| SSE NEWS ARCHIVE - January to March 2008
30 March 2008
HEATHROW TERMINAL 5 OPENING DESCENDS INTO FARCE
John O'Doherty - Financial Times - 27 March 2008
The much trumpeted opening of Heathrow's Terminal 5 descended into farce on Thursday amid cancelled flights, delayed baggage, long queues and environmental protests.
The difficulties are embarrassing for both BAA, the airports operator, and British Airways, the sole occupier of the new terminal, which was officially opened by the Queen earlier this month.
The £4.3bn Terminal 5, which started receiving passengers on Thursday morning, was forced to cancel 34 short-haul flights due to what British Airways described as "minor problems" chiefly in the computer system, that led to three flights leaving without any luggage on board.
The baggage system appeared to be at the heart of the difficulties, with some passengers having to wait more than two hours at the carousel to receive their luggage, after staff had apparently been allocated to the wrong locations to retrieve bags from flights. Other staff were having difficulties with the car park and the employee security screening system.
The flight cancellations led to long queues of passengers lining up at ticket desks to seek refunds or alter their flight plans.
British Airways, which now has its home at T5, said it had suffered "a few minor problems" during the first day of operation. "This is not unexpected following one of the most complex and largest airport moves in history," British Airways said in a statement.
"These teething problems have included car parking provision, delays in staff security screening and staff familiarisation with the terminal. We have also had some baggage performance issues. These issues are being resolved and we are sorry for any inconvenience this has caused."
BAA was not immediately available for comment.
The situation was not helped by a protest staged by environmental campaigners earlier in the morning. Around 11am, approximately 250 protesters staged a demonstration against further airport expansion, including the mooted construction of a third runway at Heathrow.
30 March 2008
FEARS FOR FERROVIAL OVER BURDEN OF DEBT AT BAA
Sarah Gordon and Mark Mulligan - Financial Times - 26 March 2008
It should have been a proud moment as Rafael del Pino welcomed the Queen to the official opening of Heathrow airport's gleaming Terminal 5 this month. Ferrovial, the Spanish conglomerate he heads, owns BAA - and with it, London's main airports. It has transformed itself from the construction company Mr Del Pino's father founded in 1952 by snapping up not just airports but toll roads, car parks and other service companies.
But since June 2006, when Ferrovial (along with Singapore's government investment arm and Quebec's state pension fund) bought BAA, the purchase has given the company little but grief. "BAA is still a great asset. We are not sorry we bought it," says Iñigo Meirás, head of the airports division at Ferrovial. Outsiders, though, are concerned that the financial burden Ferrovial took on to buy BAA has undermined its ability to manage it.
"It's difficult to get away from the fact that BAA is simply too indebted," says Andrew Fitchie, transport analyst at Collins Stewart, the London stockbroker. "There will be a reckoning."
The fear is that Ferrovial is struggling to cope with both the financial and operational challenges the company faces - and that if BAA goes down, it could even take Ferrovial with it. Even at the time of the £16bn deal, at the height of the credit boom, the Spanish group and its partners were considered by many to have paid a lofty price for the airports operator.
If BAA were to collapse, there would be huge political repercussions, even possibly a backlash against foreign ownership of UK companies. "[BAA's] future is of central importance to the United Kingdom's transport infrastructure," parliament's all-party transport committee said this month. "BAA's monopoly position in the UK airports sector is unnecessary." The Competition Commission, meanwhile, will this year deliver its verdict on whether the UK's largest airports should remain under a single owner or whether BAA should be broken up.
Ferrovial concedes that the financial risks BAA faces have started to bite. "The financing of the BAA deal was well thought out, with all possible negative and positive scenarios taken into consideration," says Mr Meirás. "However, I would have to say that almost all the negative scenarios have been played out and none of the positive."
The purchase was predominantly financed by debt. Even Ferrovial's £2.5bn "equity" contribution was funded largely by debt at the Ferrovial group level, secured in turn against its stake in BAA and other parts of the Spanish group. Since the take-over, not only have credit conditions deteriorated but the financial terms under which BAA operates have been made less generous. Its regulator, the Civil Aviation Authority, has said airlines must pay more to use London's airports. But it has reduced the return BAA is allowed to make between now and 2013.
Ferrovial is not just facing financial headaches. Faith in its ability to manage BAA,which contributed more than onequarter of Ferrovial's ?15bn (£11.7bn) revenues last year, has also been shaken during the 21 months of its ownership. It failed, for one, to anticipate operational problems such as the security crackdown in August 2006. As chaos descended on London's airports after the discovery of an alleged plot to blow up transatlantic flights, BAA floundered.
"We estimate that literally in the space of an hour on that night our security workload went up 400 per cent," says Tom Kelly, BAA's director of corporate and public affairs. But the scale of the task elicited little sympathy from passengers, politicians or the media, which condemned the airport operator for the resulting queues, flight delays and baggage mishandling as well as inadequate facilities in Heathrow's older terminals.
BAA's new owner responded, with some justification, that it could not be held accountable for the years of underinvestment at the root of Heathrow's problems. But users of Heathrow and Gatwick airports, who according to the Association of European Airlines suffered the worst flight delays in Europe last year, are starting to vote with their feet: passenger growth is slowing. Ferrovial, long accustomed to uncritical admiration for its global ambitions in Spain, was caught off guard by the public relations crisis.
Amid an exodus of senior managers Stephen Nelson, BAA's chief executive, is the most telling casualty. Unlike other departing staff, Mr Nelson, who formerly ran BAA's retail operations, was promoted to his latest position by Mr Del Pino himself.
Ferrovial'sproblems with BAA are fast approaching crunch time . The group has tried to refinance more cheaply some of the debt it loaded on to BAA, as well as £4.5bn of bonds issued by the airports operator. Its plan - to raise the money in a securitisation backed by the assets of Heathrow, Gatwick and Stansted airports - did not seem unreasonable at the time of the takeover. Others including Australia's Macquarie were using similar models. But the uncertainty at BAA, as well as the turmoil in the credit markets, has derailed the refinancing timetable.
Ferrovial says it expects the securitisation to go ahead by June. But if this deadline is missed, credit rating agencies would be likely to downgrade BAA's bonds to "junk" status, triggering a bondholders' option to demand repayment. Investor anxiety over BAA's ability to service its debt is reflected in the cost of insuring against a default. The price for this on BAA senior five-year credit default swaps, around 20 basis points before the takeover, has risen to about 400 basis points, according to Thomson Financial.
But even if Ferrovial concludes a refinancing successfully, that solves only one of its problems.BAA must still generate enough cash to service its own borrowings as well as further Ferrovial debt. Yet BAA's operational cash flow, some £1bn in 2007, remains insufficient to meet debt service payments as well as its tax and capital expenditure bill. Since BAA has promised the regulator a £4.7bn investment programme running to 2013, it must therefore borrow to pay for that as well.
So, as global credit conditions continue to deteriorate, BAA needs to raise nearly £12bn in all. Ferrovial, whose shares have fallen 35 per cent over the last 12 months, is not in a position to bail out BAA since it faces severe cash flow constraints itself.
With finances so stretched, Ferrovial has few options. It has already sold a number of BAA's "non-core" businesses, such as World Duty Free, in order to pay down debt. But as Collins Stewart's Mr Fitchie points out: "The problem is that, as BAA sells assets, it is slowly diluting both its value and its cash flows."
Even if Ferrovial sold one of the London airports - as it may be forced to do by the Competition Commission - this would merely result in forgone earnings rather than change the overall ratio of debt to assets, thus bringing no improvement in its ability to service that debt.
Ferrovial - and BAA - will not run out of cash immediately. But the outlook for London's airports is grim, and the day when Mr Del Pino can feel full pride in his purchase appears far off.
30 March 2008
GOODBODY CUTS RYANAIR FORECAST FOR THIRD TIME
AS FUEL PRICES SOAR
Laura Noonan - The Independent - 22 March 2008
On a wing and a prayer: Ryanair's fuel hedge is about to run out, exposing the major airline to the full blast of spot prices, which have recently soared to record highs, impacting on its profit margins.
DUBLIN stockbroker Goodbody has cut its Ryanair forecasts for the third time in three months, but still believes the Irish airline will emerge from the current aviation crisis "stronger and fitter" than ever.
Goodbody's analyst Joe Gill, traditionally one of Ryanair's most bullish commentators, now believes the airline's earnings per share will plunge by 48pc for the year ending March 2009. The prediction is based on a new assumption of jet fuel staying at $1,000 a ton, as forecast by easyJet earlier this week.
"While this profit decline is dramatic, it should be judged against how the airline industry normally behaves during a cost/revenue crisis," Mr Gill's report notes.
"Heavy losses are incurred and weaker carriers disappear. Our new forecast implies Ryanair stays profitable at a time when oil prices are at record highs and consumer sentiment is weak. On the assumption that oil normalises, we expect a sharp profit recovery at Ryanair as it continues to grow while competitors stall or exit the industry entirely."
Mr Gill's comments come at the end of one of Ryanair's most volatile ever weeks on the Irish stock exchange. Ryanair's shares opened the week at ?2.81 before losing about 6pc of their value in Monday's St Patrick's Day massacre as investors deserted the Iseq in their droves.
Tuesday saw something of a Ryanair recovery, with the shares closing up 2pc at ?2.77, before easyJet's Wednesday morning profit warning plunged the shares down as much as 10pc in morning trading before closing down 8pc at ?2.55. Then came a dramatic recovery on Thursday with shares soaring as much as 10pc as oil prices retreated before closing up 8pc at ?2.75.
The extreme volatility in Ireland's aviation sector, largely created by Ryanair's turbulence, prompted investment house Cantor Fitzgerald to declare on Thursday that it would no longer invest in Irish airlines. On the same day the UK investment house also issued a moratorium on investing in Irish financials and Irish plcs with a value below ?1bn.
30 March 2008
ARORA CLINCHES DEAL FOR BAA AIRPORT ASSETS
Chris Bryant - Financial Times - 22 March 2008
BAA has agreed to sell some of its jointly owned airport office space and other development sites to a trust controlled by Surinder Arora, the hotel entrepreneur, for £265m ($525m).
The transaction frees up some much-needed capital for the highly leveraged airport operator, owned by Spanish infrastructure group Ferrovial, and adds to Mr Arora's burgeoning airport property empire.
BAA and its partner, Morley Fund Management, put the entire assets - which are valued at about £1.1bn and owned by their joint venture, Airport Property Partnership - up for sale last year but failed to secure a quick deal as the credit crunch kept potential buyers at bay.
"We're very excited about the whole transaction," Mr Arora said. "This fits in very nicely with the rest of the property portfolio within the family trust."
The deal is not the first between BAA and Mr Arora, who left India for England aged 13 and started his career as a British Airways customer services agent.
He has since amassed a fortune of more than £200m through Arora Holdings, the largest family-owned hotel chain in the UK, whose portfolio includes a £180m development at Heathrow's Terminal 5 and a hotel in Manchester, co-owned with Sir Cliff Richard. He is also the co-owner of Wentworth golf club. In 2006 he bought nine airport hotels owned by BAA Lynton, the operator's commercial property arm.
Since acquiring BAA in 2006, Ferrovial has sought to sell non-core assets in an attempt to reduce the £9bn debt raised to pay for the deal. Ferrovial has struggled to refinance this debt but a deal is due for completion by the summer.
Rather than trying to sell a mixed portfolio, it is understood BAA was advised by Morgan Stanley to separate a group of 33 mainly Heathrow-based office assets from the remaining three-quarters of the portfolio, which are industrial holdings. A source close to BAA said it secured a good price given the challenging market conditions. BAA is in talks to sell the remainder of the assets.
30 March 2008
MORE AGRO FOR BAA
Easyjet to court over airport charges
Dominic O'Connell - Sunday Times - 23 March 2008
ONE of Britain's largest airlines, Easyjet, will mount a legal challenge over the stiff price increases imposed at Heathrow and Gatwick. A judicial review of the Civil Aviation Authority (CAA) decision could threaten the planned refinancing of BAA, the company that owns and operates the London hubs.
Easyjet has retained London law firm Lane & Partners as its adviser and informed the CAA and BAA nine days ago of its intention to seek a judicial review. It is expected to formalise a claim to the High Court within a month. If the court accepts it has a case, arguments could take another six months, with a decision possible by the end of the year, legal sources said.
Ryanair said yesterday that it would join the action, and BMI British Midland is also expected to participate. Sir Richard Branson's Virgin Atlantic is as yet undecided. British Airways is unlikely to take part.
Easyjet's legal move is the culmination of a bitter row between airlines, the CAA and BAA. Airlines accused the CAA of failing to police BAA and of approving overgenerous price increases.
The CAA ruled this month that airline charges at Heathrow would increase 23.5% to £12.80 per passenger a year from April. Charges in the four subsequent years could rise 7.5% above annual inflation. Its decision led to outrage among airlines. The CAA defended the rise by saying that the large capital investment required at Heathrow and Gatwick had to be paid for. If the judicial review goes ahead, it will be the first time the CAA has been challenged since it began regulating airports 20 years ago.
A lengthy legal battle could have serious ramifications for BAA, which was bought last year for £10.3 billion by a consortium of investors led by Spain's Ferrovial. The group has since struggled to refinance the loans taken on to buy the company.
When the new prices were announced, BAA said that they would "enable [BAA] to proceed to finalise the details of the refinancing for the first time". Analysts said banks and bond investors were unlikely to take part if there was any prospect the courts could overturn the ruling.
The CAA said yesterday it had no record of being notified of Easyjet's intentions, but would "vigorously defend" its position.
Easyjet said: "We do not believe the CAA has acted correctly in its review of BAA's pricing. It has not followed the necessary process and has shown a systematic bias in favour of BAA."
Meanwhile, BAA's annual report, published on its website on the same day the new prices were set out, shows the company is at the limit of the covenants on some of its existing borrowing. "Restrictions... reach the maximum allow [sic] level at 31 December, 2007," the report said.
30 March 2008
EXPERTS SLAM HEATHROW AIR QUALITY CLAIMS
Jon Land - News Dash Online - 18 March 2008
The Government's claims that expansion at Heathrow can be achieved without breaching air quality limits have been undermined by a report from their own environmental advisers. The Environment Agency's criticisms of the 'Adding Capacity at Heathrow' consultation echo those made by local authorities campaigning against a third runway.
The councils, who are all members of the 2M Group, are now calling on transport secretary Ruth Kelly to make an urgent statement on the EA's findings.
The agency, which is the leading public body for protecting the environment, warns that the material used to justify the Government's conclusions on likely NO2 levels cannot be relied on. It says that there are arguments for postponing irreversible investment decisions in the face of uncertainty.
The full report is available on the EA's website. The key conclusion states: "We do not think that the evidence presented is sufficiently robust to conclude that the proposed Heathrow development will not infringe the NO2 Directive, bearing in mind the uncertainties that need to be addressed."
"This is because the assessment of air quality pays insufficient attention to these uncertainties and to the range of possible future scenarios for issues like road traffic, meteorological variability, climate change, background air quality and atmospheric chemistry."
The report goes on to warn: "It is likely that worsened air quality will result in increased morbidity and mortality impacts as well as a range of other impacts. These air quality impacts will be present irrespective of whether air quality remains within EU guidelines and are likely to be especially important given the very high population density of the SE region."
H&F Deputy Leader and Cabinet Member for Environment, Councillor Nicholas Botterill, said: "The Government's own scientific advisers are telling them what local councils and other campaign groups have said all along - the figures just do not add up. More and more evidence is emerging of the lengths that the Department for Transport and BAA went to so they could be sure of getting the answers they wanted from these environmental tests."
"I'm not surprised that the Environment Agency has serious doubts about the evidence used - but what really disturbs me is the thought no one bothered to seek its advice before."
OUR COMMENT: History repeats itself. The objectors at the recent G1 Stansted inquiry raised similar doubts about air quality figures, some of which have been recently confirmed and are still being debated.
30 March 2008
ALLIANCE TO FIGHT STANSTED'S SECOND RUNWAY
Dunmow Broadcaster - 18 March 2008
AN ALLIANCE of councils against a second runway at Stansted united on Monday, under the banner "CO2" (Councils Opposing a 2nd Runway).
The coalition of authorities, together representing more than three million people, came together at the Houses of Parliament on Monday afternoon to demonstrate the strength of feeling against BAA's second runway at Stansted proposals. They were joined by the "2M Group" of London councils standing against the expansion of Heathrow.
CO2 is currently made up of Essex County, Uttlesford District, Hertfordshire County, Suffolk County, Braintree District and East Herts District councils, with other authorities expressing interests in joining up.
Lord Hanningfield, Essex County Council leader, said: "CO2 will be a powerful force that will campaign on behalf of local residents to oppose this unwanted and unnecessary runway and will take the fight directly to BAA and the Government."
"A new runway would put unbearable strain on our local services and infrastructure, which is already at breaking point, and it will of course cause huge environmental damage. The Government's aviation strategy needs a total rethink."
A BAA spokesman said that the formation of CO2 did not affect the airport operator's stance on the need for a second runway at Stansted. He said: "The councils involved with this have been opposed to a second runway since the Future of Air Transport white paper in 2003. They've come up with a nice new name for it now, but they've been in that camp for a long time."
Leader of Uttlesford District Council (UDC), Cllr Jim Ketteridge, said that all political parties in the district were united in their belief that a second runway would be seriously detrimental to the area.
"As the local authority with Stansted Airport within its boundaries," he said, "we remain strongly opposed to a second runway. It is a stance supported by all political groups on the council. We have a strong mandate in opposing the application following the result of a referendum held in the district."
UDC's deputy leader, Cllr Jackie Cheetham, will join a large number of politicians and dignitaries at a rally being organised by Stop Stansted Expansion (SSE) next month. Representatives from various councils and groups including the Society for the Protection of Ancient Buildings, CPRE, Friends of the Earth, Greenpeace and The National Trust will join a large number of MPs and MEPs to hear from a selection of authoritative speakers.
Carol Barbone, SSE campaign director, said: "The level of opposition to BAA's plans is unprecedented as we prepare to fight - and overturn - its wholly unsustainable proposals."
The rally is taking place at the Rhodes Centre in South Road, Bishop's Stortford, at 8pm on Wednesday April 2.
30 March 2008
WHAT ABOUT CLIMATE CHANGE?
'Jet-setting' government clocked up 300 million air miles last year
Nigel Morris, Home Affairs Correspondent - The Independent - 25 March 2008
The Sustainable Development Commission warned the Government that it urgently needed to "raise its game" to reduce its environmental footprint.
Ministers were accused of hypocrisy and extravagance after the Conservatives calculated that Whitehall departments and major public bodies clocked up more than 300 million "air miles" last year. The Tories said the flights would have been enough to take politicians and civil servants to the moon 1,280 times or make 12,240 journeys around the world.
The figures came after the Sustainable Development Commission, an environmental watchdog, warned the Government that it urgently needed to "raise its game" to reduce its environmental footprint. It called on Whitehall to set a target for cutting air travel in favour of greener alternatives.
The Tories calculated the total journeys by public bodies after obtaining details of the amount of carbon offsetting by the Government in 2006-07. It was the first time Whitehall has disclosed the figures for carbon offsetting.
The highest air travel totals were recorded by the Foreign Office (90.5 million miles), the Ministry of Defence (43.4 million, excluding military travel) and the Department for International Development (42.2 million).
But several largely domestic departments also ran up large totals. The Cabinet Office, including Downing Street, accumulated 38.5 million miles, HM Revenue and Customs staff covered 17.3 million miles and the Home Office accounted for 9.4 million miles.
Ministers and officials from the Department for Communities and Local Government covered 555,000 miles travelling to four continents, while the Department for the Environment, Food and Rural Affairs covered 1,658,000 miles to the likes of Thailand and Australia.
Officers from the Metropolitan Police travelled 16.9 million miles, Transport for London 1.6 million miles and the Greater London Authority 637,000 miles.
The Tories estimated the total travel by ministers and civil servants over the period to be 306 million miles. They claimed the price of the tickets to the taxpayer would have been £50m, excluding expenses such as hotel bills and the cost of food. Francis Maude, the shadow Cabinet Office minister, said: "Ministers - and Ken Livingstone - are failing to practise what they preach on the environment, as they and their civil servants jet around the world on foreign jaunts. Labour ministers should start showing some social responsibility and set clear targets to reduce unnecessary travel, in order to reduce carbon emissions and save taxpayers' money."
Tony Bosworth, senior transport campaigner for Friends of the Earth, said: "Tackling aviation growth is essential to cutting climate change emissions. The Government should be setting an example and not use planes where there are good rail alternatives available."
A spokesman for the Cabinet Office said: "The Government would never indulge in unnecessary air travel, but no one should try to suggest Britain's interests can only be pursued over the phone. For example, Defra sent delegations to important international environmental talks, helping to secure crucial environmental commitments."
The Independent disclosed last week that two thirds of cabinet ministers travel in vehicles occupying the top emissions bands.
Between April 2006 and December 2007, ministers and staff from the Department for Environment, Food and Rural Affairs and its agencies spent £1.8m on 2,361 separate flights to foreign countries
18 March 2008
DOUBLE STANDARDS? ARE AVIATION EMISSIONS IGNORED?
Government figures hide scale of CO2 emissions, says report
John Vidal - The Guardian - 17 March 2008
Britain's climate change emissions may be 12% higher than officially stated, according to a National Audit Office investigation which has strongly criticised the government for using two different carbon accounting systems. "There is insufficient consistency and coordination" in the government's approach, the NAO said.
Using one system, which the government presents to the UN and in public, Britain emitted 656m tonnes of COP2 in 2005, and claims an improvement on 1990 figures. However, the lesser known and more accurate data in the government's national environmental accounts show emissions to be in the region of 733m tonnes in 2005, a NAO report says today.
"There are two different bases on which the government reports emissions: that required for the UN, and the environmental accounts prepared for the Office of National Statistics?(which are) more comprehensive as they include aviation and shipping emissions. They present UK progress in reducing emissions in a markedly different light", says the report. The report says there have been "no reduction in UK emissions" if measured by the national accounts method.
The figures contained in the report fly in the face of consistent government claims that it is reducing emissions. Last week the environment minister, Phil Woolas, said in a Commons written answer: "UK greenhouse gas emissions have fallen by 16.4% since 1990. We remain on course to nearly double our Kyoto Protocol target over the 2008-12 period."
Last night opposition parties and environment groups accused the government of misleading the public at a time when the UK claims to be leading the world in achieving reductions.
"This report raises profound questions about the credibility of the government's approach to reducing carbon emissions. In the absence of reliable and honest reporting the results could be potentially disastrous", said Peter Ainsworth, shadow secretary of state for the environment.
"Labour's claim that Britain's carbon footprint is shrinking is a scam. The figures on aviation are being fiddled, meaning the government can give the green light to airport expansion without most of the subsequent rise in emissions being counted", said Robin Oakley of Greepeace.
The 40 page NAO report found that government departments interpreted data in different contexts and for different purposes, "in one case within the same document on successive pages".
The report said the government's many targets and timetables for reducing different combinations of greenhouse gases were confusing. The UK has a Kyoto target of 12.7% reduction in all greenhouse gases by 2012, an EU target of 20-30% of CO2, three domestic goals ranging between 20-60% CO2 and is in the process of drafting a new climate change bill.
"The targets can be assessed against different bases. There is 'considerable scope' for aggregating and presenting data in different ways", the NAO said.
OUR COMMENT: This pick and mix counting mixture makes it all the more important for the aviation and shipping emissions to be included in the coming Climate Change Bill, which will soon be voted on. Ask your MP to press for this change, it is time that the question of potential damage from ever increasing aviation emissions is properly assessed - it should not be left to the as yet unknown conditions of an EU trading system. Why is aviation so favoured? Other industries are equally important to the economy. All sources of greenhouse gases should be included in the bill.
18 March 2008
SECOND RUNWAY AT STANSTED 'WOULD PUT
UNBEARABLE STRAIN ON SERVICES'
Ben Quin - The Independent - 17 March 2008
Plans to double the size of the UK's third busiest airport are to face opposition from six local authorities representing 3.2 million people.
A second runway at Stansted would put "unbearable strain" on local services, according to authorities in Essex, Suffolk and Hertfordshire which pledged to "vigorously campaign" against a proposed expansion announced last week by the airport operator BAA. Uttlesford District Council - which covers Stansted - has been asked for permission by BAA to build the runway and a second terminal, although a final decision will almost certainly be made by ministers following a public inquiry. If approved, the £2.5bn development would open in 2015 and serve 68 million passengers a year by around 2030.
The county councils in Essex, Hertfordshire and Suffolk, and district councils serving Braintree, East Hertfordshire and Uttlesford, said a second runway was "unwanted and unnecessary". Local politicians announced they were forming a cross-party group named Councils Opposing a 2nd Runway (CO2) and called on the Government to "totally rethink" its aviation strategy.
Matthew Knowles, a spokesman for the Society of British Aerospace Companies, said the expansion was designed to meet demand from the public for flights that would bring money into the economy.
OUR COMMENT: What demand? Why is Ryanair advertising thousands of ?free? or very cheap seats?
18 March 2008
WHAT'S THE CATCH WITH RYANAIR'S FREE FLIGHTS BONANZA?
Emine Saner - The Guardian - 18 March 2008
Last month, the low-cost airline Ryanair warned that its profits could halve this year because of high fuel costs and low consumer confidence. So why is it giving away a million free flights - it will even pay the taxes - which, it says, are worth £34m?
Its cheery chief executive, Michael O'Leary, promised the CO2-laden bonanza if his horse won at Cheltenham last week; it didn't, but he still decided to go ahead, or so the airline's spin machine has it. Actually, Ryanair has run this promotion before - in May last year, when it was struggling to fill its planes.
"It brings a lot of new customers to our website," says Caroline Baldwin, the UK head of sales and marketing. Is it to fill empty planes? "No, not at all," says Baldwin, who is sticking to the horse story. Strange, then, that so far this year, Ryanair's load factor - the measure of how full the planes are - has been 2% down on the same time in 2007.
Last month, the airline was forced to declare the taxes and charges in its advertised rates following pressure from the Office of Fair Trading. The consumer magazine Holiday Which? said Ryanair was the worst airline when it came to its hidden charges - book a free flight (actually, it charges a nominal 1p) from London to Oslo, say, and if you don't watch it, you can be charged £5.77 for travel insurance, £3 for priority boarding, £21 to check two bags in at the airport and a credit card charge. Then there is the inflight food and drink, car hire, hotels, financial services ... "The hope is that we would make money from those ancillaries," admits Baldwin.
O'Leary has said that it is his ambition to be able to offer all of Ryanair's seats free one day, with all the money coming from the add-ons. Cost to the environment isn't included.
18 March 2008
CATERERS FOR EASYJET 'TOOK OUT OF DATE FOOD FROM BINS'
FOR AIR PASSENGERS
Stephen.Moyes@Mirror.co.uk - 16 March 2008
Out of date food scavenged from a smelly skip has been served to easyJet passengers, an ex-catering worker claims. He was told to climb into a car park bin to find sandwiches because there was not enough food for an inflight meal order.
The 10 packaged Bacon Bloomers were dusted down and unwittingly given to passengers on no-frills flights out of Luton. They were two or three days past sell-by dates.
The Mirror launched a surveillance operation and other staff at the world's largest inflight caterer Gate Gourmet confirmed that they had also reused discarded food.
The 20-year-old anonymous former worker said: "I climbed into the skip bin to fetch old food that had been thrown away. The food was buried under discarded items. I was told there was not enough food in the warehouse and the company wanted to avoid complaints. It was treated as a bit of a joke."
Another employee added: "I wouldn't fly easyJet and I would never buy the food. We know how we did it."
Neil Harding, 28, who worked at the Luton warehouse until January, said: "If there is a mix-up in the order and after things have been disposed of, they realise there is a problem with that day's delivery. That was when food was fished out of the bins and used a day or two later than it should be."
Mr Harding also claimed some staff had not yet had criminal record checks as required by the Department of Transport. He said: "Food is packed in the warehouse and sent into the hold of the planes.
"It is therefore essential that no one could work there who could be considered a threat to security. This was not the case." And containers were not made tamper proof, he said.
Others said prepared food was left on the floor. Tables were hurriedly brought in after easyJet said it wanted to inspect the place because of complaints.
One manager said: "Now everything is made on tables, nothing on the floor." Staff claimed the firm could not cope after winning a contract in October to supply meals and drinks for up to 60 Luton easyJet flights a day.
18 March 2008
FEARS OVER BAA REFINANCING
Alistair Osborne - Daily Telegraph - 18 March 2008
Airports operator BAA has admitted to the holders of £4.7bn of bonds that the Competition Commission could scupper its plans to refinance £10bn of debt.
José Leo, BAA's chief financial officer, said the owner of seven airports including Heathrow, Gatwick and Stansted had figured the possible forced sale of airports into the structure of its proposed refinancing.
"We are obviously conscious that the commission's report might ask BAA to sell an airport, so we have to be ready for that," he said.
However, he admitted in a two-hour conference call: "The commission can make decisions and express views that could be incompatible with my plan. It is out of my hands."
Mr Leo was making BAA's biggest presentation yet to the holders of nine classes of sterling and euro-denominated bonds that predated 2006's £10.1bn takeover of the airports operator by a consortium controlled by Spanish company, Grupo Ferrovial. Including debt, the takeover totalled £16.3bn.
BAA wants to "migrate" these bondholders into a new securitised vehicle backed by the London airports. But the bondholders are ready to fight their corner over the transfer terms.
Discussions have only just started via the Association of British Insurers and bondholders questioned whether BAA could achieve its refinancing, as planned, by the end of the second quarter - particularly given the worsening credit crunch.
Mr Leo, who ducked all detailed questions on the refinancing, dismissed the "noise in the press" that the Civil Aviation Authority had last week helped the company by hiking landing charges at Heathrow and Gatwick.
"No one can argue that the outcome of the CAA report is a gift to BAA," Mr Leo said, stressing the CAA had made an "unprecedented" cut to BAA's cost of capital.
18 March 2008
LABOUR'S FLYING CLUB LOBBIES FOR BAA
Jon Ungoed-Thomas - Times Online - 16 March 2008
The airport operator BAA has used an elaborate network of lobbying and PR groups, headed by senior Labour figures with access to the government, to promote its controversial plans for a third Heathrow runway.
Among the Labour insiders recruited to front pro-aviation lobby groups are Brian Wilson, a former industry and energy minister, and Lord Soley, a former chairman of the parliamentary Labour party.
Jo Irvin, now a member of Brown's inner circle in Downing Street, not only headed BAA's public affairs department but also fronted one of the prime lobby groups backing Heathrow expansion.
Another Labour apparatchik, Stephen Hardwick, was closely involved in the same lobby group, as well as being employed as director of public affairs for BAA.
Opponents of the third runway claim the links between BAA and the government have given it an undue influence over aviation policy. John McDonnell, a Labour MP, said: "BAA dominates the government's aviation policy. There have been a number of front organisations over the years that have promoted aviation. They are all funded by the industry and are largely paid lobbyists."
Details of BAA's lobbying groups - and its close links to government - are now to be examined by a parliamentary inquiry into lobbying.
It comes after a Sunday Times investigation last week revealed that BAA and the government "fixed" environmental targets while researching the impact of a third runway.
BAA funds two key groups - Future Heathrow, led by Soley, and FlyingMatters, which is headed by Wilson and has also investigated opponents of expansion.
Their precursor was Freedom to Fly, which was set up at a time when BAA was concerned that its arguments for more air travel were not being given the same prominence as those of environmental groups, which were warning of the dangers of growing carbon emissions.
The group was chaired by Brenda Dean, the Labour peer, and was supported by other aviation companies, including British Airways, and unions. The director was Irvin, who is now a special adviser in Downing Street on trade unions.
Freedom to Fly, which was closed after the 2003 aviation white paper was published, was followed by Future Heathrow, the lobby group headed by Soley. As well as BAA, the group's backers include British Airways, the pilots' union Balpa and the London Chamber of Commerce.
Earlier this year, during the consultation on a third runway at Heathrow, the group held a reception in a dining room at the Commons to lobby MPs about the benefits. Ruth Kelly, the transport secretary, was among the guests mixing with BAA executives and other senior figures from the aviation industry.
BAA is also one of the biggest backers of FlyingMatters, contributing £48,000 in 2007-08. The lobby group operates from offices a short stroll from Westminster where it campaigns for airport expansion and investigates groups opposing BAA's plans.
Last year a FlyingMatters investigation found that Uttlesford district council had spent £228,000 in legal fees on opposing BAA's plans to expand Stansted. Michelle Di Leo, director of FlyingMatters, said: "The terms of the debates on aviation were being set by those opposed to a growth in air transport. Our main objective is to rebalance the public debate."
She said the information about Uttlesford district council was released in response to a freedom of information request from FlyingMatters and it was legitimate to examine the use of public funds. She added that groups opposing airport expansion were well funded and it was reasonable to question the source of those funds.
The aviation industry uses Whitehall as a key recruiting ground for new personnel. Tom Kelly, who was Tony Blair's chief spokesman, was appointed BAA's public affairs director last year. Julia Simpson also left Downing Street last year, where she worked as an adviser to Blair, to become British Airways? head of corporate communications.
The lobbying firms used by British Airways - Brunswick and Lexington - also have close links to Labour. Alan Parker at Brunswick is a friend of Gordon Brown, and Mike Craven at Lexington was formerly chief media spokesman for the Labour party.
William Dinan, of Spinwatch, which campaigns for more transparency about lobby groups, said such groups - including environmental campaign groups - should be required by law to disclose their backers and the amount of funding they were receiving.
He has given evidence to the lobbying inquiry being conducted by the Commons public administration committee and is to submit further written evidence on BAA's lobbying network this week.
Joss Garman, a spokesman for Plane Stupid, which is campaigning against the third runway, said: "It was always extraordinary that a government which claims to be concerned about climate change would even consider building a third runway at Heathrow. Now, as a light is shone into the murky corners of the lobbying process, we're beginning to understand how it was that Brown put his credibility at risk."
A BAA spokesman said the groups FlyingMatters and Future Heathrow were broad-based coalitions and the company's involvement was disclosed on their websites. He said the groups worked to promote the social and economic benefits of airport expansion.
Soley, who is paid £28,000 a year by Future Heathrow, said his group had relatively meagre resources when compared with the groups campaigning against airport expansion. He said detailed questions should be asked about the sources of their funding.
18 March 2008
MINISTERS FACING ALL-OUT FIGHT OVER HEATHROW DATA
Paul Waugh, Deputy Political Editor - This is London - 10 March 2008
The Government is facing a legal battle over its plans to expand Heathrow amid fresh claims it colluded with the airport to hide noise and pollution increases.
In a move that could seriously delay the building of a third runway, an alliance of green protesters and London councils is poised to take court action after confidential documents suggested that the Department for Transport failed to assess properly the full impact of the project.
Whitehall memos indicate that civil servants skewed their study to fit data supplied by Heathrow owners BAA, which claimed that the extra 230,000 flights a year would lead to minimal increases in air pollution and noise levels.
Just as damagingly, the Environment Agency, the Government's own watchdog, has concluded that the DfT failed to carry out proper work on the impact on public health and warned there could be more deaths among residents from pollution.
Lobby group HACAN ClearSkies said there were now "very, very strong grounds" for a lawsuit and that it would work with Greenpeace and authorities such as Wandsworth Council to claim the DfT had failed to carry out its statutory duties. The groups are to meet barristers today.
In a separate move, Tory MP Justine Greening today wrote to the Parliamentary Ombudsman Ann Abraham to complain that Cabinet Secretary Sir Gus O'Donnell repeatedly failed to act on claims that civil servants had acted in cahoots with BAA and tried to cover up the facts.
Ms Greening, whose Freedom of Information Act battle has led to the release of confidential files on the affair, said that the way the public had been misled was "completely indefensible". She also backed a fresh legal challenge on the grounds that the public consultation on the expansion, which ended last month, was flawed.
Gordon Brown believes that a third runway at the airport is vital to maintain Britain's competitive edge and BAA insists its figures on noise and pollution will stand up to scrutiny.
But an official involved in "Project Heathrow" - the DfT unit that researched the impact of the runway - has backed critics' claims about the consultation. "They knew exactly what results they wanted and fixed the inputs to get there. It's appalling," the official told the Sunday Times.
It was also alleged that BAA instructed DfT officials on how to "strip out" data which indicated environmental targets would be breached. The study reduced the likely carbon emissions caused by not including incoming international flights.
John Stewart, chairman of HACAN ClearSkies, said: "If the civil servants involved did collude with BAA, we have to ask whether they should remain in post. Similarly, we have to ask if Transport minister Jim Fitzpatrick knew any of this."
Greenpeace executive director John Sauven said: "The Environment Agency's move to disown the consultation is the final blow to Brown's dodgy runway dossier."
18 March 2008
VILLAGERS IN FLIGHT PATH FURY
Dave Gooderham - East Anglian Times - 11 March 2008
DISGRUNTLED residents in a tiny Suffolk village last night vowed to fight plans to move an aircraft flight path over their homes - claiming the decision would shatter their tranquil existence.
The idyllic lifestyle enjoyed by the few hundred residents of Thorpe Morieux, near Sudbury, could be lost forever if plans to move an aircraft holding area serving Stansted Airport are given the go-ahead.
Now concerned villagers, who warned other neighbouring communities could also suffer, have revealed they will fight any attempt to move the flight path - just weeks after residents in Sudbury were celebrating the switch away from their skies.
Thorpe Morieux resident Frances Bee said: "We feel Thorpe Morieux is one of the last areas of tranquillity and that is why people move here."
"With such a small village, you accept certain things like having no shop, school or limited public transport. But you accept that because this area is quiet and beautiful and residents are looking for a less hectic pace of life. Now that could be shattered by these plans."
"We believe the basic design principles are flawed as it has shifted focus to low population areas. By definition, this means areas which are quiet and will be affected by the noise much more than any town."
Mrs Bee believes villages like Lavenham, Needham Market, Cockfield, Felsham and Monks Eleigh could also suffer. And South Suffolk MP Tim Yeo, who met with worried residents on Saturday, has urged villages to join forces to fight the plans.
"I think residents in Thorpe Morieux have got a very strong case and I have always thought it was wrong that flight paths should be shifted to areas of less population density when any noise can be heard more," he told the EADT.
NATS - formerly the National Air Traffic Service - last month launched a three-month consultation period proposing to shift the stacking zone over the Sudbury area. A spokesman said the new proposals had been based on guidelines from the Civil Aviation Authority (CAA) advising avoidance of centres of population.
He added: "We would encourage people to get involved in the consultation process and not just sit back and be unhappy. We can then use this feedback to consider our position before a final decision is made."
Mrs Bee urged residents to attend a Thorpe Morieux Parish Council meeting on Thursday evening, when members will be discussing the new flight paths.
18 March 2008
A SHORTAGE OF PASSENGER SEATS?
February traffic figures
BAA Online - 11 March 2008
BAA Group airports in the UK handled 10.2 million passengers in February, an increase of 3.5% on the same month last year. Traffic in the first 28 days of the month (i.e. ignoring the extra leap year day) was down by 0.5% on last February.
European scheduled traffic was up by just 0.1% while European charters rose by 1.5%. North Atlantic activity was 1.1% lower, while traffic on other long haul routes was, in aggregate, up by 1.0%. Domestic traffic continued its recent softness with a 3.7% decrease.
Again adjusting for the leap year distortion, there were mixed results for individual airports. Heathrow?s traffic was up by 0.1%, Gatwick?s by 3.4% and Edinburgh by 3.9%. Moving in the other direction were Stansted (-7.6%), Glasgow (-5.7%) and Aberdeen (-1.2%).
In total, and before adjusting for the extra day, air transport movements were up by 0.8% but down 3.0% after adjustment. On this latter basis Gatwick (+0.6%) was the only individual airport to handle more movements in February.
The headline result for air cargo was an increase of 8.9% largely driven by a 12.7% increase at Heathrow. The leap year adjusted total figure was an increase of 5.3% (Heathrow 9.3%).
18 March 2008
THOUGHT FOR THE WEEK
Charles Clover - Daily Telegraph - 13 March 2008
I'm sure the Queen is used to being put in an invidious position by her government of the day, but I'm afraid she finds herself in a real stinker having to open Heathrow Terminal Five amid the fierce controversy about air travel's effect upon climate change and the role of the bloated, Spanish-owned airport operator, BAA.
No doubt her people have thought up something nice she can say about the colour of the carpets or the loyalty and diligence of the construction workers to get round the fact that this shiny new terminal, and indeed the Government's whole "predict and provide" aviation policy, is built upon broken promises, cowardice and deceit.
Don't get me wrong, I'm as much of an eco-sinner as anyone, having spent more hours in the air and queuing in the miserable, sardine-like conditions at Heathrow than most of my fellow countrymen. I just think that the nation needs to be honest with itself about aviation policy, that aviation cannot be allowed to be a special case, and that fliers should pay their environmental costs.
Let's just spell out some of those many broken promises. Number one was in 1980, when an inquiry inspector gave permission for Terminal Four on the condition that there would neither be a fifth terminal or a major expansion of Heathrow.
Number two, was the promise by BAA, during the lengthy T5 inquiry, that a fifth terminal would not lead to a third runway. Number three was the inspector's agreement when T5 was given permission in 2001 that there should be a limit of 480,000 flights a year. The Government's plans for a third runway would lead to more than 700,000.
Then cast your mind to the nice bit of Essex where the Government's endorsement of a new runway at Stansted now threatens 1,000 acres of medieval homes and woods and to make Thaxted, Great Dunmow, Saffron Walden and Bishop's Stortford into a kind of giant Hounslow within a generation. There, to get the first runway, the Government of the day in the 1980s undertook that a second runway would never be built.
We all want to fly. Just do we have to do it for £10, with no hot meal, amid an orgy of Tie Rack, bookshop, car showroom, shopping mall sprawl which apparently has no end? Who is all this good for, us or BAA - which seems to have been colluding with the Government to rig the results of the consultation over the expansion of Heathrow?
Alistair Darling's new plane tax will hardly restrain flying at all. The Queen can't say this, so I will: there must be a limit, for the climate's sake, to the growth of aviation and building no more runways would be a good place to start.
13 March 2008
THE SECOND RUNWAY APPLICATION HAS AT LAST ARRIVED -
LET BATTLE BEGIN!
"Second runway on course for 2015"
Press Release by BAA - 11 March 2008
Greater choice and opportunity for millions of air travellers comes a step closer today as BAA submits its Generation 2 (G2) planning applications for the development of a second runway at Stansted Airport.
The proposal is the result of four years of intensive and rigorous planning work to deliver this key milestone of the Government's Air Transport White Paper. Stansted is to be the location for the first new runway in the South East of England for over 50 years. The two-runway, two terminal airport is expected to be open in 2015, serving 68 million passengers a year in around 2030.
Key features of the development plans include:
* The creation of over 13,000 new jobs by 2030
* UK economic benefits of £9 billion - much within the £100 billion Eastern region economy
* Reduction in land required from around 700 hectares to 442 hectares
* Extra 208 hectares of existing land adjacent to the extended airport boundary dedicated to a comprehensive nature conservation and landscaping scheme to reduce and offset the effects of the development
* The number of residential dwellings required down by over 25% with the number of listed buildings lost reduced from 29 to 13, with 10 of these to be dismantled and rebuilt
* The number of people within the 57 dBA leq air noise contour down from over 11,000 in the White Paper to under 5,000
Around 70 stringent sustainability targets, including:
* By 2030 Stansted's carbon dioxide (CO2) emissions from energy use will not exceed those in 2006
* By 2030, water supplied to Stansted will be no greater volume than that used by the single runway airport operation at present
* 10% or less of waste to landfill by 2030
* By 2030, 70% of waste generated by the airport's operation will be recycled
* Investment planned in road and rail improvements to build upon Stansted's UK leading position for public transport use by passengers
Sir Nigel Rudd, Chairman of BAA, said: "BAA is proud to reach this significant milestone in the future development of Stansted. We remain fully committed to building a second runway, a project that is central to government policy in delivering additional runway capacity in the South East. This important project will bring huge benefits to the East of England and UK economy, and will increase choice and opportunity for millions of business and leisure travellers."
Alastair McDermid, BAA Director for Stansted Generation 2, said: "Stansted represents all that is best in a modern, mobile and dynamic economy so I'm very proud of the exciting and innovative G2 plans we present today."
"To help shape this vision we have listened very carefully to the views of thousands of people, and I firmly believe we have planned the best airport project of its time. Our proposals represent a significant investment by BAA to deliver the sustainable and responsible growth of air travel in the UK. They allow the national and regional economies to compete in an increasingly global market place and share in the huge social and economic benefits available. At the same time we have worked extremely hard to minimise the environmental impacts that were anticipated by the Government when it published its Air Transport White Paper in 2003."
"The potential benefit of a second runway is enormous for business growth, for the creation of thousands of new jobs, for supporting inward investment and for boosting inbound tourism. And the social and cultural benefits of even greater opportunities for leisure travel and to visit friends and family cannot be underestimated."
"But this is not growth at any cost. The global issue of climate change is one which we take very seriously and is recognised as requiring international action. There is agreement that the best way of addressing the challenge is through a global emissions trading scheme, and BAA has been leading the call for the aviation industry to be part of that."
"We want to make sure passengers have the best possible experience as they travel through Stansted, that it's efficient and cost effective for airlines and that it's an airport which in terms of its environmental credentials is at the leading edge of what it's possible to do."
13 March 2008
COUNTY COUNCIL TO FIGHT SECOND RUNWAY PLAN
"Second runway on course for 2015"
David Jackman - Citizen-series website - 10 March 2008
PROPOSALS - expected to be announced tomorrow - for a second runway at Stansted Airport would mean "significant environmental damage", warns Essex County Council which says it intends to fight the controversial plans "tooth and nail".
Airport operator BAA is due to reveal its plans at a press conference in the morning, but already opposition is being voiced against the move which the county council says would also place a "huge strain" on existing public services and infrastructure.
County council leader Lord Hanningfield said: "This is not what the people of Essex want and it is not what the people of Britain need."
He added the proposals "totally contradict the government's so called commitment to protecting the environment as well as reducing emissions."
He added: "Indeed it is odd for a government who claim they want to improve the environment of this country but who also seem committed to the expansion of aviation on unproven suppositions."
"If it goes ahead, it will have a severe impact on the quality of life of hundreds of thousands of Essex residents with more pollution, traffic, noise and will place huge pressure on already overstretched infrastructure and public services.
"For these reasons we are strongly opposed to a second runway and we will fight it tooth and nail. It is time for the government to go back to the drawing board and rethink its aviation strategy."
13 March 2008
UNVEILING OF STANSTED EXPANSION BID
Controversial plans for a second runway at Stansted Airport
are due to be announced
Express website - 11 March 2008
BAA will unveil a planning application to expand the airport, which is the third busiest in the UK. The plans face fierce opposition from environmental campaigners and local residents, but business leaders say the scheme is essential to the growth of the economy.
The Stop Stansted Expansion (SSE) campaign group claims the development would ruin 1,000 acres of countryside and ancient woodland.
"The application must serve as a rallying call - not just for local people who seek to safeguard this unspoilt area of countryside but for all those who care about our legacy to future generations," said Peter Sanders, of SSE. "We will fight BAA's plans tooth and nail."
Lord Hanningfield, leader of Essex County Council, said: "This is not what the people of Essex want and it is not what the people of Britain need. If it goes ahead, it will have a severe impact on the quality of life of hundreds of thousands of Essex residents, with more pollution, traffic and noise."
He added: "It is time for the Government to go back to the drawing board and rethink its aviation strategy."
David Frost, director general of the British Chambers of Commerce, said the development was much-needed. "With the UK economy now facing a slowdown, it could not be more crucial that the country's third busiest airport is permitted to expand," he said.
13 March 2008
CAA ISSUES ITS PRICE CONTROL DECISIONS
FOR HEATHROW AND GATWICK AIRPORTS
CAA press statement - 11 March 2008
The Civil Aviation Authority (CAA) is today publishing its decisions for price controls for Heathrow and Gatwick airports for the five years from 1 April 2008 to 31 March 2013. The CAA's package of price caps and incentives will enable and encourage BAA to deliver genuine service quality improvements and to invest to raise the level of facilities and service that can be delivered to passengers and airlines. The outcome for passengers should be decently modern airports and consistently high service standards.
The CAA has set the following maximum charges:
£12.80 per passenger in 2008/09, an increase of £2.44 on a like-for-like basis, representing a 23.5 per cent increase in real terms from the current (2007/08) price cap, with allowed charges subsequently increasing in each of the following four years by no more than retail price index (RPI) inflation plus 7.5 per cent each year.
£6.79 per passenger in 2008/09, an increase of £1.18 on a like-for-like basis, representing a 21.0 per cent increase in real terms from the current (2007/08) price cap, with allowed charges subsequently increasing in each of the following four years by no more than RPI inflation plus 2.0 per cent.
At both airports, the difference from the CAA's November proposals is in the first year increase, which is £0.83 per passenger or 7 percentage points greater at Heathrow and £0.72 per passenger or 12 percentage points greater at Gatwick.
The main reasons for the differences since November are (i) additional investment, particularly at Heathrow, the need for which has largely been endorsed by the airlines operating at each airport; and (ii) additional security costs at both airports, but with greater impact at Gatwick, which, in the CAA's view, are necessary both to reduce queues for passengers and to meet Department for Transport security requirements and the Government's drive to restore more normal arrangements across the UK for passengers' hand baggage. Otherwise, these decisions are aligned with the recommendations made by the Competition Commission, updated for subsequent airport-airline agreements, information received since the Commission completed its report, and the final round of consultation on the CAA's November 2007 proposals.
The CAA recognises that the resulting increases in airport charges are significant. However, these higher airport charges are essentially paying for the modernisation of Heathrow and Gatwick, in terms of both facilities and service, for the direct benefit of the passenger. At Heathrow, this entails paying for the full capital and operating costs of Terminal 5 as it comes into service on 27 March 2008, the construction of the Heathrow East Terminal by 2013, and bringing the rest of the airport up to comparable modern standards. At Gatwick, the next quinquennium will see the construction of a major new pier, the redevelopment of the South Terminal check-in area and forecourt access, and a new baggage system.
In terms of service, the CAA's decision provides for shorter security queuing times, enhanced levels of service across the airports (such as more reliable equipment and cleaner terminals), and greater and more immediate information to passengers from BAA (including displayed in the terminals themselves) of how it is performing against the standards it has been set.
It is important that airlines and passengers receive the services that they are paying for in airport charges. The CAA therefore confirms its earlier proposals for stronger incentives on each airport in the coming five-year period to deliver higher and consistent service quality and improved infrastructure.
These stronger financial incentives include:
A greater proportion of the investment programme at each airport will be subject to triggers?, under which penalty payments are incurred each month for late delivery of specified outputs from projects. The CAA has decided to set triggers covering over 60 per cent of Heathrow's and Gatwick's respective capital programmes for Q5, under which around 5 and 4 per cent respectively of airport charge revenue would be at risk during Q5 in the event that these projects were not delivered on time.
A broader range of services will be subject to financial incentives, with enhanced targets most notably for passenger security processing, which should deliver a quicker and more reliable experience for passengers - queues less than 5 minutes for 95 per cent of the whole day. The CAA proposes to increase the maximum level of rebates for poor service performance from 3 to 7 per cent of total airport charge revenue (up to around £63 million at Heathrow in 2008/09, and £17 million at Gatwick). The CAA has also introduced bonuses for performance above target, to promote continuous improvement in service beyond the enhanced minimum standards set by the CAA. These bonuses can be up to 2 per cent of airport charge revenue for passenger service performance above targets, delivered consistently across all terminals (up to around £20 million at Heathrow in 2008/09, and £5 million at Gatwick).
The CAA has maintained its earlier proposals for the price caps to be based on a pre-tax real weighted average cost of capital of 6.2 per cent at Heathrow and 6.5 per cent at Gatwick as recommended by the Competition Commission. Before doing so, the CAA has analysed recent turbulence in the financial markets, but found that while there had been movement in some individual components of the cost of capital, overall the Competition Commission's recommendations remained valid.
Commenting on these decisions, which are informed by the recommendations of the Competition Commission and build on agreements reached between the airports and airlines, as well as over two and half years of consultation, Dr Harry Bush, CAA Group Director, Economic Regulation, said:
"These decisions build on the enduring themes of the CAA's previous regulatory proposals in this review. Passengers and airlines deserve better than they have been provided with at Heathrow and Gatwick in recent years. However, the resulting improvements in airport facilities and service standards - some £5 billion of investment over the next 5 years and a halving of security queuing times - have to be paid for in increased charges."
"But airlines and passengers need to be sure that they are getting the enhanced facilities and services that they are paying for. Hence, the CAA's emphasis on greater financial incentives - with BAA being penalised a lot more if it fails service standards and earning bonuses if it exceeds them (but only if passengers in every terminal benefit)."
"The price caps have been carefully based on investment programmes emerging from airport-airline discussions and also on a shared airline-airport desire to improve quality of service, in particular for passengers at security. The CAA hopes that the constructive engagement between airports and airlines that underlies much of this pricing decision will continue in the future to the benefit of their shared customers."
13 March 2008
AIRLINES ATTACK AIRPORT PRICE HIKE
Kevin Done, Aerospace Correspondent - Financial Times - 11 March 2008
Airlines on Tuesday launched a sharp attack on the economic regulation of the three London airports, as the UK Civil Aviation Authority announced a big increase in the charges BAA can set at Heathrow and Gatwick.
The CAA said it was increasing the price cap at Heathrow by £2.44 or 23.5 per cent in real terms to £12.80 per passenger for the coming year from April 2008. Charges in the four subsequent years could rise by 7.5 per cent a year above inflation.
Harry Bush, CAA group director for economic regulation, said "improvements in airport facilities and service standards - some £5bn of investment over the next five years and a halving of security queuing times - have to be paid for in increased charges."
British Airways, the biggest operator at Heathrow, which is about to benefit from the opening of the £4.3bn Terminal 5 at the airport on March 27, said the big jump in charges "demonstrates conclusively that the airport regulation system has failed, to the detriment of customers".
Airports operator BAA said it remained committed to spending £4.8bn in the next five years on its UK airports, but claimed the returns it was being allowed by the CAA were too low.
It said the CAA review "does not recognise sufficiently the scale of the task we are embarked on; the pressures of handling such large infrastructure projects; the full cost of the increased security requirements; as well as the impact of the credit market turmoil."
Ferrovial, which acquired BAA in 2006 in a highly leveraged takeover, has been struggling to refinance about £9bn of BAA debt.
BAA said it intended to implement the refinancing, including an investment grade, ring-fenced structure backed by designated assets - Heathrow, Gatwick and Stansted and the Heathrow Express rail link - by the end of the second quarter.
It said the plans for the refinancing were "well advanced" and it was "actively engaging with key parties including the rating agencies".
Paul Ellis, British Airways? general manager for airport policy and infrastructure, accused the CAA of giving in to pressure from BAA and of agreeing too big a rise in charges.
"When BAA's new owners, Ferrovial, bought them, the CAA said they would not be influenced by Ferrovial's high debt levels. In practice, they have ignored their own policy and caved in to intense pressure from BAA by setting excessive price increases. Heathrow passengers will pay, on average, 17 per cent more than the Competition Commission recommended in September 2007."
British Airways said "urgent changes" must be made to current UK airport regulation.
The structure of BAA is being investigated by the Competition Commission and one result of the probe could be a call for the breakup of BAA's London airport monopoly. BAA owns seven airports in the UK, Heathrow, Gatwick and Stansted in London, Glasgow, Edinburgh and Aberdeen in Scotland and Southampton.
13 March 2008
NEW ROAD PLANS FOR STANSTED AIRPORT
(NOT FOR THE COMMUTER!)
New road layout plans for airport
Kevin Done, Aerospace Correspondent - Financial Times - 11 March 2008
Plans to change motorway junctions and trunk road access to Stansted Airport to accommodate increased traffic have been announced.
A new junction to be called 8b, close to the existing junction 8 and 8a, is proposed on the M11 in Essex. Existing roads taking traffic onto Thremhall Avenue, an airport approach road, could also be changed.
Proposals are to be submitted for work, funded by the airport's operator BAA, to start in 2012 and finish in 2015.
Transport Minister Tom Harris, has announced the Highways Agency's preferred route.
Best traffic option
"The announcement confirms our commitment to a safer and less congested M11 and A120," he said.
"These improvements, once delivered, will also be a boost to the economy, both nationally and regionally.
"The Highways Agency has proposed this route as the best option for traffic needs in the future."
A separate statement said the road access plans are "essential" to the proposed expansion at Stansted Airport "to provide safe and easy routes for road users in addition to the expansion of rail and other public transport facilities".
Work depends on the outcome of a planning application, which is expected to be submitted soon, and comments from those taking an interest in the project.
13 March 2008
MORE CASH NEEDED FOR AIRPORT PLANS?
BAA sells duty-free outlets to Autogrill
Martin Arnold and Maggie Urry - Financial Times - 9 March 2008
BAA, the UK airport operator, on Monday announced it had sold a chain of 58 duty-free stores to Italy's Autoúgrill in a £545m ($1.1bn, ?717m) deal.
The sale of World Duty Free raises much-needed cash for Ferrovial, the Spanish infrastructure group that acquired BAA in 2006 in a highly leveraged deal.
Autogrill, controlled by the Benetton family, has exclusive rights to run stores at London's Heathrow, Gatwick and Stansted airports thanks to a 12-year BAA concession.
The deal cements Autoúgrill's position as the world's biggest food and drink provider at service stations, airports and rail stations. Last year it acquired Alpha Airports, operator of retail outlets and catering services in smaller UK airports.
Autoúgrill, listed on the Milan stock exchange, aims to save costs by combining World Duty Free and Alpha. It is also announced on Monday that it had taken full control of Aldeasa from the UK's Imperial Tobacco. The joint venture operates more than 200 airport shops in Spain, Portugal, Latin America and Africa.
Ferrovial decided to sell WDF and other non-core assets to reduce the £9bn of debt it raised to fund its £10.1bn purchase of BAA 18 months ago alongside two financial partners.
It has since had to increase costly security checks and been hit by a public campaign over delays and lost baggage. The credit crunch last year forced Ferrovial and its partners to postpone a £9bn securitised bond issue.
The company hopes to have debt restructuring ready by the middle of this year. Pricing the deal also depends largely on final tariff caps at Heathrow airport, to be published on Tuesday.
Ferrovial was advised by Merrill Lynch and Autogrill was advised by UBS.
Autogrill's acquisition of Aldeasa has to be approved by the European Commission, and Imperial expects to complete the sale by May.
The sale will raise ?275m in cash for the cigarette maker, plus the repayment of ?80m of debt. Imperial said the enterprise value of ?355m represented 9.2 times earnings before interest, tax, depreciation and amortisation.
Imperial acquired the interest in Aldeasa when it bought Altadis, the Spanish tobacco group, in January. It paid ?12.6bn for Altadis and is buying out the minority shares in Logista, its logistics business, for ?910m.
When it launched the offer for the Gitanes and Gauloise cigarette maker last summer, Imperial said it would partly finance the deal by a rights issue of up to £5bn before the mid-July anniversary of making its formal bid.
Imperial said those plans had not changed despite the turbulence in financial markets.
Autogrill and Altadis had been joint owners of the Aldeasa business since 2005, which had total sales of ?830m in 2007.
13 March 2008
TRANS-ATLANTIC FLIGHT ARRIVES IN LONDON
WITH JUST FIVE PASSENGERS ON BOARD
Daily Mail - 5 March 2008
Furious environmental campaigners have hit out at an airline that sent a plane on a 4,000-mile journey with just five passengers on board. With enough room to fit 245 passengers, the American Airlines flight made the nine-hour trip on 22,000 gallons of fuel - a total of 4,400 gallons per passenger.
However, the lucky five passengers were treated to a luxury flight from Chicago to Heathrow when they were upgraded to business class and were waited on by two cabin staff each.
American Airlines came under criticism when the flew a Boeing 777 with just five passengers on board. Each passenger on the plane had a massive carbon footprint of 43.2 tonnes of CO2 and it has been branded one of the worst "environmental crimes".
The flight had been fully-booked, but an 11-hour delay due to a mechanical failure meant most passengers made other travel arrangements.
Richard Dyer, of Friends of the Earth, said: "Flying a virtually empty plane is an obscene waste of fuel. Through no fault of their own, each passenger's carbon footprint for this flight is about 45 times what it would have been if the plane had been full."
The average car would have to drive 123,000 miles to clock up the same carbon footprint or a British household would five years to use up the same amount in gas and electricity.
Environmentalists have reacted angrily to the airline's decision. Campaigners said it was an obscene environmental crime and was the worst case of its kind they had come across.
Rather than cancel the near-empty flight AA90, American Airlines decided to go ahead with the controversial trip went ahead as more passengers were waiting at Heathrow for the plane to arrive.
Norman Baker MP, the Liberal Democrat spokesman for transport, said: "I have heard of planes flying at two thirds full before but this is the worst example I have come across. It is a climate change crime. It shows the ludicrous nature of the aviation industry."
"For an airline to think it sensible to fly aeroplanes which are virtually empty and where the crew outnumber the passengers is madness. I hate to think of the size of each passenger's carbon footprint on that flight."
"I understand the airline has a timetable to stick to and you can't leave people stranded but I can't believe there wasn't an alternative rather than fly a near-empty plane across the Atlantic."
Anita Goldsmith, for Greenpeace, accused the US airline of putting profit before the environment. She said: "Aviation is the fastest growing source of climate changing emissions, yet here we have another example of the reckless approach the industry takes when it comes to a choice between profit and convenience over the environment and all our futures."
Environmentalists have been campaigning for the government to force airlines to pay for carbon offsetting rather than passing it on to passengers.
Mr Baker said: "This case shows the need for the aviation industry to pay its own tax on fuel rather than the passenger which would give companies the incentive to fill their planes."
Mr Dyer, of Friends of the Earth, added: "Governments must stop granting the aviation industry the unfair privileges that allow this to happen by taxing aviation fuel and including emissions from aviation in international agreements to tackle climate change."
Flight AA90 had been due to take off from Chicago's O'Hare International airport at 3.10pm on Friday, February 8. It did not leave until after 5am the next day and arrived in London at 5pm.
Anneliese Morris, spokeswoman for American Airlines, said they thought long and hard about cancelling the flight but did not due to the number of passengers waiting in London. She said: "This situation is very rare. Exceptional operational circumstances meant that we had to operate this flight from Chicago to London with just five passengers on board."
"The flight operated with a full complement of crew as they had to position in London to operate one of the flights back to the US. The decision to do so is never taken lightly, but we had to consider the knock-on impact cancelling this flight would have had on our schedule out of London on a weekend when all of the flights were extremely busy."
"Our goal is to operate our fleet as efficiently as possible to provide our customers with excellent service while being a responsible environmental citizen."
David Learmount, of Flight International magazine, said that had American Airlines cancelled flight AA90 it would have taken days to transfer the Heathrow passengers onto other planes. He said: "The average load factor across the Atlantic is 88 per cent, that is every plane flying between the US and the UK is 88 per cent full."
"To transfer 250 passengers onto other planes would take days to clear the flight, because there will be five passengers on one plane here and 10 on another there. The bulk of the passengers will spend two or three days stuck in a hotel being paid for by the airline."
13 March 2008
HOW TO ESCAPE HEATHROW HELL
Protesters are lining up on all sides to oppose the expansion of Heathrow airport. The answer is to be bold and build a new airport to the east, fit for the 21st century.
Dipesh Gadher - Times Online - 5 March 2008
The world's biggest passenger jet will swoop into Heathrow for the first time on March 18, heralding a new era in air travel. The Airbus A380 is a double-decker "super-jumbo" ready to fly you to the future - but it will be landing at an airport mired in the past.
Heathrow, the busiest international airport on the planet, has become a byword for misery and chaos. Last month it was found to have the highest number of flight delays in Europe, with more than a third of aircraft suffering problems. To compound the pain, British Airways, Heathrow's largest carrier, has one of the worst records for lost luggage, according to the Association of European Airlines.
Though the Queen will open Heathrow?s £4.3 billion terminal five on March 27, bringing more check-in space and luxury shops, it will serve only BA customers and won't alleviate the congestion in the skies. Airbus reckons Heathrow will eventually be serving 90 super-jumbos a day.
Yesterday a former senior executive of a leading airline summed up the mess. "The bottom line is that it's a third world airport," he said. "It's a national disgrace."
By contrast, that first A380 flight will have come from Changi airport in Singapore, whose history is the antithesis of the UK's main hub. When Singapore's old airport became overcrowded, the city-state government had a choice: continue to expand the existing site, which was hemmed in by urban development, or build a new airport from scratch.
Officials chose the latter and Changi rapidly rose out of land partly reclaimed from the sea. The new airport, which opened in 1981, has proved a huge success, winning almost 300 passenger service awards.
The same dilemma now faces Britain. Should the government keep adding to Heathrow, which has grown piecemeal for 60 years while urbani-sation has hemmed it in all around? Or is it time for bolder solutions?
Ministers and BAA, the private company that runs the airport, seem intent on expanding Heathrow by building a third runway and sixth terminal by 2020. The move would see the number of flights soar by 40% - more than 200,000 extra flights a year over London.
The proposals have provoked uproar. On Wednesday, the deadline for a government consultation on the third runway, five members of the pressure group Plane Stupid bypassed security at parliament and took their protest to the roof of the House of Commons as Gordon Brown arrived for Prime Minister's Questions.
Thousands of residents in west London, faced with more pollution, congestion and noise, have attended meetings to oppose the plans. The normally mild-mannered National Trust has spoken against the proposals. Ken Livingstone, the mayor of London, has accused shambolic Heathrow of "shaming" the capital, and the London Assembly is opposed to a third runway.
Into the political confusion stepped Boris Johnson, the Tory mayoral candidate. It was time, he said, to reconsider plans for a brand new airport to the east of London in the Thames estuary. Johnson, who will launch his transport manifesto tomorrow (though it will concentrate on roads and trains rather than airports), said: "If you look at what is going on in other countries around the world - in Hong Kong, in Washington - it's not impossible to move the capital's biggest airport."
For inspiration showing what is possible, look east. Beijing last week opened a giant airport terminal that could house all five of Heathrow's terminals put together. The Norman Foster-designed building will increase capacity from 35m passengers to 85m - and the Chinese are looking for a site for a second new airport.
Meanwhile, the Gulf emirate of Dubai plans to open a monster six-runway "air resort" - complete with golf course and beach - in 2015.
Some environmental campaigners oppose all new airports; but expansion seems inevitable, especially if technological innovation reduces environmental damage from emissions. So if Britain is to meet the demands of future aviation, can it keep tacking extra runways onto existing sites? Or should it think altogether more radically? What are the alternatives to expanding hellish Heathrow? An entirely new airport was once the authorities' preferred option. In 1971 the Conservative government decided that Maplin Sands, off the south Essex coast in the Thames estuary, was a suitable site. Although the scheme met with objections from bird-watchers and conservationists, it was killed off three years later primarily because of a shortage of funds.
Nevertheless, similar proposals have persisted. When the current government drew up its long-term aviation strategy in 2003, it was still considering a variety of new sites close to the Thames. The schemes included a £9 billion (at 2003 costings) two-runway operation at Goodwin Sands on the east coast of Kent, as well as an ambitious four-runway hub built on an artificial island three miles out from the Isle of Sheppey.
Such sites have a huge advantage over Heathrow: located away from residential areas, they open up new airspace and potentially allow flights to take off and land 24 hours a day.
"If you located an airport properly in the Thames estuary, virtually all the flight movements would be over the North Sea," said Sir Peter Hall, president of the Town and Country Planning Association. "There would be no constraints on development at all."
At present air traffic controllers have to handle 1.4m flights a year over London. Often the distance between aircraft is at the minimum safe level. Expansion of existing airports will mean more flights and stacking over residential areas.
At the end of this month a new aviation agreement, known as Open Skies, will scrap restrictions on routes, generating more transatlantic flights and new routes to and from Europe. It all adds up to a booming industry. What are the drawbacks of a new site to the east?
A KEY hurdle for all the schemes has been their accessibility from central London. "Airports are not just runways; they are runways with the transport infrastructure around them," said Dieter Helm, a professor of economics at Oxford University specialising in transport and infrastructure. "You can have an airport anywhere if you're prepared to put in a bullet train that goes from it to your urban centre."
"But what we are appallingly bad at in the UK is any form of integrated transport strategy. If Maplin Sands had been built in the 1970s, how would people have got there from London? The answer would have been the A12." However, high-speed rail links are now a reality. One new airport proposal given serious consideration by ministers was located at Cliffe, on the Hoo peninsula in north Kent. A short new line could have connected it to the high-speed Channel Tunnel rail link, allowing travellers to get into central London in 26 minutes.
Costing some £13.3 billion for four runways, such an airport could handle 113m passengers a year, compared with the 67m passengers now served by Heathrow.
Officials at the Department for Transport (DfT) concluded that the airport "could attract a substantial number of passengers and generate large economic benefits".
Another scheme, called Thames Reach, envisaged an offshore airport close to the Cliffe site. It would involve building a £2 billion tunnel beneath the Thames to allow passengers to connect with London's planned east-west Crossrail link.
Such schemes are ambitious and expensive, and Cliffe was rejected on the grounds of high construction costs and the destruction of wildlife habitats.
But given that the cost of a new terminal and runway at Heathrow is put at up to £13 billion, the obstacles are more a matter of political will than financial or technological challenge.
True, there were serious concerns about bird strikes damaging aircraft on take-off and landing at Cliffe. And Steve Norris, the former Tory transport minister, is sceptical about Thames Reach. "You'd turn Crossrail into nothing more than an airport railway," he said. "There would be virtually no room for the traffic for which Crossrail was originally planned."
But one of the biggest hurdles to breaking the Heathrow stranglehold remains the array of vested interests centred on the existing system.
The government seems set on adding new runways at Stansted and Heathrow, with Gatwick possibly being allowed to build a second runway after 2019. All those airports are operated by BAA - which also owns Southampton, Edinburgh, Glasgow and Aberdeen airports. It has led some critics to question its "cosy relationship" with the government.
Last October Tom Kelly, former official spokesman for Tony Blair, joined BAA to head its communications strategy. A former director of public affairs at BAA has become a special adviser to Gordon Brown, and several key Labour officials have worked for BAA or pro-aviation lobby groups.
"BAA and government have regularly been in bed together over the past 15 years, with BAA seeming to take the role of the dominant partner," said John Stewart, chairman of Hacan, a pressure group representing residents under the Heathrow flightpath. Anti-expansion campaigners have even accused the two parties of "rigging" the Heathrow consultation, citing minutes of meetings obtained under the Freedom of Information Act which suggest that BAA closely worked with the DfT to "sell" the proposals to the public.
Those proposals may suit BAA, which makes a fortune from corralling passengers at airports where they have nothing to do but shop; but they are unlikely to relieve the horrors of Heathrow.
The government had originally envisaged a second runway at Stansted by 2012, although the timeframe for this appears to have slipped. It would increase capacity at the Essex airport from 24m passengers a year to up to 68m.
But experts believe the expansion would do little to solve capacity constraints on Heathrow. This is because Stansted mainly serves low-cost airlines, such as Ryanair, flying shorthaul European routes. Other airlines, catering for different markets, would still concentrate on Heathrow.
WOULD better transport links to London help? Stansted was originally conceived as a four-runway airport, so connecting it to the capital with a high-speed rail link could alter its dynamic and ease the pressure.
Yet the government remains intent on concentrating on Heathrow. Ruth Kelly, the transport secretary, has made it clear that "fundamentally we need a global hub airport" - and that, in the government's view, means expanding Heathrow.
It claims the economic benefit of a third runway would be around £5 billion a year. Critics, including the environment committee of the London Assembly, believe the figure has been exaggerated.
What is clear is that the regulatory regime and BAA's financial interests help to maintain the status quo. The landing charges BAA demands of airlines at Heathrow are linked to the revenue it generates from its retail activities on the site.
Livingstone once accused the airport operator of keeping passengers "almost as prisoner in this ghastly shopping mall so they can extract vast sums of money... in appalling conditions". The more money that BAA makes from leasing space to shops and restaurants, the lower it can set its landing charges. "This produces the bizarre outcome that one of the most congested airports in the world has some of the lowest landing charges," said one academic expert.
Stephen Nelson, who is stepping down as chief executive of BAA, has said that a third runway at Heathrow may not be enough. A fourth may later be required to meet demand.
Last week up to 2,500 angry residents, environmental campaigners and politicians gathered at Central Hall in Westminster in the biggest rally so far to oppose the third runway at Heathrow. If it were to go ahead, it would wipe out the village of Sipson, destroying about 700 properties.
"I found out on my 50th birthday that I was going to have a major road 10ft from my back door," said Christine Taylor from Harlington. "My life is going to be completely shattered if these plans go ahead". The discontent spreads far wider than those who stand to see their property demolished or blighted. In Hammersmith, Chiswick and other areas of west London, public meetings have been thronged by residents horrified at the thought of thousands more planes flying overhead.
"There's absolutely no doubt that expansion of the airport is a massive vote loser," said Norris, whose Quality of Life Commission for the Conservatives has called for a moratorium on airport expansion.
Justine Greening, Tory MP for Putney, said: "Like it or not, we are going to have to look at other options. A responsible government cannot just bury its head in the sand."
Aviation experts agree that the Heathrow site is far from ideal. "Unlike almost every major airport in every major city in the world, the prevailing wind flightpath takes aircraft right over the centre of London," said David Learmount, operations editor of Flight International magazine. "From that point of view Heathrow has always been an appalling idea."
ONLY a powerful political lead will overcome the inertia generated by the existing infrastructure and vested interests. For a new airport in the east to succeed would probably require the closure or severe restriction of Heathrow.
That is the lesson from Montreal, where the authorities built a new airport for the Olympics in 1976 while keeping the existing one in operation. After the games, people carried on using the old airport at Dorval because it was closer to the city centre, leaving the new one to become a white elephant.
But it's not too late to change course. BAA's stranglehold is under review. The structure of the airport operator is being investigated by the Competition Commission, which could lead to the break-up of the operator's monopoly in the south-east. If the government can back the spending of £9 billion or more on the Olympics, why not support a new airport?
"The brutal reality is that a third runway at Heathrow will only buy London time," said Matthias Hamm, a director of Thames Reach airport. "Ultimately, the government has got to step up to the plate and find an alternative long-term solution to airport capacity forUK citizens. Or they may well look back and think, as some now look back on the plans for Maplin, Cliffe or Goodwin Sands, that it would have been better to have seized the opportunity for a new airport earlier."
13 March 2008
REFLECTIONS ON "CLEAR SKIES"
Leading article: It is plain and simple...
this aviation boom threatens the world's future
The Independent - 1 March 2008
It would appear that air travel is about to receive a significant shot in the arm. From this month the European Union's "open skies" agreement comes into force, which means any European-based airline will be able to fly from any city within the EU to any city within the United States, and vice versa. This will mean a host of extra transatlantic flight routes. This follows the opening this week of a new Norman Foster-designed terminal to serve Beijing airport. And closer to home, Heathrow Terminal 5 is due to open later this month too.
We are living in an age of accelerating demand for air travel and these new terminals and international agreements are its fruits. But there are other, less palatable, fruits too. We got a taste of a growing backlash against the aviation industry this week when protesters managed to climb on to the roof of the House of Commons and roll out banners objecting to plans for a third runway at Heathrow. Then there is the growing evidence of the environmental harm inflicted by this industry. Aviation is the fastest growing source of greenhouse gas emissions. And the contrails left by planes are particularly damaging to the global climate. In the opinion of many scientists, we can either have international aviation growth on the present rate or we can have a stable global climate. We cannot have both. At the very least, the present rate of aviation expansion will mean our own Government missing its target of a 60 per cent cut in C02 emissions by 2050.
Many will regard the implementation of open skies as a setback for the struggle to prevent runaway climate change. To some extent this is true. The immediate consequence of the liberalisation of transatlantic air routes will be an increase in the number of flights. But it is important to make some distinctions here. It would have been quite wrong for the EU to have turned a blind eye to the traditional and uncompetitive stranglehold of national carriers on popular routes (in particular New York to Heathrow). Moreover, responsible support for open skies has to be accompanied by pressure on national governments and international bodies to act to reduce overall demand for air travel.
As this newspaper has long argued, the best way to do this is to start taxing the aviation industry fairly and properly. It is time that the price of air travel corresponded more closely with its environmental costs. The fact that airlines, by international convention, have never been subject to fuel tax or VAT has amounted to a vast hidden subsidy to this method of transport and one that urgently needs to be removed. The liberalisation of air routes should actually be complementary to this process. As we have seen in the recent row about energy bills, if there are doubts about the competitiveness of a market, environmental levies imposed by regulators can become discredited by association in the minds of consumers.
Thankfully, the issues surrounding the proposed extension of Heathrow airport are much more straightforward. The Government should be blocking Heathrow from building a new runway on international environmental grounds. Incidentally, a ban on all UK airport expansions should also help to mitigate the environmental impact of open skies. If the number of landing slots at Heathrow does not increase, there is a clear limit on the number of flights that can pass through the airport, no matter the identity of the carrier.
Open skies, resistance to Heathrow expansion, aviation taxes: there is a common theme here. It is time for governments to stop mollycoddling the airline industry and to get serious about curtailing the sector's greenhouse emissions.
13 March 2008
CONFUSED THINKING STILL PERSISTS AS TO WHAT "SUSTAINABLE GROWTH" MEANS
Kelly rejects proposals to limit air travel
Kevin Done, Aerospace Correspondent - Financial Times - 4 March 2008
Ruth Kelly, the transport secretary, on Monday firmly rejected proposals to ration air travel "crudely" by halting airport expansion or imposing punitive taxes.
In spite of a groundswell of opposition to a third runway and sixth terminal at London's Heathrow airport, Ms Kelly underlined ministers' support for "sustainable growth of aviation".
Last week the government completed a three-month public consultation on a third Heathrow runway that could boost air traffic capacity at Europe's most congested airport by 50 per cent by 2030.
In recent days environmental protesters have penetrated security at Heathrow and the Houses of Parliament, drawing attention to the growing resistance to expansion and warning of conflicts to come. Protest meetings during the consultation were attended by thousands of opponents, including most of the local authorities and MPs from the areas around Heathúrow.
Under the plans, an additional runway and a further terminal would be built to the north of the airport and would come into operation by about 2020. They would require the demolition of about 700 homes, including the community of Sipson, a local primary school and a community centre.
Ms Kelly told a conference at the Royal Institute for International Affairs on Monday that climate change was "one of the biggest threats facing the global community today".
Aviation was making a growing contribution to global warming, she said, with worldwide emissions rising at 6 to 7 per cent a year.
She warned, however, that if the UK took unilateral action to restrict aviation growth, competing countries and airlines would be "free to grow and absorb business from the UK. As a result there would be no overall emissions savings, just damage to our economy."
"Seeking unilaterally to curtail growth would be economically damaging and would push up fares, making air travel once again a luxury only the rich could enjoy."
Ms Kelly said sustainable growth in aviation could be made possible through advances in technology. Most important, however, she called for aviation to be included in a global scheme for emissions trading.
13 March 2008
NO HEATHROW RUNWAY? STOP FLYING
The objectors to the Heathrow expansion are hypocrites
if they plan to use planes as normal
David Aaronovitch - Times Online - 4 March 2008
Until I was 28, and got my first job in television, neither my family nor I had any money. One result of this relative penury was that, by my mid-20s I had only been in an aeroplane four times: twice in infancy aboard internal flights in the Socialist Republic of Bulgaria, and then by Vickers Vanguard return to Lyons at the age of 13. That was it. Every other trip abroad or at home was by train and ferry or Bedford Dormobile. I didn't cross the Atlantic till I was 27.
It is, then, with something more than jaundice, that I read the words of those who have, since their youngest days, left microscopic traces of their privileged DNA in airports on all continents, but who now rail against the "hypermobility" of others. Hypermobility - the capacity of millions of people to move around the world - we are told, destroys communities, weakens social bonds, creates pollution and threatens environments. "The business plan [for air travel expansion] cannot be faulted," says George Monbiot. "The more hellish our lives become, the more we seek to escape from them." Who has never been on holiday to, say, a Greek island for any reason other than a need to flee from Hades? What bloody condescension!
The relatively rich have always travelled - first by coach and boat, then by car and plane. Hypermobility is the fancy name for when the not-so-rich can travel as much as the rich used to. Mine has opened the world to me: Cairo, Colorado, Berlin, Beijing, Dublin, Rio and Bombay. And I have loved being in all these places. For others it might be Skiathos, Ljubljana and New York for work. Naturally most - since their time is limited - want to travel by air, and so we require more and larger airports and a greater number of flights.
Of course, there are big problems. Most obviously there are the carbon emissions, with air travel probably making an increased contribution to the greenhouse effect. But any overall plan to reduce emissions doesn't necessarily have to impact on the number of flights we take, providing the slack is picked up somewhere else. In other words, if we think that the ability of the mass of people to see the world into which they were born is a good thing, then we may trade it for other reductions. It's our choice.
Still, the desire to limit carbon emissions is the best reason for opposing the proposed expansion of Heathrow, on which the Government will decide this summer. I can respect those demonstrators who are prepared to scale high rooftops - always provided that they themselves renounce any air travel, and even if their leader, by all accounts, managed to get in two round-the-world-trips in his gap years, before seeing the light.
But what about all the other objectors? Which, to judge from the comment pages of the main newspapers, consists of just about everybody. The National Trust is against the Heathrow expansion, as are all the important London mayoral candidates. The Lib Dems are opposed, as are it seems - though it is hard to be sure - the Conservatives. My guess is that the Archbishop will come out against it soon.
The campaign is largely co-ordinated by a group called Hacan Clearskies, originating in the Heathrow area. To its credit Hacan is not just against a Heathrow expansion, but against expansion at Stansted too. In fact there's an evening event soon featuring Zac Goldsmith (whose family travel everywhere by camel) and Terry Waite, OBE. "We", says Hacan, "oppose the Government's aggressive go-for-growth policy." But it isn't primarily the Government's policy, it's the traveller's policy. No one, except civil servants and soldiers, flies because the Government tells them to. People fly like I fly and you fly, because they want to see Prague.
It isn't surprising that people who live in the vicinity of Heathrow are unenthusiastic about expansion. A few will have to move, and many Londoners may get extra flights overhead, though the noise will still be far less than in the days of Concorde. In August we were told about a poll being conducted in West London by Friends of the Earth to see if local people were willing to take the train instead of flying, if rail travel was made more affordable. But I can find no trace whatsoever of the result. Was it possible that many of these Londoners actually wanted the Heathrow expansion to go ahead? Is this the great secret we are all sharing, that actually we hope the third runway and sixth terminal get built as quickly as possible, but we really don't want to be heard to say so?
But wait, says Baldrick, I have a cunning plan. Never mind emissions, the problem is that Heathrow is in the wrong place. Let's put it somewhere where it won't offend anybody. An island, say, off the coast of Kent or Essex. The idea has been suggested here by Kit Malthouse, also by Sir Peter Hall, president of the Town and Country Planning Association, and by Boris Johnson.
Ooooh! It'd be like Singapore moving its airport to Changi on reclaimed ground, claim excited proponents. It'd be like China opening the new Beijing airport. It'd be like that island airport in Japan.
Changi airport is seven miles from Singapore city centre: an offshore London airport would be at least 35 miles from Charing Cross. Let alone how far it would be from Birmingham or Southampton. That's a lot of new road, while Heathrow currently has the Express, the Underground, the M4 and the M25. By the way, the Japanese airport is sinking and the Chinese Government enjoys certain advantages over ours: it doesn't have to hold inquiries and it doesn't tolerate objectors.
As Boris may discover. The Essex Echo last week carried comments by local Conservative MPs and councilors who were "dismayed" at the idea for an international airport suddenly appearing just offshore. The report ended in the familiar coda, "Despite repeated attempts by the Echo, Mr Johnson could not be contacted for further comment on the issue." In the past year airport expansion plans have been fought off successfully or abandoned at Luton, Manchester and Birmingham. It would be, as a correspondent to this paper wrote yesterday, 2070 before Estuary airport was up and running.
My conclusion? You don't want the Heathrow expansion, fine. But to be consistent, please don't step on an aircraft yourself.
OUR COMMENT: Surely there is a middle way - don't fly too often or unnecessarily. Then present airport capacity need not be expanded. BUT airports need to be well managed, up to date and air traffic to be better distributed.
13 March 2008
THE SENSIBLE VERDICT?
Big shift to rail urged for UK
Richard Black, Environment Correspondent - BBC News website - 4 March 2008
The UK needs a "modal shift" from road to rail if greenhouse gas emissions from transport are to be curbed, a report concludes.
The Institution of Mechanical Engineers (IMechE) says changes are needed to government policies on transport pricing, energy and town planning.
A train journey can produce about one tenth of the carbon emissions generated if the same trip is made by air. The report's authors say substantial investment in the railways is needed.
"New developments should take account of what we can learn from the Japanese system" - Bill Banks, IMechE
"We have ambitious government targets for transport emissions, but transport emissions are static," said Cliff Perry, vice president of IMechE's Railway Division and a former head of Thameslink under British Rail.
"Eighty-five percent of transport emissions come from roads, so if we are serious about doing something, we must hit road transport."
Comparing emissions between various forms of transport is not a straightforward matter, as factors such as the efficiency of engines, the number of people on board and, for electric trains, how the electricity was generated all affect the final equation.
IMechE calculates that on average London to Paris trips, people travelling by car generate two and a half times more CO2 than those relaxing in a train, while an air passenger produces 10 times more.
Road pricing is set to spread to more areas of the UK
But achieving a substantial shift from road to rail would need a coherent policy covering issues such as how secure passengers feel, the convenience of connections, the cost of tickets, and reliability. Emissions from electric trains are of course much lower if the electricity comes mainly from low-carbon sources.
The report's authors said Britain could learn much from countries with superb rail systems, such as Japan, where trains routinely arrive and depart on the minute, equipment failures are rare, and where many railway stations form centrepieces of cities and districts.
"Spatial planning has to be considered, and new developments should take account of what we can learn from the Japanese system," observed Bill Banks from Strathclyde University, deputy president of IMechE.
Train companies should consider offering services like wi-fi internet access throughout, and improving catering services so that rail travel becomes something to look forward to.
The report's authors acknowledge that the price of rail tickets can be prohibitive, sometimes costing many times more than the air equivalent.
One remedy they suggest is proper pricing of all transport options to include environmental impacts. They also suggest tickets could include references to the relative carbon output of different modes of transport.
Whatever changes are made, IMechE considers the "modal shift" will necessitate some investment in infrastructure, including new high-speed lines that can carry more trains significantly faster than the UK's existing stock.
4 March 2008
ROW OVER AIRPORT AIR QUALITY CONTINUES
Editorial - Harlow Herald - 29 February 2008
AIRPORT action group Stop Stansted Expansion (SSE) has condemned BAA's air quality information amendments which were given to the Secretaries of State last month.
BAA provided updated research on air quality effects in the Stansted area, which it has gathered while preparing the G2 application air quality assessments for a second runway. The new data was submitted after the closure of the recent G1 inquiry, which plans to increase the passenger numbers at the Essex base beyond the current 25 million a year limit, but BAA believes the new data will not make any difference to the G1 inquiry case.
Stansted's planning and business development director, Nick Barton said: "As soon as we received the results of these latest air quality tests we decided to inform the Secretaries of State."
"We now predict NOx levels are likely to be slightly higher in 2014 in parts of Hatfield Forest and East End Wood than previously predicted. The levels in Hatfield Forest will still be less than those experienced today, and levels in East End Wood virtually the same."
However, SSE has reacted to the new data by writing to the Government Minister responsible for the G1 application outcome, condemning BAA's air quality amendments.
SSE states that BAA made false claims at last year's public inquiry and has now written to Hazel Blears, the Secretary of State for communities and local government, maintaining that: "If the true position had been provided to Public Inquiry, the debate on the air pollution effects of the proposed development would have assumed a radically different complexion."
The SSE letter also notes that the campaign group is seeking legal advice on the implications of the new pollution data.
"If BAA cannot get its facts right on an issue as important as local air quality, what confidence can local residents have in any of its figures?" said SSE campaign director Carol Barbone. "Once again this is a case of BAA understating the damage that would be caused by its expansion proposals."
Stansted is capped at 25 million passengers a year and it is expected that BAA will submit the G2 application for a second runway in the coming weeks.
4 March 2008
A REVOLUTION IN THE SKIES... A DISASTER FOR THE PLANET
Simon Calder - The Independent - 1 March 2008
Cheap flights. More flights. Multiplying routes. At the end of a week that has seen protests against airport expansion, predictions of further airport chaos, and record oil prices, British travellers are showing no sign of shaking off their addiction to CO2-heavy cheap flights.
A record number of new air links will open from the UK to Europe this summer. The Independent has identified 100 entirely new short-haul international routes to be launched from Britain when the summer schedules begin at the end of this month.
More than a dozen new domestic links have also emerged, some as short as 150 miles. And, as from 30 March, when an "open skies" policy takes effect, Heathrow will see transatlantic flights increase by a quarter - adding up to 524 extra flights a month.
It is dizzying stuff. We have never been better informed about the environmental dangers of flying but the brutal truth is unavoidable. Flying is a British boom industry.
The spring of 2008 is likely to prove the most dramatic in Britain's aviation history. Even before the summer schedules, a dozen new routes are being launched - starting at 8.30am today with the maiden flight of Flywatch from Southend to Le Touquet in northern France.
On 18 March, the world's biggest airliner will touch down at Heathrow for the first time in commercial service; the Singapore Airlines Airbus A380 has been described as "the plane built for Heathrow", allowing an airport bursting at the seams to increase passenger numbers. And at 4am on 27 March, Heathrow's Terminal 5 is due to open, with a protest "flash mob" planned for later the same day.
Then there is the coming transatlantic boom when "open skies" takes effect, allowing any European or American airline to fly from Heathrow to the US - providing it can find slots at the world's most desirable international airport.
The unprecedented expansion of aviation is revealed in figures prepared by the timetable specialist OAG. Its database shows that, during the month of April, nearly 200 new departures a day are expected from UK airports. OAG calculates a year-on-year increase of 5,853 flights from the UK to Europe for April. The net growth will be slightly smaller because some flights from April 2007 have been discontinued, but the data supports the evidence of a bigger-than-ever rise in new routes.
Given the shortage of slots at airports in the South-east, it is no surprise the majority of the 100 new links are from provincial cities. Birmingham, Bournemouth, Bristol, East Midlands, Edinburgh and Exeter all see substantial growth; Belfast, Leeds-Bradford and Liverpool get an expanded range of destinations, too.
Studying the new schedules reveals many "city pairs" that traditional airlines would never contemplate. To France alone, Birmingham to Poitiers, Edinburgh to La Rochelle and Bristol to Bergerac are among the improbable new options this summer. Yet these are exactly the sorts of journeys that environmental campaigners say should be made by train.
When Eurostar's new London home at St Pancras opened three months ago, part of the plan was that connections to and from provincial cities would be simpler and more appealing. Yet the airlines evidently believe that, for example, travellers from Leeds would rather fly direct to Avignon rather than make the straightforward one-change journey by train.
France, despite being 20 minutes closer by rail than it was last summer, wins the largest share of new routes: 29, most of them in the west of the country. Poland and Spain tie for second place with 14 new links each. Flights such as Bournemouth to Wroclaw demonstrate the UK's increasingly strong links with Poland, while Liverpool to Santiago de Compostela shows the expanding horizons of pilgrims and second-home buyers.
Both those services are operated by Ryanair, which now carries more passengers than any other international airline. Driving the firm's expansion is the deal negotiated with Boeing just after the terror attacks of 11 September 2001, when it and easyJet were the only major aircraft buyers; Ryanair receives a new 189-seat 737 from Boeing's factory in Seattle every 12 days on average.
Despite a growing chorus of politicians demanding that the rate of expansion of aviation should be slowed, public funds continue to support new routes. Ryanair's choice of Edinburgh as its 27th European base was sweetened with the help of funds from the Scottish government; passengers bound for the Danish town of Billund will, in effect, be subsidised. And the US carrier Eos will benefit from a £40 tax break for each passenger when it launches business-class only flights from Stansted to Dubai and Newark, New Jersey, in July.
The spectacular expansion after "open skies" is introduced has been revealed in another analysis by OAG. In the first full month, there will be 524 more US-bound flights from Heathrow than in April 2007 - despite the airport being, in effect, full. Air France and KLM are leasing slots previously used for short-haul flights to the big US carriers previously locked out of Heathrow.
For each European route that is replaced by a transatlantic link, there is an additional cost for the environment. On an average April day, there will be 91 departures from Heathrow to America, a 24 per cent rise. The increase in supply is likely to reduce fares, which in turn will encourage more people to fly.
BAA, the Spanish-owned company that runs Heathrow, is hoping for a windfall from the new flights; long-haul passengers typically spend far more at the airport than short-haul travellers. A further boost will come when the Airbus A380 becomes a regular visitor at Heathrow.
At the other end of the scale, the appetite for short hops appears undiminished. Fourteen new domestic links are scheduled for the summer, including one from Newquay to Southampton - a distance of just 150 miles. Our love affair with aviation begins to look like a dangerous obsession.
Additional research by Harriet Lam
4 March 2008
TRAFFIC PROBLEMS IN THE SKY
HOW WILL IT AFFECT US IN THE EAST AND SOUTH EAST?
London is out of airspace
Christopher Thompson - Times Online - 1 March 2008
A NEW swathe of residential areas could be blighted by aircraft noise and pollution for the first time after regulators warned there is not enough airspace to cope with airport expansion in southeast England.
The Civil Aviation Authority (CAA) and National Air Traffic Services (NATS) say expansion in the southeast "would not [leave] sufficient airspace capacity to accommodate the scale of predicted traffic growth on the basis of current and predicted technology".
Families in the south Midlands and East Anglia face the prospect of planes circling above their homes if ministers proceed with plans to build new runways at Heathrow and Stansted.
Experts believe new queuing "stacks" will have to be created to deal with the overspill from London's crowded skies. The capital's airspace is already among the most congested in the world, with 1.4m flights over London last year. A third runway and sixth terminal at Heathrow will lead to 225,000 extra flights a year by 2030.
The CAA and NATS warning came in a submission to the Competition Commission, which is examining BAA, the company that runs Heathrow, Stansted and Gatwick. The Guild of Air Traffic Control Officers said the new stacks would be in addition to a reorganisation of flight paths announced last month.
A Department of Transport spokesperson said safety was the Government's top priority and it had worked with both the CAA and NATS to develop proposals for a third runway at Heathrow.
4 March 2008
THIS IS REALLY PLANE STUPID
Times Online - 2 March 2008
Barring a last-minute change of heart, the government is about to make a transport error of monumental proportions. A parliamentary rooftop protest last week by the pressure group Plane Stupid generated headlines but little else. The government will soon announce a third runway at Heathrow, already the world's busiest international airport. Even as the Queen opens the fifth terminal this month, plans for a sixth are in the pipeline. You do not have to be a protester to realise there is something spectacularly wrong with an extra 200,000 annual flights at Heathrow by 2020, given existing congestion and chaos. That, however, is what Gordon Brown intends to do.
We have argued before that the government should take its cue from successful moves by other countries, which have opened new airports away from centres of population with fast transport links. Our preferred solution, despite some environmental objections, would be a new airport in the Thames estuary, east of London, for less than the cost of the 2012 Olympics. That, however, is too big an idea, and has been rejected on grounds of cost, or birdlife, or inconvenience, when all these things are surmountable with farsighted leadership. Transport policy in Britain is governed by dull incrementalism. Heathrow, London's airport courtesy of an accident of geography, will carry on expanding.
It exposes the hypocrisy of policymakers when it comes to "green" and quality of life issues. Many of the increasing numbers who live on the Heathrow flightpath are about to have their lives made even more miserable by noise and atmospheric pollution. Yet many, if they are unfortunate enough to live in Ken Livingstone's west London catchment area and drive the wrong car, are about to be made to pay £25 a day, ostensibly to help save the planet. Any government that presides over the mindless expansion of Heathrow cannot seriously claim to be green. Remember that the next time you hear Mr Brown posturing about the environment.
4 March 2008
MORE PROBLEMS FOR BAA
SQUEEZE ON BAA COULD BE TERMINAL
A competition probe and capped returns on assets guarantee
a rough ride for the new chief executive
Dominic O'Connell - Times Online - 2 March 2008
FOR any businessman, it would be difficult to imagine a more exalted occasion - a black-tie dinner at Mansion House, the spiritual heart of the City, with 150 of the great and good for company. Alderman Alan Yarrow, vice-chairman of Dresdner Kleinwort, on your right, John Young, senior partner of law firm Lovells, across the table, and a few feet away David Lewis, the Lord Mayor, and John Hutton, secretary of state for business. Decent wines, of course - a 2006 Pouilly-Fume to start, and a 1998 Chateau Grand-Puy Ducasse to follow.
Not the kind of place to be if you have just lost a high-profile job in a very public fashion. Yet on Wednesday night Stephen Nelson, chief executive of BAA, gamely took his seat at the annual Mansion House trade and industry dinner.
That morning, his departure from BAA, which owns and runs seven of the UK's biggest airports, Heathrow, Gatwick and Stansted included, had been splashed across the front page of the Financial Times, together with the familiar litany of complaints about lost bags, delayed flights and long queues. The implicit message was clear. Nelson had been forced to walk the plank for failing to bring the airports up to scratch.
As it turned out, Nelson, a tall, youthful-looking 45-year-old with a background in retailing, had little to fear at the Mansion House dinner. Fellow guests were eager to chat, and one even sounded him out for a new job. Approached by The Sunday Times, Nelson was his usual polite self, but gave little away. "I can't really talk about it, sorry. But I will read what you write with interest," he said.
Had he talked, he might have admitted that, having been dealt a difficult hand at BAA, his departure was inevitable. As well as the public vilification, financial and regulatory pressures were steadily mounting on BAA. With Sir Nigel Rudd, a well-known catalyst for corporate change, coming in as chairman before Christmas, Nelson was the obvious scapegoat.
He might have said - though probably not, given his loyalty to BAA - that his departure could be the precursor to something more significant. By the end of the year the system of regulation that has governed Britain's airports since privatisation in 1987 may be swept away, and with it BAA's long-held and fiercely defended monopoly in London.
Colin Matthews, his replacement, appears to have an ideal background. A former technical director with British Airways, he knows aviation, and garnered broader business experience at Hays, the logistics group. And he learnt to work in a regulated industry when he was boss of the water company Severn Trent.
But time is not on his side. BAA, owned by a consortium of investors led by the Spanish infrastructure group Ferrovial, faces a difficult six months. The fun will start before Matthews officially takes up the job on April 1.
The Civil Aviation Authority (CAA) is next week expected to set the prices that BAA can charge at Heathrow and Gatwick for the next five years, and is likely to stick closely to recommendations made last year, which gave the airports group big one-off increases in charges, provoking outrage from the airlines.
BAA, however, thinks the price increases are not enough to pay for the £10 billion investment programme it has lined up to revitalise Heathrow and Gatwick - and analysts think they will not stave off wider questions about the group's finances.
BAA is focused on one key figure, the amount it is allowed to earn from airport assets. The CAA is likely to set this at 6.2% a year. When the Ferrovial-led consortium paid £10.3 billion to buy BAA last year, it was assumed it would get 7.75%.
The difference is crucial. The consortium took out big loans to buy BAA and planned to quickly refinance the deal. It could have cut the cost of its borrowings by issuing bonds backed by the future revenues of Heathrow and Gatwick, a common financial process called securitisation. But events conspired against it. First the uncertainty over the CAA's decisions put the refinancing on hold; then it got caught in the wider credit crunch.
Matthews and his shareholders will have to find a solution soon. Analysts point out that BAA's finances are extremely tight. A recent results statement said BAA generated cash of £800m in the first nine months of this financial year, but paid out £890m on its capital spending plans. It had an interest bill of £329m.
Robert Crimes, an analyst at JP Morgan, estimates that BAA could run out of the cash to fund capital spending halfway through next year - a forecast insiders at the group dispute.
Before then, it needs to either complete refinancing or find money elsewhere, perhaps from the sale of assets or a fresh injection of shareholder funds. Joaquin Ayuso, Ferrovial chief executive, said last week: "We have to study alternatives, that's natural. Even though we do think the refinancing is possible, it is difficult because of the current state of the markets."
Crimes said in a note to clients last week that he expects the refinancing to begin in April to avoid looming increases in interest rates on the acquisition loans.
The financial tangle would by itself probably be enough to keep management and shareholders busy. But there are potentially more challenging issues just round the corner. BAA's dominance of the London and Scottish markets (it owns Glasgow and Edinburgh airports) is being examined by the Competition Commission. It is expected to publish its interim findings toward the end of next month, with the full report to follow in August.
Many predict the break-up of BAA. It could be forced to sell one or more of the London airports - with Gatwick the most likely candidate for disposal.
That may not be the end of the competition watchdog's interest. In a paper on the issues in the inquiry, published last year, it queried the entire basis of airport regulation, questioning whether it provided the right kind of incentives for efficient operation and investment in new capacity. Worryingly for the Ferrovial consortium, it also asked whether the highly indebted nature of the business was a matter for public concern.
Former BAA executives expressed sympathy for Nelson, saying he had faced a difficult task taking on the chief executive's role after the Ferrovial takeover.
Brian Ross, economic adviser to the Stop Stansted Expansion campaign, which is trying to thwart plans for a new runway at the Essex airport, believes Matthews will struggle under the sheer weight of challenges the company faces. "Matthews is a tougher cookie but will find, just as Nelson found, that the sheer scale of problems facing BAA renders the current business model unworkable and unsustainable."
4 March 2008
BAA UNDER PRESSURE TO CUT AIRPORT PROPERTY PRICE
James Rossiter - Times Online - 25 February 2008
BAA, the airport owner, is struggling to sell a portfolio of warehouses and offices around Heathrow and Gatwick and is under pressure to cut the £1 billion price tag by at least £100 million.
Ferrovial, the Spanish owner of BAA, has been trying to sell the property for more than a year, as it tries to reduce and refinance £8 billion of debt that it took on to fund its share of the purchase of BAA.
Airport Development and Investment, in which Ferrovial has a 61 per cent stake, bought BAA for £16.3 billion. However, the credit crunch has made debt refinancing more complicated and since the beginning of the year some of Ferrovial's borrowings - £4.7 billion worth of bonds - have been attracting higher rates of interest.
Ferrovial is thought to be working on transferring those bonds into a new securitised vehicle, but it could face opposition from bondholders, thought to include Standard Life, Legal & General, Norwich Union, Scotttish Equitable, Axa and Clerical Medical.
BAA had hoped to sell its half-share in its £1 billion Airport Property Partnership by late autumn to help to ease its debt burden. Morley, BAA's partner in the venture, decided that it would sell its half-share at the same time as BAA.
Sales talks between BAA, advised by bankers at Morgan Stanley, and the final-round bidders - Brixton, the industrial developer and Prologis, an American developer - fell apart late last year, with BAA refusing to budge on price. It is understood that the buyers wanted the price to be cut by 20 per cent.
The portfolio was valued last June at £1 billion, including about £600 million of debt. Two quarterly valuations since have failed to change the value put on the assets, despite the affects of the credit crunch and as fears of oversupply hit demand. The next quarterly valuation is due in March and property insiders expect the assets, including the BA World Cargo Centre at Heathrow, to be marked down by more than 10 per cent.
Meanwhile, BAA is understood to have hired investment bankers at Macquarie, the Australian bank, to explore raising a £1 billion loan secured against its regional airports - Southampton, Glasgow, Edinburgh and Aberdeen.
4 March 2008
FERROVIAL DELAYS £10BN BAA DEBT DEAL AS PROFITS HALVE
Times Online - 26 February 2008
Ferrovial, the Spanish construction group, disclosed today that it had failed to refinance the £10 billion debt it took on acquire UK airport operator BAA 18 months ago. It had planned to refinance the debt a year ago.
The delay puts further pressure on the company to sell assets as the interest payment on its total ?30 billion (£22.6 billion) debt ballooned from ?1.23 billion to ?1.9 billion, wiping out nearly half of Ferrovial's annual profits.
Ferrovial had been hoping to cut BAA's debt by selling its duty-free business and raising £1 billion through the sale of a property portfolio that has been on the market for more than a year. It now appears the Spanish group will have to reduce the price tag on the property by £100 million to generate interest.
Nicolas Villen, Ferrovial's finance director, said refinancing BAA's debt was "still complicated in the current market climate". Last year, Mr Villen said that the £10 billion refinancing was scheduled to be completed by the end of 2007.
Mr Villen said today that a deal would not go ahead before the Civil Aviation Authority announced the new price caps, reviewed every five years, that BAA charges airline operators to use its airports at Heathrow, Stansted and Gatwick.
Financing the BAA debt pushed Ferrovial's profits down 49 per cent to ?733.7 million for the year to December 31, 2007.
Revenues for the 12 months rose 18.4 per cent to ?14 billion. They included full-year results for BAA the first time since Ferrovial bought the British airport operator for £10.3 billion in July 2006.
Ferrovial had been hoping to securitise the £10 billion debt that was used to buy BAA. This would involve repackaging the debt into smaller parcels of bonds that would be sold on to investors, such as investment banks.
However, since the credit crunch took hold of the global financial markets in the middle of last year, banks are much more cautious about taking on additional chunks of debt, leaving companies with huge interest payments on billions of pounds worth of borrowings weighing down on their balance sheets.
24 February 2008
RURAL PEACE COULD BE SHATTERED BY NEW FLIGHT PATHS
About Property website - 21 February 2008
National Air Traffic Control (Nats) has announced plans to reorganise the flight paths to the UK's airports ? potentially shattering the tranquillity of some of the country's most picturesque properties.
Nats - which manages Britain's airspace - announced today it was launching a 13-week consultation with a view to making changes to Britain's overcrowded skies.
It is thought those in London and the Home Counties, which have a combined population of 12.5 million people, will be particularly hard hit.
The plans involve the creation of four new holding stacks ? which will be used by aircraft circling to land ? for the airports at Luton, Stansted, Gatwick and Heathrow.
As a result, a large number of formerly idyllic villages may see the number of flights passing overhead increase.
The new stack system is likely to affect villages located in Essex, east of Saffron Walden, south and west of Bishop?s Stortford, along the Blackwater estuary and villages in Hertfordshire north of Berkhamsted, north of St Albans and south of Luton.
The changes to the Nats system are designed to alleviate bottlenecks in the present system, which was designed 30 years ago.
While only 701,000 thousands flights used the airports in question during 1975, this number had increased to 2.6 million in 2006.
According to Nats, some 20,000 fewer people will be affected by low flying aircraft as a result of the changes. However, those in the countryside are likely to see noise increase.
As Nats explained in a statement: "Avoiding both densely populated areas and the surrounding countryside was not possible in airspace that is amongst the busiest in the world. As a result, requests for route changes tended to move routes away from centres of population to less populated countryside".
Questions are also being asked in some quarters over the location of the new holding stacks.
"The new routes mean aircraft would be flying over communities that have previously enjoyed relative tranquillity where overflying will make a greater impact because of the absence of other background noise," said Martin Peachey, chairman of Stop Stansted Expansion's noise committee.
"The question we are asking is why the holding stacks aren't being put to the east, over the sea. Given that most flights arrive from the east and the south, this would have far less impact on the population as a whole."
It is hoped to implement the new system in March next year.
24 February 2008
PRESS RELEASE BY NATS
21 February 2008
CAMBRIDGESHIRE, SUFFOLK & NORTH EAST ESSEX AREA
Routes that would change under the TC North proposals are primarily Stansted and Luton arrivals. The biggest change involves creating three new holds, one for Luton and two for Stansted, to replace the two they currently share.
The Luton hold would be to the west of Cambridge; and the two Stansted holds would be between Ipswich and Stowmarket, and to the south of Newmarket. This means that aircraft heading to land at either airport would route towards these holds; arrivals from the east would cross the Stour & Orwell Estuary and fly in the vicinity of Ipswich at heights above 10,000ft.
NATS aims to avoid centres of population when establishing holds. It is also important to note that in less busy periods aircraft often do not use holds at all. Overall there would be 22,000 fewer people (36 per cent) living under the three new holds than under the two existing holds currently shared by the two airports.
A dedicated website at nats.co.uk/TCNconsultation is available from today. It includes a short DVD providing an introduction to the changes and a postcode search facility which enables people to see the flight paths, and the heights of aircraft, over their area. An online questionnaire enables people to provide feedback. In addition, for people without internet access, copies of the consultation document, along with the DVD and leaflets, will be held in main libraries and the DVD and leaflets relevant to their area are being sent to parish councils.
The consultation period closes on May 22 2008. All feedback will be submitted to the Civil Aviation Authority which decides whether the proposed change can go ahead. If approved, the change will not become operational before Spring 2009.
24 February 2008
FLIGHT PATH SHAKE-UP
Sinead Holland - Herts & Essex Observer - 21 February 2008
A SHAKE-UP of Stansted Airport flight paths has been given a cautious welcome today by Bishop's Stortford's MP Mark Prisk and his opposite number in Uttlesford, Sir Alan Haselhurst.
NATS - the National Air Traffic Services - has just revealed its plans for the skies above East Herts and Uttlesford, including the removal of two 'holds' or stacks over Royston and Sudbury where aircraft queue before landing at Stansted. They would be replaced by two new locations: between Ipswich and Stowmarket and to the south of Newmarket.
Stansted departures, particularly easterly, would also change significantly. The Noise Preferential Routes, which operate up to 4,000ft, would be realigned. NATS claims almost 8,000 fewer people, or 67 per cent, would be living under the revised flight paths.
The document says: "Redrawing the route map also enables NATS to avoid as many town and villages as possible. Towns such as Ware and Hertford will see significantly fewer aircraft at low levels and the changes would also enable an improved approach to be introduced for easterly arrival."
Mr Prisk said: "On first glance, I'm pleased that NATS have adopted the continuous descent approach which should mean less noise for everyone. However, I want to examine the precise routes proposed because we need to ensure that any changes do not unfairly penalise communities in East Herts."
Sir Alan said there would be winners and losers in the shake-up - with relief for Newport and Clavering at the expense of villages like Radwinter and Debden Green, but that the increased altitudes and the removal of Luton traffic from Stansted's stacks could mean some noise alleviation for all. However, he cautioned that airport expansion could cancel out any perceived benefits.
He said: "It looks as though there will be marginal benefits - bearing in mind we are talking bout inherently noisy machines in the sky."
A dedicated website, outlining the new options and including a questionnaire is online at www.nats.co.uk/TCNconsultation.
Residents have until May 22 to respond. If approved, the changes could be operational from spring 2009.
24 February 2008
NEW AIRCRAFT STACKS 'WOULD SHATTER PEACE'
Cambridge News - 22 February 2008
TRANQUIL rural peace will be shattered if planes queue over new areas near Cambridge and Newmarket as they wait to land at Stansted and Luton, say critics. Changes to the way aircraft queue at busy times to land at the two airports are being proposed by air traffic control company NATS.
The proposals mean planes would be stacked over areas to the west of Cambridge, south of Godmanchester and south of Newmarket between Ipswich and Stowmarket. But members of the Stop Stansted Expansion group fear peace will be destroyed by noisy planes.
Martin Peachey, spokesman, said: "The new routes mean that aircraft would be flying over communities that have previously enjoyed relative tranquillity, where overflying will make a great impact because of the absence of other background noise."
"The question we are asking is why the holding stacks aren't being put to the east, over the sea. Given that most flights arrive from the east and the south, this would have far less impact on the population as a whole."
Currently, aircraft bound for both airports share the same holding areas over Royston and Sudbury but the changes to the stacks and departure routes will also affect Saffron Walden, Haverhill, Linton and a line close to the A11, from Duxford through to Stowmarket.
Cambridgeshire County Councillor John Reynolds said the council would be looking in detail at the technicalities and working to ensure that any changes caused minimal noise disruption to communities in the Cambridge area.
He said: "These proposals mean more stacking facilities near to Cambridge. We do have some real concerns that new stacking proposals will have an impact on the local area. This is not just about overflying, but the height of overflying."
Terry Holloway, the group support executive for Marshall's of Cambridge, said: "As an airport operator we were consulted on the stacking arrangements to make sure there was no interference with traffic flying in and out of Cambridge airport. There was no conflict at all so no grounds for objection."
Mr Holloway added that holding arrangements were a major issue for a large number of airports and that eliminating stacking through better traffic management would save carbon emissions and also lessen noise.
The proposals can be viewed at www.nats.co.uk/TCNconsultation and the consultation process closes on May 22.
24 February 2008
R2? IS IT AFFORDABLE?
The Sunday Telegraph - 17 February 2008
The debt-laden acquisition of BAA by Ferrovial was the deal of 2006. Now there is talk it may have to sell a major UK airport to refinance. Alistair Osborne reports:
Thirty years have passed since the late TV playwright Dennis Potter remarked: "I did not fully understand the dread term 'terminal illness' until I saw Heathrow for myself. It is tempting to say little has changed. In 2006, Ferrovial landed BAA - a deal that is now headed for turbulence.
Regulatory threats and the credit crunch are putting pressure on the holding company's balance sheet
Some passengers will make any detour to avoid Heathrow - the only building site in Britain with its own airport. Who can blame them? Security queues, blocked loos, lost bags, late flights have all combined to produce a new entry in the national lexicon: Heathrow Hassle.
It may be little comfort, then, to learn that the passengers' hassle is no great shakes compared with that of the airport's heavily indebted new owners.
When Rafael del Pino, the boss of Spanish infrastructure group Ferrovial pulled off the deal of 2006 with the £16bn purchase, including debt, of airports operator BAA, little did he realise what was on the horizon.
Del Pino's family owns over 58 per cent of Ferrovial, itself one of the most highly leveraged companies in Europe, with interests spanning construction, property, airports and the Cintra road-toll business.
True to form, he put together a debt-fuelled consortium - Airport Development and Investment (ADI) - controlled by Ferrovial, with 61 per cent of the equity. It planned to snaffle BAA's seven UK airports - including the regulated trio of Heathrow, Gatwick and Stansted - and refinance sharpish. Just like the passengers, the planned £10bn refinancing is stuck in the departure lounge.
Three things have combined to wreck Ferrovial's plans. First, an uncompromising stance from Harry Bush and his team at the Civil Aviation Authority - the industry regulator. The proposals from economic regulation chief Bush, due to be finalised early next month, broadly blow a £150m hole in ADI's annual cash flows.
Secondly, there's the threat that BAA will get broken up at the hands of the Competition Commission, whose boffins have long had their ears bent by the airlines over its London monopoly. Now they are investigating, with preliminary findings due mid-2008. The commission may force ADI to sell one of the London trio, with Gatwick tipped as favourite.
Thirdly, along has come an unprecedented credit crunch, which is threatening to squeeze the life out of ADI and leave its refinancing plans in tatters.
For a quick snapshot of the market's concerns, clock this. Ferrovial's shares have halved in a year to a little over ?41, where the company is now capitalised at just ?5.8bn (£4.3bn). Yet it is groaning under ?32bn of net debts. Meanwhile, the price of ADI's £2bn of junior debt has plummeted and is trading at just 82p in the pound (see graph). Credit agency Standard & Poor's has cut BAA's corporate rating to junk status. And respected City analysts such as JPMorgan's Robert Crimes are warning that BAA could "run out of cash" next year.
The upshot is that, at Ferrovial's current share price, its interests in Britain's premier airports - whose replacement costs would run to tens of billions - are being valued at precisely zip.
Now, the word in the market is that, regardless of the Competition Commission, ADI may have to sell an airport or inject fresh equity to ride out the current turbulence.
No matter that the BAA camp denies that. Reputations are on the line. BAA is led by chief executive Stephen Nelson and chairman Sir Nigel Rudd who, unlike the Spanish, knows his way round Whitehall. Neither are saying anything, while Rudd is keeping an uncharacteristically low profile.
Sources close to the refinancing insist it is ready to go once Bush has done his worst. They mutter too that bond traders, hedge funds and mischievous bankers have vested interests in driving down prices - and possibly triggering asset sales. Whatever, the market scents blood.
ADI's other shareholders are the Canadian pension fund, Caisse de dépôt et placement du Québec, with 29 per cent, and the Singapore-backed investment company GIC, with 10 per cent.
To buy BAA, the consortium had to find just under £12bn. It paid £10.1bn for BAA ordinary shares, £1.33bn for its convertible debt, £307m to redeem employee share options and racked up £212m of transaction costs. The consortium also inherited BAA's £4.6bn debt.
It radically increased BAA's debt-to-equity ratio. Of the near-£12bn ADI paid, only £4.27bn was equity, with Ferrovial stumping up £2.6bn for its controlling stake. Typically, most of Ferrovial's equity contribution was borrowed.
Brian Ross comments on the situation:
Reader's Letters - Evening Standard - 19 February 2008
IF Alistair Darling manages to survive the Northern Rock debacle, his next problem may be just around the corner.
Bankers have predicted that BAA could run out of cash early next year, which should set alarm bells ringing at HM Treasury because the Government believes massive expansion of Heathrow is urgently needed to safeguard London's position as the world's leading financial centre.
In 2006 DTI Secretary Alistair Darling allowed BAA to be bought by Spanish construction company Ferrovial. The deal was funded mainly by borrowings with the result that BAA is now sitting on a £17 billion debt mountain and is saddled with an interest bill that is eating up its entire annual profits. BAA just hasn't the cash to fund a £1 billion a year investment programme.
Ferrovial is in no position to help either - it has £24 billion of debt and its share price has halved in a year. So the Government's policy of ensuring expansion of London's airport capacity is now in the hands of a Spanish construction company and its nervous bankers.
And who was the author of this policy? None other than Alistair Darling, in his days as Transport Secretary. Despite his undoubted skill at evading responsibility, he must be praying this chicken does not come home to roost.
24 February 2008
TERRY WAITE TO SPEAK AGAINST STANSTED EXPANSION
Suffolk Free Press - 14 February 2008
Terry Waite is to speak at a concert organised by campaigners against further expansion at Stansted and Heathrow airports.
Mr Waite, who lives at Hartest, will share a platform with Conservative Party environment expert Zac Goldsmith.
The concert, at the Grosvenor Chapel, Mayfair, on March 6, is designed to unite communities "threatened" by expansion at Stansted and Heathrow.
Mr Waite has in the past criticised BAA's airport expansion for environmental reasons. Campaigners are waiting for the results of last year's public inquiry into Uttlesford District Council's decision to refuse a planning application for Stansted's latest expansion plans.
He said: "At one time, it looked like a second runway was a foregone conclusion. It still has to be fought against, but there is no longer such a clear cut case."
"We are fighting to get our messages about airport expansion through on two fronts, against the expansion of flights and passenger numbers, and we are fighting because the proposals would affect the whole infrastructure and tranquillity of this part of the country."
"If development went ahead we would all be affected. The first loss would be our heritage, something which could never be replaced."
"Then there would be the contribution to environmental pollution, not only noise from overflying but more than a doubling of carbon dioxide emissions from the present five million tonnes annually from airport operations to some 12 million tonnes with a second runway."
"It is a dreadful thought."
19 February 2008
BAA BLAMES DEFRA FOR AIR QUALITY MISTAKES
BAA Provides Clarity on Air Quality Information
Press Release by BAA - 18 February 2008
Updated research on air quality in support of the planning application for a second runway development at Stansted has made BAA's technical team aware of the need to amend information on the Air Quality effects from the G1 development that was submitted to the recent G1 public inquiry.
The matter is not considered to make any difference to the merits of the case presented to the G1 inquiry, but BAA has acted quickly to ensure that the Secretaries of State, who are currently considering the independent planning inspector's report are informed.
Since the close of the G1 public inquiry, work on air quality assessments for G2 has had the benefit of more air quality data from nearby monitoring sites. This new data has enabled the technical team to update the air quality model which is used to predict future concentrations of emissions in the atmosphere and which formed the basis of the information which had been presented to the G1 planning inspector.
Latest air quality assessments have found that future background levels of Nitrous Oxide (NOx) in the atmosphere, to which those from forecast road traffic flows and aircraft movements are added, are now predicted to be slightly higher in future years than previously estimated. As a result of these increases in background levels, future NOx contours for 2014, both with and without the G1 proposals, now include small parts of both Hatfield Forest and Eastend Wood.
Stansted's Planning and Business Development Director, Nick Barton said: "As soon as we received the results of these latest air quality tests we decided to inform the Secretaries of State. We now predict that NOx levels are likely to be slightly higher in 2014 in parts of Hatfield Forest and East End Wood than were previously predicted. The levels in Hatfield Forest will still be less than those experienced today, and levels in Eastend Wood virtually the same. Added to which there is no evidence to show that any harm is or is likely to be occurring to vegetation. Significantly, no objectors at the G1 inquiry made the case that it would."
"This new air quality data does not diminish from the strong and compelling case we presented to the inquiry and we remain as confident as ever of a positive outcome."
OUR COMMENT: One of the key questions debated at the inquiry into the expansion of Stansted airport to 35m passengers/year was the effect that increased air pollution would have on Hatfield Forest. BAA had predicted that levels of nitrogen oxides, NOX, would not exceed the statutory limit of 30 micrograms/cubic metre of air. Opponents of expansion, all argued that the lack of monitoring round the airport and the gaps in the methodology used to make future predictions meant that BAA's optimism over future air quality was not justified.
Now, BAA admit that their predictions were too low. Hatfield Forest, a unique national forest, will be invaded by polluting emissions capable of damaging vegetation and trees many hundreds of years old. BAA claim that this serious underprediction is due to failures by Defra, who are responsible for calculating background levels all over the UK. How was this error detected? Because, BAA say, they carried out background air quality measurements round the airport themselves during the last year in the course of preparing evidence for the application to build a second runway.
BAA claim that no evidence of damage to vegetation was presented at the inquiry ? have they lost the pages of arguments put forward on this issue?
BAA were criticised at the inquiry for failing to carry out a comprehensive air quality survey before making the application for the expansion of the existing runway. Had this been done this error would have been detected and many hours of inquiry time might have been saved.
The Minister is now considering the Inspector's report on the Inquiry, and her decision is expected soon. This new evidence has been referred to her by BAA with their own conclusions on its importance. Opponents of expansion will certainly wish to comment. What does DEFRA say?
SSE'S INITIAL COMMENT
19th February 2008
"This is a matter of the utmost seriousness and BAA now accepts that it systematically understated the air quality impacts of its proposed development on the existing runway, despite repeated denials that it had done so during cross-examination by SSE, UDC and others at the public inquiry last year. We are now considering our position and will comment further in due course."
19 February 2008
STANSTED AIRPORT AMENDS AIR QUALITY FIGURES
Editorial - Harlow Herald - 19 February 2008
NEW research on air quality at and around Stansted Airport has seen BAA's technical team amend air quality information from the potential G1 development.
Details submitted to the G1 public inquiry in relation to the planning application for a second runway has to be clarified and the Secretaries of State are being notified.
The latest air quality assessments show the future background levels of nitrous oxide (NOx) in the atmosphere are now predicted to be slightly higher in future years than previously estimated. The new figures include forecast road traffic flows and aircraft movements.
The matter is not considered by BAA to make any difference to information presented to the G1 inquiry, but BAA has acted quickly to make sure the Secretaries of State, who are currently considering the independent planning inspector's report, are informed.
Stansted Airport's planning and business development director, Nick Barton, said: "As soon as we received the results of these latest air quality tests we decided to inform the Secretaries of State."
"We now predict that NOx levels are likely to be slightly higher in 2014 in parts of Hatfield Forest and East End Wood than were previously predicted. The levels in Hatfield Forest will still be less than those experienced today, and levels in Eastend Wood virtually the same."
"Added to which, there is no evidence to show that any harm is or is likely to be occurring to vegetation. Significantly, no objectors at the G1 inquiry made the case that it would."
He added: "This new air quality data does not diminish from the strong and compelling case we presented to the inquiry and we remain as confident as ever of a positive outcome."
Since the close of the G1 public inquiry, air quality assessments for G2 has benefitted from more air quality data from nearby monitoring sites.
The new data allows the technical team to update the air quality model, used to predict future emissions in the atmosphere.
16 February 2008
THE ECONOMIC BENEFITS OF EXPANDING
HEATHROW ARE NEGLIGIBLE
Press Release - Airport Watch - 14 February 2008
A major new report, published today by independent economic consultants CE Delft undermines the economic case for expansion at Heathrow. It challenges Government claims that its current proposals to expand Heathrow will benefit the economy to the tune of £5 billion.
The CE Delft report, 'The Economics of Heathrow Expansion', argues the Government's figures are based on flawed research which overestimates the importance of aviation to the economy. The Oxford Economic Forecast (OEF) reports, on which the Government relies, do not take account of the billions of pounds the country is losing each year from the tax-free fuel and the exemption from paying VAT the aviation industry enjoys. Nor do they factor into their calculations the annual bill, also running into billions, of the cost downsides of aviation expansion: noise, air pollution, community destruction and climate change.
John Stewart, the Chair of HACAN, said, "It's crystal clear that the economic benefits of expanding Heathrow would be negligible if the true costs were factored in. This report should be required reading for government ministers before they even consider giving the green light for expansion at Heathrow."
Stewart added, "What the CE Delft report clearly shows is that it is essential that the Government should not rely on propaganda promoted by vested interests. We are not asking that they should wholly rely on the CE Delft report. What we do say is that we need a proper independent study into the economic impacts of airport expansion and that greater."
Speaking at the launch of the report this morning, former transport minister Steve Norris said: "The Government is pushing ahead with plans for a third runway without really understanding what that means for the economy. It seems that the OEF report is fundamentally flawed and that by relying on it the Government are misleading us over the need for a third runway at Heathrow. We are often told that a third runway is essential for the Capital's economy. But this report shows those benefits have been overstated by the Government and the aviation lobby. How can we compare the cost of valid alternatives, such as high-speed rail, if we are over-estimating the value of more runways?"
Geraldine Nicholson, Chair of NoTRAG, said, "Thousands of people around Heathrow will lose their homes if expansion goes ahead. This independent report shows that it will all be in vain. There will be huge community pain for no real economic gain."
The CE Delft Report also gives little comfort to pro-Heathrow expansion groups such as Future Heathrow who argue that, unless Heathrow expands, business will locate to other cities in Europe, such as Frankfurt and Paris, whose airports are expanding more rapidly. The evidence shows that London continues to be an attractive destination for business even though some other European airports are expanding more rapidly.
The full report can be viewed on the HACAN website - www.hacan.org.uk. It was commissioned by HACAN, in association with NoTRAG.
CE Delft is an independent research and consultancy organisation specialised in developing innovative solutions to environmental problems. The solutions CE Delft delivers are technologically robust, economically prudent, politically feasible and socially equitable. Visit www.ce.nl/eng.
The Government's current consultation paper estimated that a 3rd runway at Heathrow would benefit the economy to the tune of £5 billion, spread over 70 years.
The Government?s economic claims for the economic value of expansion are based on The Contribution of Aviation to the UK Economy, (1999), which it commissioned from consultants Oxford Economic Forecasting (OEF). The report was largely paid for by the aviation, with its forward being written by representatives of the industry. An updated OEF Report was published 2006.
16 February 2008
HEATHROW ECONOMIC ANALYSIS IS SERIOUSLY FLAWED
Kevin Done, Aerospace Correspondent - Financial Times - 15 February 2008
Opponents of plans to build a third runway at Heathrow airport claimed on Thursday that the government had based its support for the project on "seriously flawed" economic analysis.
A report published by CE Delft, the Dutch consultants, cast doubts on the government estimates that expansion would bring economic benefits totalling £5bn ($9.8bn).
The report, commissioned by Hacan, the leading lobbying group opposed to further growth of the airport, attacked much of the economic analysis previously conducted by Oxford Economic Forecasting in two reports commissioned by the aviation industry. The OEF reports have been widely used by the government to demonstrate the wider economic benefits derived from the growth of aviation.
The CE Delft study said that OEF had significantly overestimated the suppressed business demand that would be released by expansion at Heathrow. It also found that if it did not expand, people would spend their money elsewhere, with the result that other sectors of the economy would grow.
Steve Norris, the former Conservative transport minister and candidate for mayor of London, said on Thursday the government was pushing ahead with plans for a third runway "without really understanding what that means for the economy... We are often told that a third runway is essential for the capital's economy. But this report shows those benefits have been overstated by the government and the aviation lobby."
"How can we compare the cost of valid alternatives, such as high-speed rail, if we are overestimating the value of more runways?"
The battle over the future growth of Heathrow is intensifying, as the government is due to complete a three-month public consultation into plans for the greater use of the two runways, and for the building of a third runway and sixth terminal.
Lord Soley, director of the Future Heathrow campaign, said it was "ridiculous to pretend Heathrow isn't important to business. Businesses themselves say Heathrow's expansion is vital to their future, and every other piece of research supports the view that international air links are crucial to the UK economy."
16 February 2008
SPOTLIGHT SWIVELS FROM AIR TO SEA CO2 EMISSIONS
ENDS Europe DAILY 2483 - 13 February 2008
Greenhouse gas emissions from shipping are almost three times higher
than previously thought, according to a report prepared for the
International maritime organisation (IMO).
The study says ships emitted 1.12bn tonnes of greenhouse gases in
2007, while previous estimates, by the Intergovernmental panel on
climate change (IPCC), had put the figure at only 400m tonnes.
The IMO study was commissioned as part of work to develop new air
pollution proposals discussed last week in London, and was released
at the meeting. The findings were publicised the Guardian newspaper on Wednesday.
The new estimate of shipping emissions represents nearly 4.5 per cent
of global greenhouse gas releases and is nearly twice that thought to
be emitted by airlines. Emissions are expected to grow by 32 per cent
But European commission spokeswoman Barbara Helfferich denied the
Guardian's assertion that the EU had said shipping emissions
accounted for less than two per cent of world emissions. The
commission had assumed a range of between 3.5 and 5 per cent, she
said. But she acknowledged a degree of confusion over the estimates.
"We understand the data is incomplete," she said.
Shipping emissions are exempt from Kyoto protocol reduction targets
but the commission has said it will bring forward measures to control
them in 2009 (see related article, this issue). Emission trading
remains the favoured option. Legislative proposals to include the
sector in the EU carbon market could materialise in early 2009.
The new study uses a different method to calculate emission levels.
Instead of estimating emissions from fuel purchases, it takes a
bottom-up approach based on the number of ships, their operation time
and their fuel consumption rate.
OUR COMMENT: There is always the wind... it sufficed for about 6000 years.
16 February 2008
STANSTED NEWS: BAA'S LATEST FLIGHT STATISTICS
BAA website - 13 February 2008
23.6 million passenger movements were recorded in the 12 months to January 2008, a fall of 0.6% from the 12 months ending January 2007.
The single month of January 2008 was 9% down on January 2007.
BAA's statistics for all its UK airports in January show a 2% drop from January 2007.
16 February 2008
SECOND RUNWAY PLAN BY APRIL 1
Sinead Holland - Herts & Essex Observer - 4 February 2008
A SECOND runway plan will land at Uttlesford District Council by April 1 - and that's no joke.
After a series of delays, director of the G2 project Alastair McDermid has confirmed that the scheme will be submitted "in six to eight weeks time".
He told watchdogs on the Stansted Airport Consultative Committee: "It's later than I anticipated, it has taken a long time. But I'm fairly confident it will be six to eight weeks."
Uttlesford District Council (UDC) has been expecting the bid to build a 68 million passenger airport by the end of the current financial year on Monday, March 31 - but Mr McDermid said his only concern was to submit the scheme as soon as possible and he had no specific date in mind. He said the raft of applications would also serve as a master plan for the airport - despite calls for a condensed document to be prepared.
Uttlesford district councillor Keith Artus said it was "outrageous" to expect the general public to "wade" through a mountain of paperwork.
Mr McDermid also refused to rule out further growth at the airport in the future, when he was accused of "onion-skin planning" by Herts County Councillor and Bishop's Stortford representative Bernard Engel, who demanded to know if G2 was the full extent of BAA's ambitions for Stansted.
"I'm never going to say never. Nobody is in a position to say nothing will ever come forward 10 or 20 years in the future - the Government is not saying that and nor am I," said Mr McDermid.
Despite the recent hitches, he told the committee he expected a public inquiry to take place later this year - when an independent inspector will make a recommendation to Government, after UDC has carried out in-depth consultation.
Despite Mr McDermid's message to the meeting on Wednesday last week, Stop Stansted Expansion has again questioned BAA's commitment to building the second runway. The campaigners believed that last month's decision by Transport Secretary Ruth Kelly to continue to regulate charges at Stansted has crashed the plans, because the scheme is not economically viable without price increases for airlines.
They accused BAA of bluffing the regulator and claimed there was now clear evidence that the company's resolve to build a second runway was "faltering".
A spokesman said: "BAA is expected to submit its much-delayed planning application for a second runway at Stansted in March. SSE views this as a speculative exercise rather than a genuine signal of BAA's intent."
16 February 2008
BAA WAVERS OVER RUNWAY
Editorial - Harlow Herald - 7 February 2008
CAMPAIGN group Stop Stansted Expansion (SSE) believes BAA is faltering over its second runway proposals at Stansted. The protest group claims that BAA's response to last month's Civil Aviation Authority (CAA) consultation is the strongest sign yet that the airport operator is unsure of the viability of a second runway.
The consultation suggests that prices at Stansted Airport will continue to be regulated, with new caps possibly being introduced from April 2009. SSE believes that with caps in place, BAA will not be able to charge enough to make the cost of a second runway worthwhile.
A BAA spokesman said: "As the Secretary of State for Transport has acknowledged, the principal issue for airports in the South East is the timely delivery of new runway capacity, as outlined in the 2003 White Paper. We will continue to argue strongly for a regulatory framework which delivers investments in new runway capacity at Stansted and Heathrow and we look forward to this consultation."
In response to the statement, SSE's economics adviser, Brian Ross, said: "There is nothing new or surprising in this latest statement from BAA but it completely contradicts the message coming from BAA management at Stansted, namely that BAA is committed to the G2 project. Either BAA is trying to bluff the CAA or it is not absolutely committed to a second runway."
SSE predicts that BAA will submit its planning application to Uttlesford District Council for a second runway at Stansted next month, but believes the application will be speculative rather than a genuine declaration of its intention to build.
The SSE believes BAA is in no position to build a second runway because the company is in more than £12 billion debt.
16 February 2008
SILVERJET HITS NEW LOW AS EOS PLANS TO FLY SAME ROUTES
Kevin Done, Aerospace Correspondent - Financial Times - 12 February 2008
The share price of Silverjet, the UK all-business class airline, fell to a new low on Monday, as the rival US carrier Eos Airlines announced plans for services between London and both Dubai and New York Newark - the two routes operated by Silverjet.
Competition for lucrative premium passengers in the London market is intense, and the start-up all-business class carriers face a tough battle to develop their networks amid rising fuel prices and a determined response by the legacy network airlines.
British Airways announced two weeks ago that it planned to launch two all-business class flights a day next year between New York and London City airport, the closest airport to the financial districts of the City of London and Canary Wharf.
Concerns have been growing about the viability of the all-business class, long-haul airline model, since Maxjet Airways, a rival US start-up flying between London and the US, collapsed into bankruptcy in late December.
The Silverjet share price fell 2p or 8 per cent on Monday to close at 22p, as the airline also confirmed that the Reuben brothers, the UK property developers, had abandoned their plan to convert a £10m loan into an equity stake in the group because of the collapse in the share price to less than half the 60p conversion price. The loan will remain in place and is repayable at the end of December 2009.
Lawrence Hunt, Silverjet chief executive, said the group's "primary focus is to continue driving passenger numbers and yields, thereby restoring shareholder value". The share price has fallen 89 per cent from the peak of 209p reached in March last year.
Based on bookings to date Mr Hunt said he was "highly confident" that the airline would fill more than 60 per cent of its available seats in February, up from 54 per cent in January, at an increased yield. Forward bookings beyond February continued to be "strong", he said.
Eos said it planned to start daily services between Stansted and New York Newark in May and between Stansted and Dubai in July. It began flying between London Stansted and New York JFK airports in October 2005 with 48-seat Boeing 757s and a premium cabin pitched between business and first class.
To date it has concentrated on building the frequency of its services between London and New York, rather than broadening the network, and is currently flying four times daily on the busiest days. It has expanded its fleet from four to seven aircraft.
Silverjet began flying in January 2007 and operates twice a day between London Luton and New York Newark and daily to Dubai. It has a fleet of three 100-seat Boeing 767s and is due to add two more next month.
16 February 2008
Financial Times - 11 February 2008
It is not just financial regulators who took their eye off the ball during the credit boom. BAA, majority owned by Spain's Ferrovial since August 2006, wants to raise £11bn to repay existing debt and fund capital expenditure by securitising its regulated London airports. As credit markets have deteriorated, the timetable for the securitisation has receded ever further into the distance.
Meanwhile, BAA appears to be slowly but surely running out of cash. In September it revealed that cash flows were insufficient to service a total of £1.8bn of estimated annual interest payments and capital expenditure. Standard & Poor's has already lowered BAA's credit rating to speculative grade. If its cash and available liquidity facilities - now believed to be £1.4bn - fall below the level needed to finance 12 months of capex and debt service, its legacy bonds could follow.
Ferrovial's consortium partners, which include the Singapore government's investment arm, could conceivably inject more equity into BAA. Ferrovial itself could not: JPMorgan estimates that the cash flows from Ferrovial's other divisions, after debt service and dividends, will be just ?50-?100m in 2008-09. Spreads on BAA's five-year credit default swaps reflect increasing pessimism - up from 192 basis points on January 1 to 453bp on Thursday, according to Thomson Financial data.
That infrastructure assets of Heathrow's significance are in such financial jeopardy is, ultimately, a government failure. The Civil Aviation Authority, unlike other UK regulators, does not licence the companies it oversees and thus has limited powers.
The gas and electricity sector regulator, in contrast, can require companies to maintain an investment grade rating, and even force parent companies to inject cash into ailing subsidiaries. Such powers have their perils but might, plausibly, have avoided the uncertainty now surrounding the UK's airports. But even if an imminent report by a parliamentary committee recommends beefing up the CAA's muscles, it will be a clear case of shutting the stable door after the horse has bolted.
16 February 2008
WHITEHALL STONEWALL AIR FAIR QUESTIONS
Evening Star - 13 February 2008
MINISTERS are today passing the buck on the difficult questions over the increasing numbers of jet planes in Suffolk's skies. Suffolk Coastal MP John Gummer is asking a series of Parliamentary questions - but is meeting a wall of silence.
Mr Gummer agreed to take up the fight for Suffolk at Westminster and to ask some of the questions the Evening Star has been battling to get answers to at the very highest levels. But he is getting the same responses from transport ministers, told they are not responsible for the numbers of planes, the impact on the communities living below them, or safety - despite the government's policy to double air travel in the next 20 years.
Transport minister Jim Fitzpatrick, parliamentary under-secretary with responsibility for aviation, shipping, the environment and road safety, said National Air Traffic Services (NATS) and the Civil Aviation Authority (CAA) should provide the answers. Both of these have dodged the questions - sometimes saying each other held the information - raising big questions over who is accountable to the public.
Mr Gummer asked:
* If the Secretary of State for Transport Ruth Kelly would bring forward proposals to reduce the number of planes flying over Felixstowe?
* What is the maximum number of planes per day permitted to use the flight corridors over the Felixstowe, Walton, Trimley, Kirton area and the Suffolk coast?
* How many commercial aeroplanes flew over Suffolk in the last 12 months and on each day of the last 12 months?
* What account is taken of the effect on communities living under flightpaths when taking decisions on the number of planes flying on those routes?
* What the estimated maximum number of aeroplanes that may fly safely over Suffolk each day?
Mr Fitzpatrick failed to give complete answers to any of the questions. He said it would be up to NATS and the CAA to reduce the number of flights over the Felixstowe area - and the authority could do this if it chose through the current proposals to alter airspace.
On the question of the impact on people living under flightpaths, he said the CAA had a duty to take this into account as part of its air navigation duties. "Under this process, proposers of airspace changes are required to consider the impact of changes to airspace arrangements on the areas which are overflown and to consult widely on the proposed changes," he said.
"Detailed guidance is given on what impacts are to be taken into account, how they should be measured and on who should be consulted."
National Air Traffic Services is currently designing its airspace proposals and consultation is expected to take place this spring.
What do you think of the possibility of tens of thousands more planes flying over Suffolk? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN, or e-mail EveningStarLetters@eveningstar.co.uk
Campaign Azir Fair says:
More than 1,200 planes currently cross Suffolk every day and the number is set to grow hugely - possibly double - in the next two decades
The planes bring noise, pollution, and blot out the sun with their contrails, and the fear is flights will get lower.
Our campaign agrees with and supports Stansted Airport at its current flight and passenger limits, but is against expansion of the airport which will have an intolerable impact on the quality of life of people in Suffolk.
It is against proposals to increase the number of passengers by ten million a year on possibly 75,000 extra flights, and against the building of a second runway which would more than double the current flights - another 300,000 a year.
The campaign wants a full review of pollution being caused by the jets - both the impact on ozone layer and on the environment at ground level - and of the increasing noise being caused by the aircraft 24/7.
We want assurances that planes will not be allowed to fly lower than the present lowest levels across Suffolk.
There must also be a full review of the current flightpaths to look at the possibility of moving flight corridors on a regular basis so the same communities do not suffer noise nuisance incessantly.
16 February 2008
DOES ANYONE WANT MORE FLIGHTS?
ARE THEY REALLY NECESSARY?
Kent says 'no thanks' to new estuary airport plans
Kent News - 12 February 2008
Plans to site a new airport at Cliffe were driven out by protesters
Wildlife campaigners have slammed plans for a new airport in the Thames Estuary.
The Conservative London mayoral candidate, Boris Johnson, said that the Thames Estuary was a potential site for a new London airport. He said Heathrow was "a planning error" and instead of expanding it by building new runways, he said ministers should build elsewhere.
"What we don't want to do is entrench a planning error of the 1960s by further expansion at Heathrow. We should look at whether there's a solution to the east, in the Thames Estuary," the MP told The Sunday Times.
He was backed by Sir Peter Hall of the Town and Country Planning Association, who claimed the estuary was ideal because there would be no constraints on development.
But the Royal Society for the Protection of Birds reacted with horror to the proposals. The RSPB said the estuary, including the RSPB's Cliffe Pools reserve in Kent, is one of Europe's most important sites for wild birds and is protected by European and UK law.
The RSPB said more than 200,000 birds use the Thames Estuary in winter including species whose numbers have dropped steeply elsewhere. It said their presence would pose a serious risk of bird strike, a threat that would be impossible to avert.
The RSPB predicted attempts to build an airport in the estuary would face substantial legal blocks and warned it would seriously hamper all attempts to cut the UK's greenhouse gas emissions.
Dr Mark Avery, Conservation Director at the RSPB, said: "The Thames Estuary, as it is now, is a precious and irreplaceable site for wildlife and an invaluable asset to those living and working in the adjacent Thames Gateway. It is unthinkable that development should be considered and irresponsible to promote such a scheme with no thought for safety, the legal implications or the terrible impact on all of our attempts to cut carbon emissions."
"We are not obliged to cater for the predicted demand for air travel. The sector makes a disproportionate contribution to climate change and should be included in targets for cutting emissions. Boris Johnson is recycling discredited ideas. He and his colleagues should think again."
And Cllr Paul Carter, the leader of Kent County Council, appeared to dismiss his Tory colleague's proposals. Cllr Carter wrote on his blog: "I read with interest Boris Johnson's call in The Sunday Times for the government to resurrect plans for a new airport on artificial islands in the Thames Estuary. Alongside all the very good reasons why we were opposed to an airport at Cliffe in the first place, from an engineering point of view Boris' solution is highly complex and extremely expensive."
"We already have an airport in Kent that is underutilised - Manston. A million passenger movements would create between 1,500 to 2,000 much valued jobs."
Around 150,000 people objected to Government proposals to build an airport at Cliffe in 2003. The scheme was dropped.
In Hong Kong, the government built an airport on an artificial island that was linked to the mainland by train in a £20 billion scheme.
16 February 2008
VIRTUAL FLYING THE VIRGIN WAY?
Defeating climate change by air
Observer - Financial Times - 14 February 2008
Wanted: one Churchill. Job description: to vanquish climate change.
Apply to: Sir Richard Branson, Virgin Group.
The Virgin Atlantic chief told the United Nations this week that he was planning to set up a "war room" on climate change.
Funded with a few million dollars of his own money, the organisation will consider "new and radical" ideas on climate change. He warned global warming would only be tackled if people took it as seriously as they did the British effort to win the second world war.
Sir Richard is tight-lipped on his favourites for the post of "the new Churchill" needed to head the war room, but Al Gore might have some free time while, if former British prime minister Tony Blair doesn't get to be president of Europe, he too will be looking for a new challenge.
What will be the first task of the new Churchill? Climate experts tell us our runaway consumption of fossil fuels and the goods we make with them are causing the problem. That would have been familiar to the original Churchill, one of whose first actions in fighting Hitler was to ration essentials such as food, clothing and petrol.
During the war, British train stations and roadsides were plastered with posters asking: "Is your journey really necessary?"
So surely the new climate Churchill will put up the same posters at Virgin check-in desks.
16 February 2008
BUSINESS VISITOR CENTRE PLAN
Dunmow Broadcaster - 7 February 2008
BUSINESSES in Uttlesford have backed the opening of a visitor centre at Stansted Airport.
The Saffron Walden Business Forum has passed proposals to support an airside business centre, designed specifically to cater for and to promote businesses in Uttlesford.
Jeremy Rose, a member of the forum's management team, started the initiative to encourage visitors, business travellers and tourists to use local firms for support services, manufacturing or events and accommodation.
BAA Stansted spokesman Mark Pendlington said: "The forum is one of many leading organisations in the area that really make a massive contribution to bringing businesses together. I'm very excited about the initiative to bring a facility to the airport."
16 February 2008
AIRCRAFT NOISE CAN KILL, REPORT CLAIMS
Nic Fleming, Medical Correspondent - Daily Telegraph - 13 February 2008
Thousands of people are killed each year by increases in blood pressure triggered by night-time noise from aircraft, a new study claims. Each increase in noise caused by aircraft caused increases in blood pressure within minutes.
Researchers found the sound of planes taking off and landing while people sleep increases blood pressure both immediately and in the long term.
Those living closest to airports were almost 50 per cent more likely to suffer from hypertension, a known trigger for heart attacks, strokes, kidney disease and dementia.
The findings come from a major four-year study called the Hypertension and Exposure to Noise near Airports (Hyena) project, funded by the European Commission.
Approximately six million people in the UK receive treatment for high blood pressure, and it is estimated to cause approximately 100,000 strokes and heart attacks every year. About half are fatal.
Dr Lars Jarup, co-author of the new study from Imperial College London, said: "We know that noise from air traffic can be a source of irritation, but our research shows it can also be damaging for people's health. Our studies show that night-time aircraft noise can affect your blood pressure instantly and increase the risk of hypertension."
"This was surprising. Such an immediate effect from noise events has never been shown. While these were transient effects, other work we have carried out shows repeated exposure has a long term effect on blood pressure. Our findings are significant in light of plans to expand international airports."
Dr Jarup and colleagues, whose work will be published in the European Heart Journal, identified 140 people who had lived near four major European airports - Heathrow, Athens, Malpensa, Italy, and Arlanda in Sweden - for at least five years.
For one night they had their blood pressure measured every 15 minutes, while noise levels and types were recorded in their bedrooms. Each increase in noise caused by aircraft caused increases in blood pressure within minutes.
Findings from the main Hyena study suggested planes can boost night-time noise levels by up to 30 decibels for those living nearby, and that each 10dB increase causes an average increase in the chances of being diagnosed with hypertension of 14 per cent.
16 February 2008
NIGHTTIME AIR TRAFFIC NOISE CAN
INCREASE BLOOD PRESSURE: STUDY
Agence Presse - 13 February 2008
Noise at night from airport and road traffic can increase blood pressure during sleep, according to a study published Wednesday.
The findings could give ammunition to opponents of noise pollution and proposed airport expansions, including at London's Heathrow, one of four European air hubs examined in the study. The three others airports were Athens, Stockholm and Milan.
A team of European scientists led by Lars Jarup of Imperial College London monitored 140 sleeping volunteers in their homes near the airports, checking blood pressure every 15 minutes with remote devices.
They found that a noise louder than 35 decibels -- corresponding to a plane flying overhead or heavy vehicle traffic-- provoked a spike in blood pressure.
Even a partner snoring loudly could produce the same effect, said the study, published in European Heart Journal, put out by the European Society of Cardiologists.
"The short term effects of loud noise during sleep have been documented in the laboratory settings but not in populations living under normal conditions," said co-author Klea Katsouyanni, a researcher at the University of Athens Medical School.
People with high blood pressure -- also called hypertension -- have an increased risk of developing heart disease, stroke, kidney disease and dementia, previous research has shown.
High blood pressure is defined by the World Health Organisation as being 140/90 or more. The first number measures maximum heart pressure (systolic), while the second measures pressure when the heart is in a resting phase (diastolic).
Aircraft noise caused an average increase of 6.2 in systolic blood pressure, and 7.4 for diastolic blood pressure. The figures for heavy road traffic were only slightly less. The loudness, rather than the source, was the critical factor in boosting blood pressure, the researchers found.
"We know that noise from air traffic can be a source of irritation, but our research shows that it can also be damaging for people's health," said epidemiologist Lars Jarup of Imperial College London.
Parallel findings by the same researchers to be published next month in the journal Environmental Health Perspectives, show that people that live under a busy flight path for at least five years are at greater risk of developing high blood pressure, Jarup told AFP.
An increase in night-time aeroplane noise of 10 decibels, he said, enhanced the risk of high blood pressure by 14 percent in both men and women. The second study monitored 6,000 men and women. Both studies appear amid continuing controversy over a proposed new runway at Heathrow, one of the busiest international airports in the world.
The number of flights serving the airport are projected to expand from nearly half a million to 700,000 per year. In all, a couple of hundred people living near Heathrow could be affected by high noise levels, Jarup estimated.
"It is clear that measures need to be taken to reduce noise levels from aircraft, in particular during night-time, in order to protect the health of people living near airports," he said.
The researchers, based in Athens, Stockholm, Milan and London, are currently investigating whether combined exposure to noise and air pollution increases the risk of heart disease.
16 February 2008
YET ANOTHER RISK TO YOUR HEALTH
Health effects of climate change in the UK 2008:
an update of the Department of Health report 2001/2002
Department of Health and Health Protection Agency - 12 February 2008
Heatwave 'could kill thousands'
Climate change could lead to a heatwave in the South East of England immediately killing 3,000 people, a study has found.
A Health Protection Agency and Department of Health report said that by 2010 there will be a 1-in-40 chance that the region will experience a serious heat wave.
The study, published on Tuesday, examined the possible impact of climate change should it continue unabated. It said that while the UK was adapting well to rising temperatures experiences since the 1970s, the country faces an increased risk of flooding.
The number of people at risk from floods is set to rise from 1.5 million to 3.5 million by 2100, it said.
The panel of experts behind the report also warned that malaria could return to the South East in the next 50-100 years. Outbreaks are likely to be rare and easily controlled, it said, but authorities need to prepare for larger outbreaks in continental Europe and the emergence of more deadly strains of mosquitoes in wetland areas.
The study also concluded that tick-borne diseases, such as Lyme disease, are likely to become more common due to changes in land management and as people spend more time outside.
Food poisoning cases are expected to rise by 14,000, or 14.5 per cent.
Increased exposure to sunlight will lead to a rise in skin cancers, while winter deaths will continue to decline as the climate warms.
Robert Maynard of the HPA said: "Climate change is likely to be one of the major challenges that humanity faces this century. It is important that we assess the possible health impact and take any actions that could minimise the consequences."
The report will form the basis of the HPA's response to a recent request for information from the Royal Commission on Environmental Pollution, which is studying how to adapt the UK to climate change.
8 February 2008
PROFITS, PLANES AND PROPHECIES
WHAT PRICE FOR THE ENVIRONMENT?
Grounded by debt: the upgrade of Heathrow
Chris Blackhurst - Evening Standard - 4 February 2008
NOTHING excites more anger among the business community than the state of Heathrow. It's one subject that pretty much everyone is agreed upon: the airport is awful.
When BAA was taken over by Ferrovial of Spain, I feared the worst. Then Sir Nigel Rudd was appointed chairman, and my view shifted. If anybody could crack heads and put the passengers ahead of the shopkeepers in the horrible mall that passes for an airport, it was Rudd.
A natural cost-cutter, he is also a supreme pragmatist - it's hard to conceive of him doing anything to undermine the franchise any further. Sadly, I wonder if I'm being too optimistic. The problem, I'm hearing, is Ferrovial's debt.
BAA chairman Marcus Agius and chief executive Mike Clasper drove a very hard bargain for the company. Their shareholders should give thanks, for they pushed the price to 50% of its market value, slightly above £10 billion. That left Ferrovial saddled with £9 billion of debt - which, I'm told, it's struggling to service.
The difficulty is that to improve Heathrow, BAA is going to have to invest heavily (it's planning on injecting £6.2 billion into its airports over the next 10 years). Quite how it's going to put that amount in and continue to meet its debts isn't clear.
Unfortunately, one route may be to slash costs. That can only be to the detriment of the traveller. Staff numbers are falling and the emphasis is on saving money, not spending it.
Rudd is a smart cookie - they don't come any cannier. But I fail to see how he can provide the better experience his customers and the City crave while keeping his Spanish masters and their bankers sweet.
8 February 2008
RYANAIR'S O'LEARY WARNS ON PROFITS
Jeremy Warner - Independent - 5 February 2008
Matilda told such dreadful lies, it made one gasp and stretch one's eyes ... (Hillaire Belloc).
Michael O'Leary, chief executive of Ryanair, has been crying wolf about this, that and the other for so long now, it is tempting to write off his latest apocalyptic warning about economic calamity and its likely consequences for the airline industry as just another case of alarmist blarney. This time he predicts "the perfect storm", which has become the most repeated cliché in the English language to describe a cocktail of negatives. Is he right to be so pessimistic, either for his own company or the airline industry as a whole?
In the past, Mr O'Leary's gory predictions have tended to be so much hot air, designed to knock down expectations only to better them, or perhaps deliberately intended to deter potential low-cost rivals hell-bent on challenging his position in the market. It was only a few years back that he was saying most low-cost operators wouldn't be able to withstand a $50-a-barrel oil price. Yet even at $90 a barrel, the industry is proving surprisingly resilient.
This time around, Mr O'Leary doesn't just predict "a deep, dark, recession", he would actually welcome one, which he says would both blow away the competition and put paid to green taxes, a doubling of landing charges at Stansted and other "luxury" ideas of the years of plenty. In any case, if fuel prices remain at their present inflated levels, then profits next year could halve, Mr O'Leary said.
Load capacity is already down 2 per cent for January and Mr O'Leary is predicting a 1 per cent fall for the next six months as a whole. That could translate into a much steeper decline in yields, or average fares per passenger. Curiously, there is a mismatch between this gloomy prognosis and Mr O'Leary's plans for his own company, where aircraft orders which cannot easily be wriggled out of commit Ryanair to expanding capacity by around a fifth per annum for at least the next five years.
Nor do his predictions tally with what the full-service airlines are saying. British Airways said last week it saw no let up in strong demand for long-haul premium travel. And there's the rub, for there is obviously a world of difference between long-haul business-class traffic and what the low-cost airlines do, which is short-haul leisure.
If there is a worldwide recession, BA and other full-service airlines will suffer alongside everyone else. Yet for the moment, it is short-haul leisure which is suffering most acutely from the downturn, and perhaps in particular, the relatively immature eastern European markets which Ryanair has been aggressively expanding into. So perhaps this time, we should believe Mr O'Leary. Like Belloc's Matilda, he may indeed be about to be burned alive.
8 February 2008
RYANAIR BLAMES HIGH FUEL COSTS FOR PROFITS DROP
Danny Fortson, Business Correspondent - The Independent - 5 February 2008
Michael O'Leary, the chief executive of Ryanair, has warned that full-year profits might fall for the first time since 11 September 2001, but expressed hope that the UK would be hit by a "deep, dark recession" that would force smaller rivals out of business and put a dampener on rising airport landing charges and green taxes.
Blaming high fuel costs and falling load factors on its planes, Europe's largest low-cost airline saw profits for the first nine months of the year drop by 27 per cent to ?35m (£26m). The fall came despite a 21 per cent rise in passenger numbers and a 16 per cent jump in turnover. Mr O'Leary said that if the "perfect storm" of high fuel prices and a recession occurred this year, Ryanair could see its profits driven down "by up to 50 per cent" next year.
He was confident, however, that the company was well placed to benefit over the longer term, as a downturn would weed out rivals and hamper Government moves to increase fees, such as landing charges.
"We are generally pessimistic about the next 12 months, profits will probably fall," said Mr O'Leary. "We need a deep dark recession. It would be bloody good for the industry. It would help see off the environmental nonsense that has become so popular among the chattering classes."
Mr O'Leary has loudly criticised Government measures, such as the doubling of the air passenger duty, and continues to fight proposed hefty increases to landing charges at Stansted, the airline's base serving the London area, and Dublin airport.
Mr O'Leary painted the profits drop as a temporary speed-bump, but the City was less convinced. Chris Reid, an analyst at Deutsche Bank, said that the figures showed a trend of costs rising faster than capacity and revenue growth. The company is "not getting the benefit of its volume growth in its unit cost base and in our view this is leading to, from a profit perspective, business model failure".
With about 100 aeroplanes on order, Mr O'Leary predicted that, despite the near-term turbulence, the company will double capacity and profits in five years. Yet the market has sold down the shares by more than a third in the past six months, gripped by worries that the company may get caught in a pincer of vastly increasing capacity just as demand begins to drop if the UK and European economies stumble.
The company has been able to partially offset higher costs by selling aircraft in the second-hand market. Ryanair booked ?12.1m (£9.1m) through the sale of five planes to Chinese and Indian carriers in the most recent quarter, and could sell another 10 over the next six months. Mr O'Leary said carriers were paying "very generous" prices for second-hand planes because many cannot get immediate access to new models as the order books of Boeing and Airbus are full for years to come.
The company also has a business plan in place for its planned transatlantic budget carrier, though Mr O'Leary said that he would not start it up until he could swing a deal to buy new planes on the cheap.
8 February 2008
RYANAIR WARNS OF A 50% PLUNGE IN PROFITS
Robert Lea - Evening Standard - 4 February 2008
Profits at Ryanair could crash 50% in 2008 as the airline industry heads for a potentially catastrophic recession.
The stark warning came today from Michael O'Leary, chief executive of Europe's leading budget airline, which is responsible for carrying 50m passengers every year.
The extraordinary profit alert from Ryanair - the most pessimistic outlook ever from O'Leary, the enfant terrible of the industry - comes as the carrier also reported its worst January this decade with its planes last month flying on average less than 70% full.
But the downturn in Ryanair's fortunes should prove a boon for travellers who have been complaining of rising fares and added baggage charges and the like among the budget carriers.
"Our only competitive response can be to slash fares and see what the competition make of it," said O'Leary.
The Irishman today warned Ryanair is battening down the hatches for a 'perfect storm', not least on the price of oil, where it will soon be completely unhedged after deciding not to take a bet to forward-buy kerosene and mitigate the soaring fuel cost.
"With oil prices at $90 a barrel and fear of recession in the UK and many other European economies, the current outlook for the coming fiscal year is poor," said O'Leary. "We remain essentially unhedged for next year. Current oil prices, which have risen by nearly 40% to $90 a barrel, will impose significantly higher costs during a year when we are expanding capacity by almost 20%."
"To compound this negative outlook, European consumer confidence is waning, which would suggest that, unlike two years ago - when higher yields [profits per passenger or average fares] compensated for higher oil prices - next year's yields may be flat or continue to fall, as consumers become more price-sensitive."
"European airlines are facing one of these cyclical downturns, with the possibility of a 'perfect storm' of higher oil prices, poor consumer demand, weaker sterling and higher [take-off and landing] costs at unchecked monopoly airports such as Dublin and Stansted, which account for a significant proportion of Ryanair's traffic."
"At our most optimistic, a combination of flat yields and $75 oil would see profits grow by 6% to approximately ?500m [£375m]. At our most conservative, if forward oil prices remain at $85, and consumer sentiment and sterling weakness leads to a 5% reduction in yields, profits in the coming year could fall by as much as 50% to as low as ?235m."
Ryanair today reported that profits in its latest trading quarter to the end of December plunged by 27% to ?35m. With passenger load factors in January running at just 69% - historically, the airline flies at an average of more than 80% - Ryanair also indicated that profits in the current trading quarter, the last of its financial year, will be just ?15m, to make a total of ?470m for the year.
8 February 2008
EASYJET KEEPS PROFIT-GROWTH FORECAST AS SALES RISE
Tracy Alloway - Bloomberg.com - 7 February 2008
EasyJet Plc, Europe's second-biggest discount airline, said first-quarter revenue rose 14 percent, prompting the airline to stick to an earnings-growth forecast as charges for travelers checking baggage offset higher fuel costs.
Sales in the three months ended Dec. 31 increased to 418 million pounds ($819 million), Luton, England-based EasyJet said today in a statement. Pretax profit in the year through September, excluding one-time gains or costs, will rise by about 20 percent, the carrier said, reiterating earlier targets.
The airline is attracting customers by cutting ticket prices while adding to profit by getting passengers to pay additional fees such as the baggage charges, which it introduced in October. EasyJet's growth forecast contrasts with the outlook at larger competitor Ryanair Holdings Plc, which said Feb. 4 that earnings may drop by as much as half in its fiscal year ending March 2009.
"EasyJet has already reacted to the initial volume weakness with reductions in fares," said Chris Avery, an analyst in London at JPMorgan Chase & Co. with an 'overweight' recommendation on the stock. "They sound confident that conditions are sufficiently good to maintain guidance."
EasyJet shares fell as much as 12.25 pence, or 2.7 percent, to 436 pence, as 2 1/2-week low, and were down 2.2 percent at 438.5 pence as of 9:40 a.m. in London. The company also said today that the load factor, or proportion of seats filled, declined by 0.9 percentage point from a year earlier to 80.8 percent in the quarter and dropped 2.9 points to 72 percent in January.
"People will look this morning at the load factor as consumers push back against the bag charge," Avery said. "We saw this lag last spring, when air-passenger duty and Stansted airport handling charges were doubled. This time, EasyJet keeps the bag charge."
EasyJet is striving to boost earnings by generating more ancillary revenue, or sales from products or services besides tickets, and attracting more business travelers, who tend to make later, more expensive bookings. EasyJet's fee for checking baggage started in October, a year and a half after Ryanair introduced similar charges.
Revenue in the quarter from non-flight items, including the new baggage charges, jumped 62 percent from a year earlier to 57 million pounds, EasyJet said. Ticket sales rose 9 percent to 361 million pounds, although revenue per seat declined 4 percent as EasyJet slashed prices to win travelers and keep up with rivals.
Ryanair Fare Cuts
Dublin-based Ryanair said Feb. 4 that fiscal-2009 profit may fall by as much as 50 percent as the airline cuts fares to stimulate demand while spending money on new routes and flights.
EasyJet's forecast for underlying pretax profit excludes items such as the acquisition of GB Airways, spokesman Toby Nicol said. EasyJet agreed to buy GB, a former British Airways Plc franchise, in October, to overtake the larger European carrier at London Gatwick airport and add longer routes.
Taking over GB will lead to about 7 million pounds in first-half integration costs as EasyJet spends more to advertise the new routes before the summer, the airline said today. For the full year, the acquisition will cost about 12 million pounds.
Ryanair and EasyJet are the only European discount airlines planning significant expansion in coming months. Ryanair plans to increase capacity by 20 percent in the next fiscal year as it takes delivery of new Boeing Co. aircraft. EasyJet will grow by about 15 percent as it takes on new Airbus SAS planes.
Passenger Numbers Rise
The number of passengers carried in the quarter rose 12 percent to 9.1 million, while January passenger numbers increased 7.3 percent to 2.76 million travelers, EasyJet said. Growth in the quarter was driven by travel in Italy, Spain and Switzerland.
"Forward bookings are in line with expectations, despite the uncertain macroeconomic environment," EasyJet said. "Whilst revenue will be ahead of previous guidance, this impact is largely offset by an increase in costs denominated in euros, principally airport costs, navigation and European based crew costs."
The economy in the U.K., EasyJet's biggest market, may expand by 1.8 percent this year, the slowest growth rate since 1992, as higher credit costs and a housing-construction slowdown curb consumer spending, according to economists. Oil, the airline's single biggest operating cost, reached a record $100.09 a barrel Jan. 3.
The airline hasn't added hedging contracts to hold back fuel costs for the fiscal year, EasyJet said today. About 40 percent of fuel needs are hedged at $735 a metric ton, compared with $688 a ton last year.
8 February 2008
CHANGES TO AVIATION TAX TO HIT LONG-HAUL FLIGHTS
Proposed tax on long-haul flights could lead to increased ticket prices
and fuller planes
Sarah Griffiths - BusinessGreen - 1 February 2008
Airlines operating heavy aircraft and long distance flights will be hardest hit under aviation tax proposals released by the Treasury yesterday.
Under new plans, Air Passenger Duty (APD) is set to be phased out by November next year to be replaced by a per flight levy that charges aircraft based on their distance traveled and weight. The proposed taxes will affect all planes over 5.7 tonnes, including freight aircraft which were exempt from APD charges.
According to the Treasury report, the tax could be divided into three bands with proportionately lower taxes for the European economic area and flights of under 3,000 miles. Meanwhile, planes travelling more than 3,000 miles will be subject to higher taxes.
British Airways criticised the proposals insisting that the EU emissions trading scheme, which airlines will join in 2011, provided a more effective way of addressing for aviation's contribution to CO2 emissions. "Emissions trading leads directly to reduced emissions. Taxes do not. APD is not used to fund environmental benefits and there is no guarantee that a flight-based tax would, " the company told The Guardian.
But with aviation predicted to account for 21 per cent of the UK?s carbon emissions by 2050, the Treasury report insisted the proposed tax system would, "introduce fairer duty, more in line with the environmental impact of flights, including the distance travelled". It is hoped the scheme will incentives airlines to invest in lighter aircraft and introduce measures to operate fuller planes.
However, the report did not detail the level of the proposed taxes, prompting speculation on the scale of the impact on aviation emissions. David Symons, director of corporate services at green consultancy WSP Environmental, said that the proposed taxes would encourage airlines to fly planes fuller but warned that without a significant levy the impact on passengers could be minimal. "Flight costs have come down so far in the past few years that the scheme will only encourage people to change behaviour if the levy each person pays is significantly higher than today," he said.
A spokeswoman for EasyJet agreed that it is impossible to predict the effect on airfares until more details on the level of the tax are released. However, the move is likely to place further pressure on corporate travel budgets and encourage more firms to embrace travel reduction measures such as video conferencing.
In related news, Airbus announced its plans today to fly a double-decker A380 on alternative fuel for the first time, according to a Reuters report. The fuel for the test flight between Bristol and Toulouse, France will be derived from natural gas. The announcement follows recent confirmation from Virgin Atlantic that it is to operate a biofuel-powered test flight later this month.
8 February 2008
PLANES LOSING OUT TO TRAINS IN UK
Evening Star - 4 February 2008
AIR traffic in the UK is not growing anywhere near as fast as the rest of Europe, according to a new report today. But aviation experts say it is not concern over the environment making people think twice about flying - it's less money in their pockets to spend on holidays.
Better rail services though are having an impact on how people travel, taking the train rather than the plane for trips around Britain.
Despite the slow down, the air industry is still determined to press ahead with expansion - more cheap flights and plans to expand airports, particularly Stansted and Heathrow.
Currently around 1,200 jet planes fly over Suffolk every day - some 600 of them over the Felixstowe area, the Clapham junction of the county's skies - causing growing frustration over noise and concern over pollution.
The new report by the Civil Aviation Authority (CAA) said: "Passenger traffic at UK airports has grown at an average annual rate of about six per cent since the mid 1970s, more than twice the rate of economic growth in the UK. However, over the last few years the growth rate, although still positive, has fallen to approximately two pc per annum."
"UK air passenger traffic growth in 2006 was slower than in 14 other developed aviation markets in the EU, many of which saw economic growth similar to the UK."
The CAA's research shows no frills cheap flights are still growing by around ten per cent, and business travel has risen.
"Growth in domestic air travel, which accounts for one fifth of all trips, seems to have been mainly affected by competition from other transport modes, particularly due to improvements in long distance rail services and changes in airport security that have increased total journey times for air travel," said the report.
It was not thought air passenger duty was having an impact because the slow down started before this was imposed.
CAA expert Dr Harry Bush said: "The CAA's analysis shows the impact on passenger air travel of recent slowing of consumer expenditure, but also indicates a significant impact from the recovery of rail travel and from the increasing internationalisation of the UK economy, with the consequent growth in air travel to visit family members or friends in other countries."
"Looking to the longer term, demographic changes and ownership of homes abroad are also likely to buttress air travel demand, although relatively small changes in frequency of leisure travel between mid and higher levels of income suggest demand growth is constrained to some extent by factors other than income, such as availability of leisure time."
Should we fly less to protect the environment? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN, or e-mail EveningStarLetters@eveningstar.co.uk
FASTFACTS: WHO FLIES MOST
Half of the UK population do not fly at all in any year - those who do take more than two return trips on average.
Higher income households take more flights, single people and childless couples fly more than families, and those who own property abroad fly often.
Households with total earnings over £115,000 per year take around 60 per cent more trips per year than those earning less than £40,000.
Regional airports have continued to grow at a faster rate than London airports, and in 2006 handled 42 per cent of passengers at UK airports.
8 February 2008
SOAPBOX: SKIES OPEN UP, BUT US HAS ADVANTAGE
Willie Walsh in 'Global Talk' - Financial Times - 4 February 2008
We are approaching an important moment in transatlantic aviation.
Stage One of the new air treaty between the European Union and the US comes into effect on March 30. For the UK, this means the first significant change in the regulation of transatlantic air travel since the 1970s.
Freedom for airlines to fly from any EU airport - including Heathrow - to any US airport, has been billed in some quarters as the demise of the last bastion of protectionism and the start of an unprecedented consumer bonanza.
The truth is more mundane. Last year, there were 14 airlines operating between London and the US. This year, with the new deal in place, there will be 15.
Stage One of the agreement provides a limited, but useful liberalisation that British Airways will fully exploit.
We will press hard for a much more radical deregulation in the Stage Two process between Brussels and Washington, which begins in May.
One reason why Stage One will have less impact than some have predicted is that Heathrow is not the ultimate protectionist citadel it has been labelled. In fact, for years it has been Europe's most competitive transatlantic hub.
At Heathrow, there have been four airlines (British Airways, Virgin, American and United) battling with each other for business on routes to the US. That is more than at Frankfurt, Paris, Amsterdam or any other European airport.
Heathrow has offered customers the widest choice not only of carriers, but of non-stop destinations in the US and departure times too.
The new treaty will lift restrictions on the US destinations we can fly to from Heathrow, and the number of times we can fly to them.
So, from March 30 British Airways will begin flying to Dallas-Fort Worth and Houston from Heathrow rather than from Gatwick.
In addition, we will increase frequency on our Heathrow to New York JFK route from 51 flights a week to 55. We will increase frequency on the Heathrow to Seattle route from 10 flights a week to 13, and on Heathrow to Washington from 21 services a week to 24. This transatlantic expansion is not leaving out Gatwick, from where we will increase flights to Orlando from seven a week to 10.
That is not the only way in which we will exploit the additional freedoms Stage One brings. We are the first European airline to launch a network of routes from outside our home country to the US. Our new subsidiary, OpenSkies, will start operations in June with daily flights from the Continent to New York.
OpenSkies will begin with services from either Brussels or Paris. Whichever city is not selected for the launch will start flights to New York later in the year.
By the end of 2009, we plan to have an OpenSkies fleet of six aircraft, operating between the US and European business centres such as Frankfurt, Amsterdam, Milan and Madrid in addition to the French and Belgian capitals.
OpenSkies will operate Boeing 757 aircraft, carrying up to 82 passengers with three cabins. The business class cabin has 24 seats that convert into 6ft beds. There will be 28 premium economy seats with a generous 52in seat pitch, and 30 economy seats.
We are confident this British Airways subsidiary will be a great success, as we build on the strength of the BA brand in the US and Europe.
Why name the airline OpenSkies? Not just to mark this first step toward a freer EU-US aviation market, but also to signal our commitment to the far more radical liberalisation the industry needs.
The Stage One deal is unbalanced in favour of the Americans. It gives US carriers access to European airports, and the right to pick up passengers and fly them on to other EU destinations.
However, European carriers are not granted the equivalent right to operate between US cities.
US airlines can fly on from EU airports to destinations in the Middle East, south and East Asia ? some of the most lucrative air routes in the world. But the reciprocal rights for European operators flying on from the US are limited to the much slimmer pickings of Central and South America.
We want the Stage Two negotiations to address these flaws.
But most important of all, we want Stage Two to sweep away the anachronistic restrictions on the ownership and control of airlines, so that EU investors can take majority stakes in US airlines and vice versa.
Then the industry will be able finally to reap the benefits of sensible consolidation.
If the negotiations do not succeed by 2010, we shall press for the termination of the Stage One deal, as provided for in last year's agreement.
Genuine deregulation of transatlantic aviation would drive efficiency and bring consumers the kind of benefits we have seen within Europe since the deregulation of the early 1990s.
That is what true "open skies" is about.
And as they shuttle between Europe and the US, our OpenSkies flights will remind legislators of our determination to achieve it.
Willie Walsh is CEO of British Airways
8 February 2008
AIRLINES 'ARE AKIN TO ARMS DEALERS' IN ETHICS STAKES
The move by Standard Life threatens to do lasting damage to airlines
as an investment brand
Alistair Jamieson - The Scotsman - 7 February 2008
AIRLINES have been labelled unethical by one of Britain's biggest investment firms, which plans them to blacklist them alongside arms dealers, pornographers and animal-testing laboratories. Concern over the millions of tonnes of carbon dioxide produced by commercial aircraft has prompted the Edinburgh-based Standard Life to cease investing in carriers such as British Airways, Ryanair and EasyJet on behalf of tens of thousands of customers of its ethical funds.
The move, which could prompt other fund managers to follow suit, comes amid a fierce debate between green campaigners and the airline industry over the true impact of flying on the environment.
Standard Life Investments, which manages £588.5 million through its Socially Responsible Investment (SRI) range of funds, made the move after almost one-third of its customers who took part in an annual survey called for airline shares to be excluded.
Scottish Widows last night said it already excluded airlines from its own ethical-fund products. But the decision provoked fury from the airline industry, which highlighted the number of domestic flights between Scotland and London used by investment firms.
Neal Weston, of the British Air Transport Association, said: "The financial services industry itself relies so heavily on aviation to conduct its business, and we are sad to see it turn its back on airlines. The government has confirmed that aviation industry covers its own environmental costs and that it is worth £11 billion to the UK economy."
Dan Welch, a writer for Ethical Consumer magazine, welcomed Standard Life's move and said other big firms might consider similar policies. But he added that not all airlines were equally to blame.
"There is a debate to be had here," he said. "We prefer schemes which make a distinction between private charter airlines, where emissions per passenger are much higher, and airlines which carry lots of economy-class passengers and are therefore less inefficient."
Aviation accounts for 2 per cent of global carbon emissions and 13 per cent of emissions in the UK. But studies have shown that shipping accounts for more than 5 per cent worldwide, prompting the aviation industry to claim it is being made a scapegoat for climate change.
The Standard Life decision also exposes the often arbitrary nature of ethical boycotts. The change was made after 3,000 of the 39,000 holders of Standard Life ethical funds took part in an annual survey. About 30 per cent of respondents called for airlines to be blacklisted ? a figure described by management as "significant".
Julie McDowell, the head of SRI at Standard Life Investments, said: "A panel of senior management and three ordinary investors made the decision based on feedback from the survey. We try and reflect ethical concerns of our investors as closely as possible, but we can't always make all the changes that individual investors would like."
She added that suppliers to airlines were not included in the boycott.
Companies which are already avoided by Standard Life's ethical funds include those which manufacture pesticide products, those which test products on animals, intensive farming companies, pornographers, weapons manufacturers, brewers, tobacco producers and those which derive 3 per cent or more of their revenue from gambling.
Ms McDowell added: "For 17 per cent of respondents to our survey, climate change was the top concern, while 53 per cent saw it as one of their top three concerns. Interestingly, 91 per cent of investors surveyed would prefer to invest in companies that are doing their best to reduce their climate-change impacts, whereas only 9 per cent of investors felt that it was better to completely avoid investing in companies that are significant contributors to climate change."
Julian Parrot, a partner with the Edinburgh financial advice firm Ethical Futures, said: "Scotland's financial services industry has not exactly blazed a trail when it comes to making ethical decisions, and there is plenty more that could be done, but this is a step in the right direction."
ETHICAL investments in Britain are now worth more than £6 billion, with up to half a million customers choosing to put their money only in stocks and shares of socially responsible companies.
A recent study by Ethical Investment Research Services (Eiris) revealed there are now almost 90 ethical retail funds available to UK investors, like those offered by Standard Life.
Dan Welch, of Ethical Consumer magazine, said most funds boycotted industries rather than specific firms, and that some consumers wanted to avoid unethical firms while others wanted to buy a stake in them to try to influence corporate policies.
He said: "Some funds work on the basis of negative screening - filtering out companies or industries which investors do not want be associated with. Others are more positive, investing in firms they support, for example those involved in renewable energy or which have led the way in changing their behaviour."
He added: "One of the top-rating ethical funds, run by the co-operative CIS, actually invests in BAE, which is obviously controversial. The idea is that by being part of the firm and trying to influence its direction, it can achieve more than by ignoring such companies and just allowing them to carry on what they are doing."
He added that many ethical funds avoided firms involved in alcohol, tobacco or pornography because the ethical market was originally dominated by churches and religious customers.
"There used to be a more moralistic theme than is the case now," he said.
An Eiris spokesman, Mark Robertson, said: "Growing concern over issues such as climate change mean more and more people are thinking about the impact their investments can have. In 2006, there were a record number of ethical options available to UK investors and significant increases in interest in ethical investment."
So is Standard Life right to classify the global aviation industry as an ethical pariah?
IT is undeniably a breakthrough when large institutions such as Standard Life choose not to back the aviation industry on ethical grounds. The world's top scientists not only recognise that aviation already accounts for 13 per cent of the UK's contribution to climate change, but that there is no "fix" that can make aviation sustainable in the timeframe in which we need to tackle climate change.
By about 2037, aviation will account for Britain's entire carbon quota. Ethical investment in aviation just does not exist. Institutions are now recognising that any investment in aviation is an investment in the problem rather than the solution.
Airlines receive over £10 billion in tax breaks each year because of tax-free fuel and VAT-free tickets and planes. That's enough to buy over 30 new hospitals, build 2,000 new schools, put at least 450,000 new police on the beat, and pay the tuition fees of over three million students.
Most aviation growth stems from the demand of the wealthiest 5 per cent of the world's population, making 95 per cent of the global population bear the consequences.
Investing in aviation growth means supporting a massive increase in noise pollution for neighbouring communities to airports, it means denying the next generation from living in a world where they can breathe clean air, enjoy diverse ecosystems and eat healthy food.
Standard Life is putting other companies and the Scottish Government's green "attempts" in the shade and demonstrates that there are economic as well as environmental consequences from climate change.
Dan Glass is a campaigner with environmental group Plane Stupid Scotland
MOST within the aviation industry recognise that aviation pollutes and that we must improve the environmental efficiency of today's operations and work on tomorrow's technologies.
The Stern review said that aviation accounts for 1.6 per cent of global greenhouse gas emissions, rising to 2.5 per cent in 2050, assuming no substantial technological breakthroughs. Given that the UK is responsible for just 2 per cent of the world's emissions, the impact of UK aviation on climate change is mathematically minimal. This is not an excuse for inaction, but aviation will only ever be a small part of the overall solution.
We are on the cusp of big advances in aircraft and engine technologies that will lead to dramatic reductions in emissions, which have not yet been factored into the environmental forecasts about our industry. In the meantime, airlines have an obligation to maximise their environmental efficiency (particularly by operating the cleanest available technology).
The same business model that gives us low fares (new aircraft, high occupancy rates, direct flights) also gives us environmental efficiency in the skies - EasyJet emits 27 per cent fewer greenhouse gases per passenger kilometre than a traditional airline on an identical route.
We also intend to play a leading role in improving the environmental performance of our industry. There is a lot to be done - reforming Europe's inefficient air traffic system, implementing a meaningful European emissions trading scheme, working on the next generation of aircraft, giving customers comprehensive environmental information and helping them to offset the carbon emissions of their flight.
Andy Harrison is the chief executive of EasyJet
8 February 2008
MPS CALL FOR ECO-LABELLING OF AIRLINES
Fiona Harvey and Jim Pickard - Financial Times - 5 February 2008
MPs accused airlines on Monday of "dragging their feet" on environmental schemes.
The Treasury select committee said airlines should adopt a system of "eco-labelling" allowing customers to compare the environmental impact of airlines when buying a ticket.
Members also urged the government to ensure cargo flights and private planes were included in plans for a new duty on aircraft in place of air passenger duty.
"Aircraft emissions are a fast-growing component of the UK?s emissions, yet the aviation industry seems to be doing little about the problem," said John McFall, committee chairman. "Our proposals for an industry-wide eco-labelling scheme would at least provide customers with the environmental information they need to make a choice between providers."
However, Michelle Di Leo, director of industry coalition Flying Matters, said the committee was "simply ignoring the tough environmental targets to which the whole of the UK aviation industry has committed, including cutting CO2 emissions of new aircraft by 50 per cent by 2020. That's not feet-dragging, it's environmental leadership."
The MPs' report is a response to the recent Stern Review, which said prompt action to cut emissions would be cheaper than delaying. Mr McFall on Monday night called for the matter to be taken up at a higher level in government by putting a minister in charge of the Office of Climate Change.
The committee also criticised the government for its "timid" use of green taxes to change consumer behaviour, noting environmental taxation fell from 9.7 per cent of total tax revenue in 1997 to 7.3 per cent in 2006.
The report says: "The government has failed to maintain its commitment to the 1997 Statement of Intent [on environmental taxation]. We recommend that the government reverse this reduction in commitment."
The MPs also called for a strengthening of the European Union's greenhouse gas emissions trading scheme, which it said was "hamstrung" because it gave away too many permits for free. The scheme's second phase must involve "tough" new caps, the MPs said.
Ofgem, the energy watchdog, has called for energy companies to repay an estimated windfall worth £9bn created because generators had been given most of their emissions permits for free.
Mr McFall said: "For environmental economic tools to have impact in changing behaviour they must have bite. The potential impact of the EU ETS has been hugely diminished by the over-allocation of permits."
The report also urged the EU to have better links with other schemes worldwide. "There is a real danger that the international community will be unable to join up this patchwork of schemes at a point in the future," the MPs warned.
8 February 2008
STANSTED RE-LAUNCHES HIGHLY SUCCESSFUL
Help for Housebuyers from Stansted Airport
(Find out what your average noise experience will be)
Stansted Airport - 6 February 2008
Stansted Airport today re-launched its popular property pack at a special breakfast reception for up to 50 estate agents and representatives of banks and building societies. The pack, successfully introduced in 2006, will also be distributed directly to over 450 local estate agents, building societies, banks, solicitors and libraries within a 30 mile radius of the airport.
The updated pack, designed to provide the best possible information about the airport's flight operations and future growth plans, contains details of arrival and departure flight paths, aircraft noise, development plans and destination maps - all significant issues for people who are considering buying a property near to the airport.
Attending today's event Richard Hair, Chairman, Essex Branch of the National Association of Estate Agents (NAEA), said: "We welcome Stansted's property pack as a valuable tool in the armoury of information available to our home buyers and to our members. We know this pack can help make an extremely difficult decision much easier and the NAEA are pleased to be invited along to be part of Stansted's desire to share as much information as possible with local communities."
Vicki Hughes, Noise Communications Manager for Stansted Airport, added: "We all know that buying a property can be a very difficult and demanding experience. It's a huge decision and one we all want to get right. We know our property pack provides some really useful information that will help inform people about our plans for growth and development as well as tell them about our current operations at Stansted."
"To also help potential home buyers and local residents in the area better understand the nature of our operations, we have launched a new noise website www.stanstedairport.com/noise. This is essentially a one stop shop for noise enquiries and provides the facility for users to log their noise enquiries and complaints on-line, as well as being able to view Stansted aircraft tracks."
"And it shouldn't be forgotten that there are also numerous benefits to living near the airport, including easy and convenient access to Stansted's 160 destinations across Europe and beyond - an increasingly important factor in many people's lifestyle choices."
"Stansted also has an excellent public transport network, not only providing direct rail links to London and the Midlands but supporting with a wide variety of bus and coach routes that link many local towns and villages in the area. Again, these can be important factors for anyone choosing to come and live close by."
It's clear the airport is a key issue for many people who are considering buying a property in the local area so we are determined to do all we can to provide them with best and most up-to-date information available about Stansted.
OUR COMMENT: Will the pack tell all - how many flights will pass over your house? ? how many at night?
8 February 2008
PIE IN THE SKY? OR IS THERE STILL HOPE?
EU launches E1.6bn clean aircraft technology plan
ENDS Europe DAILY 2477 - 5 February 2008
A €1.6bn public-private research partnership that aims to drastically
reduce the environmental impact of aviation was officially launched
in Brussels on Tuesday.
The EU "clean sky" joint technology initiative (JTI) will develop
pre-competitive aircraft technologies designed to help meet the
sector's self-imposed targets to halve noise and carbon dioxide
emissions and slash 80 per cent off nitrogen oxide (NOx) emissions by
2020. EU funding will amount to €800m over the project's seven-year
lifetime (2008-14). This figure will be matched by industry.
Speaking at the launch event, EU research commissioner Janez Potonik
said meeting the environmental challenges facing the aviation sector
would require vast resources, expertise and commitment. "Neither
industry nor the public sector can achieve this alone. The clean sky
JTI provides the necessary governance structure to balance the public
and private interest."
The official launch followed publication of the EU regulation
establishing the initiative in the bloc's official journal on Monday.
The regulation was approved by EU governments in December.
4 February 2008
STANSTED NEWS - IS R2 AFFORDABLE?
BAA fine tuning application for second runway
News Desk - Business Weekly - 23 January 2008
BAA, the owner of Stansted Airport in Essex, is honing the finer details of an official submission of its blueprint for a second runway.
Executives have been playing a waiting game to see whether a definitive decision on its G1 expansion proposals was forthcoming. This is expected to give the green light for Stansted to scale up to new record highs in passenger numbers.
Regardless of that outcome, BAA will submit its G2 second runway plans and recent indications from the Government suggest that the application will be welcomed with open arms.
Timewise, we expect the second runway proposals to officially go forward near the end of February, possibly the beginning of March at the latest. BAA's Spanish owner, Ferrovial, says it is committed to funding the airport's ambitious growth proposals.
Stansted management are meanwhile progressing talks with operators in emerging markets such as China and India to bring direct services into the airport, which is superbly located strategically - midway between Europe's financial capital of London and the hi-tech capital of Europe in Cambridge.
Business traffic between Stansted and the US is already flowing at record levels with eos and American Airlines forging ahead with services. Now Stansted is about to open up Africa - as reported exclusively by Business Weekly last June.
A new low-cost airline flying between Stansted and Cape Town could be launched later this year; Redair is the creation of South African aviation entrepreneur, Andy Cluver, who currently operates a helicopter service for visitors wanting to fly over Table Mountain. Flights to Cape Town will be sold from £142 one-way, excluding tax. The new carrier plans to offer five return flights a week from Stansted to Cape Town. Additionally, it will offer services between Cape Town and Barcelona and Malaga.
Cluver is confident that a new low-cost alternative to the major airlines will prove a success in South Africa. "Our tickets will be selling from £142 for a one-way flight, but if you want frills they will be available at an extra cost," he said.
According to UK Trade & Investment, the UK is South Africa's major trading and investment partner and South Africa is the UK's 22nd largest overseas market with exports totalling £3.2bn in 2005. The UK is also South Africa's second most popular foreign destination - long or short haul - behind Botswana.
4 February 2008
REFORM OF ALLOWANCES WILL COST BAA £5BN
Vanessa Holder - Financial Times - 1 February 2008
The phased abolition of an "anachronistic" tax allowance is set to cost BAA £5bn ($10bn) in lost relief, according to the airport operator, which attacked the change as retrospective and damaging to the stability of Britain's tax system.
The company has emerged as the biggest loser from the abolition of industrial buildings allowances, which is due to be implemented in this year's finance bill.
BAA's assessment suggests the abolition of the allowances will cost the equivalent of £500m upfront, reflecting the discounted value of increased tax at 28 per cent spread over 25 years into the future. BAA had expected to make use of the allowances on about half the £4.4bn that it has spent on the Terminal 5 development at Heathrow.
Overall, the abolition will cost businesses, particularly in the infrastructure and transport sectors, an estimated £11.5bn in lost tax relief over 25 years, according to Chris Sanger, head of tax policy at Ernst & Young.
The move had created "a really bad impression" among businesses, said Mr Sanger, because the unexpected, retrospective nature of the change, unveiled by Gordon Brown last March, was seen as a dangerous precedent that could undermine the UK?s reputation as a stable place for foreign direct investment.
In a document published last month, the Treasury rejected calls to maintain the allowances for existing assets. It said the allowances, introduced as an incentive for postwar reconstruction, had become a poorly focused and administratively complex subsidy for a disparate range of assets.
Marian Drew, head of tax at BAA, was "incredulous" at the retrospective nature of the change. "The removal of relief for past transactions is a rewriting of the past, in that people would have made different decisions about investment. It will undermine the attractiveness of the UK as a stable and good place to invest in."
Ms Drew was "astonished" the Treasury suddenly announced the measure last March, without prior consultation.
Brian Harris, head of tax at RWE Npower, the energy company, said the change could jeopardise new investment, as well as removing tax relief from more than £100m of Npower assets. "We were very disappointed by the retrospective nature of the abolition of IBAs, which has really been very unhelpful." The tax regime's volatility and failure to create incentives would put the UK at a disadvantage in winning investment.
4 February 2008
BAA THE ECONOMY CLASS CLIENT
Dan Stewart - Business News - 1 February 2008
BAA was the client that revolutionised construction to deliver Heathrow Terminal 5 on time and budget, but the cultural change that has followed its takeover by Spanish contractor Ferrovial has left many observers wondering whether that revolution is now over.
Back in the days when Heathrow Terminal 5 was being conceived, somebody at BAA must have had a Zen-like insight - here was a scheme where money was so important that it must be ignored. In other words, the whole £4.3bn project had to proceed without the financial friction that invariably accompanies construction work, and this, one could argue, was the source of the terminal's eventual success, and the reason why so many contemporary accounts described it as the dawn of a new age.
So it is ironic that, now that T5 is about to open and the critics are paying tribute to the client's skill in procuring it, it looks more like the end of an era. One former director, who asked not to be named, puts it like this: "BAA should be asking itself what kind of company it is. Is this a company that is investing in the future infrastructure of Britain, or is it a company that is sacrificing its key concerns because of its debt structure?"
BAA acquired its debts in June 2006, when it was taken over by a consortium led by Ferrovial. The Spanish contractor bought it for £10.1bn, a 50% premium on its market value, and to finance the deal it borrowed nearly £9bn from five banks. So, ironically again, it was the company's perceived excellence that landed it with its present debt burden. Last month, investment bank JP Morgan warned that it could run out of cash in 2009 unless it refinanced its loan or sold off assets.
Since the takeover, BAA has divested itself of a property portfolio and its duty-free retail business, and has mooted closing its pension scheme to new entrants. It has also parted company with a number of senior personnel (see below) and the talk now is of a cultural change in how BAA does business.
Margaret Ewing, who stepped down as chief financial officer shortly after the takeover, said Ferrovial was driving the business "purely from a financial perspective", ignoring its public duty to the millions of passengers dependent on its success.
"Running Heathrow and Gatwick is very important to London and the UK economy and therefore you feel that you are contributing something beyond just driving shareholder value," she said. "To drive a business purely from a financial perspective means you have got to have different values."
The former director agrees: "It's a different leadership model, and the drivers have changed," he says. "Under [former chief executive] Mike Clasper, it was a FTSE 50 company on the public-private boundary. That changed when Ferrovial came on board. Now it's about saving cash."
On the other hand, running airports is an investment-intensive business. Demand for air travel is rapidly increasing and BAA is the world's largest airport operator, so it must find money for a continual programme of expansion and refurbishment. At present, the company has work worth £6.2bn planned for its seven British airports over the next decade.
That ought to provide some comfort for the construction companies on BAA's third-generation framework. However, the axe is hanging over 200 staff in its construction project management division, part of BAA Capital Projects, and there have been suspicions that other major changes were happening within the Capital Projects arm. Then it emerged last week that the first major construction project after T5's completion - the satellite building T5c - would not be built using the famous T5 Agreement. It seemed that Ferrovial's own private credit crunch was changing BAA's reputation as the industry's most enlightened client.
One former employee of BAA Capital Projects, the division responsible for delivering its construction programme, says the change of ownership is already affecting the way BAA does business. "The approach now is about finding deficiencies in the supply chain and cutting them out," he says. "It's a world away from the contracting approach of the [former chief executive John] Egan days right through to T5. I don't think we'll see that again at BAA."
Andrew Wolstenholme, BAA's capital projects director, says the redundancies in the department were a process of "simplification". "If you look at the size of our organisation over the past two or three years, it has crept up to a level where we feel we can downsize," he says. "This is not axing 200 people to save money. This is actually getting a simplified process in order to make sure we are fit to deliver a £3.5bn programme at Heathrow."
The question is how this will affect the future of BAA's capital projects division. Wolstenholme is preparing to oversee some £6.2bn of work over the next decade, including the refurbishment of Heathrow Terminals 3 and 4, the construction of Heathrow East, and - pending a government inquiry - further terminals and runways at Heathrow and Stansted.
For all its success, T5 can still lay claim to being one of the most expensive terminals ever built. A cost consultant close to BAA says its successful completion would have been impossible if the money had been harder to come by. "Granted, they got great value from the money they spent," he says, "but it's still a lot of money. It will be delivered on budget, but the key to it is how high that budget is."
BAA's next project on a similar scale to T5 will be Heathrow East. This terminal will have as much floorspace as T5 but will be built to a significantly lower budget, currently estimated at £1.5bn.
BAA says this is because the site needs no rail interchange or road access, and has the advantage of existing utilities and infrastructure, and the project team - including Ferrovial as project director - can use lessons learned from T5.
Tony Douglas, the former chief executive of T5 and now chief operating officer at Laing O'Rourke, the main contractor at Heathrow East, is confident that "there is a lot from T5 that we will learn from and go forward with. If you have something with lots of complexity then by definition you need to grasp the lessons".
He also rejects the idea that T5's success lay with the size of its budget. "That is a complete misunderstanding of what this project was about," he says. "Having the T5 Agreement meant we could maximise value. If we had adopted a conventional outcome, we'd have paid at least a billion more for it." However, neither Douglas nor Wolstenholme is able to say that the T5 Agreement will be used again.
"What we're doing with the next generation of frameworks is picking out the learning from T5 and acknowledging that one cap doesn't fit all our projects," says Wolstenholme. "The projects will be run very much in a T5 style, and we will handle risk in appropriately different ways."
He continues: "Perhaps BAA got too involved in some areas of integration where we should have stood back and let our first-tier suppliers take on more of that accountability. There are a lot of different ways of getting the same result."
In the meantime, there is some encouragement for those who fear BAA will cut quality at Heathrow East as they cut costs. David Bartlett, BAA's design director, recently set up an "alignment day" for architects working at Heathrow to congregate and inform each other what their plans were.
Nigel Ostime, an aviation specialist at framework architect 3D Reid, attended the meeting. He said: "The fact that Bartlett chose to do this at a time of change is very positive. BAA wants to make sure that there's consistency and coherent design, and that we are delivering high-quality buildings."
Likewise, Douglas says there is no reason why there should be any inconsistency: "Requirements from an ownership point of view don't make any significant difference."
However for the former BAA director, who has had experience from within of how the new parent works, there are still doubts. "The key indicator in this will be Heathrow East," he says. "Everything you need to know about Ferrovial will be in how they deliver that project."
As project director for Heathrow East, Ferrovial would seem to be in control of its own fate. The only question that remains is what the cost will be for BAA.
THE DEPARTURE LOUNGE
Since Ferrovial bought BAA in June 2006:
July 2006 Mike Clasper
WAS chief executive, BAA
NOW board director, EMI
September 2006 Margaret Ewing
WAS finance director, BAA
NOW vice chairman, Deloitte
November 2006 Mick Temple
WAS managing director, Heathrow Airport
November 2006 Roger Bayliss
WAS construction director, BAA Capital Projects
NOW project director at St Bart's and the Royal London, Skanska
June 2007 Tony Douglas
WAS chief executive, Heathrow Airport
NOW chief operating officer, Laing O'Rourke
August 2007 Duncan Bonfield
WAS director of corporate affairs, BAA
November 2007 Mark Shirburne-Davies
WAS design director, BAA Capital Projects
NOW First Base
December 2007 Greg Ward
WAS operations director, Heathrow
4 February 2008
THE GREAT HEATHROW CON
Camilla Cavendish - Times Online - 31 January 2008
The British public have been led to believe the third runway is essential. That's untrue.
Camilla Cavendish has been a McKinsey management consultant, an aid worker, and CEO of a not-for-profit company. She is now a leader writer and columnist on The Times.
Heathrow is full. Those three little words send sober people into paroxysms. The worried wealthy of Holland Park, Chiswick and Kensington, realising that they may be under the flight path of the proposed third runway, are thronging to protest meetings. Green groups slam the Government's consultation, soon to end, as a sham. The four mayoral candidates for London have taken out full-page adverts declaring their opposition. Business leaders outdo Greenpeace for apocalyptic language, claiming that the airport is "critically important to economic prosperity" and making dire predictions that firms will flee abroad. "Heathrow can either decline or develop," says Future Heathrow, a business lobby group. "It cannot stay as it is."
That this last statement is manifestly untrue has not stopped the Government succumbing to the hysteria. Some of Ruth Kelly's Cabinet colleagues are incredulous that the air industry is being licensed to undermine other policies. Like a woolly mammoth that missed the Ice Age, the Department for Transport trundles on with its goal of doubling UK flights in 25 years, despite the many authoritative reports that show that this will make it impossible for Whitehall to meet its climate change commitments.
Forget joined-up government: while the Environment Secretary urges retailers to phase out old-fashioned light bulbs, and the Treasury dubs air travel so evil that passengers must pay more tax, Ms Kelly blithely waves forward flights, runways and the roads that connect them.
There has always been one rule for the air industry and another for the rest. While the Treasury defends petrol taxes partly on environmental grounds, the airlines continue to pay no tax on fuel. The EU is imposing standards on car manufacturers that have them screaming, but it cannot touch the air lobby. The DfT dropped its "predict and provide" approach for cars years ago, recognising that the creation of roads led inexorably to more traffic and that environmental considerations made rationing essential. But it continues to predict and provide for the air industry, refusing to consider that demand should be curtailed.
The double standard has led to a rash of broken promises on Heathrow. Terminal 4 was approved in 1978, subject to a cap on annual traffic movements of 275,000. Two years later BAA recorded 287,000 movements, and 376,000 in 1990. When Terminal 5 was approved in 2001, the planning inspector and BAA stated that a third runway would be "totally unacceptable", and set a new cap of 480,000 movements. But by 2003 a White Paper aimed at 700,000.
The justification is the importance of aviation to the economy. It would be foolish to argue that air travel is not important to business. But some of the mythology is misleading. The growth in air traffic is overwhelmingly from leisure travel, not business. More than 80 per cent of international travellers at UK airports, and 60 per cent at Heathrow, are holidaymakers. Outbound tourism outstrips inbound, creating a whopping £18 billion balance of payments deficit. Only this week, the Travelodge chain of hotels called for an end to unfair tax breaks for budget airlines, which it said were "the single biggest cause of decline in traditional [UK] tourism resorts".
It is one thing to treat the air industry as a special case, it is quite another thing to distort the facts. And here the Government's collusion with the industry is a problem.
Take the greenwash first. Ministers repeat the mantra that "Heathrow's expansion will only go ahead within strict environmental limits". But they know full well that the absence of legal standards on noise leaves communities defenceless. New EU air-quality standards had looked like an insuperable hurdle to a third runway, but are being fudged with ropey claims that road traffic emissions will fall. Two weeks ago the Advertising Standards Authority ordered British Airways to withdraw the claim, made by its CEO in an e-mail to Executive Club members, that the third runway would reduce carbon dioxide emissions because aircraft would no longer have to waste fuel queueing to take off or land. This flatly contradicted Whitehall models, which assume that the new runway will raise CO2 emissions by 2.6 million tonnes a year from the 200,000 extra flights.
Secondly, take the arguments about capacity. BAA's figures demonstrate clearly that Heathrow is not full. Not remotely. The appendix to the government consultation on the third runway states that 67 million passengers used Heathrow in 2006, and that this could rise to 122 million if a third runway were built. But it also shows that 95 million people could use Heathrow if "maximum use were made of existing runways".
At one stroke we are looking at a con, perhaps the greatest ever perpetrated on the British people by the DfT. For BAA itself is telling us that 28 million more people could use Heathrow without a new runway and without breaking the cap on flights.
How? By using larger planes and filling more seats. Jeff Gazzard, of Airport Watch, says that if Heathrow were not allowed to expand, it could spur the airline industry to invest more rapidly in larger aircraft like the A380, on which some are already hedging their bets.
Bigger planes would not solve climate change, although they would reduce local pollution. The point is that we have been told that Heathrow is full when it is not. That kind of distortion suggests that the DfT has ceased to function as an arm of government and has become a mere subsidiary of BAA.
4 February 2008
GOVERNMENT NOT CUTTING CO2 EMISSIONS ENOUGH
Paul Eccleston - Daily Telegraph - 31 January 2008
The Government has been criticised for failing to cut Britain's greenhouse gas emissions quickly enough. Although official figures showed a slight fall overall, emissions from energy, transport and aviation actually increased.
Total emissions were down 0.5 per cent on 2005 but CO2 emissions stayed virtually the same.
Total emissions were down 0.5 per cent on 2005 from 665m tonnes to 652m tonnes but CO2 emissions - which make up 85 per cent of all emissions - stayed virtually the same falling by a tiny 0.1 per cent - from 555m tonnes to 554m tonnes. Two of the biggest culprits for CO2 emissions - energy and transport - saw their levels rise by 1.5 per cent and 1.3 per cent.
In the aviation industry pollution from domestic flights dropped by 2.8 per cent but in international flights rose 1.5 per cent. Friends of the Earth said if aviation had been included in the official figures released by the Department for Environment, Food and Rural Affairs (Defra) they would have risen by six per cent.
Between 1990 and 2006 emissions from aviation fuel have more than doubled leading to calls from environmental groups for the aviation industry to be included in the new Climate Change Bill which will set legal limits on CO2 emissions.
The environmental group's climate campaigner, Martyn Williams, said: "Aviation is the fastest growing source of emissions in the UK and has twice the climate impact because the gases are emitted at altitude. Yet the Government has left aviation emissions out of the Climate Change Bill currently being debated in parliament."
"Leaving aviation emissions out of the Climate Change Bill makes a mockery of the Government's climate strategy. It's plane unfair to expect all the other sectors of the economy to play their part in the fight against climate change while aviation remains outside the law."
Friends of the Earth wants the Government to include emissions from all sectors of the British economy including aviation and shipping.
Shadow environment secretary Peter Ainsworth said: "The latest figures on greenhouse gas reduction are extremely disappointing and a worrying indication of the scale of the challenge we face. At this rate it will take over 500 years to meet the current CO2 reduction target set out in the Government's climate change bill. If the Government is satisfied with the progress it's made people will rightly ask 'What planet are they on?'."
Liberal Democrat Shadow Environment Secretary, Steve Webb said: "The Government is completely failing to match its rhetoric with actions. Although ministers made good early progress, this has now slowed to a snail's pace. This year, carbon emissions fell by a measly 0.1 per cent."
But Defra claimed the figures showed the UK was now in a strong position to exceed its commitment under the Kyoto Protocol to a 20 per cent cut in CO2 emissions on 1990 levels by 2010.
Welcoming the figures Environment Secretary Hilary Benn said that while the downward trend was positive, a much bigger change was needed. "The UK is on track to meet and go well beyond its Kyoto commitments, but as a country we must do much more across the board. We have to make a real change to every aspect of our lives and our economy. The Government is taking steps to make that happen."
"That's why we've introduced the Climate Change Bill in Parliament, which will set a target to cut carbon dioxide emissions by at least 60 per cent by 2050, and are looking at whether that target should be stronger still. That's why we're reforming the planning system to remove barriers to renewable energy and backing new nuclear power generation. And that's why we'll play our full part in fulfilling the EU's clear commitment to build a low carbon economy in Europe."
The biggest fall in CO2 emissions was in the residential sector, with a fall of 4 per cent on 2005 levels, along with a decrease of 1.6 per cent in the business sector.
Defra said this came alongside 2.9 per cent growth in the economy and showed the UK is continuing to break the historic link between economic growth and growth in emissions. It claims the UK's greenhouse gas emissions are now 16.4 per cent lower than 1990 levels. When the effect of the EU Emissions Trading Scheme is included - where companies can buy permits if they exceed their limits - the overall reduction is 20.7 per cent.
Mr Benn said that the decrease in emissions from the residential sector, coming on top of a similar decrease in 2005, was a hopeful sign. "The fall in household emissions for the second year in a row is very encouraging. People are much more aware of their impact on the climate than they were even a few years ago, and I'm hopeful that these figures will become a continuing trend as we all increase our efforts to cut our carbon footprints at home."
But he acknowledged that more had to be done to curb pollution caused by airline flights. "The rising emissions from international flights make it clearer than ever that we to get all flights arriving at and departing from EU airports into the EU Emissions Trading Scheme by 2012," he said.
"The European Parliament must back the agreement reached by Environment Ministers last December, which will ensure that the aviation industry meets the environmental cost of its emissions, and that growth in the aviation industry means emissions are reduced elsewhere," Mr Benn said.
Matthew Knowles, spokesman for the Society of British Aerospace Companies, said: "The aviation industry is doing its part to cut greenhouse gas emissions. Our sustainable aviation initiative aims to cut CO2 emissions to 50% of 2000 levels by 2020. Also, aviation makes up a very small proportion of UK CO2 emissions."
"Environmental campaigners would do more good by focusing their energies on other, much greater, CO2 producers that are not taking the large, voluntary steps that aviation is taking to cut CO2 emissions."
4 February 2008
WARMING OCEANS INCREASE STORMS
Clive Cookson - Financial Times - 1 February 2008
Scientists have quantified for the first time the link between warming oceans and increased hurricane activity. The research at University College London shows that a 0.5°C increase in sea surface temperature - which is within the range expected over the next few years - would cause a 40 per cent increase in North Atlantic hurricanes.
The mathematical study, published in Nature yesterday, also finds that local sea surface warming was responsible for about 40 per cent of the increase in Atlantic hurricane activity (relative to the 1950-2000 average) between 1996 and 2005. During that period the sea surface warmed by 0.27°C. Other factors would have caused the remaining 60 per cent of storm activity.
Matt Huddleston, climate change specialist at the UK Met Office said: "This paper is important in that it suggests the link between tropical storms and the warm Atlantic surface waters is perhaps stronger than realised in recent decades, and this has huge implications for the impacts of potentially damaging hurricanes on infrastructure in the US and the financial markets globally."
4 February 2008
CHEAPFLIGHTS.CO.UK DEFENDS BUDGET AIRLINES
30 January 2008
The UK?s leading flight price comparison website, has hit out at claims that budget airlines are destroying traditional tourism in the UK. Cheapflights.co.uk has defended the cut price airline industry against accusations made in a Select Committee inquiry into tourism.
"Without budget airlines, thousands of families in the UK would be unable to travel abroad" says Francesca Ecsery, general manager at Cheapflights.co.uk.
"Outrageous price hikes, particularly on train fares, and the government's fuel taxes do not help traditional tourism in the UK" she added.
Train fares went up by an average of six percent on some routes and a whopping 14% on others this year. By comparison budget airline flights to Malaga are on offer for just £41 return, which is an absolute bargain. "When the average holiday maker is faced with this kind of choice, who can blame them for letting the plane take the strain," says Ms. Ecsery.
The inquiry also claimed unfair tax breaks for short-haul airlines are damaging regional tourism to UK seaside resorts and suggests that a ten per cent reduction in overseas flights by British tourists by 2020 would create 31,250 jobs, injecting £1 billion into struggling tourism locations outside of London.
Ecsery continues in saying, "I think that the main reason for the decline in traditional tourism resorts is that the offering in the UK is not as good as it is abroad. When looking at price, quality, and hassle factors for the UK vs. international resorts, you just can't compare. For the same price you will often find better lodging, food, and service. Add all of that to the fact that destinations such as southern Europe offer a better climate for most of the year, and you have more reason to travel than not."
"Cheap flights only bring these destinations closer to home, but even if UK resorts lowered their costs, they would still have to improve their service, food and quality of lodging. If the quality of what is on offer in the UK were equal to or perhaps even better than that which can be obtained in southern European resorts, I think holidaymakers might be more inclined to remain closer to home and go to them instead," says Ecsery.
"Claims that a ten per cent reduction in overseas travel by British tourists would create more jobs at home are absolutely incorrect. These claims have completely ignored the fact that this reduction would also cause a recession for budget airlines, which would result in job cuts and damage to the economy in turn," concludes Ecsery.
OUR COMMENT: There seems to be agreement with the UK tourist viewpoint that ridiculously cheap budget airline flights are persuading people not to holiday in the UK. She is also correct in saying that train fares are excessive and with 26 companies booking the best route can be horrendous - there is very little encouragement to would be passengers ? except those wishing to travel on Eurostar, away from the UK again. Is she correct to say that the tourist facilities in the UK are worse than in Europe? What do you think?
29 January 2008
LATEST ACTION ON CLIMATE CHANGE
AVIATION WILL BE INCLUDED IN THE NEW TRADING SCHEME
EU given policy prescription for climate leadership
ENDS Europe DAILY 2468 - 23 January 2008
The European commission staked the EU's claim to world climate policy
leadership on Wednesday by tabling a string of major new measures
designed to cut the bloc's greenhouse emissions and cajole world
governments into accepting tough global curbs.
Commission president Jose Manuel Barroso said the "historic" package
would implement pledges made by EU leaders last year to take 20 per
cent off the union's greenhouse gas emissions by 2020 relative to
1990 "We're translating principles into concrete and specific measures," he said.
Draft legislation to tighten national emission limits, boost
renewable energy, develop carbon capture technologies and overhaul
the EU's carbon market rules would "help the economy to a new phase
of low carbon" and give EU firms "first-mover advantage in many
Mr Barroso wants EU governments to adopt the laws by early 2009, to
set an example ahead of talks later that year that will conclude a
world climate policy.. "If we want a global agreement
it's absolutely indispensable that Europe leads the way".
Implementing the package would cost less than 0.5 per cent of EU GDP
by 2020 and prevent higher costs later, Mr Barroso said. "I prefer to speak of gains
and not of costs..if you see the very limited cost of our action now
compared to the very high cost of delayed action, you see we have a
The revised EU carbon trading scheme would cut industrial carbon
allocations by 21 per cent relative to 2005 levels. But it would
include safeguards ensure EU firms in energy-intensive sectors do not
suffer at the hands of competitors in countries with looser carbon
constraints. "Let me be clear, if we do not make progress [in
international talks] we will protect European companies from carbon
The EU would give its firms free carbon permits or make foreign firms
buy permits to access the European market. "We're giving incentives
for others to join us..this is the best way to press these countries
to come to an agreement," he said. Emission levels would not rise as
a result, he insisted.
A new law would increase the share of renewable energy in final EU
energy consumption by 11.5 percentage points to 20 per cent by 2020.
It would introduce renewable certificate trading and set out the
world's "most important and advanced criteria for sustainability for
The package's other elements include a law sharing among member
states the effort of emission cuts in non-ETS sectors, a directive
setting the framework for developing carbon capture and storage, and
new guidelines allowing more state subsidies for environmental
In today's issue we report in detail on the commission's proposals.
In Thursday's issue we will bring you reaction to the plans from
those likely to be affected by them.
29 January 2008
PROPOSALS FOR POST-2012 EU CARBON TRADE RULES EMERGE
ENDS Europe DAILY 2468 - 23 January 2008
The European commission has issued draft legislation to overhaul the
EU's greenhouse gas emission trading scheme (ETS) for a third phase
running from 2013 to 2020.
"The carbon market is at the heart of our approach," commission
president Jose Manuel Barroso declared on Wednesday. "Cap and trade
is going to be extended.. and made more efficient." The ETS "is
going to be the prototype for the world to imitate," environment
commissioner Stavros Dimas said.
The commission proposes to cap emissions from ETS installations at 21
per cent below 2005 levels by 2020 (EED 08/01/08
Allowances would be centrally allocated by the European commission instead of through national allocation plans (Naps).
The overall EU carbon permit allocation would fall linearly from 2013
to 2020 by 1.74 per cent each year. The allocation would be 1.974bn
in 2013, falling to 1.72bn in 2020. These figures are based on the
scope of the scheme in the 2008-12 second phase and will be adjusted
according to changes in installation coverage from 2013.
The same 1.74 per cent linear reduction factor would be used to set
the cap for a fourth trading period from 2021-28. The factor would
be reviewed by 2025. Five per cent of allowances each year would be
set aside for new market entrants.
Power plants would have to buy all their carbon allowances from 2013.
They would be able to obtain free allowances only for heat delivered
through cogeneration. Other sectors, including aviation, would get
80 per cent of their allowances free of charge in 2013, but this free
allocation would be reduced annually by equal amounts, to zero in
Plants fitted with carbon capture and storage facilities would not
get free allowances. Instead their emissions would be regarded as
not having been emitted - removing the need to buy carbon permits.
By mid-2010 the commission would decide which EU industry sectors
might be "at significant risk" of carbon leakage - meaning that they
could be forced by international competitive pressure to re-locate.
By mid-2011, it would review any international or sectoral climate
agreements in place for the post-2012 period and decide whether the
sectors need protection from competitors facing lighter carbon caps.
To compensate for this pressure it would either increase the free
allocation of permits - potentially up to 100 per cent - or require
importers to buy permits.
The commission emphasises that the environmental stringency of the
scheme - the overall carbon cap - would remain unchanged.
Around 60 per cent of allowances will be auctioned in 2013, the
commission estimates. Ninety per cent of these would be given to
member states in proportion to their emission share in 2005. The rest
would be given to low-income, high-growth EU states.
Governments would carry out auctions individually and retain the
revenue. At least 20 per cent of auction revenues would have to be
ring-fenced to reduce emissions, to support climate adaptation, and
to fund renewable energy and carbon capture development.
There are no proposals to include shipping and road transport in the
scheme from 2013. Forestry and agriculture emissions are explicitly
excluded because of monitoring difficulties.
The scheme would be extended to the aluminium, non-ferrous metals and
chemicals sectors. National authorities would have the power to
exempt smaller installations (below 25 megawatts) if their emissions
were consistently below 10,000 tonnes of CO2 annually.
Biomass-burning plants would also be exempt.
OUR COMMENT: Aviation gets off lightly but will still be capped. Airport expansion plans will not add up to the schemes requirements. The government needs to do its carbon sums again and explain these discrepancies.
29 January 2008
COMMISSION PLOTS COURSE TO 2020 CLEAN ENERGY GOAL
ENDS Europe DAILY 2468 - 23 January 2008
The European commission has proposed a new legislative framework to
increase the share of renewable energy sources in EU final energy
consumption to 20 per cent by the end of the next decade.
The commission proposes to achieve the goal through differentiated
binding national targets to increase renewables share from a 2005
baseline to 2020. The targets cover all uses of renewable energy in
all applications, from transport fuels to heating and electricity.
The proposed national targets range from 10 per cent for Malta to 49
per cent for Sweden (see table below). Energy commissioner Andris
Piebalgs said consultations with national capitals had shown wide
acceptance of the proposed national targets. Over twenty member
states would accept them without any changes, he predicted.
There is a proposed separate blanket target to increase the share of
biofuels in transport fuels by 10 per cent. National targets already
in place since 2001 to raise the share of renewables in electricity
production by 2010 remain valid.
But Mr Piebalgs said all target-setting would end after 2020. "This
is a temporary measure designed to support deployment of new
renewable technologies. I believe that after 2020 the EU will not
need a specific renewables directive at all," he said. The maturity
of the industry and the high price of carbon would ensure its further
development, he predicted.
Under the rules EU states would have to submit national renewables
action plans to the commission by March 2010, setting targets for the
share of renewables in the electricity, transport and heating and
cooling sectors, and describing the measures adopted to achieve them.
Not all biofuels would count towards the 10 per cent target. To be
eligible, firstly, the fuel producer would have to demonstrate net
greenhouse gas (GHG) savings of at least 35 per cent compared with
conventional fuels. An annex specifies default GHG savings for
certain biofuels and a method for calculating GHG savings for others
Secondly, biofuel production would have to comply with a set of
sustainability criteria. This would disallow fuels produced on land
"with recognised high biodiversity value", such as forests and nature
protection areas. So-called second generation biofuels would count
double. Commission president Jose Manuel Barroso said the criteria
were "simple enough to be workable and robust enough to be credible".
Member states would have to take several other steps to pave the way
for the expected growth in the renewables sector. These include
ensuring access to the energy grid for renewables producers, updating
building codes to encourage renewable heating and cooling, and
streamlining authorisation procedures for new renewable
Some of the EU renewable energy targets
EU states 2020 climate reduction targets
The European commission has proposed individual greenhouse gas
reduction targets to be achieved by EU member states by 2020.
Combined with targets to reduce industrial emission under the EU's
carbon trading scheme, they are would implement the EU's overall goal
to reduce its emissions by 20 per cent compared with 1990. They will
replace targets set under the Kyoto protocol when these expire in
The newly proposed targets are different in two important respects
from the Kyoto targets. Firstly, they cover only emissions from
sectors not included in the carbon emission trading system (ETS).
Secondly, the reductions have been re-calibrated from a baseline of
emissions in 2005, the year for which the most accurate recent data
After these adjustments the overall EU reduction target for non-ETS
sectors is minus ten per cent. This has been shared out among the
EU's 27 member states using a GDP per capita calculation, with newer
less-developed member states generally allowed to increase their
The number-crunching gives targets ranging from -20 per cent for
Denmark, Ireland and Luxembourg to a maximum emission increase of 20
per cent for Bulgaria. Each member state also has a fixed emission
cap for 2020 expressed in tonnes of carbon dioxide equivalent. The
table below shows the various targets for each member state.
In a new and late addition to the commission proposals, all member
states would have to ensure that their emissions in 2013 are lower
than average emissions from 2008 to 2010. Then, from 2013, emissions
would have to fall each year in equal steps to meet the 2020 goal.
Some of the EU greenhouse gas (GHG) emission reduction targets
relative to 1990
target by 2020
relative to 2005
cap in 2020
29 January 2008
MEPS ADD GREEN CRITERIA TO AIRPORT CHARGING LAW
ENDS Europe DAILY 2464 - 17 January 2008
The European parliament has voted to allow airports to vary the
charges paid by airlines and passengers for using their facilities
according to the airport's environmental performance.
Voting on a
proposed EU directive on airport charges on Tuesday, MEPs said
airports should be able to differentiate their fees on the basis of
green factors such as noise pollution, providing the criteria are
"relevant, objective and transparent".
They also narrowed the
directive's scope to larger airports with over five million
passengers annually, compared with one million proposed by the
29 January 2008
BUSINESS AIRLINES SAY NOT 'DOOMED TO FAIL'
www.airwise.com - 15 January 2008
Business class-only airlines defended their strategies on Tuesday after one of their peers collapsed last month (at Stansted) and a brokerage said a second was "doomed to fail".
MAXjet, Silverjet and Eos were all launched in recent years to compete on the lucrative transatlantic business market. But last month MAXjet filed for bankruptcy protection after being hit by rising fuel costs, weakening business traffic and tough competition from the likes of British Airways and American Airlines.
UK brokerage Daniel Stewart questioned Silverjet's business model on Monday and said its shares would be worthless within a year because it would run out of cash.
But Silverjet Chief Executive Lawrence Hunt aid on Tuesday the airline was on track to enter profit by the end of March, had just had a record week of US bookings and was nearing its target of charging GBP1,100 pounds (USD$2,157) per seat.
Hunt said weakness in the US economy might be helping Silverjet by forcing corporations to look for cheaper alternatives to traditional business-class travel. "We had a record sales week last week in the US," he said. "We've seen a massive increase in corporate enquiries by companies looking to cut costs."
Analysts at Blue Oar Securities said the demise of MAXjet should help Silverjet gain customers. "Hardly a risk-free investment, but after yesterday's fall to 35p, the shares are below net asset value of 48p a share and the possibility of an approach from one of BA's European rivals should not be ruled out," they added.
Eos operates at the top end of the business-class market with just 48 seats on each of its four Boeing 757s rather than the maximum of around 200, so is less likely to feel the benefit of business travellers trading down from the traditional carriers.
But Eos Chief Executive Jack Williams said January had started well, with planes 70 percent full. "We've seen a pretty good bounce-back since the New Year," he said. "We're not running at full corporate break-even, but we are covering the flight variable costs."
Williams said the tough competition that MAXjet had complained of had come as no surprise. "You need to be careful when you enter a rich, premium market like London to New York," he said. "We expected a competitive response, and we can compete with anybody."
One London analyst said that while both Silverjet and Eos had strong business models, new routes would often take 18 months to build up profitable passenger volumes. "You can burn through a lot of cash waiting for that," he added. "These companies' biggest enemy is time."
29 January 2008
ANOTHER BROKER LOWERS RYANAIR FORECAST
News Airlines - 11 January 2008
Ryanair - Weak sterling to bite
Goodbody Stockbrokers has become the second broker this week to lower its financial forecasts for Ryanair next year.
Analyst Joe Gill said stubbornly high fuel prices, slowing consumer demand in the UK and a weak sterling had affected forecasts for the 2009 financial year.
He said these factors pointed to challenging conditions for airlines exposed to the UK market, which accounts for 40% of Ryanair's sales.
The analyst now sees a 2% drop in operating profits in the year to March 2009, compared with a previous forecast for a 10% rise.
"At times of economic weakness, travel and leisure related companies tend to underperform other stock market sectors," said Mr Gill. He said this had already started across the European airline sector in 2008, and would not abate unless oil prices eased and signs of economic stability emerged.
Earlier this week, Citigroup lowered its earnings per share forecast for the airline for both 2009 and 2010 because of higher fuel prices and a weaker sterling.
29 January 2008
MORE RUNWAY MADNESS?
GATWICK'S POSITION SAFE, MP TOLD
BBC News - 16 January 2008
A legal agreement stops the runway being built before 2019
The government has told Crawley MP Laura Moffatt the jobs of 25,000 people at Gatwick are safe despite expansion at other UK airports.
A legal agreement stops a second runway being built at the Sussex airport until 2019, but proposals to expand Stansted and Heathrow are already on the table.
Ms Moffatt told the House of Commons on Tuesday loss of business at Gatwick would have a huge impact on the region.
But transport minister Tom Harris said the airport would retain its position. Transport secretary Ruth Kelly set out proposals for a third runway and a sixth terminal at Heathrow in November.
'Quality of life'
At Stansted, a planning inquiry was held last year into airport owner BAA's plans to increase passenger numbers from 25 million to 35 million a year, with a second runway and terminal.
Ms Moffatt said her constituency was economically reliant on the UK's second largest airport. "It gives us a quality of life that many people would never have been able to achieve because of the opportunities and the quality of jobs it brings to us," she said.
"It brings challenges, too, of course but I believe those challenges are worth facing."
Mr Harris said the government intended Gatwick to remain the lynchpin of airport capacity in the South East. "We reflected this in our Air Transport White Paper and remain confident that Gatwick will retain its position," he said.
Many local objectors oppose any expansion of Gatwick on environmental grounds.
BAA's interim master plan published in 2006 remained committed to the agreement not to build a new runway before 2019 but included it as an option for 2023 or early 2024.
It estimates 40m passengers a year will be using Gatwick by 2015, rising to 80m by 2030 if a second runway is built.
OUR COMMENT: There seems to be confusion as to the employment situation in relation to airport expansion. Why should jobs be at risk if business continues as usual, with no further expansion at any of London's airports? Is it seriously suggested that jobs and business can only be preserved by constantly expanding the number of flights and passengers?
29 January 2008
MORE NOISE VICTIMS PROTEST
STAR CAMPAIGN GOES TO WESTMINSTER
Evening Star - 20 January 2008
SUFFOLK Coastal MP John Gummer is today backing the Evening Star's Air Fair campaign - and promising to raise problems of jet planes over the county in Parliament.
Mr Gummer is taking up the fight for Suffolk at Westminster and is set to ask some of the questions the Star has been battling to get answers to at the very highest levels.
About 1,200 passenger planes are now flying over Suffolk every day - with half of them going over the Felixstowe area, the Clapham junction of the skies.
With air traffic set to double in the next 25 years, the number of planes could also double, generating more problems of noise and pollution.
The county's tranquil rural atmosphere is already being eroded and it is feared changes to airspace - set to happen in 2009 - will see more communities plagued by planes.
Mr Gummer said he was very concerned about the growth in air travel and the impact on the environment. "This is an issue which is affecting many parts of our county and my constituency in particular as the planes come in or out of our airspace over the coast," he said.
"I believe we should be looking to cut down on flights where possible - and there are many routes now where high-speed trains can make the journeys easily and almost as quickly with a much smaller carbon footprint."
He is to take the Star's unanswered questions and pursue them as Parliamentary questions. Government policy is determined to increase air travel and airports are already preparing for the future.
Stansted airport is awaiting the result of a public inquiry into its application to add ten million extra passengers a year on 23,000 more flights, and is expected to submit its plans for a second runway, which could add 300,000 planes to the skies, very soon.
Heathrow is also seeking permission for a third runway which would see flights grow from 473,000 a year to 700,000-plus, with many of them heading out over Suffolk.
National Air Traffic Services is currently designing its airspace proposals and consultation is expected to take place this spring.
What do you think of the possibility of tens of thousands more planes flying over Suffolk? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN, or e-mail EveningStarLetters@eveningstar.co.uk
FASTFACTS: Questions John Gummer is seeking answers to:
How many commercial planes are crossing Suffolk daily, and annually, on flights to or from UK airports and foreign destinations (including those overflying the UK)?
What would be the maximum number of planes which could fly over Suffolk daily? Will expansion of Heathrow/Stansted and other airports mean planes have to fly lower to accommodate the extra air traffic?
What is the maximum number of planes per day which could use the flight corridors over the Felixstowe, Walton, Trimley, Kirton area and the Suffolk coast in general?
Who decided the vast increase in flights which have been experienced over the past few years should be sent over the Felixstowe peninsula and the A12 corridor from south Suffolk into Essex? Where is the democracy - how are the CAA and NATS accountable to members of the public?
Has Felixstowe been targeted because it is already a busy area - noise and pollution from Britain's biggest port, busy A14 and rail line - and extra activity would not be noticed?
Planes are flying over Felixstowe when there is so much open countryside (with fewer people living in it) and sea, north and south of the area. Is the impact on communities under the flightpaths not taken into account?
Planes fly over the Felixstowe area throughout the day and night, seven days a week on exactly the same routes day after day, with pinpoint accuracy. Why can the flightpaths not be adjusted by a few degrees to take the air traffic away from the urban area (either over the less populated countryside or empty sea) on certain days of the week to give residents a break from the constant noise?
Councils say they have no jurisdiction to deal with aircraft noise - so who does monitor it and would be responsible for taking action to curb it, particularly in areas many miles from airports?
Work has been done to monitor aircraft noise close to airports, but have any surveys been done to assess the impact of aircraft noise on people living under flightpaths which are many miles away from airports?
What research is taking place into the effect of pollution from aircraft on those living below flightpaths? Are particles from jet exhausts - which are said to be having an impact on global warming high in the atmosphere - falling to earth and adding to air quality problems in our towns and villages?
Should the government be promoting an expansion in air travel at all bearing in mind the growing concerns over carbon emissions, noise and other issues?
Should the government be looking harder at taxing air travel - and putting the money it raises into other, more environmentally-friendly transport systems, eg more high-speed rail routes?
16 January 2008
PRICE CONTROLS TO STAY AT STANSTED
Kevin Done, Aerospace Correspondent - Financial Times - 15 January 2008
London Stansted airport is to remain subject to price controls despite a recommendation from the Civil Aviation Authority, the government's official adviser on aviation, to free the airport to negotiate charges freely with the airlines. Price controls at Manchester airport are to be ended, however.
The decision on Stansted is a blow to the CAA. Ruth Kelly, transport secretary, rejected its advice to end price controls, saying the authority would continue to set the maximum level of charges as the "best way of protecting passengers". But the move is a significant victory for Ryanair and EasyJet, the Irish and UK low cost airlines, the main carriers using Stansted, which together account for around 85 per cent of the airport's passenger volumes.
EasyJet said last year "We know from our booking patterns that Stansted is a partial local monopoly and monopolies need greater price regulation, not less." Ryanair, which has removed part of its capacity at Stansted this winter, argued that passengers needed protection from the BAA "overcharging monopoly".
The CAA has come under heavy attack from airlines for its economic regulation of BAA's three London airports, Heathrow, Gatwick and Stansted.
It called on the government last summer to end the present regime of regulated price controls for both Stansted and Manchester, the third and fourth largest UK airports. That would have represented the biggest shake-up of the economic regulation of UK airports since the system was introduced in response to the privatisation of BAA, the UK airports group, in 1987.
The CAA currently regulates charges imposed on airlines at four UK airports: the three London airports, which are all owned by BAA, and Manchester, which is owned by 10 local authorities led by Manchester City Council. It said last year that Stansted did not have and was not likely to acquire "substantial market power".
Competition law was sufficient to address the risk of abuse, while continuing regulation ran the danger of distorting the big decisions to be taken on the timing and scope of increasing capacity at Stansted, including the building of a second runway.
The CAA also claimed that Manchester airport faced strong competition in some of its local markets, with strong route overlaps in particular with Liverpool and Leeds-Bradford airports. It said last year that competitive pressures limited any incentive for Manchester to raise prices "unreasonably".
In rebuffing the CAA's advice on Stansted, Ms Kelly said she had "taken into consideration the fact that the airports in the south-east are now operating at almost full capacity. This is bad for passengers in terms of delays, congestion and lack of choice and it is also bad for the UK's productivity and growth."
The government supported the building of a second runway at Stansted, she said, and was also in the midst of a public consultation on adding capacity with a third runway and sixth terminal at Heathrow. "Until this new capacity can be delivered, the CAA plays an important role in protecting passengers," she said.
By contrast, Ms Kelly said Manchester should be freed from price controls because "other local airports, such as Liverpool, offer real choice for passengers." There would be spare capacity at Manchester and competing airports "for the foreseeable future, even allowing for expected growth in demand," she said.
The decision to "de-designate" Manchester would enable the airport to grow and develop "without the costs of excessive regulation falling to passengers in the future."
BAA is owned by Ferrovial, the Spanish construction, infrastructure and services group.
Decisions on designation at Manchester and Stansted Airports
Department for Transport Press Notice - 15 January 2008
Transport Secretary, Ruth Kelly, has today published decisions on whether Stansted and Manchester Airports will continue to have their charges regulated by the independent regulator, the Civil Aviation Authority (CAA).
The following decisions have been made in the best interests of passengers:
* Manchester will be de-designated so that it will be able to set its own charges.
* Stansted will continue to have the maximum level of its charges set by the Civil Aviation Authority (CAA). The Government believes that this remains the best way of protecting passengers who use the airport.
Ms Kelly said: "In making my decision on Stansted, I have taken into consideration the fact that the airports in the south-east are now operating at almost full capacity. This is bad for passengers in terms of delays, congestion and lack of choice and it is also bad for the UK's productivity and growth. This is why the Government supports a second runway at Stansted and is currently consulting on adding capacity at Heathrow, whilst satisfying strict local environmental conditions on noise and air quality."
"Until this new capacity can be delivered, the CAA plays an important role in protecting passengers. I am therefore asking the CAA to continue to protect passengers by setting price caps at Stansted until new capacity is delivered or until further evidence emerges from the ongoing Competition Commission review."
"In making my decision on Manchester I have taken into consideration the fact that other local airports, such as Liverpool airport, offer real choice for passengers. Furthermore, there is spare capacity at Manchester and competing airports now and for the foreseeable future, even allowing for expected growth in demand. The decision to de-designate Manchester will enable the airport to grow and develop without the costs of excessive regulation falling to passengers in the future."
OUR COMMENT: The Minister's main concern seems to be for the price of the ticket - it seems strange to describe Stansted as operating to almost full capacity. The recent inquiry was investigating the effects of increasing the number of flights and passengers within the existing parameters of the present airport. The existing limits on passenger numbers and flights were imposed largely for environmental reasons ? the capacity of the local area to accommodate more planes and passengers. These limits placed on expansion have not yet been reached. Additional passenger demands for more flights are still only a statistic in the minds of the DfT. Faced with repeated advertisements of mass offerings of cut price air fares for recreational journeys, how can the Minister conclude that passengers are clamouring for more air space at Stansted? Has she not realised that many planes are flying with loads below capacity and that airline profits have fallen?
16 January 2008
MORE IMPORTANT ISSUES FOR THE MINISTER
The Price of Oil - and - the Price of Burning the Oil
Average family faces £500 fuel surcharge for long-haul holidays
This is London website - 12 January 2008
Families flying abroad face paying a fuel surcharge of more than £500 as airlines hike their prices again.
The latest increases are the result of rocketing oil prices and a chronic shortage of aviation fuel. They come on top of existing charges which already exceed £100 per passenger.
Air France and Dutch airline KLM yesterday increased their surcharges by up to £12 on a return booking, blaming the spiralling cost of oil.
Passengers on long-haul Air France and KLM flights now pay a total surcharge of up to £126 per return trip, or £32 on short-haul. This means a family of four will pay £504 in surcharges for a long trip.
Britain's three largest carriers, BA, Virgin Atlantic and BMI said they had no current plans to raise surcharges, but increasing pressure on fuel prices and supplies may prove unstoppable. British Airways said last night: "We continue to monitor the price of oil and keep the surcharge under constant review."
BA passengers are already paying a £116 surcharge on return flights of more than nine hours - £464 for a family of four - and £96 on flights of under nine hours. The airline is likely to be in the forefront of any price increases because it has only 'hedged' - or agreed a fixed price in advance - for half of its 2008 fuel needs.
Virgin Atlantic has hedged about 65 per cent of this year's fuel needs. Oil industry experts are predicting a surge in oil prices from Easter as world demand for supplies soars ahead of the holiday season. They believe oil will go up to between $110 and $115 a barrel, having recently hit $100 a barrel. Motorists are now paying £1.04 a litre for petrol and £1.10 for diesel and face another 3p a litre.
Ray Holloway of the Petrol Retailers' Association said: "Crude price will start rising significantly from Easter. We'll be back at $100 a barrel by the end of February. And by summer we could be at $110 to $115. That's bad news for motorists and for holidaymakers. It will mean 3p a litre or so on pump prices and higher aviation fuel prices."
Airlines are also suffering a shortage of aviation fuel, which in the 12 months to December has nearly doubled in price from $596 to $908 a tonne.
The situation is so serious that Esso and BP in the UK have stopped producing paraffin to concentrate on boosting aviation fuel.
Even so, supplies at Heathrow and other British airports remain 3 per cent short of demand. Experts predict even worse to come with demand for energy from booming economies including India and China. Watchdogs at the Air Transport Users Council (AUC) have described fuel surcharge hikes as a "classic example" of misleading price practices.
In August last year Sir Richard Branson's Virgin Atlantic escaped hefty fines and gained immunity from prosecution after blowing the whistle on a price-fixing deal involving fuel surcharges with rivals British Airways, which was fined £270million by UK and U.S. watchdogs.
Budget airline Ryanair says fuel surcharges are a "rip-off" and insists: "We will never apply a fuel surcharge, not now, not ever."
Speculation that British Airways might be the subject of a takeover bid by a Middle Eastern airline sent BA shares soaring yesterday.
But the Emirates airline insisted it was not planning to buy a stake in BA. "Emirates is concentrating on organic growth," said a spokesman in London.
16 January 2008
THE REAL QUESTION - FOR THE WRONG REASONS
Analysis: Airline growth lands with a bump
Robert Lea - Evening Standard - 14 January 2008
The Evening Standard City correspondent Robert Lea takes a close look at the aviation sector and finds that pundits reckon it may already be in recession.
'Fleet of foot': Even easyJet could come under pressure
The explosive report from the Civil Aviation Authority that the UK air passenger market could be heading for recession raises serious questions not only for the British economy but also for our major airline and airport companies.
Evidence from the CAA shows that in two years growth in air passenger numbers has dived from a 30-year average of about 6% to just 2%, the bottom has fallen out of single largest air travel segment - international holidays - and domestic flight numbers are already falling.
That raises questions such as do we need the new terminals and runways being lobbied for at Heathrow and Stansted, and is the inexorable rise of Ryanair and easyJet finally ending? Growth has fallen to less than the UK's annual GDP growth of 3.3%, and some economists would argue that means air travel is already in recession.
The latest CAA statistics show:
* Growth in the number of Brits flying on international holidays - one in three travellers - has ground to a halt from 6% in 2005.
* The numbers on domestic flights - accounting for almost a quarter of all passengers - are falling at about 2% compared with growth five years ago of more than 10%.
* The single biggest growth market, 'visiting friends and relatives', is running at 12%, accounting for about one in six passengers.
* The fastest-growing market is the premium-paying international business traveller (one in eight of passengers); with growth numbers above trend for much of the past two years at up to 10%.
The CAA believes the figures show the airlines are exposed to the turn in the economic cycle and their reliance on disposable income of its frequent flyers. It says households with earnings of more than £115,000 are 60% more likely to fly than those on the national average.
It also found that those who own a second-home abroad are 55% more likely to fly, and single people and childless couples are 50% more likely to fly than family folk.
It's all bad news for the carriers, as stock prices show. British Airways, easyJet and Ryanair have fallen between 40% and 50% in the past 12 months while shares in Thomson Holidays group TUI and Thomas Cook have dived more than 20% in the last month.
The carriers' ability to react to market demographics will secure their future. It's well-known that British Airways is only interested in premium-paying passengers, typically international business travellers.
Ryanair and easyJet have won their spurs by being light on their feet. With its Irish roots, Ryanair is very aware of the boom market in ferrying economic migrants back to the bosoms of their families while easyJet, though more closely linked to the falling holiday market, has cleverly wooed the business traveller as well as the second-homer.
Do the figures allow airports to sustain their arguments for more terminals and runways if demand is falling? That depends on whether we believe the decline in passenger numbers is cyclical or structural. Heathrow argues that the very fact it is full, and therefore patently unable to cope with congestion, means it needs massive new facilities like Terminal 5 to kick-start demand.
The alternative argument is that, rather than growth, London's airports should concentrate on quality and properly serving the economically important business community, while any volume demand should be catered for by investment in regional airports.
The CAA statistics pose some tough questions for airlines and airports; parliamentarians and ministers should take heed, too.
OUR COMMENT: Spare a thought for climate change. The planet needs less growth. Less growth need not mean recession, surely business can prosper without continuous expansion?
16 January 2008
THE GOVERNMENT TELLS US - THE PUBLIC - WHAT TO DO
ABOUT CLIMATE CHANGE AND WHAT NOT TO DO
Encouraging greener living - Defra publishes Public Attitudes Research
News Release - Department for Environment, Food And Rural Affairs (DEFRA) - 14 January 2008
The Department for Environment, Food and Rural Affairs (Defra) has today published a framework to encourage environmentally friendly behaviour among individuals and communities. The report pulls together evidence on public understanding, attitudes and behaviours and draws conclusions on the potential for behaviour change among members of the public.
Defra's environmental segmentation model is also included in the research. It divides the public into seven clusters, each sharing a distinct set of attitudes and beliefs towards the environment and is based on people's responses to a broad range of attitudinal questions as part of the 2007 Defra attitudes and behaviours survey. The model will be used to improve Government's understanding of people's environmental attitudes, values and behaviours towards the environment. By defining the different motivations and barriers to pro-environmental behaviour, the model will help policy makers understand how to support different groups of people to take action.
Environment Minister Joan Ruddock said "We all need to do our bit to tackle climate change. Most people want to do something but sometimes don't know how. This report will help Government and stakeholders reach people and empower them to make changes in their lives today that will make a big difference tomorrow."
In recognition of the important role the voluntary sector plays in influencing proenvironmental behaviour, Joan Ruddock also announced that a new grant scheme will be set up to support voluntary organisations to encourage people to adopt a greener lifestyle.
The report identifies 12 headline behaviour goals based on a range of low/high impact and easy/hard behaviours which could potentially engage large numbers of people and others which would be more appropriate for targeting particular population groups.
The 12 headline behaviours are:
* Use more efficient vehicles;
* Use your car less for short trips;
* Avoid unnecessary short haul flights;
* Use water responsibly;
* Install insulation / microgeneration;
* Manage your energy usage;
* Recycle more;
* Waste less food;
* Buy energy efficient products;
* Eat more food that is locally in season;
* Adopt a lower impact diet.
The report also looks at people's willingness to act on these headline goals. The results indicate that there are some behaviours, such as wasting less food and more responsible water usage, where most people are already willing and, in principle, able to act.
The more challenging behaviours, such as avoiding unnecessary flights or installing microgeneration for electricity, are those where there is relatively low willingness to act, or where there are external barriers to action.
Motivators and barriers vary across population groups and may change over time according to life stage and other individual circumstances. Common motivators for behaviour change include health or financial benefits, the 'feel good factor' and 'being part of something'. Common barriers include the need for activities to fit with people's current lifestyle and the difficulty of changing habits.
Stephen Hale, Director of the Green Alliance, said: "2008 can be a landmark year for government action to help every one of us reduce our environmental impact. Government has a critical role in enabling us to act. This report demonstrates public support for action, and contains the evidence needed to design and implement new and successful policies."
16 January 2008
STEEL INDUSTRY LAUNCHES ATTACK
ON 'VINDICTIVE' BRUSSELS PLANS
Andrew Bounds in Brussels - Financial Times - 14 January 2008
A steel and iron industry lobby group has accused bureaucrats of a "vindictive" campaign to chase the sector out of Europe to meet European Union climate change goals.
In a mounting war of words, Eurofer claimed that Jos Delbeke, who runs the EU scheme to cap and trade carbon emissions, admitted that the booming sector would have relocated offshore within a decade of a new law cutting greenhouse gas emissions coming into effect in 2013. Mr Delbeke denied he made the remark.
The clash comes as the EU's heavy industries mount a last-ditch lobbying offensive against a draft law that they claim would force many of them to leave the bloc.
"The effect would be catastrophic," said Gordon Moffat, secretary-general of Eurofer. "The way this is framed would give us no option but to leave. If we move elsewhere that does nothing to combat global warming." The industry favours benchmarks agreed globally.
Mr Moffat claims Mr Delbeke made the comments on the sidelines of a business event on climate change in Brussels in September. He has several witnesses, but there is no minute or recording of the conversation. Nevertheless, the allegation highlights how high the stakes are for industries such as aluminium, chemicals, cement and paper.
On Friday, 13 business associations wrote to José Manuel Barroso, European Commission president, to ask him to amend the legislation, to be adopted on January 23. They say that refusing free permits to pollute would increase costs that could not be passed on to customers. According to Commission research, prices would have to rise between 5 and 48 per cent. Aluminium production would leave Europe within a decade.
The influential groups have also been badgering national governments to force Brussels' hand.
Meanwhile, Indian steel magnate Lakshmi Mittal, Philippe Varin, chief executive of Corus, the Anglo-Dutch company, and Ekkehard Schulz, of Germany's ThyssenKrupp, have asked for a meeting with Mr Barroso next week.
A spokeswoman for Stavros Dimas, the environment commissioner drawing up the trading reform, said the industries were scaremongering. "We are not destroying industries. It is about innovation and moving forward. Industries will have to adapt in the light of climate change and global competition," she said.
However, Mr Moffat countered: "This is not innovative - it is vindictive." He said the cut of 21 per cent in emission allocations on 2005 levels between 2013 and 2020 was a big enough restriction. The European steel industry is the most efficient in the world. It uses half as much energy as China to produce a tonne of steel.
However, an expected carbon price of ?30 a tonne from 2013 would add ?55, or about 10 per cent, to steel prices, before the cost of higher power bills. Some 370,000 jobs are under threat, many in areas of high unemployment such as southern Italy and former communist countries.
The EU produced 210,000 tonnes last year of world output of about 1.3bn tonnes.
OUR COMMENT: The Steel industry has some cause for complaint when the aviation industry is being let off serious action. We can't do without steel but we can manage without as many cheap flights.
16 January 2008
SOME WISE ADVICE
Britain must stop ducking action on green issues
Tim Yeo - Financial Times - 14 January 2008
The speed at which climate change has risen up the agenda of both business and government reflects a growing recognition of the threat it poses. The action needed to build a low-carbon economy, on which the world's future prosperity and possibly the survival of the human race depend, will be cheaper and less painful if taken now rather than in five years.
Few countries understand this better than Britain but, despite this, we are unlikely to meet our existing targets for cutting greenhouse gas emissions, let alone the tougher ones that the latest scientific evidence suggests are necessary. Equally seriously, little or nothing is being done to develop the low-carbon infrastructure that would secure us a competitive advantage when the price of carbon rises - as it inevitably will.
Many of the measures required are controversial. Politicians pay lip service to environmental goals but the message that the price of flying must rise, that greener electricity costs more, that high-carbon lifestyles at home and at work are unsustainable is rarely spelled out. A bipartisan consensus is urgently needed. Across the fields of energy, transport and the built environment - which together account for more than half of all greenhouse gas emissions - existing technologies can solve the problem. But they are not being widely used so the opposition should make clear it will support any measures that promote them.
Last week's Conservative response to the government's proposed nuclear power stations was a good start. However, the get-out clause about not using any public money, a condition not applied to most other forms of low-carbon electricity generation, must not be a pretext for future wriggling. Nuclear is not the whole answer to Britain's energy requirements but, alongside more renewables and energy efficiency, it can cut dependence on gas imports and fossil-fuel-generated electricity.
Transport is sensitive because increased wealth has boosted demand for travel by price-conscious consumers. But, once flying bears the costs of its environmental impact, fares will rise sharply and countries such as France, which have invested in high-speed rail, will be better placed.
Britain's competitive position would be strengthened, not weakened, if substantial emission-related taxes were imposed immediately on all domestic flights. The revenue raised should be hypothecated into investment in a nationwide high-speed rail network. This would also release much-needed capacity on the existing rail lines.
On the road, decisions are easier because low-carbon vehicles already exist. The message does not have to be "don't drive" but "drive a lower-carbon vehicle". The best approach would be widespread use of road pricing with charges directly related to real-time emissions, which technology can now measure and monitor externally.
Road pricing should be accompanied by a radical reform of taxation. Taxes on buying, licensing, driving and parking low-emission cars, vans, and trucks should be slashed. Lost revenue should be recouped by big increases in taxes on high-emission vehicles.
The decision by Ken Livingstone, mayor of London, to raise the congestion charge for gas guzzlers just weeks before running for re-election suggests he thinks this change is popular. The opportunity to reward drivers for going green is staring the government in the face. If it needs opposition backing to persuade ministers to do this, what is David Cameron waiting for?
The answer for the built environment is equally simple. Current technology enables new buildings to be constructed on a zero-emission basis. Council tax and business rates should be cut for all homes and commercial premises that meet this goal. This change could be revenue-neutral if the lost revenue was made up by higher taxes on buildings that fail to do so.
The existing stock of buildings will take a little longer to bring up to scratch. Cutting stamp duty to reward property owners who have achieved high standards of energy efficiency and raising it to penalise those who have not would speed the process. Buyers of older buildings should also be able to recover stamp duty and qualify for lower council tax or business rates if they achieve specified energy efficiency levels in the first year of ownership.
All these proposals could be introduced now. They need only political will. This challenge is for the opposition as well as the government. The longer it is ducked, the bigger the bill we will all eventually pay.
The writer is chairman of the Commons environmental audit committee
16 January 2008
A WORKING-CLASS ALTERNATIVE TO 'GREEN WASH'
A Unite activist - News Environment - 13 January 2008
On Sunday 13 January, activists from the labour and anti-climate change movements will meet in Nottingham to develop the Workers' Climate Action network. This network aims to fill a void among those fighting climate change; to create unity of purpose and tactics between these often-divergent forces, with a purposefully working-class focus.
Looking at the numerous political campaigns that my union runs, there is no mention of the environment or progressive policies that seek to slow or halt runaway climate change. Not content with simply turning a blind eye, UNITE and GMB belong to a pro-aviation lobby group called 'Flying Matters' - in partnership with BAA, EasyJet, BA and the CBI.
Of course, they are attempting to look after the jobs of their members, but what is important is how they do that. Rank and file members should offer an alternative that is genuinely in the interests of the working class and does not rely on their employers' initiatives. The ruling class will not be the main victims of climate chaos, though it will be their policies that have caused it.
To take one example, the criticism made of aviation as a source of emissions has never taken into account those who work in the industry. Actions neither seek to provide workers with alternative work nor tackle the reasons of long hours/low pay, poor public transport and short holidays that ties people into using this industry. Choice is the luxury of the rich; green activists must recognise this before promoting consumer-orientated solutions to structural problems. It is not a surprise then that one Unite branch officer reported low morale due to constant to public criticism of the role of aviation.
The official energy and industry policy of the main unions ? most importantly Unite ? must be smashed and replaced by radical and worker-centred solutions to climate change that understand these problems and can fight inside their industries with solidarity from those outside aviation, power stations and heavy industry.
One clear answer is to take action. Working people should fight for jobs and the long-term sustainability of humanity ? we cannot leave it to profit-mongers, a subservient state or elitist greens. The causes and consequences of climate change do not exist outside of the divisions of class therefore the solutions cannot either.
Workers' Climate Action is an initiative begun by activists in Sheffield, which seeks to build a national network that will intervene in labour and green movements to put forward ideas and action that match radical demands with practical solutions. Among other tactics, we will seek to mobilise workers in environmentally damaging industries to campaign for alternatives, help to steer climate change activists into dialogue with workers, and to make their action united against those causing this problem and towards solutions that seek new systems to another crisis born of limitless capitalist expansion.
We welcome all activists who want to be a part of a democratic and radical alternative to elitism and greed. For more information about the campaign and organising of the Workers' Climate Action network email: email@example.com
16 January 2008
THE CONSEQUENCES OF INACTION
Loss of Antarctic ice has soared by 75 per cent in just 10 years
Steve Connor, Science Editor - The Independent - 14 January 2008
Parts of the ice sheets covering Antarctica are melting faster than predicted, with the net loss of ice probably accelerating in recent years because of global warming, a study has found.
A satellite survey between 1996 and 2006 found that the net loss of ice from Antarctica rose by about 75 per cent as the movement of glaciers towards the sea speeded up.
Scientists estimate that that the West Antarctic Ice Sheet lost about 132 billion tons of ice in 2006, compared with a loss of 83 billion tons in 1996. In addition, the Antarctic peninsula lost about 60 billion tons of ice in 2006.
"To put these figures into perspective, 4 billion tons of ice is enough to provide drinking water for the whole UK population for one year," said Professor Jonathan Bamber, of the University of Bristol. "We think the glaciers of the Antarctic are moving faster to the sea. The computer models of future sea-level rise have not really taken this into account."
Sea levels are estimated to have risen by 1.8mm a year on average during the 20th century, but data from the past decade or so suggest that the average rise is now about 3.4 mm per year.
Computer models used by the Intergovernmental Panel on Climate Change (IPCC), which predict that sea levels will rise by no more than about 50cm by 2100, are based largely on the stability of the Antarctic ice sheets. But many scientists now believe this forecast is too restrained. "I agree with a number of scientists who feel the IPCC is likely to have underestimated the upper bound of predicted sea-level rise by the end of the century ? 50 cm is probably too conservative," Professor Bamber added.
There are two key factors in estimating the net loss of Antarctic ice. The first is the flow of glaciers towards the sea; the second is the build-up of snow over the vast landmass of the frozen continent. The IPCC models imply that global warming will increase the moisture content of the atmosphere and so may actually increase snowfall over Antarctica, much of which is too cold to be affected by rising global temperatures. This would suggest a net build-up of ice. However, Professor Bamber believes the IPCC's models have not taken into account the complex, dynamic interaction between the ocean and the ice shelves of West Antarctica and the Antarctic Peninsula, which are warmer than East Antarctica.
Eric Rignot, who led the latest study published in the journal Nature Geoscience, said the findings indicated a rapid loss of ice to the sea rather than a net gain. "We have determined that the loss is increasing with time, quite rapidly at 75 per cent in ten years," Dr Rignot said. "We have also established that most of this loss, if not its entirety, is caused by glacier acceleration. The IPCC focussed on the surface mass balance component. We find this component is not indicative of the true mass balance."
The acceleration in ice loss over the past 10 years could increase in coming decades, he added. "As some of these glaciers reach deeper beds, their speeds could double or triple, in which case the contribution to sea-level rise from Antarctica could increase quite significantly beyond what it is now. Many people suspect Antarctic ice to be immune from changes. We are finding this is not the case.
"The future is the big question. The potential exists for ice speed to increase two or three times, which will result in a doubling of the mass deficit from Antarctica."
Melting into history
* July 1985: UK scientists detect hole in ozone layer
* January 1995: Larsen A ice shelf disintegrates
* July 1998: Evidence suggests future collapse of West Antarctic ice sheet
* March 2000: An iceberg 183 miles long and 22 miles wide breaks adrift
* February 2002: Larsen B ice shelf collapses
* October 2003: World's largest iceberg splits
* March 2006: Research shows shrinking ice has raised sea levels by 1.2mm
* September 2007: Sea ice covering Antarctica melts back to record low
16 January 2008
AND - A WARNING
AIR POLLUTION CAUSES SPERM MUTATIONS
Male mice breathing city air carry more mutations
Heidi Ledford, Report of Article in Nature - 13 January 2008
Don't breath the air: it might meddle with your reproduction
Air pollution can cause DNA mutations in the sperm of mice reared in an industrial city, researchers have found. The results add to ongoing concerns about the effects of air pollution on human health and fertility.
The mice, reared in cages kept in a shed downwind of two steel mills and a busy highway in a Canadian city, showed a host of genetic changes compared to similarly housed mice breathing filtered air. DNA in the sperm of the mice in the polluted area contained 60% more mutations, had more strand breaks, and had more bases that had been chemically modified via the addition of a methyl group. That modification, called DNA methylation, can affect whether a gene is expressed.
All of these changes could, in theory, alter gene expression and function in offspring of these mice, but that has not yet been directly tested.
"It's important to move this forward to the next step: determining whether there are any human corollaries to this," says Jonathan Samet, an epidemiologist at the Bloomberg School of Public Health at Johns Hopkins University in Baltimore, Maryland.
Air pollution has been linked to respiratory and cardiovascular difficulties, developmental defects and lung cancer in humans. But researchers have only begun to tackle the effect of pollution on sperm.
"There has been work on the reproductive effects of pollution, but that has largely focused on outcomes of pregnancy, not on male effects," says Samet.
Epidemiological studies in humans have suggested a link between air pollution and reduced male fertility, but such studies are often confounded by other lifestyle differences such as diet, genetic background, and economic class. No such research has been done on people in Hamilton Harbour, Canada, where the mouse studies were carried out.
Previous work had demonstrated that the offspring of wild birds that breed near steel mills inherit more DNA mutations than their rural counterparts. Then, studies in mice suggested a possible reason for that pattern. Canadian researchers found that filtering out particles from polluted air lessened the risk of heritable mutations in mice caged near Hamilton1. And the bulk of mutations from pollution were coming from the father.
Now, in work published this week in the Proceedings of the National Academy of Sciences USA, Carole Yauk of Health Canada in Ottawa and her colleagues have returned to Hamilton. This time they monitored male mice for direct evidence of DNA damage in their sperm.
After three weeks of breathing the Hamilton air, the mice were already showing more signs of DNA breakage than control mice breathing filtered air. At 10 weeks, their DNA was significantly more methylated than controls. And 16 weeks after the experiment began, their DNA contained more mutations at a specific site than the controls.
Precisely how the pollution caused the DNA damage remains unclear. "It's quite a leap to go from a lungful of air to damaging germ cells in the testes of these mice," says Christopher Somers, a biologist at the University of Regina in Saskatchewan and an author on the study.
The researchers also tested the DNA for signs of direct mutagenesis by a class of chemical compounds called polycyclic aromatic hydrocarbons. Although these compounds are known to cause mutations and are enriched in the Hamilton air, there were no signs that they were responsible for the damage.
That could mean that the changes may be a more general response to particulate pollution, says Somers. For instance, metals bound to the particulates can favour the production of chemically reactive forms of oxygen called reactive oxygen species.
"If that?s the mechanism, you might think that it has general applicability to other sources of pollution, not just steel mills," says Samet.
OUR COMMENT: This would not be due to rising carbon dioxide levels, but fossil fuels when burnt produce other chemicals that possibly could be capable of such effects.
12 January 2008
AIRLINES: PROFIT HAS BEEN PUT BEFORE PASSENGERS...
...AND REGULATOR CAA HAS DONE NOTHING TO STOP IT
Sinead Holland - The Herts & Essex Observer - 10 January 2008
Airlines at Stansted are on the attack this week, accusing the airport's official regulator of "dismal failure".
The scathing criticism "on all counts", which followed a vote of no confidence, was submitted to Sir Joseph Pilling, who is carrying out an independent review for the government.
In their statement, Stansted Airline Consultative Committee members catalogued a "litany of failures" by the Civil Aviation Authority's regulation group. The carriers complain that the organisation has not protected passengers while promoting the airport's profitable operation.
Specifically they have told Sir Joseph:
* The CAA allowed BAA to double charges in April last year leading to a reduction in passenger numbers.
* BAA is proceeding with a plan for Stansted which is three times more expensive than that proposed by users and involves an unnecessary land grab of more than 800 acres of Essex countryside.
* BAA intends to increase airport charges again this year, bringing charges to a level 47% above the cap generated by the CAA's own formula, when accurate inputs are used, and
* Having forced passengers to endure long queues and delays in the past year, BAA now intends to increase passenger charges (even as the government relaxes certain security restrictions).
Stansted ACC chairman David O'Brien said: "Stansted airlines have lost confidence in the CAA's ability to properly regulate the BAA monopoly at Stansted. The CAA has allowed BAA to ignore the unanimous requests of users for the provision of low cost efficient facilities at Stansted Airport.
Even as passengers were forced to endure long security and immigration queues, BAA doubled charges at Stansted while the CAA stood idly by. The CAA now presides over an airport regime where charges have doubled and passenger traffic is falling". He accused the CAA of "abandoning" airlines and passengers to a BAA monopoly.
Sir Joseph's review is separate from - but complementary to ? the ongoing Competition Commission's Inquiry into BAA control of the South East's main airports, including Stansted.
OUR COMMENT: This is a continuation of the bad feeling exhibited at the Stansted public inquiry last year when the airlines actually opposed BAA's plans for making maximum use of the present runway. (Though they indicated that in their view an increase to 30mppa with no increase in the number of flights would be acceptable.) However, while their accusations were and are supported by the evidence, they are also concerned both for their own profits and declining numbers of passengers. There is nothing wrong in making profits, but not at the expense of either passenger comfort and safety, or wages and working conditions of employees. Neither is there any evidence that any of the parties in this dispute consider the role of aviation in the ever increasing need to restrict carbon emissions. Do they seriously expect to avoid the need to cut back on fossil fuel use and live on the savings of other sections of the public and industry? If fewer passengers are going to travel then there is hope that the public, at last, are taking heed of the warnings.
12 January 2008
TURMOIL IN MARKET DEEPENS
AS RYANAIR SHARES HIT TURBULENCE
Laura Noonan - The Independent - 10 January 2008
Aviation market turmoil cranked up a notch yesterday as another ?480m was wiped off Ryanair's value and investors dumped 3.5pc of Aer Lingus' stock.
Analysts were quick to point out that turbulence was linked to economic fears in the UK rather than inherent weaknesses in the airlines, but the selling frenzy continued nonetheless.
Ryanair was the biggest casualty on this side of the Atlantic, losing 8pc of its value yesterday and recording its worst day on the stock market since the profit warning of January 2004.
The latest fall means a massive ?750m has been wiped off the airline's share price in just two days, while chief executive Michael O'Leary is sitting on personal paper losses of ?20m.
The airline's dismal week in the markets began in earnest on Tuesday, when rival EasyJet spooked the markets by reporting a 2.2pc dip in the level of seats filled in December.
Yesterday morning, matters were compounded when Citigroup issued a research note downgrading their earnings forecast for Ryanair for 2008 and 2009, amid fears of higher fuel prices and a weaker pound against the euro.
Later, a mid-morning announcement of a new base in Bournemouth did little to appease UK-wary investors as some 45pc of Ryanair's flights already pass through the economically troubled UK.
"There's a lot of negative UK sentiment building at the moment, and people could be wondering why they're increasing their exposure there," said one analyst.
A spokesman for Ryanair, however, insisted that Bournemouth was a "good market, with lots of potential", adding that the airline was growing "throughout Europe" not just in the UK.
Meanwhile, industry-watchers don't think they've seen the last of Ryanair's fall. "If the Bank of England do something positive on interest rates it could give the shares a boost. If they do something negative the shares could fall even further," said one analyst, referring to today's BOE meeting.
Over at Aer Lingus, some 18m shares were off-loaded yesterday, marking one of the stock's busiest ever days and making the airline the fourth most-traded stock on the ISEQ. The trade, which covered more than 3pc of Aer Lingus stock, was seen as particularly significant since less than 30pc of the airline's stock is in freefloat. Aer Lingus shares closed down almost 2pc at ?2.06, suggesting a seller-led boom rather than a buying spree, with the bulk of the activity linked to one trade processed by Goodbody's.
Well-placed sources suggested the trades had involved "a number of institutions". A spokesman for Ryanair declined to comment on the trades; however, sources close to the company confirmed the airline was not involved.
12 January 2008
THE CAA GIVES ITS OWN REPORT
TRENDS IN UK AIR PASSENGER TRAFFIC
CAA News Release - 11 January 2008
The Civil Aviation Authority (CAA) has published a report, Recent Trends in Growth of UK Air Passenger Demand, which sets out an analysis of how growth in different segments of passenger traffic at UK airports has changed in recent years and the likely causes of these changes. It investigates four factors: broader economic trends, competition with rail, aviation cost pressures and attitudes towards the environment. It also examines the propensity to fly of different leisure passenger types, in particular the relationship with income, demographic factors and property ownership abroad.
Slowing growth overall and in some passenger segments
Passenger traffic at UK airports has grown at an average annual rate of about six per cent since the mid 1970s, more than twice the rate of economic growth in the UK. However, over the last few years the growth rate, although still positive, has fallen to approximately two per cent per annum. The decline has affected both the London and the regional airports.
UK air passenger traffic growth in 2006 was slower than in 14 other developed aviation markets in the EU, many of which saw GDP growth similar to the UK.
The decline in the passenger growth rate of no frills services from the UK is marked, but the growth rate remains around 10 per cent. By contrast, both full service and charter services are now showing negative annual growth rates.
The slowdown in growth since 2005 is not shared equally across all passenger segments, but mainly affects the two largest: international holidays taken by UK residents (where traffic grew by only 0.2 per cent in the year to June 2007) and domestic travel (where traffic fell by 1.4 per cent in the year to October 2007).
The CAA's work suggests that growth in UK resident international holiday travel, which still accounted for around one third of all trips in 2006, shows a lagged relationship with changes in UK consumer expenditure growth. Much of the slowdown can therefore be attributed to a slowdown in consumer expenditure growth experienced in 2005 and 2006.
Growth in domestic air travel, which accounts for one fifth of all trips, seems to have been mainly affected by competition from other transport modes, particularly due to improvements in long distance rail services and changes in airport security that have increased total journey times for air travel.
Airlines and passengers have also experienced cost increases, particularly through rising jet fuel prices which have almost tripled since early 2004, but also through the doubling of Air Passenger Duty in February 2007. The slowdown in growth of UK passengers significantly pre-dates this increase in APD, so it cannot have been the primary cause.
but continued strong growth in others
Despite these cost increases, other passenger segments of international traffic, namely business (which accounts for 12 per cent of all passengers), leisure travel to visit friends and relatives (which accounts for 15 per cent) and non-UK resident holiday travel (which accounts for 6 per cent), have all continued to increase at or above the historic growth rate for total traffic of 6 per cent per annum.
Recently, the growth in UK resident passengers visiting friends and relatives abroad has been sustained mainly by nationals of other EU countries resident in the UK, with annual growth rates in the last couple of years exceeding 20 per cent. This highlights how the freedom of movement of labour and liberalisation of markets within the European Community have affected the UK economy.
Who flies most?
Data from the 2007 CAA Passenger Survey indicate that those UK residents who used UK airports took, on average, around two and a quarter return flights per year for leisure purposes in 2007. However, other surveys indicate that this represents only a subset of the UK population as a whole, up to half of whom will not fly at all in any 12 month period.
The CAA has identified relationships between the frequency of leisure flying and various characteristics of current passengers (independent of the effects of changing fares and consumer expenditure). This analysis indicates that propensity to fly is most significantly related to household income (with higher income households taking more flights), household composition (with singles and childless couples taking more flights than families), and ownership of property abroad.
- Individuals in households with total earnings over £115,000 per year were likely to take around 60 per cent more trips per year than those earning less than £40,000.
- Owning a property abroad increased the number of trips taken by an individual per year by around 55 per cent.
- Other factors being equal, those in single person households took around 50 per cent more trips in a year than individuals in couples with children.
These results can be combined to show, for instance, that those passengers in single person households earning over £115,000 per year take, on average, nearly two and a half times as many trips per year as couples with children whose household income is less than £40,000 per year.
Historic trends in UK demographics point towards a growth in those lifestyles with a higher propensity to fly (for instance, increased ownership of property abroad and couples having children later in life), strengthening the growth of the industry and indicating that the recent slowdown in growth in some UK-based segments is unlikely to have arisen from changing demographics.
At present, there have been no more than two years of slower traffic growth, and the evidence would suggest that this has been mainly as a result of the current economic environment and competition from domestic rail services, rather than any longer term, structural change in demand for air services. As yet, air passengers? attitudes to the environment do not seem to be having a significant effect on the demand for air travel.
Dr Harry Bush, Group Director, Economic Regulation, said: "The CAA's analysis shows the impact on passenger air travel of recent slowing of consumer expenditure, but also indicates a significant impact from the recovery of rail travel and from the increasing internationalisation of the UK economy, with the consequent growth in air travel to visit family members or friends in other countries. Looking to the longer term, demographic changes and ownership of homes abroad are also likely to buttress air travel demand, although relatively small changes in frequency of leisure travel between mid and higher levels of income suggest demand growth is constrained to some extent by factors other than income, such as availability of leisure time."
OUR COMMENT: Again, no thoughts as to the need to reduce unnecessary air travel miles. Does the aviation world live on another planet?
12 January 2008
MORE OVER-OPTIMISTIC "GREENER" CLAIMS
ABOUT AIRCRAFT PERFORMANCE
Boeing UK falls foul once again of advertising standards watchdog
over Boeing 787 noise claim
RSS News - 9 January 2008
Barely a month after receiving a rap on the knuckles over claims concerning CO2 emissions of the new 747-8 airliner. Boeing UK has once again had a complaint against it upheld by the UK?s Advertising Standards Authority (ASA).
On this occasion, the complaint referred to a magazine advertisement that stated "... Boeing and QinetiQ are testing cutting-edge aerodynamic designs that will allow the new 787 to... fly 60% quieter than ever before". The complainant challenged whether the claim was misleading and whether it could be substantiated because he believed the claim referred to the noise footprint of the aircraft and not to the peak sound level.
Boeing told the ASA the 787 had been designed as a replacement for the 767 family of Boeing aircraft and the comparison in the ad was therefore with the 767.
It said there were various different ways of measuring noise made by aircraft. However, it contended the calculation of the noise footprint of an aircraft, or airport, was the methodology consistently used by Boeing, its competitors, industry regulators and community groups to describe aircraft noise, and had been used on this occasion.
Boeing said it was unaware of any method that used the peak sound level measurement in a claim that would be understood by the general public. Nevertheless, it maintained the reduction in peak sound level between the 767 and 787 was 4.5dBA and pointed out that the major London airports used a 3dBA difference to support a 50% noise reduction and, therefore, its claim was also supported if measured this way. However, it said the current lack of a meaningful method of calculating percentage-based peak level noise comparisons explained why the noise footprint methodology instead was used throughout the aviation industry.
Boeing said the industry standard method for calculating noise footprints used by it and competitors was the FAA Integrated Noise Model (INM), which took into account the characteristics of an aircraft such as its weight, thrust and engine type. The INM calculated that the noise footprint at 85dBA for the 767 was a total area of 1.9 square miles, whereas the 787 was 0.7 square miles and therefore 63% smaller.
In its adjudication, the ASA agreed with Boeing, after consulting with the UK Civil Aviation Authority (CAA), that the INM was a recognized and commonly used model for calculating the noise footprint of an aircraft.
However, it had been told by the CAA that the measurement of a 3dBA decrease as a 50% reduction in noise level was, in fact, a barely perceptible difference and therefore the typical noise level reductions for some people within the noise footprint of the aircraft would only be just discernible. It understood from the CAA that reductions in noise footprint area were conceptually very different from reductions in noise exposure experienced by individuals.
The ASA therefore considered that "without qualification, the claim '60% quieter' was ambiguous and that readers were unlikely to understand that the claim was based on a reduction of the noise area of the aircraft. We considered that the ad should have made that basis of the claim clear and because it did not we concluded it was likely to mislead."
It has told Boeing to make the basis of the calculation clear when making noise reduction claims in future.
Meanwhile, the ASA is following up a complaint made against British Airways following an email from BA's Chief Executive Willie Walsh to members of the airline's Executive Club in November that urged them to back the construction of a proposed new third runway at Heathrow.
The email suggested that a third runway would cut down on carbon dioxide emissions by 330,000 tonnes a year by limiting the need for aircraft to circle the airport while waiting to land. According to UK government figures, a third runway would lead to an overall increase in emissions of 2.6 million tonnes a year as a result of an extra 220,000 flights.
According to a report in The Times, the ASA has asked BA for assurances that it will not repeat the claim of a reduction in emissions as a result of a new runway.
12 January 2008
HOPE FOR THE FUTURE?
EU environment ministers unanimously vote
to include aviation emissions in EU ETS from 2012
RSS News - 20 December 2007
EU environment ministers discuss aviation emissions proposal
Thu 20 Dec 2007 ? In a unanimous vote of all 27 member states, EU environment ministers have agreed to include aviation emissions in the EU Emissions Trading Scheme (ETS) but have watered down several key proposals put forward by MEPs last month.
The main points include:
* Airlines to join the ETS in 2012, not 2011 as proposed by the EU Parliament last month.
* Ministers agreed that airlines should buy 10% of permits upfront at auction, substantially lower than the 25% demanded by MEPs.
* The cap on emissions was set at the average level of the period 2004-2006, although MEPs had called for the cap to be set at 90% of that level.
* Smaller operators and new start-ups to be exempted from the scheme.
Francisco Nunes Correia, Portuguese environment minister and whose country currently holds the presidency of the Council of the European Union, pronounced the agreement "a great success" and the first opportunity for the EU to show real leadership on climate change after Bali.
"Aviation raises very significant issues when it comes to CO2 emissions," he commented after the Council meeting. "The transport sector in general is one of those in urgent need of measures when it comes to the control of emissions and climate change."
The EU Environment Commissioner, Stavros Dimas, said: "Emissions from the aviation sector represent about 3% of the European Union's total greenhouse gasses. That is higher than those from other industries such as steel, which are already covered by the ETS. Emissions from aviation have risen very fast over the past few years, roughly doubling since 1990 and are expected to double again by 2020. If we do nothing to stop this rapid growth then we shall undermine the progress we have made in cutting emissions in other sectors. All sectors should contribute in a fair way in fighting climate change.
"Today's political agreement backs the general thrust of the Commission's proposals. Most of the changes proposed by the Council are technical improvements which the Commission welcomes. This includes exemptions for commercial operators with very low traffic levels and the introduction of an allowance reserved for new entrants and very fast-growing airlines."
"We have agreed a starting date of 2012 for all flights, dropping the plan of an introductory starting date of 2011 for intra-EU flights proposed by the Commission. The agreement will strengthen our position in the very difficult two years ahead when we will be negotiating the Bali roadmap, so we are doing what the European citizens are expecting of us and we should not forget that citizens around the world are looking to see what Europe is undertaking to fight climate change."
"This is the first step in anticipation of a broader review of the ETS system that should take place by 2013. In view of the size of the problem [of aviation emissions], other steps may be taken later. I have to underline that aviation is very important in today's world. I don't say we have to stop the growth of aviation but we must stop the growth of emissions of CO2 and other greenhouse gasses caused by aviation."
As to why the Council proposed the later start date of 2012, Dimas said some countries wanted 2011 but others had argued for postponement until 2013, so a compromise had been reached. The draft directive will now pass back to the European Parliament and final agreement is expected in 2008.
12 January 2008
HOPE WITH RESERVATIONS
Environment campaigners claim agreement by EU ministers on aviation will fail to curb emissions and could derail international climate targets
RSS News - 21 December 2007
The European Federation for Transport and Environment (T&E), the principal environmental organization campaigning on transport at EU level, has called the decisions taken by EU environment ministers on aviation's inclusion in the EU Emissions Trading Scheme (ETS) "shameful" and accuses the EU of being "two-faced" in its approach to the industry.
"If environment ministers get their way, the scheme simply won't cut emissions and will end up being yet another subsidy to the aviation industry," said João Vieira of T&E. "It's a shameful end to a year filled with promise for action on climate change."
According to T&E's calculations based on the official impact assessment, the European Commission plan as it stands would offset just one year's growth in emissions from aviation. T&E criticized the vote by ministers not to strengthen the proposed emissions cap and to allow the aviation sector unlimited rights to buy credits from other sectors. It called the decision to give airlines free emission permits "a recipe for massive windfall profits".
According to Tomas Wyns, EU ETS expert for Climate Action Network Europe (CAN-E), the EU was failing to implement ambitious greenhouse gas mitigation policies that would threaten the trust built up in Bali towards the developing world and risk a delay or stall in the forthcoming international climate change negotiations.
T&E accused the EU of a "two-faced approach" to aviation and climate change, citing the recent publication of a Top Ten of European achievements in 2007 that included leadership in both "the fight against global warming" and "cheaper airfares to the USA through an 'open skies' agreement".
"With no fuel taxes, no VAT on tickets and massive subsidies to airports, aircraft manufacturers and airlines, the aviation sector is already one of the most favoured. That the EU celebrates when it makes the most polluting form of transport in the world even cheaper is incomprehensible," said T&E's Vieira.
10 January 2008
THE PERILS OF 'PREDICT AND PROVIDE'
EastJet passenger numbers fail to match rise in capacity
Dan Milmo, Transport Correspondent - The Guardian - 9 January 2008
EasyJet raised fears of a severe slowdown in the budget airline boom yesterday as its shares plunged on the back of weak passenger numbers.
Analysts said that the news indicated that the budget sector, which is pouring profits into new aircraft on new routes, was racing ahead of passenger demand amid weakness in the UK and European economies.
EasyJet said the proportion of seats sold for each flight had fallen by 2.2% to 78.9% in December. Passenger growth also disappointed, coming in at 10% against some analysts' expectations of around 15%. EasyJet shares closed 18.9% down at 460.25p.
Andrew Fitche, analyst at Collins Stewart, warned that easyJet and Ryanair must sell some tens of thousands of extra seats a week because of multimillion pound aircraft orders at a time when consumer spending was coming under severe pressure.
"What industry has ever succeeded in putting extra capacity into a demand slowdown? It has never happened before and I don't think the airline sector will be any different", he said. Fitchie added that easyJet and Ryanair had "little ability" rein in expansion plans. Last year Ryanair bought 27 Boeing 737-800s for $1.9bn and easyJet has 104 Airbus planes on order worth $4bn.
EsayJet's buying spree helped increase total passenger numbers in December, which grew 10% to 2.9m but failed to keep up with the total increase in capacity of 13.5% as it added 15 jets to its fleet. Ryanair's load factor fell 2% last month, while British Airways also admitted demand on its short haul operations. An easyJet spokesman said the airline was "comfortable" with its performance, adding that the average load factor over the past 12 months was on target. Pre-tax profit guidance of between £225m and £230m, up 20% from £191m last year was left unchanged.
Analysts added that easyJet was probably compensating for the load factor problems by keeping up revenue from each passenger. Easyjet is expected to generate an extra £120m from increased baggage charges this year, helping to offset lost ticket revenues.
Ryanair launched another seat sale yesterday as it pushed more cheap fares at customers who, according to no-frills business principles, will generate profits by paying baggage check-in fees and booking hotel rooms through the airline's website. Europe's largest budget airliner offered 2m seats for ten pounds, including taxes and charges.
The offer coincided with a report from consumers' group Which? warning that the cost of a flight could be £28 more than advertised, despite guidelines ordering airlines to include compulsory taxes and charges in their headlines. Ryanair was singled out as the worst offender, with bag check-in charges of up to £20.
"We think Ryanair's charge to use the check-in is unfair, you can only avoid it if you don't check luggage into the hold," Which? said. A Ryanair spokesman defended the charges, saying that nearly half its passengers avoided the fees by checking in online and travelling with hand luggage only. Ryanair shares dropped yesterday by 5% to £3.88.
OUR COMMENT: The budget airlines are to be congratulated in modernising their fleets so that their aircraft are safer, quieter and more fuel efficient. Increasing the number of routes and so flights is a different matter. Government and airlines are obsessed with the need to entice ever more passengers into airplanes, offering a multitude of alleged bargains which, as Which? is pointing out, may not be quite what they are advertised to be. Meantime emissions rise, climate change accelerates, all for the want of a failure to face reality and institute an effective policy of limiting unnecessary air travel expansion.
10 January 2008
STANSTED AIRLINES IN ANGRY CALL
FOR THE CAA TO BE SCRAPPED
Danny Fortson, Business Correspondent - The Independent - 5 January 2008
Airlines using Stansted airport have called for the Department for Transport to scrap the CAA and replace it with a new civil aviation regulator after having "lost all confidence" in the body's ability to regulate BAA, the airports monopoly.
In scathing written evidence submitted yesterday to Sir Joseph Pilling ? appointed last year to conduct a DfT investigation into the Civil Aviation Authority ? airlines including Ryanair, British Airways and easyJet accuse the regulator of a "lack of willingness to deal with the abusive conduct of BAA."
The charges will increase the pressure to break up BAA, which operates seven airports including Heathrow and Gatwick. The Competition Commission is carrying out an inquiry to determine whether an increase in competition via a breakup would lift the standard of services at the group's airports.
In yesterday's submission, seen by The Independent, the Stansted ACC, the group representing the airlines using the airport, suggests that "the appointment of an alternative regulator should be considered which has the required industry expertise." The group added: "The CAA has not demonstrated any particular expertise in respect of the airport sector which would suggest that it is capable of discharging the economic regulatory function in respect of the UK's airports."
The carriers are angry over an increase in landing charges at Stansted that BAA pushed through last year which has increased their operating costs and led to a drop in passenger traffic as customers chose cheaper airports. David O'Brien, the Stansted ACC chairman, said: "The CAA has allowed BAA to ignore the unanimous requests of users for the provision of low-cost, efficient facilities at Stansted airport. Even as passengers were forced to endure long security and immigration queues, the BAA doubled charges at Stansted while the CAA stood idly by. The CAA now preside over an airport regime where charges have doubled and passenger traffic is falling."
The CAA declined to comment as the inquiry was ongoing. BAA also declined to comment.
The group also criticised BAA's plan for a second runway and a new terminal building which it has branded a "gold-plated" development that will allow it to increase charges to airlines without providing the required increase in capacity. Meanwhile, BAA and the CAA have clashed over Heathrow expansion plans.
10 January 2008
BA REPRIMANDED OVER CLAIM THAT
NEW RUNWAY WILL REDUCE EMISSIONS
Ben Webster, Transport Correspondent - The Times - 5 January 2008
British Airways has been reprimanded for attempting to manipulate a government consultation on the expansion of Heathrow by making false claims about the environmental impact.
The Advertising Standards Authority has written to BA ordering it to withdraw a claim, in an e-mail to customers by Willie Walsh, the chief executive, that a new runway would reduce carbon dioxide emissions.
Mr Walsh wrote to tens of thousands of members of the airline's Executive Club in November asking them to support the construction of a third runway. He sent the e-mail the day after the Government announced a three-month public consultation on expanding Heathrow. Mr Walsh claimed that expansion would reduce carbon dioxide emissions by 330,000 tonnes a year because aircraft would no longer have to waste fuel queueing for take-off or circling while waiting to land.
His e-mail implied that the claim about CO2 reduction had been endorsed by the Government. But he failed to make clear that, according to the Department for Transport's consultation document, the new runway would raise overall CO2 emissions by 2.6 million tonnes a year by allowing an extra 220,000 flights.
The authority has asked BA to confirm by January 9 that it will not repeat the claim. In a letter to a BA customer who complained about the e-mail, the authority wrote: "We believe you have a valid point and have instructed BA to change their ad. We have asked them for a written assurance that any future marketing communications about the expansion of Heathrow airport will not suggest an overall decrease in CO2 emissions."
BA refused to say last night whether it would comply with the authority's letter. It also refused to say how many passengers had been sent the e-mail or whether the airline would now send them a clarification. In a statement, the airline said: "By the time a third runway opened, emissions trading for which British Airways has long campaigned would ensure that every extra tonne of carbon dioxide from aviation growth above 2005 levels would be matched by a tonne saved elsewhere."
10 January 2008
MORE PROBLEMS FOR AIRLINES
Rising oil prices fuel US airlines' fears
Justin Baer in New York - Financial Times - 6 January 2008
In a March 2004 speech, James May, president of the Air Transport Association, delivered a grim prognosis for the health of the US airline industry, which was grappling with mounting fuel costs.
"When cash is available and the gamble makes sense, we hedge," said Mr May, whose trade group represents most US carriers. "But today's prices are killing the industry."
At that time, oil traded at $37 a barrel.
Almost four years later, most of the nation's airlines still have a strong pulse. But for an industry now facing oil at $100 a barrel, Mr May's comments might as well have come from an era before wide-bodied jets and in-flight movies.
Fuller flights, fuel-efficient aeroplanes, recent bankruptcies, fare increases and more restrained expansion plans have all helped the industry to shake off record fuel prices and return to profitability.
But with the US economy's slowdown sure to sap demand for both corporate and leisure travel this year, the airline industry faces renewed questions on its ability to weather yet higher energy costs without taking more drastic measures.
United Airlines, American Airlines and Delta Air Lines moved to lift ticket prices by as much as $20 last week to help offset the latest increase in the jet fuel price, which is now above $2.80 a gallon.
Every additional cent on fuel adds another $190-$200m to US carriers' fuel bill, according to the ATA. The expected rise in empty seats will make it harder for fare increases to stick, forcing carriers to make steeper cuts to their expansion plans for 2008.
"Longer-standing incumbents have principally reacted by cutting back schedules," says John Heimlich, the ATA's chief economist. "You'll see (seat) reductions. Sometimes it's existing routes, sometimes it's new markets." Industrywide domestic capacity should drop by 0.5 per cent this year, compared with a 2 per cent increase in 2007, Mr Heimlich says.
For years, airlines sought to cushion fuel surges by hedging against the commodity. The trading strategy Southwest Airlines adopted in early 2001 paid off within months, when the 9/11 terrorist attacks otherwise crippled the industry and helped send some of the carrier's bigger competitors into bankruptcy court.
Times have changed, and oil's unrelenting climb to $100 has caused even seasoned airline executives to doubt their ability to predict the commodity's direction. Hedging now, while oil trades at record levels, would be a bold call.
"The question is: 'is this the new norm??'" David Neeleman, JetBlue Airways chairman said last month. "If oil goes up to $120 and no one is hedged then you don't look like a fool. But if you do it at $100 and it goes to $80 or $70, then you really look like a fool."
You can also lose money, as both Continental Airlines and United did in late 2006 when the carriers' contracts had locked in some of their fuel needs at prices above where the commodity had traded. And the higher prices climb, the more expensive hedging becomes.
Of the big carriers, all except Southwest have more than half of their first quarter fuel needs exposed to market prices, according to research compiled by Lehman Brothers, Calyon Securities and the ATA.
It's little wonder, then, that airline chief executives have become more vocal in preaching the merits of consolidation; a large merger or two would free the industry to scale back capacity more dramatically. And those chieftains can make a more convincing case to regulators and organised labour if their profits have already been crimped by record fuel costs.
"All else being equal, they'll be more pressure to consolidate at higher prices," Mr Heimlich said. "All of a sudden, you find it easier to do when one is in bankruptcy or in a weakened financial condition."
10 January 2008
MORE PROBLEMS RECOGNISED FOR THOSE ON THE GROUND
Disturbed sleep link to diabetes
BBC Online - 2 January 2008
Deep sleep is associated with changes that affect metabolism
A disturbed night's sleep may increase the risk of developing diabetes, US research has suggested.
The US team discovered that volunteers who were roused whenever they were about to fall into the deepest sleep developed insulin resistance.
This inability of the body to recognise normal insulin signals leads to high blood sugar levels, weight gain and, eventually, even type 2 diabetes.
The study appears in the Proceedings of the National Academy of Sciences.
Strategies to improve sleep duration and quality should be considered as a potential intervention to prevent or delay the development of type 2 diabetes - Dr Esra Tasali
Previous studies have shown an association with diabetes and a lack of sleep. It is also already known that the deepest sleep, known as slow-wave sleep, is associated with changes that affect metabolism.
To test the impact of sleep quality on blood glucose control, nine healthy men and women were first monitored for two consecutive nights to see what their normal sleep patterns were.
Then on the following three nights, the research team woke them with a loud noise when they drifted into deep sleep - characterised by long slow-moving delta waves in the brain. The amount of overall sleep they had was unchanged.
After injecting the volunteers with glucose and measuring their daytime blood sugar levels and insulin response, the researchers found that eight of them had become less sensitive to insulin.
Lead researcher Dr Ersa Tasali, of the University of Chicago, said there was an alarming rise in the prevalence of type 2 diabetes associated with an ageing population and increased obesity and it was important to understand the factors that promote its development.
"We had shown previously that restricting sleep duration in healthy young adults results in decreased glucose tolerance. The current data further indicate that not only reduced sleep duration but also reduced sleep quality may play a role in diabetes risk."
"The current evidence suggests that strategies to improve sleep duration and quality should be considered as a potential intervention to prevent or delay the development of type 2 diabetes in at-risk populations."
Dr Tasali added that chronic shallow sleep and diabetes are typical factors associated with ageing and more research was needed to find out if age-related changes in sleep quality contribute to such metabolic changes.
3 January 2008
BAA IN FINAL BID TO AVERT AIRPORTS STRIKES
Bob Sherwood, London and South-East Correspondent - Financial Times - 31 December 2007
A final attempt to avert a series of strikes that threaten to shut down Britain?s biggest airports will begin on Monday. BAA, the airports operator, has invited unions to last-ditch talks in the hope of avoiding a 24-hour walkout next Monday.
It is understood that unless a deal is reached by Wednesday, BAA will inform airlines and passengers that flights will be grounded. About 5,000 workers, including firefighters, security, maintenance, administrative and clerical staff, are threatening to strike at BAA's seven airports.
If the essential safety staff walk out at 6am on Monday, as planned, all flights will be cancelled at Heathrow, Gatwick, Stansted, Southampton, Glasgow, Edinburgh and Aberdeen. Such action would cause misery for thousands of travellers ? on the day the government's strict cabin baggage restrictions are due to be eased at most airports.
The action, led by the unions Unite and the Public and Commercial Services Union (PCS), is being taken in protest over the decision by Ferrovial the Spanish owner of BAA, to close its final salary pension scheme to new members. The unions believe that this could be the first step towards axing the pension scheme.
Negotiations broke down last week, but BAA said it was expecting talks to begin again, at its request, on Monday. Unite said nothing had changed since last week's breakdown, but it remained "hopeful" that BAA had something new to say over the pension scheme. The company believes that it will have to begin to put in place its contingency plans if a resolution is not reached by midweek.
A further 24-hour strike is planned for a fortnight on Monday, to be followed by a 48-hour stoppage due to start at 6am on Thursday, January 17.
When the unions voted for strike action before Christmas, Mark Serwotka, the PCS general secretary, said: "It is a disgrace that those working at the privately run BAA could have their final-salary pension scheme attacked when the company is raking in huge profits."
BAA said the pension changes would apply only to new entrants, and that no one striking would be affected. The group is understood to be willing to offer guarantees over the pension rights of current employees.
Passengers will be allowed to travel with more than one carry-on bag at 19 airports from next week, although confusion is predicted, as the one-bag limit will remain in force at some airports, including Gatwick, Edinburgh and Glasgow. Those airports have still to prove that they can process more items without compromising security, although the clearance for Edinburgh and Glasgow to lift the one-bag rule could come soon.
In addition, some airlines may maintain their own regulations on hand luggage and others will face having to enforce different rules if they operate from more than one airport.
The Department for Transport has said the onus will be on the industry to inform passengers of how they should prepare for particular flights.
OUR COMMENT: BBC news reported 3rd January 2008 that agreement has been reached for further talks on the possibility of carrying out a consultation exercise on potential pension changes. There will be no strikes therefore next week at Stansted or Heathrow.
3 January 2008
DFT PLEASE NOTE - PLANTING TREES IS NOT THE SOLUTION TO ALL THE EXTRA FLIGHTS YOU ARE PROMOTING
Trees absorbing less CO2 as world warms, study finds
Shorter winters weaken forest carbon sinks
Data analysis reverses scientists' expectations
James Randerson, Science Correspondent - The Guardian - 3 January 2007
The ability of forests to soak up man-made carbon dioxide is weakening, according to an analysis of two decades of data from more than 30 sites in the frozen north.
The finding published today is crucial, because it means that more of the CO2 that we release will end up affecting the climate in the atmosphere rather than being safely locked away in trees or soil.
The results may partly explain recent studies suggesting that the amount of CO2 in the atmosphere is increasing faster than expected. If higher temperatures mean that less carbon is soaked up by plants and microbes, global warming will accelerate.
The Intergovernmental Panel on Climate Change, which shared the Nobel Peace Prize with Al Gore, has concluded that humanity has 8 years left to prevent the worst effects of global warming.
Carbon uptake by land and sea is crucial to predictions about future warming. "We are currently getting a 50% discount on the climatic impact of our fossil fuel emissions", the the climate scientist John Miller of the University of Colorado wrote in a commentary in the journal Nature ? meaning that half of what we put out is sucked up by the oceans and ecosystems on land. "Unfortunately we have no guarantee that the 50% discount will continue, and if it disappears you will feel the full brunt of our unrelenting emissions of CO2 from fossil fuels."
The surprise rethink concerns abundant evidence from around the world that winter is starting later and spring earlier. In northern latitudes spring and autumn temperatures have risen by 1.1C and 0.8C respectively in the past two decades. That means a longer growing season for plants, which scientists thought should be a good thing for slowing warming. This increased growth is even visible from space, with satellite measurements indicating a greening of land. As plants take up more CO2 that should put a break on CO2 increases.
However, the new data suggests that is too simplistic. The team analysed data from more than 30 monitoring stations spread across northern regions including Siberia, Alaska, Canada and Europe. The data, which go back to 1980, charts the levels of CO2 in the local atmosphere. This is a product of both uptake by plants during photosynthesis and release of CO2 by plants and microbes during respiration.
The team focussed particularly on the date in autumn at which the forests switched from being a net sink for carbon in to a net source. Instead of moving later in the year as they expected, this date actually got earlier ? in some places by a few days but in others by a few weeks.
"The information that we had from satellite data, that the greening was increasing, looked like a positive sign. There was hope that this would help us to mitigate emissions," said Anders Lindroth, at Lund University in Sweden, who was part of the research team. "But even if we have a greening, it doesn't mean that we have a positive effect on the carbon balance ? its bad news."
"This means potentially a bigger warming effect," said Timo Vesala at the University of Helsinki, who led the project.
The precise effect the trend will have on future warming is hard to predict, said Colin Prentice of the University of Bristol. "Over a longer period of decades, models predict changes in vegetation structure, including tundra regions becoming forested, and the forests tend to take up far more carbon than the tundra, so I would be sceptical about reading any particular future implications into these findings."
The research could partly explain findings by the Global Carbon Project, which confirmed that the rise in CO2 levels is accelerating. Between 1970 and 2000 the concentration rose by about 1.5parts per million (ppm) - 35% higher than expected. Part of the rise is due to increased carbon dioxide production by China, but the team said weakening carbon sinks is also to blame.
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