| SSE NEWS ARCHIVE - April to June 2008
28 June 2008
EU STRIKES DEAL ON BRINGING AIRLINES INTO ETS
ENDS Europe DAILY 2572 - 26 June 2008
The European parliament and governments have bridged their
differences to reach a second-reading agreement on including aviation
in the EU emission trading scheme. The Slovenian presidency brokered
a deal with MEP negotiators on Thursday.
The compromise is expected to be endorsed by member state officials
on Friday morning. Thereafter it will be put to a vote in the
parliament on 9 July. If MEPs approve it, rubber-stamping by
ministers will follow as a formality.
Full details of the deal were not yet available as ENDS went to press
on Thursday, but its outlines matched expectations last week.
All flights into and out of EU airports will be included in the EU
carbon trade scheme from 2012, the council's preferred date. Airline
emissions will be capped at 97 per cent of 2004-6 levels in the first
year of inclusion. Thereafter, the cap will be brought down to 95
Airlines will have to pay for 15 per cent of their allowance
allocation. Auctioning revenues will not be ring-fenced, as MEPs had
wanted, but governments will have to report on how they spend them.
They are encouraged to invest in "low emission modes of transport".
Both the emission cap and auctioning levels from 2013 may yet be
revised through a separate proposal to change the EU emission trading
scheme (ETS), currently also being debated by EU lawmakers.
There will be a 15 per cent limit on the use of carbon credits
generated through Kyoto's flexible mechanisms. MEPs' demands for a
multiplier to account for nitrogen oxide emissions and a gateway
mechanism to force aeroplane efficiency improvements have been
Airlines and environmentalists were not enthused by the deal. "The
policy will offset just one year's growth in emissions from the
aviation sector," said T&E campaigner Joao Vieira. "We should be
marking a historic multilateral deal.. but in fact we are marking a
historic missed opportunity."
The Association of European Airlines (AEA) warned of carbon leakage.
"Why would you pay more for your ticket if you can transit through a
non-EU hub that avoids the tax that is now the ETS?" said a
spokeswoman. She emphasised that the commission's impact assessment
was carried out when oil only cost $40 a barrel.
28 June 2008
ATMOSPHERIC CO2 LEVELS "MUST BE CUT TO 350PPM"
ENDS Europe DAILY 2572 - 26 June 2008
Governments negotiating a post-2012 global climate agreement must
agree tougher targets to avoid dangerous climate change, a group of
leading experts and scientists has warned. Carbon dioxide levels in
the atmosphere must be cut down to 350 parts per million, they say.
Current objectives discussed as part of ongoing climate negotiations
are to stabilise greenhouse gas concentrations at 450ppm to limit
temperature rises to two degrees by the end of the century, or 400ppm
for CO2 alone. But new scientific evidence shows that these levels
are too high and can no longer be seen as safe, scientists say.
The call was made in an advertisement published this week in
newspapers the Financial Times, the International Herald Tribune and
the New York Times. A declaration was also published by the Swedish
Tallberg foundation. "The safe level of atmospheric carbon dioxide
is no more than 350ppm and it may be less", the declaration says.
The Tallberg foundation is currently holding an international
conference to discuss how to achieve this target. Global levels of
CO2 are now around 385ppm. They rose by 0.6 per cent last year,
according to US government agency Noaa.
The declaration was signed by leading scientists such as NASA chief
scientist James Hansen. Other signatories include the European
environment agency, the Stockholm Environment Institute and Irish MEP
Avril Doyle, who is leading parliament discussions on plans to revise
EU emissions trading rules.
28 June 2008
Second runway 'is top priority'
Sinead Holland - Herts & Essex Observer - 19 June 2008
NEW boss of BAA Colin Matthews has made clear his commitment to a second runway at Stansted Airport. The chief executive, who took charge in April, highlighted his hopes for growth in a keynote speech last week - and ensured the operator remains on a collision course with anti-expansion campaigners like SSE.
More than 200 invited guests ranging from regional business leaders to representatives from councils and airlines gathered at Duxford Imperial War Museum near Cambridge to hear his battle plans for Stansted.
He said: "This is an ideal opportunity to share with you two of the top priorities I have set for BAA. First for us, is to achieve consistent high standards of customer service - and that means to our airline customers as well as travellers. I am determined to deliver continuous improvement in standards across all service areas. And that applies to Stansted as much as it does to Heathrow and elsewhere."
"Second, is to demonstrate my commitment and that of BAA to the delivery of additional runway capacity to meet future demand for UK air travel - and that includes a second runway at Stansted."
"Like everyone else at the moment, we are facing up to a number of business challenges as the effects of the economic uncertainty works through the economy. Longer term economic growth is predicted beyond the challenges of the current cyclical downturn - and with it will come continued growth in demand for air travel. Stansted is at the forefront to meet that challenge."
He believed a second runway - which will enable the airport to handle 68m passengers a year by 2030 - would bring "significant benefits" to the East of England and create 13,000 new jobs.
He added: "The development will support plans for regional development, as well as underpin the investment planned for road and rail infrastructure in the region."
He acknowledged environmental concerns, but was clear: "I am acutely aware that our plans have attracted widespread public debate - and quite right too. But our focus, as always, is on achieving sustainable growth, and as our plans have taken shape during years of extensive consultation we have refined our proposals so that in terms of environmental credentials, we are at the leading edge of what it is possible to do."
SSE campaign director Carol Barbone said: "The choice of Duxford for BAA's summer schmooze is apt given that a museum is where BAA's outdated second rundway application belongs."
BA has submitted plans for a second runway and a public inquiry is expected to begin late this year or in early 2009. Meanwhile the operator and its opponents are waiting for the Government's verdict on removing the current 25m passenger cap and allowing up to 35m travellers to use the existing single runway.
28 June 2008
BAA SAYS REFINANCING STILL ON TRACK FOR EARLY Q3
Sonya Dowsett - Reuters - 26 June 2008
Debt refinancing linked to its British Airports division BAA is on track to be finalised early in the third quarter, a BAA spokesman said on Thursday.
Spanish construction-to-services group Ferrovial has tried for over a year to renegotiate the debt in a deal aimed at cutting financial costs after original plans were delayed as bank credit dried up due to the global liquidity squeeze.
"We expected to complete early in the third quarter, that expectation still holds," a BAA spokesman said. "The timetable remains as it has been communicated over the last few months."
Banks arranging a 7.15 billion pound loan aimed to partly refinance the debt taken on by Ferrovial to buy BAA in July 2006, plus existing BAA debt, will launch this deal to investors at a bank meeting in London on Friday.
Meanwhile, talks with BAA bondholders continue as Ferrovial tries to move them into a new investment-grade structure, backed by income from its airports. Bondholder approval is essential for the deal to get underway.
One London-based BAA bondholder who asked to remain anonymous said he had his doubts whether Ferrovial would be able to get the deal sewn up to schedule, although he said the fact the banks had started the syndication process was positive.
"We still have major doubts that this deadline is achievable, it just seems too tight," he said. "There's an awful lot of documentation to get through first of all and I'm sure there will be amendments required by both the bank lenders and the bondholders. Just to get the documentation done itself can take weeks and weeks."
Ferrovial shares have been volatile as the deadline for the refinancing nears. The stock was 4 percent lower at 39.3 euros at 1220 GMT, after gaining 8.6 percent on Wednesday. (Editing by Quentin Bryar)
28 June 2008
TAKE A FLIGHT TO... WHERE?
Evening Star - 16 June 2008
VERY few people have heard of it, no-one can point to it on a map or name any of its attractions - and yet you can fly there for £25.
Ever heard of Tampere?
It's one of the latest nonsense journeys to nowhere destinations - which most people call "cheap flights" but the airlines and airports brand as "affordable" - putting another plane in the sky over Suffolk.
The Evening Star carried out a snapshot survey to see whether people had heard of the Finnish town. Not one person we spoke to in Hamilton Road, Felixstowe, had heard of Tampere - and not one could even say which country it might be in.
Three people though did say the £25 price of a flight would attract them to take a trip there - simply out of curiosity and because it was so cheap.
Sadly, that is a symptom of all that is bad about these flights.
People do not sit at home wondering if there is a flight to Tampere, or Balaton, Billund, Chisinau, Kaunas, Paderborn, Bergerac or Tromso, as they might dream about visiting Rome, Madrid, Sydney, Paris or Berlin.
But as soon as there is a cut-price flight to one of these obscure places, people are unable to resist and the demand is created - one of the reasons Suffolk has so many more jets flying over it these days, plaguing countryside communities with noise and fuelling worries over pollution.
There is no way of stopping it - airlines need to generate air travel to exist; airports need air companies' planes to use their runways. The government says air travel will double by 2030 and its plans are only just taking off.
Mark Davison, head of media relations at Stansted, said there was a demand for the affordable flights and if a route to a destination - however little known - was not viable it would not survive. "It doesn't matter if it is Newark, New York, or Bergerac, France - the airlines only run these services if there is a demand which makes them profitable," he said.
"The airlines look at where there is demand for a destination or interest can be created. Just because a destination may be hard to pronounce or an A level geography student couldn't find it on a map, it doesn't mean people should not go there and our surveys of people on these flights have shown there is a wide variety of reasons people might want to visit these places."
Independent travel, allowing people to explore, was part of the travel revolution, and often while Britons may not have heard of places, the people living in those places have heard of Britain and want to visit here, boosting tourism.
Balaton is in Hungary; Billund in Denmark; Chisinau Moldova; Kaunas Lithuania; Paderborn Germany; Bergerac France; and Tromso Norway.
Should the number of planes flying over Suffolk be cut? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN.
28 June 2008
EXCLUSIVE: NO ICE AT THE NORTH POLE
Polar scientists reveal dramatic new evidence of climate change
Steve Connor, Science Editor - The Independent - 27 June 2008
It seems unthinkable, but for the first time in human history, ice is on course to disappear entirely from the North Pole this year.
The disappearance of the Arctic sea ice, making it possible to reach the Pole sailing in a boat through open water, would be one of the most dramatic ? and worrying ? examples of the impact of global warming on the planet. Scientists say the ice at 90 degrees north may well have melted away by the summer.
"From the viewpoint of science, the North Pole is just another point on the globe, but symbolically it is hugely important. There is supposed to be ice at the North Pole, not open water," said Mark Serreze of the US National Snow and Ice Data Centre in Colorado.
If it happens, it raises the prospect of the Arctic nations being able to exploit the valuable oil and mineral deposits below these a bed which have until now been impossible to extract because of the thick sea ice above.
Seasoned polar scientists believe the chances of a totally ice free North Pole this summer are greater than 50:50 because the normally thick ice formed over many years at the Pole has been blown away and replaced by huge swathes of thinner ice formed over a single year.
This one-year ice is highly vulnerable to melting during thesummer months and satellite data coming in over recent weeks shows that the rate of melting is faster than last year, when there was an all-time record loss of summer sea ice at the Arctic.
"The issue is that, for the first time that I am aware of, the NorthPole is covered with extensive first-year ice ? ice that formed last autumn and winter. I'd say it's even-odds whether the North Pole melts out," said Dr Serreze.
Each summer the sea ice melts before reforming again during the long Arctic winter but the loss of sea ice last year was so extensive that much of the Arctic Ocean became open water, with the water-ice boundary coming just 700 miles away from the North Pole.
This meant that about 70 per cent of the sea ice present this spring was single-year ice formed over last winter. Scientists predict that at least 70 per cent of this single-year ice ? and perhaps all of it ? will melt completely this summer, Dr Serreze said.
"Indeed, for the Arctic as a whole, the melt season startedwith even more thin ice than in 2007, hence concerns that we may even beat last year's sea-ice minimum. We'll see what happens, a great deal depends on the weather patterns in July and August," he said.
Ron Lindsay, a polar scientist at the University of Washington in Seattle, agreed that much now depends onwhat happens to the Arctic weather in terms of wind patterns and hours of sunshine. "There's a good chance that it will all melt awayat the North Pole, it's certainly feasible, but it's not guaranteed," Dr Lindsay said.
The polar regions are experiencing the most dramatic increasein average temperatures due to global warming and scientists fear that as more sea iceis lost, the darker, open ocean will absorb more heat and raise local temperatures even further. Professor Peter Wadhams of Cambridge University, who was one of the first civilian scientists to sail underneath the Arctic sea ice in a Royal Navy submarine,said that the conditions are ripe for an unprecedented melting of the ice at the North Pole.
"Last year we saw huge areas of the ocean open up, which hasnever been experienced before. People are expecting this to continue this year and it is likely to extend over the North Pole. It is quite likely that the North Pole will be exposed this summer ? it's not happened before," Professor Wadhams said.
There are other indications that the Arctic sea ice is showingsigns of breaking up. Scientists at the Nasa Goddard Space Flight Centre said that the North Water 'polynya' ? an expanse of open water surrounded on all sides by ice ? that normally forms near Alaska and Banks Island off the Canadian coast, is muchlarger than normal. Polynyas absorb heat from the sun and eat away at the edge of the sea ice.
Inuit natives living near Baffin Bay between Canada and Greenland are also reporting that the sea ice there is starting to break up much earlier than normal and that they have seen wide cracks appearing in the ice where it normally remains stable. Satellite measurements collected over nearly 30 years show a significant decline in the extent of the Arctic sea ice, which has become more rapid in recent years.
28 June 2008
AIR TRAVEL IN THE TROPICS CAUSES MORE WARMING
New Scientist - 25 June 2008
Want to salve your conscience and offset your holiday carbon emissions? You might want to rethink that trip to the tropics. A typical flight there has a greater impact on global warming than a flight in temperate latitudes.
As well as producing carbon dioxide and contrails, planes also produce nitrogen oxide, which triggers both the creation of the warming gas ozone, and the destruction of another greenhouse gas, methane (Journal of Geophysical Research).
In mid-latitudes, these ozone and methane reactions cancel each other out and you get zero net warming from nitrogen oxide emissions, says Keith Shine of the University of Reading, UK. But the brighter sunlight in the tropics is very efficient at converting nitrogen oxide to ozone - in fact it creates ozone five times faster than in the air of mid-latitudes, according to Shine's calculations - whereas methane destruction only increases marginally. Worryingly, the warming effects of ozone are particularly strong at a plane's typical cruising altitude of 35,000 feet, he adds.
The research raises the question of whether future attempts to control aircraft emissions should consider extra penalties for flights in tropical countries where air travel is booming. India, for instance, has the fastest growing airline fleet in the world.
For now aircraft emissions are excluded from international treaties on curbing greenhouse gas emissions. But the European Union has plans to control aircraft emissions from 2011.
28 June 2008
COST OF TACKLING GLOBAL CLIMATE CHANGE
HAS DOUBLED, WARNS STERN
Author of landmark report says 2% of GDP is needed
Inaction would mean far greater economic damage
Juliette Jowit and Patrick Wintour - The Guardian - 26 June 2008
The author of an influential British government report arguing the world needed to spend just 1% of its wealth tackling climate change has warned that the cost of averting disaster has now doubled.
Lord Stern of Brentford made headlines in 2006 with a report that said countries needed to spend 1% of their GDP to stop greenhouse gases rising to dangerous levels. Failure to do this would lead to damage costing much more, the report warned - at least 5% and perhaps more than 20% of global GDP.
But speaking yesterday in London, Stern said evidence that climate change was happening faster than had been previously thought meant that emissions needed to be reduced even more sharply.
This meant the concentration of greenhouse gases in the atmosphere would have to be kept below 500 parts per million, said Stern. In 2006, he set a figure of 450-550ppm. "I now think the appropriate thing would be in the middle of that range," he said. "To get below 500ppm ... would cost around 2% of GDP."
In a recent report for the London School of Economics, Stern acknowledged that even 1% of GDP was "not a trivial amount". For the UK it is equivalent to £14bn a year. But he argue that it was a fraction of annual economic growth, and much less than the 8-14% that was spent, for example, on health by industrialised countries.
His reassessment of the cost of battling climate change comes at a sensitive time, the day before Gordon Brown makes a major speech setting out a £100bn strategy for ensuring that 15% of all energy used in the UK will come from renewable sources by 2020. The government has come under pressure from the Tories, whose statements on the environment include effectively banning new coal power stations and opposing a third runway at Heathrow.
Ministers are already under political pressure to row back on environmental taxes, such as increases in fuel duty and vehicle excise duty. Downing Street aides admit government policy is ahead of public opinion and that its proposals are on the margins of what the electorate will tolerate at a time of escalating oil prices and falling house prices. Brown will highlight that as many as 160,000 green jobs will be created by his climate change measures.
Speaking yesterday at the launch of the Carbon Rating Agency, the world's first ratings agency for carbon offsetting projects, Stern warned that the 2% estimate required governments to act quickly. "All this depends on good policy and well functioning [carbon] markets. There are many ways to mess this up, many ways of acting to make it more costly," he said.
The Stern review in October 2006 called for global emissions to be cut by a quarter by 2050 and to be stopped from rising above the equivalent of 550ppm of CO2, a measure that combines the effect of all the greenhouse gases. The current level is 430ppm, and is rising by 2ppm a year.
Yesterday, Stern, a former World Bank chief economist and head of the UK government economic service, said he now believed the limit should be 500ppm. This would reduce the risk from a 50% chance to a 3% chance that the global average temperature would rise by 5C above pre-industrial levels, he said, pointing out that the last time this happened, 35-55m years ago, alligators lived near the north pole. "These kind of temperature changes transform the word," he said.
His new comments follow a speech in April in which he said that the latest research showed climate change was more of a threat, and called for global emissions to halve by 2050, including cuts of 80% in the UK and 90% in the US.
The Department for Environment said the case for cutting global emissions was still strong: "We cannot afford inaction on climate change. Even at the upper range of the estimates, the cost of avoiding dangerous climate change is much lower than even the most conservative estimates of inaction."
OUR COMMENT: Have they informed the DfT of their views? Or BAA?
28 June 2008
A WARNING TO ALL
Aircraft noise linked to heart attacks
Local London Reporter - This is London - 23 June 2008
A report has found aircraft noise is responsible for 100 heart attacks in London.
Aircraft landing and departing Heathrow Airport are responsible for around 100 heart attacks in London every year, new research has found. The Greater London Authority (GLA), commissioned consultants Berry Environmental to look at the effect of aircraft noise on people's health.
The report, Effect of Noise on Physical Health Risk in London, also found that traffic noise is responsible for 108 heart attacks and 499 cases of heart disease in the capital each year.
John Stewart, chairman of pressure group HACAN, said: "These findings are shocking but not surprising. People are telling us all the time about how the constant noise from the planes stresses them out. It is inevitable that this amount of stress will lead to heart attacks."
Earlier this year, Dr Lars Jarup from the Imperial College London carried out a study which surveyed residents around six airports including Heathrow. Dr Jarup's study found a proven link between heart attacks and aircraft noise.
22 June 2008
THIS YEAR - NEXT YEAR - SOMETIME - OR NEVER?
EU close to deal on bringing airlines into ETS
ENDS Europe DAILY 2568 - 20 June 2008
The European parliament and council of ministers are expected to
reach a second-reading agreement on including aviation in the EU
emission trading scheme next Thursday.
Sources close to the talks say the two main outstanding issues are
the date from which to include airlines and how to spend auctioning
revenues They suggest the parliament could move toward the council on both counts,
accepting 2012 rather than 2011 as a start date and an obligation for
governments to report on how revenues are spent, rather than
The initial cap on aviation sector emissions looks likely to be set
at 95 per cent of average emissions over 2004 to 2006. This is a
mid-way compromise between parliament and council demands
Between ten and 25 per cent of allowances will be auctioned in 2013, with the exact level yet to be agreed. MEPs and ministers still disagree on how and when future cap
and auctioning levels should be decided.
MEPs' demands for a multiplier to account for nitrogen oxide
emissions and a gateway mechanism to force aeroplane efficiency
improvements seem to have been dropped. MEPs are also ready to
accept the council's position on access to credits from Kyoto's
flexible mechanisms, sources say.
OUR COMMENT: How does Ruth Kelly intend to find sellers of surplus carbon credits to allow for her hoped for massive increase in aircraft flights? Presumably through the so-called "flexible mechanisms" ? all too often a euphemism for a different kind of exploitation of poorer countries.
22 June 2008
ECONOMIST DRAWS UP GLOBAL EMISSIONS TRADING SCHEME
ENDS Europe DAILY 2568 - 20 June 2008
A British researcher has proposed an operator-based global carbon
trading scheme to cut shipping and aviation emissions to zero by 2052.
The two sectors' emissions are not covered by international carbon
caps in the Kyoto protocol and the EU has been frustrated at progress
to regulate their emissions through other treaties. The bloc is in
the process of including aviation in its industrial carbon market and
shipping could follow.
Terry Barker of Cambridge university envisages eight-year trading
periods starting in 2013, full auctioning of allowances, and a
successively reduced emissions cap based on 2004-6 emissions. The
cap would allow for market growth to 2013.
Access to international carbon credits could start at 20 per cent and
decline to 5 per cent by 2052. This would encourage technological
change to reduce the sector's emissions directly, instead of
offsetting through investments in other projects, he says.
Auctioning revenues could partly finance innovation and partly flow
to developing countries. A new World carbon authority would manage
UK transport minister Ruth Kelly called on nations to consider
emission trading to tackle shipping emissions at an International
maritime organisation (IMO) meeting last week. The IMO will discuss
carbon mitigation options in Oslo next week.
Meanwhile, the International civil aviation organisation held a
workshop to discuss carbon trading and aviation on Wednesday and
Thursday. It has been criticised for not doing enough to tackle
22 June 2008
Financial Times - 15 June 2008
Some of the planes in US-based Northwest Airlines venerable fleet of DC-9s were rolling off the production line when Lyndon Johnson was still in the White House. The need to replace ageing aircraft with more efficient jets is one reason behind the boom in orders placed with manufacturers Boeing and Airbus. However, the oil price has now gone past the point at which it is a helpful stimulant into a terrific dead weight.
The US airlines, on the whole, have yet to order new aircraft, but since the end of May the budget carriers JetBlue and AirTran have deferred delivery of 39 single-aisle planes out to the middle of the next decade. On Friday US Airlines joined the list of troubled carriers cutting jobs and unprofitable routes.
The shrinking American market points to trouble ahead for the rest of the industry. Global passenger growth in the first quarter of 4 per cent, year on year, was a deceleration from 8 per cent at the end of last year. Business travel globally turned down in March. There is a widening gap between growth in passenger numbers and capacity in the years ahead. For the past four years air traffic growth has averaged 9 per cent annually ? the fastest sustained period of expansion since the 1970s. If global gross domestic product growth falls to 3-4 per cent this year, Credit Suisse estimates that passenger growth will be just 2-3 per cent.
On present delivery forecasts the number of seats on narrow-body jets ? the single aisle planes used mainly for short-haul flights where competition is brutal - is set to grow by 6 per cent this year, and at a similar level out to 2012. But at current oil prices the airline industry faces an increase in its annual fuel bill - already $136bn last year ? equivalent to a fifth of its $500bn annual revenues. Something has to give.
22 June 2008
STANSTED PASSENGER NUMBERS DOWN BY 4.4 PER CENT
Sandra Perry - Herts & Essex Observer - 11 June 2008
THE number of passengers using Stansted Airport fell by 4.4 per cent in the first five months of this year, figures released by BAA today (Wednesday, June 11) show.
But while Stop Stansted Expansion (SSE) referred to the announcement as the "rise and fall" of the airport, operator BAA said that it was nothing more than a cyclical event against a background of a global economic slowdown.
From January 1 to the end of May, 8,703,700 passengers used the Essex airport. May's total of 2,019,500 was 3.3 per cent down on the same month last year.
The number of Heathrow travellers was down 0.3 per cent in the first five months but up 0.6 per cent in May. Gatwick users rose by 1.1 per cent last month and by 2.9 per cent since January.
SSE called on BAA to scrap its "misguided expansion plans" for a second runway, saying it was the seventh month in a row that Stansted had posted a decline. It was now running at an average of 23,000 fewer passengers a week. By contrast, Gatwick showed steady growth, despite the economic downturn.
SSE pointed out that Stansted had lost all three of its transatlantic routes in the past six months and was back to being an airport focused on cheap leisure flights to UK and other European destinations.
Its campaign director Carol Barbone said: "It seems that Stansted's management are so focused on pie-in-the-sky expansion plans that they've taken their eye off the ball and are losing passengers in droves. They would do well to end their obsession with building a white elephant runway that nobody wants."
But a spokesman for BAA Stansted said: "Everybody knows there's a global economic slowdown and it's affecting different markets in different ways. Gatwick has suffered in the past and Heathrow's numbers are fluctuating up and down. We are not unduly worried."
He added that G2 (the second runway proposal) was needed to provide extra capacity in the South East. "We are getting on with the job."
22 June 2008
INTERVIEW WITH BAA PLANNING OFFICER
Are Uttlesford residents reassured? BAA assure them that they are doing all they can to help relieve their future difficulties and sufferings, they now only need 442 hectares of our land to build a second runway!
Planning Resource - 13 June 2008
Everything possible has been done to mitigate the environmental and social impacts arising from the expansion of Stansted Airport, BAA planning chief Roger Pellman tells Vicki Shiel. The stack of planning application documents stands almost 3m high and comprises 70 folders. Roger Pellman has had his work cut out as head of environmental planning on BAA's controversial Generation 2 project at Stansted Airport.
Even its most dedicated opponents might sympathise with the sheer amount of detail - particularly on ecological issues - that Pellman and his team have had to produce at every turn. Having worked on the proposal since its inception in 2004, he believes that BAA has succeeded in reducing many of the negative impacts that ministers anticipated from the development.
"Seasonal hurdles, such as the fact that you can't move birds or bats when they're mating, mean that we have had to go into considerable detail even at a very early stage," he explains. "Then there are the species protected by European law. Newts, bats, badgers, water voles - these are the things that keep me awake at night," he reflects.
Pellman joined BAA's Heathrow Airport team in the mid 1970s. "I was attracted to airport planning not because I had a particular interest in airports at that time but because I've always been interested in the delivery of strategies," he explains. "I'm not much good at devising them myself, but if you hand me one I'm pretty good at delivering it."
He went on to work on the Gatwick Airport masterplan in 1983 before returning to Heathrow in 1987 to manage the Terminal 5 planning application. He was involved from the earliest stages through to its submission in 1993 and the ensuing public inquiry, which lasted for a record 525 days.
He then joined the BAA team that responded to the government's consultation on new airport capacity in the South East. "We published our views and the government took them into account when formulating its policy in the 2003 aviation white paper. So I guess I had a hand in Generation 2 before it even started because we recommended that up to three new runways should be built - one at Gatwick, one at Heathrow and up to two at Stansted."
The white paper outlined the government's support for two new runways in the South East, the first to be built at Stansted and the second at Heathrow. It also stressed that operators should maximise the capacity of existing facilities. A decision is expected imminently on BAA's application to increase throughput on Stansted's single runway.
Asked how seriously opponents' views are taken, Pellman is adamant that he and his team have done all they can to mitigate the negative impact of the development, which includes a new terminal building and associated infrastructure works. "We acknowledge people's concerns. These are important issues and local impacts need to be examined. We do understand the seriousness of what we're doing," he insists.
"The government anticipated the loss of 700ha of land and we have reduced that to 442ha. It predicted the loss of 29 listed buildings and we have reduced that to 13, ten of which we are to rebuild. We have reduced the number of houses that will be lost from more than 100 to 73 and the number of people affected by air noise from 11,000 to 5,000. We have worked very hard and are satisfied that we have done as much as we can," he argues.
The most enjoyable part of the project for Pellman has been working in a large team and seeing how its members interact. In all, he has drawn on advice from 35 planning and environmental consultancies. "I don't think that anyone working with us will have been involved in anything this substantial before. It's much bigger than Terminal 5 or the Olympic Games," he says.
"We were determined that all of the consultants should be involved from the beginning so everybody knew why we came to the decisions that we did. Inevitably the ground noise consultant disagrees with the ecologist, who disagrees with the landscape consultant. It has been very gratifying to see how these people have worked with each other to iron out their differences."
To those who oppose expansion of airports in London and the South East, Pellman is adamant that this stance conflicts with wider objectives for London to be a world city, to remain a leading financial centre, to be racially diverse and to provide a hub at which global companies will choose to locate themselves. "All those things are enabled by having the global connections that airports provide," he claims.
"Once you start to prevent the growth of airports, those objectives become more difficult to achieve and we will lose out to our European competitors," he warns. He points out that airports in Paris, Frankfurt and Amsterdam all have the capability to increase passenger throughput and already operate more runways.
Despite the opposition, it would be an understatement to say that Pellman is confident that Generation 2 will eventually get the green light. "It would be enormously surprising if the application is not approved. The support for what we're doing in the white paper has been repeated by the government at every opportunity since and we have significantly reduced the predicted environmental impacts," he asserts.
"That does not mean that we don't have to work very hard to explain what we're doing to mitigate the local effects that will occur. The process will still have a great deal of value in testing whether we've done our best," he concludes.
OUR COMMENT: Can he seriously believe that these miniscule mitigation measures can ever compensate for the horrors that are to be heaped onto residents daily lives?
22 June 2008
NEWMARKET RACEHORSES 'UNDER THREAT'
FROM STANSTED EXPANSION
Ben Webster, Transport Correspondent - The Times - 10 June 2008
Leading figures in Britain's horse racing industry are threatening to move their animals overseas because of plans for more than 400 aircraft a day to circle over their stud farms. National Air Traffic Services (Nats) is proposing to create a new holding stack near Newmarket, Suffolk, for aircraft queueing to land at Stansted. The stack is one of two being created to cope with a large expansion of the Essex airport.
Stansted handles about 190,000 flights a year at present. BAA, the Spanish-owned company that runs the airport, wants to increase that number initially to 260,000 on the existing runway and then to open a second runway in 2015, raising total capacity to more than half a million flights a year.
Newmarket, at present one of the most tranquil areas in East Anglia, has the largest concentration of stud farms in Europe. The Derby winners of 2006 and 2007, Sir Percy and Authorized, both retired to stud there, and this year's winner, New Approach, is also likely to end up in the area.
BAA has submitted plans to double size of Stansted by 2015. More than 7,000 thoroughbreds are cared for by 2,000 people on stud farms in a few dozen square miles underneath the proposed stack. A study commissioned by the Newmarket Horse Racing and Breeders Group suggested that almost two thirds of the stud farms would either move or curtail investment in the area because of the noise and air pollution created by the stack.
Aircraft would descend in spirals to 7,000ft (2,100m) before breaking out of the holding pattern to make their approach to Stansted. Some would pass over the stud farms as low as 4,000ft. The group says it has been told by Nats that the noise of an aircraft at 7,000ft is similar to that generated by a van passing within 50ft at 40mph. Another 100 aircraft would pass over Newmarket en route to a stack for Luton airport.
The study found that many of the stud farm owners were international businessmen and women with horseracing interests in other countries, to which they could easily move their Newmarket horses. Dalham Hall, the biggest stud farm in the area, employing 250 people, is owned by Sheikh Mohammed Al Maktoum, the ruler of Dubai. He also keeps and breeds racehorses in Ireland, France, the United States, Australia and Japan.
Newmarket's stud farms and racehorse trainers collectively spend more than £100million a year in the area on wages, goods and services. The study said: "Much of this investment is footloose in the sense that it is capable of being invested in a number of locations in the world, Newmarket - and indeed Britain - being merely one of them. A clear consideration in making such investment is the high quality of the environment around Newmarket and the absence of any pollution. It would not take much for owners to choose other training and stud locations and not to invest here."
Alastair Watson, chairman of the Newmarket Stud Farmers Association, said: "We realise that the stacks have to go somewhere but we have a hundred employees for every 1,000 acres and they spend 85 per cent of their time outdoors. Elsewhere in East Anglia there is only one person per 1,000 acres and he's sitting in a tractor and wouldn't hear the aircraft."
Nats claims that the new stacks will result in fewer people overall being exposed to excessive aircraft noise because its guiding principle has been to move flight paths from urban to rural areas. More than 62,000 people live under the two existing stacks shared by Stansted and Luton, compared with 40,000 under the three stacks being proposed to replace them.
But critics of Nats's policy point out that low-flying aircraft will be more noticeable in the countryside because there is less background noise.
A Nats spokesman said that the consultation on the proposals would end on June 19. The new stacks are due to begin in March. He added: "The racing community in Newmarket has made comments and these will be considered after the consultation closes."
22 June 2008
MP ANGRY OVER INCREASED FLIGHTS
Evening Star - 12 June 2008
AIR chiefs were today accused of "dumping noise pollution" on residents by changing flightpaths to send jets over some of the most tranquil areas of Suffolk. MP David Ruffley said air management company NATS should go back to the drawing board and rethink their proposals and demanded a meeting with officials to discuss the situation.
He said the changes - which NATS say are necessary to deal with current congestion in the skies -will see increased air traffic over some of the most peaceful villages. He had met with members of the Save Our Silence action group, who represent villages worried at plans for a holding stack over countryside between Stowmarket and Hadleigh, including residents of Rattlesden, Felsham, Gedding, Drinkstone, Great Finborough and Poy Street Green.
"The clear view of my constituents is that Stansted air traffic from the east should be held over the sea," said Mr Ruffley, the Bury St Edmunds MP.
"They also question why these proposals are being made in advance of a decision on a second runway at Stansted. Not only did SOSAG members emphasise very strongly their criticism of the proposals to hold aircraft at altitudes below 7,000 feet over sparsely-populated rural areas in Mid Suffolk but they were also very critical of the consultation's methodology and the lack of readily available information from NATS."
"I call on NATS to go back to the drawing board and rethink air traffic proposals for our part of Suffolk. They are dumping noise pollution on my constituents, whereas they should be looking at ways to reduce the impact of air traffic over Suffolk, particularly if Stansted air traffic increases significantly in the future."
"NATS do not deny that it is possible to hold air traffic over the North Sea, just that it is all very difficult and would need a complete redesign of the air traffic system. If that's what it takes, then that is what they should do. My constituents pointed out that people don't have to live in the countryside to be affected by the NATS proposals - this is not a 'nimby' protest."
"Many town dwellers visit rural areas to get some peace and quiet. If the tranquillity we currently enjoy in our delightful villages is shattered, tourism and the rural economy will suffer."
NATS, which is carrying out a 17-week consultation into the proposed airspace changes, says the changes are needed to keep the skies safe and manage air traffic effectively, reduce delays and bring in environmental improvements. It wants to introduce continuous descent approaches (CDA) where aircraft stay higher for longer, reducing fuel burn and noise.
22 June 2008
GOVERNMENT SPIN OILS THE WHEELS OF AIRPORT EXPANSION
16 June 2008
The impact of soaring oil prices on the UK economy will significantly reduce future air passenger numbers, bringing into question the need for airport expansion, according to new independent research released by WWF-UK today.
"Expanding the UK's airports means locking the UK into a carbon-intensive future that is incompatible with the Government's climate change targets." Peter Lockley, head of transport policy, WWF-UK
The case for airport expansion, including the third runway at Heathrow, is based on the premise that there will be more air passengers in future than the UK's airports can currently handle. The research reworked the government's air passenger forecasts for 2030, examining the impacts of a more realistic price of oil, the knock-on effect this could have on the UK's gross domestic product and the potential introduction of policies encouraging a switch towards alternatives.
Combined, these factors produce an estimated figure of 350 million air passengers in 2030 - nearly 150 million less than the Government assumes will be taking to the skies and well within the current UK airport capacity of around 425 million passengers per year.
The government's air passenger forecast assumes that oil prices today are only US$60 a barrel and will fall to US$53 by 2012 and remain at that level indefinitely. At present, oil costs US$136 a barrel, with some analysts forecasting prices as high as US$200 in the near future. By doubling the Government's estimate to a conservative assumption of US$106 a barrel in 2030, the impact of the increased oil price on air fares alone would cause an estimated 15% reduction in the growth of air passengers.
"The government's current projections for passenger numbers are pie in the sky, based on estimated oil prices which border on the fantast," said the head of transport policy at WWF-UK, Peter Lockley. "What's more, the government hasn't even examined a scenario where it makes an effort to promote alternatives to flying such as videoconferencing," he added.
The research also examines the economic modelling used by the government specifically to justify the third runway at Heathrow. By applying a few simple and reasonable adjustments to the government's model - raising the projected price of carbon, only counting the benefits to UK passengers rather than non-UK ones and not counting taxes as a benefit - the £5 billion benefit claimed by the government swiftly becomes a £5 billion loss.
"Expanding the UK's airports means locking the UK into a carbon-intensive future that is incompatible with the Government's climate change targets," said Lockley. "If passengers start turning away from planes thanks to high oil prices and better alternatives, or we look a little more closely at the government's calculations behind projected profits, then the economic case for putting added pressure on the climate begins to look extremely shaky," he explained.
WWF-UK calculates that greater use of videoconferencing and alternative methods of travel combined could serve to reduce passenger growth by up to 13%. These figures are backed up by their recent report, Travelling Light, which discovered that 89% of major businesses expect to cut their flights in the future and that a similar number believe videoconferencing is the key way to achieve this.
WWF-UK is currently asking businesses to take the One in Five Challenge, and reduce their flights by 20% within five years, as part of its One Planet Future campaign and strongly urges government agencies and departments to sign up to the campaign and commit to cutting their flights.
22 June 2008
CHEAP TRAVEL: IS THE BUBBLE ABOUT TO BURST?
All the signs suggest that cheap travel is coming to an end. But don't forgo this year's holiday, says Nick Trend: it could be your last chance of a break at a reasonable price.
Nick Trend - Daily Telegraph - 13 June 2008
"You've never had it so good": that was our front-page headline on this section just over a year ago when I was highlighting the incredibly good value to be had by travellers of all types.
Air fares, ferry and rail fares, car-hire costs, even insurance premiums - they were all spectacularly lower than the prices we had been having to pay only a decade earlier. Even foreign exchange rates were looking attractive this time last year: the pound was worth ?1.41 and US$1.92, so most hotels and villas on the Continent were much cheaper than their equivalents in Britain, and the United States offered excellent value for money.
Prices had never been so low in real terms, and travellers had never enjoyed so many opportunities and such variety. For 10 heady years we had got used to air fares that were, in some cases, lower than the cost of travelling to the airport.
Each spring we were offered an ever greater choice of destinations from our local airport. And we had a new lease of independence, becoming enamoured with the internet and the idea that we could save even more money by cutting out the operator and booking direct. But are the good times about to end? Have we been dancing drunkenly on the deck of a Titanic sailing towards an iceberg?
It looks pretty certain that our luck is running out. There are still plenty of cheap deals around at the moment, but this summer could be our last chance to enjoy bargain holidays, before the full impact of soaring oil prices and a weak pound hits the travel industry. So, if you can still afford it, don't scrap your travel plans this year - make the most of them.
The storm clouds have been gathering for the past few months. First, the value of the pound began to plummet. Since this time last year, it has fallen to about ?1.20, which means that, for British travellers, prices in the EU have effectively risen by nearly 20 per cent. The dollar has remained much better value, but there is now another catch.
The cost of oil has suddenly started to have a serious effect on travel costs - especially on fares to a long-haul destination such as the United States. There seem to be new increases every week. Virgin has increased its fuel surcharges three times since May 7. Totals for return flights (including security and insurance charges) are up from £111 (£133 on flights of more than 10 hours) to £161 (£223 if over 10 hours).
Premium-economy and Upper-Class passengers must now pay even more - up to £271 return extra for flights of more than 10 hours in Upper Class. A fortnight ago, British Airways raised its fuel surcharges once again - the latest rise adds another £60 return to the cost of many long-haul flights.
Ferry and cruise companies have been hit, too. Last Friday SpeedFerries raised fares on its Dover-Boulogne service by 50 per cent - from £36 to £54 return, citing a rise in the price of its fuel from 10p to 60p a litre as the reason. And as we went to press Oceania Cruises increased its fuel surcharge to £7 per guest per day for all new reservations from June 16.
But at least these price rises are only imposed on new bookings. If you have already bought your ticket, you won't have to pay more. This is not necessarily the case with package holidays. The number of tour operators planning to impose surcharges this summer is rising steadily. Some 26 members of the Association of British Travel Agents and Tour Operators have already applied to start imposing the charges on customers who have already booked and paid for their holidays.
You may be forced to pay significant amounts of money, or lose your holiday altogether. Under EU rules tour operators are allowed to charge customers up to 10 per cent more for their holiday if costs (of aviation fuel or foreign currency, for example) rise after the holiday is booked. (They may do so as late as 30 days before departure as long as they absorb the first two per cent of the increase.)
Only if the tour operator tries to raise the price by more than 10 per cent are you entitled to cancel your holiday and receive a full refund. Otherwise, under the booking conditions, you can be forced to pay up or lose out.
Other costs have also been rising more stealthily, as travellers have been perceived as easy targets for governments and airports looking to raise guaranteed revenue.
BAA, for example, has been allowed to increase the charges it makes on airlines (which, of course, are passed on to passengers as part of the air fare) at Heathrow by 23.5 per cent since last year. This takes the charge per passenger to £12.80. It will also be allowed to increase its charges by 7.5 per cent above inflation for each of the next four years. BAA defends this by saying that the money is needed for vital investment in the airport infrastructure and the costs of security.
Trailfinders, the flight specialist, reports that an ever-increasing proportion of the fares it sells are made up of taxes and charges. It gave me the example of a current return fare of £385.70 it is offering to New York with British Airways. The air fare itself is just £136, but by the time some 10 compulsory charges have been added on - including £40 of UK air passenger duty, £15.60 of US passenger tax, £19.70 of UK airport charges and £161 of fuel and security surcharges - the final fare the passenger pays has nearly tripled.
The no-frills airlines don't use surcharges in the same way; they prefer to adjust their fares by the hour according to their costs and demand for seats. But in the past year they have begun to make flying much more expensive for anyone who wants to travel with luggage, to be sure of sitting with their family or travelling companions, or who can't check in online.
For example, on a return flight to Marseilles with Ryanair some £45 in taxes and charges is already included in the fare. You will pay another £24 (including airport check-in fee) if you want to check in a bag on both legs, another £8 for priority boarding, and another £6.40 for each passenger if you pay by credit card.
We are suffering not only from increased costs. It looks as though the choice and variety of what has been on offer may be under threat. Some routes have already started to go. Two weeks ago DFDS announced that it would end its Newcastle-Norway ferry service in September, citing high fuel costs and the economic slowdown as key reasons. Then Ryanair announced that, although it intends to continue to expand its routes, it would be grounding 20 aircraft over the quieter winter months, because it was cheaper to keep them unused than in service.
In the United States, which is often a barometer for what will happen over here, Continental Airlines has just announced that it is cutting capacity by 11 per cent, while United Airlines is grounding 100 of its planes.
Ten days ago, Giovanni Bisignani, director-general of IATA (the International Air Transport Association), predicted that the aviation industry would lose US$2.3 billion in the current financial year. He pointed out that, around the world, 24 airlines had gone bust in the past six months, and he expected more to go under. Six of those airlines were British or flew into British aiports. They included the "business-class" carriers MAXJet and Eos, and the Hong Kong-based no-frills airline Oasis.
We have not yet seen any significant routes dropped by no-frills airlines. But they will clearly feel the pinch. Last week, Ryanair claimed that it was the most efficient and best placed to cope with high fuel prices. But it also admitted that, if oil prices stayed high, next year would see average fares rise by about five per cent and the airline would do no better than break even.
So how serious are things likely to get? The last time a major recession hit the travel industry, in 1991, one of the biggest tour operators - Intasun - and the leading budget airline - Air Europe - went out of business. Thousands of passengers were stranded abroad or lost money.
Although the situation today is not comparable, the omens are not good. We may be lucky - perhaps the oil price will fall back, or perhaps the highly competitive and efficient nature of most British airlines will enable all the major operators to survive the crunch. But they will have to look hard at which routes are worth keeping, and which will have to be abandoned.
And one thing is certain - if oil prices stay high, the pound remains weak and the economy stagnates, we will see an end to many of the bargain holidays and much of the cheap travel we have enjoyed over the past decade.
The worst is certainly still to come. To some extent we have so far been insulated from the full impact of rising costs because many travel companies buy fuel and currency well in advance. When airlines and operators have to negotiate new contracts, they will be facing much higher costs. And that can only mean one thing for us. Just as it is hurting now each time you fill up the car, it will hurt even more when you book next year's holiday. So make the most of it in 2008.
22 June 2008
POLLUTION RULES MAY BE SUSPENDED TO ALLOW
BIG EXPANSION AT HEATHROW
Ben Webster, Transport Correspondent - The Times - 16 June 2008
More than 60,000 extra flights will pass low over London each year under a government plan to suspend air pollution limits to allow Heathrow to expand. The two existing runways will be used much more intensively, meaning that people living under flight paths will no longer have half a day's respite from aircraft passing overhead.
The plan will result in an additional 25 million journeys by road to and from the airport each year, causing a sharp increase in air pollution from vehicle exhausts. The worst increases in nitrogen dioxide, which causes respiratory illnesses and premature death, will be along the M4 corridor.
At present, one runway is used for landings and the other for take-offs, with their roles switching at 3pm each day. The Government is proposing to abolish "runway alternation" and replace it with "mixed mode", under which the runways would in effect be treated as separate airports with continual take-offs and landings on each.
The Government is planning to allow the expansion to start in 2010 despite having promised to adhere strictly to European Union limits on air pollution that come into force that year. The 2003 White Paper on air transport stated: "We are committed to meeting these standards, and it is clear that major new airport development could not proceed if there was evidence that this would likely result in breaches of air quality limits."
But ministers are now planning to apply to Brussels for a five-year exemption from the EU limits. The plan is buried in a paragraph on page 88 of the Department for Transport (DfT) report Adding Capacity at Heathrow Airport, which was the subject of a public consultation that closed in February. The report says that Britain may apply for "a further five years from 2010 for compliance with the NO2 limit values, subject to [European] Commission approval". But it fails to set out the consequences for the health of people living around the airport.
Ministers are keen to add capacity as soon as possible at Heathrow, which is already close to its planning limit of 480,000 take-offs and landings a year. They claim that there will be more than £5 billion of economic benefits from allowing the number of flights to rise to 540,000 by 2015 on the existing two runways and up to 702,000 after a new runway opens in 2020.
A delegation of leaders of local authorities that represent more than two million residents around Heathrow will travel to Strasbourg next month to ask the Commission to block the Government's plan by refusing to grant a five-year exemption. Edward Lister, leader of Wandsworth council, said: "The Government has said all along that if it can't meet the new EU air quality targets then expansion cannot go ahead. Now they are trying to move the goalposts. We will be telling Stavros Dimas, the European Environment Commissioner, just what UK ministers are up to. The Government is trying to wriggle out of its air quality commitments so it can wave through yet another expansion at Heathrow."
Darren Johnson, a Green Party member of the London Assembly, said: "Burying this clause deep in the consultation document is a sign that the Government is embarrassed about the way they have neglected the health of Londoners. Applying to the EU for a delay in reaching the air quality legal limits will impact on the health of tens of thousands of people. It goes against the whole spirit of consultation to effectively try to hide that fact from the public."
A DfT spokesman said: "A variety of options on mixed mode were included in the consultation, including the possibility of introducing additional capacity under mixed mode ahead of 2015, and responses are currently being analysed. The department remains committed to meeting its obligations in respect of air quality under the EU directives... these obligations will come into force by 2010, or 2015 if the UK is granted an extended compliance period."
The DfT is considering ways of limiting the increase in air pollution, including the imposition of a lower speed limit or a toll on the M4 near Heathrow.
OUR COMMENT: Surely no Government would deliberately increase the risk of further damaging the health of their citizens? Is the DfT to become the Department for Pollution?
10 June 2008
REVEALED: AIRLINES' £10BN GOVERNMENT FUEL SUBSIDY
Andrew Grice - The Independent - 9 June 2008
The Government has been urged to abolish a £10bn-a-year "hidden subsidy" to the airline industry to bring it into line with hard-pressed motorists struggling with higher petrol prices.
Although the aviation industry claims it is being badly hit by the soaring price of oil, it still enjoys a double boost denied to drivers because it does not pay fuel duty or VAT on the fuel for its planes. New figures suggest this subsidy is worth £9.92bn at current levels of fuel tax.
The proposal will be strongly opposed by airlines, which have already warned that passengers face surcharges of £30 a ticket this summer because the cost of aviation fuel has doubled in the past year.
With hauliers and fishermen protesting that their livelihoods are at risk and motorists feeling the pinch as the economy slows, the Liberal Democrats argue that the airlines should no longer get special treatment.
"This is a massive public subsidy for an industry that is one of the fastest-growing contributors to climate change," said Norman Baker, the party's transport spokesman, whose written Commons questions revealed the scale of the perk. "Ordinary motorists continue to pay fuel tax, so why should aviation continue to be exempt?"
He said it was wrong that drivers had to pay 58p per litre in fuel duty, plus VAT of 17.5 per cent, while the aviation industry only paid air passenger duty of £1bn a year.
Mr Baker called on the Government to push for an international agreement to tax aviation fuel to put the industry on a "level playing field" with other modes of transport. The figures show that the amount of aviation fuel used in the UK has risen by 50 per cent - from 8.45 million tonnes to 12.69 million tonnes since 1997.
The Liberal Democrats' move was welcomed by Friends of the Earth, which is lobbying the Government to beef up its Climate Change Bill ahead of a Commons debate today. Martyn Williams, the group's parliamentary campaigner, said: "Words are not enough - ministers must take firm action to wean us off our fossil fuel dependency and to tackle climate change, improve energy security and stop the country being held hostage to rising fuel prices."
At first glance, extra tax revenues from the airlines might look attractive to the Chancellor, Alistair Darling, as he struggles to balance his books after finding £2.7bn to compensate losers from the abolition of the 10p rate of income tax. However, he is wary about similar calls for a windfall levy on the oil companies, believing that business needs certainty about the tax system so that it can plan ahead. He has already alienated some business leaders over plans to streamline corporation tax and the treatment of foreign residents with non-domicile status.
Imposing higher tax on aviation fuel could be seen as a "green tax" but the public's appetite for paying a price to help the environment appears to be waning as the global credit crunch bites. The Chancellor is already facing a revolt by Labour MPs over his plans to raise retrospectively by £200 a year the vehicle excise duty paid on cars up to seven years old. Critics say drivers of family cars will be hit.
Last September, David Cameron backed the idea of imposing VAT on aviation fuel for domestic flights and a new airline passenger tax linked to the carbon impact of each flight. Although the Tories remain committed to "green taxes", which they would use to cut taxes on families, some Tory insiders say Mr Cameron's enthusiasm for them has cooled because the public has "reached its limits" on tax levels as the economic picture darkens. He will set out his latest thinking on the environment in a speech this week.
The aviation industry is stepping up its campaign for lower taxation by governments, warning that airlines around the world could go bust amid the oil price hike, the twin threat of recession and inflation and lower disposable incomes.
It is pressing the EU to scale down its plans to include aviation in its emissions trading scheme (ETS) to combat climate change, which will be finalised this summer. Peter Hartman, chairman of the Association of European Airlines and chief executive officer of KLM, said: "ETS was designed at a time of $40 [per barrel of] oil. We now have $130 oil ? and it could go higher. ETS was designed at a time of 6 per cent growth. We now have 3 per cent - and it will go lower. Meanwhile, we are becoming more and more energy-efficient."
The International Air Transport Association (IATA) warned that the industry will be forced into red by the fuel crisis. It predicts worldwide losses of $6.1 bn (£3bn) this year if oil remains at its current price. "Airlines are struggling for survival and massive changes are needed," Giovanni Bisignani, IATA's director-general, told its annual meeting in Istanbul last week. "Governments must stop crazy taxation, change the rules of the game and fix the infrastructure. [The] labour [force] must understand that jobs disappear if costs don't come down."
10 June 2008
AIRLINE INDUSTRY TO PLUNGE INTO LOSS
Kevin Done, Aerospace Correspondent in Istanbul - Financial Times - 2 June 2008
Record fuel costs will plunge the global airline industry back into loss this year, after carriers only returned to a net profit in 2007 for the first time in seven years.
Giovanni Bisignani, director general of Iata, the International Air Transport Association, said: "Oil skyrocketing above $130 per barrel has brought us into uncharted territory. Add in the weakening global economy and this is yet another perfect storm." The situation had "changed dramatically in recent weeks," he said, "$130 per barrel oil is reshaping the industry even as we speak."
In the next 12 months the industry could face $99bn of extra costs from oil, and Mr Bisignani said 24 airlines had already collapsed into bankruptcy in the last six months. The latest casualty was Silverjet, the UK all-business class carrier, which fell into administration and ceased flights last week.
"Even more massive changes" were needed to ensure the survival of the industry than occurred in the years after the September 11, 2001 terrorist attacks in the US, which helped to plunge the airline industry into recession, Mr Bisignani told the annual meeting of Iata in Istanbul.
Heathrow 'a disgrace'
Service levels at London Heathrow, Europe's busiest and most congested airport, were a "national embarrassment," Mr Bisignani added.
Iata gave the "worst regulator award" at its annual meeting in Istanbul to the UK Civil Aviation Authority as the economic regulator for Heathrow, Gatwick and Stansted, which are all owned by BAA, a subsidiary of Ferrovial of Spain.
Mr Bisignani said the CAA had allowed charges at Heathrow to be increased by 50 per cent during the last five years and had recently approved increases by 86 per cent during the coming five years. Such rises could only happen in "Monopoly-land," he said.
The spreading impact of the US credit crunch was slowing traffic growth, he said. "After enormous efficiency gains since 2001 there is no fat left and skyrocketing oil prices are changing everything."
Iata forecast the airline industry would plunge from a net profit of $5.6bn last year, the first profit since 2000, to a loss of $2.3bn in 2008. As recently as March Iata was forecasting a profit for the airline industry this year of $4.5bn, based on an average oil price of $86 per barrel.
The latest forecast is based on an average price of $107 per barrel for the benchmark Brent crude oil for the year, a consensus view from 60 experts, which would increase the airline industry?s fuel bill by $40bn to $176bn.
If the oil price stayed for the rest of the year at $135 a barrel, where it has been trading in recent days, the airline industry's global losses were forecast to rise further to $6.1bn. For every dollar increase in the crude oil price, carriers globally faced an increase in costs of $1.6bn.
"The situation is desperate and potentially more destructive than the setbacks the industry had faced in recent years from terrorism, economic slowdown, the outbreak of Sars (severe acute respiratory syndrome) and the war in Iraq," said Mr Bisignani.
The airline industry had improved its fuel efficiency by 19 per cent in the last six years and had reduced non-fuel unit costs by 18 per cent. It remained weak after six years of losses in the last seven and was still $190bn in debt.
"This is an extraordinary crisis with the potential to re-shape the industry with impacts throughout the global economy," said Mr Bisignani, "governments, industry partners and labour must deliver change."
He called on governments to end the present system of 3,500 bilateral treaties that govern international aviation and prevent global consolidation. Iata was planning an Agenda for Freedom Summit later this year aimed at encouraging drastic reforms in the way the industry was regulated.
Airlines should be free "to innovate, compete, grow, become financially healthy or even disappear," he said. Mr Bisignani also warned airline unions that jobs would disappear, unless costs were reduced.
10 June 2008
COST OF FLYING COULD TAKE OFF
AS BIG AIRLINES CONSIDER ADD-ON FEES
Traditional carriers look at budget rivals' price tactic
Soaring fuel costs pile pressure on industry
Dan Milmo in Istanbul - Guardian - 3 June 2008
Major airlines could join their low-cost rivals in charging passengers for baggage check-in and food amid soaring oil prices, a leading industry executive warned yesterday.
The head of one of the world's biggest airline alliances, oneworld, whose members include BA and Qantas, said the group would consider changing membership rules to allow budget airline-style charges.
"If the industry moves to a standard of charging for an apple juice in economy, the alliance will move in that direction," said John McCulloch, oneworld's managing partner. Asked if bag check-in charges are also on the horizon, he added: "Airlines would argue that it's the right way to do it. It's £20 a bag, £10 for a meal. We are going to see much more of that."
Add-on fees for refreshments and stowing bags are a staple of the budget carrier industry, but long-established airlines have refused to levy such charges in case they lose out to competitors.
Echoing the comments of BA boss Willie Walsh last month, McCulloch said fares would also have to rise if carriers were to stay in business. With oil trading at $130 a barrel, the majority of airlines, including BA, are technically unprofitable. BA and Virgin Atlantic have increased fuel surcharges over the past week to try to cover their costs.
"It is unsustainable. Airlines are going to have to find some way of combating this fuel price, whether it's increasing fares or cutting costs, because the business is unsustainable today." He added: "People have to realise that it's going to get more expensive to travel."
A BA spokesman said the airline was committed to being a full-service carrier and had no plans to charge for checking in bags or for food, although it is scaling back expansion plans in the face of high oil prices.
Silverjet, the Luton-based transatlantic carrier, became the latest airline to enter administration because of financial problems last week, joining eight US airlines and two carriers that operated flights from the UK: Nationwide Airlines and Oasis Hong Kong Airlines.
BA, Qantas and Air France-KLM have said in recent weeks that fares will have to increase, but McCulloch warned that consumers might refuse to travel, and plunge carriers into further trouble, if ticket prices rise too far. "Fares have to rise to a realistic level to reflect the fuel price. Whether that can happen without the industry breaking up is the key question."
McCulloch, speaking at the AGM of the International Air Transport Association in Istanbul, added that the 10 oneworld airlines, which include Hong Kong-based Cathay Pacific, Spain's Iberia and the world's largest carrier, American Airlines, would have to cooperate more closely on buying fuel. Fuel accounts for about a third of airline budgets and that proportion is rising, with the price of jet fuel up 50% since January.
McCulloch added that ownership laws, which restrict foreign carriers to 25% of the shares in US airlines and in the EU to 49%, would have to change as the airline industry focuses on mere survival over the next year. Unions would also have to give concessions, he said.
Two major US carriers, United Airlines and Delta, have dropped merger talks because of union concerns, and American Airlines and close rival Continental have also cooled discussions.
10 June 2008
MORE CONCESSIONS TO AVIATION?
Treasury hints at retreat on aviation tax plan
Jean Eaglesham, Chief Political Correspondent - Financial Times - 7 June 2008
The Treasury has signalled its willingness to offer concessions on reforms to aviation tax that have been lambasted by business and long-haul airlines and drawn implicit threats of legal action from the US.
Substantive changes to the proposal to replace air passenger duty with a tax per aircraft would mark a further unravelling of Alistair Darling's pre-Budget report of last autumn. The chancellor has already been forced to stage partial retreats on capital gains tax and the levy on non-domiciled foreign residents in the UK.
"We're the last in a series of tax changes that has gone pear shaped," an airlines industry insider told the Financial Times. A senior Labour MP said: "This is another Treasury mess."
The proposed reforms, due to come into force in November next year, would significantly affect airline passengers and operators, as well as raise more than £500m ($985m) extra a year for the strained Treasury coffers.
Delivery companies such as FedEx and DHL would have to pay the new tax on freight-only flights, in contrast to their exemption from the existing air passenger duty, unless they decide to use other European airports instead and bring the goods into the UK by truck.
Millions of passengers transferring between aircraft in the UK would also be brought within the scope of aviation duty for the first time. The proposed design of the new duty - charging for each flight, rather than charging passengers according to their final destination - means UK passengers could save significant amounts of tax by using non-UK hubs, such as breaking long-haul flights from Britain in Amsterdam.
The US embassy has formally notified the government of its "significant policy and legal" concerns, warning that the proposals appear to breach the 1944 Chicago convention and last year's "open skies" transatlantic agreement.
Business is warning that the changes will cause significant damage to the UK aviation sector, to airport hubs such as Heathrow and to regional airports. The CBI employers? group said the duty was "misconceived" and "likely to be ineffective" as a green tax.
The Treasury signalled on Friday night that it would respond to the outcry over the impact on transit business in this autumn's PBR. "We are aware of people's views around this and, like all consultations, will take those into account in designing the final form of the tax," an official said.
10 June 2008
FIDDLING THE FACTS?
"Labour commited to cutting CO2" ? Ruth Kelly
Nick Lakeman - Bolton News - 5 June 2008
BOLTON West MP, Ruth Kelly, has said the Goverment is committed to cutting green house gases while building bigger airports.
The secretary of state for transport told a House of Commons debate that hitting carbon emission reduction targets was compatible' with its plans to expand Gatwick and London Stansted airports.
Ms Kelly said: "We are championing a European emissions trading scheme whereby any increase in aviation emissions above the base level would have to be matched one for one by a reduction in carbon emissions elsewhere, paid for by the aviation sector."
"In that way, not only do we help to push forward with our climate change objectives, we do so in a way compatible with future economic growth."
Ms Kelly said Britain needed to move from a fuel-intensive economy to one that is low carbon and that climate change was now one of the five overarching goals of transport policy.
OUR COMMENT: Now it's official. Aviation will be even more favoured over the rest of British industry by allowing airlines to increase their carbon emissions ? but someone else will have to reduce theirs to compensate. The surprise is that the rest of industry does not protest. AND, the overall intention is and has to be to cut carbon emissions, not just to break even. Is the idea to burden the less developed countries with so-called off-setting schemes? Avoiding the UK's responsibility for their share of the present excess CO2 situation?
10 June 2008
RYANAIR TO GROUND 10% OF FLEET
News Airlines - 3 June 2008
Budget airline Ryanair said it would ground up to 10% of its fleet this winter to combat soaring airport charges. The carrier - which unveiled a 17% rise in pre-tax profits to 528 million euro (£419m) in the year to March 31 - said it would be more profitable to keep 20 aircraft on the ground at Stansted and Dublin than put them in the air.
Chief executive Michael O'Leary blamed the "unjustified" doubling in landing and handling charges levied by Stansted operator BAA and higher charges at Dublin Airport. He added that the effect of oil price rises - which have nearly doubled to the 130 US dollar a barrel mark over the past year - had been mitigated through bulk buying at cheaper prices.
But Mr O'Leary warned that this year's prospects depended entirely on oil costs - and that Ryanair would break even if prices remained at the 130 US dollar mark for the rest of the year.
Ryanair carried 50.9 million passengers during the past year, 20% more than the previous year.
Mr O'Leary said average fares for the coming year were likely to rise by 5%. During the year to March 31 the airline's average fares, including baggage charges, came in at 44 euro (£35) - down 1% on the year before. Total revenues were 21% up to 2.7 billion euro (£2.1bn).
He blamed higher airport charges on the "abysmal" failure of industry regulators but said his overriding concern was the "irrational" price of oil. He pledged to absorb higher costs even if they led to a short term fall in profits.
Mr O'Leary added: "The airlines who will survive this period of higher oil prices and industry downturn are those with new cheaper fuel efficient aircraft, lower costs, substantial cash balances, low net debt and management who are ready to exploit downturns to drive costs lower and increase efficiency. No airline is better placed in Europe than Ryanair to trade through this downturn."
10 June 2008
STANSTED AIRPORT HITS BACK AT RYANAIR
Sinead Holland - Herts & Essex Observer - 3 June 2008
STANSTED bosses hit back this afternoon (Tuesday, June 3) after cheap flight chief Michael O'Leary revealed he was set to cut Ryanair services from the airport again later in the year.
The budget carrier's controversial boss gave his warning - despite new figures showing more than 5m passengers used his no-frills service for the first time in May. The Irish budget carrier recorded a 22 per cent traffic increase to become the first UK airline to top the total in one month, it was announced today.
At the same time Mr O'Leary confirmed that net profits for the year to March 31, 2008, increased by almost 20 per cent to 480.9m euros (£381m) from 401.4m euros a year before. He said: "Profits are up 20 per cent because the average fares including the baggage charges fell by one per cent last year. We're still lowering the cost of air travel which is why we're growing so rapidly."
However, over the next year he expected high oil prices and low consumer confidence to take their toll on the industry and renewed his call for the break-up of BAA - which operates Stansted as well as Heathrow and Gatwick. He claimed the charges levied at the Essex gateway would make it more profitable for him to keep aircraft on the ground next autumn and winter, rather than fly from Stansted.
A spokesman for the airport said: "These are a fantastic set of financial results for Ryanair and we are delighted to have them here at Stansted. The record profits were achieved during the 12 month period beginning April 2007, exactly the same period during which we ended discounting our airport charges to airlines."
He said the airport's charges were not arbitrary but capped by the CAA and added: "It is common practice for some airlines to suspend services or reduce frequency to various destinations during the winter season where they feel there is insufficient demand - a course of action Ryanair chose last year."
"Given the current softening of global economic conditions and sky high oil prices, this is a business decision Ryanair may take again this winter. We have factored this potential outcome into our latest passenger forecasts. However, it should be noted that just last week, Ryanair announced it will launch a new service to Germany from Stansted this October."
10 June 2008
A WARNING TO STANSTED
International Herald Tribune - 4 June 2008
Last month the European Union issued a new Air Quality Directive, setting standards and target dates for reducing harmful air pollution, starting in 2010. As EU member states implement the directive, European airports will find themselves subjected for the first time to binding, region-wide limits on the emissions that they produce.
With jet fuel costs soaring to record levels, and airlines around the world cutting back on flights and routes, the problem of aviation-produced pollution might appear to have taken a back seat. But in the long term, air travel worldwide is poised to keep on growing, and airports to keep on expanding. More passengers will mean more road traffic to and from airports, and emissions will be aggravated further by ground service equipment and auxiliary plane power, both of which rely on fossil fuels.
In coming years, new runways are under discussion, or have already received the go-ahead for construction, at the largest European airports - London Heathrow, Frankfurt, Amsterdam Schiphol, and Milan Malpensa.
In most cases, the addition of a new runway will increase an airport's traffic by as much as 50 percent and bring with it a consequent rise in road traffic. "This means more planes, cars and trucks," said João Vieira, an analyst with the European Federation for Transport and Environment, a group in Brussels that campaigns for sustainable transport.
While airports conduct detailed environmental assessments before embarking on expansions, they have not, so far, been penalized for failing to deliver on promises to keep emissions in check. "New construction should have an environmental impact assessment, and if air quality levels aren't met, you can't expand," Vieira said.
While aircraft emissions are under consideration for inclusion in the EU emissions trading system, no such system covers airport-related emissions from ground vehicles. To make matters worse, hub airports experience peak arrival and departure periods of up to three hours, as often as twice or three times daily, with levels of noise and air pollution that are significantly higher during those periods, Vieira said.
Large airports, which in many ways resemble small cities, generate their own commuter traffic as employees travel to and from work, mostly by car.
Heathrow Airport, for example, employs around 50,000 people.
For the worst air quality in Europe, the runner up after major urban areas is the vicinity around the largest airports, including Heathrow, Frankfurt, Paris Orly and Paris Charles de Gaulle, said Tim Johnson of the Aviation Environment Federation, a British environmental pressure group.
Following the path taken in 2003 by the British government and BAA, the owner of Heathrow, to reconsider the environmental impact of a planned major expansion of the airport, President Nicolas Sarkozy of France announced a year ago the creation of a sustainable development charter for Charles de Gaulle airport. The charter, to be published in September following hearings with local communities, is aimed at improving the quality of life for neighboring residents and businesses, including curbing noise and road traffic and improving air quality.
Until recently, most local protests against European airports have focused on noise pollution more than air pollution. But that may be changing, said Robert O'Meara, a spokesman for Airports Council International Europe, an association of airport operators. Protests, sometimes virulent, last August against the increased noise and air pollution that would result from the expansion and the increased air traffic that would use a proposed new runway.
To date, there has been only one peer-reviewed European study of the public health impact of large airport-generated pollution. Commissioned by the Dutch Ministers of Health, Transport and the Environment in 1999, the report analyzed the likely impact within a roughly 10-kilometer, or six-mile, radius from the planned Terminal 5 at Heathrow and the new Berlin Brandenberg International Airport - planned to replace three existing fields
- as well as the actual impact of Munich International Airport, opened in 1992.
An analysis in the Dutch report of epidemiological studies carried out in the vicinity of airports showed a correlation between airport-related pollution levels and death rates, as well as rates of hospital admissions for respiratory and cardiovascular illnesses.
The Dutch report also highlighted studies indicating a link between living in a polluted area like the neighborhood of a major metropolitan airport and respiratory diseases, like bronchitis, in children. Several studies showed an association between long-term exposure to ozone and deaths from lung cancer.
While some European airports, including Frankfurt, Schiphol and Charles de Gaulle, have adopted environmental plans - in some cases starting as early as the 1970s - these plans have only been voluntary.
Under the new directive, however, EU member states are required to submit noise maps and noise abatement action plans. As of last month, 16 member states had submitted noise maps and anti-noise strategies. Data were still lacking for 11 member states and 41 airports, said a press officer for the European Commission's environment directorate.
Most environmental campaign groups expect some member states to seek derogations from the directive's targets, which are likely to be granted if the states provide detailed plans showing that they have made serious attempts to curb noise and air pollution.
European airports, meanwhile, are starting to grapple with the issue of emissions on an industrywide basis, as opposed to individual initiatives.
The European chapter of Airports Council International is drafting a voluntary carbon protocol to map, reduce, avoid and neutralize carbon emissions, O'Meara said. Adherence to the protocol would be externally audited by an environmental group, which would deliver an evaluation of pan-European efforts, he said.
"European airports are facing ever-increasing environmental pressure," said Olivier Jankovec, director general of ACI Europe. "The decades-old environmental approach of airports proactively tackling environmental responsibility at local level is no longer enough in the context of climate change."
Environmental groups say that airports must tackle air pollution from ground activities, and provide more incentives for travelers to use public transport to and from airports.
"Airports are ripe for greenhouse gas emissions reduction if they do an inventory and come up with strategies to reduce emissions from ground-level ozone, nitrous oxide, sulfur oxides and noise," said Deron Lovaas, a transport industry analyst with the Natural Resources Defense Council in Washington. "As the globe grapples with climate change, we will have to deal with this issue."
Among the priorities for Lovaas: More and better intercity rail services; energy sub-metering for airport tenants; replacing old boilers; hybrid electric airport shuttles; and energy-efficient lighting.
Johnson, of the Aviation Environment Federation, has his own list of preferred solutions: A congestion charge for Heathrow; nitrogen oxide scrubbers in road tunnels; and carpool systems for airport employees.
Pollution-fighting measures already installed at some European airports include carbon dioxide-absorbing green roofs on buildings at Schiphol, Frankfurt and Zurich. Some airports are also replacing diesel-powered grnatural gas or electricity. Few have gone as far, yet, as Arlanda, near Stockholm, one of a select group of carbon-neutral airports.
Constrained by a requirement in its operating license not to build a single new parking space, Arlanda offers priority parking spaces close to the terminal for "clean" cars. A third of its taxi fleet is made up of green-fueled "eco-taxis," and the airport plans to convert its entire bus fleet to run exclusively on biofuel from locally produced rapeseed.
Airports are also cutting emissions by replacing fossil-fuel powered power generation. Some airports are collecting organic waste from their activities and using the biomass to produce electricity. At Paris Orly, a $17 million project is under way to tap into a lake of water beneath the airport to produce geothermal power by 2011. The airport says this could cut CO2 from its power generators to 7,000 tons a year from 20,000 tons. Frankfurt airport is studying a similar plan.
Still, carbon emissions from airport operations are responsible for only about 5 percent of total aviation emissions, ACI Europe says.
At Frankfurt airport, which received approval from the regional Hesse government last year to build a third terminal, the airport has agreed to promote alternative modes of transport, finance noise insulation programs, increase charges for night flights, use low-noise approach and departure procedures for night flights and put in place a voluntary purchase program to help local residents who wish to move away.
While the airport has obtained a permit to go ahead with construction, which could start next year, the airport authorities are waiting for the resolution of a number of lawsuits that are pending in the state administrative court of Hesse against the planned expansion.
As airports move to clean up their environments, their biggest challenge will be managing ground transportation, which produces 40 percent of airport-related emissions, ACI Europe says. "It's extremely difficult," Johnson, of the Aviation Environment Foundation, said. "Encouraging behavioral change is the real challenge."
"Airports have not looked at this seriously," said Brian Siu, a transport analyst with the Natural Resources Defense Council, an international environmental advocacy group based in New York. "Most have not even inventoried, let alone come up with a strategy to reduce their carbon footprint."
OUR COMMENT: The application for a second runway at Stansted, showed (as did the assessment carried out for the application to increase in the present runway traffic - the Ministers' decision is still awaited) that the pollution levels from the airport's activities experienced in part of the ancient National Nature Reserve and SSSI Hatfield Forest are sufficient to cause damage to the Forest's ecology, notably to the trees, many of which are several hundreds of years old. These trees would be protected by this same Directive except for the fact that there is a legal argument as to whether the presence of the M11 motorway within 5 Kms of the Forest removes this protection. There are also questions as yet unanswered on community exposure to increased airport road traffic passing through residential districts.
Airports, Stansted included, as they expand, increasingly pollute the countryside and the communities living around them. There is a point when such pollution, noise and air, becomes either dangerous to health, or intolerable to the quality of life, or both, and expansion should cease before this point has been reached. Stansted has already reached that point and should not be allowed to grow further. Heathrow reached it years ago!
2 June 2008
THE END OF THE OIL ERA?
For all the anger around the world, the era of cheap fuel has ended
Leader - Independent - 25 May 2008
Gordon Brown this week described the present economic crisis as the third great "oil shock" of recent decades. In fact, there are important differences between the present situation and the energy shocks of the 1970s. The cause of the high price of oil in that unhappy era was Middle Eastern producers cutting back supply for political reasons; the fundamental reason for soaring prices today is a surge in demand from the rapidly growing economies of Asia. Yet the Prime Minister was justified in drawing a comparison with regard to the political ramifications.
This has been a week of fuel protests across Europe. Fishermen from France, Portugal, Belgium, Italy and Spain have gone on strike, some blockading ports. Hauliers in Britain have clogged London with their vehicles. Dutch lorry drivers and French farmers have staged similar demonstrations. In America, there have even been bizarre cases of thieves stealing chip fat for power. There have been political fuel protests too. The leader of the Scottish executive, Alex Salmond, has chosen the opportunity to pick a fight with Westminster over the distribution of the proceeds from the UK's North Sea oil fields. All these events have a common cause: the fact that oil is now trading on international markets at around $130 a barrel and consumers are feeling the pinch. The political response has not been encouraging so far. The French President Nicolas Sarkozy has proposed a Europe-wide cap on fuel VAT. Labour MPs, desperate to hang on to their seats beyond the next election, are demanding a suspension of the planned 2p rise in fuel duty and the new, more environmentally progressive, vehicle excise duties.
And our Government, despite Mr Brown's grasp of the scale of the problem, has resorted to impotent posturing: demanding that Opec, the oil-producing cartel, increase production and handing out permits for more oil drilling in Britain's inexorably declining North Sea fields. Meanwhile, the main thrust of yesterday's "fuel poverty" alleviation proposals was to continue subsidising home heating.
Subsidies and tax cuts will only put off the pain that needs to be endured if we are to reconfigure our economies to run on renewable energy. Governments around the world ought to be explaining to their citizens that the era of cheap fuel is over. The present spike might (indeed probably will) subside, but global demand will not fall back significantly, nor will pressures on supply. Put simply, the world's oil is running low just as more countries desire it.
This means we need to begin the long overdue task of breaking our reliance on the power source of fossil fuels. Governments and businesses need to invest heavily in sustainable energy sources, such as wind turbines, solar and wave power. And there must be a concerted effort from all of us to conserve energy. The transition must be carefully and sensitively managed, of course. In terms of domestic heating costs, this means governments (especially those in colder nations) heavily subsidising home insulation, energy conservation and micro-generation schemes. And some developing world governments with high food prices (one of the consequences of higher energy costs) will need help from richer countries to ensure that their people do not starve.
But the very thing governments should not be doing is bowing to popular pressure to interfere in the market to make energy less expensive. The oil shocks of the 1970s were followed by three decades of cheap oil and gas. The energy conservation and diversification projects established in those years were rapidly discarded. The economics are radically different this time. Our response must be radically different too.
Sean O'Grady: UK oil profits are largely an illusion - Saturday, 31 May 2008
In theory, it would be all too easy for the Chancellor to postpone the 2p increase in fuel duty. This year, the Institute for Fiscal Studies revealed, the Treasury will receive a windfall of about £1bn from the increase in the price of oil and higher tax revenues from the North Sea. Next year the bonus will be £1.25bn. Some economists put the annual boost to the public finances as high as $9bn (£4.5bn), depending on the oil price.
By contrast, the cost of postponing October's planned increase in duty on petrol and diesel is a mere £550m. In principle, Alistair Darling could also help hard-pressed families by putting off the controversial increase in vehicle excise duty on older cars. The cost to the Exchequer of dropping the increase for older cars would be £465m this year, rising to £735m in 2010-11. Indeed, on the most optimistic estimates of the North Sea windfall, Mr Darling could go on to end child poverty, lower stamp duty for first-time buyers, raise the winter fuel allowance and announce all sorts of other voter-friendly reforms.
In his Budget in March, the Chancellor's estimates for revenues from the North Sea were based on the consensus view that the average price of oil over the next year would be $83.80 a barrel. Since then the price has touched $135, and independent observers forecast that the average price of oil over 2008-09 will be $103 a barrel. Tax revenues should increase commensurately in the UK's petrol-economy.
But Britain is not Saudi Arabia, and the North Sea oil tax windfall is largely illusory. Every reduction of 1 per cent in the national income pushes public borrowing higher by some £10bn, dwarfing any windfall from the North Sea. A full-blown recession, which is unlikely but possible, would push public borrowing over £100bn per annum, compared to £43bn now, and shred the Government's fiscal framework.
Should the price of a barrel of oil stay where it is or, still worse, reach the $200 a barrel level predicted recently by the president of Opec, the effects on the UK as a whole will be devastating. As in the oil shock of the 1970s, spending power is being sucked out of the economy. Stagnating output, thanks also to the credit crunch, and higher inflation because of the boom in food and commodity prices, are combining to squeeze wages, household incomes, profits and, ultimately, government revenues. The transport, distribution and retail sectors are being especially badly affected by inflation in fuel costs, with companies such as British Airways feeling the pain most severely.
There is scarcely a corner of the economy that will not be affected by the quadrupling in oil prices since 2004. Lower growth means lower tax revenues and an extra burden on the public finances. They were badly stressed even before the strain from the acquisition of Northern Rock and the £2.7bn compensation package for the abolition of the 10p rate of tax. The Government failed to raise taxes and rein in spending sufficiently during the boom, and is now badly exposed to exogenous shocks such as the oil-price hike and the credit crunch. Or, to use the vernacular, Gordon Brown is skint.
2 June 2008
FSA CHIEF HEATS FUEL DEBATE
Fiona Harvey and Jean Eaglesham - Financial Times - 31 May 2008
Higher energy prices are a "legitimate" way to cut greenhouse gas emissions, Gordon Brown's chief adviser on climate change said yesterday, even as the government faces mounting pressure from MPs to ease fuel taxes.
Adair Turner, the chairman of the government's climate change committee and new head of the Financial Services Authority, told the Financial Times that, as a matter of principle, "everyone accepts that putting a price on carbon is a crucial instrument" to cut emissions. "That will put up the price of energy and there is no way round that. We should not deny that is what these policies do," he said.
Lord Turner's comments underline the growing conflict between environmental policies - which rely on increasing the cost of energy to encourage people to cut their emissions - and the government's need to respond to widespread concerns over the effects of high energy prices. The timing of Lord Turner's intervention could hardly be worse for Mr Brown. As Labour yesterday suffered its worst poll rating since records began in 1943, the prime minister remained under intense pressure over his handling of the fuel crisis.
Mr Brown this week unveiled a flurry of measures including state support to ease fuel poverty, signals of a U-turn on motoring taxes and a minor boost to North Sea oil production. He highlighted the impact on families of "the cost of filling up at the petrol station and in the rise in gas and electricity bills". Though he refused directly to criticise Gordon Brown, Lord Turner said the emphasis should be on encouraging people to cut their fuel use, rather than easing price pressures: "There are huge opportunities for energy efficiency."
He added: "If you are worried about the impact on low-income groups of fuel prices, the response should be to intensify support for them to improve their energy efficiency, rather than say you have to give up on climate change objectives."
Lord Turner will wield the greatest influence of any official over the government's climate policies for the next six months as he crafts a strategy for emissions reductions for the next five years and beyond. After that, he will give up his climate change responsibilities to focus on the FSA.
The Tories have latched on to fuel prices as an electorally potent issue, which played well in the Crewe by-election victory. Alan Duncan, shadow business secretary, accused the government of having "desperately tried to make it look as if they're doing something about energy prices. In fact they're not."
2 June 2008
ENVIRONMENTALIST STICKS TO GUNS
Fiona Harvey and Jean Eaglesham - Financial Times - 31 May 2008
At the end of a week in which the political impact of rising energy costs has been brought home to the prime minister, Adair Turner's robust defence of high fuel prices will not have been welcome in Downing Street.
Lord Turner, the government's environment supremo, in effect threw down the gauntlet to Gordon Brown by making it clear that he was determined to hold the government to its environmental commitments despite the difficult backdrop.
The Europe-wide greenhouse gas emissions trading scheme, which has already increased electricity prices, would lead to an increasing rise in prices, he said. He went on: "As the system [of emissions trading] tightens, they [energy prices] will go up higher. The [system] will have to tighten further, and it is quite legitimate as part of a totally rational climate change policy."
While calling for help for people on low incomes, he said the government should press ahead with policies such as emissions trading. "Recession is the last argument for loosening [such policies] as recession could [have the effect] of bringing emissions down," he added.
The government will soon release details of how it will conduct the first auctions of carbon permits under the emissions trading scheme. Electricity generators will be forced to buy permits to emit carbon dioxide, instead of receiving them free as they did from 2005 to last year.
Lord Turner conceded that auctioning would affect prices "marginally" in the next few years and "increasingly" thereafter. "This is ultimately going to show up in higher prices for goods, most obviously higher energy prices."
Auctioning permits will raise several billions for the Treasury in the next four years - perhaps £4bn to £5bn a year, according to Paul Klemperer, professor of economics at Oxford.
The CBI and some environmental groups have called for the revenues to be devoted to environmental projects. But yesterday Lord Turner told the FT: "I do not accept that it [the auction revenue] should all be hypothecated." He said: "It is legitimate to say some should be used to reduce tax elsewhere in the economy." He pointed particularly to low-income groups, which would suffer most from rising energy prices.
Lord Turner's committee must produce, by December, a report on how far Britain should aim to cut its emissions and the role to be played by business. The signs are he will ignore industry voices saying the government should lower energy prices, and politicians who want to reduce emphasis on the environment while the economy slows down.
2 June 2008
THE END OF THE BUDGET AIRLINE?
Dan Milmo in Houston - The Guardian - 23 May 2008
The list of bankrupt airlines is growing by the week, but the biggest casualty of the oil squeeze in the airline industry could be the cheap fare and the holiday plans of a generation weaned on affordable air travel. A decade of low ticket prices has fuelled the Tallinn stag do and made Ryanair an unlikely linchpin in the market for continental second homes. It has also led to a 200% growth in UK regional airports. But airline executives warn that fares have to rise.
This raises serious questions over the business models of two of the most financially robust carriers in the world: Ryanair and easyJet. The dominant players in the European budget airline market rely on low fares to pack their aircraft, wringing profits out of passengers by charging for add-ons such as luggage check-in and hotel bookings.
British Airways, Air France-KLM and Australia's Qantas are hoping to trade their way out of trouble by raising fares, but that approach is anathema to Ryanair and easyJet. According to analysts at the investment bank Credit Suisse, they have to take action.
"Without the benefit of fuel hedging, and in the absence of mitigating action by management teams, we do not believe that any airline can be profitable in the medium term ? not even easyJet and Ryanair," said Credit Suisse, acknowledging that Ryanair will slip into a loss if oil trades at $140 a barrel. Even Michael O'Leary, the combative chief executive of the Irish carrier, was forced this week to concede that the oil price was "really hurting".
EasyJet admits fares will have to rise, but says it will still be cheaper than competitors. "In the long term no industry can exist if it doesn't cover its costs. However, that cost is very different for different airlines and it is incumbent now on all airlines to look at all areas of their costs base to see where other costs can be axed to keep fares low," said Toby Nicol, easyJet's director of communications.
Some analysts are concerned that budget carriers will suffer because even if their fares remain comparatively low ? Ryanair and easyJet have cost bases far leaner than those of BA or Air France-KLM ? they will still be too expensive for consumers living in a parlous economic environment. So far, neither carrier is reporting a decline in demand, but the doubt remains that leisure flying will become an expendable luxury.
Willie Walsh, chief executive of BA, said this week that the cheap flights era was coming to an end, with bargains such as the £39 lead-in fare to disappear. EasyJet, waiting for rivals to go bust so it can inch up fares, believes it can keep prices at an alluring level.
"EasyJet's average fare last year was £43 one way, before government tax, so the era of the £39 fare is actually still very much alive and well. BA may no longer be in a position to offer such low fares but easyJet still is," said Nicol.
At a lunch in Texas this week, Walsh congratulated oil industry executives on their recent good fortune, and the sarcasm was palpable. BA and carriers around the world are facing extinction due to soaring fuel costs, while oil companies reap the benefits from prices of more than $130 a barrel.
BA is one of the few airlines strong enough to survive, but Walsh made clear on a visit to Houston, Texas, the global energy capital, that passengers will have to share the pain. "We are going to see fewer airlines out there. The [fare] pricing model will change to reflect the reality of industry costs," he said, warning that higher fares were inevitable. BA is expected to raise fares by at least 4% over the next year, say analysts.
Fuel accounts for about a third of airline budgets and the huge rise in the global oil price has floored an industry that had barely recovered from the terrorist attacks on September 11 2001. Having slashed their cost bases to a profitable level, the recent fuel increases have put many airlines under water again.
The boss of Air France-KLM warned this week that the structure of the industry will change "profoundly" over the next 12 months as the oil price bites. Airlines are already being picked off from the lower rungs of the industry. Over the past six months, four carriers operating UK flights have collapsed: business class airlines Eos and Maxjet, Oasis Hong Kong Airlines, and South Africa-based Nationwide Airlines. Even the established carrier BMI reported a 50% fall in profits to £15.5m yesterday, while Silverjet's shares were suspended amid funding problems.
These problems and the collapse of a further three US carriers were due mainly to the rocketing cost of fuel. Brian Pearce, chief economist at the International Air Transport Association, the global airline body, believes many carriers are too weak to cope.
"Airlines have had two years of profits and decent cash flow but normally, as was the case in the 1990s, they have four years of good trading when the industry is at the peak of its cycle. That allows airlines to protect their balance sheets. It is looking much more fragile this time."
Although BA last week celebrated record pre-tax profits of £883m, it warned analysts it might struggle to break even over the next two years. With £1.8bn cash and a relatively low debt, it hopes to be better placed than others to ride out the storm. Nevertheless, every $1 rise in the oil price knocks £16m off its profits. If oil stays at more than $125 a barrel, its operating profit will be wiped out. EasyJet is in a similar position, with Ryanair not far behind.
Compounding the problem, consumers are having to spend more on petrol and domestic fuel, making them less able to afford higher airline fares.
"Since we have seen this 50% increase in jet fuel, the US economy has collapsed around our ears and global passenger revenues have slowed down sharply," said Pearce, pointing to a 1% fall in business passengers for all airlines in March. Fuel hedging, whereby airlines buy fuel in advance at a fixed price, is also providing diminishing shelter. BA has bought about two-thirds of its fuel at $86 a barrel until next March, but it has little cover thereafter.
The best hope is that oil is in the grip of a speculative boom. Walsh says US oil consumption fell 7% in February, equivalent to a 2% slump in global demand, but the oil price went up.
But every cloud has a silver lining: the oil boom is turning BA's Heathrow-Houston route into a very popular one.
OUR COMMENT: More heads buried in the sand?
2 June 2008
EU BACKS EARLY START FOR AIRLINE CARBON TRADING
David Gow in Brussels - The Guardian - 28 May 2008
MEPs threw down the gauntlet to struggling airlines yesterday by voting overwhelmingly to include aviation in Europe's emissions trading scheme (ETS) a year earlier than planned.
The European parliament's environment committee said airlines should be covered by the ETS from 2011 rather than 2012 as proposed by the European commission and the 27 national governments.
The MEPs pressed the EU to force airlines to bid for at least 25% of pollution permits and to set the cap on CO2 emissions at 90% of the levels between 2004 and 2006 rather than 100%, with the cap lowered in subsequent years from 2013.
The vote comes as airlines are suffering from rising fuel prices, forcing US carriers to cut flights and axe jobs and many others to impose surcharges on passengers. It also coincided with displays of alternative, "green" fuels at the Berlin air show.
Caroline Lucas, a British Green MEP, said the vote demonstrated determination to get tough with the aviation sector as a factor in global warming. She accused national governments, including Britain, of being "shamefully keen" to water down the commission's proposals to auction the permits in an effort to prevent companies profiting from the free permits.
Britain wanted to limit auctioning of permits to 10%, for example. Greens wanted 100% auctioning but said the 25% limit proposed for the first two years of the scheme would be increased.
Peter Liese, a German Christian Democrat who drew up the committee's proposals, said the plan would cost passengers up to ?10 (£8) extra on intra-EU flights and ?40 more on transatlantic routes.
2 June 2008
TECHNOLOGY WILL NOT SOLVE
AVIATION'S EMISSION PROBLEMS
Aircraft improvements "insignificant until 2045"
ENDS Europe DAILY 2551 - 28 May 2008
Improvements in aircraft efficiency will not dramatically affect the
all-round environmental performance of the German air fleet until
after 2045, according to a new study for the German environment
"All industry efforts to reduce emissions are welcome, but they have
to be strengthened," German junior environment minister Michael
The study analyses aircraft industry goals to halve aircraft fuel
consumption and noise emissions and cut nitrogen dioxide (NO2)
emissions by 80 per cent, all by 2020. It concludes that although
more efficient engine features are now available, improvements beyond
10 per cent are not in sight.
Fuel efficiency goals cannot be achieved simultaneously with
improvements in NO2 and aircraft noise emissions, due to weight and
engine efficiency conflicts, it says. New, more efficient planes now
going into service would not be a major part of fleets until 2017,
2 June 2008
SHOCK AS AIRLINE AXES STANSTED US FLIGHTS
Annie Davidson - Eadt Online - 29 May 2008
A SHOCK decision by a major international airline to scrap its transatlantic service from Stansted Airport has led to renewed calls for a review of expansion plans at the site.
American Airlines announced yesterday it would no longer be operating its Stansted to New York flights as of July 2 blaming high fuel prices and the poor economy.
Stansted Airport's strategy and solutions director, Nick Barton, said he was "disappointed" by the announcement which came just seven months after the service was launched but remained confident it could develop long haul operations at the airport in the future.
Airport owners BAA want to build a second runway at Stansted which could see homes and businesses demolished in nearby villages to make room for the development.
However, Carol Barbone, spokeswoman for Stop Stansted Expansion campaign said the announcement was a "significant blow" to BAA's aspirations for the development of Stansted Airport. "It comes at a time of six consecutive months of falling passenger numbers with no appetite for the scale of expansion BAA have clearly being hoping for because of the economic situation and oil prices."
She added BAA would be "foolhardy" not to review the expansion plans in the light of the announcement.
And Lord Hanningfield, leader of Essex County Council and a member of the CO2 Group (councils opposed to 2nd runway), echoed her view. He said: "There is now a real need for a frank discussion over the consequences of expanding the infrastructure for air travel as the government is wont to do."
American Airlines said the decision was among the first of a number of reductions to its flight schedules but it would continue to provide its full flight schedule between Heathrow and New York.
Mr Barton said: "We're obviously disappointed by today's announcement from American Airlines that it plans to cease its Stansted operations in July. Today's decision is reflective of the global situation, especially relating to rising oil prices and the current economic environment, and is part of a number of cutbacks being made by American Airlines across its domestic and international network."
"We continue to work closely with airlines keen to commence services from Stansted and with those already here looking to further develop their existing European networks. Let there be no mistake, we remain confident in the prospects for the development of long-haul operations at Stansted."
2 June 2008
SILVERJET SUSPENDS OPERATIONS
Financial Times - 28 May 2008
Silverjet, on Friday became the latest airline to cease operations after the all-business class carrier failed to secure emergency funds. The carrier, which operated from London's Luton Airport to New York and Dubai, said it continued to be in talks with potential investors but was yet to conclude talks to its satisfaction.
Silverjet has been is battling for survival in the face of the steep rise in fuel costs and mounting losses, and its two closest rivals Maxjet Airways and Eos Airlines of the US have collapsed into bankruptcy.
The airline, which is listed on London's alternative investment market, last week asked for its shares to be suspended after funding from Viceroy Holdings, a Middle East and US based fund, failed to materialise.
It was floated in May 2006 at 112p. The shares climbed to a peak of 209p in March last year, six weeks after flying operations began, but have since collapsed and were suspended last week at 13p. The last service of Silverjet is flight Y7254 from New York, which is due to land at Luton at 3pm on Friday.
Silverjet said a further announcement would be made soon. It advised customers to seek ticket refunds from the point of purchase, such as travel agents or credit card companies.
The Civil Aviation Authority, the UK regulator, said it estimated that 7,000 UK and 2,500 non-UK customers of the airline are affected.
In a statementon Silverjet's website, Lawrence Hunt, the airline's chief executive, said: "When our inaugural flight took off in January 2007, we pledged to change the face of air travel. Your appreciation of our unique values and your belief in our product has allowed us to achieve this."
"Your belief in us was shared by our investors ? but regrettably, due to unforeseen circumstances, they were unable to unlock the finance that we needed. As a result, we are very sad to announce that from 30 May 2008, we will cease operations and we are no longer able to honour flight reservations."
He added: "We are working actively with new investors who are prepared to inject new funds so we can recommence operations."
2 June 2008
CAA JOINS GROWING CHORUS CALLING FOR BAA BREAK-UP
David Robertson - Times Online - 23 May 2008
The Civil Aviation Authority (CAA), the top aviation regulator in the UK, said today that it wants BAA, the airports operator, to be broken up.
The CAA joins the Competition Commission, Office of Fair Trading and all the major airlines operating in calling for BAA to give up control of Heathrow, Gatwick and Stansted airports - London's three main airports.
The Competition Commission said last month in an "emerging thinking" report on BAA's control of London's airports that the monopoly was anti-competitive.
The CAA responded to that report today stating that common ownership of the UK's busiest airports was "likely to prevent, restrict and/or distort competition".
The Competition Commission is expected to deliver its final verdict on BAA's monopoly later this year, which could force the company to sell Gatwick and/or Stansted and also Glasgow.
Dr Harry Bush, group director of economic regulation at the CAA, said: "BAA enjoys a very strong market position in the UK airport market, owning a number of neighbouring airports that to varying degrees would otherwise be expected to act as rivals and compete for airlines and passengers."
"In the absence of sufficient competition in London, greater reliance has been placed on regulators to decide upon the airports? pricing and to guide the airports? investments in capacity and service quality," he said.
2 June 2008
BAA TO SHOW FINANCING PROGRESS
OR RISK RATING DOWNGRADE TO JUNK
Angela Jameson - Times Online - 22 May 2008
BAA, the airports operator, was under increased pressure today to refinance debts after rating agency Moody's threatened to downgrade the group to junk status.
Moody's last night confirmed the Baa2 rating for BAA and said that it remained on review for possible downgrade to sub-investment grade, pending completion of the refinancing. Ten days ago, BAA's shareholders were forced to pump an emergency £400 million into the airport operator after the group hit problems refinancing part of £10 billion of debts.
In a statement to the stock market, the company detailed the hurdles that it had still to overcome to achieve the refinancing. BAA wants to transfer its London airports into a ring-fenced structure, in which the assets would be rated separately from the rest of the group.
However, Moody's gave warning that the next two to three weeks were critical for the refinancing. "Failure to secure adequate commitments from banks within this period could cause the transaction timetable to slip materially and, in a worst case, could reflect a difficulty in bringing it to fruition."
"While Moody's would expect BAA to successfully source the required ratings and bank commitments, failure to demonstrate progress towards the expected timetable within the next few weeks could exert pressure on the ratings: a downgrade into speculative grade is possible if Moody's concludes that progress is insufficient to indicate that a financial close of the ring-fenced financing around summer 2008 is achievable," Moody's said.
The ratings were initially placed on review for downgrade on April 10, 2006, following the announcement that Airport Development and Investment, the vehicle set up to buy BAA by Spanish construction group Ferrovial, had made a formal debt-financed cash offer for BAA.
Moody's went on to say that, in its view, BAA has sufficient cash and facilities to see it through to early 2009. However, it will need additional facilities, either bank finance or equity, to ensure that it can meet its cash needs throughout next year.
BAA said that it had not yet finalised aspects of its refinancing plans nor has it managed to convince all its lending banks to transfer £4.7 billion of bonds into the new ring-fenced funding structure. It also said that it had not yet begun negotiations with its bondholders, but planned to do so through a special committee set up by the Association of British Insurers.
The airport group gave warning that the credit market turmoil caused by the global credit crunch may prevent it from completing its refinancing, although it was confident it would do so by the end of the third quarter.
2 June 2008
BAA PLUNGES INTO RED ON AIRPORT SECURITY COSTS
Robert Lindsay - Times Online - 28 May 2008
BAA, the owner of Heathrow, Gatwick and Stansted airports, revealed that rising costs for hiring security staff and maintenance had pushed it into a loss in the first quarter of the year, despite booming passenger numbers.
The airport operator, owned by Spanish construction group Ferrovial, also wrote down the value of its properties at Heathrow, Gatwick and Stansted by £97 million. As a result, profits of £89 million in the first quarter last year turned into a £62 million loss in the three months to the end of March this year. This was despite growth in the number of passengers at the UK airports of 0.9 per cent to 32.3 million.
Colin Matthews, chief executive, said: "Our operating profit was clearly affected by higher security and maintenance costs, reflecting the importance we place on delivering a safe and convenient service to passengers, through higher standards and better facilities."
He said the company hired an extra 2,200 security staff mostly in the second half of last year to cut queues and implement tighter security measures, as part of regulatory requirements.
There were also exceptional costs of £20 million at Heathrow Terminals 1 and 2 where British Airways is moving out and £34 million to prepare the new Terminal 5 for its disastrous opening on March 27.
BAA is battling to refinance some £10 billion of its debt and Ferrovial and other shareholders recently had to inject an additional £400 million into the company to increase the chances of the refinancing reaching completion.
Meanwhile, the Competition Commission has ruled that BAA's ownership of airports in the UK is anti-competitive and has said it is considering forcing the operator to sell some of its airports.
2 June 2008
LETTERS TO THE EDITOR
Tackling climate change remains a policy priority for Tories
Financial Times - 30 May 2008
From Peter Ainsworth MP
Sir, Your article "Wilting agenda: Britain loses its appetite for green initiatives", Analysis, May 28) stated incorrectly that the importance of tackling climate change has dropped off the list of Conservative political priorities.
The idea that green issues evaporate at the first touch of economic hardship betrays a misunderstanding of the environmental agenda. The necessity to build a sustainable economy is not just a "green issue". It is just as much an economic one; business as usual is clearly unsustainable in the long term. Current economic stresses should underline that point rather than diminish it.
Any public policy that makes our vehicles, homes and businesses more fuel-efficient and encourages the use of cheaper, more reliable sources of energy is not peripheral, but central. Green policies therefore become more important in times of economic stress, not less. The issues of increased energy costs and the need for emissions reductions must be addressed by policies to develop low-carbon technologies.
The necessity to build a future British economy that is sustainable in the long term must not be used as an excuse to raise money for a cash-strapped Treasury today. There can be few better ways of putting the public off the whole green agenda than dressing up new taxes as green taxes. David Cameron has made it very clear that any green taxes introduced by the next Conservative government will be replacement and not additional taxes. Any rises in green taxation will be compensated by reductions elsewhere - for example, on families and work.
The whole point of green taxation is to change behaviour and to provide incentives. Thus, the government's meddling with vehicle excise duty is wholly misconceived. It threatens to punish people for decisions they have already made.This tax increase would raise more than £1bn for the Treasury, with no reduction in the tax burden elsewhere and all resulting in only a microscopic cut in CO 2 emissions.
David Cameron has not gone quiet on climate change. It remains one of the top policy priorities of our party and we believe we can deliver the necessary change through positive, job-creating policies rather than using the environment as an excuse to raise revenues when the going gets tough.
Shadow Secretary of State for the Environment, Food and Rural Affairs
22 May 2008
PUT UK AIRPORT EXPANSION ON HOLD,
DEMANDS GREEN GROUP
Financial case for new runways 'unsound'
Report says proposals face a series of court cases
Dan Milmo and John Vidal - The Guardian - 21 May 2008
The government should completely rethink its aviation policy and shelve plans to expand Heathrow and Stansted airports, according to an influential advisory body.
The Sustainable Development Commission, chaired by Sir Jonathon Porritt, said there were big question marks over the environmental and economic arguments underpinning the proposals for British airport expansion. It warned that the government faced a wave of legal challenges if it did not hold an independent review of its 2003 aviation white paper, which sanctioned new runways at Heathrow, Stansted and other airports.
"A lot of basic data upon which important decisions will be made is heavily contested. Our recommendation is that an independent assessment is undertaken," said Hugh Raven, a SDC member. He added: "The SDC is not in the business of launching legal challenges, but there may well be other key stakeholders who are."
The report warned that the unresolved debate over the environmental and economic impacts of aviation was "not in the interest of government, the public, or the aviation industry". It added: "It undermines government plans for aviation, delays decision-making, and diverts the efforts of government and industry to mitigate the environmental impacts of aviation."
Raven said some economic arguments behind airport expansion, such as the financial value of transfer passengers who spend a short time in the UK, were "fundamentally grey". The alleged financial benefit of aviation is an important issue in the airport expansion debate, including one fiercely contested claim that a third runway at Heathrow would boost the UK economy by £5bn. The integrity of environmental data was also in doubt, the report added, amid disputes over the impact of noise and air pollution on communities near airports.
In a demand for a review of the government's aviation policy, the SDC said a special commission should be established with four tasks: to re-examine the economic, social and environmental costs of aviation; start talks with the public and "key stakeholders"; recommend changes to the government's aviation white paper; and encourage action in areas where both sides of the debate agree on a way forward, such as new technologies.
It added that the review could be carried out by the government's Sciencewise centre, part of the Department for Innovation, Universities and Skills, and that it should contribute to a new aviation policy to be published by 2011.
In an update to its white paper last year, the Department for Transport predicted a doubling of UK air travel to 465 million passengers a year by 2030. The government is expected to give the go-ahead to a third runway at Heathrow during the summer, while a planning inquiry into lifting a passenger cap at Stansted, Britain's third largest airport, is expected to deliver its verdict imminently.
Last night a government spokesperson said: "We fundamentally disagree with the findings of this report. It is simply wrong to claim that there is a consensus that the evidence base is flawed and, as the report admits, the most recently published background data on Heathrow was not even discussed.
"We strongly believe the aviation industry must play its part in meeting its environmental costs, which is why the government championed the inclusion of aviation in the EU emissions trading scheme. But, given the government has conducted a widespread debate over the last six years, deferring a decision in favour of a further three-year debate, as this report suggests, is not a serious option."
BAA, Britain's largest airport group, said there was an "urgent need" for new runways at Heathrow and Stansted: "BAA does not support a review of the air transport white paper, which could only add another substantial delay to the government's strategy for aviation in this country."
Michelle Di Leo, director of aviation industry lobby group FlyingMatters, said: "The air transport white paper was based on 13 months of public consultation and 500,000 responses. If that doesn't represent thorough consultation, I don't know what does."
22 May 2008
JOHN STEWART: NOW COMMISSION A STUDY
TO BRING US THE REAL FACTS
The Independent - 21 May 2008
Will the Government listen this time round? Its own adviser, the Sustainable Development Commission, is calling for a moratorium on airport expansion until stronger economic evidence is produced and until there is greater certainty about the level of emissions that will result.
This comes on top of calls from many other sources for a rethink. Bob Ayling, the former chief executive of British Airways, says the plans to expand Heathrow do not add up in economic terms. All the opposition parties are against the expansion plans for Heathrow as they stand.
The Government is on incredibly shaky ground in claiming that the expansion can go ahead within the agreed emissions levels, and its economic claims for expansion are equally weak.
A report produced by the independent Dutch consultancy CE Delft found that while Heathrow has been important to the UK in financial terms, its expansion would have a negligible effect on the economy because businesses are coming to London anyway.
The CE Delft report challenged the economic arguments of the Transport Secretary, Ruth Kelly, and others that, if Heathrow were not expanded, businesses would go to other European cities where airports are expanding, particularly Frankfurt, Amsterdam and Paris.
The report found there was little evidence that businesses would relocate because of the other attractions of London: it is a thriving financial centre with a relatively low tax economy compared with other European countries.
The expansion of Heathrow may well be in theinterests of BA and BAA, but that is not the same as saying it is essential for the health of the wider economy. Businesses outside the aviation industry say they are not desperate for a bigger Heathrow: where they are losing money is where thechief executives of top companies are held up for hours, and that's what they want BAA and the Government to sort out.
It is highly significant that the report challenges the Government so directly on emissions. The report's call on the Government to quantify the emissions from its expansion programme for aviation comes close to being a damning indictment of the Government's claims that it can go ahead and still meet the UK's emissions targets.
It is now time for the Government to address the recommendations in this report and commission a truly independent study into the economic case for its expansion plans for Heathrow and elsewhere. Equally, an independent study should be commissioned into the real impact of expansion on noise, air pollution and emissions. Until that is done, it makes no sense at all to go ahead with this programme of aggressive expansion of aviation. What we need is a moratorium on aviation expansion until we have the real facts.
John Stewart is chairman of the campaign group Hacan Clear Skies
22 May 2008
EVIDENCE SUPPORTING AIRPORT EXPANSION IS FLAWED,
SAYS GOVERNMENT ADVISER
Cahal Milmo - The Independent - 21 May 2008
The decision on whether to press ahead with the bitterly contested expansion of Heathrow and Stansted airports must be postponed because the evidence supporting Britain's aviation strategy is "inadequate" and the subject of "fundamental disagreement," a damning report by the Government's own green watchdog will say today.
Controversy over issues such as the contribution of air travel to climate change and its benefits to the economy is so deep that only a special commission, similar to the Turner commission on pensions, can dispel the atmosphere of "rising distrust" on aviation between the Government, voters and environmentalists, according to the Sustainable Development Commission (SDC). The body, which was set up by Labour and is charged with advising ministers on contentious environmental and economic issues, said making a decision on major projects such as the third runway at Heathrow, expected this summer, and a second runway at Stansted on the basis of current heavily disputed evidence was "impossible" in the current climate of "conflict and controversy".
Instead, the SDC study - published today with the Institute for Public Policy Research (IPPR) think-tank after 12 months of discussion - calls on the Government to go back to the drawing board and revise its 2003 Air Transport White Paper, which argued that as long as certain environmental safeguards were met, an expansion of Britain's airports would provide a boost to the economy. One government-backed consultation paper on expanding Heathrow said the net benefit would amount to £5bn per annum.
Hugh Raven, the SDC commissioner behind the report, said: "The Government thinks its evidence base is adequate. We don't think it is. This data is heavily contested. While we expected to find areas of conflict, we were unprepared for the level of fundamental disagreement over the data underpinning the Government's whole aviation strategy."
"Until some basic questions are answered, the UK cannot be in a position to make major decisions about the future of air travel. The Government must live up to its commitment to listen to voters' concerns and ensure we make the best possible decisions for everyone involved."
The proposal for a special commission, which received backing last night from campaign groups including Greenpeace and WWF, as well as the Institute of Directors, put the Government in the uncomfortable position of attacking a body which was set up by Tony Blair in 2000 with a remit to help shape Labour's green policies. The Department for Transport (DfT) criticised the SDC findings and said a further debate on airport expansion, as well as revision of its White Paper - which would take until 2010 or 2011 - was "not a serious option".
The plans to add a third runway - and potentially a sixth terminal - to Heathrow, the world's busiest international airport, have become a cause célèbre for campaigners concerned at the impact of aviation on global warming and issues such as noise pollution, as well as a major headache for Gordon Brown's embattled government as it seeks to balance economic growth with cutting carbon dioxide emissions at a time when passenger numbers are growing inexorably.
Transport department figures suggest that the extra runway, at a cost of up to £8.3bn, will increase the number of flights to and from Heathrow from 473,000 a year to more than 700,000 by 2030 and generate an extra 181 million tonnes of CO2 by 2080. The number of passengers passing through British airports is predicted to rise from 241 million last year to 500 million by 2030.
The SDC report, entitled Breaking the Holding Pattern, found there was "widespread controversy" over six key areas, in particular accurately calculating the impact on the climate of rising aviation emissions, the economic benefits of higher aviation in terms of inbound and outbound tourism as well as wealth creation, and the extent to which improvements in aircraft technology can reduce or stabilise CO2 from air travel.
The Government has already been accused of underestimating the cost of climate change caused by expanding Heathrow, put at £4.8bn in the Stern Review. Friends of the Earth says the true figure is £13.4bn.
Such "high levels of conflict" between campaigners, the industry and the Government mean that the only meaningful resolution is a powerful independent commission on the lines of the Stern Review on climate change, or the Pensions Commission chaired by the former CBI director general Lord Turner, according to the SDC and IPPR.
The study found there was a "lack of policy coherence" across government and an "urgent need for renewed political leadership". In such a context, making a decision on an expansion of Heathrow and Stansted or signing up to new international agreements on climate change without "evidence that is widely agreed to be sound" was therefore "impossible".
The SDC report said: "While the evidence informing these decisions is so widely contested, and the outcomes of important political decisions on addressing aviation's climate impacts remain uncertain, we believe the risks of decisions in favour of expansion outweigh the possible benefits."
Campaigners said the proposals were a significant blow to the Government's efforts to claim solid evidence for backing airport growth. Anna Jones, a transport campaigner at Greenpeace, said: "Now even Gordon Brown's own environment advisers are calling on him to halt the rush towards Heathrow expansion. It's hardly surprising, given the overwhelming evidence that the case for a third runway has been fixed by the Government and the aviation industry."
Both BAA, the airport operator which owns both Heathrow and Stansted, and the DfT sought to counter the report findings by saying there had already been widespread consultation on the expansion plans and that any delay would damage the economy and hit thousands of homeowners with "planning blight".
A DfT spokesman said: "We fundamentally disagree with the findings of this report. It is simply wrong to claim that there is consensus that the evidence base [for expansion] is flawed... Given that the Government has conducted a widespread debate over the last six years, deferring a decision in favour of a further three-year debate as this report suggests is not a serious option."
Grand plan for expansion
Air travel in Britain will grow inexorably in the next 20 years and airport capacity must expand dramatically to cope with a tripling in passenger numbers by 2030 to 465 million a year, the Government says.
The centrepiece of the UK aviation strategy for the next three decades, as laid out in the 2003 Air Transport White Paper, is the building of a third runway and possibly a sixth terminal at Heathrow - the world's busiest international airport - and the addition of a second runway at Stansted in Essex "as soon as possible".
Permission for BAA, the embattled owner of Heathrow and Stansted as well as Gatwick and several regional airports, to build the third runway at a cost of up to £8.3bn was made contingent on several environmental restrictions, such as meeting new European air pollution rules. If the Government gives the go-ahead this summer and planning permission is granted, the runway would be in operation between 2015 and 2020.
Stansted, where proposals for a second runway have been the subject of a ferocious campaign by opponents, will be able to handle up to 80 million passengers a year if the plans are approved. There will be no new runway at Gatwick before 2019, when a planning restriction on additional capacity at the airport expires.
Beyond south-east England, the White Paper said there was a case for a new runway at Birmingham International and an extra terminal and runway extension at Bristol.
In Scotland, land has been set aside at Edinburgh airport for a new runway to accommodate 20 million passengers per annum by 2020 alongside a new terminal. Runway extensions have also been earmarked for Aberdeen and Inverness airports.
22 May 2008
AIR STACK PLANS DON'T STACK UP
Cambridge News - 21 May 2008
PUBLIC consultation on plans to stack thousands of aircraft over towns and villages in Cambridgeshire has been slammed as "flawed".
Cambridgeshire County Council said NATS (National Air Traffic Services) had failed to carry out "any proper consultation whatsoever" on proposals to replace the existing two stacks serving Luton and Stansted airports.
The proposal is for a new stack for Luton covering air space to the west of Cambridge, south of Huntingdon and east of St Neots, and two new ones for Stansted, one of which would be over airspace south of Newmarket and north of Haverhill and Linton.
Councillors said NATS had refused to talk to parish councils about the proposals, had not given people long enough to respond to the issue, and had underestimated how many people could be affected by increased aircraft noise.
In their response to the consultation, councillors said NATS' unwillingness to engage with the public undermined the credibility of the process and gave the impression that it had "prejudged" the outcome.
Cllr Matt Bradney, cabinet member for growth and infrastructure, said: "NATS have refused to engage with the district councils and totally opposed the idea of meeting any parish councils at all. NATS have taken no consideration of areas of growth and totally underestimated the population below. We have strong concerns over noise and visual intrusion."
Cllr Fred Yeullett, cabinet member for communities, said: "The consultation process is flawed or non-existent."
Cllr Martin Curtis, cabinet member for children, said: "I find it astonishing with something as important as this, they bury their heads in the sand and forget parish councils have a voice or even exist."
Bassingbourn councillor Linda Oliver and Cllr Ian Bates, who covers the Hemingfords and Fenstanton, also spoke out against the proposals. Cllr Oliver said: "If the consultation is to have any value, it must be based on accurate data, which it is not. There are issues around population, location, and growth."
Cllr Bates said: "My simple answer is keep the existing two and find a third. There is no need to change."
NATS recently extended the public consultation until Thursday, June 19.
It is also under fire from Uttlesford District Council, which has criticised the lack of alternative choices during the consultation and the fact that people could only respond by email, not by letter.
It also wants NATS to recommend to the Civil Aviation Authority and central government that a limit be put in place on the number of flights using the airspace.
22 May 2008
COUNTY WANTS HALT TO FLIGHT CHANGES
Suffolk Evening Star - 19 May 2008
CHANGES to flightpaths over Suffolk should be put on hold until decisions are made over the proposed expansion of Stansted according to county bosses.
Suffolk County Council experts are worried permitting the Essex airport's current runway to be used to its maximum capacity and building a second runway will mean significant increases in the number of jet planes over Suffolk.
County councillors are being recommended to object to the airspace changes, which will affect many people across the county, ruin its tranquillity and cause "unacceptable consequences" for urban areas.
Officers question why changes are needed now, before Stansted expands, and if there are alternatives which might be considered. They also want to know why flights cannot be stacked over the sea rather than villages and peaceful countryside, and voice concern over whether aircraft will be flying at lower levels in future.
Air traffic management company NATS says the proposed changes are designed to deal with current congestion in the skies, and say the new routes should mean a one-third reduction in the number of people who will be flown over by passenger planes.
The plans include creating two holding stacks for Stansted - one near Newmarket, and the other between Stowmarket and Hadleigh, removing the current one near Sudbury - and changes to routes for planes arriving at Stansted and Luton.
A report to the county council cabinet on May 27 says there will be winners and losers - with some people currently affected by aircraft noise obtaining relief and others experiencing an impact for the first time.
Some rural areas would see aircraft as low as 4,000ft, while on the Felixstowe peninsula and over Ipswich planes will come as low as 7,000ft, flying over the area in a north-westerly rather than westerly direction in future.
However, consultation documents only detail those routes seeing changes - and not the hundreds of other flights, such as those from Heathrow, which will not be affected but add to the overall impact.
Lucy Robinson, director for environment and transport, said: "The lack of information on existing arrangements which are to remain unchanged means that the overall impact of future overflying is harder to judge. The refusal of NATS to entertain submissions on the overall growth of air traffic and the possible development of new runways is regrettable, since these could significantly increase the impact of the proposals in the longer term."
22 May 2008
AIRLINE TIE-UPS LOOM AS CRUNCH HITS
A combination of declining passenger numbers and high fuel costs
is driving British and American carriers into each other's arms
Dominic O'Connell - Sunday Times - 18 May 2008
THE chat is gloomy these days on channel 123.45, the radio frequency that lets airline pilots talk to each other as they whizz between Europe and America high above the North Atlantic.
Regular users say that for the past month all the talk between the cockpits has been of how few passengers there are on board. As well as the chatter over the airwaves, there are other telltale signs that the airline industry is flying into one of its regular slumps.
Pilots are frequently asking air-traffic control for permission to fly high - at 40,000 or 41,000 feet - early in their trips, heights they would normally only be able to attain later in the journey when they had burnt off fuel. "That tells me they are taking off with very light loads," said one British Airways captain.
Yesterday the anecdotal evidence was given solid backing. British Airways, the biggest carrier on the North Atlantic with a market share estimated at 35%, said rocketing fuel prices and weakening demand could come close to wiping out its earnings in the current financial year.
BA was in no danger of going under, with £1.8 billion of cash and additional loan facilities under its belt, but others might not survive. "This will make it imperative for some in the industry to seek consolidation," said Willie Walsh, chief executive.
BA's forecast was another reminder, if it were needed, of the mercurial nature of the airline sector. Walsh's gloomy prognosis came seconds after he had unveiled record annual results. They were for the 2007-8 financial year, which finished at the end of March.
The airline hit its long-held goal of achieving a 10% operating margin, paid its first dividend in eight years (5p a share), and handed out staff bonuses totalling £35m. Walsh did not take his personal bonus, of about £700,000, as public penance for the botched opening of Heathrow's terminal 5. But after lauding their achievements of last year, BA managers were with the next breath warning about the next 12 months.
Keith Williams, finance director, showed analysts an alarming chart that depicted the airline's operating margin disappearing to zero as oil prices edged up to $120 a barrel - roughly where they have sat for the past fortnight - and warned that fuel costs could increase by £1 billion this year. BA spent £2 billion on fuel in the financial year just ended.
Walsh said he was looking at reducing capacity for the winter, and it was likely planes would be grounded from October onwards. "All airlines are going to have to take serious action to restore profitability," he said.
Analysts were fulsome in their praise of the 2007-8 results, but warned of what was to come. "Investors need to be very conscious that BA could make a loss for one or both of the next two years if the oil price is much higher" said Chris Avery at JP Morgan.
"Of course, most of the rest of the industry would then be in far deeper trouble. In that scenario, the resumption of the dividend might prove to have been a false dawn in our view," Avery said.
For BA, there are problems beyond even the pincers of rising fuel and falling demand. Passengers? confidence has been shaken by the disastrous opening of T5 at Heathrow, where a succession of management cock-ups led to the cancellation of scores of flights, inconveniencing thousands of passengers and misplacing thousands of bags.
Travellers' moods will not have been improved by Walsh's recent admission to the Commons transport committee - repeated at last week's results - that the T5 chaos was in part the result of a calculated risk taken by the airline's management.
In a revealing session, Walsh told MPs that the company had known there were problems with the building from September, when BA began to move in its staff and test systems. It was "not 100% complete".
Walsh said managers had reviewed their decision to open as planned on March 27 on a weekly basis, and had decided that the problems caused by delaying the move to the next opportunity - at the beginning of October, the start of the "winter" season for airline schedules - would be greater than those caused by pressing ahead.
BA also faces extra competition on its key routes from Heathrow for the first time in 30 years. Thanks to a 1976 treaty between Britain and America, only four airlines - BA, Virgin, United Airlines and American Airlines - were allowed to fly to American cities from Heathrow. As the biggest player at Heathrow, BA exploited the situation, tapping into the rich streams of business traffic between London and New York in particular.
The restrictions ended last year when America signed an "open skies" agreement with Europe. Now any American or European airline can fly across the Atlantic from Heathrow, and a cluster, including Air France, Delta Air Lines, Northwest Airlines, US Airways and Continental Airlines, have crowded in to take advantage. Such is the pulling power of Heathrow that some have paid tens of millions of pounds to buy the runway slots necessary to start their new services.
An analysis by OAG, the airline-scheduling specialist, shows that the number of seats on transatlantic routes from Heathrow has increased by about 100,000 this summer compared with last year. Flight numbers are up by almost 1,000 over the six-month summer season, which runs from April to October.
BA's biggest British competitor, Sir Richard Branson's Virgin Atlantic, claims to have taken market share from its rival as a result of the T5 chaos. Yet there are signs that Virgin, too, is finding the going tough. Last week it launched a business-class seat sale running until late next month, offering seats for just over £1,000 return - about one-quarter of the normal rate for a busy season fare.
Industry executives - and transport bankers - are now starting to think about what the result of the industry squeeze will be. Most, like Walsh, expect long-awaited industry consolidation finally to kick off, with the weaker of the American carriers likely to be most under pressure.
The big American airlines are already huddling together for safety, with a merger agreed between Delta Air Lines and Northwest Airlines, and talks going on between Continental, American and US Airways about a range of possible mergers or marketing alliances. Last month, Continental called off merger talks with United Airlines, with Wall Street sources blaming fears over the latter's finances and whether it had the cash to ride out a downturn.
BA confirmed last week it was in talks with American, its existing US partner, and Continental. It is understood BA is not pursuing a full-blown merger - American ownership restrictions would prevent that - but rather a marketing alliance with one or both airlines that would allow them to collude on pricing, schedules and capacity on certain routes.
Walsh's other priority, however, may be closer to home, with the future of BMI British Midland up for grabs. Airline industry websites were last week buzzing with rumours of a supposed visit by the senior management of Lufthansa to BA's Heathrow headquarters.
The German airline already owns a stake in BMI British Midland, and has an option later this year to take control from the majority shareholder, chairman Sir Michael Bishop. BMI is the second-largest slot-holder at Heathrow after BA.
Most industry executives had assumed that if Lufthansa took control - and it is a big if, with the exact details of the arrangement with Bishop not having been made public - it would forge a relationship with Virgin Atlantic, creating a large new airline as a thorn in BA's side.
Walsh said he had not met Wolfgang Mayrhuber, Lufthansa's chief executive, last week, but reiterated his interest in BMI, saying Bishop would decide its future. "It's entirely up to him, and as far as I can see from his public comments he is not about to sell," he said.
22 May 2008
FURY AS BAA LOOKS TO DOUBLE PROFITS
AT 'NATIONAL DISGRACE' HEATHROW
Danny Fortson - The Independent - 15 May 2008
Ferrovial, owner of the embattled airport group BAA, has courted fresh controversy by publishing internal predictions that its profits at Heathrow will more than double within five years.
The Spanish group expects the airport to generate £1.37bn in earnings after expenses by 2012, up an astonishing 117 per cent from the £632m it expects to pocket this year from a facility that British Airways' chief executive, Willie Walsh, recently said had been "a national disgrace for many years".
The projections will be damning for BAA, which has in the past threatened to shelve major investment programmes, such as Heathrow East, if it did not receive sufficient financial incentives. It will also make uncomfortable reading for the CAA, the aviation watchdog whose approval of major increases to the landing fees that the London airports can charge airlines will make the outlandish earnings possible.
By 2012, BAA expects to have operating margins of 61 per cent at Heathrow. "Airlines work on margins of 3 or 4 per cent. What other business do you know that has 60 per cent margins? It clearly shows that there is only one joke in town, and that is the [regulatory] system in the UK," said Paul Charles of Virgin Atlantic. "The CAA is a lapdog, not a watchdog."
A spokesman for the CAA pointed out that the regulator actually cut last year the allowed return on capital that BAA can pocket. He added: "Nothing in Ferrovial's announcement suggests the CAA's price control decision was inappropriate. The decision involved cutting the cost of capital from 7.75 to 6.2 per cent, but it also involved allowing for some £5bn of investment over the next five years and halving of security queuing times. Passengers deserve improvement to service quality, but these improvements have to be paid for."
Ruth Kelly, the Secretary of State for Transport, began a review of UK airport regulation last month. The Competition Commission has hinted it will recommend a break-up of BAA's monopoly over London's airports later this year.
22 May 2008
'ACT NOW TO SAVE OUR NATURAL ENVIRONMENT OR BRITAIN'S MOST PRECIOUS WILDLIFE WILL BE LOST FOREVER'
Emily Dugan - The Independent - 19 May 2008
England's green and pleasant land is in catastrophic decline, with some of its most precious wildlife at risk of disappearing for ever, the first comprehensive report into the nation's natural life has shown.
In a landmark study into every aspect of the environment, the government advisory body Natural England has compiled research from all corners of the countryside, from woodland and wetland to marine life and salt marsh. Its findings make for bleak reading. Under siege from climate change, development, pollution and aggressive new farming methods, the country's biodiversity is already significantly less rich than it was 50 years ago, The State of The Environment report said.
Just 3 per cent of grassland is rich in native plants and a fifth of the countryside is already showing visible signs of neglect, it reported. The collapse of this habitat is having such a devastating effect on native species, including the red squirrel, the turtle dove, the bumblebee and the adder.
"If we don't act now, there's a real danger some of our most precious wildlife will be lost for ever and our lives will be poorer for it", said Helen Phillips, chief executive of Natural England.
Conservation charities echoed her appeal, saying they hoped the report would be a springboard for government action. "This is a timely and hard-hitting call which the Government must heed and act upon," said Sue Armstrong Brown, the RSPB's head of countryside conservation. "We are now seeing the consequences of decades of ignoring environmental limits. Now, with the climate changing and wildlife crashing worldwide, it is time for a new green leadership. There has never been a time when human action has put so much wildlife in peril. The Government should support Natural England's plans and allocate enough money to put them into place."
The report makes clear that, with government commitment, the gradual decline could be combated and even reversed. Its authors are urging action on a series of recommendations which they say could save the natural environment from destruction. "England needs a new approach to conservation if we are to effectively tackle the modern pressures on land created by climate change and development," said Ms Phillips. "We need to find ways to manage our landscape to create a mosaic of uses so that we can help our wildlife survive - be it through new 'national park' around the length of England's coastline, better use of the green belt or improved use of public funding for farmers to deliver a better natural environment."
There are already signs that, with the right level of focus and funding, these schemes can work, with the notable success stories of reintroduced species such as the red kite, the large blue butterfly and the pool frog cited as evidence for the merit of long-term projects.
Numbers of native woodland butterflies species have declined by 50 per cent in 10 years, and their demise is all the more worrying as they are an indicator group - meaning that, as they respond quickly to changes in their environment, they act as a litmus test for the health of the natural world. Natural England has suggested that a return to traditional woodland management might tackle the fall in numbers. By using coppicing - the regular culling of smaller trees - the flowering plants they rely upon will be given the chance to thrive again.
The management of wetlands and salt marshes has also been analysed in the report, where native species are suffering similarly catastrophic falls. A major decline in wading birds native to unprotected wetlands has been identified, with, for example, the number of snipes down by 90 per cent. Agricultural and urban development has drained the soil in some areas, leaving it too dry for them to survive. However, by preventing further drainage, and reinstating raised water levels, this trend can be reversed.
Natural England has drawn up a manifesto of measures that it believes can change the fate of the countryside. It has put tackling climate change at the top of its spending agenda for the £2.9bn of public money allocated to its cause. To carry this out, it plans to prioritise locking-in carbon, absorbing excess rainwater to prevent flooding and connecting wildlife sites. It will also be helping the Government find space for renewable energy by publishing a map of suitable locations for onshore wind farms.
Another key element of its carbon plan is improved maintenance of upland areas, 29 per cent of which are now in an unfavourable condition. Peat - indigenous to such areas - absorbs more than half of the UK's carbon. But its properties are lost when it dries out, so Natural England has suggested avoiding upland draining and over-grazing in the regions to which it is native.
The Environment Secretary, Hilary Benn, said he believed the right measures, such as the planned investment of £2.9bn in agri-environment schemes over the next five years, could make a difference. "We also now recognise that climate change is presenting us with a new challenge in conserving biodiversity and managing our landscapes," he said. "We need new approaches to conservation, and we are working closely with Natural England to develop these."
But this has done little to reassure environmental campaign groups such as Friends of the Earth, who want a more fundamental overhaul of government policy. The group's campaigns co-ordinator, Paul de Zylva, said: "The Government must do more to safeguard our future. Green speeches are not enough - we need urgent action.
"Ministers must put the environment at the heart of all their policies - including transport, the economy, housing and planning - and invest in clean, green solutions that would make Britain a world leader in developing a low-carbon economy."
22 May 2008
BUSINESSES CUT FLIGHTS BY STAFF
Kevin Done - Financial Times - 16 May 2008
Many businesses are seeking to reduce the number of flights taken by staff as a way of reducing carbon emissions, according to a report released today by WWF-UK, the conservation organisation.
A survey of 100 companies in the FTSE 350 index shows that 89 per cent are expecting to cut flights during the next 10 years and 85 per cent regard video conferencing as a way to reduce travel. The survey was carried out by Critical Research as part of WWF's One Planet Future campaign, which is asking businesses to cut one in five flights.
Peter Lockley, head of transport policy at WWF-UK, said the report showed there was a "real appetite" among many leading businesses to reduce flying. Green alternatives such as video conferencing not only provide a swift solution for cutting carbon, they can also save businesses time and money," he said.
According to WWF, the report strengthens the case for stopping further expansion of airports. "If business travellers, who currently account for more than a fifth of passengers from the UK and a third from Heathrow, are increasingly choosing to hold "virtual meetings" instead of taking flights, the case for airport expansion begins to evaporate," said Mr Lockley.
22 May 2008
'GREEN' AVIATION CONCEPTS UNVEILED
The eco-friendly look of future aviation has been unveiled
at the Science Museum in London
Press statement by the Science Museum - 16 May 2008
A series of "green" concept aircraft with light, new materials and advanced engine technologies went on display in an exhibition which will run for six months.
Looking at the likely impact of aviation on climate change, the free exhibition, sponsored by European aerospace company EADS, is entitled Does Flying Cost the Earth?
The display includes a futuristic blended-wing body aircraft model from Cambridge University. Designed to reduce fuel burn, the plane is one big "flying wing", featuring a novel centre-body shape with leading edge carving. This design balances the aerodynamic forces without the need for a tail, and features streamlined wings which provide efficient lift distribution and low cruise drag.
The concept also features engines with high-capacity low-speed fans designed to minimise noise levels and improve fuel efficiency. Researchers are predicting that planes like this could cut carbon emissions by 25% and might become a reality by 2030.
Visitors to the exhibition will also see an innovative easyJet aeroplane model. Featuring open rotor engines, the plane is designed to reduce carbon emissions by 25%. Situated at the back of the aircraft, the open rotor engine is operated by fan blades which cut through the open air and use less fuel.
Other features include swept-forward wings which make the aircraft more aerodynamic. It would also be made from lighter materials such as carbon fibre composites. This style of aeroplane could be in use by 2016.
Other items on display include examples of lighter aircraft materials such as the titanium aluminised turbine blade from an aeroplane engine and an example of carbon fibre composite. A section from an aeroplane engine designed to make planes more energy efficient is also on show.
Some advice on the web site
Does Flying Really Cost the Earth?
Flying is more controversial than ever. As the world's population grows and flying becomes more affordable, the appeal of jetting off on holiday outshines the darker side of aviation - its carbon footprint. So how is flying affecting our climate? Find out what the problem is, how the experts are tackling it ... and why your actions matter - http://www.sciencemuseum.org.uk/antenna/flying/contribution
Reduce the number of flights you take
Rising passenger numbers mean that flying is having a bigger impact than ever on climate change. Flying makes up about 12% of the average Briton's carbon footprint, but if you're a frequent flyer it's likely to be more than that.
Choosing not to fly at all can be one of the most effective ways you can reduce your carbon footprint and make a difference to climate change. About 3% of people surveyed in the UK have said they have given up flying because of its impact on climate change. But for many people giving up flying isn't really an option. And it's important to remember that it could have downsides for our economy, and for those countries that depend on visiting tourists for their income.
Still even if giving up entirely is not realistic for you, then you can make a big difference to your carbon footprint by choosing to fly less. Think about taking one flight fewer every year, or even try to limit yourself to just one trip each year.
So which flights can you consider cutting out? Well, longer trips account for more emissions than shorter trips. A return flight from London to Sydney creates more CO2 than most people emit in a whole year. So holidaying closer to home can help cut down your carbon footprint.
But that doesn't mean short-haul flights are in the clear. And mile for mile, flying short distances is worse for the environment than longer trips. That's because more of the journey is taken up with the most fuel-intensive parts of the flight - takeoff and landing.
So what else can you do to cut down on the number of flights you take? Well, take a look to see if you can take an alternative to get to your destination. Read more about replacing short-haul flights in our chapter on 'taking a greener alternative'. And to cut down on business flights, lots of companies are now opting to use video conferencing instead of taking a flight.
So will you choose to reduce the number of flights you take?
Make a pledge - http://www.sciencemuseum.org.uk/antenna/flying/action/pledge
17 May 2008
BAA IN GRAVE DANGER AS REFINANCING ATTEMPTS FAIL
David Robertson: Analysis - Times Online - 10 May 2008
It is not only British homeowners who face a summer of repossessions - BAA is in grave danger of having its debt called in. Attempts to refinance the £10 billion of debt taken on by Ferrovial when it bought BAA two years ago have so far failed.
The £400 million cash injection from Ferrovial and other shareholders will buy BAA a little time but if it cannot refinance in the next two months, the company's credit rating will almost certainly be moved to junk status. When that happens half the company's bondholders, who own about £3 billion of debt, will be able to call in their money.
That would probably trigger a fire sale of BAA assets to fend off bankruptcy. If BAA runs out of cash, it could be forced to shut airports.
A sale of Gatwick and Glasgow airports is thought to be in the works, which would raise about £2.5 billion. If BAA loses the support of its debtholders completely it may be forced to sell even more assets, potentially leaving it with only the crown jewel: Heathrow.
17 May 2008
BAA MAY SELL GATWICK TO EASE REFINANCING DIFFICULTIES
Angela Jameson - Times Online - 10 May 2008
BAA, the owner of Heathrow and Gatwick, may have to bring forward the sale of one of its airports amid concerns that it will be unable to complete the £10 billion refinancing of its debts.
The airports operator said yesterday that its investors had agreed to stump up an extra £400 million in funding to help to improve the chances of a refinancing being achieved. The extra cash is needed to enhance the company's credit ratings, which were cut last month to one notch above junk.
The refinancing difficulties mean that the sale of Gatwick, which could raise at least £2 billion, could be accelerated. Macquarie, the Australian investment bank, has been advising BAA for several months on the possible sale of assets. Shares in Ferrovial, the Spanish majority owner of the British airports group, fell sharply in Madrid over concerns that the refinancing might not be achieved.
The problems precede a significant increase in BAA's interest charges, which are scheduled to rise next month, according to people familiar with the company. Last year the gross interest payments for BAA and its financing vehicle, ADIL, were £964 million - more than the £956 million that BAA generated in earnings from all its airports.
17 May 2008
BAA BREAK-UP REVIVES SECOND GATWICK RUNWAY
Times Online - 10 May 2008
Ferrovial holds 62 per cent of BAA, and the remainder is shared between Caisse de Dépôt et Placement de Québec and GIC, the Singapore sovereign wealth fund.
BAA said that it had not finalised aspects of its refinancing plans, noting that it had not completed the rating process or received sufficient commitments from its lending banks to transfer a tranche of debt into a new, ring-fenced funding structure, backed by its London airports and the Heathrow Express. So far only the European Investment Bank has announced that it has signed up to the bond transfer.
While negotiations with its banks continue, the group intends to begin consultation with bondholders, who hold about £4.7 billion of BAA debt that was in the market at the time of the 2006 take-private deal, through the Association of British Insurers (ABI).
However, the airports group gave warning that credit market difficulties could affect these plans. "BAA may not ultimately be in such a position [to begin negotiations] owing to continuing challenging market conditions," the company said.
A BAA spokesman insisted that the company had sufficient cashflow to service its debt and intended to stick to its timetable of completing the refinancing by the end of the third quarter.
The ABI, which represents most of Britain's big pension funds and institutional investors, has been asked by BAA to conduct a bondholder inquiry to try to establish the identity of BAA's bondholders.
The refinancing problems emerged on the day that BAA confirmed that it would move long-haul British Airways flights to New York - and seven other destinations - into Terminal 5 next month.
17 May 2008
SHAREHOLDERS PUMP £400M EMERGENCY FUNDING INTO BAA
Angela Jameson - Times Online - 10 May 2008
Shareholders of UK airport operator BAA have been forced to pump an emergency £400 million into the airport operator as credit crunch turmoil dashed hopes of re-financing £10 billion of debt by the summer.
In a statement to the stockmarket today, BAA said that it had still not yet finalised aspects of its refinancing plans nor has it managed to convince all its lending banks to transfer £4.7 billion bonds into a new ring-fenced funding structure, backed by its London airports and the Heathrow Express. So far, only the European Investment Bank has formally announced that it has signed up to the bond transfer.
Shareholders in BAA have had to agreed to inject an emergency £400 million into the owner of seven UK airports which include Heathrow and Gatwick. Ferrovial controls 62 per cent of BAA with the rest shared between French bank Caisse de Depot et Placement de Quebec and Far Eastern sovereign fund, Singapore's GIC.
Shares in Ferrovial, the Spanish majority owner of the British airport group, fell 4 per cent in Madrid.
BAA also said that it had yet to begin negotiations with holders of BAA bonds, but said that it hoped to do so in the coming weeks through the Association of British Insurers.
However the airport group gave warning that credit market difficulties could compound these plans. "BAA may not ultimately be in such a position [to begin negotiations] owing to continuing challenging market conditions."
The ABI, which represents most of Britain's big pension funds and institutional investors, is to set up a Special Committee and has also been asked by BAA to conduct a bondholder enquiry, to try and establish the identity of BAA bondholders.
"If and when BAA is in a position to commence consultations with bondholders, BAA will make a further announcement," the company said.
A spokesman for BAA said that today's statement was a positive step, as the company was sticking to its original timetable of implementing the refinancing by the end of the second quarter and completing it by the end of the third quarter.
The refinancing problems emerged on the day that the airport operator confirmed that it would finally move British Airways long-haul flights to New York, and seven other destinations, into Terminal 5 in June. The rest of British Airways flights will be moved over the summer, into the autumn.
17 May 2008
FERROVIAL TO INJECT £400M TO BAA
Mark Mulligan in Madrid and Anousha Sakoui in London - Financial Times - 9 May 2008
Ferrovial and its partners have agreed to inject £400m ($780m) into BAA in an attempt to stop £4.5bn in bonds being downgraded to junk status because of concerns over the financial health of the UK airports operator. The Spanish company, which controls 62 per cent of BAA, said the move was aimed at securing an investment grade rating for about £9bn in debt, including the bonds. The equity injection could be the first of several, as the company and its partners - the Singapore government?s investment office and Quebec state pension fund - seek to appease rating agencies ahead of a massive refinancing.
Some analysts estimate that ADIL - BAA?s holding company - needs as much as £1bn in new equity. Standard & Poor's has threatened to downgrade the bonds to non-investment, or junk status if the refinancing is not completed by the middle of July. This could trigger a sell-off by institutional investors, which can often only hold investment grade financial assets. Ferrovial said it was about to begin negotiations with the bondholders on the terms of the securities? migration to a new vehicle grouping the regulated assets of Heathrow, Gatwick and Stansted airports. The so-called "ringfence" structure will also include the Heathrow Express rail link.
Shares in Ferrovial dropped 5 per cent on the news, among heightened fears that BAA's precarious financial state could eventually sink the Spanish group. "The terms of any refinancing would be punitive because of the uncertainties and risk, and we believe ultimately the debt will balloon and squeeze out the equity," said Andrew Fitchie, transport analyst at Collins Stewart in London. "We have a sell recommendation on Ferrovial."
Ferrovial led a consortium that paid £16bn - including existing debt - for the UK airports operator in June 2006, at the height of the credit boom. However, plans to refinance most of the acquisition debt with asset-backed bonds were torpedoed by last summer's credit crunch.
Negotiations with banks and investors have been further complicated by operational problems at Heathrow and Gatwick airports, BAA's most important assets. The disastrous opening of Heathrow's showcase Terminal 5 recently, during which hundreds of flights were cancelled, was the latest in a series of incidents that have highlighted operational shortcomings at BAA's airports. BAA's regulator, the Civil Aviation Authority, has also played a part in the refinancing delay, by reducing the return BAA is allowed to make between now and 2013.
BAA has also been threatened with a break-up by UK competition authorities. In spite of all this, people close to Ferrovial said the company was confident of securing a new "backstop" bank loan, of about £5.5bn, which would cut its interest on existing acquisition debt while helping fund capital expenditure between now and the end of next year. This would also give it breathing space while it waits for the frozen securitised bond markets to reopen.
17 May 2008
UNITED STATES SAYS AIR TAX IS ILLEGAL
Dominic O'Connell - Sunday Times - 11 May 2008
MINISTERS have flown into another business tax row after the US government made a blistering attack on a new £2.5 billion aviation duty, questioning its green credentials and claiming that it broke international law.
The extraordinary criticism was made in an official diplomatic note sent to the Foreign Office by the American embassy in London last month.
It said the new charge, proposed in this year's budget as a replacement for air-passenger duty, "raises significant policy and legal issues" and asks whether it can be justified when the government plans a third runway at Heathrow.
It is understood John Byerly, deputy assistant secretary for transportation and America's top aviation negotiator, met Treasury officials last week to press home the argument.
The row with the Americans - and British Airways, which is also opposed to the tax - is the latest in a succession of business tax debacles to hit Labour.
Entrepreneurs were incensed by changes (later partly rescinded) to the capital-gains-tax regime, while the City raged against a crackdown on wealthy nondomiciled taxpayers.
Meanwhile multinationals are threatening to quit Britain over proposals on the taxation of foreign earnings, with The Sunday Times revealing last week how a delegation from some of the world's biggest companies visited Downing Street to confront Gordon Brown and Alistair Darling on the issue.
All this comes on top of Labour's other fiscal nightmare, the fall-out from the scrapping of the 10p income-tax band.
The new flight levy, which the Treasury says will help reduce greenhouse-gas emissions, is proposed as a replacement for air passenger duty (APD), which has been in place for more than a decade. APD was controversially doubled last year, with passengers paying up to £80 for a one-way trip, depending on the length of the flight and class of travel.
The Treasury wants to change the basis of the duty, moving it from individual passengers to a per-plane basis.
The American diplomatic note said the switch contravenes the 1944 Chicago Convention, the treaty that governs most of international aviation. It claimed it was also in breach of the open-skies deal hammered out last year between Europe and America.
The Americans also query the basis of the duty, saying the green claims are farfetched. "The Treasury's proposal, although cast as an environmental measure, appears in reality to constitute nothing more than a device for generating additional revenue from the airline community," says the note.
The duty was likely to reduce the number of flights from Britain. "This would seem an anomalous result, however, given the focus in the UK on, among other things, restoration of the competitiveness of Heathrow airport with the opening of terminal 5 and the consideration of a third runway."
While BA and other long-haul airlines are opposed to the duty, budget airlines such as Ryanair and Easyjet support it.
American government sources said Washington could bring a case against the UK at the International Civil Aviation Organisation, the watchdog for world aviation, or under the disputes procedure of last year's EU-US open-skies agreement.
"The government is in a cleft stick, caught between the Americans and the long-haul airlines on one side and the budget airlines and the green lobby on the other," said one executive.
17 May 2008
BAA'S HEATHROW CHIEF MARK BULLOCK
EXITS AFTER T5 DEBACLE
Dearbail Jordan - Times Online - 13 May 2008
BAA's managing director of London's Heathrow airport, who was responsible for assuring "cost, time, quality and safety" at Terminal 5, is leaving the airport operator with immediate effect.
Mark Bullock, who held overall responsibility for T5, is the third senior manager to depart since the terminal's disastrous opening on March 27, when hundreds of flights were cancelled and thousands of passengers? bags were lost.
Last month, British Airways announced that Gareth Kirkwood, the director of operations, and David Noyes, the director of customer services, would be leaving the company.
BAA said today that Mr Bullock is leaving as part of a "structural change" already announced by the operator's new chief executive, Colin Matthews, who joined the company on April 1. However, less than a month ago, Mr Bullock was promoted to a new executive committee set up by Mr Matthews. Mr Matthews said today: "Mark Bullock has made a significant contribution to BAA and to Heathrow Airport in particular and has led the airport through a particularly challenging period. I am grateful for his efforts."
Mr Bullock will be replaced by Mike Brown, currently the chief operating officer at London Underground, who will join the group in September. Until Mr Brown takes over, Heathrow's operation will be overseen by Terry Morgan, BAA's airport services director.
Mr Bullock said today: "Leading the team at Heathrow Airport is an intense and demanding role, but one I have enjoyed very much. The managing director role at the airport will change substantially under the new structure being introduced by Colin Matthews and, while I understand and support those important changes and the renewed focus on day-to-day operations, the time is clearly right for me to move on and take on new challenges. I wish my successor and everyone associated with Heathrow Airport every success in the future."
Mr Bullock first joined BAA in January 2004, as T5 programme assurance director where he was responsible for the "finance, commercial and risk management functions" as well as assuring "cost, time, quality and safety" at the yet to be opened new terminal.
Last year, Mr Bullock took overall responsibility for Heathrow when the previous chief, Tony Douglas, left BAA after calling the state of the airport "unacceptable", adding that it was "bursting at the seams" and was "held together by sticking plaster".
BAA, which is majority owned by Spain's Ferrovial, is currently struggling to refinance £10 billion worth of debt and last week secured £400 million in funding from investors to help enhance its credit rating that would help the company agree a cheaper rate of borrowing.
The difficulties with refinancing the debt means BAA may have to bring forward the sale of one its assets, potentially Gatwick, which could fetch at least £2 billion.
17 May 2008
DRIVING AND CHEAP FLIGHTS
LAY WASTE TO RECYCLING CAMPAIGN
Rosemary Bennett, Social Affairs Correspondent - The Times - 9 May 2008
Hopes that Britain has turned into a nation of environmentalists were dealt a severe blow yesterday by an official report which found that the nation's carbon footprint was growing.
Although far more households were separating their rubbish for recycling, any benefits to the environment have been more than wiped out by a sharp rise in car journeys, a decline in cycling and a dramatic increase in commercial flights. The findings come in the latest report on regional trends from the Office for National Statistics.
It found that the number of cars owned by British households had increased by five million to 27.8 million in the past decade. All regions have had an increase in car registration, but the North East and East Midlands have had the biggest growth, up 30 per cent each. In the past two years alone, there has been a 3 per cent increase in distance travelled by car to 5,900 miles per person per year.
Added to this was a rapid escalation of air travel, the most environmentally damaging form of transport by far. Air passenger numbers have increased by 54 million over the past five years, with British airports now dealing with 235 million passengers annually.
Stansted, a hub for the no-frills airlines easyJet and Ryanair, has had the largest growth during the period, with more than 23 million passengers using the airport in 2006, up 73 per cent on 2001.
The airports in Liverpool, Bristol and Southampton have all had a doubling of air passenger numbers.
In contrast, cycling has undergone a sharp decline in the past decade with miles travelled by bicycle down to 38 a year per person from 43 in 1996, a drop of 12 per cent. Only London and Yorkshire bucked the trend. London has had an increase of 39 per cent in miles travelled, as commuters get on their bikes to avoid crowded Tubes and trains and the congestion charge. In Yorkshire the increase in miles travelled by bike was 22 per cent. Miles walked were unchanged over the decade at roughly 200 miles a year per person.
The picture on waste was mixed. Households have been unable to cut the amount of waste they produce despite pleas from campaigners and politicians. Figures show that families are producing an average of 23.5kg a week, just as much as five years ago.
A separate report published yesterday found that people were needlessly throwing away 3.6million tonnes of food each year. The Waste and Resources Action Programme found that salad, fruit and bread were most commonly wasted, and 60 per cent of all dumped food was untouched. The study suggested that £1 billion of food wasted was still edible. Nearly a quarter, in terms of cost, was disposed of because the ?use by? or ?best before? date had expired. Nutritionists say that the ?use by? dates are a guarantee of quality, not of safety.
Joan Ruddock, the Environment Minister, said that the costs to the environment of throwing out good food were significant. "There are climate change costs to all of us of growing, processing, packaging, transporting and refrigerating food that only ends up in the bin."
Recycling was the only bright spot in the otherwise bleak environmental picture, with all regions of the country reporting a significant increase in the past five years. In England homes were recycling 27 per cent of their waste compared with 15 per cent five years ago.
East Anglia was the recycling capital with 34 per cent of all household waste recycled. Homes in the North East and London recycle least, with just 21 per cent of waste heading off to the recycling plants.
Paul Vickers, the head of regional statistics at the ONS, said that the picture was at best mixed. "All regions are recycling more, with the eastern region recycling the most," he said. "But air travel is up, and we have seen a substantial increase at regional airports, and the stock of cars owned is growing steadily."
Mike Childs, the head of campaigns at Friends of the Earth, said that until the Government got a grip on transport, there would be little progress on turning Britain green. "The Government must do much more to help people live less polluting lives. This must include tougher energy efficiency standards for products and cars, greater investment in public transport, and taxes aimed at making it cheaper and easier for people to go green," he said. "If ministers are serious about creating a low-carbon economy they must take urgent action now."
OUR COMMENT: Stansted's last figurers show that numbers of flights are falling compared to the same time last year. Unfortunately not from any aviation policies, but maybe the cost of fuel and the credit crunch, or are some air travel addicts beginning to count all the costs and go by train?
8 May 2008
AIRLINE EMISSIONS 'FAR HIGHER THAN PREVIOUS ESTIMATES'
Cahal Milmo - The Independent - 6 May 2008
The aviation industry claims the contribution of flying to global CO2 emissions will rise to 5 per cent by 2050. Critics claim the true figure will be much higher
The aviation industry's failure to curb its soaring carbon emissions could lead to the "worst case scenario" for climate change, as envisaged by the United Nations.
An unpublished study by the world's leading experts has revealed that airlines are pumping 20 per cent more carbon dioxide into the atmosphere than estimates suggest, with total emissions set to reach between 1.2 billion and 1.5 billion tonnes annually by 2025.
The report, by four government-funded research bodies, is one of the most authoritative estimates of the growth of pollutants produced by the industry. It was presented to a conference co-organised by the United States' Federal Aviation Authority but not given a wider audience.
Combining data produced by the leading emissions-modelling laboratories in the US, Britain and France, the study found that the number of people seriously affected by aircraft noise will rise from 24 million in 2000 to 30.3 million by 2025, despite the introduction of quieter jets, and that the amount of nitrogen oxides around airports, produced by aircraft engines, will rise from 2.5 million tonnes in 2000 to 6.1 million tonnes in 2025.
Jeff Gazzard, a spokesman for the Aviation Environment Federation, the group that uncovered the report, said: "Growth of CO2 emissions on this scale will comfortably outstrip any gains made by improved technology and ensure aviation is an even larger contributor to global warming by 2025 than previously thought. Governments must take action to put a cap on air transport's unrestrained growth."
The report, Trends in Global Noise and Emissions From Commercial Aviation for 2000 through 2025, was presented last year to the USA/Europe Air Traffic Management Seminar in Barcelona but withheld from wider publication.
Its authors at the US Department of Transport, the European air traffic management body, Eurocontrol, Manchester Metropolitan University and the technology company QinetiQ predict that CO2 will rise from its current level of 670 million tonnes to up to 1.48 billion tonnes by 2025. This exceeds the previous estimate, made in 2004, of 1.03 billion tonnes by 2025. The growth in aviation CO2 means that the highest forecast for aviation emissions produced by the International Panel on Climate Change will be met or exceeded.
The aviation industry, which is exempt from the Kyoto protocol on reducing greenhouse gases, claims the introduction of new technology over the next 25 years means that the contribution of flying to global CO2 emissions will rise from 2 per cent of the total to 5 per cent by 2050. Critics claim the true figure will be much higher because it does not include the CO2 reductions being made elsewhere.
The International Air Transport Association, which represents 240 airlines, said it was working towards producing binding targets to reduce CO2 emissions. "With fuel costs doubling in the last year, airlines already have an incentive to work towards greater efficiency," a spokesman said. "There has been a 70 per cent improvement in fuel efficiency in the last four decades. Aviation is a benchmark of environmental responsibility for others to follow."
UK carbon emissions
Total: 556.2 million tonnes
*Power generation: 220.8m
*Transport (including aviation): 133.5m
*Transport (not including aviation): 96m
*Public sector: 10.5m
Figures for 2006, Defra
8 May 2008
MORE ARGUMENTS OVER AVIATION EMISSIONS TRADING
Mixed reaction to aviation carbon trade plans
ENDS Europe DAILY 2535 - 5 May 2008
The European parliament's rapporteur on plans to include the aviation
sector in the EU's carbon trading scheme is facing more opposition
than expected to his proposed second-reading amendments to the law.
In an environment committee debate on Monday, German centre-right MEP
Peter Liese received broad support from "shadow" rapporteurs from the
assembly's main political groups, but also considerable lists of
"details" to be worked out.
"I sometimes got the impression colleagues didn't quite remember how
they voted at first reading," Mr Liese said. He is proposing to
re-table all main first-reading amendments adopted by the parliament
a year ago.
Dissent centred on a proposal to ring-fence revenues from auctioning
carbon allowances. A new demand for airlines to cut emissions by 1.5
per cent annually from 2013-20 and criteria for derogations were also
Fellow centre-right MEP Caroline Jackson said ministers would never
accept ring-fencing and that pursuing it was "pointless". She urged
the rapporteur to carry out an impact assessment to analyse the cost
of his proposals.
Finnish MEP Eija-Riita Korhola, also of the EPP, and Liberal shadow
rapporteur Holger Krahmer said auction revenues should be dedicated
to the aviation sector. They also suggested MEPs should speed up a
second-reading agreement by dropping their demand for a nitrogen
oxide (NOx) multiplier.
Several MEPs, including Socialist shadow rapporteur Matthias Groote,
disapproved of Mr Liese's proposal to demand that airlines cut
emissions by 1.5 per cent annually from 2013-20. Mr Groote wants
to insert the 1.74 annual cut implied in the commission's emission
Mr Groote did support Mr Liese's proposed trading introduction date,
auctioning plans and NOx multiplier. Green MEP Caroline Lucas was one
of several to support a proposed efficiency "gateway" clause.
8 May 2008
THE WORLD NEEDS A WORKABLE AIR TRAVEL TAX
Michael Skapinker - Financial Times - 5 May 2008
Rooting about for Mediterranean holiday possibilities on the Expedia website recently, I came across a flight for £300. About half of that was the fare; the rest was labelled "taxes and fees". I do not regard taxation as theft and I accept that air travellers should pay for the environmental damage they cause. Still, a 100 per cent tax rate did seem steep.
I carried on clicking and discovered I was getting off lightly. On the British Airways site, I investigated what tax I would pay if I were setting out this morning from London's Heathrow to New York's JFK. When I looked, an economy flight leaving this Tuesday and returning on Tuesday next week was selling for £296.40 ($583). The fare accounted for just £80 - which suggested a ticket tax of 270 per cent.
I asked BA to explain how this excess was calculated. It turned out that only £55.40 was straightforward taxation: £40 in UK air passenger duty and £15.40 in US arrival and departure taxes. There was also a US customs user fee. As passengers cannot say they would actually prefer not to use customs, I suppose this counts as a tax too, as does the US "immigration user fee". But there are also airport passenger charges (far higher at Heathrow than at JFK) and security charges. Biggest of all was a £126 fuel surcharge, which is not a tax at all.
Airlines object when governments load extra charges on to their tickets. They do not help themselves by making the tax component of their fares so opaque. But governments are to blame too: they should have come up with a uniform taxation system for this most international of industries rather than the existing hodgepodge of national charges.
The most obvious tax would be on aviation fuel. The problem is that tax on fuel for international flights is outlawed by the Chicago Convention, international aviation's Magna Carta.
Most countries do not impose value added tax on international flights, which means the industry was for years undertaxed. The UK government set out to remedy this and has since become an enthusiastic taxer of air travel. As 20 per cent of international flights begin or end in the UK, the most important airlines have all been dragged into the net.
When the Conservative administration introduced air passenger duty in 1994, it did not pretend it was anything other than a way to fill government coffers. There was no mention of the environment.
As air passenger duty has climbed (it is now £80 on a business class flight to a non-European destination), the government has increasingly described it as a green tax, there to ensure the industry covers its environmental costs.
The airlines insist they more than cover them, which sounds fanciful, given that flying's depredations extend beyond carbon dioxide emissions to noise and traffic congestion around airports. But a recent study by the independent Institute for Fiscal Studies says that, although the external costs of aviation are uncertain, studies indicate the airlines' claim is broadly true.
Low-cost carriers such as EasyJet have objected that the duty does not focus on the real environmental offenders as it does not distinguish between flights on fuel-efficient aircraft and wasteful ones. Because all non-European destinations are subject to the same duty, passengers flying to New Zealand also pay no more than those travelling to Morocco.
The government has agreed that, from next year, taxes will be imposed per aircraft rather than per passenger. Its recent tax changes have been fiascos. Fortunately, it has asked for comments on this one as it looks like being a fiasco too.
The government says its favoured method of assessing the tax will be an aircraft's weight at take-off combined with the distance travelled. As many in the industry have pointed out, this will provide no incentive to use more efficient aircraft. It will also encourage airlines to use smaller aircraft, when the best environmental outcome would be to reduce the number of flights by using larger ones.
There is also the practical problem of how airlines will pass this tax on to customers. At present, each customer who flies pays duty. What would happen under the proposed system if the family in row 35 failed to show up and the airline found itself short of the money to pay the per-aircraft fee? Would the cabin crew organise a whip-round among the other passengers?
The European Union is proposing a different approach: capping airline emissions at the average level of 2004 to 2006 and issuing emission permits to carriers. A small proportion of permits would also be auctioned. Any airline that wanted to exceed its level would have to buy additional permits. This would force the industry to innovate to keep emissions down.
The problem is that the rest of the world does not want an airline emissions trading system. Given how chaotic and dysfunctional the existing airline tax systems are, the rest of the world should come up with a better idea if it can.
8 May 2008
CONSOLIDATION TALK FAILS TO DROWN OUT
AIRLINES' DOUBLE TROUBLE
Kevin Done, Aerospace Correspondent - FinanciaL Times - 3 May 2008
After months of damaging retreat, many airline share prices have gained in recent days as the crude oil price fell back from its latest peak on Monday.
Speculation about industry consolidation - particularly in the US, where Delta Air Lines and Northwest Airlines are seeking to merge - has also helped some airline stocks to bounce back. But the respite could prove temporary.
"We're having a fool's rally," a leading aviation analyst said yesterday. "This is a rally associated with the oil price coming down from $117 to $110 a barrel. But with $110 oil airlines are still in very grave difficulties."
The oil price rose again yesterday as Turkish fighter aircraft attacked Kurdish positions in northern Iraq.
British Airways' share price rallied this week. A rise of about 12 per cent was supported by its disclosure that it was exploring "opportunities for co-operation" with American Airlines and Continental Airlines. But the recovery was small measured against the fall during the past 12 months of more than 50 per cent.
More important influences on the outlook for aviation are the oil price and growing economic weakness round the world. Jet fuel has overtaken labour as the biggest single cost and accounts for 30 to 40 per cent of carriers' total expenses. And there are fears of outright recession in the US.
Chris Avery, European aviation analyst at JPMorgan, said that, for BA, the "enormity" of the industry fuel price rise and recession meant that any eventual gains from an enhanced transatlantic alliance were "pretty small beer".
In recent months the mood has darkened and many US carriers and some in Europe reported losses in the first quarter. Profit warnings have become commonplace, and there have been several airline bankruptcies.
The latest data for global airline traffic, released yesterday by the International Air Transport Association, added to the gloom by showing an underlying rise in passenger traffic of 4 per cent year on year.
Iata said the slowdown in demand growth continued a sharp downward trend that began in December 2007 when the US credit crunch started to be felt in the airline industry.
"Traffic only tells a part of the story," said Giovanni Bisignani, Iata director-general. "Astronomical oil prices are hitting hard. And the buffer of an expanding economy has disappeared. The fortunes of the industry have taken a major turn for the worse."
For many US network carriers, such as American, United, Northwest and Delta, fuel cost problems are compounded by the large number of older, less fuel efficient aircraft they are still operating.
Airlines have tried to claw back some of the higher fuel costs through fuel surcharges and fare increases, although they are starting to meet consumer resistance to higher prices.
Carriers are taking out hedging contracts for part of their future fuel requirements. Air France-KLM, Lufthansa and BA are among the most successful practitioners of this kind of insurance.
BA said in March it was 60 per cent hedged for the first half of the current financial year, at about $80 a barrel, and 45 per cent hedged for the second half at $83 a barrel.
"I am sometimes asked, 'How high does the fuel price have to go before you lose your operating profit?' " Keith Williams, BA chief financial officer, said recently.
"Assuming no change in the level of fuel surcharging, I believe at the moment that would be just under $120 a barrel. Long-run fuel prices at those sorts of levels would of course result in pretty fundamental changes to our industry."
Margins are shrinking at frightening speed. Yesterday the June forward contract for Brent crude oil resumed its upward movement, trading $3.70 higher at $114.20 a barrel.
8 May 2008
TEMPUS: ON TRACK
Nick Hasell - Times Online - 1 May 2008
There may be a world of difference between airlines and bus and train operators but that has not stopped National Express from feeling the effects of a downturn in air travel.
In today's first quarter trading update, the FTSE 250 transport group says it has seen a "softening" of demand on its Stansted airport routes - it runs both train and coach services to the terminal - as a result of lower passenger volumes through the airport.
But that is the only weak spot in an otherwise solid statement. UK coach revenues were up 5 per cent, buses up 6 per cent and rail ahead ahead 9 per cent, with the East Coast Main Line - its newest franchise - especially buoyant. Trading in its North American school bus division remains steady, with no sign that US school boards are cutting back on spending.
Perhaps most reassuring, given concerns over the impact of a weakening Spanish economy, National Express says trading in that territory - where it last year bolstered its Alsa operation with the £450 million purchase of Continental Auto - remains on track.
But that did little to revive the shares, which have fallen by a quarter since the start of the year. Fuel prices are a persistent concern, but they account for only 5 per cent of operating costs. Further, as confirmed today, the company is 85 per cent hedged for 2008 and 40 per cent for next year - albeit at an unspecified price.
With bigger bus operations than any of its peers, National Express should also be among the more defensive given the scope for what is fashionably-termed "modal shift": people relinquishing more expensive forms of transport for cheaper ones - from cars to trains, and from trains to coaches.
Yet at less than nine times next year's earnings, it remains the cheapest stock in its sector. Even more persuasively, the company has pledged to raise its dividend by 10 per cent in each of the next three years - from yesterday's yield of 4.3 per cent.
Tuck away for the long term.
8 May 2008
BRUSSELS BACKS DOWN ON TRADE IN TAKE-OFF SLOTS
Andrew Bounds in Brussels and Kevin Done in London - Financial Times - 1 May 2008
The European Commission yesterday abandoned its long-standing opposition to the trade in take-off and landing slots at congested airports - pioneered at London Heathrow, Europe's busiest airport - and lifted its threat of legal action against the UK government to stop such deals.
"We are recognising for the first time that secondary trading is an acceptable way of allowing slots to be swapped among airlines," Jacques Barrot, European transport commissioner, said. He praised the Heathrow scheme as a model.
"This system has already shown its value in London, where it has allowed a range of airlines to take advantage of the opportunities provided by the EU-US aviation agreement and to create new levels of competition," he said.
Mr Barrot's staff emphasised that trading, for money or any other asset, must be transparent and fair. "At crowded airports, we need to make sure slots are used as efficiently as possible and that airlines have a fair chance to develop their operations," Mr Barrot said.
New entrants should now be eligible for half of new or unused slots each year. The Commission proposal requires a "co-ordinator" to create a pool for such slots and to allocate them, with the first 50 per cent going to new applicants. The regulations retain "use-it-or-lose-it" provisions designed to prevent carriers from blocking rivals or wasting precious airport capacity.
The Association of European Airlines, which represents scheduled carriers, welcomed the proposal. "We have always maintained that the problem is lack of capacity rather than the way slots are traded," it said.
Slots at Heathrow, the leading gateway airport in Europe for US travellers, have been traded for years. The practice has been backed by the UK government ever since it was supported in an action in the High Court in the late 1990s. Slot trading has been a vital mechanism at Heathrow to maximise efficiency. The airport is at full capacity nearly all day and there are virtually no free slots.
The price of Heathrow slots has more than doubled in two years, partly in response to a surge in demand from US airlines seeking to exploit the US-EU "open skies" treaty that came into force in March.
Several US carriers have been able to start services to Heathrow and Continental Airlines recently disclosed it had paid $209m (£105m, ?134m) for four pairs of slots to start services from New York Newark and Houston.
30 April 2008
WARNING: FUEL CRISIS SPELLS END FOR CHEAPER HOLIDAYS
John Ingham and Jane Wharton - Daily Express - 30 April 2008
ROCKETING fuel prices will bring an end to the era of cheap family holidays, experts warned yesterday. Airlines offering long and short haul holidays are pushing up prices to pay the escalating cost of fuel.
British Airways yesterday announced new fuel surcharges and budget companies Ryanair and easyJet have both issued warnings of reduced profits with oil prices driven high around the world.
Several budget airlines have already gone bust, including three in America, and those fighting to stay in business are passing on higher costs to passengers.
Compounding the problems for the travel industry is the strength of the euro against the pound which is raising the prospect of holiday surcharges. In the past nine months the pound has fallen 17 per cent to 1.22 euros, adding to the misery. Oil prices have risen due to several factors including soaring demand in China and India and instability in Nigeria.
Liberal Democrat Transport spokesman Norman Baker said yesterday: "The days of cheap of flights and cheap holidays are numbered. There is only one way the price of oil is going and that is up."
Aviation expert John Strickland of JLS Consulting said low-cost airlines would try to keep fares as low as possible, but would push harder to increase add-on revenues.
From Monday Europe?s biggest budget airline Ryanair will raise the cost of putting a bag in the hold from £12 to £16 and for using a check-in desk to £6 to £8 for return flights. It is also planning 40 job cuts at its Dublin call centre. For families forced by higher prices to holiday at home, the outlook is not must better with analysts at uSwitch.com revealing the widening effect of the fuel crisis.
It forecast that unleaded petrol will cost £1.50 a litre - or £6.75 a gallon - within months. Across the UK, the total fuel bill will hit £81 billion from which the Treasury will take £51 billion.
There were the first signs of a growing revolt yesterday with a petition launched on the Downing Street website calling for a cut in fuel duty. Hauliers also took to the streets of London to protest at escalating diesel prices and tax.
BA yesterday had to deny rumours that it was preparing to issue a second profits warning. It stood by its March forecast of a profit margin of seven per cent for 2008-09 based on an average fuel price of $85 a barrel. But BA - like most airlines - buys its oil in advance to find the best prices. Even so, last month it forecast a £450million increase in its fuel bill to £2.5billion. Fuel accounts for a quarter of airline budgets and the cost of fuelling a transatlantic flight has risen to £22,100.
The new fuel surcharges announced yesterday will come into effect on Friday, adding an extra £6 for return short-haul flights, making the total surcharge £26 return.
Long-haul flights of nine hours or less face an extra surcharge of £20 return, taking the total to £126 return. Long-haul flights of more than nine hours will have an extra surcharge of £30 return, taking the total surcharge for a return flight to £158. A family of four will pay £104 return in fuel surcharges for short-haul, £504 return for a medium-range long-haul flight and £632 for the longest long-haul flights.
Last night Ryanair admitted that planned job cuts were linked to several factors including oil prices but insisted that its increased charges for luggage are designed to "influence passenger behaviour" and ruled out an end to cheap flights.
A spokesman for Abta played down fears of an end to cheap holidays, claiming modern planes are much more fuel efficient. He said: "If fuel prices stay at this level, prices are going to rise but the cost of flights today are near enough the lowest they have ever been historically."
The green lobby is also monitoring the current oil crisis. Tony Bosworth, Friends of the Earth Transport Campaigner, said: "The aviation industry is one of the fastest-growing sources of carbon dioxide emissions. Rising fuel prices are likely to make air travel more expensive. The Government must do more to make greener travel options, such as long-distance rail travel, cheaper and easier to use."
30 April 2008
FUEL COSTS COULD END CHEAP FLIGHT ERA
£16 a bag on Ryanair as airlines add surcharges
Soaring oil prices bring fears of more bankruptcies
Dan Milmo, Transport Correspondent - The Guardian - 29 April 2008
British travellers already thinking twice about flying to Europe this summer as the falling value of the pound cuts into their travel budget received more bad news yesterday with indications that the era of cheap flights may be drawing to an end.
Soaring fuel costs have put airlines under financial pressure which, analysts say, will inevitably be passed on to passengers through increased ticket prices, fuel surcharges and baggage check-in fees. The warnings follow a wave of airline bankruptcies in the UK and the US, and crippling oil price rises which have seen the cost of fuelling a transatlantic flight quadruple since 2000 to $44,000 (£22,100). The pressure on the airlines has been most acute this year as the global oil price rose from $80 a barrel to nearly $120.
Ryanair became the latest airline to pass that pain on to customers yesterday when it raised the cost of putting bags in the hold and checking in at airports. Passengers on Europe's largest budget carrier will have to pay £16 a bag and £8 to use a check-in desk on return journeys from Monday.
Fuel accounts for a quarter of airline budgets and the resulting financial squeeze has triggered warnings that major carriers could go to the wall or be forced to merge with rivals to survive.
For Britons holidaying in Europe this summer, the extra cost of flying comes on top of a slump in the pound against the euro. The pound has fallen by 17% since last summer - from ?1.47 to ?1.22 last week.
Some reports suggest that tour operators are also moving to levy extra charges on holidays to recoup losses caused by the fall in the pound. At least 19 operators have applied to the Association of British Travel Agents to add a charge of up to 10% to holidays already booked. Late-notice fees can be added as long as they are imposed more than 30 days before departure.
Yesterday Ryanair attempted to play down its latest charge increases, the second time it has raised baggage costs this year, as part of an ongoing drive against luggage. But analysts say the airline has hiked up such charges to cover the rising cost of fuel, which is expected to account for nearly half its costs next year.
"Their earnings are very adversely affected by the fuel price, so they need to do everything they possibly can to alleviate that cost pressure," said Andrew Lobbenberg, an analyst at ABN Amro. Long-haul carriers such as British Airways levy fuel surcharges to cover rising fuel costs, but low-cost airlines refuse to impose them, instead preferring to recoup costs through add-on charges for checking in, in-flight food and car rental deals.
Ryanair said its charges hike would help keep fares low by making airplanes lighter, resulting in less fuel being consumed, and lowering baggage handling costs. But industry experts said higher bag check-in costs are inevitable if the cost of oil stays around its current level.
John Strickland, an aviation consultant, said: "Budget airlines will push harder and harder to increase add-on revenues. There is all the more impetus to do it in a toughening oil price environment."
Ryanair and low-cost rival easyJet will try to leave fares untouched, because cheap tickets are the key part of a no-frills business model that uses bargain fares to pack passengers on to airplanes and then wring profits from them with add-ons.
"They cannot afford to raise fares. It would break their model," said Strickland. "Occupancy would fall and they will not make enough money to cover increased fuel costs." Ryanair has already warned that profits could fall by as much as 50% this year due to the fuel situation, while easyJet shares were hit recently when it said it would miss its full-year profit targets if fuel stayed at the current price.
The Ryanair hike came as another airline serving the UK market went bust over the weekend. Eos, carrying business passengers between London and New York, slipped into bankruptcy. High fuel costs and depressed economies in Europe and the US have caused airline bankruptcies on both sides of the Atlantic in 2008, including three budget carriers in the US since March.
The threat to the industry is at its most serious since the aftermath of September 11, analysts have warned. The global airline industry is barely profitable, with a return on sales of around 1%. Just 13 airlines in the world recorded a profit margin of more than 10% last year, including Ryanair and easyJet, when the average oil price hovered below $80 a barrel.
Analysts say BA's profits will be nearly wiped out if oil stays around the $120 mark over the next year. BA has admitted its fuel bill will rise to £2.5bn this year, forcing it to warn of lower than expected profits.
Extra costs per return journey
Bag check-in £10
Priority boarding pass £10 - £15
Bag check-in £16
Priority boarding £8
Check in for musical instrument or sports equipment £50
Bag check-in £9.98
Pre-assigned seating £10
Check in for sports equipment £40
30 April 2008
GOVERNMENT GROUNDS SECRET BAA PLAN
TO RECRUIT SIR DAVID ROWLANDS
Mark Kleinman - Sunday Telegraph - 27 April 2008
The Government has torpedoed secret attempts by BAA, the owner of Heathrow and Gatwick airports, to hand a lucrative directorship to Sir David Rowlands, a former civil servant who played a key role in directing national airport policy. While at the DfT, Sir David Rowlands was a central figure in Britain's aviation policy
The Sunday Telegraph has learned that BAA offered Rowlands, who spent four years as the permanent secretary of the Department for Transport before retiring last May, a role as a non-executive director several weeks ago. His remit was to have been to provide counsel on BAA's regulatory landscape and to act as a bridgehead between the company and Whitehall.
Downing Street sources said last night that Rowlands had accepted the post in principle before the Advisory Committee on Business Appointments - loosely affiliated to the Cabinet Office - recommended against the move because of its political sensitivity.
The decision underlines the Government's nervousness about the rapid transfer of senior officials from Whitehall posts into potentially lucrative private sector employment.
According to a list released under the Freedom of Information Act detailing meetings between Whitehall officials and companies such as BAA, British Airways and Virgin Atlantic, Rowlands held more than a dozen meetings with BAA during his stint at the DfT.
Last week, the Competition Commission gave a clear signal it expects to order a partial break-up of BAA by forcing the company to dispose of one or more of its major airports. Such a move would represent the biggest shake-up of airport ownership for decades.
Ruth Kelly, the Transport Secretary, announced last week a separate review of airport regulation, which will focus on the role of the Civil Aviation Authority.
During a 24-year career at the DfT, Rowlands was a central figure in Britain's aviation policy, overseeing proposals for a third runway at Heathrow and the delivery of a public-private partnership for air traffic control services.
A separate list produced by the Government's Advisory Committee on Business Appointments shows that Rowlands has taken on two other roles since retiring from the Civil Service.
He is a member of an advisory panel at Xansa, the outsourcing and technology specialist. He has also been chairing a review of roads policy for Essex County Council.
The restrictions on Rowlands' role at Xansa state that his appointment was approved "subject to the condition that, for 12 months from his last day of service [in May 2007], he should not become personally involved in lobbying UK Government Ministers or officials on behalf of his new employer".
Rowlands could not be reached for comment last night.
BAA declined to comment, while a spokeswoman for the Advisory Committee on Business Appointments refused to comment on Rowlands' case, but said: "Any application or advice would remain confidential until such time as an appointment was taken up or an announcement was made".
30 April 2008
FLY ME TO THE MOON: AIRPORT SALES
ARE RIGHT ON FERROVIAL'S RADAR
Disposals may be difficult but the break-up of BAA is just
what its Spanish owner always wanted, finds Mark Leftly
Independent on Sunday - 27 April 2008
As Christopher Clarke strode into the Competition Commission's briefing room, he knew what the members of the press were thinking. Advisers who two weeks earlier had read a draft of the "emerging thinking" report, on BAA's airport domination in Scotland and the south-east of England, had warned Clarke, the inquiry's chairman, that the findings would be seen as a break-up call.
Following the publication of the report last Tuesday, Clarke had toured television studios that morning, explaining that the report did not represent the definitive view of the inquiry, which would be given in August. To the hacks, however, a relaxed Clarke repeated the earlier words of the Competition Commission's press officer: "This is about as far as we have ever gone at this stage."
With phrases like "common ownership adversely affects competition" scattered through the report, the sell-off of at least some of BAA's seven airports now has an air of inevitability.
But what this ignores is that nearly everything is going to plan for Ferrovial, the Spanish conglomerate that bought BAA for £10.6bn in 2006 in a heavily bankrolled deal. "What people don't realise," smiles a former executive at BAA, "is that Ferrovial is going to end up getting one of the greatest steals in corporate raiding history."
Ferrovial's need to refinance the massive debt it took on to buy BAA is well known. But more to the point, says the insider, is that the capacity constraints at Heathrow, Stansted and Gatwick meant Ferrovial was always prepared to sell parts of the portfolio. "It did due diligence, so this situation came as no surprise."
A second source adds that while Macquarie, the Australian investment bank, has been reported as advising on refinancing BAA's unregulated airports - Glasgow, Edinburgh, Aberdeen and Southampton - it has also been valuing chunks of the portfolio. The source concludes that Ferrovial is gearing up for a sale.
The Spanish group has already sold 33 properties and its World Duty Free retail chain for a total of more than £800m. A further property sale that is under negotiation should bring in £700m. Gatwick could fetch £3bn and "if they get dead lucky", says the first source, Ferrovial might also be able to sell Stansted. All that could total £6bn, which would mean the Spaniards end up spending a net sum of well under £5bn.
Heathrow, meanwhile, has fixed assets worth £8bn - hence the description as one of the great corporate raids. A senior City transport banker agrees: "Heathrow is the important thing here - nothing else is critical to Ferrovial."
But disposals will bring difficulties (see the airport boxes). If the Competition Commission recommends selling Gatwick, it could well be demanding that Ferrovial sell at a time when the market has not recovered, leading to low bids. Then there are concerns over the regulatory burdens at Heathrow and Gatwick, which mean the owners cannot fix charges to airlines as high as they'd like.
"This is all high risk," says the former BAA executive. "And there's an awful lot more complexity than Ferrovial bargained for. You're talking weeks, months and years for all this to play out."
Gatwick - Bidders could be grounded
This is the airport that has provoked the most speculation on bids.
Although sale price estimates fluctuate from £3bn to £5bn, two candidates may be in difficult positions. Macquarie is already acting as an adviser to BAA, so faces conflict of interest concerns. Fraport, the German transport company, owns Frankfurt airport, which could be seen as a rival to Gatwick due to its size and proximity to a major financial centre, meaning Brussels might veto a deal on competition grounds.
There are also fears that interested parties could be put off by Gatwick's status as a "designated" airport. To ensure BAA did not have a stranglehold on its sites, various systems and services, have been outsourced. This makes any purchase less attractive, and is also the reason why baggage handling at Heathrow's T5 is not done by BAA.
Edinburgh, Glasgow, Aberdeen Sales head for take-off
Accounting for 84 per cent of passengers north of the border, BAA disposals in Scotland are likely to be recommended when the inquiry releases its findings. It is thought bid teams are being put together for Glasgow and Aberdeen, which would be Ferrovial's favoured sales.
Unlike the London airports, these Scottish assets are unregulated, making them far easier for bidders to price. As charges are not reviewed every five years, there is also greater certainty, allowing bidders to raise relatively cheap long-term debt to buy and develop the airports. One source believes that, as a result, sales in Scotland will be completed before Gatwick.
But buyers may not be able to hike charges to carriers as there is not the same level of demand as in London.
Southampton - Ripe for redevelopment
With the spotlight on the London giants, a possible sale of Southampton airport is often overlooked. But Ian Tyler, the chief executive of Balfour Beatty, the construction group with a 60 per cent stake in Exeter airport, has admitted an interest and there is sufficient development potential to attract more bidders.
Clarke attacked BAA's management of Southampton, citing a "lack of ambition". In 2003, the Government suggested the airport could accommodate seven million passengers a year, but BAA said 2.5 million was more realistic.
Flybe, Southampton's main carrier, was critical of BAA's capital expenditure plans and the commission report endorsed that view: "BAA had not developed Southampton, despite constraints at its London airports, as it did not understand how to develop a regional airport."
Heathrow BAA seeks room for manoeuvre
The prize asset. In return for not putting up a fight against the sale of other airports, an aviation source believes Ferrovial will push the Government to lift the Civil Aviation Authority's regulatory powers over charges to airlines using Heathrow.
In the recent five year settlement, BAA was granted a charge far less than it argued was necessary to help fund investment. "Heathrow is already one of the cheapest international airports in all of Europe," says the source. "Ferrovial could raise prices by 50 per cent tomorrow without really affecting demand."
One banker points out that the regulatory burden has been so heavy that "it doesn't allow the necessary capital expenditure to ever catch up" with the needs of Heathrow.
Stansted - Stand by for a forced sale as carriers cut up rough
A harder sell than Gatwick, the Competition Commission was also damning of BAA's management here: "At Stansted there has been no constructive engagement on capital expenditure... and the airlines object strongly to BAA's proposed development and lack of consultation."
Ryanair and easyJet, which account for 80 per cent of the airport's passengers, have said plans for a new runway and terminal don't meet their needs. They told the inquiry they would have "little option" but to use different airports.
Clarke noted a "lack of responsiveness to carriers' needs" and said he would look further at easyJet and Ryanair's complaints. A forced sale, then, looks increasingly likely.
30 April 2008
LABOUR 'BETRAYAL' OVER AIR QUALITY
Marie Woolf, Whitehall Editor - Times Online - 27 April 2008
The government has decided to sacrifice air quality standards across London in order to allow an extra 60,000 flights per year into Heathrow.
Ministers are planning to ask the European commission for a special deal to exempt the capital from official limits on exposure to air pollutants.
MPs representing constituencies under the Heathrow flight path accused the government of "an enormous betrayal" for allegedly breaking a promise to block Heathrow expansion unless air quality standards were met.
John McDonnell, Labour MP for Hayes and Harlington, said the government's decision, disclosed in a document obtained by The Sunday Times, was also "a disgraceful act of bad faith". He added: "Ministers must have been on their feet about 20 times where they said there will be no expansion of Heathrow unless they can meet the air pollution limits."
He said next week he and other MPs would demand that ministers should explain themselves in the Commons.
Exposure to nitrogen dioxide (NO2 to respiratory problems and premature death in vulnerable people.
Plans to allow flights to land and take off on the same runway at Heathrow as early as 2010 could lead to an extra 60,000 flights per year. The extra passenger volumes will also generate additional traffic to and from the airport. A third runway would generate a further increase in flight numbers and emissions.
Susan Kramer, Liberal Democrat MP for Richmond Park which lies under the Heathrow flight path, said: "Poor air quality hurts our health but it's the issue that the government never wants to talk about when it comes to Heathrow. Now we know why: they have a dirty little secret."
The European Union air quality directive, which comes into force next month, would require the UK to meet limits on NO2 by 2010, in line with World Health Organisation standards.
The government's plans to secure a waiver from the rules was disclosed in a presentation given to a conference on air quality earlier this month by an official at the Department for Environment, Food and Rural Affairs. The civil servant from the department's air quality unit disclosed that the government is drawing up plans to ask Brussels for formal permission to delay compliance with Europe-wide air quality rules.
An environment department spokesman confirmed that the government was expected to apply for a five-year exemption for NO2 emissions and a year for particulates of less than 10 microns in size.
OUR COMMENT: What a disgrace for the country that pioneered the first National Health Service! Hopefully the EU will insist on maintaining higher standards for its citizens.
30 April 2008
STANSTED AIRLINE FILES FOR BANKRUPTCY
Eadt Online - 28 April 2008
AN AMERICAN premium airline operating out of Stansted Airport has filed for bankruptcy, cancelling all further flights and leaving passengers with an anxious wait for refunds.
Eos Airlines, which had flown up to four premium flights between the Essex airport to New York each day, filed for bankruptcy on Saturday, saying it had "insufficient cash" to continue after failing to secure investment.
The airline operated some flights from Stansted yesterday but they were the last and customers who have already purchased tickets will have to seek a refund from their credit card company. A statement issued on the Eos website said it would immediately implement a "eduction in its workforce" and "eliminate" the positions of most of its employees.
Jack Williams, Eos' CEO, said: "After overcoming today's extremely challenging economic and credit environment to negotiate terms for a round of financing, it is regrettable that we were forced to take this action. Unfortunately, just as we were working toward closing on an investment that would have carried us to corporate profitability in 2009, some issues arose that we could not overcome."
He said it was "regrettable" that it was unable to close on the financing needed, leaving it with "insufficient cash" to continue operations. Mr Williams added: "I want to express my appreciation to our dedicated employees and to the many guests who have become like family to us."
A spokesman for BAA Stansted, which runs the airport, said it was "disappointing news" and referred customers to the Eos website for more information.
Launched two years ago, the airline used Boeing 757 planes with 48 seats that reclined into beds but many flights were reported to be significantly below capacity.
Business seemed good just 18 months ago in September 2006 when the airline doubled its daily service, which offered a standard return ticket at the time costing £2,750. However the airline is just one of a number of smaller operators in America hit hard by rising fuel prices, economic pressures and falling demand.
Brian Ross, economics adviser for campaign group Stop Stansted Expansion, said the news was a blow to BAA's hopes for developing long haul and business services at Stansted and reducing its dependence upon short-haul leisure flights. SSE had long been critical of Eos and fellow all-business operator Maxjet, which went out of action in December, for environmental reasons.
The group's research showed that each Eos passenger produced the equivalent of nine tonnes of carbon dioxide on a return trip to New York - more than three times as much as a passenger travelling on a scheduled flight with a conventional airline.
Mr Ross said: "Clearly no-one can be happy about the job losses and unpaid bills which will arise from the demise of these two US airlines but when aviation is already the fastest growing cause of climate change it is unacceptable to have such profligate operations."
30 April 2008
CAA ISSUES ITS MANDATORY REFERENCE OF STANSTED AIRPORT TO THE COMPETITION COMMISSION
CAA Press Release - 29 April 2008
The Civil Aviation Authority (CAA) has today issued its formal, mandatory reference of the Stansted Airport price control to the Competition Commission and has set out a number of options for the price control design.
The choice between these options depends upon the extent of competition now and in future ? which could be affected by the Competition Commission?s own market inquiry into BAA?s airports ? and establishing which is best suited to delivering investment in the right facilities at the right time.
Getting the design and level of the price cap right is important as it affects the prices paid by airport users, the service quality received by passengers and the investment that the airport could undertake. Further, as Stansted competes for passengers and airline services, the price cap could also affect price, service and investment at other UK airports and the evolution of competition in the airports market.
The price cap options identified by the CAA and in consultation responses vary in the extent to which they:
* Rely on competition ? and associated commercial negotiation between the airport and its airline customers ? to constrain pricing and protect the interests of airport users;
* Base the price cap on historic costs derived from the airport?s past operation and regulation rather than the prices that an operator would normally charge to pay for necessary and efficient investment; and/or
* Protect the commercial interests of airlines currently operating at the airport.
The CAA has also identified issues around the practical implementation of different options and ways of implementing transitional arrangements, so that any changes are introduced over a period of time.
Speaking today, Dr Harry Bush, the CAA?s Group Director of Economic Regulation, said: "Devising an approach to regulating Stansted is unusually challenging. It needs to take proper account of uncertainties around forecasting of market trends, the scale of the proposed investment and the strongly held ? but sharply differing ? views of the airport and its principal airline customers. And, importantly, to do so in a way that benefits passengers."
"The extent to which Stansted is ? and can be ? subject to competitive pressure should inform the design and level of the price cap for Stansted as this will affect pricing and investment at other airports and the prospects for future competition. I look forward to receiving the Commission's views and recommendations on the future regulation of Stansted later in the year."
Following the January consultation document, the CAA has:
* Further refined the price cap options, including a sixth option identified by airlines in their responses to the January consultation, focusing on how these options could be implemented in practice;
* Undertaken initial analysis of Stansted operating costs and commercial revenues, identifying some scope for further airport efficiency improvements;
* Considered the airport's efficiency in undertaking and consulting upon capital investment projects, which suggests that whilst investment in the current price control period was delivered efficiently in terms of timing and cost, there is scope for improved information to airlines, in line with previous CAA analysis; and
* Requested information from BAA to justify the commercial case for its airport expansion plans and from airlines to enable the CAA to understand better the market position of the airport.
30 April 2008
THIS IS THE MOST SERIOUS NEWS
AVIATION MUST PLAY ITS PART TOO
NO MORE EXPANSION!
Carbon dioxide, methane up sharply in 2007 - US Government
Deborah Zabarenko, Environment Correspondent - Reuters - 23 April 2008
The amount of two key greenhouse gases in Earth's atmosphere rose sharply in 2007, and carbon dioxide levels this year are literally off the chart, the U.S. government reported on Wednesday.
In its annual index of greenhouse gas emissions, the U.S. National Oceanic and
Atmospheric Administration found atmospheric carbon dioxide, the primary
driver of global climate change, rose by 0.6 percent, or 19 billion tonnes
The amount of methane increased by 0.5 percent, or 27 million tonnes, after
nearly a decade of little or no change, according preliminary figures to
scientists at the government's Earth System Research Laboratory in Colorado.
Methane's greenhouse effect is 25 times more potent than carbon dioxide's, but
there is far less of it in the atmosphere. Overall, methane has about half
the climate impact of carbon dioxide.
The primary source of carbon dioxide is the burning of fossil fuels, which is
increasing, with China now the world's biggest emitter, said Pieter Tans, who
studies greenhouse gases at the laboratory. The United States is second.
The greenhouse gas index, based on data from 60 sites around the world, showed
that that last year's carbon dioxide increase added 2.4 molecules to every
million molecules of air, a measurement known as parts per million, or ppm.
OFF THE CHART
Carbon dioxide levels were about 270 ppm in the mid-18th century, before the
wide use of fossil fuels that began with the Industrial Revolution. Last
year's levels were near 390 ppm, and they have been rising more steeply over
the last three decades, Tans said in a telephone interview.
"The average (annual rise) over the last five or six years has been 2 ppm and
that is actually steeper than it has been in previous decades," he
said. "This whole decade the rate of increase has accelerated, and we have a
very clear candidate (for the cause) and that's emissions from burning fossil
The rise continued in 2008, according to a chart of global carbon dioxide
emissions online here, which showed world emissions of this gas heading off
the chart at over 386 ppm.
"It's gloomy," Tans said. "With carbon dioxide emissions, we're on the wrong
track, it's obvious. And I'm also fully convinced that we're in actually
quite a dangerous situation for climate."
The increase in methane emissions after years of little change may indicate
that methane locked for thousands of years in frozen Arctic soil known as
permafrost is being emitted into the atmosphere as the soil melts.
"What used to be in the deep freeze is now being taken out in the warming,"
It is also possible that the 2007 rise in methane emissions is due to some
other cause. Methane emissions rose sharply between 1978 and 1998 and then
24 April 2008
BAA UNDER PRESSURE:
WATCHDOG ATTACKS AIRPORTS MONOPOLY
Kevin Done and Michael Peel - Financial Times - 23 April 2008
The UK airports market was yesterday plunged into a period of unprecedented upheaval after the anti-trust watchdog attacked the dominant role of BAA, the world's leading airports group.
The Competition Commission's criticism of the company - a subsidiary of Spain's Ferrovial - could pave the way for a break-up of the group's monopoly of the main airports in London and Scotland. Its findings also increase the likelihood BAA will choose to put some of its airports up for sale before it is forced to do so.
Also yesterday, the government took the first step towards a radical overhaul of the current system of airport economic regulation and the setting by the Civil Aviation Authority of the maximum charges that must be paid by airlines at Heathrow, Gatwick and Stansted.
The commission said BAA's common ownership of seven airports in the south-east of England and Scotland "adversely affected" competition. The ownership of the London airports - as well as Southampton and three in Scotland: Glasgow, Edinburgh and Aberdeen - "may not be serving well the interests of either airlines or passengers", it said.
Christopher Clarke, chairman of the commission's inquiry into BAA's airports, said: "We are particularly concerned by its apparent lack of responsiveness to the differing needs of its airline customers, and hence passengers, and the consequences for the levels, quality, scope, location and timing of investment and levels and quality of service."
In an interim report explaining its "emerging thinking" about the structure of the UK airports market, the commission said it planned to publish its provisional findings in August, including possible remedies such as requiring the sale of one or more of BAA's airports, if competition problems were to be identified.
Mr Clarke said the commission had gone a lot further than was usual at this stage in industry enquiries. He admitted it was "very difficult to know" what an airport industry after a BAA break-up would look like, although there were good reasons for thinking a more competitive market would lead to new ideas and potential improvements.
"You get different investment plans, different responses to customers. At the moment we are not seeing a lot of difference," he said. Ian Giles, a competition lawyer at Norton Rose, said: "The market will read this as a sign that BAA is likely to sell off at least Gatwick and one of its Scottish airports. Investment banks are already sounding out potential buyers."
Douglas McNeill, transport analyst at Blue Oar Securities, added: "The break-up of BAA is moving steadily closer, and owner Ferrovial now has about a year to make disposals before the commission forces its hand. That means one of the Scottish airports and one or more of those in England. There will be buyers for these assets - but will they be prepared to match the valuations that were implicit in the high price Ferrovial paid for BAA two years ago?"
The report is yet another serious challenge to the consortium led by the Spanish construction, infrastructure and services group, which acquired BAA less than two years ago for more than £10bn. Ferrovial already struggles to refinance more than £11bn of BAA debt after the highly leveraged takeover in summer 2006.
Financial returns at Heathrow and Gatwick are squeezed by the new five-year price cap regime imposed recently by the CAA. It also faces severe operating challenges at Heathrow, Europe's busiest and most congested airport, especially after the disastrous opening of its £4.3bn Terminal 5.
Colin Matthews, BAA chief executive, said the group remained "of the view that its ownership is in passengers' interests, both in terms of tackling the shorter-term service problems and in following through with major commitments to investment in facilities and capacity".
Airlines welcomed the commission report, with Ryanair and Flybe calling again for BAA's break-up. Ryanair said the monopoly had been "bad for consumers, bad for passengers and damaging [to] UK tourism".
24 April 2008
BREAKING UP BAA WOULD BE BENEFICIAL
Leader - Financial Times - 23 April 2008
The prospect of loosening BAA's grip on London airports moved nearer to take-off yesterday. Good. The UK's competition watchdog believes that there could be some competition between Heathrow, Gatwick and Stansted if they were separately owned. Different ownership would not provide a complete solution to the miseries of using Heathrow. But it is a necessary part of an answer that must also include a revamped regulatory regime.
Ferrovial must have become inured to abuse for its operational management of BAA. In the months since June 2006, when the Spanish group took on a pile of debt to buy the airport company, Heathrow has become hated, a byword for chaos and incompetence.
But the report from the Competition Commission on its "emerging thinking" still makes uncomfortable reading. The regulator expresses particular concern that the airport group seems unresponsive to the needs of airlines and passengers and worries about the impact on investment and customer service. In regulator-speak this is strong stuff.
Nor can BAA take refuge in its usual argument that there cannot be competition between London's airports until the severe shortage of capacity has been alleviated. The report turns this analysis on its head, to question whether the capacity problem can be addressed without an injection of competition.
The potential benefits of competition are apparent. Research suggests that some travellers are already prepared to switch between the three London airports on some short-haul and leisure flights, so competing owners would have incentives to improve services to attract airlines and their customers. Different owners for Gatwick, Heathrow and Stansted would mean more sources of investment and the ability to focus on more than one big project at any one time. Competition would also improve regulation, since it would enable comparison between operators.
Alongside a break-up there must be a wide-ranging regulatory overhaul. The current regime is feeble and inflexible. It does not provide the right investment incentives and fails to penalise the small service failures that blight travel on a daily basis. A break-up would also mean new challenges. The regulator would, for example, have to ensure that Heathrow did not focus on where it was most likely to lose business at the expense of, say, long-haul passengers who could less readily go elsewhere.
Breaking up BAA would not create a passengers' paradise overnight. But without a split that paradise looks even less attainable.
24 April 2008
FOCUS ON TRANSPORT FAILURES
Financial Times - 23 April 2008
Frustrated passengers may find their spirits slightly lifted by reading the competition watchdog's unflattering assessment of BAA's stewardship of Heathrow and other leading airports.
Beneath the Competition Commission's temperate and sometimes technical language lies a wide-ranging critique of BAA's performance - from security queues at Heathrow to waiting times for bags at Aberdeen.
The deeper message is that responsibility for the problems is spread wider than the company, with the crisis rooted partly in the inability of the transport system as a whole to cope with a big rise in demand for air travel.
The commission notes that BAA's south-east airports - including Heathrow, Gatwick and Stansted - show a "lack of responsiveness" to airlines and passengers. It picks out embarrassing statistics, including Heathrow's 90th-place ranking (out of 101) in a survey by Airports Council International - an operators' group - of customer perceptions of service.
Heathrow, Stansted and Gatwick all rank 93 or below on the council's rankings of waiting times in security queue. A separate BAA survey last year found that a third of Heathrow passengers said they had experienced a wait of 10 minutes or more at security points.
Christopher Clarke, the commission's inquiry chairman, noted many complaints about airports, but said airlines and border officials must bear some responsibility for long-standing gripes over baggage handling and immigration queues.
While the commission's criticism of BAA's "failure to ensure operating excellence" may appear understated, it threatens far more serious problems for the company than angry passengers complaining about overcrowding or broken travelators.
24 April 2008
PREPARING FOR A ROUGH LANDING
Financial Times - 23 April 2008
The next test of Spanish-owned BAA's airports monopoly by Christopher Clarke will come when the Competition Commission's amiable deputy chairman uses its facilities to take a short-break in Sicily.
The 62-year-old former banker is known to spin a good yarn over a City lunch. But underneath this affability are strong leadership skills which have helped oversee the regulator's team put together in March last year.
Combined with sharp political antennae, it probably means that the commission is likely to recommend a break-up of the airports operator in its report this summer.
Mr Clarke read economics at Cambridge and joined Shell in 1967, going on to obtain an MBA from London Business School. After a stint at Arbuthnot Latham, in 1982 he became director of Samuel Montagu, the investment bank arm of Midland Bank, which was bought by HSBC. Mr Clarke was a director of its investment bank from 1996 to 1998, Joining the commission in 2001, he became deputy chairman in 2004 and led inquiries into store card credit services and current accounts in Northern Ireland.
The father of two is a member of Berkshire Golf Club, playing off a handicap of 15, but is eschewing golf for the Italian walking break with his wife ahead of the next stage of the inquiry.
24 April 2008
GLANCE AT PAST
John O'Doherty - Financial Times - 23 April 2008
The British Airports Authority was created in 1965 to run some airports formerly controlled by the Ministry of Civil Aviation, writes John O'Doherty.
It initially took ownership of just three London airports - Heathrow, Stansted and Gatwick - as well as Prestwick airport outside Glasgow. By 1975 Aberdeen, Glasgow and Edinburgh airports had been added, but Prestwick was sold off in 1992.
Following Margaret Thatcher's re-election as prime minister in 1983, the Conservative government took steps to privatise the authority. In July 1987 BAA plc floated on the stock exchange, raising £1.2bn.
Crucially - from the perspective of yesterday's announcement - that privatisation programme rejected alternative plans to break up the authority into competing airport companies, a scheme strongly opposed by BAA at the time. Concerns over BAA's dominant position in the UK's civil aviation market have surfaced at regular intervals since.
The other problem for the company has been capacity. As long ago as 1986 the Civil Aviation Authority argued that an additional runway would be needed in the south- east. But no new runways have been built, while additional terminals have opened in Gatwick and Heathrow and passenger numbers have more than doubled since 1990 at airports run by BAA.
In recent years BAA has expanded beyond the UK, taking over Naples airport in Italy and securing retail contracts at Pittsburgh, Baltimore-Washington International and Boston's Logan airport.
After the Spanish infrastructure group Ferrovial took over the company in 2006 for £10.3bn, it was announced BAA would sell some non- UK airports. It has since divested holdings in Budapest airport and some Australian airports.
24 April 2008
ALL SIDES HAIL REVIEW OF PRICE CONTROL SYSTEM
Kevin Done, Aerospace Correspondent - Financial Times - 23 April 2008
Yesterday's announcement by Ruth Kelly, transport secretary, of a government review that should lead to a radical overhaul of the airport price control regime was welcomed by all sides - airlines, airports and the regulator.
The challenge will be to put in place a system that can support investment in new airport capacity, at reasonable prices, while ensuring passengers are provided with a quality of services that will end the airport misery of recent years.
While consumers want an end to "Heathrow hassle," the airlines ultimately expect the regulatory system to deliver a mechanism to hold the airports in check and moderate future increases in airport charges. They were stunned by the scale of the price rises recently approved by the Civil Aviation Authority, the economic regulator.
Three airlines - Easyjet, Ryanair and BMI British Midland - and the International Air Transport Association are planning applications for a judicial review of the five-year charging regimes recently approved by the CAA for Heathrow and Gatwick airports. Ryanair says it intends to challenge charges at Stansted.
BAA, the owner of all three London airports, believes that, on the contrary, the latest price settlement is squeezing its returns and fails to offer sufficient incentive to invest.
Harry Bush, CAA director of economic regulation, said recently that the regulatory regime could be improved "by placing the interests of consumers unambiguously at the heart of the CAA's duties and by encouraging competition between airports and between airlines for their business".
The present system seeks to reflect the often conflicting interests of airlines, airport operators and passengers. But in a clear warning to airlines angered by the scale of price increases at Heathrow and Gatwick, Mr Bush said it was "clear that regulatory reform is no magic bullet - airport investments and service quality will still need to be paid for".
The Competition Commission has yet to make its mind up on what regulatory reforms are needed but said yesterday it was concerned the present system might adversely affect competition.
Any changes to the regulatory system would not come into operation for at least six years, Ms Kelly said yesterday, in order not to change the price caps just agreed for Heathrow and Gatwick (and next year's settlement for Stansted) and to give investors at least some medium-term certainty on the financial outlook.
The airport regime, put in place in 1986, is one of the oldest economic regulatory systems in the UK and Ms Kelly accepted there was an "urgent need" to consider how the framework could be updated.
She said the government review would focus on how to provide incentives to improve the passenger experience, "encourage appropriate and timely investment in additional airport capacity to help deliver economic growth", and address the environmental impact of aviation on airport development.
A panel of experts led by Professor Martin Cave, a regulatory economist and director of the centre for management under regulation at Warwick Business School, will be appointed to advise her. The CAA has already made clear that it wants the scope of its powers to be brought into line with those of the other independent utility regulators including Ofcom, Ofwat and Ofgem in the telecoms, water and electricity sectors.
Currently, as the commission report pointed out yesterday, the CAA has only limited powers to intervene in an airport's business, once the price caps have been set for five years. In addition BAA, unlike other utilities, is not subject to a licence.
Importantly there are no provisions to ring-fence the assets of any airport or for a special administration regime in the event that BAA was to get into financial difficulties.
OUR COMMENT: There is also a need for the government and the aviation industry to accept that aviation must play its fair part in reducing carbon emissions. Expansion of airport capacity will only aggravate the situation. The first question might be ? Are today's flights fully utilised? Does the UK need more passenger seats ? as opposed to more flights? How many flights take off with less than maximum capacity? How many passengers are unable to book seats when they need them? And, how many bookings are stimulated by the repeated adverts in the papers for cheap seats?
Queuing at airports should not be taken as the equivalent of a bus queue waiting for full buses. How many flights are fully booked? The queues are a function of the terminal passenger capacity and efficiency. Are all the flights really needed? It's the flights that do the damage!
24 April 2008
SLEEPING NEAR AIRPORTS IS BAD FOR YOUR HEALTH,
SAYS EU RESEARCH
European Commission - Environment DG - 22 April 2008
Recent studies indicate that exposure to noise is damaging to your health. New research from the EU-funded HYENA (Hypertension and Exposure to Noise near Airports) Study shows that living near an airport increases your risk of hypertension.
Traffic noise from roads, airports and railways is a major environmental problem and is increasingly recognised as a serious threat to public health by the World Health Organisation. Recent research suggests a link between traffic noise and hypertension, a medical condition in which blood pressure is raised.
A 4-year study carried out as part of the HYENA project, explored the health effects associated with exposure to aircraft noise. The project included studies near major airports in Germany (Berlin Tegel), Greece (Athens), Italy (Milano Malpensa), the Netherlands (Amsterdam Schiphol), Sweden (Stockholm Arlanda) and the UK (London Heathrow). In total, 5,000 participants, between 45-70 years of age, who had lived near any of the six European airports for at least five years, were included in the study.
Participants were exposed to substantial night-time noise in all the participating countries, particularly in the late evening and early morning. Night-time noise caused a significant increase in blood pressure amongst participants. The results suggest that an increase in night-time aeroplane noise of only 10 decibels increases the risk of blood pressure by 14 per cent in both men and women. Exposure to 24-hour road traffic noise also increases blood pressure, particularly in men.
The International Air Transport Association (IATA) has predicted an annual growth in the number of passengers of 4.3 per cent until 2015. As air travel is on the increase and airports are expanding to meet this demand, traffic noise around airports is likely to increase. This research suggests that the rise in noise will also contribute to the growing burden of cardiovascular disease on public health resources.
Preventative measures should be considered to reduce noise. The Green Paper on Future Noise Policy aimed to develop noise reduction policies to prevent human exposure to excessive noise levels, which endanger health and quality of life. Following on from this, the Directive on Environmental Noise aims to provide a common basis for tackling the noise problem across the EU.
24 April 2008
PUTTING ON A SHOW AGAINST EXPANSION
James Burton - Herts & Essex Observer - 22 April 2008
THE finest talent from Essex and beyond came together at Little Easton's Barn Theatre on Saturday to support the campaign against Stansted expansion. More than 150 turned up to the sell-out show, raising around £2,000 for SSE's second runway fighting fund. Some 17 acts took the stage, providing a wide variety of entertainment from music and comedy to magic acts and dance routines.
Among those watching the show was "Her Majesty the Queen" - or rather actress Jeanette Charles, who has played the monarch in such popular films as Austin Powers: Goldmember and The Naked Gun.
Most performers - some amateur, some professional - came from within the [Observer] area, with a few extra coming from further afield.
The bill included Bishop's Stortford musician Keef Jackman, who runs the highly successful Acoustic Club at the town's Half Moon pub, and former music teacher Liz Kadir, of Stansted, who showed off her talents on the French horn.
Dunmow singer and guitarist Laura Kearns performed a song she had written called I Won't Let Them Take My Home From Me, which reflected many residents' concerns about the future of their area.
The show was the brainchild of Broxted resident Irene Jones, who has been campaigning against the expansion of Stansted Airport for more than 30 years. She said: "We started auditions in January, and it was difficult at times because people have jobs and we couldn't always get everyone together for rehearsals at the same time."
"The Barn Theatre is a particularly appropriate location, as it is threatened by expansion at Stansted. I didn't know how popular this evening would be, but after it sold out I just wish I'd arranged it to run for more than just one night!"
"We had no problem selling the tickets at all. People have been very supportive - they want to come and have a good time, but they also want to show their support for the cause. Fund-raising events like this help us to cement our belief as a community in what we are doing."
24 April 2008
MORE DOUBT ON COSMIC CLIMATE LINK
Richard Black, Environment Correspondent - BBC News website - 18 April 2008
Cosmic rays have their origins in hugely energetic events in space
Research has thrown further doubt on the notion that cosmic rays are a major influence on the Earth's climate.
The idea that modern global warming is due to changes in cloudiness caused by solar influences on cosmic rays is popular with "climate sceptics".
But scientists found changes in cosmic ray flux do not affect cloud formation - the second such report in a month. Separately, other researchers have found that particles from space may affect temperatures at the poles.
Both pieces of research were presented here at the European Geosciences Union (EGU) meeting.
As a factor in climate change, we don't have any indication that this is important at all
Cosmic rays, hugely energetic particles coming from space, smash into the top of the Earth's atmosphere, creating a cascade of charged particles lower down. These particles may help water droplets to coalesce, and so aid the formation of clouds.
The proposed link to climate change is that cosmic rays can be partially blocked by the Sun's solar wind. When the Sun is forceful, there are fewer cosmic rays arriving in the atmosphere, so fewer clouds form, which has a net heating effect on the Earth.
FEELING THE HEAT
Three theories on how the Sun could be causing climate change
If the mechanism has an impact today, several scientists have hypothesised, it should be possible to spot a link between the intensity of cosmic rays and the formation of clouds.
Jon Egill Kristjansson from the University of Oslo is one; and he unveiled his new results at the EGU meeting.
Over the southern Atlantic, Pacific and Indian oceans, where air is much cleaner than in more urbanised regions of the world, particles from ship's chimneys change the properties of clouds in a way that is clearly visible to the Modis instruments (Moderate-resolution Imaging Spectroradiometers) onboard Nasa's Aqua and Terra satellites.
Nasa satellites show the impact of shipping exhausts on cloud formation
The particles are stimulating the formation of water droplets. If cosmic rays play a significant role in cloud formation, Dr Kristjansson reasoned, sudden changes in cosmic ray intensity should also show up, producing increases in cloud cover, changes in the size of droplets, and possibly in the total amount of water carried in the clouds.
"We have short-term changes called 'Forbush decreases', caused by eruptions on the Sun, where cosmic ray flux can decrease dramatically over one or two days and then gradually recover," he told BBC News. "The cosmic ray signature on clouds, if there is one, should show up here."
He identified 13 Forbush events between 2000 and 2005 and looked for evidence in Modis data of concurrent changes in could properties. Although some of the events were followed by a decrease in cloud cover or changes in the size of cloud droplets, others preceded an increase in cloud cover, or no change at all.
Overall, the results essentially appeared random; abrupt dips in cosmic ray intensity did not produce any discernible pattern of changes in clouds, either immediately or in the four days following the Forbush decrease.
"This is a careful piece of work by Jon Egill Kristjansson that appears to find no evidence for the reputed link between cosmic rays and clouds," commented Joanna Haigh from Imperial College London, who is also attending the EGU meeting and has also studied possible links between solar variability and modern-day climate change.
Data showed no impact of galactic cosmic ray (GCR) flux on cloudiness
"It's supporting other recent work that also found no relationship," she added, referring to a research paper published two weeks ago by a UK team which, using different sets of data and different means of analysis, also found no discernible influence of cosmic rays on cloud cover.
"I think that as a factor in climate change, it's pretty clear that we don't have any indication at this point that this is important at all," added Dr Kristjansson. "Whereas global mean temperatures have been rising steadily over the last 30 years, we see that the cosmic ray flux has been steady."
The EGU meeting also saw the first presentation of other research that could perhaps help to explain temperature variations seen between different regions of the Arctic and Antarctic.
Computer models have predicted that energetic particles hitting the top of the atmosphere in polar regions may change temperatures by stimulating the production of nitrous oxides (NOx).
"The energetic particles induce NOx production, and the NOx is then transported down to the stratosphere," explained Annika Seppala, who led the project from the Finnish Meteorological Institute and also works with the British Antarctic Survey. "NOx destroys ozone in catalytic reaction cycles; and when you change ozone in the stratosphere, that... can then feed down to surface temperatures," she told BBC News.
Periods of intense activity warmed (red) some regions and cooled others (blue)
Dr Seppala's observations appear to bear out the models' predictions, at least in winter in the polar regions. In periods of relatively intense particle activity, some areas of the Earth's surface in both the Arctic and Antarctic are warmer while others become colder, showing differences of up to 2C or 3C compared to the long-term averages.
In periods of unusually low particle activity, the patterns are reversed.
The mechanism appears to be redistributing heat across the polar regions; there is no evidence for any overall warming or cooling, Dr Seppala added, nor that the scale of the effect has changed over time.
"The results were amazing, and I think it's something significant that we have to take into account," commented Katje Matthes from the Free University of Berlin, who chaired the EGU session which saw the new data presented. "I think it's rather a local effect," she added, "and I don't think it has a big impact on global temperatures."
The Antarctic picture is particular fascinating. High particle flux places a big red patch, indicating warmth, over the Antarctic Peninsula, an area that is feeling the impacts of climate change faster than most other parts of the planet.
The heating and cooling from this mechanism might be short-term; but scientists studying the loss of ice from this region of Antarctica will surely want to understand whether the short-term natural highs and lows combine with the overall warming trend in a way that speeds melting.
Dr Seppala's team now intends to investigate what happens in the other seasons of the year, which will give a better understanding of the importance of this newly confirmed process.
24 April 2008
WILL THEY DO WHAT THEY SAY?
Aviation Industry Commitment to Action on Climate Change
Statement at Third Aviation & Environment Summit, Geneva - 22-23 April 2008
"As leaders of the aviation industry, we recognise our environmental responsibilities and agree on the need to:
* Build on the strong track record of technological progress and innovation that has made our industry the safest and most efficient transport mode; and
* Accelerate action to mitigate our environmental impact, especially in respect to climate change while preserving our driving role in the sustainable development of our global society.
Therefore, we, the undersigned aviation industry companies and organisations declare that we are committed to a pathway to carbon-neutral growth and aspire to a carbon-free future.
To this end, in line with the four-pillar strategy unanimously endorsed at the 2007 ICAO Assembly, we will:
1. Push forward the development and implementation of new technologies, including cleaner fuels;
2. Further optimise the fuel efficiency of our fleet and the way we fly aircraft and manage ground operations;
3. Improve air routes, air traffic management and airport infrastructure; and
4. Implement positive economic instruments to achieve greenhouse gas reductions wherever they are cost-effective.
We urge all governments to participate in these efforts by:
1. Supporting and co-financing appropriate research and development in the pursuit of greener technological breakthroughs;
2. Taking urgent measures to improve airspace design including civil/military allocation, air traffic management infrastructure and procedures for approving needed airport development; and
3. Developing and implementing a global, equitable and stable emissions management framework for aviation through ICAO, in line with the United Nations roadmap agreed in Bali in December 2007.
Our efforts and commitment to work in partnership with governments, other industries and representatives of civil society will provide meaningful benefits on tackling climate change and other environmental challenges. We strongly encourage others to join us in this endeavour."
OUR COMMENT: Note the reservations, its not all as good as it claims to be!
17 April 2008
HEATHROW PROFITS UP BY 10 PER CENT TO £438 MILLION
David Robertson and Miles Costello - Times 0nline - 15 April 2008
Heathrow's profits rose by more than 10 per cent last year, despite the UK's largest international airport coming under repeated criticism for its poor service and standards. Accounts for the private holding company that owns BAA, the airports operator, show that Heathrow's operating profits rose by £40 million to £438 million in 2007.
Profits at Stansted rose 68 per cent to £86 million after BAA doubled the charge for each passenger using the airport.
The sharp rise in profits angered airlines who use BAA's facilities. They claim that the company is making huge profits but is failing to offer a good service. Heathrow, in particular, has faced repeated criticism for long security queues and the poor quality of its infrastructure.
The rising profits will provide airlines with further evidence that BAA is abusing its position as the owner of London's three main airports.
The Competition Commission is expected this month to deliver its preliminary findings on whether BAA's London monopoly should be broken up.
Jim Callaghan, the head of regulatory affairs at Ryanair, said: "BAA is abusing its monopoly position by charging outrageous fees while providing a rubbish service and that is why they can enjoy huge profit increases."
BAA was bought by Ferrovial, the Spanish infrastructure company, in 2006 through a subsidiary called Airport Development and Investment Limited (ADIL), which filed 2007 accounts with Companies House last week.
The ADIL figures show that revenue for BAA's seven UK airports, as well as Naples airport in Italy, was £2.2 billion, up 7.9 per cent from the previous year. The company made profits of £745 million, up 13.4 per cent.
The accounts also show that ADIL is reducing the amount that it spends on new infrastructure at Heathrow, despite BAA's claims that it is working to improve the facilities. Capital expenditure was £875million last year compared with £977 million in 2006.
BAA said yesterday that this was due to reduced spending on Terminal 5 as it neared completion. However, Ferrovial has been unable to reap the full rewards of BAA's big profit increase because of enormous interest payments on the debt taken to finance the BAA acquisition.
ADIL was able to pay Ferrovial and its other backers only £86 million last year after interest payments of £964 million. ADIL's total debt stands at £16.9 billion and Ferrovial has been unsuccessfully trying to refinance in order to reduce the interest payments. If it fails to refinance within the next two months, BAA's credit rating is likely to be moved to junk status.
Ferrovial has sold World Duty Free and part of its property portfolio in an attempt to reduce its debt levels.
The criticism of Heathrow's profits comes as British Airways faces its own problems at the airport, particularly the recent chaotic move into its new home at Terminal 5. Standard Life Investments, BA's second-largest shareholder, has begun a series of meetings with senior executives at the airline. It is understood that Standard Life will meet Willie Walsh, BA's chief executive, today having spoken to Martin Broughton, the chairman, yesterday.
The problems at Terminal 5 are thought to be only one of a list of issues that will be raised with management. The meeting comes as investors are becoming increasingly alarmed at the bad news coming from Britain's flag carrier. The T5 debacle followed a profits warning last month and shareholders are concerned that a malaise has started to set in at senior management level.
"We need to be sure that BA is prepared for a deteriorating operational environment. The economy is turning down and fuel costs have turned up," a shareholder said.
Source ADIL accounts
Airside shops (not including Duty Free)|
£74 million (+8.4%)
Landside shops and bookshops|
£48 million (+0.3%)
Restaurants and cafés|
£60 million (+3.6%)
Bureaux de change|
£57 million (-1.3%)
£164 million (+5.5%)
£22 million (+5.3%)
£36 million (+5%)
17 April 2008
AIRPORT POLICE RECEIVE £1 MILLION BOOST
Dunmow Broadcast - 8 April 2008
TOP airport cops look set to receive a £1 million boost to help them continue winning the fight against Stansted's criminals.
The latest figures released by Stansted Airport Police Force show a reduction in airport crime by almost 12 per cent over the last year, up to the end of March.
Divisional commander Chf Insp Ian Grüneberg, praised his 93 officers for their part in making Stansted the best-performing airport police force in the country.
Boasting a crime detection rate - the number of reported crimes that are solved - of over 61 per cent, Chf Insp Grüneberg said: "Essex Police are managing a detection rate of just over 30 per cent, so what we are doing here is a real achievement. I'm enormously proud of my officers who have worked as a team to meet the challenges of the last 12 months and make the terminal a safer place"
To continue winning the battle against the airport's criminals, the Chief Inspector said he expected to be able to announce the completion of a £1 million agreement between the police and the airport in a matter of weeks.
Chf Insp Grüneberg, 51, said: "The police services agreement is a win-win situation; it benefits the public of Essex, travellers, airport operators and the police. The agreement would see us receive one extra inspector, 18 extra officers and two additional vehicles, and it would all be funded by Stansted Airport Ltd and not the Essex taxpayers."
The extra resources will enable Stansted Airport police to improve their effectiveness by continuing operations that have proved successful over the last 12 months and introduce initiatives to tackle new threats.
Chf Insp Grüneberg highlighted a number of operations that had helped the force achieve their impressive figures. "Operation Bruno has reduced theft by baggage handlers from 10 offences per week to less than one a week," he said.
"The operation saw 19 search warrants executed and 23 arrests made including an eight-month prison sentence for the ringleader. A clear message was sent to baggage handlers, and people in trust at the airport, that they must look after the public's property."
Theft of rental vehicles was stopped almost overnight by the introduction of the car hire thumbprint scheme and police visibility has been increased through the neighbourhood policing initiative.
Future initiatives for the airport police include the introduction police dog patrols and a further crackdown on offensive weapons being brought into Stansted.
OUR COMMENT: Hopefully this means that Essex council tax payers will no longer subsidise airport security.
17 April 2008
TIDE GOES OUT FOR WORLD'S AIRLINES
Kevin Done, Raphael Minder and Robin Kwong - Financial Times - 9 April 2008
The sudden collapse of Oasis Hong Kong Airlines shows how quickly the tide is going out for the world's airlines as they struggle to deal with surging fuel prices and softening economic growth. Start-up carriers such as Oasis are especially vulnerable, and inevitably it is the new business models, usually dreamed up in the years of feast, that start to look most at risk in times of famine.
One of the first casualties of the accelerating shake-out was Maxjet, a pioneer of the new breed of all-business class carriers that began springing up to fly the North Atlantic three years ago. Maxjet, US-registered but listed on Aim, London's junior market, collapsed into bankruptcy at the end of last year.
It blamed its demise on fuel price inflation, tough competitive pressures and a decline in consumer spending. In addition, the turmoil in the financial markets had made it impossible to raise fresh funds.
In recent weeks, at least five other US carriers have thrown in the towel, including small charter airlines. But the casualties include Skybus, a start-up low-cost carrier with new orders in place with Airbus for 65 A319 jets, and well-known names such as Aloha Airlines with more than 60 years of history and ATA.
Leading US airlines are reducing capacity in the domestic market, grounding old short-haul aircraft and are scrambling to try to increase fares as they struggle to come to terms with an oil price of more than $100 a barrel.
In Europe, the perennially lossmaking Italian flag carrier, is teetering on the edge of bankruptcy while the Italian unions decide whether or not to accept big job cuts and a shrinking of the airline in return for a last-ditch rescue by Air France-KLM. Among the industry leaders, British Airways has already warned that profit will decline significantly during the next 12 months.
Both Ryanair and EasyJet, Europe's two biggest low-cost airlines, have issued profit warnings, with Ryanair saying its profit could fall by as much as 50 per cent under the impact of rising oil prices and falling fare levels. "When the tide goes out, you find the business models that were never really sustainable," says Chris Avery, aviation analyst at JPMorgan.
Oasis Hong Kong styled itself as a low-cost long-haul carrier but in reality it was more a low-fare airline with a mix of some of the elements of the short-haul low- cost carriers that have proved so successful, alongside some of the high-cost elements of the traditional full service, long-haul carriers.
Asia has become the world's fastest-growing aviation market and Derek Sadubin, chief operating officer at the Centre for Asia Pacific Aviation, a Sydney-based consultancy, says the collapse of Oasis was unlikely to stop "a proliferation of new airlines in this region in the next few years".
He says Oasis had made some specific, questionable choices, however, notably devoting almost 25 per cent of its seating capacity to business passengers, thereby reducing the total number of seats available. Oasis was also flying four-engine Boeing 747-400 aircraft, consuming more fuel than twin-engine aircraft. Furthermore, as a standalone company, it did not have the brand recognition and internet booking synergies that airlines such as Jetstar and AirAsia X can derive.
Mark Webb, Hong Kong-based transport analyst for HSBC, says the fate of Oasis "indicates that the low-cost long-haul model is problematic". He adds: "Low-cost regional and short-haul models have been working in other markets but long-haul, low-cost hasn't really worked anywhere else either. Nobody has been able to do a profitable low-cost, long-haul carrier."
Still, Stephen Miller, Oasis chief executive, last night defended his airline's business model. "It just needed a little more time and a little more network [destinations], and a critical mass of aircraft," he told the Financial Times. "What Oasis has shown is that the business model is accepted by the market."
Analysts also said on Wednesday that the demise of Oasis would not halt moves by some Asian legacy carriers to develop low-cost offshoots. Among them, All Nippon Airways, the second-largest Japanese airline, recently established an Asian strategy unit in Hong Kong to look at regional expansion opportunities and forge ties with possible joint venture partners for the launch of a low-cost airline.
Azran Osman-Rani, chief executive of Malaysia-based AirAsia X, said on Wednesday that "The Oasis example reinforces our view that a sustainable low-cost, long-haul airline model must stick to core principles of high aircraft utilisation and high seat density to achieve a sustainable cost position". He added: "But more importantly, it is always a bigger challenge to start up a new airline from scratch."
17 April 2008
JOWELL BLAMES BAA FOR DAMAGE
TO LONDON FROM HEATHROW SHAMBLES
Jean Eaglesham, Bob Sherwood and Kevin Done - Financial Times - 12 April 2008
The fiasco at Heathrow's Terminal 5 has "damaged London" and BAA, the airports operator, must take responsibility for the economic cost, Tessa Jowell, the minister for the capital, has told the Financial Times.
The warning came as British Airways yesterday delayed by at least five weeks the transfer of most of its long-haul flights at Heathrow to the £4.3bn showpiece terminal. The airline and BAA said the move from Terminal 4, due on April 30, would be postponed until June 5 at the earliest to allow time to "iron out any remaining problems". Rival airlines, which are to take over Terminal 4 once BA has left, criticised the delay.
BAA and BA are under intense pressure from the government to resolve the problems. Ministers fear that the poor performance of Europe's busiest airport is damaging the economy, as executives shun the UK rather than risk suffering lost baggage, delays and cancelled flights.
"Conditions at Heathrow have damaged London," Ms Jowell said. "I suspect if you're viewing the prospect of coming to London for business... you may just simply roll it all up into the trouble you expect when you get to Heathrow."
"BAA has to be responsible in a sense for every bit of lost business to London from people making that kind of decision [not to come to the UK]." Asked whether BA should also bear responsibility, she declined to "go right through the charge sheet".
The minister rejected accusations by some business people that London's sclerotic transport system meant the city could no longer function effectively, saying: "That is the very worst perception on a bad day. There are Monday morning problems, there may be wet Friday afternoon problems, and nobody would be for one moment complacent about those, but the fact is that London is one of the most attractive cities in the world to do business in."
The government believes the damage is not irreversible. "Provided the problems are resolved and don't recur, then I think that over time people will forget this pretty disastrous first month," Ms Jowell said.
But she warned of "the risk to London's economy of failure to sort out Heathrow. And I don't just mean in terms of it becoming a functional airport, but an airport that is, as some European airports are, a positive pleasure to arrive in."
17 April 2008
M25 in third runway's 'crash zone'
Jon Ungoed-Thomas and Marie Woolf - Sunday Times - 13 April 2008
IN January, BA38 from Beijing limped into Heathrow, skimming over the airport fence and crash-landing short of the runway. It was hailed as the "great escape" for those on board, and the ramifications are still being felt in Whitehall today.
When the stricken flight passed over motorists on the southern perimeter road, the jet was said to be so low "you could reach out of the window and touch it". The drama, however, raised a worrying question for those championing airport expansion: what if it had been trying to land on the proposed third runway?
Under the plans for Heathrow's expansion, Ruth Kelly, the transport secretary, intends to sandwich one of the busiest runways in the world between the elevated M25/M4 junction to the west and the residential area of Harlington to the east.
It emerged last week that the motorway junction, 650 yards from the end of the proposed runway, will be in the crash landing zone or "public safety zone" where there is an accepted higher risk of an accident.
Kelly's department failed to include maps showing this zone in the consultation documents, which critics say would have caused uproar. Department for Transport (DfT) officials have already been accused of fixing the evidence in favour of a third runway.
"It's ridiculous to put a runway so close to a major motorway junction and residential areas," said Geraldine Nicholson, who lives adjacent to the junction and chairs the No Third Runway Action Group.
"They are wanting to put this runway in one of the most built-up areas in Britain and we're being told they haven't even yet carried out a detailed risk assessment. It's crazy."
When the government's 2003 white paper backed the third runway, it envisaged it would be 1.2 miles long. It has now been lengthened, partly to accommodate a greater mix of aircraft, but also to allow flights to clear the considerable obstacles at both ends safely.
The government's consultation document states: "The position of the third runway is governed by the need for aircraft to maintain a safe distance from the elevated M4/M25 junction to the west and the Harlington church spire to the east."
To date, the row over Heathrow expansion has centred on the extra noise and pollution. Flight BA38 has focused attention on the safety problems.
Tim Jurdon, manager of the aviation team at Hillingdon council, said: "The safety zones are where it's most likely there could be a crash. If it wasn't at Heathrow, we would argue there would be less risk."
Jurdon's team have drawn up the "public safety zones" at both ends of the third runway. He says the western zone crosses the M25/M4 junction. This was not disputed last week by the DfT, which said safety would be considered by any future planning inquiry.
The government's policy on airport safety zones is detailed in a 2002 circular and states that the number of people in the zones should be kept to a minimum. It says: "The basic policy objective governing the restriction on development near civil airports is that there should be no increase in the number of people living, working or congregating in public safety zones and that, over time, the number should be reduced as circumstances allow."
With a likely surge in traffic growth if Heathrow expansion is approved, the government appears to breach its own guidelines by allowing a safety zone to cross a motorway junction. They state that busy traffic routes should be considered on a par with housing developments when assessing the impact of the zones.
Geoff Marks, an executive council member of the Aviation Environment Federation, a nonprofit making organisation campaigning for sustainable aviation, said: "The fact the maps of the public safety zones are not even in the consultation document suggests the government hasn't done its job properly."
Marks said the government should consider adding airport capacity in more open areas, such as the Thames estuary, where there would be a significantly lower risk of casualties in the event of a crash. He said other large airports, such as Charles de Gaulle in Paris and Munich International airport, were located away from big cities partly to reduce the risk of ground casualties in the event of a crash.
A report commissioned by the DfT on airport public safety zones in the 1990s said it was too costly to relocate transport routes that already fell within the zones. Safety objections will be aired in a planning inquiry if the government approves the third runway this summer.
New documents released under the Freedom of Information Act also show the Civil Aviation Authority raised a series of safety concerns during the consultation process.
CAA officials were understood to have been concerned about the extra air traffic at Heathrow and the potential conflict with air traffic from nearby RAF Northolt, which is regularly used by ministers. In one DfT meeting, officials were told there was a "conflict of objectives" between expanding commercial activities at Northolt and the proposed Heathrow expansion.
The CAA also raised concerns about proposals to have gaps of just 60 seconds between planes taking off in the same direction from the two existing runways. CAA officials were concerned the proposal might breach international safety standards.
The DfT last week said "the issue of the number of people affected by any new public safety zone would need to be looked at as part of any future planning application". It failed to respond to whether allowing the M25/M4 junction to be at the end of a runway broke its own guidelines.
The department said the guidelines were publicly available and the question would be a matter for any future inquiry. The statement said: "Safety is the government's top priority. The proposals and location for a third runway at Heathrow in the consultation document have been developed with the CAA and safety considerations were taken fully into account."
The DfT said the "airspace arrangements" for Heathrow expansion had been reviewed by the CAA and approved for the consultation document. "The proposals are not definitive and would need further detailed work."
17 April 2008
NUMBERS OF PEOPLE FLYING IS SLOWING
Evening Star - 14 April 2008
AIR chiefs say the growth in the number of people flying has slowed down dramatically. New statistics from the Civil Aviation Authority show that last year UK airports handled 241 million passengers - an increase of just 2.4 per cent on 2006, with growth in numbers at their lowest for a decade. Since the 1970s, annual growth had been six pc a year.
Experts say there are several reasons why people are thinking twice about flying - with less money in their pockets to spend on holidays being the main one. Better rail services are also having an impact on how people travel, with more people taking to the train for trips around Britain. Use of domestic flights fell by 1.9pc last year.
Despite the slow down, the air industry is still determined to press ahead with its expansion with more cheap flights and plans to expand airports, particularly Stansted and Heathrow. Currently around 1,200 jet planes fly over Suffolk every day - causing growing frustration over noise and concern over pollution.
Government believes doubling air travel over the next 20 years will boost the economy, but that will simply mean more passenger planes flying over Suffolk.
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."
The CAA said during 2007, landings and take-offs of commercial aircraft at UK airports grew by 1.8pc to 2.5 million. At the London airports - Heathrow, Gatwick, Stansted, Luton and London City - the increase was 2.6pc, bolstered by increases of 16pc at London City and 6pc at Luton.
A CAA spokesman said: "More regional airports are developing a greater range of services and there are now nine airports handling more than five million passengers each a year, together accounting for nearly one third of all UK passengers, while a further nine airports each handle more than one million passengers annually."
Are there too many 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: 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 2007 handled 42 per cent of passengers at UK airports.
17 April 2008
TOUGHER NEWS ON CLIMATE CHANGE
Stern takes bleaker view on warming
Fiona Harvey and Jim Pickard - London Financial Times - 16 April 2008
The Stern report on climate change underestimated the risks of global warming, its author said on Wednesday, and should have presented a gloomier view of the future.
"We underestimated the risks... we underestimated the damage associated with temperature increases... and we underestimated the probabilities of temperature increases," Lord Stern, former chief economist at the World Bank, told the Financial Times on Wednesday. In retrospect, he said, he would have taken a much stronger view in the report on the drastic changes that would come about if greenhouse gas emissions were not abated.
In the report, he estimated the costs of climate change at between 5 per cent and 20 per cent of global gross domestic product. But these costs would be much higher if the report had taken a more aggressive stance on the probable consequences of warming. Lord Stern said data published since his report came out, in October 2006, had led him to change his mind.
Last year, the Intergovernmental Panel on Climate Change, the body of the world's leading climate scientists convened by the United Nations, published the most comprehensive study of climate change science. It predicted a temperature rise of 3 degrees Celsius within the next 100 years with catastrophic consequences for the planet, unless greenhouse gas emissions were stabilised and then cut within the next decade.
"The damage risks are bigger than I would have argued. Things like the damage associated with a 5 degree temperature increase are enormous. We can't be precise about what it would be like but you can say it would be a transformation," he said. But he defended his estimates of the cost of taking action on emissions, which he put in the report at about 1 per cent of global GDP.
"Subsequent reports, [from] McKinsey, the International Energy Agency, the Intergovernmental Panel on Climate Change, have pointed to the [Stern report's] costs of action being roughly in the right ball park. Nothing [since] has led me to revise the cost of action," he said.
"I probably would have emphasised the importance of good policy [if writing the report again today] and how bad policy puts up the costs [of cutting emissions]," he added.
Lord Stern has come under attack from economists and climate change sceptics since his report, which some sceptics regard as scaremongering. Some argued that he underestimated the cost of taking action to cut emissions and overestimated the benefits to future generations.
Following the publication of his report, Lord Stern visited dozens of governments around the world to persuade them of the need to cut emissions and the low cost of doing so. His report has formed a key part of discussions on climate change policy, including the UN-led negotiations last December in Bali at which a timetable was drawn up for two years of negotiations on a successor to the Kyoto protocol.
17 April 2008
SCOTLAND IS FIRST WITH THE NEW
PLANNING DICTATORSHIP PROPOSALS
Plane Stupid Scotland Scale Parliament to
Challenge Backdoor Airport Expansion
Plane Stupid Scotland Press Release - 14 April 2008
Plane Stupid Scotland scaled the Scottish Parliament building today, in an early morning protest at Scottish Government plans to impose massive airport expansion by the back door. At 2pm the protestors voluntary walked off the building, were arrested and taken to St.Leonards police station.
The surprise occupation exposes outrageous Government proposals to ban the public and MSPs from consultations that sanction major developments, including airport expansion. The action comes the day before consultation on these National Planning Framework proposals closes. Two members of Plane Stupid Scotland occupied the rooftops of the Parliament, unfurling a massive banner saying, "Planestopping! Choose a future: No airport expansion."
Under National Planning Framework proposals, Ministers will designate a whole generation of dirty development as 'National Developments', which bypass public or parliamentary approval. Subsequent planning enquiries will be limited to design issues. The meager consultation exercise on the proposals ends tomorrow (April 15) with legislation expected in the autumn.
The NPF is being targetted for its signicant ? but stealthy - contribution to UK-wide airport expansion programmes, and the massive increase in carbon emissions that airport expansion will produce.
Plane Stupid Scotland spokesperson Tilly Gifford said: "The environmental and democratic credibility of this Framework is zero. We are facing a runaway climate threat, but the Scottish Government's reaction is to triple air traffic and use the NPF to gag affected communities. Without reducing aviation and emissions there will be no future to plan for."
The proposals list Edinburgh and Glasgow airport expansions as National Developments, reinforcing existing plans to expand all Scottish airports by 2030. As a blank cheque for massive airport expansion with no scrutiny or accountability, the NPF is recipe for disasters like Heathrow in every major Scottish city.
The planned expansion, from 14 million to 50 million passenger movements by 2030, would cause a massive rise in climate change emissions, confirming aviation's position as the fastest growing source of greenhouse-gas emissions in the UK. The program makes a mockery of the NPF's sustainability remit, and of Scotland's target of reducing emissions by 80% by 2050.
Spokesperson Richard Shore added: "Aviation is destroying our future and retreating into smoke-filled rooms is no solution. You don't get good planning by gagging the people you're planning for. We need democracy, and we need to face the fact that air traffic must shrink."
Plane Stupid Scotland is fed up with Government inaction and white elephants in the face of an unprecedented climate threat. Today's action by Plane Stupid Scotland is the start of concerted action against the National Planning Framework, as part of the growing movement of ordinary people who have decided we must act ourselves to tackle climate change.
17 April 2008
HE DID TRY TO REDUCE THE GOVERNMENT'S
CARBON FOOTPRINT (AND SAVE SOME MONEY)!
Brown forced to hire charter jet after abandoning BlairForce One
Ben Webster, Transport Correspondent - The Times - 17 April 2008
To Americans used to seeing their President land in style on Air Force One, Gordon Brown's arrival in New York on an anonymous charter aircraft may have seemed a little undignified. The Prime Minister was forced to make an unusual choice of carrier just three weeks after dropping proposals approved by Tony Blair to avoid such complications.
BA, despite having a fleet of more than 230 aircraft, could not find a spare jet to fly Mr Brown and his entourage to the US for his three-day visit. Virgin and bmi could not help either, forcing Downing Street to go to a charter company in Essex that normally flies football teams and pop stars.
BA and Virgin said that all their aircraft were needed for scheduled services, and both denied any suggestion that they had snubbed Mr Brown; bmi only has three long-haul aircraft and they each have full schedules.
Mr Blair usually travelled overseas on a rented British Airways Boeing 777, with the Union Flag symbol on the tailfin disguising the absence of a dedicated prime ministerial aircraft. Last month, Mr Brown cancelled plans made by Mr Blair for the purchase of a VIP airliner that would have been used by the Royal Family and senior ministers.
The plane, dubbed "BlairForce One", would have cost about £100 million. Mr Blair approved the decision to buy the aircraft after having to fly to a summit in Brussels on an aircraft with Austrian livery. He may also have been concerned about the safety of private chartered aircraft after being involved in an aborted take-off when an engine blew up on the runway at Johannesburg in 2006.
Mr Brown, displaying his self-denying son-of-the-manse streak, ruled last year that ministers should take scheduled flights where possible, but the size of his entourage for the trip to the US - almost 100 aides, officials and journalists - required a dedicated aircraft. Downing Street turned to Titan Airways, based at Stansted airport, which is popular with celebrities and the super-rich for offering a discreet but luxurious service. Titan supplied a Boeing 757 that had room for 250 passengers but was modified to contain 100 reclining leather seats.
Mr Brown may have to opt for Titan again when he attends his first G8 summit in Japan in July. That month marks the start of the busiest holiday period for scheduled airlines and none is likely to have an aircraft available. BA's long-haul fleet is fully stretched after the airline lost a Boeing 777 in a crash at Heathrow in January.
An aviation industry source said: "There are good logistical reasons why no scheduled airline could help Mr Brown this time. But he may not find airlines falling over themselves to be helpful in future. With his popularity waning, what is there to be gained from carrying him, especially when any slip-up would be seized on by the media". BA, however, has reason to show gratitude towards Mr Brown. He has persisted, against the advice of some members of his Cabinet, in supporting a third runway and a sixth terminal at Heathrow.
11 April 2008
GOODBYE TO THE COUNTRYSIDE?
SECOND RUNWAY FIGHT 'TO THE LAST'
Councils, environmental groups and members of the public have vowed to "fight to the very last breath" to stop expansion at Stansted Airport.
Crowds packed the Rhodes Centre, in Bishop's Stortford, for a rally (2 April) at which 16 speakers called for BAA's plans for a second runway to be overturned.
BAA recently lodged an application to build the runway, which would take passenger numbers from 25 million a year limit to 68 million by 2030. The airport is also waiting for the result of a public inquiry into making full use of the current runway, to increase annual passenger figures to 35 million.
Lord Hanningfield, leader of Essex County Council, told the meeting: "We are going to do everything we can to stop expansion at Stansted. I pledge to you we will put all the resources and efforts needed into stopping it."
"There is no scope for an enormous amount of infrastructure in North Essex and no economic justification for such expansion. We will fight to the very last breath."
Sir Alan Haselhurst, Saffron Walden's MP, said: "Let the drumbeat of resistance sound. We can and we will prevail."
11 April 2008
RALLY OVER "ECO-TOWN" PROPOSAL
Sinead Holland - Herts & Essex Observer - 7 April 2008
THE threat of more than 5,000 homes in an eco-town between Elsenham and Henham forced former adversaries to join forces today (Friday, April 4).
Uttlesford's Conservative MP, Sir Alan Haselhurst, made an impassioned plea for unity at an impromptu rally, held at the site the Labour Government has just revealed is now on its 15-strong shortlist for massive development.
In a consultation document made public yesterday (Thursday, April 3), housing minister Caroline Flint used the fact that the district council's Tories had earmarked the location as their preferred option for 3,000 new homes by 2021 - to the outrage of residents and the authority's Liberal Democrat members - as a reason for taking the plan forward.
The report also made it clear that a second runway at Stansted Airport was central to the case for the eco-town from the Fairfield Partnership, which has already secured a huge swathe of farmland the size of Saffron Walden for its new town - amid fears the eventual number of dwellings could approach 10,000.
The eco-town proposal, which residents and politicians fear will be in addition to the 4,200 new homes the Government has already ordered Uttlesford to accommodate, has now prompted the district's Conservatives to fight the Government, despite their previous stance.
Cllr Howard Rolfe denied there had been a U-turn and said that his party would make it clear to Ms Flint that their earlier endorsement of 3,000 homes was not a "green light" for more than 5,000 - although he and his colleagues stand accused by villagers of "serving them up on a plate" to both the developers and the Government. He backed Sir Alan, who vowed: "We are not going to have a runway or an eco-town in our midst."
The MP accused the Government of "sugaring the pill" of development with the eco-town tag and camouflaging its true intentions. He said: "There is going to be a sustained and hard fight and a battle to get through this."
After the Government's shortlist was revealed, Steve Biart, director of strategic land at the Fairfield Partnership, said: "The decision endorses the strategic merits of Elsenham as a location for a new market town within Uttlesford, which has already been recognised in the emerging core strategy."
OUR COMMENT: The Core Strategy is being reviewed, following the protests and the realisation that the Elsenham proposal itself had not been fully evaluated before the decision was taken to include it in the Core Strategy. Part of the problem is that it is not at present, with 3000 houses, a true "eco-town", it is much too near Elsenham, and too small to be sustainable. If expanded, as is suggested, it would join up with the next village, Henham, making a corridor of urban development from Stansted to Newport, overflown by aircraft if the new flight paths are approved and the second runway goes ahead. To suggest this kind of development could be called an "eco-town" is quite ridiculous. Is the inclusion in the Government's list a misguided attempt to influence the case for a second runway?
11 April 2008
M11 PLANS GO ON DISPLAY
Harlow Herald - 2 April 2008
MAJOR development plans for the M11 and A120 were unveiled to the public this week.
The £100 million investment from Stansted Airport owner BAA would create a new junction on the M11 as part of the expansion plans for a second runway and terminal (G2).
The proposals, which went on display at The Charis Centre, in Bishop's Stortford, last Thursday, also include a new junction on the A120. BAA hopes to expand the airport by building another terminal and second runway by 2015 and by 2030 it is expected Stansted will serve 68 million passengers a year.
East Herts Council were initially consulted by the Highways Agency last year about the improvements. An EHC spokesman said: "We welcome improvements to the M11 and junction 8 in principle, however we remain opposed to a second runway and would not want to see the improvements if they only come with the expansion of the airport."
A new junction on the M11, which would be called 8b and located north of the current junctions, is thought would best serve the existing terminal, while a second terminal would be best served from the south via existing junctions 8 and 8a plus a new A120 junction. Junction 8b would be sited north of Birchanger services and south of Church Road. It would be a two-bridge roundabout over the M11 connected to the motorway by four slip roads. The existing Trinity junction on the A120 would be replaced north of the Holy Trinity Church at Takeley.
Robert Gibson, project manager for the Highways Agency, said: "It all depends on BAA's [G2] planning application and if they are successful, it goes ahead. If not, then it doesn't go ahead. It would improve access to and from an expanded airport. "The aim would be to have it open to traffic in 2015, but it depends on the planning process which we don't have any control over."
If G2 is given the green light, the M11 and A120 would be expanded to cope with extra passengers and construction of the scheme is expected to start in 2011. It is scheduled to open for public use by 2015 to coincide with the planned launch of the new terminal and runway.
It is thought the benefits of creating a new junction on the M11 and A120 would mean easier, safer and more reliable access to the two terminals by reducing traffic around junction 8.
An Uttlesford District Council spokesman said: "UDC is aware of the application and will be submitting its comments in due course, following consideration and analysis of the scheme. We will be looking at the proposals in the context of the G2 applications."
Although steps to reduce the impact on the nearby environment, such as earth mounds and planting trees, have been looked at, the plans would re-route Great Hallingbury Brook into a new parallel channel to accommodate junction 8b. A section of the A120 would be widened by 0.8 miles between the existing three- lane section and the replacement junction.
Anyone wishing to comment on the proposals has until June 26. Depending on the nature and weight of any objections, a public inquiry may be held.
Comments should be sent to the Highways Agency, Major Projects Directorate, Woodlands, Manton Lane, Bedford, MK41 7LW, marked for the attention of Robert Gibson or by e-mail to sg2airportaccesstom11@ highways.gsi.gov.uk
OUR COMMENT: Traffic from a 68mppa airport (possibly 80mppa eventually) will not be contained without also widening the whole M11. Plans for utilising the relief lanes will not be enough. BAA knows it has to pay for the immediate access roads but won't finance any further work other than minor sums for local junctions - that fact emerged at the recent inquiry. So ? what about our present traffic congestion? What could it be like in 2015?
11 April 2008
RUNWAY LAND GRAB PLANS REVEALED
Sinead Holland - Herts & Essex Observer - 4 April 2008
THE full extent of the land grab BAA is planning for Stansted Airport's second runway was revealed today (Thursday, April 3).
The company has published details of hundreds of compulsory purchase orders (CPOs) it would require to accommodate 68m passengers a year by 2030.
Three long lists detail every parcel of land - including homes, gardens, fields, waterways, footpaths and even a cricket ground and the Three Horseshoes pub at Molehill Green - which will be swallowed up by the runway and associated buildings, new roads and the "off-setting" measures planned as part of a landscaping and replanting package.
BAA has boasted that since the second runway was first recommended in the Government's Aviation White Paper, the land required to realise the project has dropped dramatically, while opponents like Stop Stansted Expansion, the National Trust, The Woodland Trust and The Society for the Protection of Ancient Buildings remain horrified by the devastation and destruction they say the scheme still entails.
BAA said: "A 700 hectare site was envisaged but today planning permission is being sought for 442. Further improvements include: fewer buildings lost, less woodland lost, and fewer homes and people affected by noise." A spokesman told the Observer that the compulsory purchase lists should be read with caution.
Many of the properties named are already owned by BAA, but must be detailed because they are occupied by tenants. Other land has also been secured, or is currently under negotiation, and some of the plots specified are subject to special legal notification stipulations.
He stressed that the compulsory purchase process was starting now simply to comply with statutory requirements - but the orders were clearly dependent on achieving planning approval for the G2 project and remained "an option of last resort".
11 April 2008
MP YEO WARNS AGAINST AIRCRAFT NOISE
Suffolk Free Press - 4 April 2008
Tim Yeo opposes second runway
Villages will have their peace shattered by aircraft noise if Stansted Airport expands further, an MP has warned.
Tim Yeo has realeased a statement that will be read on his behalf at a Stop Stansted Expansion Group rally in Bishop's Stortford tomorrow.
Here is Mr Yeo's statement in full:
"Firstly, I want to congratulate Stop Stansted Expansion on the really excellent campaign they run and on the very high quality of their contributions to last year's public inquiry. Everyone in the region who is adversely affected by Stansted Airport owes them a considerable debt of gratitude."
"Secondly, I must reiterate my long standing and unqualified opposition to the continued growth of Stansted Airport. Under the National Air Traffic Service's recently proposed flight paths changes, residents of communities such as Lavenham, Thorpe Morieux, Cockfield and Monks Eleigh, to name only four, would have their peace shattered by aircraft noise even with the existing numbers of flights to and from the airport."
"Any expansion in traveller numbers will cause misery to many of the communities I represent in Suffolk. A second runway would also mean the permanent loss of a huge swathe of unspoilt countryside and ancient woodlands. As BAA eventually admitted the pollution impacts of their plans for increased flights will be far more serious than it originally claimed."
"But politicians do not just have a responsibility to speak up for the interests of their constituents; they must also balance the benefits of decisions for the whole of Britain. And the growth of Stansted fails that second test too."
"As Chair of the Environmental Audit Committee I am very conscious of the fact that it cannot be justified either on environmental or economic grounds."
"The more we know about the impact of climate change the more urgently we must make sure that the cost of air travel reflects that impact. And as was made abundantly clear at the Public Inquiry, as primarily a provider of low cost holiday flights, Stansted fuels Britain's tourism deficit by nearly £20 billion, which totally undermines claims that the airport is in our national or even regional economic interest."
Mr Yeo will be speaking at a public meeting to discuss the latest proposals on flightpaths at Lavenham village hall, at 7.30pm on Wednesday, April 9.
11 April 2008
WHO SENDS CLIMATE CHANGE DISTRESS CALL
Frances Williams in Geneva - Financial Times - 8 April 2008
Countries must make urgent preparations to cope with adverse health impacts of climate change that could kill millions, the World Health Organisation said on Monday.
Rising global temperatures threatened more deaths and disease from malnutrition, storms and floods, water shortages, heat waves and pollution, and insect-borne diseases such as malaria and dengue fever, the UN agency said.
"The core concern is succinctly stated: climate change endangers human health," Margaret Chan, the WHO director-general, said in a statement to mark World Health Day. "While the reality of climate change can no longer be doubted, the magnitude of consequences, and most especially for health, can still be reduced."
Poorer nations needed help to shore up fragile health systems and better systems for disease surveillance and forecasting. She urged leaders of the Group of Eight industrialised nations to address this at their Japan summit next month.
Estimates of health impact of climate change vary, but there is widespread agreement at a global level they will be negative, substantial and affect developing countries most severely.
In a November report, the UN development programme said 600m more people in sub-Saharan Africa would go hungry from collapsing agriculture. Another 400m people would be exposed to malaria and other diseases.
Malnutrition causes about 3.5m deaths each year. Periodic drought, a main cause, is to increase. Extreme weather, especially storms and floods, threatens more deaths and injuries, and outbreaks such as cholera.
Water scarcity and torrential rainfall increase the risk of diarrhoeal disease. Changing temperatures and rainfall patterns will spread malarial mosquitoes and other insect vectors.
Heatwaves in crowded urban "heat islands" could kill many elderly, as during the European heatwave of 2003, and aggravate allergies - such as hay fever - and atmospheric pollution.
"Climate change can affect problems that are already huge, largely concentrated in the developing world, and difficult to combat," Dr Chan said.
11 April 2008
WHO IS RESPONSIBLE?
Spy caught by anti-aviation group was "more Austin Powers than 007"
Ben Webster, Transport Correspondent - Times Online - 8 April 2008
A spy who infiltrated a direct action anti-aviation group has been exposed after making a series of elementary errors that aroused the suspicions of genuine activists.
Toby Kendall joined Plane Stupid, the group that occupied the roof of the Houses of Parliament last month, after graduating from Oxford last year. He told the activists that his name was "Ken Tobias" and said that he was deeply concerned by the impact of the aviation industry on climate change and that he wanted to help to organise protests.
But his habit of wearing a Palestinian scarf with his Armani jeans and designer shirt made some members question his identity. He was also the only member to turn up early to every meeting but had no friends in the activist community. He took part in protests, dressing as a penguin in one stunt, but always tried to remain in the background.
Plane Stupid began a mole hunt and, after feeding him false information that found its way within two days to the aviation industry, discovered his real name and employer.
Mr Kendall, 24, works for C2i International, a counter-intelligence company run by former special forces officers. It claims that its agents are "hand-picked from Special Operations at New Scotland Yard". Its website puts "aerospace" at the top of a list of industries for which it works.
BAA, which owns Heathrow, has repeatedly been targeted by Plane Stupid. When asked by The Times whether it had any connection with C2i or Toby Kendall, BAA said: "BAA can categorically state that we do not have a relationship with C2i or the individual in question."
After being asked more detailed questions, BAA said it "had no contact with the named individuals but was subject to an unsolicited pitch by C2i. We rejected their invitation to enter into an arrangement with them."
Justin King, C2i's managing director, claimed to have been unaware of Mr Kendall?s infiltration of Plane Stupid. He said Mr Kendall was employed to carry out counter-surveillance such as "debugging company offices".
He added: "The security industry is full of people on the circuit who masquerade as this and that. When they are not working for us how can we stop them from working for other people?" Asked how he felt about one of his team infiltrating a protest group, he said: "I'm not particularly happy about it. We will have to look into it."
Mr Kendall failed to return calls yesterday and appears to have gone to ground after being confronted by members of Plane Stupid.
A spokesman for the group said: "This special agent was more Austin Powers than James Bond, though the question still remains, who paid for the spy?"
11 April 2008
PILOT'S UNION ATTACKS BA OVER TERMINAL 5
Kevin Done, Aerospace Correspondent - Financial Times - 6 April 2008
British Airways pilots have attacked failings by the airline's senior management that led to the "unhappy shambles" of the opening of the showpiece Terminal 5 at Heathrow two weeks ago.
In a letter to the Financial Times [SEE BELOW], published on Monday, Jim McAuslan, general secretary of the British Airline Pilots Association, says the T5 problems were "symptomatic of British Airways' loss of focus on delivering a sound operation".
He added: "This airline can and should make Britain proud but a fundamental change of attitude is required from the very highest levels of BA management."
Banks, institutional investors and analysts need to wake up to the fact that there is "something very wrong at the heart of this company that is making our once great brand a laughing stock".
The attack from Balpa comes as the union is locked in a bitter industrial and legal dispute with the airline, and Mr McAuslan on Sunday accused BA of trying to bankrupt the union through legal actions taken in response to an overwhelming vote by BA pilots in February in favour of strike action.
The dispute centres on BA's system of pilot recruitment at its new OpenSkies subsidiary, which is planned to begin services this summer between continental Europe and the US, starting with the Paris/New York route.
The deepening rift with the pilots comes as the airline faced renewed operations problems at Heathrow over the weekend. Computer glitches with the state-of-the-art baggage system at T5 on Saturday, combined with heavy snowfalls on Sunday, led to scores of flight cancellations by BA and other airlines.
British Airways had hoped to operate a full schedule of flights at T5 over the weekend for the first time in the 10 days since the opening of the terminal. Instead the computer problems with the T5 baggage system, which BA was quick to blame on BAA, the airport operator, led to the cancellation of 24 flights on Saturday and 12 yesterday.
Heavy snowfalls on Sunday morning compounded operational problems across the airport as the frequency of flights was slowed to allow the runways to be cleared. Stands became congested owing to delays in de-icing aircraft. BAA said a total of 185 flights to and from Heathrow had been cancelled by airlines including BA, Lufthansa , Alitalia, Iberia and Virgin Atlantic.
BA was worst hit and said it had been forced to cancel 144 flights to and from Heathrow across all its terminals, more than a quarter of its total planned schedule of 534 flights, owing to the bad weather. The cancellations included three long-haul flights from Heathrow to New York and Miami. It also cancelled 44 flights to and from Gatwick.
The airline's speed in publicly blaming BAA for the baggage system computer software problems suggests the carefully-orchestrated efforts, by both the airline and airport operator, to avoid the T5 opening debacle degenerating into a damaging "blame game" are starting to break down.
Letter from Jim McAuslan
Published: April 6 2008
Sir, Failings on the opening days of Heathrow Terminal 5 are symptomatic of British Airways' loss of focus in delivering a sound operation. This airline can and should make Britain proud but a fundamental change of attitude is required from the very highest levels of BA management.
The British Airline Pilots' Association has for years pressed BA to focus on operational integrity - punctuality, baggage delivery and product quality. Get that right and the customers will keep coming back.
It is with great sorrow and acute embarrassment that BA pilots have witnessed the unhappy shambles that the opening of T5 has become. BA pilots have reacted in the right way by once again going the extra mile to solve problems and extend their working duties to maximum legal limits in order to minimize the suffering of our customers and protect the company they love and the uniform they wear. This has been done despite the background of a pending industrial dispute.
This month sees a massive increase in direct competition on BA's most lucrative routes from the home base at Heathrow. We also see consolidation on an unprecedented scale, in the likes of Air France and KLM, that has yielded benefits from synergies of a level way beyond simple cost reduction. BA's response? Messing up its home base and dabbling with aircraft operating from Paris and London City to New York.
Banks, institutional investors and analysts need to wake up to the fact that there is something very wrong at the heart of this company that is making our once great brand a laughing stock. The margins may look good (for this industry anyway) but the financial establishment's preoccupation with the bottom line has glossed over the warning signs that have been there for those with ears to listen and eyes to see.
The punctuality tables; the reports, including those from FT columnists, of quality standards nose diving; more and more lost baggage, long before the T5 debacle; the growing reluctance to answer questions; the clear irritability with differing points of view; fronting up, in full public gaze, to the prime minister on the issue of a religious cross; taking court cases to appeal and still losing; threatening its own pilot workforce's association with bankruptcy when it should have been focused on exploiting the gift-wrapped opportunity of a move to T5.
BA proclaims that 400 people (a massive 1 per cent of the workforce) turned up last weekend to help sort baggage, but two weekends ago 1,300 pilots and their families marched on BA's headquarters complaining about the creation of a European offshoot, "OpenSkies", which will use BA money and BA aircraft but not BA pilots because they may contaminate this start-up operation. No wonder team spirit and respect are in short supply.
The ramifications of what is going on in BA will be felt far more widely. Our reputation as a country has been harmed no end. Support for a third runway has taken a direct hit. When you are running a national icon you have responsibility for far more stakeholders than shareholders.
So my question to the UK's financial establishment and government on BA is this: when are you going to listen with all your senses as to what is happening inside our business and when are you going to act on how it is "led"?
General Secretary, Balpa, 5 Heathrow Boulevard, West Drayton UB7 0DQ
11 April 2008
RYANAIR CEO SAYS DEPARTURE DATE A MOVEABLE FEAST
Paul Hoskins - Reuters - 7 April 2008
DUBLIN, April 7 (Reuters) - Ryanair Chief Executive Michael O'Leary admitted his departure had become something of a "moveable feast" after saying several times over the past two years that he would go in the next two to three years. "I think at least another 10 years," the head of Europe's biggest low-cost carrier joked to reporters on Monday when asked how much longer he planned to stay. "I plan to go on and on and on like Chairman Mao."
O'Leary, who since 1994 has turned Ryanair into one of the world's most profitable airlines and become one of Ireland's richest men in the process, said he wanted to win his fight for greater competition at UK and Irish airports before going.
"Frankly, if I had a competing terminal at Dublin airport and the break-up of the London airport monopoly then I think it would be an appropriate time to go," he said at a news conference to publicise planned legal action against Ireland's aviation regulator over increased charges at Dublin airport.
O'Leary warned his plans could always change in six months, however, saying he was "not entirely wedded" to Ryanair.
"My plan has always been remarkably consistent. I intend to step down in the next two or three years," he said. "It's a bit of a moveable feast ... but one day I'll be right."
Shares in Ryanair have lost half their value over the past year due to fears about the airline's lack of protection against rising oil prices, but O'Leary repeated it would not make sense to take out insurance at current levels. "If oil prices fall below $80 a barrel we'll be hedging as much as we can for as long as we can, but there's no sign of that happening at the moment," he said.
O'Leary said the high cost of jet fuel was the main reason for Ryanair's "conservative guidance" on earnings. "At the most conservative, we're predicting that profits may fall by as much as 50 percent this year. They may rise by a small amount but that would need a very favourable combination of yields and significantly lower oil prices."
O'Leary said his recent decision to freeze pay for senior management had been met with a mixture of anger and frustration but that it was a pretty good outcome in the circumstances. "If profits are to fall by something like 50 percent in the next 12 months it won't be a pay freeze next year, there'll be pay cuts."
The airline also planned to remove even more aircraft from Stansted airport next winter than last year and introduce capacity reduction measures at Dublin for the first time. "It'll be a bigger number again (at Stansted) and the same process will start at Dublin airport."
O'Leary painted his usual bleak picture for the airline industry, describing current conditions as dreadful, but said Ryanair, which has a fleet of about 120 Boeing 737-800 aircraft, was ready to exploit the downturn by buying more. "In recent months, aircraft prices have crashed ... all of a sudden the manufacturers are starting to feel the cold draught."
O'Leary said he did not expect to snap up troubled rivals, however: "But we'll be very happy to see them all go bust." (Editing by David Hulmes)
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