| SSE NEWS ARCHIVE - April to June 2009
AIRLINES IN "SURVIVAL MODE" - IATA
Centreforaviaion.com - 26 June 2009
Airline revenues continue to deteriorate, according to IATA, while yields are under "severe pressure". IATA's worldwide international traffic results for May-2009 show a 9.3% decline in passenger demand (RPKs), while freight demand was down by 17.4%. The industry body noted, "after a 20% fall in international passenger revenue in the first quarter, we estimate that the drop accelerated to as much as -30% in May - this crisis is the worst we have ever seen".
IATA stated demand in the past two months has been "slightly stronger" than the 11.1% decline reached in March, even after adjusting for the distortions caused by the timing of Easter. It added, "this indicates that a floor may now have been reached". IATA estimates the global impact of swine flu on global travel patterns in May was a 1% drop in passenger traffic.
The industry capacity adjustment of -5.0% in May 2009 however did not keep pace with the fall in demand, leading to a 3.3 ppts fall in load factors to 71.2%, down from 74.5% in May 2008.
Middle East airlines buck the downward trend
Middle Eastern carriers bucked the declining trend again, with 9.5% growth in demand and a 14.5% expansion of capacity.
IATA airlines RPK growth by region: Jun-08 to May-09
Source: Centre for Asia Pacific Aviation & IATA
Asia Pacific carriers recorded a 14.3% fall in demand last month. IATA noted that while capacity adjustments by the region's carriers were the most severe (-9.3%), they did not keep pace with the fall in demand driven by weak economies and the impact of swine flu on the region "with the most vivid memories of the SARS crisis".
North American carriers recorded a 10.9% fall in passenger demand, considerably worse than the 4.2% fall in April. This was the result of weak demand to Latin American destinations affected by swine flu, "along with significant recession-driven drops in both trans-Atlantic and trans-Pacific markets", according to the airline body.
European carriers, in additional to weak long-haul markets, saw some loss of market share to European LCCs, whose traffic grew by 2.1%, while the network carriers reported a 9.4% decline.
IATA airlines passenger load factor growth by region: Jun-08 to May-09
Source: Centre for Asia Pacific Aviation & IATA
"Relative improvement" in freight markets
IATA stated the 17.4% decline in international freight demand (FTKs) is a "relative improvement", compared to the 21.7% reduction in April, which is "one of the first physical signs of the economic recovery being anticipated in equity markets".
The airline body noted freight volumes last month rose by around 3% above April levels, as manufacturers began to add to their product inventories in anticipation of an economic recovery. However, inventories remain 10-15% higher than normal in relation to sales levels, according to IATA, "indicating that a significant recovery is not expected in the near term".
IATA added, "surveys of purchasing managers indicate we could experience a further improvement in air freight demand during June and July to levels that are 12-15% below last year's levels".
Most regions were relatively aligned in the severity of the freight declines. Latin American carriers were the worst performers with a 21.0% fall, followed by Africa (-20.0%), Europe (-19.2%), North America (-18.8%), and Asia Pacific (-18.1%). Middle East carriers were the exception with a 3.7% fall. Capacity adjustments in freight markets have been catching up to demand declines. Freight load factors are 3.6 percentage points lower than a year ago.
IATA airlines FTK growth by region: Jun-08 to May-09
Source: Centre for Asia Pacific Aviation & IATA
Outlook: Strong headwinds, airlines in "survival mode"
IATA Director General and CEO, Giovanni Bisignani, stated, "we may have hit bottom, but we are a long way from recovery". He noted that while the impact of the recession appears to be stabilising, "strong headwinds from debt and low asset prices are expected to weaken and delay any significant recovery". Mr Bisignani concluded, "airlines are in survival mode. Cutting costs and conserving cash are the priorities."
Qantas today announced plans to defer the delivery of 15 B787-8s for three years, in what is becoming a familiar pattern by airlines to cut back on capital spending on their fleets to defend shrinking cash balances.
IATA warned, "even if we look beyond the crisis, it is difficult to see a return to business as usual. This crisis is re-shaping the industry. The burden cannot be placed on airlines alone".
WHAT IS THE REAL CLIMATE IMPACT OF FLYING
AND WHAT CAN WE DO ABOUT IT?
BBC Online - 28 June 2009
Whenever the debate over climate change is aired - flying, and the harm it does in terms of CO2 emissions, is to the fore. As you'll see from the actions elsewhere on this site, skipping a long-haul flight can be one of the most effective ways to cut our carbon footprint.
Yet the UK aviation industry claims it's responsible for only a modest 7% of the country's greenhouse gas emissions. And if that's true, can flying really be so bad?
* One short-haul flight has the same potential to warm the climate as three months worth of driving a 1.4 litre car
* Less than half of Brits fly for their holidays
* The average annual income of Heathrow passengers is £54,488
* Around a third of flights from Heathrow and Gatwick are delayed by over half an hour
* In 2006, British airports handled more than 200 million passengers and it is (officially) predicted that that number will double over the next 15 years
* 56% of people are concerned about the environmental effects of air travel, but only 10% have reduced the number of flights they take
* One flight to Sydney generates emissions equivalent to driving a mini around the earth 640 times
* To avoid more expensive airspace, certain airlines for example, take longer routes to the Canary Islands, creating an extra three tonnes of CO2 per flight
* Over 10 years, all UK CO2 emissions (transport, farming, housing and construction) fell by 9%, apart from flight emissions, which doubled
What's the problem?
While aviation emissions may seem relatively low now, they are growing faster than any other source of greenhouse gases in the UK. Brits currently take 200 million flights a year but if air travel continues to increase at current rates this will rise to 600 million by 2030. The Tyndall Centre for Climate Change Research estimates that before 2050, UK aviation emissions could exceed the emissions budget of the whole UK economy, wiping out hard-earned reductions in other areas.
What can we do?
We can fly less. Like it or not, analysts say that is the simplest way to reduce passenger numbers in time to stop dangerous levels of climate change. But there is good news: we don't have to give up flying altogether. In fact, the majority of flights are taken by a small percentage of people who fly frequently. In 2007, for example, a third of all flights were taken by just 4% of the population who took five or more flights a year. So the most effective change would appear to be for frequent flyers to dramatically cut their air miles, while those of us who fly more than twice a year cut down a little.
It needn't mean missing our holidays either: since 27% of flights from Britain go to Spain and 50% to the rest of Europe, taking the train is an increasingly viable substitute.
Choosing to fly less often, to holiday in Britain or to visit Europe by train instead of flying offer some of the most significant CO2 savings of any personal action.
Can technology help?
As yet there's nothing that will prove effective enough soon enough to significantly reduce aviation's impact on climate change, but various proposals exist to improve the efficiency of flying:
* Better air traffic management systems - this would include filling planes to capacity and therefore scheduling fewer flights.
* More efficient planes such as the Airbus A380 could reduce emissions compared to older aircraft, but it would take decades to replace existing fleets and the savings are being outweighed by air traffic growth. Planes are becoming more efficient by about 1% a year, while the industry grows by 7% a year.
* Alternative fuels - aircraft have flown on biofuel blends in recent test flights, but they are unlikely to be used on regular flights in the foreseeable future while technical issues remain to be addressed. There are also significant question marks over the sustainability of biofuels. The first manned hydrogen fuel cell plane recently carried two people in a test flight conducted near Madrid, but scaling this technology up for commercial passenger jets is expected to take at least 20 years, and would create contrails, which may further warm the climate.
* Airships - you may laugh, but an airship running on non-flammable helium is one of the least polluting forms of passenger travel. An Atlantic crossing to New York would take around 45 hours. Before you rush to buy your ticket, this route is not yet commercially viable.
* Flying more slowly - in a bid to reduce fuel, Belgium's Brussels Airlines have cut weight on aircraft and started to fly more slowly on certain routes. This adds a minute or two to journey times and saves 1 million Euros on their annual fuel bill. Planes on other routes currently fly at pre-set speeds, putting a limit on such savings.
What are the politicians doing?
Political progress on reducing aviation emissions might be categorised as, at best, uneven. Unlike with trains, buses and cars, international flight emissions are not included in the Kyoto protocol (the legally binding inter-governmental contract to reduce greenhouse gas emissions). The reason for this omission, say governments, is that flights cross many international borders, making it hard to identify who's responsible for aircraft emissions.
Aviation will, however, be included in the European Emissions Trading Scheme (ETS) - but not until 2011. The Department for Transport anticipates plane travel emissions will be capped at 2004/6 levels. Even then, scientists at the Tyndall Centre suggest the ETS will do little to reduce actual plane travel emissions because airlines will be able to increase passenger numbers through buying in extra permits. And they predict that the small price rise proposed for plane travel under the ETS will deter very few people from flying.
Meanwhile, UK government aviation policy - as set out in the 2003 aviation white paper - seems sure to result in large-scale aviation expansion, including a third runway and sixth terminal at Heathrow. And Britain looks set to expand its airports around the country on a scale greater than that envisaged by any other European nation. Air operators claim this will benefit passengers by cutting congestion. Campaigners respond that making flying more appealing will simply increase demand, in turn increasing the need for further new airports and runways - a pattern demonstrated by recent road-building policies which, they argue, have actually increased traffic congestion.
Another criticism of Britain's aviation policy is that the industry has an effective subsidy of around £10 billion a year as no tax is levied on aviation fuel in the UK, and plane tickets are VAT-free.
The government defends its policy on the grounds that aviation is critical to supporting the UK's world status as a hub for finance, industry and tourism.
What's the climate impact of aircraft emissions?
Flying injects exhaust emissions directly into the upper part of the atmosphere, where they cause the most damage. The effects of the resulting mix of chemical reactions are complex and hard to calculate, occurring over timescales between three days and 100 years. Even so, scientists believe that between 1992 and 2050, the overall impact of these emissions will prove somewhere between 1.2 and four times that of CO2 at ground level. (Contrails add to this mix of effects. Made up of soot and water vapour, scientists know that in some weather conditions contrails cause cirrus clouds to form, which warm the climate further, though these effects are as yet poorly understood.)
What difference does this make in practice? Well, the CO2 emissions of a return flight from the UK to Malaga for example are 480kg. If you multiply by the lower estimate of 1.2, the true extent of the damage would be 570kg - the same amount of CO2 saved by recycling nearly 15,000 green bottles. At the upper end, emissions could top 1900kg.
This factor is also relevant when assessing the overall contribution of aviation to UK emissions. The government's figures on the climate change impact of flying are calculated based on domestic and international departures from the UK and suggest it contributes only about 7% of the country's CO2 emissions. But because of the extra impacts, research suggests that it's likely to create something closer to 11% of our national total.
A CRY FOR MORE ACTION
Jonathon Porritt: Economic growth at all costs is just not sustainable
The Independent on Sunday - 28 June 2009
Governments still adopt increases in economic growth as the overarching imperative and everything else really plays second fiddle. The consequence of this is that an awful lot of other policy areas tend to get downgraded. Our fear is that the costs of generating prosperity in consumption-driven economic growth actually outweigh the benefits of the growth itself.
Greenhouse-gas emissions, the impact on people's health of increasingly unhealthy lifestyles, the impact on communities, which suffer if we put economic growth before all else - these are all big costs. And they all lead to negative impacts on people's lives.
The Government has put in place an impressive set of foundations to produce a more sustainable society, but at the same time we've seen a lot of indicators heading in the wrong direction. We have more negative impacts than we have positive impacts, so the overall report card would read good progress in some areas but, overall, not a good picture.
I feel some disappointment because I would have wanted to see faster progress. The Government will be launching an Energy White Paper on 13 July, which is the sort of thing they could, and should, have done four or five years ago. And Lord Adonis, the new Secretary of State for Transport, came back recently from a visit to mainland Europe full of praise for integrated transport polices around cycling and walking. But this is basic stuff and we could have been doing what other countries have done 10 years ago.
We have a terrible record of leading the world on rhetoric and then failing to deliver in our own backyard, and that's particularly true on climate change. The new Climate Change Act is a significant step forward but I doubt that the Government is going to be blowing its trumpet very loudly about its overall record on sustainable development at the next election because I think it knows it would be on very dodgy ground.
It takes quite a long time to turn an economy from unsustainable economic growth to genuinely sustainable economic development. That is the journey we're on. I am confident that we're moving in the right direction; it's just happening much too slowly.
I'm still a member of the Green Party and I'm anxious to take on a more campaigning role. We've wasted too much time, and people know we need to move a lot faster. I'm looking forward to playing a role in ensuring that happens.
Jonathon Porritt is the outgoing chair of the Sustainable Development Commission
LEADING THE WORLD - IN HOT AIR
Leading Article - The Independent on Sunday - 28 June 2009
Just as New Labour's "new dawn" was giving way to the harsher light of hard work nine years ago, Tony Blair appointed Jonathon Porritt to chair a new Sustainable Development Commission. It was an inspired appointment. Mr Porritt has a remarkable record of a lifetime's commitment to, and technical knowledge of, the green cause. The commission was a visionary idea, albeit labelled with the stodgy concept of "sustainability" - a way of describing the central imperative of environmentalism, namely that human activity should not deplete the earth's capacity to sustain future generations.
This is the key to viable green politics: how to reconcile the square of economic growth with the circle of protecting the environment. It is the theme on which Mr Porritt has focused, including in his recent book, Capitalism as if the World Matters.
Yet Mr Porritt is now stepping down as chair of the commission, saying, as we report today: "We've wasted too much time and people know we need to move a lot faster." And the commission will publish a report this week that puts the Government in the stocks for its impending failure to meet a series of important targets. Speaking to The Independent on Sunday, Mr Porritt says: "We have a terrible record of leading the world on rhetoric and then failing to deliver in our own backyard, and that's particularly true on climate change."
Mr Blair's rhetoric and vision was important, but it was only the start of what was needed. Towards the end of his time at No 10, the rhetorical machine was increasingly cranked up, but, as Mr Porritt suggests, the follow-through was wanting. Gordon Brown never had the rhetoric, or the plausible appearance of conviction, but he did create the Department of Energy and Climate Change under Ed Miliband, and last week he set out Britain's preparations for a global deal at the Copenhagen summit later this year.
For nine years, though, progress has been too slow. One of New Labour's failings has been its "Year Zero" approach to policymaking, allied to an attention span that would make life difficult for a butterfly. Mr Porritt points out that Lord Adonis, appointed Secretary of State for Transport earlier this month, is an enthusiast for the continental model of using public transport and bicycles for more urban journeys. Yet that made sense in 1997, if not before, and John Prescott committed Labour to such a policy even before the new dawn broke.
That is a small example, but it applies across the piece. Sustainability requires a shift in the rules of capitalism, the most important being to put a higher price on carbon, in order to use market forces to reduce the output of the gases that cause climate change. That is how higher standards of living can be reconciled with preserving the eco-system. That is how the apparent oxymoron of green growth can be achieved. Not by tacking on green gestures as an afterthought to policies designed to promote growth, with the implication that we will forget them in times of recession, but by re-pricing the measurement of growth to take into account its environmental cost.
The creation of Mr Porritt's independent Commission was an attempt by Mr Blair to hold himself and his Government to account for achieving that fundamental change. Of course, it has not been a complete failure and, as an optimistic green newspaper, we prefer to see the glass as half full. Much has been achieved, but it is now time to step up the pace.
Not least because the global situation has changed. It was always the case that "environmentalism in one country" made no more sense than the socialist equivalent. It would have been better if Britain were on course to meet its target for a 20 per cent cut in carbon dioxide emissions by next year. As Mr Miliband's brother David said when he was Secretary of State for the Environment, it would be valuable to "set an example" to the rest of the world, as well as being in our self-interest to gain first-mover advantage in green technologies and markets. But it would hardly make any difference to global outputs of carbon dioxide, with coal-fired power stations being built in China faster than they can be counted.
Now, however, a new US President has transformed the prospects for a global deal at Copenhagen: the Chinese would only ever act if the world's largest polluter, America, would. The world recession also gives us a chance to start to shift towards low-carbon capitalism.
Britain could play an important role in helping to broker such a deal, but only if, nine years late, Gordon Brown and Ed Miliband heed Mr Porritt's warning and finally make up for lost time.
THE NEW TRANSPORT MINISTER MAKES A STATEMENT
My Transport Manifesto - Lord Adonis
Department of Transport - 25 June 2009
Transport Times has long been at the forefront of innovative thinking in transport policy, and I am delighted to be making my first major speech as Secretary of State, setting out my transport manifesto, at this conference.
The subject of your conference - 'door to door public transport' - is a theme close to my heart. I know it invokes the dreaded words "integrated transport policy", which Sir Humphrey Appleby famously described as "a bed of nails, a crown of thorns and a booby trap". But then his minister, Jim Hacker, didn't seem to achieve anything much at all in his many episodes as minister or indeed Prime Minister, so I am not proposing to take any lectures from him.
When it comes to tackling big challenges, I take the same approach at transport as I took for many years at education. I am an activist, not a fatalist, striving for a vision of a fundamentally better future and constantly working at a step-by-step game plan to get there. Indeed, the policy context has some strong similarities. For decades people said that there were deep intractable cultural reasons - the English class system and all that - why England had underperforming state schools, and that no government could do anything much about it. Furthermore, because the simple headline-grabbing policy solutions were mostly from the extremes of left and right - whether it was the abolition of private education from the left, or vouchers and a market free-for-all from the right - this only heightened the distrust of pragmatic Middle England that bold but sensible reform could bring about fundamental change for the better. Yet with a will and the right policies, it was possible to do so, commanding the broad confidence of the general public, by investment and reform focused on the essentials of improving teacher recruitment, school standards, school organisation and school leadership.
So too in transport. The fatalists are rife here as well. How many times have people told me that we just have to grin and bear congestion, that we in Britain are incapable of carrying through long-term infrastructure projects, that you will never get people cycling on British roads, and that our engineers simply aren't up to French, German and Japanese standards, so we will never run railways as well.
I don't buy any of that. On the contrary, there are grounds for optimism, and firm foundations on which to build. More than £150bn has been invested in transport infrastructure over the past decade. Thanks to John Prescott and Michael Heseltine, we now have High Speed One and the gloriously rebuilt St Pancras station. Thanks to John's successors, who dealt successfully with the aftermath of the collapse of Railtrack, we now have a national rail system carrying more passengers than at any time since before Beeching, with greater capacity and high levels of safety and punctuality. The bus fleet is being modernised; a national concessionary fares scheme is in place for the over 60s and disabled people; and new powers have been given to local authorities to regulate and improve bus services. Road safety has improved markedly.
As for genuinely integrated transport, under Ken Livingstone's pioneering leadership London led the way with a renaissance of buses and major improvements to the tube, supported by the successful congestion charge. A transformation is now underway of north-south and east-west London rail links, uniting overground and underground through Thameslink and Crossrail. London also pioneered integrated ticketing through Oystercard, which makes switching from bus to tube simple and ticketless, which is soon to be extended to London's overground lines.
These accumulated achievements give me confidence that, with political will and a combination of long-term vision and practical short term reforms, we can address effectively the three major transport challenges that face us - first, the provision of extra capacity on a sustainable basis; second, shifting, fast and for good, to low carbon technologies and practices within each mode of transport; and third, radically improving the attractiveness of public transport by facilitating far more door-to-door journeys wholly or in part by public transport - whether it be bike plus train, or car plus train or coach, or bus plus train, or different combinations of the above.
Let me take these three priorities in turn.
First, capacity. It is a fact that there is a long-term increase in the demand for transport, and that increasing demand for transport is correlated with both national prosperity and personal fulfilment. The nature of these correlations is to some extent subjective and disputed; and I certainly don't see simplistic "predict and provide" as the duty of government. Our task is to balance, as best we can, the demand for transport and its economic and personal benefits on the one hand, with resource constraints and environmental impact on the other.
One of the most interesting things I read on joining the Transport department last October was Tom Vanderbilt's fascinating book on the history and nature of traffic. Vanderbilt points out that "one of the curious laws of traffic, the world over, is that most people spend roughly the same amount of time each day getting to where they need to go. Whether the setting is an African village or an American city, the daily round-trip commute clocks in at about 1.1 hours." This law of traffic, he suggests, is rooted not only in the search for a livelihood but also in something more fundamental in human nature and desire in terms of mobility and work-life balance. It is why, for example, an area of roughly seven square miles is the mean area of Greek villages to this day, and why the old core of a pedestrian city like Venice has a diameter of 5 km. What has changed over time, and from place to place, is of course how far you can get in a 1.1 hour round trip, and what this means in terms of agglomeration and economic effects.
In these respect, my less exciting but vital reading has been the Eddington report, which concludes that "a long-term strategic outlook for transport policy in the UK must extend over a 20 to 30 year time horizon", and that policy and investment should focus particularly on "those key points where economic success has concentrated demand, notably within and around urban areas, at international gateways and on busy inter-urban corridors" where "congestion, delay and reliability are already real issues."
This is precisely our policy: to focus on capacity constraints; and to do so by a combination of sensible short, medium and long term investments - not forgetting the long-term dimension, mindful, as David Begg so rightly says, that short-termism has been the British transport policy disease.
This imperative to evaluate and plan for the long-term led to the infrastructure announcements we made on 15 January, to which I am fully committed. These include an increase in motorway capacity in congested areas over the next decade, but not by means of new motorways, or even for the most part widened motorways, but rather by means of hard-shoulder running, which has now been shown on the M42 to be safe and effective. Hard-shoulder running generates extra capacity at a fraction of the cost and environmental impact of new roads or conventional widening and goes hand-in-hand with greatly improved management of motorway traffic flows - including reduced speed limits and far better information for motorists - giving motorists more predictable journey times.
On 15 January we also set a strategic framework for the future of Heathrow, recognising that extra airport capacity is crucial to Britain's prosperity and economic competitiveness over the next 20 years. But also that expansion can only happen in the context of guaranteed limits on its local environmental impact, taking effective action to tackle the climate change impacts of aviation and encouraging better public transport access.
However, the most far-reaching policy departure of 15 January in its implications for Britain's transport system was the decision to establish the High Speed Two company, and to ask it to recommend to the government a north-south high-speed rail plan by the end of the year. From my reading and international studies, it has long been clear to me - well before becoming a transport minister - that a global transport policy revolution is taking place as country after country adopts high-speed rail as its next generation backbone infrastructure. The question is not whether but when and how Britain follows suit.
Very significantly, our policy is moving in parallel with the United States. In one of his early presidential speeches, Barack Obama described high-speed rail as "a smart transportation system equal to the needs of the 21st century," and he is championing the cause powerfully. So is Governor Schwarzenegger in California, who last November won a ballot proposition for a $10bn bond to start work on a 200mph high-speed line from San Francisco to Los Angeles. Then there is France, Japan, Germany, Italy, Spain, China, Korea, Taiwan, Brazil, Belgium, the Netherlands - the list goes on of countries now far beyond us in the relative scale of their high-speed rail networks. In Europe alone, 3,600 miles of high-speed line are in operation, a further 2,000 are under construction and 5,300 planned - but only 68 of them are in Britain.
The most significant long-term transport policy decision of the next year will be on taking forward plans for a north-south high-speed rail line. The need for sustainable additional transport capacity between Britain's principal conurbations; the potential to substitute lower carbon and more convenient trains for planes and cars; the potential for getting far more freight off the roads and onto rail; the social and economic benefits of high-capacity and high-speed links between the north and the south in England, and between England and Scotland ? all these will be key factors in our decision early in 2010.
Environmental factors at large, and carbon reduction in particular, will, as I say, be notable factors in determining policy on high-speed rail. Which brings me to my second key challenge as Transport Secretary - getting Britain firmly on the path to a low carbon future.
All of us here, whatever our role in the transport sector, have a duty to champion low carbon technology and practice, as part of our wider responsibility to help the UK meet our ambitious but essential climate change obligations. However, that duty is not going to be fulfilled by exhortation alone; but rather by making low carbon travel a better and steadily more viable and attractive choice within, and between, different modes of transport. As Anthony Giddens writes in his new book on the politics of climate change, "No approach [to a lower carbon future] based mainly upon deprivation is going to work. We must create a positive model of a low-carbon future - one that connects with ordinary, everyday life in the present. A mixture of the idealistic and the hard-headed is required." That is precisely my approach - a mixture of the idealistic and the hard-headed - and it is the approach I will set out in the government's transport carbon reduction strategy next month.
Technology is part of the answer. Within each mode we need to move as fast as is economically, socially and technologically viable to lower carbon options.
For road vehicles, this means government intervention on a number of fronts, from developing new vehicle standards through the EU, to supporting R&D and helping UK industry maximise the opportunities from a shift to lower carbon technology as part of what Peter Mandelson has called Britain's "new industrial strategy." We need to secure the significant improvements that are still to be had from improving the efficiency of the internal combustion engine, while also unlocking the market for the new cleaner electric and hybrid technologies that are also emerging fast.
We are taking these steps now. Yesterday I was at the launch of eight branded demonstration models of electric cars, 340 of which will soon be available for public testing at eight locations across Britain, which will be a crucial part of manufacturers' research on consumer behaviour alongside their R&D on the technology itself. The government has already pledged more than £200 million for consumer incentives, worth between £2,000 and £5,000 for motorists looking to buy electric or plug-in hybrid cars when they come onto the market, which we expect to be from 2011.
A key element in our strategy to decarbonise cars and vans is to enable motorists to make a more informed choice as to the carbon impact of the vehicles they buy. My first announcement as Secretary of State was the extension of the new car fuel economy label to used cars, and the launch of an online database of new van CO2 emissions on the Business Link website.
The purchasing power of the public sector can also help in demonstrating the potential of new technology for decarbonising road transport. So today I am announcing that, as part of a £20 million scheme, four British companies - Ashwoods, Allied Vehicles, Smith Electric Vehicles and Modec - will begin supplying low carbon and all-electric vans to selected public sector organisations within months. They will initially supply the first 100 vans to public sector bodies later this year, including the Environment Agency, HM Revenue and Customs and the Royal Mail, as well as councils from Glasgow, Newcastle and Gateshead to Leeds, Liverpool and Coventry.
There is an exciting low carbon agenda in rail too. We are examining in detail the case for electrifying the two busiest diesel-operated inter-city lines - the Great Western Main Line from London to Bristol and Swansea and the Midland Main Line from London to Derby, Nottingham and Sheffield. We hope to have announcements to make on this in the coming months.
For aviation and for shipping, our aim is to switch to progressively cleaner, greener aircraft and ships to reduce emissions. We expect industry to drive and adopt technological improvements that will increase efficiency and reduce the environmental impact of these sectors. At the same time we recognise that even in the longer term the decarbonisation of aviation and shipping and the switch to alternative fuel sources will be more challenging than for road and rail.
And uniquely we have set ourselves a tough national target to bring CO2 emissions from UK aviation below 2005 levels by 2050. We will achieve this, first, by the use of market-based measures. These include an effective emissions trading scheme, which is why we argued successfully for aviation's emissions to be capped within the EU system from 2012 and why Ed Miliband and I will be pressing for international aviation - as well as international shipping - to be included in any new global deal agreed at the Copenhagen Climate Conference in December. Secondly, it is also essential that for planes as for cars, we drive the development and adoption of new technology, including fuel efficiency improvements in aircraft engines and airframes; improvements in air operations, both in terms of more fuel efficient practices and air traffic management; and the use of alternative fuels, provided these can be produced sustainably.
In promoting low carbon transport, there is no lower carbon or healthier means of getting from A to B, besides walking, than cycling. Cycling has for too long been the Cinderella of transport policy - adored but neglected, when in fact it ought to be central to our thinking and planning if we are serious about a low carbon and healthier future. Improved cycling facilities will be one of my key priorities as Secretary of State. It is no accident that the countries which are most serious about cycling - I think particularly of Holland and Germany - are also among those which have the most joined-up transport systems, because cycling by its very nature is a short distance mode of transport and requires good interchange facilities if it is to be a central part of a wider system.
Nearly half of all people in Britain over the age of 11 own a bike, and two in five of all journeys are under two miles so are in many cases well-suited to being undertaken by bike. The government is investing a lot more in this area; Cycling England has a three-year budget of £140 million and is doing a good deal of useful work including the designation of cycling demonstrations towns and cities from Brighton to York. Sustrans' Connect 2 is also helping to revitalise cycling and walking in 79 communities across the UK by creating new routes for the local journeys we all make every day. Thanks to Sustrans, crossings and bridges are being created over busy roads, railway lines and rivers. These connections then link into new networks of local paths to get you to where you want to go by foot or bike.
But to be frank, our record on cycling so far is mixed at best. Whilst in London cycling has more than doubled in the last ten years, in England as a whole it is down by nearly 20 per cent and cycling makes up only 1.7 per cent of all trips which does not compare at all well with other European countries. I am looking forward to discussing with Philip Darnton of Cycling England how we can bring about a step-change in numbers getting their bikes out of the shed or the garage and into use.
One key factor is the ease of interchange between cycling and other forms of travel. Let me take the specific issue of the interchange between cycling and rail travel. While some 60 per cent of the population lives within a quarter of an hour cycle ride of a railway station, only two per cent of journeys to and from stations are made by bike. By contrast, in Holland, cycling accounts for roughly a third of all trips to and from rail stations. This massive difference isn't in the different genes of the British and the Dutch; it has a lot to do with the provision of facilities for cyclists at stations.
I saw this at first hand last month when I visited Holland. At this point I have a slide show [show photo slides]. The station at Leiden has properly organised and supervised parking for 4,500 bikes; by contrast all of London's rail terminals put together only have cycle storage facilities for 1,200 bikes. Leiden, a city of just 120,000 people, is planning to increase its 4,500 station bike parking spaces to 6,000 - an increase of 1,500 which is larger than the total number of spaces available at all London terminal stations.
I toured some of London's mainline stations by bike on Sunday to investigate their cycle parking facilities, and it was a sorry story, as my photos show. For the most part cycle storage is very limited, unsupervised, badly signed and difficult to access. Only at London Bridge, thanks to a new initiative by the Mayor, is there proper supervised storage - but that, again, is badly signed, not open in the late evenings and the cycle store is a five minute walk from the station.
To help tackle this problem I am announcing plans to radically improve station cycle storage. I will make available £5 million over two years for transformation projects to improve cycling storage facilities at up to ten major railway stations nationwide, including in London. This will be on top of existing improvement plans - for example our new south-central franchise, which is providing 1,500 extra cycle parking spaces - as well as 1,000 extra car parking spaces - at stations across south London, Sussex and Surrey. I see this as a model for future rail franchises nationwide.
I am asking my station champions Chris Green and Sir Peter Hall to recommend which stations would benefit most from this funding and the sorts of services that would be of most value, for example potentially including maintenance facilities as well as safe storage. I have asked them to report to me on scheme design before the end of the summer.
By enabling people to make the choice to cycle as part of longer public transport journeys we can make a massive difference not only in tackling congestion, promoting rail and protecting the environment but also in making Britain a much fitter, healthier country.
And this is just one aspect of improving transport interchanges. The report of the Door-to-Door working group being launched here today has an entire chapter on them. As the report points out, best interchange practice could be something as simple as ensuring station staff are well informed and easily identifiable and that public announcements are clear and give the right amount of detail. Or it could mean more real time information screens and greatly improved signage to make connections and onward journeys simple to understand and easy to navigate.
Buses clearly have a critical part to play, not only as a form of local transport but also in providing effective interchange with other forms of travel.
In Brighton, a partnership between the local authority and bus operator has not only brought about increases in bus patronage and user satisfaction, but also delivered real time bus information at stops right across the city, as well as in the rail station.
In Oxford, effective partnership, effective traffic restraint and bus priority means that around 40% of trips to and from the city centre are by bus, and buses link to rail services by operating from the rail station forecourt.
In Leeds, passengers can walk outside the rail station and straight onto a free bus service running around the city centre.
In Hull, the new Paragon Interchange brings together buses, coaches and trains under one roof, as well as providing better ticket offices and facilities for cyclists and pedestrians.
I want these to be models of good practice for emulation nationwide. The Local Transport Act provides the powers for local authorities and bus operators to work together to boost bus use and improve interchange, and I am keen that they do so.
Another critical dimension to improving interchange is the extension of smart ticketing across transport networks.
By extending the use of smart ticketing technology, we can transform people's perception and experience of public transport. In Japan tens of millions of people regularly use their mobile phones as their ticket to travel on railways and subways. In Hong Kong 95% of all those aged between 16 and 65 own an 'Octopus' smartcard and use it both for public transport and for paying for other goods and services.
In London, the Oyster card has transformed the travel patterns of Londoners. As I said earlier, to make it even more attractive, Oyster pay-as-you go will soon be extended to cover rail journeys in London and we are also funding the project to make London compatible with the national ITSO smartcard standard.
And there are excellent examples outside the capital as well - bus passes being used as library cards in Bracknell Forest, free transport being used to incentivise leisure centre use in Nottingham, and disposable multi-journey smartcards in Cheshire to name but a few. If we get this right then the whole country could follow London in revolutionising the connectivity of public transport, and increasing its use radically. Our intention is to publish a consultation document on smart ticketing this summer, including possible incentives to boost development and take-up.
In conclusion, let me return to high-speed rail, which as I say is the critical issue for decision in the next year, to which I will be giving a good deal of personal attention.
My first overseas visit as Transport Minister was to Japan, to study the bullet train revolution which has swept Japan in the past half century. At the entrance to Tokyo Central Station is a plaque which declares the Shinkansen "product of the wisdom and effort of the Japanese people".
Yet crucial to the history of the Shinkansen is the fact that it was not inevitable that it should have taken place. What happens generally seems pre-ordained, as it was both with Japan's decision to pioneer high-speed rail and our decision not to. But this is quite unhistorical. On the contrary, the phrase "railway downfall theory" was in vogue in 1950s Japan: the view that rail was an outdated technology which was set to follow horse carriages, canals and sailing ships, to be replaced by faster planes for the longest distances and by far more flexible and individualistic cars and trucks for shorter distances.
This view was indeed widely held within Japan National Railways at the time, and it was only the vision and leadership of a small group of talented managers and engineers which ordained otherwise. They concentrated on the immediate capacity requirements of the densely populated and economically critical Tokyo to Osaka corridor, convincing the government that a patch-and-mend upgrade to the existing line was too cautious for this key route and that new technology offered a much more fit-for-purpose solution. The rest, as they say, is history.
I believe we are at a similar turning point in British transport policy. It is part of a wider low carbon imperative which embraces the nation at large - but with challenge comes opportunity, and it is an opportunity which I am intent we should seize.
OUR COMMENT: Seize it and make it happen! And do not forget to bring the Aviation White Paper up to date, and recognise that the much publicised ETS cap for aviation emissions needs to be just that, a CAP, no cheating and stealing emission allowances from other industries and developing nations.
EFFECTIVE INTERNATIONAL ACTION?
The emperor has no clothes - but who is willing to say so?
European Federation for Transport and Environment - 15 June 2009
Editorial by Bill Hemmings
A fascinating but frightening game of bluff is being played with global attempts to curb aviation's contribution to global warming.
It is the equivalent of the emperor standing up naked and challenging all the on-lookers to say that he is wearing no clothes.
The last 12 years since the Kyoto Protocol was signed have been hugely disappointing in the field of aviation. But once it became clear two years ago that the EU was going to put aircraft emissions into its Emissions Trading Scheme (ETS), and the Bali climate meeting called for a more ambitious set of reduction commitments than Kyoto to be agreed at this year's Copenhagen climate summit, the feeling was that aviation was under pressure to do something. There followed a battle within the aviation sector as to how far the industry needed to go to satisfy the parties at Copenhagen and keep control of aviation's climate impact within the International Civil Aviation Organisation (Icao).
That battle took the form of Icao establishing a group of 15 'wise men' (the Group on International Aviation and Climate Change, or 'Giacc') from a representative group of countries. The 15 were asked to draw up an action plan on aviation climate change. That final action plan - effectively a draft of Icao's final offering to Copenhagen - was revealed earlier this month.
If one wants to be kind about it, it is honest in its admission that there was very little consensus, and that certain states did not honour their agreements under the Kyoto protocol. But in effect it is nothing but a bunch of empty promises.
Icao promised an 'aggressive' plan of action to tackle climate change - all it has come up with is a set of 'aspirational goals' with no commitments. The wording of it admits to the ongoing conflicts within Icao between developed states wanting global action and developing countries (led by China) who, citing the UNFCCC principle of differentiated responsibility, insist that only developed countries need to reduce international aviation emissions.
The 15 also published a basket of optional market-based measures for states to choose from, but acknowledged that there was still no agreement on how cross-border measures could be undertaken. So a principal objective of the group, first raised in 2007, has still not been addressed.
Where does this leave the process? It seems a blatant invitation to the UNFCCC to take responsibility for aviation away from Icao (and shipping from the IMO) and to set emission reduction targets - and take over responsibility for developing emission reduction measures.
This so-called 'action plan' is no credible basis for the Copenhagen agreement to continue to entrust Icao with responsibility for reducing aviation emissions. The question now is: will the UNFCCC see that the emperor is wearing no clothes and take over this vitally important responsibility?
RYANAIR JOINS IN -
IT'S ALL THE FAULT OF THE AIRPORT TOURIST TAX
Ryanair Freezes Growth at 9 UK Bases
Government must scrap £10 tourist tax and breakup BAA monopoly
as BAA traffic falls 4.5 million in 5 months
European Investor Online - 23 June 2009
Ryanair freezes growth at 9 UK bases with immediate effect
Ryanair, Europe's largest low fares airline, today (23rd June 09) confirmed that it will freeze growth at its nine UK bases with immediate effect. Ryanair highlighted that Gordon Brown's £10 tourist tax, combined with the BAA Monopoly's high airport charges have caused the loss of over 4.5 million passengers at the BAA UK airports in the first five months of the year.
Ryanair called on Gordon Brown to scrap this £10 APD tax and speed up the sale of Gatwick and Stansted airports to prevent a further collapse in UK tourism and related jobs next winter. If the UK traffic collapse continues for the full year the UK economy will lose over 10 million passengers, 10,000 airport jobs and over £2.5billion in tourism spend in 2009 alone, with the Government losing at least £350 million in VAT receipts.
The UK is now a high cost tourism destination which is in steep decline. Ryanair urged the British Government to follow the lead of the Belgian, Dutch, Greek and Spanish Governments who have recently scrapped similar tourist taxes and/or airport charges in order to reverse falling passenger numbers and prevent further tourism and job losses.
Ryanair's Michael O'Leary said: "Ryanair will grow by 15% this year to over 67 million passengers. However, the UK will not share in any of this growth in 2009 as Ryanair (the only major European airline continuing to grow) freezes growth at our nine UK bases. Gordon Brown's £10 tourist tax will see Britain lose over 10 million passengers, 10,000 airport jobs and more than £2.5 billion in tourism spend in the UK this year alone. The Government should follow the example of their Belgian, Dutch, Greek and Spanish counterparts by immediately scrapping this stupid and regressive tourist tax to avoid any further devastation to British tourism and jobs."
"Tourism is one of the UK's most important industries and employers. It responds quickly to price changes. The Government's £10 tourist tax is making the UK an uncompetitive destination and they must scrap this tax now to prevent a further collapse of UK passenger, tourism and job numbers. While the UK keeps taxing tourists Ryanair will switch its growth to other EU countries where low cost airports are growing and where Governments are welcoming tourists not taxing them."
OUR COMMENT: It is difficult to see how a £10 tourist tax could deter most people from a holiday that will cost hundreds - statistics published claim that the fall in passengers are largely from business class passengers economizing on the costs of business travel. It would make more sense if Ryanair catered better for essential business journeys.
TRANSPORT SECRETARY LORD ADONIS WARNS
AILING AIRLINES THERE WILL BE NO BAILOUT
Karl West and Ray Massey - Daily Mail - 22 June 2009
Transport secretary Lord Adonis waded into the row between Virgin founder Sir Richard Branson and British Airways after warning there would be 'no bailouts' given to ailing airlines. The Virgin boss enraged BA when he said the Government should not rescue the struggling carrier, which admits it is in a 'fight for survival'.
Lord Adonis insisted: "We are not in the business of giving bailouts. Nor would the public expect us to. We don't see any public interest to be served by giving public subsidy."
BA has insisted that it has not sought, nor would seek, a bailout.
Sir Richard said BA had brought the matter on itself when chief executive Willie Walsh said that BA was in a 'fight for survival' and asked staff to work without pay for a month.
Sir Richard said: "Loss making and inefficient airlines should be allowed to go the wall, no matter how big or prestigious they were. The Government should not intervene to stop companies going bust. Big inefficient companies which have let their overheads grow should not necessarily survive for ever. If they do disappear it will allow new and more efficient companies to take their place."
He said Virgin Atlantic was ready to grow and take over any take-off and landing slots at airports that such a demise would create: "We're ready to expand if an airline goes bust. We just want to make sure that if an airline does go bust, the slots go back into the pot."
The Italian Government has been accused by rivals of subsidising its national carrier Alitalia, which re-emerged from liquidation earlier this year after merging with domestic rival Air One.
Sir Richard also predicted yesterday that the recession would kill off first-class travel. He made his remarks as he took off on a 25th anniversary flight to commemorate the launch of his own airline Virgin Atlantic a quarter of a century ago.
The businessman said the last 12 months in aviation had been "the most volatile in our 25 year history". He believes Virgin Atlantic will survive the downturn, but that first class travel across all airlines will "disappear for good".
Recent official figures have shown a massive slump in first and business class travel.
As a result there is a vicious price war for business class customers for a return ticket to New York with Virgin Atlantic today charging £1,098, compared to £1,049 with American Airline United, and £1,099 with Virgin's arch-rivals British Airways.
Sir Richard, whose airline offers an 'Upper Class' premium service, commented: "We have heard that our principal rivals are looking to get rid of first-class altogether. And it's high time. Who wants to spend £8,000-£9,000 on a first-class ticket when they can fly with us for less than half that? I suspect first-class travel will disappear during this recession."
The Virgin boss said his airline was "doing better than most" during the downturn, adding: "This year is going to be tough for everybody. But it's a fantastic time for passengers. I suspect they are getting the same sort of prices they were getting 25 years ago."
But despite this warning, British Airways today launched a new business-only flight from London to New York as it tries to fight back from its financial crisis.
The airline, which announced record annual losses of £401million last month, is to charge up to £5,000 return for a seat on the twice-daily flights from London City airport to JFK.
Billed as a 'City to Wall Street' flight, BA promises executives the most convenient connection between the two financial centres. It has bought two small A318 planes which will each carry only 32 passengers. Today's announcement will be seen as an aggressive move by BA to win back first-class customers.
London to New York has always been seen as the most lucrative business class route in commercial aviation, but BA has lost ground to competitors including Virgin Atlantic and Delta.
BA's chief executive Willie Walsh said today: "In the harshest trading environment airlines have experienced, we believe it is more important than ever to embrace the future and innovate. That is what this historic new route is all about."
The airline has axed more than 2,500 jobs since last summer, frozen pay and offered unpaid leave to cut costs.
The service will begin in September and tickets start at just ££1,100. Tickets for the new flights go on sale tomorrow - starting at about £2,000 for a non-refundable, non-transferable return flight on a Friday and going up to £4,900 for a more flexible weekday return.
High-paying premium passengers have declined sharply across the industry as firms slashed their travel budgets. Business-only airlines Silverjet and Eos both ceased operating last year, but BA hopes the convenience of getting to City airport in Docklands will lure customers from Canary Wharf and the Square Mile.
The east London airport also openly touts itself as a 'stress-free' alternative to Heathrow, where clients regularly complain of long queues and lost baggage. The Airbus A318s are the largest aircraft that can be flown from City. All 32 seats on the plan convert to fully flat beds.
Passengers will also be able to log on to the internet. Because the planes are so small, there will be a refuelling stop at Shannon in Ireland - where passengers will be able to clear US immigration.
BA bosses hope a 15-minute quick check-in at City airport and not having to queue for immigration at JFK will cancel out the 45-minute refuelling stop, making it as quick as other transatlantic flights.
STANSTED EXPANSION INQUIRY DELAYED
Avril Ormsby - Reuters - 18 June 2009
A public inquiry into a possible second runway at London's Stansted Airport has been delayed for a second time while an appeal against an anti-competition ruling awaits, the government said on Wednesday.
The Communities and Local Government minister John Denham said in an open letter the inquiry could not be held while the future ownership of Stansted remained in doubt.
"It is clear to me that it is neither feasible nor realistic to announce the start date for the Stansted G2 public inquiry until such time as the outcome of the appeal is known," he wrote.
British airports operator BAA, majority owned by Spain's Ferrovial, is appealing against an order by competition regulators to sell three airports, including Gatwick and Stansted in London, within two years. BAA is in the process of selling Gatwick.
While there is no set timetable for the appeal process it is likely to take about 9 months, Denham said.
Nick Barton, Stansted Airport's commercial and development director, said in a statement: "This announcement does not alter the fact that new runway capacity is urgently required if the United Kingdom is to preserve its global economic competitiveness, and the case for a second runway at Stansted remains a strong one."
The inquiry was originally scheduled to have begun on April 15, but the then minister Hazel Blears delayed announcing a timetable for the inquiry.
STANSTED RUNWAY INQUIRY LIKELY TO BE DELAYED
UNTIL AFTER ELECTION
Ben Webster, Transport Correspondent - Times Online - 17 June 2009
The public inquiry into a second runway at Stansted is to be delayed by at least nine months, increasing the chances that the project will eventually be scrapped.
John Denham, the Communities Secretary, said the start of the inquiry would be delayed until after the outcome of BAA's appeal against the Competition Commission ruling that it should sell Stansted, Gatwick and a Scottish airport. The ruling is expected in February 2010 but if BAA loses it could appeal to the House of Lords. This means an inquiry is unlikely to start before the next general election.
BAA had originally hoped to open the Stansted runway in 2012 but the earliest possible opening date has slipped to 2017. The delay means proposed new runways at Heathrow and Gatwick could take precedence and remove the need for a second runway at Stansted.
The Conservatives have ruled out new runways at Heathrow, Gatwick or Stansted but hinted that they might allow Luton to be expanded.
Nick Barton, Stansted's development director, said that Mr Denham's announcement "does not alter the fact that new runway capacity is urgently required if the United Kingdom is to preserve its global economic competitiveness, and the case for a second runway at Stansted remains a strong one".
Lord Hanningfield, leader of Essex County Council, which opposes the second runway, said: "This is another nail in the coffin for the Government's ill-conceived plans to force unsustainable and unneeded aviation expansion on the British people."
"A public inquiry will now not take place until after the general election, and with the Conservatives committed to opposing the second runway this is effectively the death-knell for BAA's unwanted plans. The chances of a second runway at Stansted may be effectively over but we would ask the new minister to take the brave step of admitting it."
AIRPORT DENIES UNFAIR TRADING CLAIMS
Stansted Airport has strenuously denied claims of unfair trading practices
Braintree & Witham Times - 17 June 2009
Stop Stansted Expansion (SSE) has asked the Office of Fair Trading to investigate claims made after it surveyed taxi firms, bed and breakfast accommodation and guest houses within a 15 mile radius of the terminal.
The group claims that of the 28 replies to its questionnaire, there were complaints from taxi firms about its exclusive agreement with one firm, which has a dedicated pick-up area directly outside the terminal building while other operators must pick up passengers from the short-stay car park and pay for parking.
Meanwhile, accommodation providers complained against the accommodation booking desk at Stansted, which they claimed charged local B&Bs and guest houses excessive rates of commission and gave preferential treatment to airport hotels.
SSE campaign director Carol Barbone said: "There are clearly some issues here which deserve to be investigated. Local taxi firms and family-run B&Bs obviously do not feel they are getting a fair crack of the whip from BAA at Stansted and hopefully this is something which the Office of Fair Trading will pursue on their behalf."
But Nick Barton, Stansted Airport's commercial and development director, said: "It's now very clear to us the real purpose of SSE is not to oppose expansion but to attack the very existence of Stansted. It is seeking to damage the airport and, in doing so, the livelihood of the thousands of people who work at Stansted, their families and our millions of passengers."
"We are extremely proud of our track record and have an excellent reputation as a responsible business within our local community. We are always keen to spread the huge benefits the airport generates within the local area, and we work hard to encourage local businesses to take advantage of the opportunities that exist and share in our success."
"The feedback we receive from local businesses and business groups is overwhelmingly positive and we are committed to working in partnership with as many local firms as possible."
EUROPEAN AIRPORTS CONFRONT INDUSTRY CHALLENGES
AT A CRUCIAL TIME
Press Statement - 16 June 2009
The European airport community gathered in Manchester today for the 19th ACI EUROPE Annual Assembly and Congress. On this occasion, European airport trade body ACI EUROPE addressed the economic outlook and the full range of industry challenges in the context of the worst ever trading conditions faced by its members.
Between January and April, passenger traffic at European airports fell by more than
10% while freight traffic fell by nearly 25%, with more than 90% of airports losing
traffic over that same period.
Olivier Jankovec, Director General ACI EUROPE confirmed that traffic recovery
is nowhere in sight for the time being: "Air traffic is likely to remain depressed in
the coming months, due to very weak passenger demand, without even
considering the risks associated with swine flu or further increases in oil prices."
He also indicated that ACI EUROPE had just revised its full year traffic forecast
downwards: "We are now looking at an 8% decrease in passenger traffic for
the full year and a 16% drop in freight traffic - this is more than 15 times the
yearly traffic decrease we experienced following 9/11."
ACI EUROPE stressed that airports are being hard hit by the crisis and that they
are facing specific challenges related to the nature of their business.
Jankovec said "Airports get a special double-whammy. Decreasing aeronautical and
commercial revenues as a result of fewer flights with fewer passengers. Increasing
costs as a result of the credit crunch. For a capital-intensive business like ours,
which is increasingly reliant on capital markets, this is far from neutral.
Profitability is shrinking and there will be losses this year in the sector."
SHORT-TERM vs. LONG-TERM
Airports face a unique challenge, as they need to deal with the immediate impact
of the crisis without losing track of the long-term growth perspective for aviation.
On airports' reaction to the crisis, Jankovec commented "Airports are not standing
still. But unlike airlines, they cannot react by moving to a better market location or
simply reducing the scope of their operations. They can only do one thing:
make their own market location more competitive."
This explains the fact that there has not been massive increases in airport
charges across Europe to compensate for falling revenues. But while airports
are tightening their belts, cutting costs, freezing recruitment and reducing staff
numbers ?by up to 30% in some cases, they also need to keep investing now for
Jankovec stressed "As economies will recover, so will demand for air services.
Despite the crisis, experts still expect Europe to face an airport capacity
crunch by 20302. Investing in future capacity must remain a priority."
OUR COMMENT: Aviation interests are still not facing facts. Future expansion and reducing climate change are incompatible. Now is the time to rationalize routes, cease promoting ridiculously cheap flights, improve airport services and consider how to balance the true demand for flights with the environmental realities.
APD INCREASE COULD FORCE AIRLINES TO SCRAP ROUTES
The Government's decision to double Air Passenger Duty (APD) could lead to record numbers of routes from British airports being abandoned, a private aviation company claimed this week
Charles Starmer-Smith - The Telegraph - 12 June 2009
One in 10 routes could disappear this year and airports may face heavy losses
Jonathan Breeze, chief executive of Jet Republic, said the rise in APD - the tax paid by passengers flying out - would lead to a fall in passenger numbers and force airlines to drop loss-making routes.
The tax is to increase by up to 112 per cent over the next 18 months. On short-haul flights (under 2,000 miles) it will rise by just £2, but on a flight to Singapore, Malaysia or Australasia, a family of four will pay £340 - more than double the current rate.
The Airport Operators Association, which represents 72 airports, has written to Geoff Hoon, the Transport Secretary, saying that the increase, coming as it does during a recession, will threaten the survival of some airports.
The association predicts than one in 10 routes will disappear this year and that many airports will sustain heavy losses. Over the past year, more than 40 routes from leading airports have been abandoned in response to a fall in bookings. The number of passengers using Stansted fell by almost 20 per cent in May, compared with the same month last year, as airlines concentrated on the main hubs of Heathrow and Gatwick. The number of passengers using those two has fallen by 6.5 per cent and 3.9 per cent respectively, year on year.
Charter flights have witnessed the biggest decline: 688,100 passengers took charters last month, compared with 865,900 in May last year.
The United States was the worst affected destination. The number of passengers flying there through BAA's airports fell by nearly 10 per cent in May, compared with a decline of less than two per cent on other long-haul routes.
Airlines continue to cut fares in an attempt to keep people flying. The International Air Transport Association reported this week that economy-class fares have fallen by more than a third over the past year on transatlantic flights and by 31 per cent on flights between Britain and the Continent. IATA predicts that air fares will continue to fall for the rest of the year.
This week, a return flight to New York was being sold for as little as £219 by Kuwait Air - down from about £290 last year - while a return flight to Auckland could be bought through the online travel company Travelbag for just £439 - down from about £700 last year.
Last week, Sir Richard Branson, president of Virgin Atlantic, told Telegraph Travel: "British travellers are currently paying the same as they were when we launched the airline 25 years ago. If you have been wanting to take that trip to Australia, now is the time to do it. There are some unbelievable bargains out there."
Sir Richard also predicted that a big American airline would collapse by the end of the year, pointing out that, although fuel prices have fallen from the peak of $147 a barrel last year, they have almost doubled to $65 in the past three months. About 30 airlines have collapsed in the past 18 months, including Silverjet, Maxjet, and Oasis Hong Kong.
CONCERNS FOR BUILDINGS OWNED BY STANSTED AIRPORT
Letter to The Dunmow Broadcaster - 12 June 2009
THE Society for the Protection of
Ancient Buildings (SPAB) shares the
concerns over the number of houses
owned by airport operator BAA around
Stansted that are lying empty ('Empty
homes fears', Broadcast June 4). This area is one of the most notable
in England for historic buildings,
especially medium-sized and smaller
timber-framed structures dating from
the Middle Ages to the 17th century.
Many of the properties now in BAA's
ownership are listed as being of special
architectural and historic interest.
BAA, however, seems incapable of
recognising their attributes.
Over the past few years, we have
noticed how a significant number of
BAA's historic properties have been left
vacant for long periods. In such
circumstances, maintenance problems
are less likely to be identified and dealt
with promptly, and it is surprising how
quickly deterioration can occur.
In one case, for example, rainwater
from a disconnected downpipe was
discharging down the wall of a late
15th/early 16th century cottage for a
considerable period ? a straightforward
fault that could have been easily rectified
to avoid timber decay and other potential
problems arising from penetrating
In another vacant grade II
listed house, water damage recently lead
to the collapse of a ceiling.
What's more, where BAA has carried
out work to its historic buildings it has
done so with apparent indifference to
the need for specialist building
Hence the instance in Broxted where
it illegally installed plastic doubleglazed
windows in a listed, thatched
cottage with complete disregard to the
historical context and was forced to
remove them by the local authority.
After the SPAB raised concerns over
BAA's treatment of its historic properties
at the 'G1' public inquiry in 2007, a
representative from BAA indicated he
was keen to discuss these with us
further.We are still awaiting his call.
Secretary Society for the Protection of Ancient Buildings
AN IMPORTANT CONSULTATION
Airport launches consultation to help tackle aircraft noise
News Stansted - 12 June 2009
Stansted Airport has today launched a 16 week public consultation on its proposed plans to continue minimising aircraft noise impacts over the next five years.
The UK's third busiest airport is seeking views on its proposed Noise Action Plan and will hold a series of noise briefings in local towns and villages affected by aircraft noise during August and September. The consultation will run until Friday, October 2, 2009.
Stewart Wingate, Stansted Airport's managing director, said: "This will be one of the most comprehensive public consultations on aircraft noise ever carried out by Stansted Airport. We want to know what people think of our draft plans for the next five years before we finalise them for submission to the Government later in 2009."
"Our challenge is to manage the issue of aircraft noise in a pro-active, professional yet sensitive way as we understand it can be a real concern for our local community. We're also determined to take appropriate actions to reduce and mitigate against aircraft noise where we can - this is the right and responsible thing to do."
Stansted is required to publish a noise action plan as part of EU and UK environmental regulations. The proposed plan will run for a five year period from 2010 - 2015 and aims to manage and, where possible, reduce the impact of noise from the various aircraft types that operate at the airport. A final Noise Action Plan will be produced by the end of 2009.
Stansted Airport's head of environment, Dr Andy Jefferson, added: "Here at Stansted we pride ourselves on the pro-active way the airport monitors and reports on both aircraft noise and track-keeping. We've also worked hard to successfully reduce the impact of aircraft noise as we've developed and grown the airport, and today we have one of the most modern aircraft fleets of any UK airport."
"Aircraft are 75% quieter than they were thirty years ago, and the industry has already set itself the target of a further 50% reduction in 2000 levels by 2020 but we know there is always more we can strive to do."
As part of the consultation, Stansted has written to individuals and groups across the Eastern region, including Members of Parliament and local authority leaders.
Copies of the action plan and feedback questionnaire are available online at www.stanstedairport.com/noise. Paper copies of either document can be obtained by calling the Consultation Hotline (answerphone) on 01279 662800 or email.
OUR COMMENT: Take part - Have your say!
BAA PASSENGER NUMBERS FALL 7.3%
Roger Blitz - Financial Times - 10 June 2009
London airports are continuing to suffer falls in passenger numbers, but Heathrow is showing some signs of stemming the rate of losses, according to the latest figures from BAA, the airports operator.
BAA's seven UK airports handled 11.8m passengers in May, a 7.3 per cent fall on May 2008. Passenger traffic at the three London airports was down 7.4 per cent. But while Stansted lost nearly a fifth of passengers compared with last year, Heathrow's 5.4m total represents a fall of 3.9 per cent, a lower rate of decline than in previous months.
BAA said Heathrow's May figures demonstrated the international hub's "resilience and importance", adding that the 6.5 per cent fall at Gatwick was also an improvement on recent months and reflected the impact of "open skie" liberalisation of transatlantic aviation and the summer schedule.
The UK airports operator, majority owned by Spain's Ferrovial overall figures were in line with traffic trends since December, demand conditions remained weak but were not changing materially.
New low-cost services at Edinburgh helped provide the Scottish airport with a 1.4 per cent increase in traffic, the only BAA airport to see a rise, its second consecutive month of growth. But Glasgow suffered a 11.7 per cent fall, while Aberdeen was down 14.1 per cent. Southampton, BAA's smallest airport in terms of passenger numbers, fell by 12.5 per cent.
BAA said the rate of decline in domestic air traffic had worsened, with May's total down 10 per cent. Long-haul routes fell by 1.8 per cent, with North American traffic down 9.1 per cent and European scheduled traffic dropping 5.2 per cent.
A 20.5 per cent fall in European chartered traffic was actually an improvement on recent months. Air transport movements overall were down 8.8 per cent, with Heathrow's falling 2.9 per cent.
Ferrovial has been told by the Competition Commission to sell three airports - Garwick, Stansted and either Glasgow or Edinburgh - but is appealing.
ACTION ON AVIATION'S CONTRIBUTION TO CLIMATE CHANGE?
Airlines Call for CO2 Targets, Climate Fund
Airpoprt Watch - 9 June 2009
Some of the world's largest airlines on Tuesday called for the industry to set global emissions targets as part of efforts to include aviation in a broader climate agreement at the end of the year.
The seven airlines, including Air France-KLM and British Airways, along with international NGO The Climate Group, have backed a range of emissions reduction targets for negotiators involved in UN-backed climate talks to consider.
Aviation is responsible for about 2 percent of global greenhouse gas pollution and that share is expected to rise. The sector is under pressure from green groups, the European Union and other governments to clean up its act, leading to the airlines to try to craft a deal to tackle emissions, or risk having a deal imposed on them.
The proposals, from carbon-neutral growth, a 5 percent reduction and a 20 percent reduction in emissions through to 2020, using a 2005 base-year, will be presented to negotiators at the latest round of climate talks being held this week in Germany.
The carriers, part of the Aviation Global Deal Group, said in a statement that participation in an international carbon trading market would be crucial to meeting their goals. Under the group's proposal, a proportion of the sector's emission allowances would be auctioned to generate revenues for climate change initiatives in developing countries.
"Based on the scenarios assessed, auction revenues of up to USD$5 billion per annum could be generated to support activities such as climate adaptation programmes and initiatives to combat tropical deforestation," the group said in the statement.
The group also proposed that airlines' carbon dioxide (CO2) emissions are based on the carbon content of their annual fuel purchases and that CO2 pollution should be addressed through a global sectoral agreement, rather than a patchwork of regional schemes.
"The AGD Group believes that negotiators should set a target for the international aviation sector as part of a broader global climate agreement that would cover all international flights," the statement said. Other members of the group are Cathay Pacific, Virgin Atlantic, airport operator BAA, Finnair, Qatar Airways and Virgin Blue Airlines.
Delegates from nearly 200 countries meet at the end of the year in the Danish capital Copenhagen to try to agree on the shape of a broader climate pact to replace the UN's Kyoto Protocol, whose first phases ends in 2012.
LEVY ON INTERNATIONAL AIR TRAVEL
COULD FUND CLIMATE CHANGE FIGHT
Idea put forward by 50 least developed countries
Move could be matched by shipping fuel surcharge
John Vidal, Environment Editor - The Guardian - 7 June 2009
Britain and other rich countries will be asked to accept a compulsory levy on international flight tickets and shipping fuel to raise billions of dollars to help the world's poorest countries adapt to combat climate change
The suggestions come at the start of the second week in the latest round of UN climate talks in Bonn, where 192 countries are starting to negotiate a global agreement to limit and then reduce greenhouse gas emissions. The issue of funding for adaptation is critical to success but the hardest to agree.
The aviation levy, which is expected to increase the price of long-haul fares by less than 1%, would raise $10bn (£6.25bn) a year, it is said. It has been proposed by the world's 50 least developed countries. It could be matched by a compulsory surcharge on all international shipping fuel, said Connie Hedegaard, the Danish environment and energy minister who will host the final UN climate summit in December.
"People are beginning to understand that innovative ideas could generate a lot of money. The Danish shipping industry, which is one of the world's largest, has said a that truly global system would work well. Denmark would endorse it," said Hedegaard.
In Bonn last week, a separate Mexican proposal to raise billions of dollars was gaining ground. The idea, known as the "green fund" plan, would oblige all countries to pay amounts according to a formula reflecting the size of their economy, their greenhouse gas emissions and the country's population. That could ensure that rich countries, which have the longest history of using of fossil fuels, pay the most to the fund.
Recently, the proposal won praise from 17 major-economy countries meeting in Paris as a possible mechanism to help finance a UN pact. The US special envoy for climate change, Todd Stern, called it "highly constructive".
The Bonn meeting is the first climate meeting at which countries are discussing texts. These cover greenhouse gas reduction and financing developing countries' efforts to combat climate change.
Analysts said last night that the talks were most likely to stall over money. Developing countries, backed by the UN, argue that they will need hundreds of billions of dollars a year to adapt themselves to climate-related disasters, loss of crops and water supplies, which they are already experiencing as temperatures around the world rise. Yet so far, as a Guardian investigation revealed back in February, rich countries have pledged only a few billion dollars and have provided only a few hundred million.
"Developing countries will no longer let themselves be sidelined. In the past, they have been brought on board [climate negotiations] by promises of financial support. But all they got was the creation of a couple of funds that stayed empty. Developing countries will not settle for more 'placebo funds'," said Benito Müller, director of Oxford University's institute for energy studies.
Saleemul Huq, of the International Institute for Environment and Development, said that until rich countries made serious pledges, the rest of the negotiations would suffer because it would be impossible to agree actions without knowing how they would be funded.
Last week, a US negotiator, Jonathan Pershing, said that the US had budgeted $400m to help poor countries adapt to climate change as an interim measure. But that amount was dismissed as inadequate by Bernarditas Muller of the Philippines, who is the co-ordinator of the G77 and China group of countries.
ICAO's GIACC RECOMMENDS 'ASPIRATIONAL GOAL'
OF 2% ANNUAL FUEL EFFICIENCY IMPROVEMENT
ATW Online News - 4 June 2009
ICAO's Group on International Aviation and Climate Change yesterday recommended "a global aspirational goal of 2% annual improvement in fuel efficiency of the international civil aviation in-service fleet," but noticeably did not make any proposals on emissions trading.
"Given diverging views on the application of market-based measures across national borders, the GIACC recommends that the ICAO Council establish a process to develop, expeditiously, a framework for market-based measures in international aviation," it said. The European Commission is requiring that airlines operating to, from and within the EU submit plans for monitoring and reporting carbon dioxide emissions by Aug. 31 to begin the process of establishing carriers' status in the EU ETS set to include aviation from 2012
ICAO is seeking a multilateral solution to aircraft emissions. GIACC called its plan released yesterday "aggressive," saying a 2% fuel efficiency improvement "would represent a cumulative improvement of 13% in the short-term (2010-2012), 26% in the medium-term (2013-2020) and about 60% in the long-term (2021-2050) from a 2005 base level."
The group called for ICAO to take an "enhanced global coordinating role" that would enable it to "develop a carbon dioxide standard for new aircraft types," facilitate aircraft fuel consumption reporting by member states, "monitor and report progress on aspirational goals on a triennial basis... and identify any adjustments that may be required."
GIACC is aiming to report further recommendations to a high-level ICAO ministerial meeting taking place Oct. 7-9 with the aim of reaching a conclusion on aircraft CO2 emissions by the fall 2010 ICAO assembly.
OUR COMMENT: Now is the time to plan for and promote a green future for aviation - can the industry produce not only greener aircraft but also more efficient airports and better scheduled services, avoiding unnecessary and wasteful competition between airlines and airports?
BAA SUPPORTS LICENSING SYSTEM
BUT WILL LOOK TO RECOVER COSTS
Kaveri Niththyananthan - Dow Jones Newswires - 8 June 2009
LONDON (Dow Jones) - U.K. airports operator BAA Limited said Monday it supported the move to a license based form of airport regulation but added it would seek to recover costs from introducing a new system. Colin Matthews, chief executive of BAA, said, "There is widespread agreement that the system put together in the 1980s needs to be modernized."
While BAA agrees that the primary duty of the Civil Aviation Authority, or CAA, should be to promote the interests of consumers, it said the CAA should also be involved in other duties, "including encouraging investment in airports, aligned with the wider framework of government policy."
BAA, which is a unit of Spanish construction company, Grupo Ferrovial SA (FER.MC), said three strategic themes must underpin any new regulatory framework, namely improving customer experience; facilitating the right investment at the right time in airport infrastructure; and coherence between aviation and other government policies, especially on environmental issues.
It added the new regime "needs to be adequately stable and robust to confront important and controversial questions including the delivery of new runway capacity."
Matthews said speedy transition to a new regulatory framework will minimize the period of uncertainty associated with the current consultation and enable BAA to finance its ongoing investment program.
However, depending on the final terms of the licensing regime, BAA may need to gain consent from its creditors, including provisions relating to termination of the license and sanctions. Gaining that consent may prove costly, BAA said, adding it would look to recover costs from moving to a new system.
A spokesman for BAA said the company would seek to recover costs in a similar method to the way investment affects the regulatory asset base, which in turn determines landing charges for airlines.
CAA ATTACKS STATE PLANS FOR BAA REGULATION
The Civil Aviation Authority (CAA) has hit out at Government plans to overhaul the regulatory framework for BAA, claiming it would expose airport users to additional risks and costs
Alistair Osborne - The Telegraph - 7 June 2009
While welcoming some aspects of the proposals put forward by the Department for Transport, the industry regulator has sided with both BAA and its debt providers in opposing a "special administration regime" for the Heathrow, Gatwick and Stansted airports owner.
This would give ministers step-in rights should BAA fail, allowing them to ensure Britain's premier airports remain open. Similar rights exist at other regulated utilities, such as energy and water companies.
The DfT's proposals have partly been inspired by growing nervousness within Whitehall over the highly leveraged finances of BAA, which has £13.1bn debts. Introducing such a regime would, however, also prevent lenders from exerting their usual rights to appoint an administrator and sell off assets to recover their money.
The holders of £4.85bn of BAA bonds claim any such regime would constitute an event of default, enabling them to demand their money back - a move that would prompt a crisis at Ferrovial, the Spanish construction company that controls BAA.
In response to a consultation paper, the CAA said such a regime is unnecessary. Citing the example of Eurotunnel, the CAA argues that even if BAA was to fail, its lenders would ensure that the airports remain open.
"The experience of Eurotunnel illustrates that the owners and creditors of a heavily indebted, capital-intensive business will maintain service continuity despite significant financial distress," the CAA notes.
Adding that closure of an airport has "significantly" fewer consequences to the public than disruption to water or electricity supplies, the CAA stresses that the proposed regime would expose "airport owners and creditors to additional risk", so raising financing costs.
As such, the CAA argues, it would "have the perverse impact that airport users are exposed to higher costs". The regulator also expresses reservations over proposed regulatory change that would force it to ensure BAA is able to finance its activities.
CABINET PROFILE: LORD ADONIS BECOMES
Lord Adonis, a former key adviser to Tony Blair,
has been promoted to Gordon Brown's cabinet
Robert Winnett, Deputy Political Editor - Daily Telegraph - 6 June 2009
Previously Mr Blair's chief policy adviser, Lord Adonis is the new Transport Secretary replacing Geoff Hoon after his resignation. The promotion marks a remarkable rise for the peer who has prospered against the odds under Mr Brown. He is also highly regarded by David Cameron, the Conservative leader.
However, the appointment will add to growing fears over the number of non-elected members of the House of Lords now occupying Cabinet positions.
Lord Adonis came from a deprived background but excelled at Oxford University. He represented the Liberal Democrats on Oxford city council from 1987 to 1991 but joined Labour in the mid-1990s.
He was a key member of Mr Blair's Downing Street policy unit from 1998 until 2005 and is credited with developing the Government's city academy programme. However, during this period he is thought to have clashed with Mr Brown when he was Chancellor.
In 2005, Lord Adonis was ennobled by Mr Blair and became a junior education minister. After Mr Brown became Prime Minister he retained his position before moving to a junior posting at the Transport department last year.
The father-of-two has won plaudits for his handling of his rail brief at the Department for Transport. He has firmly backed plans for more high-speed rail services and recently undertook a tour of the railways to see for himself the problems faced by passengers.
Lord Adonis is likely to come under intense pressure to reverse a decision to expand Heathrow airport.
Mr Hoon resigned amid controversy over his expense claims. The former Transport Secretary flipped his designated second home and did not pay capital-gains tax on the sale of his London flat.
THE QUIET APPOINTMENT
The Guardian - 6 June 2009
The Guardian reports the appointment of the new Communities and Local Government Secretary. Hidden in the list of those it regards as having "real power" is the following information:
John Denham, the independent-minded Southampton Itchen MP with a strong local government background, has been handed the key role of communities secretary, where he will also have to try to rebuild Labour's now destroyed local government base.
OUR COMMENT: An undeservedly low profile for a minister whose record is unblemished and whose decisions can have far reaching effects on our quality of life, notably those of us who live near airports!
STANSTED EXPANSION STILL ON, SAYS BAA
Jessica Rowson - New Civil Engineer - 4 June 2009
Airport operator BAA last week said it remained committed to building a second runway at Stansted even though it could be forced to sell the airport and could face planning inquiry delays.
BAA Stansted airport commercial and development director Nick Barton said he was confident the £1.66bn proposal for a second runway would go ahead, despite a 12.6% fall in passenger numbers between April 2008 and 2009.
Speaking at NCE's "Airport Design & Engineering Conference" last week, Barton said: "There is a general growth pattern in aviation, despite periodic dips [due to things like 9/11, wars and economic downturns]. Supply will never exceed the demand. We expect a second runway will open around 2017/2018."
Fighting the Competition Commission
Barton's confidence comes despite the fact that BAA could be forced by the Competition Commission to sell Stansted along with Gatwick and either Edinburgh or Glasgow airports. The operator has put Gatwick up for sale but is fighting the Commission's ruling over the remaining airports.
"Supply will never exceed the demand. We expect a second runway will open around 2017/2018." - Nick Barton, BAA
BAA officials have also written to communities secretary Hazel Blears expressing concern that the prospect of Stansted having to be sold would make the current timetable for the planning inquiry into the expansion "less reliable".
The inquiry was due to begin on 15 April, but Blears has deferred the inquiry to give BAA time to consider the Competition Commisssion's ruling. Barton denied that BAA's concerns over the planning inquiry timetable constituted asking for a delay in proceedings.
"The application is in," said Barton. "The issue is whether the government thinks the case can be heard when the ownership is in doubt."
Buyers in sight for Gatwick
Meanwhile a BAA spokesmen said that sale of Gatwick was progressing well. Bidding is believed to be down to two bidders. Manchester Airports Group is believed to be one of them. The other is London City airport owners Global Infrastructure Partners (GIP), a joint venture between General Electric and Credit Suisse.
The Lysander consortium comprising Citigroup infrastructure fund, Vancouver airport and John Hancock Life Insurance was rejected by BAA in May.
The operator said it was "uncompetitive on price with no assurance of delivery". Its bid price was reported to be in the region of £1.18bn.
Speaking at NCE's conference, GIP partner Michael McGhee said the group would focus on expanding Gatwick into the low cost carrier market if its bid was successful.
"The future of short haul is low cost and we are interested in investing in low cost at Gatwick," said McGhee. "City can never serve low cost. We've got plenty of fire power to take advantage of current conditions."
AIRLINES FACE 'WORST YEAR IN AVIATION HISTORY'
The aviation industry is set to suffer the worst year in its history,
Sir Richard Branson warned today
Charles Starmer-Smith - Daily Telegraph - 2 June 2009
Sir Richard Branson believes that a major US airline will collapse in 2009
Sir Richard, the chief executive of Virgin Atlantic, told Telegraph Travel that he expected that the current economic downturn and decline in business travel would result in the collapse of a major American airline in 2009.
"Yields are at all time low and business travel has collapsed which suggests that there will be causalities in the next 12 months," he said. "This could see a major American carrier disappearing and other casualties following."
In the past 18 months around 25 airlines have gone under, including Silverjet, Maxjet, XL Airways and Oasis Hong Kong.
Sir Richard added that although fuel prices have dropped markedly from the peak of $147 a barrel last year, they have almost doubled to $65 in the last three months, increasing the pressure on airlines.
Speaking at a press conference in Tokyo to mark the 20th anniversary of the airline's services to Tokyo, he said that Virgin is well equipped to come through the financial downturn. Earlier this month the airline announced that it had doubled its profits in the past year, in contrast to the heavy losses sustained by British Airways.
Pre-tax profits rose to £68.4 million in the 12 months to the end of February, compared with £34.8 million pounds in previous year The airline claimed that it was able to achieve these figures because it took "early and decisive" action to reduce its exposure to the global economic downturn, pointing to its policy of hedging against volatile oil prices as a key factor.
However Sir Richard added that there has never been a better time for passengers to travel. "British travellers are currently paying the same price for fares as they were when we launched the airline 25 years ago," he said. "If you have been wanted to take that trip to Australia now is the time to do it. There are some unbelievable bargains out there."
However, he warned that the proposed merger between British Airways and American Airlines, which dominate transatlantic routes out of Heathrow, would impact on British passengers.
"It is the equivalent of Coca Cola and Pepsi merging, it would not be good for consumers and would inevitable push up fares on transatlantic routes out of Heathrow," he said. "If it is allowed to go ahead it would wreak havoc in the airline industry. All we ask is to be able to compete on a level playing field."
BA FACING 'FIGHT FOR SURVIVAL'
Kevin Done, Aerospace Correspondent - Financial Times - 2 June 2009
Willie Walsh, chief executive of British Airways, has warned the airline's 41,000 staff that the group "is in a fight for survival".
The UK flag carrier is seeking to extract big concessions and productivity savings from its workforce, and is seeking to inject fresh urgency into negotiations with its unions and in particular with cabin crew. It is continuing to cut thousands of jobs, with 2,500 posts eliminated since last summer.
Conflict with cabin crew brought the airline to the brink of a strike in early 2007 costing tens of millions of pounds. Mr Walsh said two weeks ago that there had been "little progress" in negotiations with cabin crew.
A ballot on a package of reforms is under way among ground services staff and Mr Walsh said both engineering workers and pilots were expected to launch ballots soon.
He told the BA staff newspaper "the crisis facing our industry has never been more serious. There has been a significant shift in consumer attitude, with people wanting more and paying less. And things are getting worse. We haven't yet reached the bottom, and everything points towards a protracted downturn."
Mr Walsh said BA had set a deadline of June 30 to complete the talks with its unions. The airline had to deliver the "permanent change" needed to "secure our long-term survival. With time running out we've had to inject some pace and energy into these negotiations."
The airline appears to be on a collision course with key parts of the workforce, most importantly cabin crew and pilots, as the management insists on permanent structural change but the unions offer only temporary concessions.
Steve Turner, aviation national secretary at Unite, which represents BA cabin crew, said two weeks ago that the union had offered only to defer wage costs until an upturn in the company's fortunes.
It had proposed "temporary solutions to temporary problems" but would not give up permanently terms and conditions secured over many years "in response to an economic downturn that will end".
Mr Walsh has told staff, however, "temporary solutions on their own are not enough. This is the greatest challenge our industry has ever faced. Our survival depends on us permanently removing costs ? and quickly."
BA disclosed two weeks ago a record pre-tax loss of £401m in its financial year to the end of March from a record profit of £922m a year earlier, the worst slump in its history. Mr Walsh ruled out any possibility of the airline receiving government aid.
MORE DOOM AND GLOOM
PASSENGERS MAY HAVE TO LOAD THEIR OWN BAGS
ONTO RYANAIR FLIGHTS
Ryanair passengers could be told to carry their own luggage onto the aircraft as well as spending a pound to use the toilet under plans being drawn up by the no-frills airline
David Millward, Transport Editor - Daily Telegraph - 3 June 2009
Ryanair believes that it could save money if it did not have to pay for baggage handlers to transport suitcases from the terminal to the aircraft
The proposals are the latest initiatives being considered by the carrier as it continues trying to cut costs.
Michael O'Leary, Ryanair's chief executive, said the airline was ready to charge passengers for using the onboard toilets. But the company believes that it could save money if it did not have to pay for baggage handlers to transport suitcases from the terminal to the aircraft.
Currently passengers are charged £10 to put a bag into the hold. Passengers who are willing to do this would see the cost of checking in a bag reduced, but the airline was unable to say by how much.
"I am struggling to understand this," said a spokesman for Stansted Airport, one of Ryanair's major bases in Britain. "They haven't discussed this with us. There are security and practical considerations to be taken into account. For a start they would have to work out where a passenger would pick up a bag after putting it through the screening process."
"Also there are aircraft moving around the tarmac. It is hard to imagine how a grandmother or somebody with impaired mobility would be able to cope.
Perhaps there is another agenda, what they are really saying is that they don't want passengers to have hold luggage at all."
The weight of luggage has been a vexed issue and it is not only airports who doubt whether passengers would be able to cope with the weight.
Earlier this year Unite, the union representing airport workers, called for passengers' luggage allowance to be cut from 32 kilograms - 70.5 lbs - to 23 kilograms, or 50.7 lbs. They said that the current weight restrictions were too high and leading to its members suffering muscle injuries.
The luggage proposals would follow on from other cuts, including removing check in desks from 146 airports across Europe - which is set to save Ryanair £44 million a year. But that has meant that its passengers have become the first in the world to pay for checking in online - with everyone having to pay £5 to do so.
It was the latest in a series of charges imposed by the airline which says its fares are the lowest in Europe. Other fees include charging £100 to change the name on a booking online and £150 via a call centre. Changing a flight costs £55 by telephone and £25 via the internet.
Meanwhile Michael O'Leary, Ryanair's chief executive, said the airline was ready to charge passengers for using the onboard toilets. "I do believe we will start charging for toilet access. If we can get rid of two of the three toilets on a 737, we can add an extra six seats."
However Mr O'Leary has ruled out proposals to charge obese passengers more for their flights because he regards the idea as impractical.
MISERY AROUND STANSTED
EMPTY HOMES FEARS
Dunmow Broadcaster - 5 June 2009
DEEP concerns have emerged over the number of empty houses around Stansted Airport and the effect they are having on local communities.
Uttlesford district councillor Susan Barker voiced her "growing sadness" over groups of houses that currently lie empty in Takeley and Molehill Green. She told Dunmow Town Council: "It is really upsetting to see so many houses not being used. It negatively affects the way communities operate."
A large proportion of the houses are owned by airport operator BAA which ran a strictly voluntary scheme allowing homeowners to sell houses onto the company in return for the market value. It was designed to allow residents to be able to move out of an area of airport expansion without being financially compromised.
A BAA spokesman said: "Over 90 per cent of the houses we own are either occupied or soon to be occupied. With the current state of the housing market, that seems to be a good ratio."
However, Takeley parish councillor Trevor Allen believes that the empty house situation is threatening to split the community and make local facilities, such as schools and shops, struggle. He said: "Takeley Primary School was struggling with small pupil numbers when this first started.
We are all deeply concerned about the way BAA is looking after houses and we want them to be sold back to private owners. Many of the houses, including Grade II listed ones, are falling into disrepair and it is unacceptable."
However, the BAA spokesman said that a great deal of time and money is put in to keep them maintained and ready for letting. "We have spent £250,000 in the last three years just maintaining the Grade II listed buildings," he said. "Regular site visits are conducted and we have a team of gardeners and security workers that continue to do work every two weeks. Money is spent on refurbishment and landscaping the houses so that they are always ready to be let out by new residents."
ARE BIOFUELS REALLY THE ANSWER
TO AVIATION'S CARBON REDUCTION PROBLEMS?
Reducing Aviation's Emissions - IATA Calls for a Global Sectoral Approach
IATA Press Release - 24 May 2009
Copenhagen - The International Air Transport Association (IATA) reiterated aviation's commitment to responsibly addressing the challenges of climate change and called on governments to deliver a global and sectoral approach to reducing aviation emissions in Kyoto 2.
"Air transport is a global industry with a good track record and ambitious targets for environmental performance. But to achieve them, we need governments to take a global approach," said Giovanni Bisignani, IATA's Director General and CEO in a statement to the World Business Summit on Climate Change in Copenhagen.
Bisignani called on governments to define a sectoral approach in Kyoto 2 with global accounting for aviation's emissions through the International Civil Aviation Organization (ICAO) and open access for airlines to properly regulated carbon markets. Such an approach would maintain a level playing field for all airlines and replace overlapping national and regional schemes.
A global approach is already underpinned with three ambitious industry targets: (1) a 25% improvement in fuel efficiency by 2020 compared to 2005, (2) to use 10% alternative fuels by 2017 and (3) a 50% absolute reduction in emissions by 2050. "We are already working to set an important fourth target: a date for carbon-neutral growth beyond which our emissions will not grow even as demand increases," said Bisignani.
Bisignani gave a progress report on the aviation industry's efforts to reduce emissions. "Aviation's emissions will fall by 8% this year. Some 6% of this is from the recession and 2% is directly related to IATA?s four-pillar strategy," said Bisignani.
Pillar 1 Technology: Fuel efficiency improved 70% over the past forty years, 23% in the last decade alone. This is mainly due to better aircraft and engines.
Pillar 2 Operations: "How we fly makes a difference. IATA's Green Teams are working with airlines around the world to implement best practices. This work is now saving around 30 million tonnes of CO2 each year," said Bisignani.
Pillar 3 Infrastructure: IATA's work to shorten routes is saving at least a further 30 million tonnes of CO2.
Pillar 4 Positive Economic Measures: Some 30 airlines have carbon offset programs. In June, IATA will launch an industry offset program so airlines can offer this option even more broadly.
Biofuels: Bisignani made special note of the industry progress on biofuels. "One of the most exciting recent developments is the progress being made in sustainable next generation biofuels. These have the potential to reduce our carbon footprint by up to 80%. Three years ago nobody thought biofuels could be applied to aviation. Four successful test flights in the last year prove that biofuels work. For the first time aviation could have a sustainable alternative to fossil fuels. Airlines did this work without government involvement. But we could achieve much more, much faster, with a fiscal and legal framework to accelerate research and reward investment. Governments must get on board," Bisignani said.
"Working with governments, a united industry - airlines, airports, manufacturer and air navigation service provider - made air transport the safest way to travel. By working together with a coordinated global approach we can make aviation the first global industry to achieve carbon-neutral growth and a model for others to follow," said Bisignani.
OUR COMMENT: The possibility of unlimited use of biofuels has already been criticized by many experts for several reasons, the most important being that far too much land would soon be devoted to growing crops for conversion into fuel and food supplies would be seriously affected. This is already happening with maize supplies. Aviation still needs to accept that unlimited expansion of air transport is just not possible.
CAMPAIGN GROUP LAUNCHES GUIDE TO REPORT
AIRCRAFT NOISE NUISANCE AT STANSTED
Saffron Walden Reporter - 22 May 2009
A NEW leaflet setting out details of how to complain about aircraft noise has been launched by Stop Stansted Expansion (SSE).
The guide is designed to help people affected by noise from planes using Stansted Airport to report their concerns in a way which will help lead to improvements to noise management and better track keeping in the future.
The Concerned About Aircraft Noise? leaflet was launched to coincide with national Noise Action Week (May 18-22) to advise people on a host of neighbourhood noise issues.
More than 20,000 copies of SSE's leaflet have already been pre-ordered by 14 parish magazines in Uttlesford and East Herts districts for distribution to households across the community in the coming weeks and months. Others are expected to follow suit.
Commenting on the new leaflet SSE's noise spokesman and technical adviser on noise to the Stansted Airport Consultative Committee, Martin Peachey, said: "SSE follows up every complaint made to BAA via the SSE website and in around a fifth of cases this yields something useful in terms of our work to press the airport to improve its system of noise and track keeping."
"We do, however, urge people to complain responsibly to avoid compromising the overall noise picture statistics."
Copies of the leaflet are available on request from SSE at 01279 870558 or can be viewed online.
AIRCRAFT NOISE TRACKING WEBSITE
IS MUSIC TO RESIDENTS' EARS
Dave Demerjian - News Environment - 22 May 2009
Under pressure from local community groups, the Vancouver airport has launched an online tool that allows people track the flight path and noise levels of arriving and departing flights, and instantly file a complaint when those flights violate noise regulations. The website, which uses a Yahoo map and real-time radar data, will help the airport assess its flight path planning and give residents living around the airport a way to have their voices heard.
"We recognize that noise associated with air travel can affect surrounding neighbourhoods," said Anne Murray, Vice President, Community and Environmental Affairs, Vancouver Airport Authority. "By putting flight and noise information at the public's fingertips through WebTrak, we hope to promote greater understanding of aircraft operations at YVR and the complex airspace in which we operate."
The Vancouver WebTrak system, which was developed by Lochard in conjunction NAV Canada, the company that operates the country's civil air navigation infrastructure, is elegant in its simplicty. Planes into or out of the Vancouver airport are displayed dynamically on top of a Yahoo map. Different types of planes get different icons, and are color coded based on whether they are inbound or outbound. Mousing over an aircraft icon displays the type of plane, its altitude and its speed, but not the operating airline (which no doubt makes the airlines happy).
The planes are tracked by radar and their noise monitored by 20 ground stations located around the airport. Decibel levels at each ground station are displayed numerically in a circle that changes color based on intensity, which makes it easy to correlate airplane activity and noise levels. For security reasons, tracking is delayed by 10 minutes, and military and police aircraft don't appear at all.
But the WebTrak does more than just monitor current activity. It stores 30 days worth of data, which means people can go back and see which plane shook the house during dinner, and will even offer suggestions if people still can't identify the offending plane. Mousing over the offending plane brings up an icon you can click through to file a complaint. "People with complaints can look on there and say I was disturbed by a plane at 3a.m. and I think it was this plane," says a resident of Surrey, one of the towns near the airport.
Communities in range of Vancouver's airport , one of Canada's largest, have been aggressive in combatting noise since flight paths over the airport were changed in 2007 resulting in more flights over crowded residential areas. The city of Richmond, BC has established an Airport Noise Citizens Advisory Task Force that partners with the airport on noise issues and also acts as a kind of watchdog. In Surrey, a group that calls itself the South Surrey Citizens Against Aircraft Noise has been especially aggressive in pushing for better noise management procedures, and lobbied hard for the WebTrak system. "Planes are not necessarily staying on the courses they've been directed to follow," said Surry resident Judy Villeneuve. "They're cutting across the community because it's shorter."
No one is claiming that the launch of WebTrak in Vancouver will actually reduce noise around the airport, but it does give area residents the information they need to keep pushing. "It levels the playing field and it allows everybody to deal with the facts," said Russ Hiebert, a member of the Canadian Parliment, after the website was launch. "Up until now, only YVR and Nav Canada had the information, and there was a belief Nav Canada wasn't being fully transparent in their disclosure of flights. No longer can there be a dispute."
WIMBLEDON SHOP TELLS CUSTOMERS TO PROTECT THE PLANET
Ben Thompson - News Environment - 30 May 2009
Protest picnic: Staff at Lush wore Edwardian clothing as part of a stunt to raise awarness over climate change
Staff from a Wimbledon cosmetics shop were out in force yesterday persuading shoppers to do their bit in the fight against climate change.
Wearing Edwardian clothing, employees from Lush were promoting the green benefit of taking the train instead of flying as part of a campaign called "climate change is no picnic".
Shoppers even had the chance to share some picnic food outside the shop front while learning some home truths about the damage caused to the planet by mass-aviation.
The environmental initiative had the support of several organisations including anit-Heathrow expansion campaigners, Plane Stupid, founded by former Wimbledon resident Richard George.
A MINISTER'S STATEMENT - AT LAST?
Financial Times - 28 May 2009
The transport secretary will call on Thursday for an international consensus on ensuring that shipping and aviation are included in any global environmental deal in Copenhagen this year.
Geoff Hoon will tell the International Transport Forum in Leipzig, Germany, that it was "a great missed opportunity" that the two dominant international modes of transport were omitted from the last global climate change deal, signed in Kyoto in 1997.
"That led to over a decade of inaction," he will tell the conference. "We cannot afford to wait any longer. It is vital that we put that right at Copenhagen."
However, the tone of Mr Hoon's speech, which will dwell on the benefits of transport and the potential for improved technology to reduce emissions, is likely to worry many environmental campaigners on transport issues. Most believe use of some forms of transport, such as aviation, will need to fall to meet emissions reduction targets.
The International Transport Forum is an annual meeting of transport ministers and other policymakers, organised under the auspices of the Organisation for Economic Co-operation and Development. The audience will include many of those that the UK has to win over if it is to get agreement on including shipping and aviation in any Copenhagen deal. Mr Hoon will call for transport policymakers to take charge of the sector's response to the climate change issue, rather than leaving it to others such as environment ministers.
"If we do not lead this debate, then others will," he will say.
Transport "will leave itself wide open to accusations that it is part of the problem, rather than part of the solution" if ministers take no action, he will add. The sector could also find solutions imposed on it that do not take account of competition or the realities of international transport, he will say.
However, much of the speech is likely to focus on potential technical solutions to aircraft and ship emissions that many environmental campaigners believe will never be sufficient to curb emissions without substantial reductions in traffic volumes.
Mr Hoon will point to changes in aircraft technology such as blended wings, a technique that reduces drag and fuel consumption, and lighter composite materials as potential ways of reducing aviation emissions. He will also point to improved engine and ship design as means of reducing ships' emissions. "Technological advances can also help to generate business and trade," he will say.
Environmental campaigners fear that a focus on potentially less polluting means of transport could distract from the need to reduce overall use of some forms of transport.
While referring to a number of potential means of curbing transport emissions, including rail electrification, Mr Hoon will avoid any reference to road-user charging. A number of reports have found charging for road use - which is officially government policy but has received far less attention in the past two years - could bring about significant emission reductions.
MORE EXPANSION PROPOSED FOR BRISTOL AIRPORT
Public health doctors argue the case against expanding Bristol's Airport
News Environment - 28 May 2009
Expanding Bristol Airport - will it be good for the city? Bristol's Public Health doctors faced this question in 2006 during the consultation about more flights and expanded facilities.
The health of people in Bristol depends on many things, including a thriving economy, the quality of the places we live in, education for our children, the food we eat, opportunities for safe enjoyable physical activity, a fair and peaceful society, and so on. So as Public Health specialists we needed to look carefully at all the issues.
We all knew that expansion at Bristol Airport was said to be essential because it would create jobs and because everyone supposedly wants to fly more. But the downside was becoming harder to ignore. It will increase the amount of aircraft noise and the volume of traffic and congestion through local communities. This will damage health, wellbeing and education for a sizeable proportion of those living nearby.
We knew that the health damage from noise, heavy traffic, and climate change were well backed by evidence. But we wanted to be certain that we were not overlooking potential positive effects on health from new jobs, and from more people on low incomes being able to holiday abroad.
We looked at evidence from a study in Luton, and discovered that it is not the people on low incomes who are mostly using cheap flights. We also looked carefully at the reports that had been written on possible economic effects if Bristol Airport were to expand. These were the Tym Report, carried out for Bristol International Airport in October 2005, and the Whitelegg Report, done for the Parish Councils and Friends of the Earth in October 2005.
They looked at trends and forecasts, and made different predictions about economic growth, about jobs at the airport, in the supply chain for the airport, from inbound tourism, and from construction. They also suggested there would be losses to the South West economy if more tourists use cheap flights to go away for weekends and holidays.
We were surprised to find that the predictions of economic benefit in the Tym report were reached by pretty much ignoring the impending energy crunch, oil price rises, future green taxes, changes in business behaviour to reduce carbon footprints, and the impacts of recession. The University of the West of England report for Business West, published in January 2008 after our submission, also seemed to overlook these looming restraints on growth.
The fact that these matters were ignored led us to feel any possible health benefits from the economic impacts of airport expansion were actually very uncertain. Our group concluded that on health grounds the damage from airport expansion would definitely outweigh the possible benefits. We submitted our conclusions, from the West of England Public Health Climate Change Group, to North Somerset Council, on December 18, 2006 as part of the consultation.
Two years on, and the International Energy Agency has advised governments to prepare for inevitable and irreversible decline in world oil production. The Government's Stern Report has also said long-term economic damage from 'business as usual' and runaway climate change will be massively worse than the short-term economic cost of changing to a low-carbon economy.
The business case for airport expansion is now looking very shaky. Passenger numbers are down and people are looking closer to home for their holidays.
Airport bosses argue that more facilities at Bristol will create jobs and help get us out of the recession. But others say that new jobs must be in sectors with a future - such as renewable energy, local food production and local recreation.
The Bristol International Airport company has no responsibility for impacts beyond their own short-term profits. It is their job to try to persuade us expansion will be good for Bristol.
But as Public Health specialists we take a broader view and our conclusion is that expanding the airport will do more harm than good for Bristol people.
Dr Angela E Raffle B Sc (Hons) MB ChB FFPH on behalf of the West of England Public Health Climate Change Group
THE CASE FOR BRISTOL AIRPORT EXPANSION
News Environment - 28 May 2009
Dr Raffle has made her diagnosis without examining all of the evidence.
Bristol International's planning application will include detailed reports, produced by experts in the fields of noise, economics, transport and the environment. We expect these to demonstrate that the proposed development of the airport is sustainable. Without having seen these reports, Dr Raffle's verdict is premature.
The application will also include a range of mitigation measures to reduce impacts on local people - with significant contributions to road improvements, for example. Far from resulting in increased congestion, the development provides an opportunity to improve the local road network.
Similarly, Dr Raffle's claims of increased noise are wide of the mark. In fact, noise around the airport will remain at pre-2006 levels, significantly quieter than residential areas close to Bristol's busy motorways.
The Stern Review made clear that the world does not need to choose between averting climate change and promoting growth and development. Indeed, the Sustainable Aviation Strategy, to which Bristol International is a signatory, targets a return to 2000 emissions levels by 2050. This will be achieved by improvements in operational procedures and advances in aviation technology.
Aerospace manufacturers spend £2.5 billion a year on researching and developing new technology, with Bristol-based companies such as Airbus at the forefront.
Bristol International is not just used for holiday flights (although we do believe enabling people to travel the world from their local airport is a good thing). Strong air links help local businesses to access overseas markets and encourage inward investment.
Connections with the rest of the world also enable overseas visitors to explore Bristol and the South West, and play an important role in the region's ability to attract conferences, exhibitions and major events. Restricting the ability to fly to and from Bristol International will not reduce emissions, it will simply displace flights to airports in other regions, to the disadvantage of local travellers and tourism businesses.
The proposed development plans would deliver an airport for the South West to be proud of. Dr Raffle's argument is a prescription for failure.
Alan Davies, Planning and Environment Director at Bristol International Airport
OUR COMMENT: Alan Davies should read the Stern Report again! Let's see the plans for this new carbon free aircraft engine before any airport rushes into expansion plans.
ANOTHER SCARE STORY
UK airports 'deserted over taxes'
News Transport - 1 June 2009
Travellers could desert UK airlines and airports over rising airport departure taxes, a poll commissioned by pilots' union Balpa showed.
As many as 76% of adults said they would prefer to fly to Australia from Amsterdam rather than from a UK airport to avoid the high Air Passenger Duty (APD) departure tax of up to £85 per passenger.
Balpa said the results were very worrying, especially as the UK Government intended to more than double APD over the next 18 months, while Amsterdam has scrapped its departure tax.
OUR COMMENT: How much does it cost to get to Amsterdam? How long does it take? AND, The Netherlands as members of the EU are part of the carbon emissions market which will soon include aviation. If properly administered all airports and airlines will be affected.
BAA SEEKS DELAY IN SECOND STANSTED RUNWAY INQUIRY
Order to sell Stansted made planning process 'less reliable'
New blow to government's airport expansion policy
Dan Milmo - The Guardian - 21 May 2009
The government's airport expansion policy was dealt a further blow today after BAA asked for the postponement of a planning inquiry into a second runway at Stansted.
If the request is granted, there will be little chance of a new runway being built in south-east England before 2020, with planning inquiries into expanding Stansted and Heathrow airports unable to go ahead until after the general election. In a letter to the communities and local government secretary, Hazel Blears, Britain's largest airport owner said the planning process was now "less reliable" because it had lodged an appeal against a Competition Commission order to sell Stansted.
"The timetable and the process for considering the... applications previously contemplated by the inquiry inspector may now appear less reliable for both the communities and for BAA as a result of the current position regarding the CC's investigation, and where that might lead," said Alastair McDermid, BAA's planning director.
BAA's chances of getting permission to build a second runway at the Essex airport were already receding before it sought an inquiry postponement. Essex county council, which is leading local political opposition to the new runway, had warned that an inquiry might not end until September next year at the earliest ? after the next general election. The Conservative party, ahead in the polls and the favourite to win an election, has promised to scrap proposals for new runways at Stansted and Heathrow if it gets into power.
BAA had already pushed back the earliest possible date of a second runway opening at Stansted by two years, to 2017, because there are not enough passengers to meet demand. The airport group has conceded that an expanded Stansted would not attract the necessary 35 million passengers a year until well into the next decade.
Stop Stansted Expansion, an anti-runway campaign group, urged BAA to withdraw the application altogether. "Having it hang like the sword of Damocles over the community for years is wrong. BAA should do the decent thing and withdraw the application," said Carol Barbone, campaign director at SSE.
BONDHOLDERS IN FRESH THREAT TO BAA FINANCES
Plans to change how BAA is regulated
increase the airport group's headaches
Alistair Osborne - The Telegraph - 20 May 2009
BAA's bondholders have hired investment banking advisers Reynolds Partners amid growing fears that the Government's proposed changes to regulation could cause the airport operator's finances to unravel.
The Department for Transport is consulting on plans to introduce a "special administration" regime for the debt-laden owner of Heathrow, Gatwick and Stansted airports, giving ministers special step-in rights should the business fail.
The move has partly been prompted by growing nervousness within Whitehall over BAA's highly leveraged finances, given the frozen credit markets and falling passenger traffic. BAA, which is controlled by Spanish construction group Ferrovial, is backed by £13.1bn of debt, including £9.6bn that is ring-fenced against the three London airports.
The regulatory threat is the latest problem for BAA, which earlier this week launched an appeal over the Competition Commission's ruling that it must sell Gatwick, Stansted and Glasgow or Edinburgh airports.
BAA is struggling to sell Gatwick - which it put up for sale before the Commission forced its hand - for anything close to the airport's £1.58bn regulated asset base. The two remaining bidders have only offered £1.3bn-£1.4bn.
Introducing a "special administration" regime would bring BAA's London airports in line with other regulated utilities, such as energy and water companies, giving ministers the powers to ensure vital industries continue trading.
However, the regime would also prevent bondholders and lenders from exerting their usual rights to appoint an administrator and sell off assets to recover their money. The holders of £4.85bn of BAA bonds claim any such regime would constitute an event of default, giving them the powers to demand their money back - a move that would prompt a crisis at Ferrovial.
"If the DfT's expert panel get their way, there will be a trigger event and the bonds would have to be repaid," said one source close to the situation. "That would probably mean BAA having to sell Heathrow - a crazy outcome."
The DfT's consultation document acknowledges the measures "may have an impact on airports existing financing arrangements" and suggests they would only be implemented "when market conditions allow this to be achieved efficiently".
Bondholders and other lenders are scrutinising the small print of their loan agreements, however. They are aware that the loan documents for BAA (SP) Ltd - the London airports company against which £9.6bn of debt is secured - contain a "regulatory change principle".
Any "proposed or actual change" triggers a six-month standstill, prior to an event of default, when the company's lenders could stop advancing BAA cash. BAA sources insist that the mere fact of DfT's consultation does not constitute a "proposed change".
One source familiar with the lenders' position said ministers had still not fully realised the ramifications of the proposed change.
"I think parts of the Government do understand it but the question is whether they decide to put protecting the public ahead of protecting BAA and Ferrovial," said one source. "It's very Catch-22. They want to make sure the public is protected from an insolvency. But in trying to protect the public they could trigger the very insolvency they want to prevent."
BAA, its lenders and other interested parties must make submissions to the consultation by June 1. The bondholders have formed an ad-hoc committee under the auspices of the Association of British Insurers to co-ordinate their response. BAA is opposed to the new regime, while the Civil Aviation Authority, the industry regulator, is next week expected to express serious reservations.
Credit agencies have already spooked lenders with warnings that a special administration regime would prompt a ratings downgrade. Alexandre de Lestrange, an analyst at Standard & Poor's, warned clients that it would "require bondholders' and lenders' approval", adding: "This could lead to a multi-notch downgrade."
The bonds are currently rated A-, but even a one-notch downgrade to BBB+ would provide Ferrovial with a severe refinancing headache. One banker said: "Even in the good times, it's tough for a BBB+ company to issue £13bn of debt. In this market, it's impossible."
One infrastructure banker played down the threat, believing BAA's bondholders are capitalising on the regulatory issue to extract extra fees from the company. "Other infrastructure industries have that regime and it's not something that's technically unfriendly to lenders," he said. "But BAA bondholders are bound to take advantage and demand something in return for any change to their loan agreements."
The problem for BAA is not only the existing lenders, but its future ones. It must refinance £1bn of debt by March 31 2010 and a further £1bn in each of the next two years. That is not to mention £1.57bn of subordinated debt, due by April 2011, that is currently trading at just 46p in the pound - down from 80p last October.
Refinancing this lot with a weaker credit rating would be a tall order - even allowing for one potential fillip in the same DfT consultation paper. This is the proposed requirement that the CAA ensures its regulatory regime allows BAA to finance its activities - a change the regulator opposes on the grounds that it should not be required to protect poorly financed companies.
Given the refinancings coming down the runway, industry observers believe BAA will have to sell Gatwick and possibly soon. A consortium led by Manchester Airport Group and London City Airport-owner Global Infrastructure Partners are still willing buyers - even if GIP threw a strop on Monday when BAA launched its appeal. BAA insists it has "other options" for refinancing the first £1bn due. But if it does, it is being terribly coy about them.
MINISTERS CRITICISED IN PLANE NOISE ROW
Evening Star - 18 May 2009
GOVERNMENT ministers have been accused of "watering down" proposals to control aircraft noise which is blighting communities across Suffolk.
Complaints about noise from passenger jets has been steadily increasing - and with plans for new runways at Heathrow and Stansted, the number of aircraft on flightpaths over the county will double in the next 20 years. At times on the Felixstowe peninsula the noise is a constant background drone, with the sound of one plane passing over merging with the arrival of the next.
The Aviation Environment Federation (AEF) is disappointed government is set to shirk new European rules for controlling aircraft noise by passing the responsibility on to airports.
The issue should have been dealt with two years ago, but the deadline was missed and fresh consultation has now been carried out by the Department for the Environment, Food and Rural Affairs (Defra).
An AEF spokesman said: "Since aviation is exempt from noise nuisance claims, local communities have no legal protection from excessive aircraft noise, and must rely either on the goodwill of airport operators or on local or central government regulation of airports' noise impacts."
"External regulation of aircraft noise would therefore seem to be essential if the UK government is to have any possibility of meeting its aim to 'limit and, where possible, reduce noise impacts over time'."
"We are disappointed, therefore, that the general aim of the proposed amendments appears to be a watering down of any commitments from central government to ensure that communities have some protection from noise."
The federation felt airports would argue the imposition of noise-related operating restrictions will leave them at a competitive disadvantage.
Consultation on the new regulations was completed this week and Defra is analysing responses.
Is noise from aircraft getting on your nerves? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN, or e-mail email@example.com
DEBT-LADEN BAA HIT AS TRAFFIC FALLS AWAY
Karl West, Daily Mail - 6 May 2009
Controversial airports group BAA plunged deeper into the red in the first quarter, weighed down by higher debts and a costly bet on interest rates.
BAA's chances of being able to extract a higher asking price for Gatwick and Stansted airports, which it is being forced to sell by the competition authorities, were also dealt a major blow as passengers numbers fell sharply.
The total number of people passing through Heathrow, Gatwick and Stansted fell 10% in the period to 24.8m as the recession hit demand for travel. But, while Heathrow's numbers fell just 6.4%, Gatwick and Stansted plunged by an astonishing 14.65.
BAA chief Colin Matthews attempted to play down the significance of weak passenger numbers on the sale of assets. He said: "Gatwick and Stansted are in fantastic locations and I think a bidder will value them on long-term passenger data, not just on one month's performance."
The Competition Commission is forcing BAA to offload Gatwick, Stansted and either Glasgow or Edinburgh airports as it seeks to break the group's stranglehold on the country's major travel hubs.
The watchdog hopes this will produce better facilities and improve service for customers. BAA is currently evaluating final bids for Gatwick, with three teams in the running - London City airport owner Global Infrastructure Partners, a team led by Citigroup, and another fronted by Manchester Airports Group.
All three offers are thought to be below the £1.6bn value placed on the hub by the industry regulator, the Civil Aviation Authority. Matthews said: "We have multiple-bidders, and committed bidders, but I think it will take a few weeks to get to a signature." BAA posted a pretax loss in the quarter of £316.2m, compared with a £55.6m reverse in the same period a year ago.
The group, owned by Madrid based construction company Ferrovial, said its figures were hit by a £140m charge related to complicated financial contracts called interest rate swaps, which seek to insure against fluctuations in borrowing costs.
The company was also reported a near fourfold increase in debt servicing costs to £327.2m, including the losses on financial contracts, from £80.7m. Net debt reached £9.6bn, up from £9.4bn. BAA also noted the falling value of Terminal 5 at Heathrow - or depreciation - left its mark on the group's numbers. The company said there was £122.8m of depreciation costs in the quarter, most of which was related to T5.
PASSENGER TRAFFIC GROWS AT HEATHROW
AND EDINBURGH AIRPORTS IN APRIL
BAA Press Release - 11 May 2009
Heathrow's resilience bolstered by increase in transfer passengers
Evidence that traffic is stabilising, helped in April by busy Easter
Underlying decline across the group remains in line with monthly trend
Outlook remains challenging.
Passenger traffic at Heathrow and Edinburgh airports rose in April, driven principally by a busy Easter period.
BAA's UK airports handled a total of 11.5 million passengers in the last month, a decrease of 2.3% on April 2008.
This improvement on the reverse seen in March (-11.3%) was largely due to the change in the timing of Easter, which this year fell in April but last year in March. Taking the two months together (to eliminate the Easter timing distortion) reveals a decline of 6.8% which is in line with the underlying monthly trend recorded since December 2008, which has been consistently between -6% and -7%.
The results for the major markets in April showed an increase of 0.7% in European scheduled traffic but a drop of 9.9% in European charters. North Atlantic and UK domestic markets both dipped by 7.6% but other long-haul routes recorded a collective increase in passengers of 1.4%.
Reflecting its role as the UK's hub airport, Heathrow continues to prove resilient in challenging economic circumstances, with traffic during April going up by 2.6%. At Heathrow, the number of transfer passengers ? which underpin the viability of many of the country's most valuable long-haul services ? rose from 33% to 38% in the first three months of 2009.
Across the three London airports, traffic declined by 1.7%, with an underlying decline (looking at March and April) of 6.8%.
Edinburgh's traffic was up 3.9% in April, again due to a strong Easter. Gatwick recorded a drop of 3.0% and Stansted a decrease of 12.6%. Elsewhere, Glasgow was down by 11.6% and Aberdeen (which is negatively affected by the Easter period due to reduced oil-related activity) saw a 10.7% drop.
During April, the number of air transport movements across the group was 7.4% lower than last April and the decline in cargo tonnage accelerated to a decrease of 21.8%. The cargo figures are generally exaggerated by Easter falling in April since freight activity is normally reduced over the holiday period.
We need to expand our airports
Theresa Villiers is opposed to building more runways ? but if we don't, the UK will lose out to other countries
STATEMENT BY BAA'S COLIN MATTHEWS
The Guardian - 13 May 2009
The debate on the need for new runways on Comment is free is welcome (Count on Tories to stop the runways) but I should perhaps address some misconceptions.
Heathrow's Terminal Five provided welcome new facilities for passengers and to allow for bigger planes, but it didn't deliver a single new take-off or landing slot. It is because of the lack of runway capacity at Heathrow that airlines are forced to choose between old destinations and new ? or to go elsewhere entirely. Last month alone Leeds/Bradford and Durham Tees Valley airports both lost their links to Heathrow as airlines shuffled their slots, while Air India decided to base its European hub at Frankfurt because it couldn't secure slots at Heathrow.
As the global economy tilts towards the emerging Asian economies we should all be concerned that Frankfurt has direct links with six Chinese cities. London's five airports have flights from just two, both to Heathrow ? which, because of the transfer traffic it attracts, is the only UK airport which can make such flights viable.
It is little wonder that so many businesses and business organisations, such as the CBI and the British Chambers of Commerce, favour new Heathrow capacity within strict environmental limits; both to improve reliability and to provide space for new destinations, as is the case at Paris, Amsterdam and Frankfurt.
As we recover from recession it is my job as BAA's chief executive to make the business case for our proposed new runways at Stansted and Heathrow. But whoever forms the next government will need to make strategic decisions for the next few decades on where those runways should be, particularly in the south-east where no new full-length runway has been built since 1945.
The shadow transport secretary announced this month that she is against a new airport in the Thames Estuary as the mayor of London has proposed, to add to her opposition to expansion at Heathrow, Gatwick and Stansted. The pros and cons of individual runway proposals will I'm sure continue to be debated, but it is surely necessary for politicians of all parties to make difficult decisions ? and those decisions are increasingly urgent if we are to keep the UK competitive in the even more globalised world that will emerge from the recession.
OUR COMMENT: BAA's Policy making ignores their own statistics! More space planned for fewer passengers!
UK IS IN NO DANGER OF 'BEING AT THE END OF A BRANCH LINE'
Readers' Letters - Financial Times - 8 May 2009
Sir, Richard Lambert, the CBI director-general, claims that transfer passengers make it possible for Heathrow to offer more destinations than would otherwise be the case ("CBI hits back on Heathrow runway", May 6).
Between 1991 and 2006, total passengers at Heathrow increased by 66 per cent (from 40.4m to 67.1m) and transfer passengers increased by 116 per cent (from 10.6m to 22.9m), yet the number of destinations served dropped by 20 per cent.
At the same time the number of flights grew, so it would be interesting to know how much of the drop in the number of destinations being served was due to airlines choosing to switch aircraft to more profitable routes, rather than to a lack of capacity.
Heathrow had nearly 23m transfer passengers in 2006 (34 per cent of total passenger numbers at that airport), while Gatwick and Stansted had around 5m (16 per cent) and 2.4m (11 per cent) respectively. Yet Gatwick offers more destinations than Heathrow and Stansted less than 30 fewer.
As for the UK being in danger of "being at the end of a branch line" from other European airports, the BAA website today shows a total of over 553 destinations served by its three London airports.
There may be some overlap but an analysis of traffic from London's five airports (BAA's three plus London City and Luton) showed they served a total of 436 unique destinations in 2006.
In comparison, its website today claims Schiphol serves 262 destinations, while Frankfurt, where nearly half of all passengers are transferring, offers 272. The numbers for Paris were not readily available.
The five London airports increased passenger numbers by 21m between 2000 and 2006, more than Schiphol, Frankfurt and Charles de Gaulle combined.
London SW14, UK
BAA: NO MARGIN FOR ERROR
Robert Peston - bbc.co.uk (blog) - 5 May 2009
The 10% fall in passenger numbers going through Heathrow, Gatwick and Stansted during the first three months of this year is one of those numbers - like the halving of Japanese exports - that shouts about the depth of the recession.
That sort of plunge in numbers flying has happened before for BAA. There was a 9.9% drop in passenger traffic during the three months that followed the September 11 terrorist outrages.
But the plunge in 2001 was fairly short-lived. By contrast, this year's fall follows a 7.1% dip in passengers for the previous three months.
That said, BAA hopes - and believes - that it's over the worst.
Its optimism is based on its analysis that the underlying passenger decline between January and March was "just" 7.2%, adjusting for the impact of a later Easter and a colder winter.
BAA, which is owned by the Spanish group Ferrovial, also draws attention to the smaller fall at Heathrow (which it estimates at less than 4% in underlying terms), than at Gatwick and Stansted - since Gatwick and Stansted are being sold on the orders of the Competition Commission.
The debt-encumbered business rather needs this "glass-half-full" analysis to be true, since it only just hit the forecast it made last October for EBITDA, or earnings before interest, tax, depreciation and amortisation (the most common proxy for cash flow).
In its supplementary prospectus dated October 1, BAA forecast that adjusted EBITDA for the whole year to March 31 (not just the three months) would be no more than 5% below £1,015m, or at least £964m. In the event, adjusted EBITDA was £968m.
If earnings had been less than half of a percentage point lower, it would have missed the target. That half percent has no statistical significance but means the world in psychological terms.
How did it scrape by?
Well, it squeezed costs. And thanks to a regulator that allowed BAA to levy increased charges on airlines for using Heathrow and Gatwick, what BBA calls "aeronautical income" rose almost a third.
Ain't it great having a de facto monopoly?
Also, the smaller numbers who flew forgot there's a recession and splurged a good deal more: there was a small increase in BAA's retail income.
But for me, the most interesting part of BAA's results announcement is a phrase that the company has highlighted in bold (presumably so that its creditors don't miss it).
In flagging up a review by the Department for Transport of how it's regulated, the airports group says it expects to be subject to a new licensing regime that would impose a "new duty on the regulator to ensure that licence holders can finance their activities".
So it would risk losing its licence to operate Heathrow if it was perceived to be too financially stretched.
The point is that BAA has an eyewatering £11.4bn of borrowings - or a hefty 11 times EBITDA - including just over £1bn that are classified as "current" (or repayable within a year").
In other words, BAA's tender parts are still in the vice-like grip of its lenders.
Still, it had a miraculous escape from bankruptcy last year: some £9.1bn of debt was due for repayment within a year, as of March 31 2008.
That, of course, necessitated the mother of all refinancings. It rather defies belief that BAA pulled off the refinancing, in the worst financial-market conditions within living memory.
But that doesn't mean it can relax. Although the recession means that its income is subject to the most painful squeeze in living memory, its lenders are unlikely to be especially tolerant or forgiving if BAA lets them down.
It matters, in that context, that in the next few weeks it achieves a decent price for Gatwick and that prospective purchasers aren't put off by the 14.6% fall in first-quarter passenger numbers - since the proceeds of that forced disposal will be used in their entirety to pay a portion off the "Refinancing Facility".
So BAA is unlikely to revert to being a dull, steady-as-she-goes utility any time soon.
And although it's understandable that for many business people and politicians the big question is whether Heathrow should be allowed a third runway, that looks almost an academic issue compared with BAA's operating and financial challenges.
AIRPORTS POLICY 'IN TATTERS'
AS STANSTED RUNWAY PLANS DELAYED AGAIN
Stansted inquiry to finish after general election
Conservatives promise to scrap expansion proposals
Dan Milmo, Transport Correspondent - The Guardian - 10 May 2009
The government's airport expansion policy is in tatters, campaigners said today after it emerged that a planning decision on a second runway at Stansted is unlikely to be taken before the general election.
An independent planning inquiry into expanding Britain's third-largest airport will not end until September next year at the earliest, according to planning experts. The Conservative party has promised to scrap proposals for new runways at Stansted and Heathrow.
The government has already conceded that a Heathrow planning application is not expected until 2012.
A senior planning official at Essex county council, which is leading local political opposition to the Stansted runway, said the inquiry would probably begin in September and last a year, with another four months before a recommendation is handed to ministers. "It is likely that the inquiry will last a minimum of one year so it will be in the next administration before there is a decision," said David Dash, project manager for the councils opposing Stansted's expansion. Even if the planning inspector finds in favour of a second runway, the recommendation can be overturned by the government.
The Stop Stansted Expansion group said the likelihood of a slip in the timetable left the government's airport policy in trouble. "The policy is in tatters, but the government does not want to step back and admit it. Ultimately it will be the Conservatives who will put the knife in," said Carol Barbone, campaign director at SSE.
The government's airports policy states that south-east England's overcrowded airports should have new runways at Stansted and Heathrow.
The transport secretary, Geoff Hoon, backed proposals for a third runway at Heathrow in January but that plan has also floundered. According to a presentation by the Department for Transport, seen by the Guardian, BAA is not expected to seek planning permission until 2012.
Theresa Villiers, the shadow transport secretary, said: "Like Heathrow, the government's plans for an extra runway at Stansted have collapsed. A Conservative government would put the final nail in the coffin for this unpopular and unnecessary new runway."
BAA has already pushed back the opening date of a second runway at Stansted by two years because there are not enough passengers to meet demand. A new runway is now earmarked for 2017, after BAA conceded that it would not attract the necessary 35 million passengers a year until well into the next decade.
The Department for Transport said that despite the recession, the south-east would still need new runways by 2030.
The communities secretary, Hazel Blears, has postponed the Stansted planning inquiry until BAA decides whether to push ahead with an application. BAA will decide over the next fortnight whether to go ahead with the Stansted planning application or to leave it in the hands of a new owner once it has sold the airport.
The group is deciding whether to appeal against a competition commission ruling that it must sell Stansted, Gatwick and either Glasgow or Edinburgh airport over the next two years. If BAA sells Stansted, it could decide against spending millions more pounds on legal fees to develop a runway that will benefit a competitor.
A BAA spokesman said that overcrowded airports were damaging the economy. "If we fail to respond positively to this difficult question, then we will simply cede economic advantage to other more ambitious economies across Europe and the Middle East."
PIE IN THE SKY?
Aviation bosses plan pollution cut
Aviation chiefs showed off their green credentials by explaining how they planned to make planes grow quieter and less polluting.
In future, planes could reduce their carbon dioxide emissions by 30%, Rolls-Royce vice president Robert Nuttall told an aviation and climate change conference in London.
And Sir Roger Bone, president of planemaker Boeing UK, spoke of the role aviation was playing in reducing emissions.
Mr Nuttall said: "Aeroplane engine technology is able to improve carbon dioxide, nitrogen oxide, and noise as a package. Technologies already on the drawing board show potential to reduce carbon dioxide by 30%, nitrogen oxide by 60% and noise by 15 to 20 decibels by 2020."
Sir Roger said: "The benefits of aviation are often overlooked in the broad environmental debate in the UK and even more so the role that the industry is playing in terms of achieving a carbon neutral growth path."
"The industry's efforts, vigorously supported by Boeing are wide ranging and include aircraft development, improvements to air traffic management systems as well as the development and trials of biofuels."
Christian Dumas, vice president of sustainability and eco-efficiency for European planemaker Airbus, said: "The role of aircraft design and innovation is crucial in reducing aviation's carbon emissions. We are very positive about the future."
Charles Grant, director of EU think-tank the Centre for European Reform, said: "The EU is currently developing a complex and sophisticated tool - the Emissions Trading Scheme - to limit emissions. The scheme will factor in a price for carbon which will give airlines and aircraft engine manufacturers incentives to introduce low-carbon technologies as soon as possible."
OUR COMMENT: These same promises were made a few years ago. Yet they are still on the drawing board. There should be no expansion of flights or airports unless and until actual models are produced and a valid future time table for low carbon operational planes is clear.
REVOLT ON HEATHROW THIRD RUNWAY
The leaders of some of Britain's biggest companies have begun a revolt against plans for a third runway at London Heathrow
Times Online - 3 May 2009
GORDON BROWN and Willie Walsh, the chief executive of British Airways, will splutter in their cornflakes this morning when they read how business leaders are lining up to oppose the construction of a new runway at Heathrow. As we reveal today, a group of Britain's top entrepreneurs, including Charles Dunstone of Carphone Warehouse and Justin King of J Sainsbury, have had enough of everyone assuming that they support the plan. They think a third runway at Heathrow is a dumb idea and are not afraid to say so.
Their intervention shatters all the assumptions made when the runway was approved. The business community, carefully marshalled by British Airways, Virgin Atlantic and BAA, was regarded as a natural supporter of Heathrow expansion. The CBI and TUC, normally deadly rivals, made common cause on the issue, and urged Brown to back the runway because the benefits to the economy outweighed the harm done to the environment.
Brown accepted the argument and overruled substantial opposition within the cabinet to approve the new runway earlier this year. It now turns out that not all business leaders agree with what Brown was told, and some of them would like the issue to be looked at again.
Leaving aside the obvious environmental costs - eventually one-third more flights over the capital, increased greenhouse gas emissions, air pollution in west London from increased activity around Heathrow and the nuisance of extra noise - the rebellious executives say the business benefits from an expanded Heathrow are not clear. Many of the extra trips could be done by high-speed rail, they say, and the two existing runways at Heathrow should provide sufficient capacity to answer Britain's network needs.
Building a new runway would not actually help the economy greatly, as allowing Heathrow to grow again as a true hub would merely promote transfer traffic - a worthy goal for airports such as Dubai, where the whole intention is to create a transport interchange, but not for a crowded island like ours, where servicing genuine visitors should be the priority.
Expect a furious backlash this week, particularly from BA. Dunstone, King & Co will be accused of not understanding the airline business, of failing to see that, without an extra runway at Heathrow, London will become an international backwater, with an economy robbed of the high-value trade associated with extra air travel.
Brown and Walsh will now be aware, however, that they cannot assume that the business world supports their runway plan. The tide has begun to turn against expansion at Heathrow.
These business leaders are not anti-aviation. They rely on air transport for their businesses. But they are serious about the environment and they want a rethink of a government decision that they believe is flawed. They will break their silence tomorrow in an open letter and I will be surprised if they don't gain huge support. This is an emotive subject and a large percentage of the public say their voice has not been properly heard.
BUSINESS CAN DO WITHOUT A THIRD RUNWAY
A misconception that those in the business community support the Government rationale for the third runway at Heathrow
The Times - 4 May 2009
Sir, It is important to understand that many individuals in the business community do not believe that the rationale put forward for the third runway at Heathrow is sufficient to justify the Government's recent decision.
The benefits to business are unclear and unproven. We see little benefit in Heathrow's increased reliance on transfer passengers. A new runway comes with no guarantee of securing a greater number of international destinations or domestic connections. Indeed, the most recent capacity increases at Heathrow that came as the cap on flight movements was raised resulted in exactly the reverse - that is, an increase in the number of frequencies between certain already well-served high-density international city pairs and an overall continued decrease in the number of destinations served by Heathrow. We have no reason to believe this trend would not simply continue with the addition of a further runway.
In a recent independent survey of small and large businesses (Continental Research, November 2008), 95 per cent of businesses said a third runway would make little or no difference to them.
Alternatives to a third runway have not yet been adequately explored. We cannot accept that the only way to improve the passenger experience of those using Heathrow is to add an extra runway and increase flight numbers massively. Insufficient money has been invested over the past 15 years in transforming the Heathrow infrastructure on the ground to reduce congestion and delays caused by the outdated alignment of buildings, jetties and parking areas. Additionally, new high-speed rail links directly connecting Heathrow to Scotland via the Midlands and the North of England will also clearly have an enormous impact in releasing significant capacity at Heathrow. All this has yet to be fully understood. At the same time the Government must reforecast all the growth assumptions made by BAA, the owner, and the airlines to take account of the significant recent falls in passenger volumes as a result of economic decline and fuel-price volatility.
The quality of life impact is too important to ignore. The Government has already admitted that air quality in the Heathrow area breaches EU standards. The increase in movements and ground transport from a third runway would put people's health further at risk. Climate change cannot be ignored and our approach to transport must reflect the seriousness with which we take our Climate Act target to cut emissions by 80 per cent by 2050. In addition, we must avoid the increased noise and safety issues resulting from an rise in the number of aircraft passing directly over a densely populated city such as London.
We recognise the business need for air travel and that strong air links between the UK and the rest of the world are required, but the business case for the third runway simply does not stack up. Moreover, millions of people in the UK oppose the new runway. They are our customers and our colleagues. The business community must take account of the strongly held views of those living in the broader community in which we operate.
To say that all those from the business community support the third runway is wrong. It is a misconception and one that we wish to put right. Today we are calling upon the Government to rethink their decision and begin the detailed work to address the real questions regarding the future of aviation in the UK, the competitiveness of our country and the challenge of making it a better place for people to live and work.
Martin Armstrong, Russell Chambers, Ian Cheshire, Jeremy Darroch, Charles Dunstone, Sir Roy Gardner, Justin King, Howard Leigh, David Levin, Jon Moulton, James Murdoch, Dominic Murphy, Lord Young of Graffham
GATWICK IN CUT-PRICE SALE
Three rival bidders for Gatwick have offered owner BAA £1.3bn to £1.4bn - nearly £200m less than the price placed on the airport
by the Civil Aviation Authority
Gatwick: Not worth as much
Tom McGhie - Financial Mail - 3 May 2009
But even though the bids are far lower than the £2bn hoped for by BAA's owner, Spanish construction group Ferrovial, two bidders are struggling to find the money to take part in the auction, which could be concluded this week.
Ferrovial is attempting to help favoured bidder Global Infrastructure Partners, the owner of London City Airport, raise the cash. A team of 40 is working this weekend to come up with funds.
The second bidder, which has also not completed its funding, is the Manchester Airport group acting with Borealis, a Canadian infrastructure fund.
The third bidder, Lysander Gatwick Investment - a consortium consisting of Citi Infrastructure Investors, Canada's Vancouver Airport services and John Hancock Life Insurance of the US - has funding.
Gatwick Airport has been hard hit by the recession, with a sharp fall in passenger numbers. And the latest flu scare will do nothing to boost bidders' confidence.
The bids are so low they could push BAA into challenging the Competition Commission's decision to force it to sell Gatwick, Stansted and either Glasgow or Edinburgh airports.
Meanwhile, easyJet will this week report record losses of nearly £130m for the half year ending March 31, compared with a £48m loss for that period last year, after suffering a huge hit on its fuel hedging policy.
Its planes are using fuel that was bought for about $140 a barrel a year ago. Oil is hovering about $45 to $50 a barrel. But analysts are still standing by the forecasts for full-year pretax profits of about £50m.
FERROVIAL LEFT WITH JUMBO-SIZED PROBLEMS
Neil Collins is a Reuters columnist. The opinions expressed are his own.
Neil Collins - Reuters - 28 April 2009
The Spanish owners of London's three airports must wonder whether someone above the skies has got it in for them.
Having paid top dollar for BAA, Grupo Ferrovial (FER.MC) has had an endless series of problems, of which the worldwide panic over swine flu is just the latest.
Never mind the potential pandemic, things already look bad enough. The problems for the owner of Heathrow, Gatwick and Stansted extend far beyond simply servicing the new debt, piled on top of the old, which the airports must support.
They go back to the fundamental error when the government sold all three as a single unit, to maximise the proceeds for the state. Yet it took 20 years for the competition authorities to admit the obvious, that for a single company to have a stranglehold on flyers from London might be a mistake.
The trigger was Ferrovial's intention to bid, but the Spaniards ignored the warning, and went ahead anyway. Three years later, they must surely wish they'd never heard of BAA.
The Office of Fair Trading sent the monopoly question to the Competition Commission, which rejected the arguments from Ferrovial and last month demanded the sale of both Gatwick and Stansted.
BAA was already reeling from the farcical opening of Heathrow's fifth terminal, but things were to get much worse. It had put Gatwick on the block, with a guide price of two billion pounds. As credit dried up, the price kept coming down, and the queue of bidders shrank.
Last week Heathrow reported the first decline in passenger numbers in half a century, as consumers cut back on discretionary travel.
Standard & Poors, the ratings agency, has told one of the bidders that it would not award investment grade status to the buyer's debt if it exceeded half the 1.6 billion pounds "regulated asset base" of Gatwick. Analysts now believe that Ferrovial has received just two bids for the airport, each below 1.5 billion pounds.
The latest health scare will do nothing to encourage the buyers to be brave, and, rumbling away in the background like a distant jumbo jet is the continuing resistance to a third runway at Heathrow.
These hammerblows have done terrible damage to the 10.7 billion pounds of BAA's senior debt. Five-year credit default swaps had ballooned out to 25 percent. The 2014 euro bond fell to around 65 cents, but it and the CDS spreads have rallied a little in relief that there appear to be two credible bids for Gatwick, rather than none. Considering the scale of Ferrovial's problems, the bonds are not obviously cheap.
The winners here are the former shareholders of BAA, who were bought out for cash at a fabulous price. The institutions who cleaned up are much the same ones who have been vociferously complaining about the travails of Barclays. Perhaps they should remember that Marcus Agius, the Barclays chairman, was the man who so skilfully lured the Spanish into overpaying.
BAA IN PERIL IF TRAVEL DECLINES
www.Buz.rep.co.za - 29 April 2009
The owner of Heathrow Airport, BAA, might breach the terms of its loans if the outbreak of swine flu caused a global decline in air travel to accelerate, Credit Suisse Group said yesterday.
A "high but not inconceivable" drop of 15 percent in traffic at BAA's London airports, compared with the 9 percent predicted before swine flu, would trigger clauses in borrowing agreements, said Credit Suisse analyst Robert Crimes.
BAA said the suggestion was "spectacularly hypothetical".
The World Health Organisation raised its pandemic alert to the highest since the warning system was adopted in 2005, saying swine flu was no longer containable.
Mexico's toll of flu-related deaths rose to 152. Cases in the US doubled to 40 and the virus was confirmed in the UK, Canada and Spain.
Japan will suspend visa-free entry for Mexicans. Other countries, including Singapore, are screening air passengers.
"We see BAA as the asset most at risk due to high debt leverage," said Crimes. He said a 15 percent traffic decline would cause a drop in BAA's revenue sufficient to breach agreements on its debt.
Such a breach would be one step short of default and would trigger clauses limiting BAA's ability to determine how it spent its cash. - Bloomberg
STANSTED PLANS ATTACKED
Cambridge News - 29 April 2009
BUILDING a second runway at Stansted Airport cannot be justified until at least 2030, say campaigners against the plan.
The Stop Stansted Expansion (SSE) group said figures in last week's Budget - and their impact on the Department for Transport forecasts for UK air travel demand - showed that the gloomier outlook for the UK economy meant a new runway was not needed.
Brian Ross, SSE economics adviser, said: "These latest Government figures totally pull the rug from under BAA's feet and show it would be a complete waste of time and money for BAA to insist on proceeding with a public inquiry when there is no prospect of its project being approved."
"We have the Competition Commission saying BAA must sell the airport; we have both the main opposition parties pledged to cancel the second runway project; we have Stansted passenger numbers down by more than 20 per cent since 2007; and now we have these new forecasts showing that the existing runway can cope with predicted demand for at least the next 20 years."
SSE's case is that a second runway would ruin the quality of life for residents over wide swathes of Essex, Hertfordshire and Suffolk, ruin the area's heritage and have a devastating effect on the natural environment.
A Stansted Airport spokesman, said: "We don't agree with SSE's views on the level of demand, and we never have."
AVIATION INTERESTS AGAIN DEMAND SPECIAL FAVOURS
UK to go ahead with air tax rises
Andrew Gough - www.abtn.co.uk - 23 April 2009
UK air travel "most heavily taxed" - BA
Airlines today (April 22) reacted strongly to the failure of the British Budget to stop propose a rise in the Air Passenger Duty (APD).
Alistair Darling, the UK Chancellor Exchequer, made no mention of the controversial tax in his Budget speech today despite intensive lobbying by the travel industry to scrap the increase.
The APD increases will see passengers charged more per segment, with four tax bands depending on destination. Further increases are planned for 2010.
The airline industry had called for the increases, announced last November as part of Mr Darling's "recession package", to be scrapped along with a proposed Aviation Duty. But today's announcement has angered many carriers including British Airways and Virgin Atlantic.
BA's ceo Willie Walsh condemned APD claiming it would penalise working families, harm economic recovery and put the UK at a competitive disadvantage. "We are disappointed that the Government has not revised its planned increases in the light of the economic downturn," said a spokesperson for BA.
"The aviation industry is facing an extremely difficult trading environment. An increase in tax rates of up to 112% will further impact declining trends in passenger numbers."
BA said it would increase its campaign against APD when the European Emissions Trading Scheme (ETS) is introduced in 2012, claiming that government figures already show UK airlines are meeting environmental costs.
Virgin's communications director Paul Charles told ABTN he was unsurprised by today's announcement, but called on the government to justify APD in its current form before introducing rises.
"Sustainability is at the forefront of everything we do, and we'd certainly like to see where the money from APD is actually going, to benefit the environment," said Mr Charles. "We'd be delighted to see the projects that APD money is going towards. Everyone knows it's a back door increase and I think passengers resent paying it."
Mr Charles said it was time to reconsider APD, a tax that could lead to thousands of job losses as increased prices affect demand. He added: "Already we have concerns about the nature of the scheme anyway in terms of the banding proposals, for example affecting the Caribbean when they shouldn't, so we would urge that the whole scheme is reconsidered, and the rises as well."
easyJet's director of communications Toby Nicol said Mr Darling had "missed the opportunity to give air passengers a much-deserved shot in the arm by refusing to ditch his planned £1 billion raid on the airline industry."
"Last year the Chancellor bottled the planned reform of Air Passenger Duty which would have made it a fairer, greener tax and instead simply announced a huge tax raid on hard-working families while continuing to exempt private jets and cargo planes," he said.
"In today's Budget he should have waived the planned increases in order to help an industry which will be at the forefront of dragging the economy out of recession, but he bottled that as well."
Ryanair, Europe's largest low cost carrier ahead of easyJet, highlighted the affect of an APD on the UK and Ireland tourist industries. "UK tourism is in the toilet due to Gordon Brown's greedy tourist tax," said a Ryanair spokesperson.
"The UK and Ireland are now the only countries who refuse to acknowledge that taxing tourists is bad for the tourism industry and will continue to see passenger traffic deteriorate until such taxes are removed."
Flybe said it had reacted with "extreme disappointment" to failure of Mr Darling, a former transport minister, to postpone the APD rises. "As a former Transport Minister, Mr Darling knows that aviation will play its part in dragging the country out of recession," said Mike Rutter, Flybe's chief commercial officer."
"The government's own figures show that aviation already pays its own way. By slapping another tax on a British success story like aviation, the Chancellor runs the risk of endangering a recovery that could be led by aviation."
The Board of Airline Representatives in the UK (BAR UK) Ltd, which represents more than 90 scheduled airlines, said it was angered and disappointed by the go ahead. Mike Carrivick, its ceo, said: "These proposals, which have already been contested by BAR UK and most other segments of the travel industry, are both excessive and ill-timed."
"Current revenues generated by APD charges already exceed the cost of aviation emissions. Increasing APD is simply a revenue generating opportunity imposed on an industry that is facing a major economic crisis."
THE MINISTER CONFIRMS: AVIATION IS FAVOURED
IN THE BATTLE AGAINST CLIMATE CHANGE
(BUT HE DOES NOT EXPLAIN WHY)
Questions in Parliament - 3 April 2009
Norman Baker (Lewes): What recent discussions he has had with the Secretary of State for Transport on managing the effects on climate change of the Government's proposals for the aviation?
Energy and Climate Change Secretary Edward Miliband said that this was a key priority and that the Government was leading the way in supporting EU regulation in this area. He added that they were the first Government to commit to reducing legislation levels by 2050.
Responding to a supplementary question on the importance of including aviation in the 80% reduction of emission by 2050 target, the Minister said that he disagreed that there should be across the board cuts of emissions, arguing that this would involve reverting to 1970s level of flying. Inevitably there would be bigger cuts in some areas than other, he argued. There would have to be a price on aviation carbon emissions but this was addressed in the EU ETS, he stated.
Conservative David Evennett questioned why aviation was being extended, such as at Heathrow, rather than investment being made in rail. Edward Miliband stated that investment in high speed rail was planned. The Conservatives wanted airport expansion in the south east but would not commit to support individual airport expansion proposals, he lamented.
WORLD WILL NOT MEET 2C WARMING TARGET,
CLIMATE CHANGE EXPERTS AGREE
David Adam, Environment Correspondent - The Guardian - 14 April 2009
Almost nine out of 10 climate scientists do not believe political efforts to restrict global warming to 2C will succeed, a Guardian poll reveals today. An average rise of 4-5C by the end of this century is more likely, they say, given soaring carbon emissions and political constraints.
Such a change would disrupt food and water supplies, exterminate thousands of species of plants and animals and trigger massive sea level rises that would swamp the homes of hundreds of millions of people.
The poll of those who follow global warming most closely exposes a widening gulf between political rhetoric and scientific opinions on climate change. While policymakers and campaigners focus on the 2C target, 86% of the experts told the survey they did not think it would be achieved. A continued focus on an unrealistic 2C rise, which the EU defines as dangerous, could even undermine essential efforts to adapt to inevitable higher temperature rises in the coming decades, they warned.
The survey follows a scientific conference last month in Copenhagen, where a series of studies were presented that suggested global warming could strike harder and faster than realised.
The Guardian contacted all 1,756 people who registered to attend the conference and asked for their opinions on the likely course of global warming. Of 261 experts who responded, 200 were researchers in climate science and related fields. The rest were drawn from industry or worked in areas such as economics and social and political science.
The 261 respondents represented 26 countries and included dozens of senior figures, including laboratory directors, heads of university departments and authors of the 2007 report from the Intergovernmental Panel on Climate Change (IPCC).
The poll asked the experts whether the 2C target could still be achieved, and whether they thought that it would be met: 60% of respondents argued that, in theory, it was still technically and economically possible to meet the target, which represents an average global warming of 2C since the industrial revolution. The world has already warmed by about 0.8C since then, and another 0.5C or so is inevitable over coming decades given past greenhouse gas emissions. But 39% said the 2C target was impossible.
The poll comes as UN negotiations to agree a new global treaty to regulate carbon pollution gather pace in advance of a key meeting in Copenhagen in December. Officials will try to agree a successor to the Kyoto protocol, the first phase of which expires in 2012. The 2C target is unlikely to feature in a new treaty, but most of the carbon cuts proposed for rich countries are based on it. Bob Watson, chief scientist to Defra, told the Guardian last year that the world needed to focus on the 2C target, but should also prepare for a possible 4C rise.
Asked what temperature rise was most likely, 84 of the 182 specialists (46%) who answered the question said it would reach 3-4C by the end of the century; 47 (26%) suggested a rise of 2-3C, while a handful said 6C or more. While 24 experts predicted a catastrophic rise of 4-5C, just 18 thought it would stay at 2C or under.
Some of those surveyed who said the 2C target would be met confessed they did so more out of hope rather than belief. "As a mother of young children I choose to believe this, and work hard toward it," one said. "This optimism is not primarily due to scientific facts, but to hope," said another. Some said they thought geoengineering measures, such as seeding the ocean with iron to encourage plankton growth, would help meet the target.
Many of the experts stressed that an inability to hit the 2C target did not mean that efforts to tackle global warming should be abandoned, but that the emphasis is now on damage limitation.
Scientists fear worst on global warming
Politicians insist that urgent and widespread action can yet prevent the worst of global warming but the cracks in that argument have been showing for some time.
Officially, UK efforts on climate change are in line with a global ambition to limit the temperature rise above pre-industrial levels to below 2C - a threshold the EU has defined as dangerous. But in 2006 David King, then the government's chief scientist, said a 3C rise was likely. Last summer, Bob Watson, the chief scientist to the environment department (Defra), told the Guardian the world needed to prepare for the possibility of a 4C rise. This autumn, Oxford University will hold a conference to discuss life in a 4C warmer world.
Hit with a double whammy of spiralling carbon emissions from the coal-fired boom in developing countries such as China and political stalemate, many climate scientists have become noticeably nervous in recent years. While technical papers in academic journals have tracked increasingly desperate predictions, most have put on a brave face in public. Likely failure to meet the 2C target, and the certainty of dreadful consequences, has been the worst-kept secret in climate science.
No longer. Today's Guardian poll of attendees at a climate conference last month in Copenhagen exposes the gulf between political rhetoric and scientific thinking. Of more than 250 experts surveyed, more than half said the 2C target could still be achieved but only 18 thought that it would be. By the end of the century, most thought average temperatures would rise by some 4C.
The figure is not plucked from their imaginations. The authoritative report from the Intergovernmental Panel on Climate Change (IPCC) in 2007 laid it out in simple terms.
If carbon emissions continue to rise at present rates, then the IPCC's best guess is a 4C rise by 2100. The Guardian poll merely highlights a belief that the warning has simply failed to penetrate. As one said: "I think a full understanding of what must be done quickly, and the consequences of insufficient action, is lacking among the policy makers and the public." Another said: "Current government actions are playing into the hands of ... an electorate that doesn't quite understand how serious climate change is."
Survey respondents were promised anonymity. Many scientists are reluctant to admit publicly that the 2C target is unrealistic, and several warned that simply raising the subject was sensitive. One said: "Telling people that x% people think it can't be done would be a self-fulfilling prophecy. Great things can only be achieved by everyone believing it can be done ... Churchill didn't stand around saying most people think we will lose the war. He said we will fight it on the beaches."
Several scientists said the G20 summit in London, where climate change was barely considered, had convinced them the action required would not be taken. Simon Lewis, a climate researcher at the University of Leeds, said: "The summit shows that political leaders do not regard climate change as an urgent issue. They were tasked to re-configure the global economy and they chose to re-affirm the old model, and not move to a low-carbon economy as scientists have urged. The summit was more of an end-of-the-world order than a new world order."
Bob Doppelt, director of the climate leadership initiative at the University of Oregon, said: "One of the problems is that the issue is still being framed as a scientific and environmental issue. This is a major mistake. Climate change is just a symptom of dysfunctional social and economic practices and policies. It is a social and economic issue. The emphasis needs to shift away from the biophysical sciences now to the social sciences if we have any hope of solving this problem."
Others said it could take a series of extreme weather events similar to Hurricane Katrina and the 2003 European heatwave to force political action. One said a "9/11-type event" that could be traced to increased greenhouse gas emissions might break the political deadlock.
Climate change explained - the impact of temperature rises
Less than 2C
Arctic sea icecap disappears, leaving polar bears homeless and changing the Earth's energy balance dramatically as reflective ice is replaced during summer months by darker sea surface. Now expected by 2030 or even earlier.
Tropical coral reefs suffer severe and repeated bleaching episodes due to hotter ocean waters, killing off most coral and delivering a hammer blow to marine biodiversity.
Droughts spread through the sub-tropics, accompanied by heatwaves and intense wildfires. Worst-hit are the Mediterranean, the south-west United States, southern Africa and Australia.
Summer heatwaves such as that in Europe in 2003, which killed 30,000 people, become annual events. Extreme heat sees temperatures reaching the low 40s Celsius in southern England.
Amazon rainforest crosses a "tipping point" where extreme heat and lower rainfall makes the forest unviable - much of it burns and is replaced by desert and savannah.
Dissolved CO2 turns the oceans increasingly acidic, destroying remaining coral reefs and wiping out many species of plankton which are the basis of the marine food chain. Several metres of sea level rise is now inevitable as the Greenland ice sheet disappears.
Glacier and snow-melt in the world's mountain chains depletes freshwater flows to downstream cities and agricultural land. Most affected are California, Peru, Pakistan and China. Global food production is under threat as key breadbaskets in Europe, Asia and the United States suffer drought, and heatwaves outstrip the tolerance of crops.
The Gulf Stream current declines significantly. Cooling in Europe is unlikely due to global warming, but oceanic changes alter weather patterns and lead to higher than average sea level rise in the eastern US and UK.
Another tipping point sees massive amounts of methane - a potent greenhouse gas - released by melting Siberian permafrost, further boosting global warming. Much human habitation in southern Europe, north Africa, the Middle East and other sub-tropical areas is rendered unviable due to excessive heat and drought. The focus of civilisation moves towards the poles, where temperatures remain cool enough for crops, and rainfall - albeit with severe floods - persists. All sea ice is gone from both poles; mountain glaciers are gone from the Andes, Alps and Rockies.
Global average temperatures are now hotter than for 50m years. The Arctic region sees temperatures rise much higher than average - up to 20C - meaning the entire Arctic is now ice-free all year round. Most of the topics, sub-tropics and even lower mid-latitudes are too hot to be inhabitable. Sea level rise is now sufficiently rapid that coastal cities across the world are largely abandoned.
6C and above
Danger of "runaway warming", perhaps spurred by release of oceanic methane hydrates. Could the surface of the Earth become like Venus, entirely uninhabitable? Most sea life is dead. Human refuges now confined entirely to highland areas and the polar regions. Human population is drastically reduced. Perhaps 90% of species become extinct, rivalling the worst mass extinctions in the Earth's 4.5 billion-year history.
CLIMATE CHANGE SCEPTICS LIKENED TO THOSE
WHO DENIED HIV AIDS LINK BY LORD STERN
Louise Gray, Environment Correspondent - Daily Telegraph - 20 April 2009
Lord Stern warned if nothing is done to keep emissions low, temperatures may rise by up to six degrees with catastrophic consquences.
The respected economist first highlighted the social and economic costs of global warming in his 2006 report for the UK Government the Stern Review.
Now in a new book, the World Bank's former chief economist has warned the science he based his predictions on is out of date. He said levels of carbon dioxide in the atmosphere are already at 430 parts per million (ppm) and the world has "probably missed the chance" of keeping emissions below 450 ppm.
This means temperatures are likely to rise by at least two degrees Celsius by the end of the century - even if measures are taken to keep the levels of carbon dioxide below 500 ppm - causing a rise in sea levels, greater frequency of storms and a "high chance that the rainforests will collapse".
If nothing is done to keep emissions low, he warned that temperatures may rise by up to six degrees with catastrophic consquences.
Lord Stern warned that Florida and Bangladesh could disappear, alligators could survive at the North Pole and millions of people would have to migrate. "The location of many species, including humans, would be radically different and many would not survive," he added.
Lord Stern, who is to launch his book - A Blueprint for a Safer Planet - at a public lecture at LSE on Tuesday, said in the face of such evidence those who continue to deny climate change are "ignorant and reckless."
"The greenhouse effect is simple and sound science: greenhouse gases trap heat, and humans are emitting more greenhouse gases. There will be oscillations, there will be uncertainties. But the logic of the greenhouse effect is rock solid and the long-term trends associated with the effects of human emissions are clear in the data," he writes.
"The arguments from those who deny the science look more and more like those who denied the association between HIV and Aids or smoking and cancer."
However, despite the gloomy predictions in the book, Lord Stern's overall argument is one of optimism. He argues that the world should cut emissions by 80 per cent by 2050 and make the world a cleaner, quieter, more biodiverse and safer place by investing just one per cent of GDP into transforming how we use and make electricity, travel and live.
"These huge risks can be reduced drastically at reasonable cost, but only if we act together and follow clear and well-structured policies starting now. The cost of action is much lower than the cost of inaction - in other words, delay would become the anti-growth strategy. The low-carbon world we must and can create will be much more attractive than business as usual. Not only will growth be sustained, it will be cleaner, safer, quieter and more biodiverse."
OBAMA ADMINISTRATION BREAKS
WITH YEARS OF 'CLIMATE CHANGE DENIAL'
Suzanne Goldenberg, US Environment Correspondent - The Guardian - 17 April 2009
The Obama administration took a bold first step towards limiting the gases that cause global warming today after formally declaring that such emissions are a danger to public health.
The official finding by the Environmental Protection Agency that carbon dioxide and five other gases threaten public welfare sets the stage for regulation of emissions from coal-fired power plants, and for forcing US car manufacturers to make cleaner and more fuel efficient vehicles.
Environmentalists celebrated the ruling as the most definitive break to date with eight years of "climate denial" under George Bush.
The EPA said the science about the dangers posed by greenhouse gases was compelling and overwhelming, and that the increase of such gases was the unambiguous result of human emissions.
"This finding confirms that greenhouse gas pollution is a serious problem now and for future generations," the EPA administrator, Lisa Jackson, said in a statement.
The agency went further than some environmentalists had expected by making specific mention of auto emissions. The reference was seen as a signal that the EPA intended to allow California and more than a dozen other states to tighten restrictions on car exhaust.
The EPA's decision, known as an "endangerment finding", gives the agency the legal authority to demand cuts in emissions following a 60-day public review period.
That means the agency can begin regulating power plants and chemical and cement factories without waiting for Congress to undergo the laborious and uncertain process of turning a climate change bill that was unveiled last month into law.
The EPA did not suggest new regulations, and Obama has said repeatedly that he would prefer Congress to act on climate change through a comprehensive package of legislation. Jackson endorsed that position today.
Democratic leaders in Congress, while praising the EPA finding, also said the best way forward was to bring in new laws for a market-based cap-and-trade system.
But the EPA ruling ? and the possibility of alternative action should Democrats fail to pass climate change legislation ? raises the prospects that the Obama administration could put in place limits on greenhouse gases in advance of the Copenhagen climate change treaty.
"EPA, through its scientists, has given us a warning that global warming pollution is a clear, present and future danger to America's families," said Barbara Boxer, the chair of the Senate environment and public works committee. "If Congress does not act to pass legislation, then I will call on EPA to take all steps authorised by law to protect our families."
The supreme court directed the EPA two years ago to examine whether the gases should be monitored. But the Bush administration, opposed to regulation of CO2 emissions, stonewalled the move.
Environmentalists said the ruling now proved America would act on climate change. "There is no longer a question of if or even when the US will act on global warming. We are doing so now," said David Bookbinder, the chief adviser on climate change for the Sierra Club.
In a conference call earlier this week, he also said the EPA ruling would help negotiations for a climate change treaty at Copenhagen by showing the international community America was determined to act on global warming.
"The president will have done as much as possible in the 10 months between his inauguration and Copenhagen," Bookbinder said. "I think the rest of the world is smart enough to say, OK, he's off and running. He's heading in the right direction, and Congress is going in the right direction. We can do business with this guy."
Others were more guarded. Phyllis Cuttino, who directs the Pew Environment Group's US global warming campaign said, "The job isn't finished. The Obama administration can and must follow-up this decision and bring real leadership to Capitol Hill."
Industry groups, meanwhile, said the EPA finding would deepen the recession. The Competitive Enterprise Institute called the finding "an economic train wreck".
The EPA said its finding was based on a rigorous review of science on six greenhouse gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. "In both magnitude and probability, climate change is an enormous problem," the agency said.
It said the consequences of increased concentrations of those gases in the atmosphere were drought, flooding, wildfires, heat waves, and rising sea levels that had especially adverse impacts on the poor. Global warming also posed a national security threat, the EPA said.
BA HAS SECOND THOUGHTS TOO!
BA boss hits out at industry arguments over the environment
Travel Weekly - 9 April 2009
British Airways boss Willie Walsh has hit out at a central plank of industry efforts to counter environmental criticism.
The BA chief executive said the industry made a "massive mistake" by repeatedly asserting aviation accounts for just 2% of global greenhouse-gas emissions. This is the airlines' contribution to worldwide carbon-dioxide emissions, according to the Intergovernmental Panel on Climate Change, although climate scientists now estimate aviation contributes nearer 3%.
Walsh told industry leaders at an Aviation and Environment Summit in Geneva: "It was a massive mistake to try to play down the impact of aviation - the biggest mistake the industry has made. I do not buy into this 2% - it is not trivial, it is a massive amount."
He added: "Some of the criticism levelled at our industry is fair. Compared with other industries, we seem to have got away free. The perception that aviation has a free ticket must be addressed."
Walsh told the summit, organised by the industry's Air Transport Action Group, that agreement on a worldwide emissions trading scheme at the inter-governmental climate conference in Copenhagen at the end of the year was essential.
"There is a real risk to our industry if we are not seen to make progress at Copenhagen," he said. "We will suffer at the hands of politicians who see us as fair game for taxation."
The European Union plans to include airlines in a regional emissions trading scheme from 2012. Most carriers are opposed, although BA has supported the move as a step towards a global scheme.
Walsh warned that progress on reducing airline emissions would not be easy and called for competition on the issue to be put to one side. "We have to be realistic - the industry faces its greatest-ever crisis," he said. "There is a tendency to compete on the environment, but let's not do that."
That call was echoed by Swiss International Air Lines chief executive Christoph Franz, who said: "It is no good [airlines] arguing 'we are clean and they are the dirty guys'."
But he warned: "This industry is structurally not profitable enough and if we have no money, there will be no green aircraft even if the technology is available. The industry has to become more profitable to be able to afford it."
In the meantime, the BA boss sees little hope of the UK government abandoning Air Passenger Duty on air fares, despite industry lobbying. ABTA repeated its call for APD to be scrapped last week following the Dutch government's removal of its aviation tax.
Representatives of the world's 49 poorest countries have called for a $6 levy on every flight to help states adapt to climate change. The proposal was presented at United Nations climate talks in Bonn this week and could go forward to the Copenhagen conference.
STANSTED NEWS - MORE EMISSIONS? TO BE OR NOT TO BE?
Group highlights Stansted finance problems
Planning Resources - 10 April 2009
The inquiry into the second runway at Stansted should be dropped because BAA has insufficient finance for compulsory purchase orders, opponents argue.
In an appendix to the Competition Commission's report, the airport operator's accounts as of 31 December 2008 show debts of £18.1 billion and negative equity of £1.7 billion, Stop Stansted Expansion maintains.
Orders can only be granted if a developer can prove that it has the resources to implement the project within a reasonable timescale.
Meanwhile, a government document has warned that BAA will be unable to lodge plans for a third runway at Heathrow before the next general election, which will be next June at the latest.
According to a presentation by DfT head of airports strategy Jonathan Moor, the airports national policy statement that would underpin a planning application will not be ready until 2011.
BAA is not expected to seek permission until 2012, although a spokesman said the timing has yet to be decided. The Tories have pledged to block the runway.
PASSENGER NUMBERS FALLING FASTER AT UK AIRPORTS,
BAA faces increasing pressure over airport sales and expansion after the number of passengers flying from the UK's major airports fell more than 11% last month
Dan Milmo - The Guardian - 20 April 2009
The decline in UK air travel is accelerating as passenger numbers at Britain's largest airports slumped 11% last month, according to airport operator BAA
The owner of Heathrow, Gatwick and Stansted posted a decline in customers for the 11th successive month today with Stansted and Gatwick, its budget airline bases, recording the steepest falls. BAA airports handle 60% of airline passengers travelling through the UK.
An ongoing dispute with Ryanair and easyJet over landing fees at Stansted is also hitting passenger numbers at the Essex airport.The low-cost carriers have withdrawn services, compounding the effects of a recession that is driving down traffic at BAA's other airports.
BAA said its seven airports were used by 10.6 million passengers in March, a decline of 11.3% on the same month last year. The group, which also owns Southampton, Aberdeen, Glasgow and Edinburgh airports, said the timing of Easter was responsible for up to three percentage points of the decline - it fell in March last year and boosted the comparative figures. However, BAA acknowledged there was a wider trend of falling air traffic and pointed to a 13.6% decline in passenger numbers at European airports in February.
Traffic through Heathrow fell 7.5%, with Gatwick down 17.7% and Stansted falling nearly 16%. John Strickland, an industry consultant, said: "We are definitely seeing a trend of increasing decline and that trend is going to continue." The March figure was nearly double the decline in February, which saw underlying passenger numbers down 6.4%.
North Atlantic traffic, weighed down by the collapse in the financial services industry, fell the most last month, by 17.6%. European scheduled airline passenger numbers were 11% down and UK domestic traffic dipped 8.6%. Some sectors enjoyed growth, with South America traffic up 8.9%, India rising 1.8% and the Middle East up 0.1%.
The ongoing passenger drought poses further problems for BAA, which is selling Gatwick and considering an appeal against the Competition Commission's ruling that it must sell Stansted and either Glasgow or Edinburgh. BAA is attempting to generate the highest possible price from bidders for its second largest asset, Gatwick, and the dwindling traffic is enhancing bidders' bargaining power. BAA also harbours concerns about whether buyers can assemble bids for three airports in tight credit markets but it remains bullish about the long-term growth prospects for British air travel.
Campaigners against airport expansion also highlighted the customer drop as further proof that Stansted did not need a second runway. BAA is considering whether to withdraw its planning application for Stansted, prompting the Department for Communities and Local Government to delay setting a date for a public inquiry yesterday. The opening date for a new landing strip has already been pushed back to 2017 by BAA after the company admitted there will not be enough passengers using the airport by the original opening date of 2015. "The business case for a second runway at Stansted is falling away by the day. It would be foolhardy for BAA or any new owner to go ahead with a second runway application," said Carol Barbone, of the Stop Stansted Expansion group.
DEAR MINISTER... STOP STANSTED SECOND RUNWAY NOW BEFORE MORE TAXPAYER MONEY IS WASTED
Press Release on behalf of Local Councils - 15 April 2009
On the day a public inquiry into a second runway at Stansted was due to begin, four local councils have written to the Secretary of State for Communities and Local Government, Hazel Blears asking her to call it off before wasting millions of pounds of taxpayers' money.
In the letter, the four local authorities (Essex, Uttlesford, Hertfordshire and East Herts) say any public inquiry would be 'a futile exercise and unacceptably wasteful of public resources' at such a difficult time for the UK economy.
The Inquiry had been postponed because of the recent Competition Commission ruling that BAA must sell Stansted Airport, making it impossible for the company to follow through on building the second runway even if permission were granted.
The letter also points out a huge fall in passenger projections for Stansted which would mean 'no [new] owner is likely to commit to investing in a second runway'.
The proposals put forward by BAA for a second runway would see the airport reach the size that Heathrow is today with flights nearly tripling, as well as the loss of 47 acres of ancient woodland and several villages.
Councillor John Jowers, Cabinet Member for Localism and Planning at Essex County Council and CO2 member, said: "Going ahead with a Public Inquiry into a second runway at Stansted would be a travesty and hugely wasteful of public money at a time when the public purse is extremely tight."
"The planning application for a second runway is now completely unviable with the applicant, BAA, now being forced to sell Stansted and predictions of falling passenger demand turning into a reality."
"While the minister may consider herself unable to cancel the Public Inquiry, no matter how hopeless the application seems, we would ask her to use her influence to bring this process finally to an end."
Cllr Jim Ketteridge, Leader of Uttlesford District council, said: "It seems incredible that serious consideration could still be given to holding this public inquiry, especially given the current economic climate."
"On behalf of the people of Uttlesford I am calling on the Secretary of State to put a stop to this now ? before taxpayers' money is wasted on this fruitless and futile exercise."
The letter which was sent today to the minister reads:
Dear Ms Blears
Stansted G2 Public Inquiry
We write on behalf of Essex and Hertfordshire County Councils and Uttlesford and East Herts District Councils, the four local authorities who will play a major role in any Public Inquiry into proposals for a second runway at Stansted Airport. You have the difficult task to determine a start date for that Inquiry and we write to provide you with the Councils' view.
Put simply, in our view, to go ahead with the Inquiry at this time would be a waste of public money at this most difficult of periods for public bodies. The changed circumstances since the application was called in and the financial and other uncertainties facing the industry together mean that an Inquiry at this time would achieve very little or nothing.
You will be well aware of the issues. Forecast demand has fallen since BAA submitted their application as evidenced by the most recent Department for Transport forecasts (January 2009) and Stansted is now barely using half the capacity of the existing runway. The future ownership of Stansted is uncertain, so the views of the eventual owner on BAA's proposal and alternatives to it cannot be known at the present time. In consequence, the Inquiry will be presented with grave and possibly insuperable difficulties in dealing with the submitted Compulsory Purchase Orders. At the same time it seems apparent that no owner is likely to commit to investing in a second runway at Stansted given the current demand forecasts, the opposition of Stansted's major airline customers to the present proposals and the current financial situation.
For these reasons the Council's consider that to go ahead with an Inquiry at this time would be a futile exercise and unacceptably wasteful of public resources. Whatever the Inspector's recommendation and Secretaries of State's decision, it is almost inevitable that a second runway would not be built as proposed by BAA nor in the timescale contemplated when its application was being prepared. Accordingly - and assuming for these purposes that the principle of a second runway at Stansted is still supported by the Government - there would need to be a further application and inquiry (including compulsory purchase procedures) at some time in the future.
We appreciate that you may not consider you are able to cancel the Inquiry outright, but as the Minister responsible for local government and its prudent use of public resources you should be aware of the Councils' views. The Councils will be asking BAA to withdraw their application by copying this letter to them but they may feel constrained to continue by the conditions of the Competition Commission's report.
We are sure you will agree that it would be a serious mistake to proceed with the Inquiry at great cost to the public purse solely because none of the main parties felt they were in a position to opt for cancellation. I hope you can use your influence to ensure this is not the case and therefore save public money - so that the local authorities will be in a position to address the matter fully if and when it is necessary to do so in the future.
John Jowers - Essex County Council Cabinet Member for Localism and Planning
Derrick Ashley - Hertfordshire County Council-Executive Member Planning, External Relations & Waste
Jim Ketteridge - Uttlesford District Council, Leader
Mike Carver - East Herts Council, Executive Member for Planning Policy and Transport.
c.c. Andrew Philipson, Carmel Edwards Planning Inspectorate
c.c. Alistair McDermid, Planning Director BAA
c.c. Nabarros (SACC)
c.c. Carol Barbone (SSE)
AIRPORTS BREAKUP COULD COST £106M, WARNS BAA
Karl West - Daily Mail - 27 March 2009
BAA reckons it will incur costs of £106million when it comes to selling off three airports it is being forced to offload by the Competition Commission. The Heathrow owner has also warned that splitting off Gatwick, Stansted and Glasgow airport from the group could result in more than a hundred job losses.
Buried in the watchdog's report, BAA's submission to the Commission includes an assumption for potential 'severance costs' of £15million relating to IT staff and £9.3million for other head office staff based at Gatwick and Stansted.
It is thought BAA employs about 100 head office workers at Gatwick, and about 20 at Stansted. When the hubs are sold these workers would be offered a chance to relocate to BAA's other London base, miles away at Heathrow.
Included in the £106million total, BAA estimates it will spend around £15million on City advisors' fees for the sale of the three airports. This will include costs for lawyers, investment banking advice, accountants and expensive public relations advisers.
A BAA spokesman said: "We have estimated the cost of separating airports from BAA to be around £106million and have provided further information to the commission over the course of the investigation."
Following a two-year probe into BAA's market dominance in London and Scotland, the watchdog last week said BAA should be split up in order to stimulate competition for passengers. It must now sell Gatwick, Stansted and Glasgow or Edinburgh.
The group, owned by Spanish construction firm Ferrovial, has already put Gatwick up for grabs and has three bidders in the final round of the £1.6billion auction.
Douglas McNeil, analyst at City brokerage Blue Oar, said: "I dare say BAA will try to pass those costs on to buyers. Ultimately, it will depend on the strength of BAA's bargaining position, which looks to be pretty weak."
NATIONAL PARKS SHOULD BE
'EXPANDED TO PROTECT AGAINST DEVELOPMENT'
Britain's national parks should be expanded to protect
the countryside from encroaching development, campaigners believe
Louise Gray, Environment Correspondent - Daily Telegraph - 30 March 2009
On the 60th anniversary of the creation of national parks in Britain, many areas of the countryside are in danger of development including new roads, pylons and housing, the Campaign to Protect Rural England said.
The organisation wants the Government to commit to protecting existing national parks and creating new ones return by returning to the principles of the original 1949 National Parks and Countryside Act.
Under the plans the North Pennines between the Yorkshire Dales and Northumberland would be the largest new national park. The CPRE also wants a "bridge" created between the Lake District and Yorkshire Dales by protecting more land in the area and the Dorset coastline or "Jurassic Coast" to become a national park.
The Government is due to make a decision on the South Downs national park later this year and CPRE and other environmental organisations want it to be as large as possible despite protests from the local council.
The Forest of Dean and the English Border with Wales in the Wye Valley should be made Areas of Outstanding Natural Beauty, according to the organisation.
Tom Oliver, Head of Rural Policy at the CPRE, said national parks were vital to local communities. He said they provided tourism opportunities, gave the community more say in how to run their own affairs through a park board and economic opportunities as well as protecting valuable landscape.
He said: "The power of beautiful places and beautiful views to lift the human spirit and inspire the best in human nature was recognised by the nation's leaders at a time of austerity and uncertainty. That far-sighted action has provided us with one of our greatest natural assets. We need to secure and extend it in the years ahead."
He added: "As we face future challenges of a similar scale and unprecedented pressures on our land and natural resources, (the) government should again give top priority to beautiful landscapes and the qualities and opportunities they offer us all."
But one critics, Tina Cant, who protested against the New Forest being made a national park, said the board set up to run parks were unelected and therefore undemocratic. She said: "I understand the principle behind national parks ? anyone who wants to protect the English countryside would understand that - but at the moment the powers that be have not got the format right so I think they should not rush into new ones."
OUR COMMENT: Hope for Hatfield Forest?
DIMAS UPBEAT ABOUT PROPOSED US CLIMATE TARGET
ENDS Europe DAILY - 2 April 2009
A US draft climate law put forward this week is a "very encouraging"
signal for the international climate talks, EU environment
commissioner Stavros Dimas said in Brussels on Wednesday.
The draft cap-and-trade law proposed in the House of Representatives'
energy and commerce committee aims to cut US greenhouse gas emissions
by 20 per cent below 2005 levels by 2020. This is more ambitious than
the US offer so far of a 14 per cent cut by 2020 as part of
international climate negotiations. This is equivalent to a return to
But despite his support Mr Dimas acknowledged that the 20 per cent
target only equates to a 5-6 per cent cut below 1990 levels by 2020.
"It's not exactly what we have as a target in the EU and what science
says is necessary," the commissioner said. It may also not satisfy
"We believe that by 2020 [developed nations] should reduce their
emissions by at least 40 percent below 1990 levels," Chinese
representative Xu Huaqing said at the UN climate talks currently
underway in Bonn, according to Reuters. Scientists say a 25-40 per
cent cut is needed from developed countries to avoid dangerous
Mr Dimas pointed out that emission reductions to be agreed by the US
as part of the international climate negotiations would apply to all
sectors whereas the proposed cap-and-trade scheme would cover only 85
per cent of the economy. He added: "I am sure with debate we will
come up with even more ambitious targets [ahead of Copenhagen]."
The draft law will influence the global climate talks also because it
foresees carbon credits from avoided deforestation and from sectoral
emission reduction projects in developing countries. Forest-saving
credits are currently shunned by the EU and sectoral crediting
mechanisms plagued by political and technical problems.
Meanwhile, the European commission on Wednesday made public the
verified emissions data for 2008 for the vast bulk of installations
covered by the EU emission trading scheme (ETS). Nearly 2bn tonnes
were emitted from about 10,500 installations.
Analysts said this equates to a 4.2 per cent decrease compared to
2007 in a like-for-like comparison. They expect the scheme to come up
short by at least 40m tonnes when the data is complete. The
commission will publish an analysis of underlying trends in May.
CZECH REPUBLIC GIVES REASSURANCES ON AAU SALES
ENDS Europe DAILY - 2 April 2009
Around CzK10 billion (E372m) from the sale of emission credits to
Japan and other countries will be made available by the Czech
government for investment in green projects in 2009, environment
minister Martin Bursik said this week.
The announcement was intended to respond to concerns that governments
were not planning to earmark some of the revenues from AAU sales for
environmental improvements. Mr Bursik said the Czech Republic
had agreed to sell 40 million emission credits to Japan. But the
details of the agreement were not revealed.
The environment minister said the CzK10 billion would be invested in
energy efficiency and renewable heating in the residential sector.
This will lead to a significant reduction in greenhouse gas emissions
as well as air pollution, he said.
The Czech Republic is still negotiating AAU sales to other countries
as well as the World Bank, Mr Bursik said. Meanwhile, the Polish
government finally approved a draft law allowing Poland to sell AAUs.
The draft will now proceed through the parliament.
OUR COMMENT: What a lot of CO2! Not many savings! Will this trading help reduce aviation emissions when airlines join the scheme?
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