises the need for Europe to be seen to be taking a lead? Will he
commit the Government to join France, Sweden, Holland and Denmark in
pressing the principle of contraction and convergence as the fairest way
forward for controlling greenhouse gas emissions?
The Prime Minister: We already are working very strongly with the European Union to make the
case for the reduction in greenhouse gas emissions; indeed, this
Government have been leading the way. In fact, much of the Kyoto treaty
would not have been negotiated but for the skill of my right hon. Friend
the Deputy Prime Minister. I have to say to the right hon. Gentleman
that in the end what is important, as well as those measures
that he mentioned, is the investment in science, technology and energy
efficiency which gives us the best chance, in the long term, of
combining economic growth and a reduction in greenhouse gas emissions.
Mr. Kennedy: The Prime Minister's positive tone is very welcome. On a practical
example, to advance the green agenda, as such a large and growing
proportion of Europe's greenhouse gas emissions comes from air travel,
will he lead a push at European level to apply to the aviation industry
the principle that the polluter must pay? Does he agree that the
environmental agenda is a classic example of how Europe can lead in the
world and Britain can be seen to be taking a real lead in Europe?
The Prime Minister: That may be a classic example of advocating a policy that one does not
believe that one will ever have to implement. I say to the right hon.
Gentleman sincerely that I believe that it is important that we take on
the challenge of aviation fuel. I believe that the best way of doing
that is investment in science and technology to produce better fuel
efficiency. That is something that is happening in this country. To be
fair, some of the main research is going on in the United States at
present. I would not favour trying to impose arbitrary restrictions on
OUR COMMENT: "Arbitrary restrictions" on people's travel? How can the abandonment of a policy of actually encouraging air travel be described in such terms? Especially when the projected increase in demand may be a forecast for additional air capacity that "one does not believe one will ever have to implement".
What about our rail services? Alistair Darling is reported as saying in relation to the fact that Virgin cross-country has scrubbed 180 of its train services (Guardian, Simon Hoggart, June 23rd) "This has improved relaibility because the lines are less crowded". Does he expect the commuters in their crowded trains to agree? Crowded lines may be unsafe and liable to be late, but crowded carriages are "only" uncomfortable. Is this real choice?
Is it not an "arbitrary restriction on people's travel"?
There are better ways to improve travel choices than expanding air travel capacity, especially as only 50% of people choose to fly, and how many fail to find a seat when they need one?
19 June 2004
The Summary Critique of the Aviation White Paper by the Sustainable Development Commission is now available on their website. It is a "must read" for the government, for BAA and for all those trying to promote a two to three fold increase in air traffic by providing sufficient airport expansion to provide the capacity that would be required. Here are the conclusions of the Report, which does not constitute a detailed analysis of the White Paper but concentrates on the issues of sustainability.
1. We have concluded that the cost-benefit estimates for additional capacity are misleadingly optimistic. We therefore support the Environmental Audit Committee's recommendation that the DfT should address this by publishing a new and fully documented appraisal, which takes account of the overall, forecasted increase in air traffic and call on the DfT to publish this appraisal by the autumn of 2004.
2. We recommend that the DfT and Defra should jointly commission a range of forecasts for how air traffic and its greenhouse gas emissions are likely to evolve over the next 30 years, what contribution they will therefore make to overall global warming on a range of scenarios. We further recommend that the UK actively seeks to ensure that a similar exercise is initiated at the European level, both to inform the stance which Europe takes globally, and to provide the basis for some initial programme for restraining emissions growth at the European level.
3. We recommend that in the short-term, DfT and Defra clarify the basis on which greenhouse gas projections are being made to ensure that full account is being taken of the radiative forcing of aviation.
4. It is an extraordinary anomaly that one of the most serious and rapidly growing contributors to climate change should be so lightly taxed throughout the world because of the absence of international agreement on a common approach, and the threat to the competitiveness of any country acting unilaterally. We call on the Government to take measures to ensure that the aviation industry is taxed according to the environmental costs it imposes as externalities on others (with adequate compensation for those directly affected).
5. Carbon emissions in the developed world (including the emissions from international aviation, allocated to the countries of arrival and departure on a 50-50 basis) need to be cut by a minimum of 60% from 1990 levels by 2050. We call on the Government to affirm that this target (given in the Energy White Paper) includes the radiative forcing from emissions from domestic and international aviation.
6. We welcome the decision by the DfT to press for the incorporation of aviation into the EU's Emissions Trading Scheme (EGUETS). We concur with its view that this is likely to provide both the most effective and the fairest mechanism for ensuring that aviation is required to internalise the full cost of its contribution to climate change. But there is still a huge amount of work to be done on both the design and the implementation of the EUETS before it delivers that outcome. We call on the Government to take all steps within the EU to ensure that the EUETS is taken forward.
7. We recommend that the inclusion of aviation in EUETS is secured before the DfT sanctions any airport expansion, not least so that it can be assessed whether such expansion is really necessary and feasible. The resulting economic framework should include measures to make best use of existing capacity and more determined measures to reduce aviation's current environmental impacts.
8. We recommend that pending the inclusion of aviation into emissions trading schemes, an emissions charge should be levied on all flights: first, by the UK on domestic flights (to show it is serious about the issue); and second, by the EU (with revenues being re-allocated to Member States) on all (not just intra-EU) flights.
The Report contains many apt comments on the conclusions of the White Paper - it lists out the Government's assessment of the sustainability of aviation expansion and compares this with the Commission's 6 principles of sustainable development, principles which should be more widely promoted.
It comments on the DfT:
"To an outside observer, the DfT still appears to be too closely respondent to the industry it is supposed to regulate, and resistant to outside influences and wider policy considerations. The Department has not responded to the Commission's previous reports on aviation and rejected offers by the Commission to help build a wider sustainability framework for policy appraisal and analysis while they were preparing their White Paper. While this may not be significant in itself, it is symptomatic of a departmental culture that is in danger of becoming semi-detached from the sustainable development imperative, which Government has wanted to put at its heart."
It also comments on the possibility for confusion over climate change statistics:
The Royal Commission on Environmental Pollution calculated that with the growth in aviation promoted by the White Paper aviation in 2050 would contribute nearly 75% of UK radiative forcing (including that from aviation). They assumed that the official target of a 60% carbon reduction target also included aviation sources. The Environmental Audit Committee assumed that the official target of a 60% reduction in carbon dioxide applied only to non aviation UK sources. They calculated that the contribution of aviation would be 66%. It is therefore very important that the Government's target is clarified.
It is also important to distinguish between CO2 emissions and "radiative forcing". Only air traffic has this extra global warming effect, over and above that produced by CO2, due to the effects of contrails, and generally agreed to multiply the effects of CO2 by a factor of 2.5. Is the Government's target only for CO2 emissions? Does it include aviation, and if so has it allowed for this extra radiative forcing effect? If this is not made clear then figures can be easily manipulated.
Note: A Hard Copy can be obtained from the Sustainable Development Commission, Ground Floor, Ergon House, Horseferry Road, London, SW1P 2AL Tel: 020 7238 4999
18 June 2004
CONCERN ABOUT CLIMATE CHANGE HITS THE HEADLINES AGAIN
The new Shell boss is worried too
David Adam - The Guardian - 17 June 2004
Oil Chief: My Fears for Planet
The head of one of the world's biggest oil companies has admitted that the threat of climate change makes him "really very worried for the planet".
In an interview in today's Guardian Life section, Ron Oxburgh, chairman of Shell says we urgently need to capture emissions of the greenhouse gas carbon dioxide, which scientists think contributes to global warming, and store them underground - a technique called carbon sequestration.
"Sequestration is difficult, but if we don't have it then I see very little hope for the world", said Lord Oxburgh.
"No one can be comfortable at the prospect of continuing to pump out the amount of carbon dioxide
that we are pumping out at present with consequences that we really can't predict but are probably not good."
His comments will enrage many in the oil industry, which is targeted by climate change campaigners because the use of its products spews out huge quantities of carbon dioxide, most visibly from engine exhausts.
His words follow those of the government's chief scientific adviser, David King, who said in January that climate change posed a bigger threat to the world than terrorism.
"You can't slip a piece of paper between David King and myself on this position," said Lord Oxburgh, a respected geologist who replaced the disgraced Philip Watts as chairman of the British arm of the oil giant in March.
The Report goes on to record that both BP and Shell have previously admitted concern over climate change, and have pledged to reduce their own emissions as well as diversfying and investing in alternative sources of energy such as wind and solar power.
It then quotes from Robin Oakley of Greenpeace, and Bryony Worthington of Friends of the Earth who subsequently issued a statement : "We are pleased that Shell appears to realise the serious threat posed by global climate change. But its core business is the production of fossil fuels is the major cause of the problem. Last year it claimed to have produced more oil and gas than ever before. If Lord Roxburgh really wants to tackle climate change, Shell must stop investing in new oil projects, such as in Sakhalin, Russia, stop the insane practice of gas-flaring and switch to alternative, renewable sources of power instead. Until it gets out of fossil fuels, Shell will continue to be a major part of the problem. Technical fixes such as sequestration may have a role to play but are likely to prove more expensive and less effective than simple measures to reduce emissions such as more fuel efficient vehicles and renewable sources of energy. Shell must realise that we need to tackle the core of the problem. There's no point in bailing out the basement while there's holes in the roof."
OUR COMMENT: The subject of the risks of climate change have been regularly appearing in the press during the last year and warnings have come not only from concerned scientists but also from the insurance industry, after flood claims have run into millions for the first time.
This is the first time that a senior member of a major oil company has made such a forthright public statement. However, burying carbon dioxide won't be enough, neither will other technical fixes to engines, whether on land or in the air. There has to be substitution of fossil fuels both in the production of electricity and in powering engines. Since there is at the moment no substitute for fossil fuel in fuelling aircraft engines nor is there any sign of substitutes for the future, then as far as air traffic is concerned it is madness for the government to propose a massive expansion during the next 30 years. The Minister may claim that the expansion proposed is less than the maximum predicted by their consultants, but it is still massive by any normal definition!
18 June 2004
LOCAL AIR POLLUTION
This is the other part of the problem caused by aircraft emissions.
People who live round any airport suffer from poorer air quality. Even if the levels of those chemicals that are regarded as harmful to health are below the legal "safe" limits there are still smells and deposits dropping from the sky.
Nicola Marshal has conducted a protracted correspondence with BAA on the situation at Stansted through the Herts and Essex Observer readers' columns. Here is her latest, published this week.
Pollution issue is still up in air
In the Observer of May 20th, Mark Pendlington, of BAA Stansted, claimed: "We have nothing to hide over pollution statistics". He then proceeded to spin the illusion of aircraft emissions being on a par with those produced by smokers and household appliances – an effort which (unlike his previous attempts at "wry humour") I find absolutely laughable.
With apologies for a misdirected email in the interim I feel that Mr Pendlington cannot go unanswered.
I understand that the pollution levels from one 747 take-off can be equated with setting the local petrol station on fire and flying it over your head. It's a performance a bit beyond what you might expect from making toast in your average toaster, now isn't it?
Multiply this by the number of aircraft flying out of Stansted in the last year and, well, I think that those visitors from Chernobyl that you mentioned would settle in quite nicely.
So you have nothing to hide with regard to pollution statistics? And yet my questions remain – like a contrail – "hanging in the air":
"Why has Stansted Airport, and its immediate vicinity, not been declared an air quality management area?" And "Where can I go to find benchmark statistics (that make sense to a lay person) that will enable me to form a judgement about how safe your operations are?" In addition, I would like to ask: "Can BAA guarantee that people living in the vicinity of an expanded airport would suffer no adverse effects on health as a result of the operation of the airport and the associated increase in transport in the region?"
Given the number of messages that I have received in support of my previous letter, I feel that an explicit public response to these questions is more appropriate than your trying to shuffle me off the letters page and into your hospitality suite!
17 June 2004
THE SUSTAINABLE DEVELOPMENT COMMISSION TELLS THE GOVERNMENT - YOU CAN'T HAVE TWO CONFLICTING PLANS - AIR TRAFFIC EXPANSION AND HOPE TO REDUCE CLIMATE CHANGE
Airport Plans "Negate Bid to Cut Emissions"
Amanda Brown, Environment Correspondent - PA News - 17 June 2004
Government plans to cut harmful polluting carbon dioxide by 60% by 2050 will be "impossible" if the Department for Transport forecast of huge airport expansion goes ahead, a senior Whitehall adviser on green issues warned today.
Sir Jonathon Porritt, chair of the Sustainable Development Commission, issued a blunt warning in a report calling for urgent action by the department to deal with the climate change problem caused by aircraft emissions.
He said there is a conflict between the department's Air Transport White Paper, published last December, and the Government's strategic commitment to dealing with climate change.
An SDC report published today makes a number of urgent recommendations to safeguard the Government's international
leadership in sustainable development and climate change.
Greenhouse gases, the main cause of climate change, are increasing due to the huge boom in air travel. This has been made worse in recent years by the growth of low- cost airlines.
The Air Transport White Paper anticipates as many as 400 million people passing through UK airports by 2020 and 500 million by 2030. The figure today is less than 200 million.
The SDC report says that by no stretch of the imagination can increases of this kind be described as 'sustainable'.
The commission wants the Department for Transport to clarify the basis on which its forecasts of future greenhouse gas emissions from aircraft are based.
It says it should also commission further research to resolve the substantial discrepancies that currently exist between different projections advanced by different organisations.
The SDC urges the Government to initiate a much more proactive and inclusive process to identify the most effective way of incorporating the aviation sector into the EU Emission Trading Scheme (EUETS) by 2008.
The Department for Transport should also reconsider with the Treasury its refusal to levy an emissions charge on all European flights pending incorporation into the EUETS in 2008, and to explain much more explicitly why such a charge would not be the best way of forcing the aviation industry to internalise the full costs it imposes on the environment.
Sir Jonathon said: "The Government has got to develop a far more joined up approach on aviation and that means the Department for Transport cannot pursue policies that cut across what the Government is trying to achieve elsewhere."
"It must advance an aviation strategy that is consistent with the UK's Climate Change Programme."
"The huge expansion of airports and air traffic outlined in the White Paper will render impossible Government efforts to adhere to its own target of reducing carbon dioxide emissions by 60% by 2050."
"The department needs to engage far more constructively with key stakeholders in this debate and account for themselves properly to Parliament and the general public."
Lord Faulkner, chair of the All Party Parliamentary Sustainable Aviation Group, said: "The Sustainable Aviation Group's task at Westminster is to inform politicians and policymakers about how best to control and reduce aviation's growing environmental impacts.
"The Sustainable Development Commission's task is to point out to Government why it's so very vital for all of us to live sustainable lifestyles and advise and act as a `critical friend' when policies don't reflect a sustainable agenda."
"The SDC's response to the Air Transport White Paper will be an important milestone in auditing whether or not the massive forecast growth in aviation can every be labelled 'sustainable'."
"We are pleased to host and support the SDC's work today and will press the Government to respond positively in turn to their expert, independent and important advice."
And what is the Government's answer?
A Department for Transport spokesman said: "The Government has set out a framework for development over the next 30 years. We have agreed to limited runway expansion - many of our airports are already operating near to capacity and we must plan ahead."
"We stand by the forecasts published in the White Paper and associated documents."
"In relation to greenhouse gas emissions, our figures show that by 2050 UK international and domestic air transport greenhouse gas emissions could amount to about one third of all UK climate change impacts."
"This is a large number, but nowhere near the 60% or 75% figures quoted in the report. We have already made clear that we are willing to assist with any queries about the information in our documentation."
The spokesman continued: "More does need to be done to limit the environmental impacts of air travel."
"The White Paper sets out a balanced and measured approach between travel needs, economic benefits of new capacity, and the environmental effects of flying."
"We recognise the importance of tackling climate change, and welcome the commission's support for our approach to aviation participation in emissions trading."
"Emissions trading is our priority, but the Government will also continue to explore the use of other non-trading economic instruments building on discussions held with stakeholders following publication in March 2003 of the paper 'Aviation and the Environment, Using Economic Instruments'."
OUR COMMENT: This report by PA news is issued as a press notice by Friends of the Earth. The Sustainable Development Commission's report "Missed Opportunity - Summary critique of the
Air Transport White Paper" can be downloaded at www.sd-commission.gov.uk/pubs/atwp/pdf/atwp.pdf
It appears that the DfT has shut its mind to any fears about our future climate problems. Even if their figures are correct, that one third of greenhouse gas emissions that they claim will come from aviation in 2050 is in itself a ridiculously high figure bearing in mind the controls that are being enforced on other sources of greenhouse gases, whether through emissions trading or through taxation of carbon and non-aviation fuel. Also, it completely ignores the additional effects of contrails. Perhaps the DfT spokesman forgot about them? It is time that the government began to honour its pledge to practise joined-up thinking and decided whether extra holidays are really worth increasing the risk of dangerous climate change.
15 June 2004
ESSEX 'USING' RESOURCES TOO QUICKLY
Essex residents are using natural resources almost 3 times more quickly than the earth can renew them.
This is a situation which will be made worse if Stansted airport gets a second runway and thousands of extra homes are built, it was claimed this week.
Figures released show that if everyone on the planet consumed natural resources at the same rate as an average householder in the County, 2.9 planets would be needed to support the world's population.
If the County itself had to provide the resources needed to support its citizens lifestyles, it would need to be 4.5 times larger than at present.
At a conference on 7 June - "A Greener Essex" - Environment County Councillor Kay Twitchen said: "The government's plans for more housing and a second runway at Stansted will only make this situation worse. The statistics are part of the first draft of an Essex Environmental Footprint Report which will form part of a footprint for the whole of the East of England."
Mrs Twitchen added "With this report we will know just how sustainable Essex is. Of course, to be truly sustainable we would only consume resources at a rate that the earth can replace. With that in mind, we can all do our bit to help reduce the Essex Environmental Footprint."
The report was calculated by determining the rate of consumption of natural resources against the rate at which they can be replenished.
Essex was facing increased environmental pressures, including pollution, water shortages and changes in climate, she said. These could result in shortages of both water and energy, and at the same time an increased risk of flooding. Wildlife would also be affected.
Essex County Council has developed a website to introduce people to new ideas. It is at www.agreeneressex.net. It contains information on what can be done to minimise everyone's environmental impact.
"It is very important that people appreciate the impact their lifestyles have on the wider environment" said Mrs Twitchen. "Small changes made by everyone can have a hugely positive effect on our environmental footprint. This new website has lots if ideas to make it easier for everyone to help choose a greener Essex."
15 June 2004
THE FINANCIAL TIMES REPORTS THE JUDICIAL REVIEW
Airport expansion opponents get day in court
Kevin Done, Aerospace Correspondent - Financial Times - 13 June 2004
Government plans to expand airport capacity in the south-east of England are to be challenged in the High Court.
Opponents of the proposals, which include building a second runway at London Stansted, have been given permission for a full judicial review of the government's White Paper on The Future of Air Transport published last December.
The High Court will hear two parallel claims, one brought by community groups fighting the expansion of Stansted and Heathrow airports who are acting in conjunction with the west London boroughs of Hillingdon and Wandsworth, and a second brought by five Hertfordshire and Essex local authorities.
Both actions claim that the White Paper was "fundamentally flawed" and that the conclusions it reached were "irrational and inconsistent with the government's own policies and with the consultation ground rules."
No date has yet been set for the hearing.
Carol Barbone, director of the Stop Stansted Expansion campaign, said, "We are determined to demonstrate to the satisfaction of the court that no government should be allowed to publish a White Paper, which disregards the results of its own consultation and flouts the evidence."
Campaigners opposed to the planned expansions claim that the White Paper ignored "the absence of a commercial justification for a second Stansted runway," and that the consultation failed to provide the public with information about alternative Thames estuary airport proposals.
BAA, the operator of the three main London airports, is in the early stages of planning a second runway and a second terminal at Stansted that will increase capacity from 35m to 50m passengers a year.
BAA hopes to file an application for planning permission for the £2bn project next year.
OUR COMMENT: 80m passengers a year with one extra runway, not 50m
11 June 2004
PARLIAMENT DEBATES AVIATION
On 9 June 9 there was a debate during which many of the flaws in the government’s White Paper were criticised. Regrettably they appear to have had little effect on present aviation policy. Here are some of the highlights in relation to Stansted. The debate was too long to report in full,
but it can be read from the Hansard Report by clicking here
Firstly, Sir Alan Haselhurst, as deputy speaker, is unable to contribute to any debate. He did, however, write the following letter on 8 June 2004 to Alistair Darling:
Rt. Hon. Alistair Darling MP
Great Minster House,
76 Marsham Street,
London SW1P 4DR
On the day of the Commons debate
on the Future of Air Transport White Paper I thought I should write you an open
letter to put on record my views.
The White Paper is disappointing
to environmentalists, the airlines and British business.
There is no firm evidence that
the Government has lived up to its claim that environmental interests would be
balanced with commercial and other considerations. The unmistakeable tilt of
the White Paper is towards growth of air traffic. How this can be consistent
with Government commitments on emission controls remains a mystery, which a
reference to an emission trading system does not dispel. Simply to indicate a
(temporary) preference for delaying expansion at Heathrow is no sort of answer
if the same amount of air traffic activity is apparently permissible if it is
However, there is a different
kind of environmental affront caused by the decision to allow BAA a second
runway at Stansted. This flies flat in the face of the Government Inspector
(the late Sir Graham Eyre) who concluded not twenty years ago that a second
runway would be an environmental catastrophe and unthinkable. You say that
times have changed since the Eyre report. You are completely wrong in that
contention. The factors which counted towards the Eyre judgement remain in
place: the rural charm of the Essex and Hertfordshire countryside, the listed
buildings, the national monuments, the houses and communities to be destroyed
and the sites of special scientific interest. The only change is need –
as determined by you. Yet Sir Graham Eyre believed that these other factors
outweighed need and he arrived at his judgement on a more thorough acquaintance
with the terrain than you appear to have allowed yourself.
To believe that Stansted will
operate at a capacity of 80 million passengers per annum requires a clear and
careful assessment of which type of air traffic will actually use Stansted. As
no-one in the industry believes that a two–hub system will enable London
to maintain its competitive edge against Paris, Amsterdam and Frankfurt, the
Government appears to be favouring the low–cost point-to-point airlines
over the regular carriers. Yet there are already signs that the cheaper form
of air travel is spreading to airports around the country. This suggests that
there is not the same need to draw passengers to the south-east as is largely
necessary for travel to intercontinental destinations. This puts a huge question-mark
over the wisdom of making Stansted a priority airport for expansion.
Willingness to see BAA bring
forward a planning application for a second runway at Stansted is conspicuously
unmatched by a commitment of resources to achieve a necessary improvement in
surface access, especially by rail. It passes belief to suppose that money on
the scale required will be extracted from BAA. It will take more – much
more – than platform lengthening and twelve car trains to avoid further
deterioration in the standard of service on the West Anglia line.
Part of the argument adduced to
justify expansion at Stansted ahead of other places is that fewer people will
be affected. If that is the case, it is extraordinary that the M11 corridor
has been selected as a prime candidate for large–scale housing development.
It would seem perverse to build more houses so that the number of residents
affected by aircraft noise and fumes can be increased.
The White Paper states that the
developer should bring forward schemes to deal with generalised blight. What
BAA has proposed so far is as un-general as it is possible to be. There is no
statutory provision and so BAA can be judge and jury in its own case. All
experience teaches that parsimony and not compassion will be the
company’s guiding principle. So the Government leaves my constituents to
BAA’s mercy and, if that was not enough, it is left to the developer to
produce its own environmental impact assessment and health impact assessment.
Rabbits and lettuce are words which come to mind.
My conclusion has to be that the White Paper misreads the
needs of Britain and our aviation industry in almost every respect. Is anyone
satisfied (with the possible exception of BAA)? I think not.
THE DEBATE ITSELF
The debate was opened by the Parliamentary Under-Secretary of State for
Transport (Mr. Tony McNulty): His speech was frequently interrupted and is a
long read. It is, though important as it contains what Mr McNulty presumably
regards as adequate answers to the many objections to the White Paper policies
for aviation expansion. We make no apologies therefore for including the whole
speech, including interruptions.
The White Paper entitled "The Future of Air Transport", which was published
on 16 December, is recognised by many people as breaking new ground. In the
history of policy papers on aviation, it is the first to make a
comprehensive and integrated attempt to put in place a strategic framework
with a 30-year horizon. Other White Papers, whatever the nature of the
Government who produced them, were largely concerned with catching up with
prevailing conditions. They did not look to the future or the 30-year vista
established in the present White Paper, which shows that the Government are
prepared to take difficult decisions and see that they are followed through.
It shows the Government's commitment to modernising Britain's communications
infrastructure to allow us to compete properly in the global economy. It
recognises the importance of aviation in our economy and shows that we
understand fully the critical balance between aviation and the environment.
As I said, it provides the first strategic vision for our airports in nearly
30 years, and includes a programme of action to ensure that key policy
objectives are met. As the Secretary of State for Transport said when the
consultation was introduced, whatever policy prevails, doing nothing is not
an option when it comes to making things happen.
People who would make sloppy, rather than intellectually rigorous,
criticisms of the White Paper might dismiss it for taking a
predict-and-provide approach. That, however, is an easy canard, as early
drafts of the White Paper gave three graded demand curves on future aviation
ranging from 400 to 600 million passenger movements. Total capacity will be
nowhere near the higher end of that demand structure. Unless people have
degrees in futurology or far-sightedness, they should not dismiss the White
Paper for taking a predict-and-provide approach. That is not helpful, and we
need a mature debate about the future of our air transport industry and
aviation in general.
We have already had the opportunity to debate specific recommendations in
the White Paper, including those on Scotland and the midlands. On an
estimates day we had a useful but limited debate on the document itself, and
I am pleased that we have a chance to debate it again today. I should like
to paint a picture showing where we are six months after its publication and
update the House on the way in which the Government and others are
developing some of its recommendations in advance of the progress report
that we intend to publish in 2006. I am delighted that there is a great deal
of interest in our debate. Even with the extended time now available, there is
still a limit on Back Benchers' speeches. It is important that the
Government hear people's views six months after the publication of the White
Paper, when they have had time to reflect and resist any early knee-jerk
Our priority is to focus on realising the objectives set out in the White
Paper; to ensure that the best use is made of existing airport capacity and
that regional airports, where appropriate, continue to grow; and to follow
up the commitment to increase capacity in the south-east of England. We have
not been idle in the six months following 16 December, and work is already
in hand. I shall set out what has been achieved so far and, more
importantly, what we expect to happen next. I have been encouraged by the
airport operators' positive response to the White Paper and their quick
reactions in taking the policy forward. I hope that that will continue. I
fully accept that communities close to all airports, not simply those
earmarked for expansion, should have clear information about their
development in the next 10, 15 or 30 years. We have asked every airport to
produce a master plan by the end of the year, and we will consult on their
form and timetable. Airports that will undergo lesser expansion, as well as
those seeking to achieve significant increases in capacity, should explain
how they might expand and, within their region, grow in spatial and economic
Mr. David Wilshire (Spelthorne) (Con): The hon. Gentleman said that he had
asked every airport to produce a report. Does he agree that we can prevent
misunderstandings and knee-jerk reactions by keeping local communities close
to airports up to date with what is happening at all times? My experience is
that that helps to get the truth across. If he is already doing so, is he
prepared to give a step-by-step explanation of progress?
Mr. McNulty: On balance, I agree, with the exception of the phrase "at all
times." It may not be appropriate to tell communities that certain meetings
or processes are unfolding if there is not a tangible end product. With that
minor quibble, I agree with the hon. Gentleman, and shall look at specific
issues affecting Heathrow and Stansted, as well as larger projects discussed
in the White Paper. Broadly, communities should have information about how
their local airport is going to develop. There has been much discussion
about development, not simply in London and the south-east but in other
areas where people are troubled by the lack of information about the future
of their airports. We are trying to facilitate the provision of such
information‹that is the essence of master planning, whether of larger
airports in London and the south-east or of smaller regional airports. It is
in the interests of operators and others to ensure that, even if they cannot
take their communities with them as they develop, people are kept informed.
Mr. Alan Duncan (Rutland and Melton) (Con): Apart from the big three
airports, there is no statutory planning process for approving airport
expansion or, indeed, verifying the plans. Given what the Minister has just
said, will he consider instigating a procedure whereby he adds his
imprimatur to an airport's plans and verifies them, so that there is recourse and redress if there is a complete collapse of trust, as there is with Nottingham East Midlands
airport, and people do not believe what the airport says?
Mr. McNulty: I suspect that however eloquently put, the hon. Gentleman's
question is slightly mischievous. He knows as much as I do about the
legislative framework for planning, and he knows that his suggestion could
not be implemented without a radical‹even more radical than we have already
carried out‹change to planning legislation.
We are seeking master plans for every airport, including Nottingham East
Midlands. Those master plans, as I understand it, will not have the status
of development documents with the consequent implications for planning
legislation, but they will be material planning matters that need due
consideration under the planning legislation. I hope that in all cases there
would be a good deal of consultation between the airports and their local
communities about at least some elements of the master planning process, or
at least some education about why the master plan goes in one direction
rather than another.
In the end, those are commercial documents and part of the commercial growth
and general plans of an airport. Clearly, as the hon. Gentleman says,
knowledge will be important. The local community's trust and co-operation
will not be forthcoming if the plan is perceived as distilled and imposed
from on high, rather than being subject to consultation, but as to whether
we will change the law so that my legalistic imprimatur is on the plan and
everything comes back to me if it all goes pear-shaped, I suspect that the
answer is no. However, I will check whether that is correct.
Mr. Mark Prisk (Hertford and Stortford) (Con): Given the previous question,
can the Minister tell the House in what way the plans will be accountable to
the local community? They are business plans‹commercial proposals‹yet they
are to be introduced into the quasi-legal process that is planning. How will
BAA's proposals for Stansted, for example, be accountable to my constituents
and those of the hon. Member for Braintree (Mr. Hurst)?
Mr. McNulty: As the hon. Gentleman knows, ultimately the proposals will be
accountable‹if that is the right word for a business document‹through the
planning process and the democratic input into it. The hon. Gentleman
evidently does not have the confidence in Uttlesford district council that
others have. That is the most appropriate place for development applications
and processes to unfold. Those are essentially commercial documents. We are
insisting on them because it is important that each and every airport
ensures that its local community knows how the airport will develop.
In some cases‹including Stansted, one would hope‹planning applications will
follow rapidly from the issue of master plans, because of the time frames
laid out in the White Paper to which BAA is committed. In other cases the
process will unfold over the long term. The hon. Gentleman knows that local
and regional airports, especially those outside London and the south-east, will be at
assorted stages of progress and development as entities, from Finningley, if
I may use that shorthand description of the newest one in South Yorkshire,
all the way through to Manchester, so their master plans and how they evolve
will be markedly different.
Mr. Duncan: To assist the Minister in developing the argument, I think he is
speaking about the planning proposals that attach to an airport as its
footprint expands on the ground. My point was about the volume of flight in
the air. That is where there is a big planning deficiency.
Mr. McNulty: I apologise if I misled the hon. Gentleman. I mean all that. I
do not mean simply precursors to planning applications. As will be clear
from the consultation, when we speak of master plans we mean the growth and
development of the airport in terms of noise, blight, footprint and possibly
aspirational expansion into areas that are not part of the current
footprint. Where such detailed planning applications are further down the
line, we hope that that will promote the debate, discourse and information
that the hon. Member for Spelthorne (Mr. Wilshire) seeks.
The master plans are at various stages of development, and I accept that
they should include many of the considerations that apply to Nottingham East
Midlands, in terms of an expansion of capacity for flights and passenger
movements that will take place within the existing footprint but will have
noise implications and affect various other public amenities.
The master planning process is right. We will continue to support the work
of others on a wide range of issues, while respecting the ultimate backstop,
or endgame: the planning process. We will continue to work closely with the
regulator, airlines and airport operators to ensure that the right capacity
is provided at the right time, at the right price and in the right
locations. We will ensure that the elements of the White Paper for which we
are directly responsible are provided on time and in conjunction with work
carried out by others, and that they provide value for money for taxpayers.
But that does not mean that we have stopped listening and learning. We want
all stakeholder groups‹I apologise for that phrase‹to be involved in the
continuing work, to assist us and, no doubt, to challenge us.
The first priority purely in terms of timing, as outlined in the White
Paper, is a second runway at Stansted by 2012. We look to BAA as the airport
operator to develop the detailed design for a new runway and associated
development. BAA is working closely with local communities, airport users
and all relevant agencies in taking that forward‹not by any means with the
full support of local communities, but working closely with them.
Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): I am sorry to interrupt
the Minister so early, but what does he imagine will be the immediate effect
on the growth at Heathrow between now and the expansion that he envisages at
Mr. McNulty: Between the development at Stansted and any subsequent decision
to develop or otherwise a third runway at Heathrow, my hon. Friend knows
that there are various matters to be considered, such as Heathrow
maintaining its existing capacity or considering with an open mind the
notion of mixed mode and other operations at Heathrow, and ways of
optimising, with all the caveats relating to strategy and the environment,
the development at Heathrow between now and the development of the first new
runway in the south-east at Stansted, as discussed in the White Paper. There
is much work to be done at Heathrow before any decision is taken about
whether, particularly for environmental reasons, a third runway is feasible.
But that does not mean that nothing will happen at Heathrow till then. My
hon. Friend's point is well made.
We expect BAA to bring forward two planning applications to the local
planning authority in due course, the first for an increase in capacity to
35 million passengers per annum, and the second for the construction of the
new runway. As a first step to delivery, BAA has assembled a team to take
forward development of the airport. It has also launched a home value
guarantee scheme for about 100 houses within the airport boundary. The
scheme allows home owners to sell to BAA at an appropriate time for the full
market value of the property and entitles them to an additional payment once
planning permission is obtained. I understand that BAA has agreed to
purchase about 20 such properties so far. For those living very close to the
airport boundary affected by noise, BAA has consulted on a home owners
support scheme and is currently considering the responses received.
In line with our White Paper commitments the Government today laid before
Parliament the draft statutory instrument to change the regulation of the
aircraft movement limit at Stansted so that in future it will be managed by
the local planning authority. Hon. Members will know that thus far the limit
has been set by the House, rather than the local planning authority. There
will be an increase in the movement limit, which has been agreed between BAA
and Uttlesford district council.
The White Paper recognised Heathrow's central role in the UK aviation
industry. Our efforts focus on considering ways of meeting the key
environmental conditions for a third runway. I have said this before but it
bears repetition: the environmental dimension to what the White Paper says
about Heathrow is not intended as a sop to the green lobby while we let
Heathrow do whatever it wants, nor is it intended as an impediment to
development at Heathrow if those environmental concerns cannot be met. They
are real concerns that must be met in full, as outlined in the White Paper,
before we advance. Work is needed on those and other concerns before 2010 or
2012, as my hon. Friend suggested.
A substantial programme of work is under way to inform the White Paper
progress report in 2006. Air quality is one major focus of the work, and
development at Heathrow depends on our ability to comply with EU air quality standards,
including the nitrogen dioxide limit, which comes into effect in 2010. We
will re-examine the assessments of impacts made before the White Paper, and
three technical panels have been set up to review the data and help to
develop an accepted scientific basis for further assessments. New research
and data collection is also planned for later this year.
Dr. Vincent Cable (Twickenham) (LD): On air quality, will the Government be
solely guided by the European Union statutory limits on NOx emissions, or
will they also take account of ground level ozone, which, as the Minister
knows from the King's College London studies published this week, already
reaches dangerous levels across west London on 70 days in the year?
Mr. McNulty: The three technical panels will review all the data. It is hard
to discern where aviation-related impacts stop and car-related impacts
start. The EU directive and the elements that come into effect in 2010 are
important, but an environmental assessment will be made in the round‹those
elements must be factored in to determine the environmental dimensions
appropriate to a third runway.
Mr. Brian H. Donohoe (Cunninghame, South) (Lab): The Minister mentions a
possible European problem. Have studies of environmental impact been
undertaken at Schiphol, Charles de Gaulle, Frankfurt or other international
Mr. McNulty: I shall return to that point shortly, but I want to continue my
little run through Heathrow and some other airports‹the point is, of course,
To ensure transparency, independent experts have been invited to sit on the
panels, and we are considering a peer review of the panels' work. Again, the
airport operator has been quick to react: BAA is currently examining the
operational aspects of mixed mode under a range of possible scenarios,
including the existing 480,000 air transport movement limit. National Air
Traffic Services is carrying out work on the airspace design implications to
help BAA develop scenarios that can then be tested for air quality and noise
I shall return to the point made by my hon. Friend at a more appropriate
point in my speech. I am standing at the Dispatch Box two hours before I
anticipated that that would happen, but I am sure that the House will
indulge me and allow me to fill those two hours.
I shall stop here momentarily and discuss NATS. The public private
partnership now handles record numbers of flights, and NATS has a
consistently high safety record. Last week's events showed us how skilled
NATS is in maintaining a safe and efficient air traffic system in this
country. Upgrades to the old flight data processing system at West Drayton
were first tested extensively in simulation. Crucially, they were then
tested offline on the real system on last Wednesday night. When NATS started
to turn the system back on, the system locked, so it shifted to the back-up
manual system and imposed flight restrictions to ensure that safety was not
Those restrictions ensured that all incoming flights could land and that all
flights in UK airspace could be handled normally‹the only delay was to
outgoing flights. The system was closed for rebooting at 6 am; it was running well by
6.40 am; it was fully operational at 7.5 am; and all flight restrictions had
been removed by 8 am. Flights, some of which were cancelled, were then
rescheduled by the airlines.
Although the system is serviceable and is widely used elsewhere, it is not
new technology, and the PPP is bringing £1 billion of investment to NATS
infrastructure over the next 10 years. The replacement for the flight data
processing system is one of the key elements of that new investment. The new
CASPIAN system, which will be introduced at Prestwick in 2009 and at
Swanwick in 201012, will be vital in ensuring high safety standards across
the UK and in the London area in particular. Just in case anyone thinks that
that is a coded message, I emphasise that any proposal to introduce mixed
mode at Heathrow would be subject to full consultation and environmental
assessment‹recent newspaper headlines about a "secret plan" are just daft.
The White Paper recognises that surface access solutions for Heathrow must
be based around improved public transport and demand management. We have had
an initial discussion on that point with key personnel and interested
parties, and further discussions will follow. A series of work streams flows
from the points about Heathrow outlined in the White Paper.
I have met a number of MPs for whom Heathrow is an immediate local concern.
Following those meetings‹this point relates to the issue raised by the hon.
Member for Spelthorne‹the key point is that I am struggling, but we will
reach a stage where we can implement a mechanism to allow local communities
to receive more significant feedback. These are still early days, and we
have not been able to implement such a mechanism over the past six months,
as I have said once or twice to hon. Members whose constituencies are in the
area, but when time frames and deadlines have been implemented on mixed mode
or other consultation processes, I assure hon. Members that I will seek to
implement a device to keep the MPs concerned involved, if not some wider
device to allow people access to clear information.
Dr. Jenny Tonge (Richmond Park) (LD): The Minister must know that the very
suggestion of mixed mode makes my constituents feel that they will never
have any peace‹even with half a day's respite, they already suffer a great
deal of noise. How long will the consultation on mixed mode take and when is
a decision likely?
Mr. McNulty: As and when there are stories to tell and timelines and
processes to unfold, I will let those hon. Members with a clear constituency
interest in Heathrow know about them. We are not about to consult on mixed
mode. The related work is complex and important and it must be carried out
in full, so that the consultation has some substance and so that people are
not led up and down the hill on more than one occasion. If I receive more
information over the next day or so, I shall gladly write to the hon. Lady,
but I suspect that I will not receive any such information.
The impact of such a change requires much technical investigation on, for
example, whether the change occurs within the existing movements limit and
what form it should take, and such issues must be examined in detail before we
put the matter out to consultation. I take the point that people are unclear
about what will happen, but I would far rather that they achieve clarity by
a proper consultation process rooted in research analysis and based on firm
proposals rather than by a Liberal Democrat referendum that asked, "Do you
want mixed mode? Yes or no?"
Dr. Tonge: Will the Minister give way?
Mr. McNulty: With respect, I shall not. I was joking when I mentioned
filling up the extra two hours of debate, but if I keep taking interventions
liberally‹no pun intended‹other hon. Members will have no chance to speak.
In this debate I am keen to hear from Back Benchers, but I am also keen to
hear from Conservative Front Benchers. The last speech made by a
Conservative Front Bencher on aviation policy was 20 pages long, but it said
exactly nothing, and it will be interesting to see whether Conservative
aviation policy has advanced.
Environmental issues are particularly important for the UK, because of our
leading role in international aviation and the success of the London airport
system‹the matter is not only an issue for Heathrow. The White Paper
recognises that it is vital that the environmental impacts of aviation are
adequately addressed, and, again, work is in hand.
The climate change impacts of aviation are a serious concern. Greenhouse gas
emissions from aviation are rising, which is a global problem that requires
global solutions, and the UK is showing leadership in addressing that
challenge. Many sceptics and climate change-deniers exist around the world,
and we must work hard to win them over. In February, the UK and other
European states succeeded in persuading the rest of the world to develop
guidelines on incorporating aviation into a future global emissions trading
scheme, and we intend to press for the inclusion of intra-EU air services in
the EU emissions trading scheme around 2008, and we will pursue that goal
vigorously during next year's UK presidency of the EU.
A new international standard for NOx emissions from new aircraft engines
comes into effect in 2008. It is 12 per cent. tougher than the current
standard‹we wanted more than 12 per cent., but 12 per cent. is better than a
lower increase‹and will help to slow down the absolute increase in global
NOx emissions. We are also examining working practices and the potential for
new technologies to minimise climate change.
It is fair to say that airport operators, too, are taking the environment
seriously. For example, BAA is pursuing a range of policies to reduce
emissions, including greater use of public transport, restrictions on the
use of private vehicles, use of fixed electrical ground power, and the
introduction of an emissions-related element in Heathrow landing charges.
On 15 January 2004, we announced our decision to continue existing night
flying restrictions at Heathrow, Gatwick and Stansted for a further year‹to
30 October 2005. We have also undertaken to consult on a new night noise
regime for those airports to apply thereafter. We aim to publish the first
of two consultation papers in the near future. Furthermore, we will, when
parliamentary time permits, seek powers to require greater use of noise
charges, new mitigation and compensation packages for noise, and new
legislation on the control of noise.
Mr. Peter Ainsworth (East Surrey) (Con): The Minister will be aware that the
Office for National Statistics recently produced documentation showing that
greenhouse gas emissions from aviation rose by 85 per cent. between 1990 and
2002. Will he take this opportunity categorically to deny that his
Department sought to intervene in the press release that the ONS intended to
issue in connection with those statistics?
Mr. McNulty: I categorically deny that, as have colleagues and others in the
Department on numerous occasions. In the report produced by his
Committee‹the Environmental Audit Committee‹the hon. Gentleman said that he
was appalled by recent reports that the Department interfered with the
publication of ONS environmental accounts. If he had rung me up to ask about
that, I could have saved him from being appalled, because it never happened
in any way, shape or form. That is what the chief statistician says, as does
everybody involved in the process. As statisticians of some repute, they
chose not to publish any information for which they could not reconcile
figures from various sources. In fact, the figures on aviation were not a
million miles away from each other. The aspect about which the ONS
statisticians had serious concerns was the reconciliation of the impact of
freight traffic on the environment. I can categorically and 100 per cent.
deny that there was any interference of any description. I am sorry that the
hon. Gentleman was so distressed that he had to mention it in his
Committee's report, but I can gladly put his mind to rest.
Mr. Donohoe: Does my hon. Friend believe that we are on a level playing
field with European airports such as Schiphol and Charles de Gaulle?
Mr. McNulty: I understand what my hon. Friend is trying to suggest.
Certainly, much of the competition that the London airports‹Heathrow,
Stansted and Gatwick‹face is not from other regional airports, but from
Schiphol, Charles de Gaulle and others in the golden triangles surrounding
London and the south-east and the equivalent areas in France and the
Netherlands. Although we should bear that in mind, it is important that any
increase in the capacity of airports in London and the south-east takes
place in a firmly British policy context in terms of our legislative
planning framework. Many people say that if travellers do not fly out of the
London and south-east airports, it is not their natural second choice to go
from Manchester or Birmingham, although it may be in some cases, so there is
key competition from Schiphol, Charles de Gaulle and others. Equally, some
airport operators claim that the planning framework and assorted other
frameworks, not least those relating to the environment, are much more
liberal‹in the true sense of the word, not that hijacked by the Liberal
Democrats‹elsewhere, so it is far easier to expand Charles de Gaulle or
I take my hon. Friend's point, but I am not seeking a level playing field in
the sense of moving towards greater liberalisation, because we understand
that although those airports compete with those in London and the south-east, any further
substantive development of capacity in London and the south-east must take
place within the consensually-based legislative and environmental framework
that prevails in British public policy.
In fairness to other hon. Members who wish to speak, I will deal with some
other elements when they arise in the course of the debate‹particularly the
development of several regional airports and cross-regional concerns such as
public service obligations and route development funds, which relate to the
connectivity of London with the rest of the country. I do not skirt round
those matters because they lack importance‹they are extremely important for
people in the regions‹but to allow other hon. Members to speak.
Mr. Wilshire: I wholly agree that aviation policy and planning should be
kept within a British context, but would the Minister extend that sentiment
to keeping British control of the negotiations with the Americans rather
than allowing the Europeans to sell us down the river to other airlines
across the Channel?
Mr. McNulty: We were doing very well in getting through a debate of such
sensitivity with reasoned, common-sense remarks from Opposition Members,
even the hon. Member for Richmond Park (Dr. Tonge), but the hon. Gentleman's
comment is as ridiculous as his tie. [Interruption.] It is more a case of
Piglet than Winnie the Pooh. In terms of the relationship between Britain
and the US, the future of aviation lies in our developing open skies policy
between us. That process is better served by EU-US talks than by bilateral
talks. That position is held by all European countries, including Britain,
and by the US‹by everyone, it would appear, except the hon. Gentleman.
Mrs. Dunwoody: He is not alone.
Mr. McNulty: And, of course, my hon. Friend the Member for Crewe and
Nantwich (Mrs. Dunwoody)‹I should have remembered that in view of the
Adjournment debate that took place the other week.
The air transport White Paper sets out a long-term vision for the future of
air transport in the UK. There is much to be done by 2006, when I promise
the House that we will carry out a substantive progress review of what has
happened since the publication of the White Paper. That review will show
that we have made a good start. We are determined to get on with the job of
delivering the White Paper's objectives‹firmly within the framework of
developing an aviation sector that can continue to make a vibrant
contribution to our economy, but only within the clear and well understood
environmental constraints that all hon. Members would broadly share and are
outlined in detail in the Paper.
The shadow Aviation
Minister, Damien Green expressed doubts about the commercial viability of a
second runway at Stansted:
The Shadow Secretary of State
for Transport, Damian Green MP has
demanded that Alistair Darling stand firm for British aviation and warned him
about signing up to a deal between the European Commission and the United
States Government, which will be bad for large parts of the UK aviation
industry. The full text of his speech is as follows:
"In the course of the next
few minutes I am going to say some things that the Minister will not like, so I
should preface them by saying that I fully recognise the difficulties facing
any Government that finds itself in the position of having to produce a White
Paper on aviation.
We all know that the opponents of
any particular project are likely to be more vociferous than its supporters. We
all know the passions that are aroused by proposals for more runways, and
looking around I suspect we will hear many of them expressed today. At the same
time we recognise that aviation has been the most obvious success story of the
transport sector over the past twenty years, because it has been subject to
competition and consumer choice, and we want that success to continue.
So I will deal with the main
issues of the White Paper and the other issues that have arisen since. These
include some environmental considerations, some thoughts on state aids, and
most topically the subjects for the Transport Council later this week, which
could take decisions which would have far-reaching and damaging effects on the
future of British aviation.
I will first take the White Paper
on its own terms. It sensibly sets out a list of balanced criteria against
which we should judge it: the need to expand capacity and people's desire to
travel by air, alongside a wish to minimise the impact of airports on those who
live nearby, and a requirement that aviation should pay the cost of the impact
its activities on society as a whole. It's hard to argue with any of that.
So does the Government's policy
live up to its own billing? We said at the time that the problems with the
White Paper were two-fold: first that it fudged some key issues and would
therefore cause blight around airports as legal battles were fought. Secondly,
that there was little sign of the joined-up thinking we are always promised,
either between the aviation policy and the rest of the Department's own
responsibilities, and still less between the Transport Department and other
arms of Government. I am afraid that both those initial fears have come to
Much of the debate inevitably
centres on runway capacity in the South East, and the problems both of fudge
and incoherence are illustrated by what has happened around Stansted. Some sort
of legal challenge was always likely, but what is significant is that the
challengers are seeking judicial review on the grounds that the development of
the policy in the White Paper was fundamentally flawed. There are four aspects
to this flaw: the lack of commercial justification for a second Stansted
runway, the potential for mixed mode use of runways at Heathrow, the failure to
allow comments on proposals to extend the runway at Luton, and failure to give
proper consideration of other options around the South East.
I am sure that others will want to
deal with these matters in more detail, so I will not develop these individual
complaints, but they do illustrate the disappointment of a White Paper so long
in gestation but which seems to have missed some basic points.
I think it is legitimate to
question whether the Government's option, of an early second runway at
Stansted, will ever come to pass. Most of the growth at Stansted has been in
low-cost flights that have done so much in recent years to increase people's
opportunity to travel. But a new runway would mean higher charges, which may
drive away these low-cost operators. If BAA tries to fund it with cross subsidy
from the airlines using Heathrow, we will certainly see another round of court
cases. So the question of the commercial viability of the second runway is a
The other issue starkly illustrated by Stansted is
the apparent lack of communication between Government Departments. The
Transport Secretary says he wants a second runway at Stansted within a few
years because the surrounding area is thinly populated. Meanwhile, the Deputy
Prime Minister wants to build thousands of new homes around Stansted.
You can have a larger airport or more housing, but
without severe environmental problems you can't have both. Page 33 of the White
Paper talks about discouraging or prohibiting inappropriate developments around
airports. I hope that by now a copy has reached the Office of the Deputy Prime
Stansted is not alone as an
example of the failure to bring Government thinking together. Birmingham
Airport is the Government's preferred location for an additional runway in the
Midlands. So it is surprising that the Department shelved plans for an
expansion of the M42 which would serve the airport directly. At the same time
we are all aware of the delays and frustrations of the West Coast Main Line
Development. It is as though the aviation White Paper was produced in a vacuum,
with no input from other parts of the transport planning process, let alone the
wider land use planning process.
Perhaps this is best illustrated
by the White Paper's attitude to the third runway at Heathrow. This is another
proposal that inevitably arouses strong passions on both sides. But whatever
attitude one takes to the proposal it is undeniable, and the Government is
right, to say that it cannot proceed until we solve the emissions problems that
would break EU permitted limits.
Equally, it is undeniable that the
main cause of the undesirable emissions around Heathrow are cars stuck in
queues on the motorways serving the Airport. And the White Paper is silent on
how the Government proposes to solve this. It would have been extremely useful
to start a debate on the merits of ideas such as the Airtrack scheme, or a spur
to the Great Western Main Line, but this chance was missed. The truth is that
two thirds of the emissions problems at Heathrow are caused by problems with
the road and rail infrastructure. Unless those problems are sorted, all the
efforts being made by BAA and the airlines to clean up their own act will not
have much material effect.
Indeed only in the past few says
we have seen a report that throws doubt on another part of the White Paper, the
proposal for mixed mode use of the runways at Heathrow. According to Professor
Peter Brooker, a former adviser to the Department on aircraft noise, 42,000
people would be exposed to noise above the acceptable threshold by the mixed
mode proposal. It may still be desirable and indeed necessary, but it would be
better for all concerned if the Government led the debate on this issue, and
did not apparently try to ignore it.
The Minister knows that, for
environmental reasons, we need railways before we can build runways. In a few
weeks time we will see the revised version of the 10-Year Transport Plan. I can
only hope that this shows more effort at integrating surface transport with
aviation than the White Paper did.
There are of course wider
environmental matters that are current. My Hon Friend the Chairman of the
Environmental Audit Committee will no doubt have much to say on this if he
catches your eye, so I will not tread on his turf, but I will say a word about
emissions generally. All of us who wish to see a flourishing aviation industry
able to innovate and create new markets in the way the industry has in recent
years, need to take this problem seriously.
No national Government can solve
this. Indeed, striking the right balance between a flourishing aviation
industry and the need to control emissions is something cannot even be done
effectively at a European level—welcome though the idea of a European
emissions trading scheme is. But in the end this needs countries from beyond
Europe to sign up either to minimum standards, or the use of economic
instruments to cope with these issues. We need to be realistic and recognise
that this is not going to happen in the near future.
So any British Government will
have to do what it can. We can and should apply increasingly stringent
standards on emissions and noise, leading to the withdrawal of the noisiest and
dirtiest aircraft. If we are going to develop usable and fair economic
instruments, we need something less crude than APD. If we are going to allow
more night flying, we need much more responsive attitudes towards local
communities from airport operators and airlines, including insulation schemes
and the purchase of the worst affected properties.
Much of this is for the longer
term. But there is a vital issue to be decided this week at the Transport
Council. The Minister will be aware that the Secretary of State will be asked
to sign up to a deal between the Commission and the United States Government
which is supposed to provide a much more liberal regime for airlines both in
Europe and in the US.
He will also be aware that the
deal the Commission has negotiated is a bad one for large parts of the UK aviation
industry. It will open up Heathrow to all US carriers, and give US carriers
unlimited access to carry passengers and cargo within and beyond the EU. In
return it does not give rights for our airlines to fly within the US, or to buy
a controlling stake in a US airline, or even to change the rules which prohibit
by law any US official using a foreign airline.
Other countries, with less to
negotiate with, may well feel that an imperfect deal is better than no deal at
all. It is very important that the Secretary of State resists this. Even if he
is isolated he should stand his ground. With an election coming up in the US it
is the perhaps the worst possible time to hope for flexibility from the US
side. Waiting six months to get a better deal would be much better than rushing
this one through.
We want to see a more liberal
regime on both sides of the Atlantic. I am aware that some UK airlines would
love to see the slots at Heathrow freed up, and I sympathise with them. But
this has to be done alongside a better deal from the Americans. If we miss this
chance then it will damage the British aviation industry for years to come. The
Secretary of State has a heavy responsibility and if he fails it he will be
rightly castigated. I hope he doesn't.
"As I said at the outset, I
recognise the conflicting pressures on ministers. We have an aviation industry
we can be proud of, but everything it does impinges on people who have nothing
to do with the industry, and on the environment. So Ministers have to strike the
right balance. The White Paper tried to do this, but failed in too many
respects. This reflects a deeper problem: that aviation policy is not
integrated with the rest of transport policy, or the Government's ideas on land
use planning. This causes unnecessary distress in communities around the
country, as well as promoting uncertainty among airlines and airport operators.
So the White Paper has been a missed opportunity—we will need to put that
right in the future.
Mark Prisk MP for Hertford and Stortford, was an early
contributor. This is a press release of what he said:
Stansted: Prisk condemns perverse and unworkable decision
Mark Prisk, MP for Hertford & Stortford, has today
condemned the Government's plans for a second runway at Stansted as being
perverse and unworkable. In a debate on the Government's white paper on
aviation, Mr. Prisk said the decision was perverse because it ignored the views
of the local community and of many people in business and the aviation
He also quoted British Airways and Virgin Atlantic, both of
whom opposed the Government's plans at Stansted.
Mr Prisk said the Government's plans were also unworkable,
because of large gaps in the road & rail plans and in the financing of the
£4 billion scheme. "It’s a financial plan that relies on
revenue from two companies who can't pay, and whose fallback position relies on
other companies who won't pay."
He concluded: "A runway that nobody wants, few can get
to and even fewer can afford. That's the result of this misguided decision at
Stansted." He urged Ministers to think again, before it was too late.
Alan Hurst MP spoke specifically on Stansted:
Mr. Alan Hurst (Braintree) (Lab): Thank you, Mr. Deputy Speaker. I make no
apologies for devoting most of my time to Stansted airport, which of course
lies in your parliamentary constituency. I concur almost entirely with the
remarks made earlier in the debate by my near neighbour the hon. Member for
Hertford and Stortford (Mr. Prisk). It is no surprise that hon. Members of
different parties should agree about the proposal for Stansted. In north
Essex and Hertfordshire, opposition to the proposals enjoys tripartisan
The county councils of Essex and Hertfordshire share the same approach, as
do the local authorities in Braintree and Uttlesford, even though those
bodies have been under the control of all three main political parties over
the past few years. That unanimity was described in a poetic prologue by Mr.
Eyre, the Queen's counsel who chaired the 1985 inquiry, when the proposal
was to raise the volume of passengers beyond 25 million a year. The inquiry
concluded that the target would be an environmental disaster, but the
present scheme would go even further.
People are worried about the preferred option in the White Paper, which is
not the somewhat easier possibility that a new runway could be squeezed
inside the present boundaries. The current scheme amounts almost to a gratuitous insult to local people, as the proposed site for a new runway lies well beyond the airport's present boundaries.
If adopted, the proposal would mean that a much larger area of countryside would be
destroyed, many more houses would have to be removed, and a much larger
number of historic monuments and buildings would be lost.
Does the proposal have any economic vitality? It may seem contradictory for
people to be worried about what will happen if the scheme goes ahead, and
also for them to ask if the scheme has any economic common sense but, as the
hon. Member for Hertford and Stortford said, Stansted at present is a
cross-subsidised airport. Most of the flights from Stansted‹well over 90 per
cent. of them‹are cheap flights at give-away prices that do not make real
In an earlier speech on this matter, I mentioned the half-forgotten figure
of Freddie Laker. People of a certain age will recall that this is not the
first time that cheap flights have been available. It has happened before,
and essentially it came to nowt.
The worry for people in the Stansted area is that schemes are sometimes
begun but only half completed. The result is desecration: monuments are
pulled down and land acquired, but the scheme does not reach fruition. I do
not suggest that airport companies are engaging in a cynical ploy, but it
might be more profitable for them to acquire valuable land that can be used
for other purposes after a time than to go ahead with an airport scheme that
appears to be a pure loss-maker in economic terms. That will certainly be
the case if cross-subsidisation from Heathrow comes to an end, as will
The shareholders of the major airlines will not put up with cross-subsidy on
a scale that means that they pay high charges at the airports from which
they fly, when companies such as Ryanair and easyJet can offer flights at
give-away prices. One does not need to be a corporate lawyer to see the
potential for lawsuits in that area. Therefore, it does not seem sensible,
in economic terms, for the BAA to go ahead with the proposed scheme.
However, it could become the master of vast swathes of potentially very
valuable land as it went about the process of implementing the proposals.
Local people would find that equally difficult. They would lose all the
things that they treasure‹countryside, buildings and communities‹and, even
if the airport does not expand as much as is anticipated, the acquisition of
land for commercial and other purposes would detract from the beauty of the
One might argue that compensation would have to be paid, but under the Land
Compensation Act 1973 only those directly affected‹at least to begin
with‹would be fully compensated. The BAA would be required, under the terms
of the White Paper, to bring forward compensation schemes for those who
suffer from more general blight. Indeed, it is fair to say that the BAA has
produced two such schemes, but they cover a very limited number of
properties and the hurdles that have to be surmounted include proving a loss
in value or a certain level of noise.
It is estimated by the anti-expansion groups that the fall in property
values in the Uttlesford district is already some £28,000 for the average
property, compared with the rest of the region. Properties in that part of
the world are fairly expensive, but that leads to the other unanswered question on
expansion for Stansted: where will the people who work at an expanded
airport live? We do not have an overabundant supply of economic housing in
Braintree or Uttlesford. The only way for the necessary labour force to
reach the area, which has almost no unemployment, is up the M11 or along the
A120, which is about to be dualled. They will almost exclusively have to
travel by private transport, and therefore the benefit of the road
improvements that we have seen recently will be lost, because the weight of
traffic will increase manyfold.
The railway connection does not have the capacity to bring in the numbers of
passengers contemplated. The White Paper says that all the issues connected
with the expansion will be a matter for the airport operators, but I cannot
imagine that the BAA will say to its shareholders that they will need to pay
for an expanded rail link‹or for expanded road capacity, for that matter. If
the expansion goes ahead, the burden will fall on the taxpayers to make it
even halfway economically viable. For that and other reasons, which time
prevents me from elaborating, I oppose the expansion of Stansted, and I
think that my constituents share that view.
debate continued with contributions from many MPs with airports in their
constituencies. Most expressed concerns about noise and the effects of
emissions notably on climate change. Some, including Mrs Dunwoody , chair of
the Parliamentary Transport Committee were somewhat enthusiastic about the need
for expansion, not necessarily at Stansted, mainly on economic grounds, with
Minister summed up, with frequent interruptions, but produced no new arguments
and the general impression is given that the government is not listening to any
of the concerns.
9 June 2004
STANSTED EXPANSION MAY NEVER TAKE OFF, WARN TORIES
Trevor Mason and Vivienne Morgan, Political Staff - PA News - 8 June 2004
Tories today questioned whether the Government's preferred option of a second runway at Stansted would ever get off the ground.
Plans to expand Stansted airport were put forward last December in the White Paper on the future of air transport.
Ministers said the new runway should go ahead as soon as possible, around 2011 or 2012, with any further expansion of Heathrow dependent on meeting strict environmental limits.
But shadow transport secretary Damian Green today accused the Government of a "fudged and incoherent policy," which faced legal challenge.
"It's legitimate to question whether the Government's favoured option of an early second runway at Stansted will ever come to pass," he said in a debate on the White Paper.
"Most of the growth at Stansted in recent years has been in low cost flights that have done so much to increase people's opportunity to travel."
"But a new runway would mean higher charges, which may well drive away these very low cost operators. And if BAA tries to fund it with cross subsidy from the airlines using Heathrow we will certainly see another round of bitterly contested court cases."
"It's reasonable to question whether the commercial viability of a second runway at Stansted is there."
He said there was also a lack of communication between Government departments with Transport Secretary Alistair Darling saying he wanted a second runway at Stansted because the area was thinly populated while the Deputy Prime Minister John Prescott wanted thousands of new homes built nearby.
"You can have a larger airport or more housing but without severe environmental problems you cannot have both," Mr Green warned.
9 June 2004
WE ARE CONCERNED ABOUT AVIATION
MPs answer criticism
Letter in The Guardian - 8 June 2004
Towards sustainable travel
Neil Wallis (Letters, June 1) asks where the voices of our elected
representatives are on the environmental effects of unrestrained aviation
growth. At Westminster, more than 40 MPs and members of the House of Lords
from all parties have formed the all-party parliamentary sustainable
aviation group precisely to continue the debate about how best to deal with
air transport's growing environmental impacts.
We are doing this in a number of ways: through debates in both houses,
including pressing for a full debate on the air transport white paper in the
Commons (which will take place today); through the first of the group's
annual Towards Sustainable Aviation awards, held recently at the House of
Lords, where we gave the Eurostar our sustainable travel award for switching
passengers from planes to trains; and through meetings with US officials and
the FAA minister to stress how importantly we view the climate change
impacts caused by air transport and what should be done about them. Later
this month the group will host the launch of the Sustainable Development
Commission's eagerly awaited response to the controversial aviation white
We are starting to build our membership and develop a strategy to deliver
fact-based, realistic ways to represent our constituents' and the wider
public's views to government. There are legitimate concerns about air
transport's impacts that still need to be addressed. My colleagues in the
group and I are working hard to give these issues the higher parliamentary
profile they deserve.
Tony Colman MP
Vice-chair, All-Party Parliamentary Sustainable Aviation Group
OUR COMMENT: This is the group that presented Carol Barbone and Norman Mead with the award for Best Community Campaign for the work done by SSE in publicising the effects of aviation on the environment.
9 June 2004
MORE TROUBLE AHEAD?
EasyJet angers City with second warning
Mark Odell - Financial Times - 8 June 2004
The credibility of EasyJet's management came under scrutiny yesterday after Europe's largest low-cost carrier angered the City by issuing a second profits warning in just over a month.
The shares plunged 37¼p to close at 163½p after the airline, based at Luton airport, warned that yields – or unit revenues – were likely to fall by at least 10% in the coming months as a result of the price war in the sector. It also warned that rising fuel prices would hit the bottom line by £4m in the full year to the end of September. Management also hinted that it might be forced to put a break on its capacity expansion, which has run at about 25% a year.
In a trading update, EasyJet said "capacity deployment for financial year 2005 is currently under review". Its shares have almost halved in value in less than a month and have under-performed the sector by 58%.
EasyJet described the update as "more detailed guidance" following the comments from management at the interim results last month. At the time, Ray Webster, chief executive, said the company had downgraded its outlook for the year from "cautiously optimistic" to "cautious".
In May analysts reacted by downgrading forecasts by around 15%. But after yesterday's statement the consensus forecast of £93m pre-tax profit this year looked set to be halved.
Investors and analysts were angered by the failure of the company to provide clearer guidance at the interim. One analyst said the airline's management had "laughed" at his suggestion that he should mark down yields by 5% for the rest of the year.
OUR COMMENT: At least the management is honest! It is also suggested that EasyJet's order for new planes from Airbus will be postponed. Following Ryanair's pessimistic forecasts as to future profits and expansion it would be very irresponsible if both the government and BAA did not check their own very extravagent claims on the need for more airport capacity.
The Financial Times follows on with some more gloomy news
Airlines criticise Brussels over "bad legislation"
Kevin Done - Financial Times - 8 June 2004
The international aviation industry yesterday attacked the European Commission for "burdening airlines with bad legislation and increased costs".
Giovanni Bisignani, director general of the International Air Transport Association, said that the Commission did not understand the airline sector. "It is high time that European Union Regulators took the trouble to learn about the industry they are busy mis-regulating" he told the Iata annual meeting in Singapore.
Iata has launched legal action against the Commission in the English high court to try to overturn recently approved rules governing the compensation payable to passengers prevented from boarding or who experience flight delays and cancellations.
The airlines have been angered by the move to make them responsible for actions outside their control. "They want to make airlines responsible for snow, said Mr Bisignani.
The report goes on to say that forecasts profits for all the world's international scheduled airlines are not likely to reach $3b as hoped, maybe with the rise in fuel prices there might be a loss of up to $3b. The global industry, including domestic services, had made combined losses of $30b in the past 5 years. Fears were expressed that if fares had to rise demand would fall.
The meeting heard about new technologies that would lead to reduced queues for checking in with self-service check-in kiosks and "print your own" boarding passes.
OUR COMMENT: Not much hope of any acceptance of the need for environmental taxes - Or an international agreement on trading carbon emissions. Let's hope that the EU Commission wins their case on behalf of passengers - and that the Commission at least starts planning to include aviation emissions from EU journeys in their carbon emissions trading scheme, just about to start.
8 June 2004
TOUGH WORDS FROM MPS -
WILL THE GOVERNMENT TAKE NOTICE?
House of Commons - Environmental Audit Committee
Press Release - 7 June 2004
Aviation: Sustainability and the Government Response
The Future of Air Transport White Paper remains the most glaring example of the failure of Government to put sustainable development at the heart of policy making, and the Department for Transport has failed to respond adequately to criticisms and concerns previously raised. This is the key message of the latest report from the Environmental Audit Committee, Aviation: Sustainability and the Government Response, published today.
Commenting on issues raised, the Chairman of the Committee, Peter Ainsworth MP, said:
"In responding to our previous report on this topic, the DfT memorandum, which is superficial and evasive, still manages to score an extraordinary own goal. We showed that emissions from aviations will constitute, on the basis of DfT's forecasts and policies, nearly 70% of the UK target for carbon emissions in 2050 - a scenario which is clearly unacceptable. In attempting to massage down our figures, the DfT has assumed that there will be no reduction in greenhouse gases, other than carbon dioxide, over the next 50 years. This is both irresponsible and intellectually dishonest."
"I am also appalled by recent reports that the DfT interfered with the publication of the ONS Environmental Accounts and the accompanying press release, in an attempt to force ONS officials to delete any reference to the staggering increase in emissions from transport, and in particular air transport, since 1990. This reinforces the perception that the DfT is behaving like a maverick department, indifferent or even actively hostile to the need to tackle global warming - despite the emphasis which has recently been placed on this by, amongst others, the Prime Minister."
The Committee's report, its Seventh Report of Session 2003-04, HC 623, contains 11 conclusions and recommendations, some of which are reproduced below. The report also includes the Government's formal response to the Committee's previous report on aviation which was published in March 2003.
Key conclusions and recommendations of the report
* The quality of the Government response is poor and not of the standard we would normally expect. In rejecting so much of our report without adequate consideration or explanation and in such an overtly challenging manner, the Department for Transport is failing to address not only our concerns but the similar concerns expressed by many other organisations including the Sustainable Development Commission and the Royal Commission on Environmental Pollution.
* A policy which estimates future demand and then aims to satisfy almost all of it is self-evidently based on a 'predict and provide' approach. The Department for Transport should respond fully to our original conclusion, and explain why it believes it is wrong to describe the White Paper in that way, particularly when the Government is actively promoting growth on the scale envisaged.
* The Department for Transport must publish a formal statement of what it understands by sustainable consumption in the context of air travel. As part of this statement, it should explain how the projected growth from 180 mppa to 476 mppa by 2030 can be reconciled with the commitment made by the UK Government in Johannesburg to encourage more sustainable approaches to consumption; and it should also set out what policies it is pursuing to discourage unnecessary air travel.
* We expressed our astonishment at the lack of essential research to underpin the incorporation of aviation in the EU Emissions Trading System, and recommended that the Department for Transport should set out what needed to be done and by when to achieve this goal. Our conclusion and recommendation was totally ignored, and the Department should now provide a full response.
* We reject the accusation contained in the Government response that our figures for the impact of aviation in relation to other UK emissions are misleading and inappropriate. The underlying truth is not in dispute: that the global warming impacts from aviation are forecast to increase massively just as we are striving to make huge cuts in emissions from all other sectors of the UK economy.
* Given the priority apparently being accorded to the need to tackle global warming, we find it bizarre that the Government response, in calculating aviation in relation to other UK emissions, assumes that there will be no reduction in greenhouse gases, other than carbon dioxide, over the next 50 years. In setting the 60% carbon reduction target last year, the Government failed to clarify how it relates to greenhouse gases other than carbon dioxide and what baseline should be used to measure achievement against. It must do so as a matter of urgency.
Details of all the Committee's press releases and inquiries, together with its Reports and other publications, are available on the Committee's Internet home page at: www.parliament.uk/parliamentary_committees/environmental_audit_committee.cfm
8 June 2004
MORE AIR TRAFFIC PROBLEMS -
IS COMPETITION FAIR AT HEATHROW?
Airlines attack BAA on Heathrow - Star Alliance says new terminal five will give preferential treatment to British Airways - Angry carriers demand parity and provision of competitive facilities
Kevin Done, Aerospace Correspondent - Financial Times - 7 June 2004
A group of the world's leading airlines including Germany's Lufthansa, United Airlines of the US and Japan's ANA, launched a bitter attack at the weekend against BAA, the operator of London Heathrow, the world's busiest international airport.
The chief executives of the 15 airlines, all members of the Star alliance, are angered by what they regard as their unequal treatment by BAA in its development of Heathrow's terminal five. The alliance believes the redevelopment favours British Airways, the main operator at Heathrow, which holds about 41 per cent of the total take-off and landing slots at the airport.
The chief executive board of Star, meeting in Singapore, has written to Mike Clasper, BAA chief executive, to demand an early meeting to express its dissatisfaction over plans it fears will give British Airways a big competitive advantage.
Robert Milton, chief executive of Air Canada, said that London Heathrow was "the key aviation franchise in the world, the greatest money-making machine in the world".
The row has developed over BAA's building of a £4.2bn fifth terminal at Heathrow, which will eventually increase capacity at the airport by about 50 per cent, adding the ability to handle a further 35m passengers a year to the current level of 63m.
The terminal is due to begin operation in 2008 and will be occupied almost entirely by British Airways, a leader of the Oneworld airline alliance. It will be the first time for decades that BA will be able to operate under one roof at Heathrow and will provide a competitive advantage, in particular for transit passengers on the BA network.
The use of a single integrated terminal will cut BA's costs, ease the movement of passengers and baggage and reduce transit times, making it more attractive to passengers.
The fifth terminal - itself bigger than most airports in Europe - will allow BA to challenge the modern facilities offered by the more efficient hubs of its rivals, Air France-KLM at Paris Charles de Gaulle and Amsterdam Schiphol, and Lufthansa at Frankfurt.
The Star airlines are demanding a guarantee of parity and the provision of competitive facilities to BA at Heathrow. The airlines have warned the airport operator that they reserve the right to take any appropriate action, including a legal challenge to resolve the impasse.
Janis Kong, executive chairman of Heathrow, had been due to make a presentation to Star alliance chief executives in Singapore at the weekend ahead of today's annual meeting of the International Air Transport Association, but Star decided, according to one senior executive, to "disinvite" her.
It is understood that the dispute has come to a head in the past couple of weeks, after the airlines were informed by BAA that it was unable to allocate the necessary capital to complete the redevelopment of the central area of the airport by 2008 and that it might not be ready before 2011, leaving them at a competitive disadvantage to BA.
7 June 2004
AIR TRAFFIC CONTROL - THE BUCK STOPS WHERE?
The Guardian comments in their Leader - 5 June 2004
This week's scenes at Heathrow were repeated at airports around the country. 200,000 passengers stranded due to a software failure at National Air Traffic Services, the company that guides commercial planes through Britain's airspace. The problem arose after a systems test interfered with the operating software that runs the air traffic control system. The result was long delays and extra costs. The disruption itself was nothing new – this week's failure being the fourth within the last three years, including the double collapses in 2002.
The immediate inquest following the system breakdown is a depressing list of familiar failings: patched up, 30-year-old software; a lack of otherwise standard infrastructure; a system due for an overhaul that had been long delayed, and will not now be in place until the end of the decade. Sounds familiar? That catalogue could just as easily have belonged to Railtrack, the defunct rail operator. In fact, Nats and Railtrack have a good deal in common, starting with the fact that both were privatised in one form or another over strong protests, with predicted under-investment and blurred lines of responsibility. In both cases substantial post-privatisation support has been required from the government.
Labour, which had expressed its opposition to privatising air traffic control while in opposition, changed its mind once in power. As things stand, the government owns 49% of Nats, having sold a 42% stake to a consortium of seven UK airlines and 5% to BAA, the airport operator. This should be a better arrangement than that of Railtrack, which was a listed company. Yet the outcome is less satisfactory. The opportunities for conflicts of interest are rife, on the part of the airlines and BAA, as the government looks to them for investment. The airlines and BAA both have trade-offs they could profitably make with the government in exchange for funding Nats – BAA over airport expansion, the airlines over charges. There remains a danger that the government's partners could use funding Nats as a dubious quid pro quo.
The alternative is for the government to taker Nats back into full public ownership. As a natural monopoly, there is no business case against re-nationalisation. It would allow the government to remain an honest broker. And, given the huge expansion of air travel expected, it would firmly place responsibility for Britain's air safety in the right laps.
OUR COMMENT: In spite of the rapid build up of air traffic congestion after a relatively short period of computer failure the Guardian appears to accept that a big expansion of air travel can be coped with safely. However, side by side on the same Leader page was printed the following letter, a timely warning about another, greater risk, that of increasing greenhouse gas emissions, another of the inevitable (and unnecessary) results from air traffic increase.
Commit to cutting carbon emissions
Today is World Environment Day, which was established by the UN general, assembly over 30 years ago. It is the year's most important occasion for focusing world-wide attention on the environment. The threat posed by climate change cannot be overstated. The accumulating greenhouse gases, mainly from the lifestyles presently enjoyed in the affluent world, are way beyond the planet's capacity to support them. Serious damage is already occurring.
We recognise that contraction and convergence – the comprehensive science – based framework devised by the Global Commons Institute – is the only strategy for responding adequately to the crisis. This requires the contraction of global carbon emissions to safe levels being made at the same time as they converge steadily, over a number of years yet to be negotiated, from the current average down to identical emissions for the world's population. It is the only solution that has both moral justification and political prospect of broad intergovernmental agreement.
We therefore call on the government to take the lead in international negotiations for the urgent adoption of this framework and for the early introduction of equal annual carbon rating.
Paul Allen - Centre for Alternative Technology
David Chaytor MP - Globe UK
Richard Douthwaite - Foundation for the Economics of Sustainability
Chris Layton - Action for a Global Climate Community
Andrew Simms - New Economics Foundation - and 11 others
Michael Meacher has his say
THE FUEL DEBATE IS NOT ABOUT 2P BUT THE FUTURE OF THE PLANET
Michael Meacher - The Independent on Sunday - 6 June 2004
The fact that Gordon Brown has agreed to "review" his plan to raise fuel duty by 2p per litre in September - and the consequent calling off of all but one of the planned fuel protests yesterday - has been greeted with sighs of relief all round. Thank heavens for that. We'd all prefer an issue ducked to an embarrassing row, wouldn't we? But now Elliott Morley has popped up and, according to one newspaper, "shattered Labour's fragile truce with the fuel protesters". He says "A simplistic knee-jerk reaction to short-term petrol supply problems is not the answer". Well, good for him.
The whole debate is taking place on the wrong basis. The issue is not merely the price to the car or truck driver (after all, the real cost of motoring has actually fallen in the past two decades), but whether petrol price policy should be driven by Middle East oil markets or by a looming global warming catastrophe.
There is now abundant evidence that global warming is proceeding faster than scientists had previously predicted. If we carry on down our present path, we shall treble the amount of carbon dioxide that we emit by 2100, to a level of 1,000 parts per million, twice what scientists regard as a safe level.
Greenhouse gas emissions from cars and lorries (and air traffic) are now the fastest rising cause of global warming. Unlike the last time we were in this situation, at the truck drivers' fuel protest in 2000, when the environment wasn't even mentioned, it should now occupy centre stage. The government should have the courage to make the case - squarely and without apology - that fuel duty is a key instrument in controlling CO2 emissions.
The counter to this argument is that increasing petrol duty is politically unpopular. It will not even be effective: the number of cars around the world, especially in developing countries such as China and India, is set to rise exponentially. Second, greenhouse gas emissions from industry - coal-burning to fuel China's increasing industrialisation - are growing rapidly. These will not be affected by Western transport taxes.
However, if the West (including eventually the USA, by far the worst polluter) does not give a lead when we are the biggest offenders, countries such as China and India, with two-fifths of the world's population, will not follow suit. So the utterly devastating consequences of global warming will simply be visited on the whole world more quickly. If we delay until climatic disaster is so intense that we are forced to take action in order to survive, it will be too late because scientists believe there is at least a 200 year lead time before measures taken now will begin to cut carbon dioxide levels in the atmosphere.
But it does mean standing up to the vested interests, which the government hitherto has not been good at, whether over tobacco advertising, promotion of unhealthy fast foods, airline subsidies or alcohol advertising. In the case of the transport lobby, it means sending out a clear and unambiguous message, whether for road traffic or air travel, that there are environmental costs that have to be paid for in full, not least to encourage the search for less damaging means of travel.
It is therefore a much bigger issue than whether or not to raise fuel duty by 2p a litre. Nor will pleading with Opec to increase production quotas have much effect when the output of member countries is already 10% above the formal quota limits. What is needed is a long-term policy to escape the regular cycle whereby governments push billions of dollars into investing in alternative energy sources as oil markets tighten, only to allow such investments to dissipate as the oil crisis eases.
First, the government should keep fuel duty steady in real terms, but make it clear that it is adding a surcharge of, say, 3% a year for environmental reasons. The extra proceeds should not accrue to the Exchequer, but should be invested in alternative, affordable public transport. Second, because the end of the Big Oil is now in sight and steadily increasing demand will overtake supply by 2010-2015 - pushing up the price of oil inexorably - a sustained multibillion pound investment in renewable energy is imperative. The eclipse of oil, the gradual run down of coal and phase-out of nuclear power, heralded in last year's Energy White Paper, now need to be followed through in founding the new energy world order. That is the real lesson of the 2p debate.
5 June 2004
WHEN WILL OIL RUN OUT?
International Projections - International Energy Outlook 2004
The high price of oil has filled the media and the minds of those who are having to pay much more for their car journeys, and also the airlines who, in spite of enjoying tax free fuel have quickly put up their fares. Some correspondents have pointed out that oil is a finite resource and that its excessive use is helping to create climate change. Surely the government too has a responsibility to warn the public what the position is likely to be in the not too distant future, as well as a responsibility not to encourage unessential oil use by promoting an expansion of air traffic capacity. Ken McDonald has been studying this year's International Energy Outlook. Here are his comments.
This Report is the source that the UK Energy White paper quoted when it
predicted that oil would run out in about 60 years.
The forecast is produced annually. The projections have not changed
much from last year, but they make pretty gloomy reading - a 54% growth
in global energy consumption from 2001 to 2025, with a 55% increase in
carbon emissions over the same period. The projections include some
alarming increases for China and India, particularly for road transport,
but still, I think, leaving them behind the USA and Europe in terms of
energy use and emissions.
A few quotes from the section on World Oil Markets illustrate the situation:
1. "The forecasts for low and high world oil price cases suggest that the
projected trends in growth for oil production are sustainable without
severe oil price escalation; however, some oil market analysts find this
viewpoint overly optimistic, based on what they consider to be a
significant overestimation of both proved reserves and ultimately
2. "The uncertainties associated with the report's reference case
projections are significant. The post-war strife in Iraq, the
international war on terrorism, uncertain economic recovery in
developing Asia and Japan, the success of China's economic reforms and
its political situation, the potential for continued social unrest in
Venezuela, Brazil's impact on other Latin American economies, and
economic recovery prospects for the FSU all increase the risk of
near-term political and policy discontinuities that could lead to oil
market behavior quite different from that portrayed in the projections."
3. "Total world oil consumption is expected to increase by 1.9 percent per
year over the projection period, from 77 million barrels per day in 2001
to nearly 121 million barrels per day in 2025. The transportation sector
is the largest component of worldwide oil use today, and it is expected
to account for an increasing share of total oil consumption in the
future. Oil's importance in other end-use sectors is likely to decline
where other fuels are competitive, such as natural gas, coal, and
nuclear, in the electric power sector, but currently there are no
alternative energy sources that compete economically with oil for
4. "Oil is projected to remain Western Europe's largest energy source, with
demand increasing by 0.5 percent per year on average from 2001 to 2025.
Almost all of the projected increase in demand for oil is expected to be
for transportation. Demand for aviation fuel shows the fastest growth
among transportation fuels in the forecast."
5. "Japan has a mature air transportation infrastructure, with more than 65
commercial airports, 14 of which handle international traffic; however,
its airports generally are congested, expensive, and in many cases
inefficient. The largest and most important airport is New Japan Narita
International, located 41 miles from Tokyo. Although it handles more
cargo than any other airport in Asia, it is overcrowded, and efforts to
expand it have been opposed by residents and lobbying groups."
6. "Japan leads the global field in alternative fuel technologies, with
more than 2,500 electric vehicles currently in use. Japan was also the
first market to develop mass-produced hybrid vehicles with gasoline
engines and electric motors. Many trucks and city buses use the
technology. In addition, there are more than 300,000 LPG-fueled vehicles
currently in use, including trucks and city taxis, as well as a number
of compressed natural gas (CNG) vehicles. Toyota became the first
automaker to debut a hybrid vehicle in 1997 with its Prius model, and it
introduced the world's first hybrid minivan, the Estima, in June 2001.
Toyota plans to sell 300,000 hybrids per year worldwide by 2005."
The following alarming quote is taken from the "Environmental Issues and
World Energy Use" section...
"The Report's reference case projections indicate that energy-related
carbon dioxide emissions from the entire Annex I group of countries will
exceed the group's 1990 emissions level in 2010. In addition, although
energy-related carbon dioxide emissions from the group of transitional
Annex I countries decreased significantly between 1990 and 2000 as a
result of economic and political crises in the EE/FSU, they showed an
increase from 2000 to 2001 and are projected to continue increasing over
the forecast period. The combined Kyoto Protocol reduction target for
the transitional Annex I countries is 10 percent below their projected
2010 baseline emissions."
The report says (Table 5) that proven global oil reserves are 1,265
billion barrels at 1st Jan 2004 (up from 1,212 bn last year). In
addition they expect a further 1,668 billion barrels to be discovered or
extracted over and above the proven reserves (same as last year). That
gives a total availability of 2,934 bn barrels (2003: 2,880 bn).
Their mid-range forecast is that global oil production/consumption
will increase from 77 million barrels per day in 2001 to about 120 mbpd
in 2025. That's about 28 billion barrels a year rising to 44.
Assuming the rate of production and consumption stops growing at 2025, I
calculate that proven reserves will be used up by around 2036, and the
projected total availability will be consumed by 2074. Last year I
calculated those years to be 2030 and 2070. Either calculation
is fairly consistent with the UK Energy White Paper which, in para 6.15,
referred to the 2002 World Energy Outlook produced by the International
Energy Agency and stated "Globally, conventional oil reserves are
sufficient to meet projected demand for around 30 years... there is
potential for oil reserves to last twice as long."
The Energy Information Administration (EIA), the independent
statistical and analytical agency within the U.S. Department of Energy,
released the International Energy Outlook 2004 on April 14, 2004,
in PDF format. The report provides an assessment of
international energy markets with projections of worldwide energy
production and consumption by fuel type and region to the
The report is now available in HTML format and can be viewed at:
5 June 2004
PLANES GROUNDED BY COMPUTER CRASH
Fourth Major Breakdown Leaves Air Traffic Control Unable
to Distinguish Between Jumbo Jets and Propeller Planes
Andrew Clark - The Guardian - 4 June 2004
It was billed as the world's most modern air traffic nerve centre, containing a huge control room and backup generators capable of powering two villages. But for two hours yesterday morning, Britain's £623m Swanwick national traffic centre was brought to its knees, with staff unable to distinguish between a jumbo jet and a propeller plane.
The fourth major air traffic control breakdown in three years left more than 200,000 travellers fuming, with delays and cancellations snowballing from Southampton to Glasgow. For an hour at the height of the morning peak, a computer failure left planes barred from taking off at all major airports.
Passengers formed long queues at check-in desks. Many saw their plans for half-term breaks scuppered by hold-ups of up to 9 hours. Rumours swept terminals that the shutdown was due to an act of terrorism, or a deliberate closure pending George Bush's visit to Europe.
The report goes on to explain what happened. "Problems began when engineers turned up at Heathrow's West Drayton control centre before 3 a.m. to test software which is intended to be introduced later this summer. The 45 minute test appeared to go as planned. But when the system was switched back on to full operation at 6.03 a.m. ready for the arrival of the morning's transatlantic traffic, controllers at Nats' nerve centre in Swanwick, near Southampton, noticed errors in flight data. We are told that "The system wasn't processing flight information in the way it should have been... the software was developed in the 1970s specifically for air traffic control and its currently in use in most countries around the world". The controllers had to fall back on a manual system, 60 flights were cancelled at Heathrow and 1,200 were delayed. 15 were cancelled at Stansted and 10 at Gatwick.
The report continues with comments and criticism from computer experts and affected airlines. Eurocontrol has reported four computer breakdowns in Europe last year. They have expressed concern at the ability of control centres to cope with increasingly crowded skies.
OUR COMMENT: While accepting that safety was not compromised, we are entitled to ask that before any expansion is allowed at Stansted a comprehensive traffic management plan should be produced and a computer control system that can cope with it. The Government has shown a cavalier disregard in the White Paper in not only omitting to carry out proper impact assessments for Stansted, but also for failing to produce even the most elementary flight control plans.
4 June 2004
DAILY MIRROR - IS IT THE END OF CHEAP FLIGHTS?
As Rising Oil Prices Threaten No-Frills Airlines...
David Edwards - Daily Mirror - 3 June 2004
THANKS to no-frills airlines, it's now far cheaper to fly to Barcelona than catch a train from London to Leeds.
But the days of low-cost fares may be about to end...
The soaring cost of oil - which hit a new high of $42.3 a barrel this week - along with fears of terrorism and failing airlines has led experts to warn of soaring ticket prices and axed routes.
"The budget airline bubble looks about to burst," confirms Richard Maslen, of Airliner World magazine.
"The problem is that entrepreneurs think it's a glamorous and fun venture but it's also unpredictable - you can't plan 24 hours ahead, let alone a year."
"There are just too many firms chasing too few customers and there are going to be casualties."
Mr Maslen says as firms fail, Europe could be dominated by five or six airlines, as in the US.
"With little competition, there will be less incentive to offer low-cost flights. The consumer needs stability in the market."
"We could also see fewer routes as firms drop flights which aren't paying their way. It all makes for bad news for passengers." Even before the oil hike, the cost of airline fuel rose by 10 per cent in the first three months of this year.
Although British Airways has introduced a £2.50 surcharge on each ticket to cover the cost, the budget airlines haven't.
Aviation analyst Chris Tarry says if prices continue to rise, firms such as easyJet and Ryanair will have to pass it on.
"Both firms operate on such tight profits that they can't afford to absorb costs like this."
The explosion in budget air travel began when the industry was deregulated in 1992.
STELIOS Haji-Ioannou, the son of a Greek shipping magnate, launched EasyJet three years later with fares that undercut rivals by 50 per cent.
He inspired dozens of hopefuls and there are now more than 50 low-cost airlines in Europe.
In the UK, there are low-cost flights to 55 European and 18 domestic destinations from 21 regional airports.
But the market is beginning to falter. This year, Birmingham-based Duo and Leeds-based Planet Air have failed while SkyNet closed last week to became the third Irish carrier to cease trading since January. Michael O'Leary, chief executive of Ryanair, has warned of a "bloodbath" with many budget operators facing bankruptcy.
He says: "Some of these loss-makers will go bust - over this winter and the next two years.
"They're not all going to survive. They can't sustain this level of losses for too long." His comments came as the Irish firm announced profits were down 14 per cent. It has also cut two French routes.
Even giants such as BA have found the going too tough. It sold its budget firm, Go, to EasyJet in 2002. Last year, KLM sold no-frills operator Buzz to Ryanair.
"Many of the low-cost operators won't be here in a year's time," predicts BA spokesman Richard Goodfellow. "And we're in the strange situation where some airlines are going to the wall within days of starting up."
"Everyone wants to be the new Stelios but these are much tougher times.
"It may be great to be a consumer at the moment - but people shouldn't expect the deals to last for ever."
4 June 2004
AIR SAFETY - A VIEW FROM STANSTED NEWS
Stansted: 2020 vision is far from clear
Stansted News - 2 June 2004
As Stansted presses ahead with expansion plans, an air safety organisation has warned Europe's skies are already dangerously close to saturation.
Eurocontrol, the European Organisation for the Safety of Air Navigation, has blamed the depletion of Europe's airspace on the rise of budget flights.
This week it claimed that by 2020 air traffic control systems across the continent would not be able to cope.
National control centres across Europe are coordinated by Eurocontrol from its Brussels base. It matches take-off and landing slots in 33 countries, stretching from Ireland to Ukraine.
In a typical day it looks after 29,000 flights, but despite a slowdown in air travel following the terrorist attacks of September 11, 2001, it predicts that annual traffic across Europe will double to 16m aircraft by 2020.
Victor Aguado, director-general of Eurocontrol, said: "In the middle of the next decade, we will reach capacity using the present systems. Beyond that, we'll need something else, which today's technology can't provide."
To cope with booming numbers of flights, the minimum height separation between aircraft has already been cut from 2,000ft to 1,000ft. At any daytime moment, there are 3,500 aircraft in the skies over Europe, carrying 400,000 people. One in ten planes is operated by low-cost airlines.
But a spokeswoman for easyJet said the number of flights will be reduced by airlines merging and folding.
A CAA spokesman said it would not allow the skies to become dangerously saturated: "As the regulator of UK air safety, we won't let this happen."
OUR COMMENT: How are they going to ensure safety while BAA is exhorted by the government to expand flights threefold? Where are the plans? Can NATS cope?
4 June 2004
HEATHROW RESIDENTS AT RISK FROM EVEN MORE NOISE
Is the government ignoring noise nuisance?
Ben Webster - The Times - 3 June 2004
Secret Heathrow plan to set noise levels soaring
MORE than 40,000 people will suffer a severe increase in noise disturbance under a plan to allow an extra 200 flights a day to land at Heathrow, a study has found. The Government concealed the true impact of the scheme in December's White Paper on airport expansion.
Homes under Heathrow's flightpaths will no longer gain respite from aircraft noise as the scheme will abolish the present arrangement under which one runway is used for landings and the other for take-offs, with their roles switching at 3pm each day.
This "segregated mode" means that people living within a few miles of the airport have aircraft flying directly overhead for only half the day. But the Department for Transport (DfT) is conducting a study into "mixed mode", which would end runway alternation and allow planes to land simultaneously from the same direction. Passengers will be able to look out of aircraft windows as they approach the runway and see another jet close by on a parallel course.
Mixed mode would allow 70,000 extra flights a year at Heathrow by reducing the queues of planes waiting to land or take off. Ministers are keen to introduce it to relieve pressure at the world's busiest international airport long before the proposed third runway could be built.
But the White Paper made no reference to the increase in disturbance that would result from the scheme and an independent study by Cranfield University explicitly criticises it for concealing the scale of the impact. It also accuses the Department for Transport of underplaying the effects of noise.
Peter Brooker, Professor of Air Traffic Management and the author of the study, calculated that mixed mode would expose 42,000 people living mainly east of Heathrow to noise above the 57-decibel threshold deemed by the Government to cause serious annoyance.
He said: "The White Paper downplayed the effect of mixed mode. The department did not make it easy for people to understand the consequences. They should have made it clear to ordinary people what the impact would be rather than letting the truth dribble out afterwards."
Professor Brooker, who was formerly the DfT's chief adviser on aircraft noise, also criticised its decision to choose 2002 as the baseline for measuring changes in noise at Heathrow. That year was the last full year of flights by Concorde, which produced about the same noise energy as 35 jumbo jets. The total noise for 2002 was therefore significantly higher than in 2001, when Concorde had been grounded because of the Paris crash.
Professor Brooker also queried the White Paper's vague reference to introducing mixed mode only in "peak hours". "The text mentions peak hours but does not say what they might be. In fact, Heathrow has become such a valuable airport for operators that its peak hours have expanded over the day, over the week and over the year."
John Stewart, the chairman of ClearSkies, which campaigns against airport expansion, said: "Professor Brooker has exposed the huge numbers of people who would be affected by much worse aircraft noise if mixed mode went ahead.
"Any increase in flights would also break the Government's agreement to abide by the strict limits on landings and take-offs set as a planning condition for Heathrow's fifth terminal. We have got to the stage where we don't believe a word the Government says."
BAA, which owns Heathrow, said it did not expect mixed mode to be introduced before terminal five opened in 2008. "There seem to be clear economic benefits from mixed mode but we will have to take account of the environmental implications," it said.
The DfT has promised a "full public consultation" on mixed mode, which is expected to begin next year.
Can UK airports take more traffic? Send your emails to email@example.com
OUR COMMENT: Take up the offer and make your views known! The government's views on noise standards are way out of date - they need to take advice from the WHO and rethink their policies.
3 June 2004
POLITICAL DONATIONS? LOBBYING FOR VOTES?
OR JUST KINDNESS TO OUR HARD-PRESSED MPS?
Parking Concessions - BAA in row over free airport passes
Kevin Done - Financial Times - 2 June 2004
BAA, the airports operator, is heading for a fresh battle at next month's shareholders meeting over its granting of free airport car parking passes to MPs, MEPs and members of the House of Lords.
A group of dissident shareholders led by Brian Ross, economics adviser to the Stop Stansted Expansion campaign, has gained sufficient support to put forward a resolution to shareholders that would authorise BAA to make annual political donations of up to £1.25m.
The row has arisen because BAA resolutely refuses to recognise the free car parking passes as political donations. It is recommending shareholders to vote against the resolution.
In a letter to shareholders it says that it has received consistent legal advice that the cost of providing the passes does not represent a political donation requiring shareholder authorisation or disclosure in its annual report. It says: "The company offers the concession because it believes that it represents a worthwhile contribution to the public good; a gesture of support for our parliamentary democracy by a company, which provides a major public service".
Currently 847 of the 1,412 eligible politicians hold such passes. BAA said it was "a service valued by the parliamentary authorities and by individual members, whose parliamentary duties involve heavy air travel".
Mr Ross said the car parking passes in issue were worth £1.1m a year. Without the resolution the issue would have "stayed hidden from view". BAA had two overarching corporate aims, he said, namely to retain their monopoly of the three London airports, Heathrow, Gatwick and Stansted, and to gain government acceptance for expansion. He said he was "infuriated" to discover in his researches for the Stop Stansted Expansion campaign that BAA was "the biggest corporate donor to politicians in cash terms. Lobbying is intense.
It is an affront to the political system that BAA is handing out freebies to the key people that are making decisions about airport expansion and to the very people they depend on to retain the monopoly. Top FTSE 100 companies should not behave like this.
BAA admits in its letter that it is "dealing with a difference of legal interpretation" in its fight with the rebel shareholders.
It accepts that MPs do have to declare the parking passes in the Electoral Commission's register of interests, but it sees a distinction between donations made to politicians "in connection with his or her political activities as a member of the party" and donations to "a holder of an elective office for his or her use as holder of that office".
BAA's parking perk has overstayed its time
BAA rebels force vote over £1m 'gift' to MPs
Neil Collins - The Telegraph (City Comment) - 2 June 2004
The perk granted by the British Airports Authority which allows free parking at its airports to MPs and MEPs has long looked like an egregious piece of toadying to the legislators. If MPs ever were badly rewarded, they are not underpaid today, and MEPs are force-fed money, even before they start to fiddle their expenses.
The perk should have been scrapped at the time BAA was privatised, but the civil servants who became its directors couldn't break the habit of thinking of politicians as their masters. Now, at last, BAA's army of small shareholders are sufficiently revolted (and organised) to try to get it stopped.
A simple resolution at the forthcoming annual meeting would probably have embarrassed the big shareholders into abstaining. Unfortunately, the resolution on the order paper is anything but simple; indeed, BAA has included two pages of legal blather, enough to muddy the waters sufficiently for the board to persuade the big battalions to vote it down.
It's hard to disagree with Brian Ross, the shareholder who has brought the issue this far, that the perk owes more to the desire of the BAA board to hang on to its south east airport monopoly than to any proper calculation of shareholders' interests. A more enlightened board would offer parking perks to them rather than the legislators.
As has been argued here many times, BAA's monopoly is not in the customers' interests, and in the long run, not in the owners' interests either, since monopolies end up being run for the comfort of those in charge. Mr Ross's irritating resolution highlights this issue again, and while he will probably fail this year, he should persevere.
3 June 2004
NEWS FROM THE AIRLINES
Budget airlines doomed, says Ryanair chief
Andrew Clark - The Guardian - 2 June 2004
Europe's largest low-cost airline, Ryanair, yesterday revealed its first loss for 15 years and enraged its rivals by singling several of them out as potential victims of a "bloodbath" in the budget travel industry.
In the clearest sign yet that the phenomenal growth in cheap air travel is reaching a limit, Ryanair disclosed that it had lost £2.3m in the first 3 months of the year as it slashed its winter fares to withstand fiercer than ever competition.
The airline's chief executive, Michael O'Leary, put a brave face on the deficit by comparing it favourably with the Irish rugby team: "We're Irish - we're used to losses. England come over and kick the shit out of us nine years out of ten".
For the full 12 months to March Ryanair's profits fell by 5% to Euros 239m - the first decline since the Irish regional airline reinvented itself as an international budget carrier in 1990.
Mr O'Leary forecast that business would remain tough for budget airlines and he predicted several of his rivals could go to the wall. He claimed that casualties could include BMI's low-cost offshoot BmiBaby, and the Exeter based airline FlyBE, both of which furiously denied they faced any financial difficulty.
"We believe some of these loss-makers will go bust - some over this winter, some over the next two years", saod Michael O'Leary. Under questioning, he added: "It may be BmiBaby or FlyBE in the UK - they're not all going to survive. They can't all sustain this level of losses for too long. He alleged that continental victims could include two German budget airlines - Germanwings and Hapag Lloyd Express.
Mr O'Leary's remarks came amid increasing concern among consumer watchdogs about low-cost airlines going bust. Unlike package holiday operators, budget airlines have no bonding scheme to protect customers. Passengers with forward bookings can be left out of pocket if an airline fails.
The article continues by listing a number of airlines that have gone bust and follows this up by reporting the denials of those threatened by Mr O'Leary's doleful predictions. It finishes by reporting that Ryanair cut its average fare by 14% to 40 Euros as it struggled to fill up its aircraft. It has scaled back its expansion plans, it will grow by only 16% this year, after a growth of 55% seat capacity last year.
OUR COMMENT: This used to be called "knocking copy", regarded as being rather an undesirable way to attack competitors. It seems somewhat ridiculous that fares are reduced to loss making levels in order to fill planes. If seats available today cannot be sold at such a low price why plan for a massive expansion? The price of oil has soared, and it seems that the time has come when it will have to be accepted that oil is a finite and potentially unreliable resource. It should not be sold cheaply to airlines, encouraging an unsustainable expansion in what is the most polluting form of travel.
FURTHER COMMENTS ON RYANAIR
Low-cost carrier offers only turbulence for shareholders
Robert Cole - The Times - 2 June 2004
DOUBTS about the sustainability of its business model have dogged the fast-growing Ryanair for several years. Shares in the low-cost carrier have doubled over the past five years. But stock has all but halved in the past 18 months. The shares are now worth less than they were three years ago.
Annual results posted yesterday gave the doubters plenty to feed on. The reduced level of profitability will be taken by some as evidence that the low-cost model is beginning to come unstuck. Yes, the company carried 47 per cent more passengers last year but the aircraft they flew on were not as full as in the previous year. Moreover, the fares paid by passengers also came down by 14 per cent. Admittedly, low fares are what Ryanair is all about and to an extent it embraces the chance to attract business by cutting prices. But fares cannot fall at 14 per cent a year indefinitely. Nor can they fall at anything like this rate for anything like a sustained period if the company is to be able to afford to invest in the new routes and the additional aircraft required to deliver passenger growth.
Ryanair's argument, effectively, is that it has become a victim of its own success. The low-cost model it follows is so powerful that established carriers and new entrants have copied it and undermined prices across the industry. However, Ryanair also says that the pressure will be temporary. The company believes it is efficient enough to withstand the price pressure and that its less efficient competitors will not. In the long run Ryanair reckons that it, and maybe one or two others, will be the only ones to prevail and thrive.
Ryanair, whatever you think about the antics of Michael O‚Leary, the chief executive, is a remarkable success story. It is, as far as European air travel is concerned, a significant force to be reckoned with. It may be the significant force. But it would be foolish for investors to assume that competitors will not learn from its success. They already have and they may get progressively better at stealing its thunder. Moreover, the increasing cost of fuel may rock the boat. So far, a hedging policy has protected Ryanair. But if fuel remains pricey - and it may - the impact on profitability could be dramatic.
Ryanair fares may offer good value. Less can be said of the shares. Avoid.
2 June 2004
AVIATION WARS HOTTING UP
Last week The Guardian highlighted the censored statistics that showed the huge increase in carbon dioxide emissions from increased air travel since 1990. Here are some responses.
The Guardian - 1 June 2004
While Ryanair has a responsibility to represent its own and its customers'
interests (Ryanair appeals against loss of £3m Belgian aid, May 26), where
are the voices of our elected representatives in Brussels and London on the
environmental effects of unrestrained aviation growth?
According to a recent survey, two-thirds of MPs have joined the government's
chief scientist in believing that climate change is as great or a greater
threat than terrorism. In this light, subsidising already cheap (and lightly
taxed) air travel is lunacy.
The Department for Transport seeks to censor the Office of National
Statistics figures about the rise in air transport CO2 emissions (Anger at
'gag' on pollution report, May 28) yet the same ministry has published work
robustly forecasting air transport CO2 emissions at 33.4m tonnes in 2000 -
in line with the ONS figure of 37.3m tonnes of CO2 from aircraft exhausts
during 2003. A rise of 3.9m tonnes is probably entirely down to the growth
in low-cost airlines.
The department's estimate of more than 70m tonnes of CO2 being pumped into
the atmosphere in 2030 by the 476 million passengers using the expanded UK
airports its recent "predict and provide" white paper seeks to facilitate
shows the enormity of the environmental problem.
Board member, Aviation Environment Federation
The omission of figures on greenhouse gases from air transport is
unfortunately entirely consistent with the government's policy to exclude
them from its commitments under the Kyoto protocol. The Royal Commission on
Environmental Pollution warned last year that aviation is set to become "one
of the major sources of anthropogenic climate change" by 2050, and figures
from the Department for Transport suggest that on current trends aviation
would account for 40 per cent of all greenhouse gas emissions by 2030.
In July 2003, the Sustainable Development Commission recommended a mix of
aviation fuel taxes, emissions trading and greater transparency to consumers
of the environmental impacts of aviation. In the event, a huge expansion in
airport capacity has been announced, along with a freeze on air passenger
duty in the last Budget.
Dr Paul Hatchwell
Editor, Climate Change Management
Despite its rhetoric, the government has consistently supported an increase
in air transport regardless of its impact on climate change and our natural
heritage. With a glut of concrete runways threatening ancient woods and
other wild places, these actions confirm the government is blinding itself
to the real causes of climate change.
During the same week came the news that Europe and the US were talking about an "open skies" agreement. An opportunity for airlines? A blow for an international sustainable aviation policy?
Your comments on the aviation talks between the US and Europe (Business
notebook, May 28) repeat the tired old mercantilist arguments which add 100
per cent or more to air fares across the Atlantic. The creation of an Open
Aviation Area comprising the EU and the US is an admirable goal supported by
Both sides realise the goal will not be achieved overnight. It is sensible
to open up the market in stages. It took three stages and 15 years to
deregulate the European aviation market. The first-stage offer on the table
represents a major breakthrough in international aviation. It will provide
significant net gains to the UK economy and result in greater competition,
choice and lower fares. Surely, that gives passengers the respect and
freedom they deserve. Or would the Guardian have the EU cave in to special
interests to preserve high fares?
LOCAL WORRIES ARE JUST AS IMPORTANT
Open letter to BAA Stansted managing director, Terry Morgan
Bishop's Stortford Citizen
ALTHOUGH I have not been invited to comment on your proposals (the Home Owner Support Scheme Consultation), I would like you to know my views.
Your 'generosity' in offering support to everyone within the projected 66dBA contour ignores the reality of the blighting impact of airport expansion proposals. Blight is being felt for many miles around, and this has been highlighted by Stop Stansted Expansion in its analysis of Land Registry data.
In Stansted itself, prices have stood still since July 2002, whilst homeowners in the rest of Essex and the UK have seen substantial rises in the value of their properties. Somehow, Stansted always seems to appear outside any noise contours, yet we suffer a constant drone of ground noise, increasingly regular jet noise from take-offs and landings, noticeably dirtier air, and we are particularly badly affected by night noise.
All these aspects have worsened considerably in recent years and the prospect of even more airport activity has clearly depressed the price of homes.
Given that BAA has already reduced the quality of life in this area and is threatening to bring it down further, the very least it can do is compensate for the financial impact it is already having on its intended victims. It is inequitable that BAA's search for increased profit should be achieved at the expense of its neighbours.
Any Home Owner Support Scheme that is to properly deal with generalized blight caused by proposals to go beyond the approved 25mppa must be founded on the loss of property value since those proposals were announced in July 2002 compared with rises in prices generally across Essex.
Your choice of 66dBA as a limit for considering claims fails to recognise the true scale of intrusion from aircraft noise and pollution, and also the impact of night noise.
Any 'guideline' for inclusion within a compensation scheme should include any properties within a 50dBA noise contour and should also include properties outside it whose values are affected by other factors, such as night noise and ground noise. It is important that any such guideline is sufficiently flexible to deter wholly unwarranted claims, yet to allow valid claims to be made.
It is also important that BAA does not sit as both judge and jury in considering claims.
I look forward to seeing a more meaningful proposal for compensation.
Also, as I live only two miles from the runway, I would appreciate inclusion in any future consultations.
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