| SSE NEWS ARCHIVE - October to December 2011
CAMPAIGNERS SEE NO NEED FOR NEW RUNWAYS
Jim Pickard - Financial Times - 31 December 2011
Britain can deal with a steep rise in aviation demand in the coming decades without building any new airports or runways, according to a report commissioned by the WWF. Instead the country could cope with the demand through the better use of existing airports around the country, the conservation group predicts.
The report says the average number of passengers per aircraft at Heathrow should by 2050 have increased from 143 to 198, as aircraft become bigger, allowing the airport to handle more traffic. This, along with a smaller 15 per cent increase in "loading" at other airports - and the use of existing planning permissions for expansion - would be enough to meet higher demand.
This approach could meet the 60 per cent growth in flights which the Committee on Climate Change has predicted as the limit after which Britain breaches a commitment to cut aviation emissions back to 2005 levels by 2050. It would not, however, be sufficient to fulfil the 115 per cent rise in demand predicted by the DFT.
Theresa Villiers, aviation minister, told the Financial Times that the "immediate challenge" was to improve airports "within the constraints of existing runways". "However, in the longer term we have committed to producing a sustainable policy framework for aviation," she said.
Ministers will publish a consultation in the spring on a draft aviation policy framework. Controversial options already floated include a new "Heathwick" hub linking Gatwick and Heathrow and a Thames Estuary hub.
The DfT has forecast that London airports will reach capacity by 2030.
But the WWF said Heathrow numbers had recently fallen and questioned why those official capacity forecasts were based on "unconstrained demand".
BAA pointed out that Heathrow was already operating at 98 per cent capacity. "Heathrow is the only airport in the UK that has the scale and capability as a global hub and we need an aviation strategy that recognises this."
EU WINS ETS COURT CASE AGAINST US AIRLINES
ENDS Europe DAILY - 21 December 2011
The EU has successfully defended the inclusion of foreign airlines in
its emissions trading scheme (ETS) in the European court. A challenge
to the move, brought by a group of US airlines, was dismissed by the
Court of Justice of the EU (ECJ) on Wednesday.
The ECJ's ruling follows a similar line to the opinion given by an advocate general in
October and leaves the legal situation clear ahead of the airlines'
entry into the scheme in January. However, further legal and
political challenges are possible.
The ruling was welcomed by the European Commission, MEPs on the
European Parliament's environment committee, and green NGOs. They
called for the US and other countries opposing the scheme to respect
the court's decision and move on.
"When we drafted the legislation, we took extensive legal advice,
also concerning the compatibility with international law," said
German MEP Peter Liese, the aviation directive's parliamentary
rapporteur. "According to our calculations, the price increase for a
flight from Europe to the US East Coast should be less than ?1."
Figures from the Anglo-Welsh environment agency suggest the three airlines involved in the case - American, United and Continental - will each have to spend around ?5m
on ETS allowances for 2012 at today's prices, assuming their
emissions are the same as in 2010. But they will be able to pass some
of this cost on to customers.
The latest estimate from market analyst Point Carbon, revised to
reflect recent falls in the EU carbon price, puts the cost of
participation in the ETS at around ?500m for the whole industry in
2012, rising to ?9bn by the end of the decade.
The airlines' argument was that the EU was breaching various aspects
of 'customary' law, the Chicago Convention, Kyoto Protocol and EU-US
Open Skies Agreement by trying to regulate activity in other
jurisdictions and over the high seas, apply taxes and charges to
aviation, and act unilaterally on aviation emissions.
Only some of these arguments have been addressed by the ECJ, which
decided that challenges based on the Chicago Convention and Kyoto
Protocol were inadmissible.
The judges were not convinced that the customary law on open seas
invoked by the airlines really applies to aircraft and point out that
the ETS will only cover flights operating outside EU airspace when
they also include parts of the EU.
Finally, the 2008 aviation directive cannot be considered a tax or
charge as there is no direct link between the quantity of fuel used
and the burden imposed on the airline. Some may even profit from
their inclusion in the ETS, the court notes.
Wednesday's ruling is a preliminary one and will now be sent to a
high court in England and Wales, which referred the case to the
European court in the first place.
Last week, the US government wrote to the commission warning it
continued to oppose the emissions trading scheme and could take
retaliatory action. It also issued a demand for information from some of the
airlines included in the ETS. The Chinese Air Transport Association
and Indian government have also threatened legal action.
HEATHROW RESISTS CAPACITY CRUNCH
AS NOISE BAR FAVOURS COASTAL HUB
Steve Rothwell and Chris Jasper - Business News - 14 December 2011
London's Heathrow airport, hemmed in by urban sprawl and barred from adding a new runway, is turning to bigger jets and glitzier shops to keep growing in the face of a campaign to build a rival hub on the Thames estuary.
Heathrow owner BAA Ltd. will widen taxiways to handle more A380 jets, adding seats, while an upgrade of its oldest terminal should lift sales, Chief Executive Officer Colin Matthews said in an interview. A government pledge to maintain a global hub in the U.K. may signal an easing of antipathy toward expanding the busiest international airport, he said in London.
"Until the last year, very senior people were arguing that transfer traffic wasn't important," Matthews said. "They're not saying that now. There's an understanding that to give business people starting or ending their journey in London the frequencies and destinations they want you have to fill the rest of the plane."
Chancellor George Osborne said Nov. 29 the government will "explore all options" for retaining a U.K. hub, "with the exception of a third runway at Heathrow." The remark suggested he may favor an offshore airport as proposed by fellow Conservative and London Mayor Boris Johnson. Architect Norman Foster, designer of Hong Kong airport, has also drawn up plans for a coastal site.
Matthews, 55, said that with the government persuaded that a hub is vital to the economy, BAA's No. 1 task is to convince lawmakers and officials that Heathrow can raise its capacity without disrupting people's lives. "People feel really strongly about noise and we have to do a better job of getting an understanding of that story on the table," he said. "It's about quieter engines and airframes, different landing technologies and ways of operating the airport, about flight paths and the time of day you operate."
A small aerodrome in open country when chosen as London's main airport after World War II, Heathrow, located 14 miles west of the city center, is now part of Europe's biggest urban area. Heathrow's runways also run east-west, so in prevailing winds planes descend over London 70 or 80 percent of the time, taking off above the city on remaining occasions. Paris Charles de Gaulle and Frankfurt airports are north and south of the urban areas they serve, so jets don't affect residents as much.
A third runway, as proposed by BAA, would lift Heathrow's capacity of 480,000 flights a year by 50 percent, Matthews said, allowing passenger numbers to almost double from a maximum 68 million based on existing aircraft sizes to about 130 million.
Prime Minister David Cameron's government, which includes pro-environment Liberal Democrats, blocked the plan after taking power in 2010. It also opposes more capacity at London Stansted, which an antitrust ruling may force BAA to sell, and Gatwick, the busiest single-runway airport, which it disposed of in 2009.
While the Department for Transport is evaluating a new aviation policy, it's headed by Justine Greening, who represents a district located directly under the Heathrow flight path and has previously been a vocal campaigner against expansion plans. Matthews says complaints from well-heeled suburbs ignore the "slightly uncomfortable truth that one of the features that makes them attractive is their connectedness to Heathrow."
Howard Wheeldon, senior strategist at BGC Partners in London, said the CEO's optimism is probably wishful thinking. "The Conservatives are clearly against the idea of a third runway, so I don't see any chance of it happening over the next three years, and possibly longer than that," he said.
While it waits for the political tide to turn, BAA, bought by Spanish builder Ferrovial SA for 10 billion pounds ($16 billion) in 2006, will spend hundreds of millions of pounds to lift the number of Airbus A380s Heathrow can handle to 35 a day. Heathrow currently offers six daily flights on the 525-seat plane, two each by Singapore Airlines Ltd., Qantas Airways Ltd. and Emirates of Dubai, which has ordered 90 of the jets. British Airways, based at the airport and its No. 1 carrier, will start taking delivery of 12 of the double-deckers starting in 2013.
"With all those A380s we need to have more stands, but they're wider than other aircraft and the taxi layout needs to be different," Matthews said. "It's expensive, it's not quick, and it won't be hugely visible, but the plane gives an increase in the number of passengers without any increase in movements."
BAA is also spending 2.6 billion pounds renewing Heathrow's Terminal 2, built in 1955. Due for completion in 2013, the plan is aimed at improving the check-in experience, and will add no capacity. Matthews said the investment will pay off by boosting retail sales that contribute one-quarter of revenue. "There's a strong correlation between retail spending and the customer rating of the quality of security," he said. "I won't buy a tie or a bag unless I'm relaxed. If I've just been really aggravated in security I won't, if I'm delayed I won't."
BAA is also in talks with airlines about demolishing 42 year-old Terminal 1 and integrating it with Terminal 2, Matthews said. The six-year plan will create a complex handling 30 million people annually, the same as BA's base at Terminal 5, which had a chaotic opening in 2008 just weeks before the CEO took over as baggage systems broke down, earning the sobriquet "Heathslow".
Matthews said runway capacity remains the ultimate concern, and Heathrow is already feeling the strain, falling from second to fourth by passengers in 2010 as the total slid 0.2 percent to 65.9 million, overtaken by Beijing with 13 percent growth and Chicago with 4.1 percent. Atlanta remained the world No. 1.
While Heathrow is Europe's busiest airport, it serves only 180 destinations - down from 227 in 1990 - as airlines focus slots on the most profitable routes, versus more than 250 at Amsterdam, CDG and Frankfurt, which all have four runways. "If we take too long over the debate we are, by default, making a choice," Matthews said. "Paris and Amsterdam will do the jobs that could otherwise be happening here."
Mayor Johnson has said he's also concerned about London's shrinking global connections and the relative paucity of links with emerging markets in Asia, while maintaining that "massive environmental dis-benefits" mean expanding Heathrow won't do. Johnson instead favors a 30 billion pound hub dubbed "Boris Island", to be built at Shivering Sands, off Whitstable in Kent. Architect Foster's Thames Hub would be located closer to London on the Isle of Grain. Both feature four runways, 24 hour flying, high speed rail links and capacity of 150 million people a year.
"There are people who dislike the concept of developing an airport in a relatively unspoiled location, but I don't see the public anger that was evident with the third runway at Heathrow, or extending Gatwick or Stansted," BGC's Wheeldon said.
Matthews said a coastal hub would take 25 years to deliver and come with a price tag that could prove to be Heathrow's biggest advantage in its own push for additional capacity. "Sooner or later people have got to put numbers on the table and figure out what the costs and benefits are," he said. "If a new airport ends up costing four times more than investing in Heathrow, landing charges are going to be four times higher."
With assistance from Katie Linsell in London. Editors: Chad Thomas, Heather Harris.
PROTESTS AT GERMANY'S LARGEST AIRPORT
New Runway Noise Enrages Frankfurt Residents
Matthias Bartsch - Speigel Online - 28 December 2011
Lawmakers in the German state of Hesse apparently underestimated the noise pollution that would come from a new runway they advocated at the Frankfurt Airport. Residents feel they were deceived, and a protest movement is swelling. But there may be no solution. In fact, the noise is likely to increase.
The protesters are starting to feel their own power, a little more every Monday when they meet to demonstrate. The participating citizens' initiatives say "at least 5,000 people" were at Frankfurt Airport's Terminal 1 last week; the police put their own more conservative estimate at 3,000.
There are a striking number of gray heads among the demonstrators, but also families with children, occupants of row houses and of pricey mansions. They have been demonstrating ever since the new northwestern landing strip opened at the Frankfurt Airport in late October, marching angrily through the terminal building with drums and whistles, holding up signs that display a variety of place names from throughout the surrounding Rhine-Main region, which is named after the area's two famous rivers.
Their weekly demonstrations are having an effect, too. Last Monday evening, as the protesters gathered beneath the large black flight information board to take up a version of "Silent Night" with lyrics expressing themes of noise, smells and enraged citizens, Volker Bouffier, governor of the federal state of Hesse, was in the nearby state capital Wiesbaden doing damage control. Bouffier, a member of the center-right Christian Democratic Union (CDU), was at the state chancellery to meet with the head of Fraport, the company which operates Frankfurt Airport, as well as representatives from airlines and air traffic control, in a desperate search for ways to keep the skies above the Rhine-Main even just a bit quieter.
The meeting, announced by Bouffier just three days beforehand, served as a tacit admission of serious negligence. With its focus on creating growth and jobs, the state government had for years underestimated just how extensively noise from the airport expansion would impact local residents, only to discover to its shock that it may have sentenced its own voters to a life smothered in aircraft noise.
Bouffier's government is watching with horror as the level of rage grows among its own voters from week to week - in the Sachsenhausen district of Frankfurt, for example, or in the tree-lined district of Lerchesberg, where airplanes now skim just a few hundred meters overhead, often only a few minutes apart.
Upscale Lerchesberg, located on the southern outskirts of the city, borders directly on woodland. Doctors, lawyers, judges, engineers and famous athletes all have their homes here. One local resident, a PhD-holding professional, recently told a Frankfurt daily that he would even be willing to rent his villa's attic apartment to al-Qaida terrorists, if they would just turn their attention to the airplanes thundering overhead. One mother wrote a heartbreaking letter to the editor about her two year-old son, who now wakes up at 5 a.m. from the noise of the jets flying over their roof, crying, "Mama, it's too loud!"
Schoolchildren went on the radio to describe how lessons have to be interrupted every few minutes as airplane noise fills their classrooms even with the windows closed. Many of the protesters say they could never have imagined it would be this loud. And many members of the government in Wiesbaden likewise seem only now to be realizing that schools, preschools, nursing homes and doctors' offices all lie within the new approach path to Germany's busiest international airport.
Surprised By Both Noise and Reactions
Fear that this unexpected wave of outrage might even exceed the level of protest directed at Stuttgart 21, a controversial infrastructure project in the neighboring state of Baden-Württemberg, is putting regional politicians on the defensive. Hesse's Economy Minister Dieter Posch of the business-friendly Free Democratic Party (FDP), for example, until now one of the strongest proponents of the airport expansion, said notably: "The level of additional noise, as well as the people's reactions, surprised us in their intensity."
That's an admission that could have far-reaching consequences, since Posch is head of the government body that was responsible for approving the expansion project, and for estimating the noise impact correctly and lawfully. If the regulaton authority itself underestimated the noise level, then the question is now whether construction of the landing strip in its current form should have been allowed at all.
The whole matter has started raising fundamental questions. "How is it possible that a runway like this one, bordered on both sides by residential neighborhoods, is even being built at all?" wonders Jochen Krauss, a 53-year-old trauma surgeon who lives in the Niederrad district of Frankfurt. The effect is worse than that of a highway built directly through an existing residential area without concrete noise barriers along it, he says. "Aircraft noise triggers people's instinct for flight," he adds, and those who live under such conditions in the long term will "definitely suffer damage to their health."
Residents of Niederrad are plagued by noise not only from the new approach route, but also from an existing takeoff path that passes directly over Niederrad and will remain unchanged despite the additional impact of the new route. The result is that residents live with constant flight noise, no matter which way the wind is blowing, 365 days a year, often at over 80 decibels for each flight that passes overhead. "Really, the only thing left to do is to move away," Krauss says.
Still, local politicians believe strict usage restrictions on the new runway could at least reduce the noise. They have united across party lines to approach the state government in Wiesbaden with their proposals for extensive adjustments to the plan: significantly expanded quiet hours and limiting use of the new runway to lighter, quieter short-haul and medium-haul planes.
OUR COMMENT: Advocates of additional runways please note!
CONGESTION 'WILL PUSH UP AIR FARES'
Grantham Journal - 15 December 2011
Air fares will "increase significantly" if UK airports, including those in the South East, become too congested, regulators have told the Government.
Capacity constraints at many airports will "increasingly limit the choice and value available to consumers", said the Civil Aviation Authority (CAA).
It added that this was particularly true of south-east England, where the Government has ruled out expansion at the country's biggest airport - Heathrow.
In a report entitled Aviation Policy for Consumers, the CAA said the Government needed to put air passengers at the heart of its thinking when it consults on aviation policy next spring. "Fares at congested airports are predicted to increase significantly as a result of capacity constraints," the CAA report said. It said such constraints could add €10 on a return fare by 2030, with a return fare at London City Airport going up by as much as €17.
The report also said that while London is well connected now, capacity constraints at London's airports may already mean that they are less able than airports in other European cities to adjust as global economic activity shifts to emerging markets such as China, India and South America;
It also said capacity constraints will increasingly shape network configuration by reinforcing the trend towards focusing on the most profitable, high-yield routes. At Heathrow this is likely to lead to further specialisation on long-haul routes, in particular those serving North America, for which Heathrow offers a geographical and economic advantage. However, a short-haul network will still be needed to sustain long-haul routes by providing feeder traffic;
Airlines may be less likely to "take a chance" on launching services to emerging markets from Heathrow, especially where UK-based demand does not generate a sufficient volume of premium traffic, the report said. And the lack of available capacity at Heathrow is already affecting the UK's ability to liberalise air services agreements with foreign states, it says. It predicts that this trend is likely to become more acute as London's airports become more congested.
CAA regulatory policy director Iain Osborne said: "We frequently hear that the UK is losing out to Europe in its aviation network and that there is a connectivity crisis in London. This review offers a chance to weigh up what approach to future airport capacity is likely to best serve UK passengers as a whole, rather than only considering what works well for south-east England."
AIRPORT NOISE FOCUS MUST CHANGE, SAYS CAA
Rose Jacobs - Financial Times - 29 December 2011
Ministers need to change the nature of the debate about airport noise as part of the government's new aviation policy or risk stagnation, the industry's main regulator has warned.
In a report on the environmental impacts of aviation, the Civil Aviation Authority argued that "a national policy response to noise that focuses exclusively on further noise reduction is unlikely to be successful", given the level of acrimony in the debate over noise. "Policy should seek to give greater consideration to mitigating the effects of noise and finding ways for residents and airport owners to engage constructively on the issue."
UK residents constitute half of all people in Europe affected by aircraft noise, with 25 per cent of the European total living near Heathrow.
As the number of flight movements at the UK's biggest airport has grown over the past two decades, the number of people experiencing noise that triggers "significant community annoyance" has fallen, thanks to new technologies and changes to flight paths. But many residents remain unhappy with noise levels and have little recourse but to lobby MPs, the CAA said.
It urged ministers to address the mismatch between the local costs and national benefits of expansion at airports. The regulator argued that noise reduction need not limit airport capacity growth, citing operational noise-mitigation measures such as steeper descents, regulatory measures such as different uses of airspace, and economic incentives such as a cap-and-trade system that would encourage airlines to seek out technologies that reduce noise.
The CAA called on Department for Transport, which is expected to unveil its framework on aviation policy this spring, to make clear its preference for concentrated or dispersed flight paths - that is, spreading the burden of aircraft noise across a wide population, or focusing it on smaller groups of residents.
John Stewart at the Heathrow Association for the Control of Aircraft Noise (Hacan) said the government's unofficial policy has been to encourage concentration. "What we would like to see is much more leeway. The big problem at Heathrow in recent years has been concentration of flight paths."
Hacan welcomed some of the noise-mitigation measures described in the CAA report but said they would only be acceptable if the number of flights to and from the airport was capped. Mr Stewart added that technological innovation is much more focused on reducing carbon emissions than noise.
The CAA is playing a more active role than previously over aviation policy, as the debate heats up over how to ease capacity constraints in the south-east of England. The report, published on Tuesday, is the second of three papers it is publishing this winter, as part of a drive to provide objective and reliable information to consumers.
MEETING THE ENVIRONMENTAL CHALLENGE VITAL
FOR CONSUMERS TO CONTINUE TO BENEFIT FROM
STRONG CHOICE AND GOOD VALUE IN AVIATION
CAA Press Release - 20 December 2011
The UK Civil Aviation Authority (CAA) today said that aviation's sustainable development does not have to be held back by a deadlock between its economic and its environmental impact.
The aviation regulator set out its view in Aviation Policy for the Environment, the second of three Insight Notes the CAA is publishing to help the Government frame its aviation policy for consultation next Spring. The Insight Note covers the environmental impact of aviation on carbon emissions, noise and local air quality. The CAA identifies that current capacity problems in the South East have partly been caused by an inability to move beyond local community concerns over aviation noise, which highlights the need for a radical approach to the issue to allow capacity increases.
Iain Osborne, CAA Group Director of Regulatory Policy, said: "To be able to develop sustainably aviation has to embrace and tackle both the noise nuisance that impacts communities around airports and climate change caused by carbon emissions. Dealing with the noise issue demands a two-sided approach. We need to consider how to reduce noise, but also recognise that it will still have a big impact on people living close to airports. So Government noise policy must find ways to help airport owners and local communities to engage more constructively on noise."
"On climate change the ideal solution is global, but an EU-wide approach is a highly valuable transition. We advise the Government to continue to push for a global emissions trading scheme and support the inclusion of aviation in the EU Emissions Trading System and to set up a policy framework that supports industry in further technological and operational solutions to reduce noise. There is also an important role for the CAA in providing trusted, reliable information to consumers about CO2 emissions performance to drive improvements."
The Note focuses on aviation noise nuisance and aviation's climate change impacts, where the CAA has considerable experience, and suggests ways forward for Government. The other major environmental issue aviation must address is Local Air Quality, which is not covered in detail as it is not a current area of CAA expertise.
Aviation noise is likely to be a significant concern surrounding the development of any new capacity, which is likely to be vital to secure choice and value for consumers in future. To meet that concern and manage sustainable capacity development anywhere in the UK will require Government to lead a more constructive and inclusive debate on aviation noise than is happening at present.
Noise is a local issue and policies need to be applicable at the local level to provide a robust platform for the aviation policy. The CAA recommends an approach to aviation noise within the policy that focuses both on reducing the numbers of people affected by noise and encouraging industry to better engage with their local communities to try to create consensus in support of sustainable development.
The CAA suggests it may be possible to set out a noise limit for airports, within which growth would be allowed, to reflect that it is aircraft noise that damages local communities' quality of life rather than aircraft themselves, so where noise is reduced, flight numbers could be allowed to increase.
Aviation noise at Heathrow has reduced significantly over time, with technological improvements mitigating increasing flight frequency. The numbers of people affected dropped by 60% between 1988 and 2010 and the total area affected shrank by two-thirds. However, in spite of these reductions Heathrow still accounts for more than one in four people in Europe affected by aviation noise.
On climate change the CAA suggest that without a global 'cap and trade' scheme, the European Union Emissions Trading Scheme is the next best option for meeting the carbon challenge. What's more, there are significant benefits to be drawn from operational and technical measures to combat climate change, such as modernising airspace. Initiatives which the CAA worked on include new green incentives for NATS, pioneering the Future Airspace Strategy and promoting Continuous Descent Approaches and Continuous Climb Departures.
OUR COMMENT: Mitigation will not eliminate noise! And, noise nuisance needs better assessment - average noise levels experienced around an airport are not a good guide to the noise annoyance experienced by residents.
'STAYCATIONS' AND WEAK POUND HAVE BOOSTED
BRITISH TRADE, SAYS BANK OF ENGLAND
Daily Telegraph - 18 December 2011
The weak pound has boosted Britain's trade position, helped by Britons taking fewer holidays abroad, according to the Bank of England.
The Bank said in its Quarterly Bulletin that sterling's 25pc fall against a basket of currencies between mid-2007 and early 2009 had encouraged a shift towards exports and away from imports, contributing to a "significant narrowing" in the UK's trade deficit. "By making UK exports more competitive and imports into the United Kingdom less affordable, weaker sterling should boost export volumes and reduce import volumes," the Bank said. "Such an increase in net trade would boost UK gross domestic product."
However, net trade remained in deficit, despite UK exports now being 15pc cheaper than their competitors, compared with before the depreciation.
Between the second quarter of 2007 and the third quarter of 2011 the net trade deficit roughly halved to 1.6pc from 3pc of gross domestic product, according to the Bulletin. Demand for UK financial services, which have remained at the centre of the global crisis, fell. Financial services accounted for around a third of UK services exports, or 4pc of GDP, in 2008.
Since the large depreciation, sterling has been broadly flat, the Bank said, adding that the future rate of sterling, as well as developments in the rest of the world, would be "crucial" to the UK's trade performance and therefore growth. One pound is currently worth about $1.55 or ?1.19.
The Bank said that British tourists had spent less overseas since 2007 because of the sharp fall in their purchasing power, boosting net trade. "As a result, they may have chosen to spend more on domestic tourism, or taken fewer holidays overall - the 'staycation' effect," it said.
Britain's official independent economic forecaster, the Office for Budget Responsibility, estimates net trade will have grown 1.2pc this year, and forecasts a 0.3pc rise next year, despite weakness in the eurozone, Britain's biggest trading partner. It fell 0.8pc in 2010.
Since the onset of the financial crisis, there has been much debate, both at domestic and international level, on the need for a rebalancing of the global economy. UK policymakers have said that in the run-up to the crisis, growth was too dependent on consumer and public sector spending. They argue the need for more growth to be driven by Britain's trade position.
OUR COMMENT: Aviation policy makers, please read the report!
REGIONAL AIRPORTS SEEK POLICY BOOST
Andrew Bounds and Chris Tighe - Financial Times - 30 December 2011
While the government was contemplating plans for a fourth London airport to deal with congestion, Plymouth's airport quietly shut. The 800,000 people of Plymouth and Cornwall must trek to Exeter to connect quickly with the capital and the world as England's regional airports face a battle to retain routes and the critical mass to survive.
"It's difficult and it's been difficult for more than two years," says John Greenway, spokesman for Manchester Airport, the largest outside London.
Plymouth shut in December after losing its London link in February despite the protests of local business leaders. A stake in Durham Tees Valley has just been put up for sale while Humberside has been taken off the market because there was no interest.
Liverpool John Lennon, which has grown quickly in the last decade to more than 5m passengers a year, is losing after two years its flights to Amsterdam via KLM, which linked it to a global scheduled network for the first time. Leeds Bradford is still trying to re-establish a connection to London that ended in 2009. The capital remains the most popular destination from Manchester.
"The government says it sees a role for regional airports: it would be interesting to know what it is," says Mr Greenway. That should become clearer in the next few months when its draft aviation policy is published. But that could prove a long wait as three fresh squalls blow up: air passenger duty, the European Union's emissions trading scheme and the takeover of BMI, the lossmaking regional.
The government has said it will go ahead in April with a double digit increase in APD, which adds £12 to a standard class short haul flight, in the face of fierce lobbying by regional airports. They had called for a new system of differential rates determined by congestion - giving them a cost advantage over Heathrow and Gatwick.
The government has not ruled out an airport congestion tax, notes Graeme Mason, planning and corporate affairs director at Newcastle International airport. "They are definitely listening and are prepared to explore it further," he says.
Airports in the north of England also fear any move to devolve APD decision-making to Scotland in the wake of the chancellor's autumn decision to lower APD from £60 to £12 on the daily Belfast to New York route, the airport's last remaining transatlantic link. Transatlantic fares are likely to rise from January 1 when the EU requires international airlines to buy carbon credits when entering the EU as part of its battle to fight global warming.
Manchester, which has about 19m passengers annually, loses 300,000 Mancunians to Heathrow and Gatwick every year because the greater volume means cheaper fares to New York and Chicago. However, as many people fly to Australia from there as from London, since it has built a good network of routes to the Middle East with Qatar , Emirates and Etihad.
Mr Mason describes Newcastle International's 2012 objective of 4.5m passengers as a "testing target". This compares with an expected 4.4m in 2011 - down from 5.6m in 2007, the airport's record year.
The signs are that in this battle for business, weaker, smaller players will struggle to hold their ground. One issue is the level of investment needed to compete; since 2000 Newcastle International has invested £100m; work is in progress on a £3.2m terminal extension to create additional security search accommodation, enhancing efficiency and customer service.
Birmingham is pumping in £100m over 10 years, Bristol has embarked on a £150m expansion and Liverpool has invested about £150m in a decade.
Bridgepoint, owner of Leeds Bradford, is investing £11m in a new terminal building. It was one of the fastest growing airports in 2011, with numbers up 9 per cent to 2.8m, thanks largely to Ryanair's arrival, and it aims to reach 5m. Tony Hallwood, commercial director, said: "The airports that will be successful are those that support major commercial centres with big populations."
All are chasing more business passengers, who account for about 20 per cent of the mix at a typical regional airport. The vulnerability of small airports is demonstrated by uncertainty over the lossmaking Durham Tees Valley airport, which has seen passenger numbers slump from more than 900,000 in 2006 to an expected 200,000 in 2011. In December Peel put its 75 per cent stake in the airport up for sale; the six nearest local authorities own the rest but there seems no prospect that they could take on the airport, despite local desire to see it continue.
Peel Airports, 65 per cent owned by Vancouver Airport Services, says it believes Durham Tees Valley does have a future but that it does not fit in its portfolio, which includes Liverpool and Robin Hood Doncaster. With BMI flying out of Bristol, Birmingham, Manchester, Newcastle, East Midlands, Norwich and Leeds Bradford, the airline's fate under new owners IAG is also being closely watched.
Mr Greenway said Manchester airport added £570m a year to the city's economy and the government needed to act soon. "From aviation comes growth. The government wants to support growth in the regions yet here we are waiting for an aviation policy."
OUR COMMENT: Were all these airports really necessary?
PASSENGERS FACE FLIGHT DELAYS BECAUSE
OF AIR TRAFFIC CONTROL PATCHWORK
Passengers are facing needless delays of up to an hour because
of the patchwork of air traffic control systems across Europe
David Millward, Transport Editor - Daily Telegraph - 30 December 2011
Britain has been singled out as one of the worst culprits by the EU as it tries introduce a single air traffic control system for Europe. Pilots have complained that the current system makes it impossible for planes to fly the the shortest route between two airports. Rather than flying at a constant speed, which is considered as the most fuel efficient way of operating, they are often instructed to slow down as they enter another country's airspace.
Passengers are also suffering as a result, said Corneel Koster, Virgin Atlantic's Operations Director. "There is no doubt that customer delays could be significantly reduced if single skies is implemented successfully. There are many occasions where passengers can be delayed by up to an hour whilst the aircraft is suspended in a holding pattern and this clearly benefits nobody."
The fragmented air traffic control system, with each country in control of its own air space, is making flights more expensive because of the amount of fuel which is being wasted. It is also responsible for aviation's carbon emissions being 12 per cent higher than they would be if there was an EU-wide air traffic control system. This has become particularly sensitive as the EU prepares to adopt a carbon trading system which, according to the Commission's own calculations, could add £10 to the price of a transatlantic flight - equivalent to an £80 levy on an American holiday for a family of four.
Plans for the Single European Sky were first drawn up in 1999. In the wake of the havoc created by the volcanic ash crisis, EU Governments agreed to accelerate the programme. All 27 member states were asked to submit plans to tackle air traffic delays by June. Britain was one of a number of countries to fail to meet the deadline.
In November Britain's plans for improving performance were rejected by the EU as failing to meet punctuality and cost efficiency targets. The Commission has warned that this could add at least £50 million to the cost of aviation in British airspace over the next three years, unless the Government revises these plans.
European Governments were accused of procrastinating by the Association of European Airlines. "Today, the fragmented system is having an enormous detrimental impact on airlines, their passengers and the environment in terms of time, fuel burn and money," it said. "Member States are trying to escape their Single European Sky commitments."
However Theresa Villiers, the aviation minister, defended the Government's record. "We want to see genuine performance improvements across Europe's air navigation service providers. We have listened to the Commission's recommendations and believe that our revised plan is robust."
RYANAIR HOLDINGS: RYANAIR CALLS FOR EARLY SALE
OF STANSTED AS BAA'S HIGH FEES FUND £240M DIVIDEND
TO SPANISH SHAREHOLDERS
News Release - 4-traders.com - 19 December 2011
WHILE BAA STANSTED'S TRAFFIC KEEPS FALLING FERROVIAL'S DIVIDENDS RISE
Ryanair, the world's favourite airline, today (19th Dec) called for the early sale of London Stansted Airport, as recommended by the UK Competition Commission in 2008, after the BAA monopoly confirmed that its high airport charges will fund dividends of £240m next year to its Spanish shareholders, Ferrovial. Ryanair calls on the UK Government to intervene and procure the early sale of Stansted and one of the Scottish airports to allow competition between airports to deliver lower costs for airport users, where the BAA monopoly has repeatedly failed while delivering bigger dividends for its Spanish shareholders.
Over the past five years the BAA has doubled its charges to airlines at Stansted, and is generating excess profits, which it is now distributing to shareholders. However, during this five year period, traffic at Stansted has collapsed from over 24m in 2007 to just over 18m in 2011. Already this year, Ryanair, easyJet, Air Berlin, Thomas Cook, Thompson and Air Asia have announced further cuts in flights and traffic at Stansted in the face of continuing high costs and monopoly profiteering by the BAA Stansted monopoly.
Ryanair's Stephen McNamara said: "Back in August 2008, the UK Competition Commission recommended the break-up of the BAA airport monopoly. The Competition Commission found that the BAA's monopoly ownership of Heathrow, Gatwick and Stansted airports had adversely affected competition. It also found that 'the way the BAA has conducted its business has adversely affected competition'. It also concluded that 'the inadequate regulatory regime operated by the CAA has adversely affected competition'."
"It is regrettable that today, while it continues to overcharge passengers and airlines at its London airport the BAA has still failed to comply with the Competition Commission's 2008 ruling to sell Stansted but is now further enriching its Spanish shareholders while it strangles London traffic, tourism and jobs. Ryanair believes that the BAA is an abusive airport monopoly, which has engaged in significant overcharging and monopoly profiteering at Stansted. It is now time for the Government to intervene to force the early sale of Stansted and one of the Scottish airports and allow competition to provide UK consumers with more choice, lower costs and a better experience at the London airports instead of allowing declining London passenger traffic to be fleeced by the BAA monopoly in order to reward its already rich Spanish shareholders."
EUROPE COMES OUT TRIUMPHANT FROM DURBAN
ENDS Europe Daily - 12 December 2011
EU officials claimed victory at the end of the UN climate talks in
Durban on Sunday, saying Europe got what it came for: a roadmap to a
legally binding global agreement. But green groups have stressed
there is no guarantee such a deal will ever be reached.
After a disappointing performance at the Copenhagen summit in 2009,
the EU seems to have re-established its leadership on climate. Major
emitters agreed to draft a wider deal by 2015, which was a key
condition set by Europe before Durban.
In return, the EU has agreed to commit to new binding emissions
reduction targets under the Kyoto Protocol. Several other countries,
including Norway, Iceland and Switzerland, will also be part of this
second commitment period. The targets and length of this new scheme
will be discussed and finalised next year.
The new Kyoto targets must be submitted to the UN for review by May.
This may revive the debate over whether the EU should adopt a 30% -
rather than a 20% - emissions reduction target for 2020 in the early
months of next year.
The fate of surplus credits (AAUs) from Kyoto's first commitment
period will also be resolved next year. A new report by NGO CDM
Watch, which was released in Durban, calculates that this 'loophole'
could single-handedly cancel nearly three quarters of the emissions
reduction pledges made by industrialised countries.
Closing this loophole was one of the EU's pre-conditions for signing
up to a second Kyoto period. But member states are divided over the
issue; Poland, a major holder of AAU surpluses, blocked discussions
with Russia in Durban.
But another key EU demand to strengthen the Kyoto Protocol's
environmental integrity was met at the meeting with the adoption of
new accounting rules on emissions reductions from land use, land-use
change and forestry (LULUCF).
In the final hours of the conference, it was the future global policy
framework that was at stake. The EU, in a new coalition with the
Alliance of Small Island States (AOSIS) and Least Developed Countries
(LDC), pushed for either protocol or a legal instrument.
After a week-long charm offensive, however, China sided with India in
speaking out against this apparent blurring of the distinction
between developed and developing countries. "We are taking actions.
We want to see your actions," China's lead negotiator Xie Zhenhua
told the plenary in the early hours of Sunday.
The US, which was criticised as the main obstacle to progress
throughout the meeting, was quiet in the final plenary, letting China
and India argue for a weaker legal framework, calling for a "legal
outcome". In the end, the plenary agreed that an alternative to a
protocol or a legal instrument should be to have an "agreed outcome
with legal force".
The exact legal form of a future climate agreement remains to be
seen, as does exactly when it will enter force. Despite Ms
Hedegaard's insistence that "from 2020" means in the year 2020, there
were reportedly stirrings of mistrust among the AOSIS group which
fears it could be interpreted as meaning any year from 2020 onwards.
Michael Jacobs of the London-based Grantham Research Institute on
Climate and Environment, believes Durban delivered important results.
"It has replaced [a] pledge and review [process] with the goal of a
legal treaty and ensured developing countries acknowledge they will
be legally bound to act on emissions in future."
But for many NGOs the lack of a commitment to raise ambition on
near-term mitigation means the meeting has failed. "The deal is due
to be implemented 'from 2020' leaving almost no room for [deeper]
carbon cuts in this decade when scientists say we need emissions to
peak," said Kumi Naidoo of Greenpeace International.
Scientists at Climate Analytics, Ecofys and the Potsdam Institute for
Climate Impact Research stressed that current CO2 reduction pledges
set the world on a pathway to more than three degrees of warming,
with potentially serious consequences.
The UNFCCC secretariat was more positive, highlighting concrete
outcomes in a number of areas such as REDD+ forestry projects,
technology transfers and "significantly advanced monitoring,
reporting and verification (MRV) framework".
COMMITTEE CALLS FOR 2020 GREEN TRANSPORT TARGETS
ENDS Europe Daily - 25 November 2011
The European Parliament's transport committee has called for interim
targets to reduce the environmental impact of the transport sector,
as part of a response to this year's EU white paper on transport
policy until the year 2050.
In a resolution adopted this week, the committee backed the goals set
in the paper but said targets should also be established for 2020 to ensure Europe
is moving in the right direction. The European Commission does not
support such targets.
The MEPs are demanding a 20% cut in carbon dioxide from road travel,
a 30% CO2 reduction for shipping and aviation and a 20% drop in noise
levels and energy use in the rail sector. The number of multi-modal
platforms would also have to grow by 20%. These goals are set for
2020 and based on 2010 data.
The committee also called for a 20% reduction in greenhouse gas
emissions from the entire transport sector, relative to 1990 levels,
and for legislation to internalise the external costs of all
transport modes. It said 'gigaliners should only be allowed on certain routes "when the existing infrastructure and safety requirements allow it".
Some 35 committee members voted in favour of the resolution, which
was initially drafted by Mathieu Grosh, with five MEPs against. All
compromise amendments were adopted, except for one calling on the
commission to clarify its position on rules for port services. The
parliament's full assembly will vote on the resolution in December.
EU COURT TO RULE ON AIRLINE CO2 CAP ON DEC 21
Barbara Lewis and Nina Chestney - DURBAN - Reuters - 6 December 2011
The European Union's highest court is expected to give its final ruling on December 21 on a European law that would force all airlines to pay for their carbon emissions, an EU source said on Tuesday.
The ruling was previously expected early next year. From January 1 next year, all airlines will have to buy permits under the European Union's emissions trading scheme to help offset the carbon emissions of flights that land or take off in Europe.
The plan has prompted a bitter battle between the European Union and the aviation industry, as the United States, China and two dozen other nations have urged the European Union not to include non-EU carriers in its plan.
Nations opposed to the plan say it would infringe a "cardinal principle of state sovereignty" by basing its charges on the distance flown by each flight, which means calculations would include foreign airspace, in violation of a 1944 pact that gives each country exclusive authority over its skies. It would also discriminate against nations located furthest away from Europe, they argue.
In October, an adviser to the European Court of Justice said the EU's rules were within the law. The opinion of the advocate general, though not binding, often influences the court's final decision. The EU's carbon market, which caps the emissions of EU industry by putting a price on carbon, is suffering from record low prices due to concerns over the future of the eurozone economy and the oversupply of permits.
If all airlines are forced to enter the scheme from January 1, 2012, it would be a bullish signal for prices, one emissions trader said. However, airlines' demand for permits was not forecast to be high at first as they will only be required to pay for 15 percent of the carbon they emit in 2012 and will be given permits for free to cover the other 85 percent. They will have to buy more emissions permits over time.
"The impact of aviation's inclusion from a demand perspective is relatively small. However the impact on market confidence of a ruling against its inclusion could add further pressure to carbon market confidence," another trader said. "If the EU can't enforce (its law) on aviation the likelihood of it covering other areas such as shipping becomes all the more remote," he added.
AVIATION COULD SWITCH TO LOW-CARBON FUEL
'SOONER THAN THOUGHT'
Richard Branson says aeroplanes have few 'filling stations'
compared with other transport, making it easier to supply them
John Vidal, Environment Editor - The Guardian - 5 December 2011
The world's 7,000 airlines could switch to low-carbon jet fuels much faster than other transport because aeroplanes have very few "filling stations", says Richard Branson.
"Unlike cars where there are millions of filling stations, there are only about 1,700 aviation stations in the world. So if you can get the right fuel, like mass-produced algae, then getting it to 1,700 outlets is not so difficult," Branson said in an interview with the Guardian from the British Virgin islands.
Branson, who announced last month he hoped Virgin would soon be able to use waste gases from industrial steel and aluminium plants as a fuel, said the industry should aim for 50% sustainable fuels by 2020. "I would be very disapointed if not. Once the breakthrough takles place, getting to 50-100% is not unrealistic. Aviation fuel is 25-40% of the running costs of airlines so the industry is open to new fuels."
Branson, whose Virgin group owns 51% of Virgin Atlantic Airways, was speaking in advance of the launch in Durban of RenewableJetFuels.org, an open access website that assesses and updates the progress of companies planning to produce commercial-scale renewable fuel for aviation. It suggests that of the 40 companies claiming to have the potential to deliver large-scale amounts ? about one third of them are "credible" from an economic, scalable and sustainability perspective in their current state.
In the next five years, according to the website published by business NGO Carbon War Room and academic publisher Elsevier, some renewable jet fuel companies "could be producing enough renewable fuel to replace 10-20% of the fuel of a typical mid-sized airline".
The data, said Branson, should allow airlines to accelerate linkups with fuel companies. "Producers can continually update and re-submit data. This is then reviewed by experts, enabling RenewableJetFuels.org to be the independent, gold standard for investors and airlines in the market," said Suzanne Hunt, head of operations at Carbon War Room.
"Trying to address climate change makes business sense", said Branson, whose Virgin airline spends around $3bn a year on jet fuel. "The jet fuel industry can charge what they like at present. New fuels will compete. You could finds the price of aviation fuel comes down."
Three years ago Virgin flew a plane to Holland on coconut fuel and no one took it seriously, said Branson. "The industry thought it was PR. BA was pretty dismissive, saying planes will never fly on bio-fuels. But it actually kickstarted thinking. Since then, even BA has started investing in new biofuels.
"We're heading in the right direction. The industry could go from one of the dirtiest to one of the cleanest in 10 years. We are investing in different companies and really beginning to see traction". The five leading alternative jet fuel companies identified by Carbon War Room are Lanzatech, SG biofuels, AltAir, Solazyme and Sapphire.
OUR COMMENT: Where does he propose growing all the plant material needed to produce such a massive quantity of fuel? What effects would this have on food production?
AIRPORT TAX CONSULTATION 'A SHAM'
UK Press - 7 December 2011
Government consultation on the air passenger duty (APD) airport departure tax was "a sham and a waste of taxpayers' money", airline chiefs have said.
In last week's autumn statement Chancellor George Osborne confirmed an 8% rise in APD from next April. The Treasury has released its response following consultation on APD, which is vehemently opposed by airlines. Despite pleas to reduce, scrap or amend APD, the Treasury said the system would carry on as it is.
In a statement, the bosses of easyJet, Ryanair, Virgin Atlantic and British Airways parent company IAG, said: "The Government's consultation on APD has been a sham and a waste of taxpayers' money. We are left with a tax that has already cost 25,000 jobs, is doing increasing damage to the prospects for economic recovery, and sends a message to the world that Britain is a difficult and expensive place to do business."
They went on: "We are united in calling for the Government to commission an independent study of APD's overall economic value and impact. We have no doubt this would confirm that APD's negative effect on UK GDP (gross domestic product) significantly outweighs its revenue benefit for the Treasury. We call for this tax on passengers to be axed."
Under the new rates from April 2012, passengers in economy class flying no further than 2,000 miles from the UK will see their APD rise from £12 to £13. In the next band up - covering flights from 2,001 to 4,000 miles - economy passenger APD will rise from £60 to £65, while those flying economy on trips between 4,001 and 6,000 miles will see their tax rise from £75 to £81.
APD for economy passengers on flights of more than 6,000 miles (such as trips to Australia) will find their APD rising from £85 to £92 in April 2012. APD for passengers in business class and first class will range from £26 on the shortest trips to as much as £184 on the longest ones from April.
AIR PASSENGER DUTY A CASH RAISER, GOVERNMENT ADMITS
The purpose of Air Passenger Duty, the "green tax" on plane tickets, is to raise money for the Treasury, the Government has admitted for the first time
David Millward, Transport Editor - Daily Telegraph - 7 December 2011
For years ministers insisted APD was a levy intended to cover the cost of the environmental damage caused by aviation. But the pretence was dropped in the small print of the Government's response to a consultation on reforming the tax. "APD is primarily a revenue-raising duty which makes an important contribution to the public finances, whilst also giving rise to secondary environmental benefits," the document said.
Last year APD raised £2.16 billion for the Treasury and the latest Government estimates that it will be worth £3.8 billion to Whitehall in 2016-17.
"While ministers have never denied that the money raised from APD helps public finances, this is the first time they have blatantly admitted that it is really a cash cow," said Simon Buck chief executive of the British Air Transport Association.
There had been hopes that the consultation would lead in some changes to APD. But they were dashed when the Government ruled out an concessions to passengers and the airline industry. It confirmed that the eight per cent rise announced by George Osborne, the Chancellor, last week, will go ahead.
This will mean, for example, that a family of four flying to the United States will have to pay £260 in APD, a rise of £20 - or £5 a person.
The Treasury decided against reducing the number of bands from four to two or three which would have seen APD cut on the longest routes. It also refused to deal with the anomaly which, because the rate is based on the flying distance to a country's capital city, means that a holidaymaker pays more in APD for a trip to the Caribbean than to Hawaii.
The Government has also refused to reclassify "premium economy" cabins, which are popular with families who are prepared to pay more for a few inches of extra leg room. Despite intense lobbying passengers in these seats will be charged the same rate of APD as those flying in the rather more luxurious business and first class seats.
British Airways said the Government's refusal to grant any concessions on APD meant that it was now likely to take on only half the 800 new recruits it had planned next year. "The Government talks about creating the conditions for jobs and growth - but the reality is the opposite," said Keith Williams, BA's chief executive. "Its tax policy, which is uniquely hostile to aviation, is costing jobs and growth at British Airways."
The results of the consultation were dismissed as "a sham and a waste of taxpayers' money" by the heads of easyJet, Ryanair, Virgin Atlantic and IAG, British Airways' parent company. They added: "We are left with a tax that has already cost 25,000 jobs, is doing increasing damage to the prospects for economic recovery - and sends a message to the world that Britain is a difficult and expensive place to do business."
Darren Caplan, the Airport Operators' Association chief executive added: "At a time when many other European countries are reducing or scrapping APD - and when the UK already has the highest level of aviation tax anywhere in the world - holidaymakers, business people and the travelling public will face even higher flying costs."
"What an appalling waste of public money this has been," said Simon Buck chief executive of the British Air Transport Association. "We are now left with a distorting iniquitous tax which, as the Government now has finally admitted, is about raising money and has nothing to do with the environment."
A Treasury spokesman defended the Government's decision. "Given that any reform of the APD banding would need to be fiscally neutral, it would inevitably lead to passengers to Europe and North America - the bulk of those who pay APD - paying more for flights. We have therefore decided against a costly and disruptive overhaul of APD at this time."
GOVERNMENT ATTACKED OVER GREEN POLICIES
Government plans to increase airline passenger tax are "damaging"
and will not benefit the environment in any way, the former boss
of British Airways warned yesterday
Victoria Ward - Daily Telegraph - 4 December 2011
Willie Walsh, who runs the International Airlines Group, said the proposals, outlined by Chancellor George Osborne, would make the UK "uncompetitive" and deter business travellers and tourists. The attack came as leading environmental campaigners accused the coalition of wrongly casting planning regulations and the environment as "enemies to growth".
In a damning public letter, an alliance of wildlife groups and activists, led by the RSPB, said the Government was showing "stunning disregard" for the value of the natural environment and expressed incredulity at the policies outlined in Mr Osborne's autumn statement.
Mr Walsh said the decision to increase Air Passenger Duty (APD) from next April would put an unfair burden on airlines and that emerging markets such as India and China felt the UK was becoming too expensive. "The first thing to remember is that it is not a green tax," he said. "The Government has made that clear. This has nothing to do with the environment. Not a penny of this tax goes to environmental issues. Why I believe this is damaging is that it is making the UK uncompetitive. It's making it expensive to do business here, it is deterring tourists from coming to the UK, it is deterring business people from coming to the UK."
Mr Walsh, speaking to Sky News, also warned that the planned new airport in the Thames estuary could cost £60 billion and suggested that to find such private investment in the current economic climate was "just not a credible proposition."
The criticism followed publication of two letters furiously attacking the policies outlined last week by Mr Osborne in his autumn statement.
Activists including the Campaign to Protect Rural England, the Wildlife Trusts and Greenpeace joined forces with the RSPB to pour scorn on the Tories' failure to live up to their own promises, accusing ministers of putting "short term profit ahead of our countryside".
"It is increasingly clear that society needs a new economic model that accounts properly for our natural capital," they said. "Yet with this statement, its 'red-tape challenge', sudden cuts to subsidies and its ill-conceived planning reforms, the government is continuing an out-of-date approach that casts regulation and the environment as enemies to growth."
Mr Osborne's statement, in which he outlined cuts in solar energy subsidies and tax breaks for energy-intensive industries, "not only flies in the face of popular opinion but goes against everything the Government said in June when it launched two major pieces of environmental policy - the Natural Environment White Paper and the England Biodiversity Strategy", they added.
A second, equally scathing letter signed by green activists including Tony Juniper, Jonathan Porritt and Caroline Lucas, the leader of the Green Party, warned that Osborne's statement had set the coalition "on a path to become the most environmentally destructive government to hold power in this country since the modern environmental movement was born." It said that policies including the "aggressive implementation" of planning reforms favouring development, were "all the more extraordinary" when pitched against David Cameron's election promises on sustainable growth.
"The Chancellor has proclaimed that protecting the environment is against the public interest - something no senior politician in this country has done in recent history," the letter said. Mr Osborne told MPs last week that he was "worried" about the combined impact of green targets on Britain and the EU. "We are not going to save the planet by shutting down our steel mills, aluminium smelters and paper manufacturers. All we will be doing is exporting valuable jobs out of Britain," he said.
Several Liberal Democrat ministers were said to be "furious" about the policies outlined in the statement amid claims that Chris Huhne, the Lib Dem energy secretary was not consulted about the comments made on green issues.
The Government's controversial plans to reduce 1,300 pages of planning guidance to 52 have invoked widespread fury. Campaigners have warned that the presumption in favour of "sustainable development" was so vague it would allow developers to "ride roughshod" over the countryside and have backed the Daily Telegraph's demands for a review of the proposals. Labour accused the Tories of undergoing a "retoxification" after abandoning key election pledges.
But the government insisted it was still pursuing its green agenda. Tim Yeo, chairman of the energy and climate committee, told the Observer: "We are getting a change of rhetoric, with more emphasis on the burdens that green projects could put on the economy. But it is out of step with what the government is doing, much of which is radical and forward-looking." Mr Yeo has also urged Mr Osborne not to bow to the demands of the airlines by scrapping APD.
NOVEMBER TRAFFIC FIGURES - BAA'S AIRPORTS
BAA Press Release - 12 December 2011
BAA's airports served a total of 7.8 million passengers in November; a drop of 0.9% compared with the same month last year. The comparison with last year is complicated by weather related disruptions in both years and the UKBA strike on 30 November 2011. Adjusting for these factors, traffic is estimated to have declined 1.6% across the group.
Heathrow handled 5.2 million passengers in November, a drop of 0.5% on the same month last year. There was an estimated reduction in passenger numbers of 50,000 after airlines reduced load factors in preparation for the UKBA strike. Adjusting for this and for weather-related losses both this year and last year, the underlying decline at Heathrow improves to 0.2%. The North Atlantic market saw continued growth, with a 3.8% increase in passengers, supported by an increased number of flights. In contrast, domestic passenger numbers continue to decline, by 12.3% in November, as a result of reduced flights. This sustained domestic decline reflects the UK regions being progressively cut off from the UK's only hub airport by a lack of capacity at Heathrow.
BAA's Scottish airports' passenger figures were boosted by better weather this November compared with 2010. Growth in European scheduled traffic of 10.8% more than offset the decline in traffic to Heathrow. Traffic to the European hubs of Amsterdam, Frankfurt and Paris continued to see particular growth, with passengers increasingly having to now connect through an overseas country to make their journey. Edinburgh reported a 3.2% increase in passengers overall, with gains of 5.4% in European scheduled traffic and 9.1% on North Atlantic services. Aberdeen's recent strong performance continued with an increase in passenger numbers of 16.1%. The recent runway extension is enabling new routes and a new service to Frankfurt is helping to drive growth of 21.6% in European scheduled traffic.
Stansted recorded a 7.5% drop in passengers overall this month compared with last year driven by a reduction in the number of seats offered by airlines on domestic and European scheduled routes.
In total, BAA's airports handled 0.4% more air transport movements than November 2010, despite Heathrow recording a drop of 0.2%. The trend of weakening results continued in the air freight sector with tonnage at Heathrow down by 4.1% and at group level by 3.7%.
BAA Chief Executive, Colin Matthews, said: "Faced with the prospect of long immigration queues at Heathrow on November 30th, we were pleased that airlines, UKBA, and the UK's hub airport worked effectively in collaboration to avoid disruption to passengers."
STANSTED LEADS EUROPEAN AIRPORT PERFORMANCE
Travel Daily - 5 December 2011
London Stansted was the best performing European airport in September 2011. According to the latest report from FlightStats, Stansted saw 88.13% of its flights taking-off within 15 minutes of its scheduled departure time. This saw it placed third in the global list, behind only Tokyo Haneda (94.6%) and Minneapolis-St Paul in the US (88.29%).
In terms of the European rankings, Barcelona came second (81.95% - 16th overall), ahead of Gatwick (81.49% - 19th), Frankfurt (80.78% - 20th), Amsterdam Schiphol (75.95% - 28th) and Heathrow (75.57% - 29th).
OUR COMMENT: Congratulations to the airport! We should also like to learn how Stansted performs relatively to other airports in terms of noise management, queuing time for booking in and proportion of passengers using public transport, for instance.
RYANAIR'S GROWTH STALLED DUE TO HIGH FUEL COSTS
AND THE STRUGGLING ECONOMY
David Robertson - The Times - 6 December 2011
Ryanair's passenger numbers have fallen for the first time since it began its rapid growth in the early 1990s.
The number of flyers last month fell by 8 per cent to 4.68 million after the low-cost airline grounded 80 aircraft in response to high fuel costs and the struggling economy. The loss of 400,000 passengers brings to an end a remarkable growth story in which Ryanair has become Europe's largest airline.
Even in the wake of the September 11 attacks in 2001, the airline continued to expand by slashing fares while its rivals faltered. However, a combination of sustained high oil prices and weak consumer spending in Europe has finally taken its toll. Ryanair says that it has been unable to increase its fares sufficiently to offset the higher costs, so it will limit losses during the winter by grounding twice as many aircraft as last year. It has cut routes to destinations including Girona in the Costa Brava and reduced the frequency of flights to other cities.
The Dublin-based carrier made a profit of ?544 million (£465 million) in the six months to the end of September and expects to make full-year profits of ?440 million. This implies a loss of ?104 million during the winter season, which it said would have been greater had it not cut back capacity.
Stephen McNamara, a spokesman for the airline, said: "As previously guided, Ryanair's 2011-12 winter traffic will decline by approximately 4 per cent as we sit up to 80 aircraft on the ground due to higher oil prices."
Trading was expected to be particularly difficult last month because winter travel tends to be skewed towards Christmas and the new year. It is predicted that, for the same reasons, conditions in February will also be tough. Ryanair had anticipated a 10 per cent fall in passenger numbers last month and analysts said yesterday that its decline of 8 per cent was encouraging.
International Airlines Group, which owns British Airways and Iberia, said that the number of flyers was down 117,000, or 2.9 per cent, to 3.8 million last month. The biggest fall in its traffic occured in its domestic markets of Britain and Spain, which were down by 13.2 per cent to 875,000. During previous periods of economic turmoil, Ryanair has sought to take advantage of the difficulties faced by its rivals by increasing supply and seizing market share.
Growth opportunities have become limited since it became the largest airline in Europe, though, and Michael O'Leary, the chief executive, has chosen to maximise profits. Last month Mr O'Leary said: "We don't want to grow too much in winter, when oil prices are over $100 a barrel. As we have slowed our rate of growth in the last couple of years, we have seen a better outcome in terms of yield. The average fare a couple of years ago was £30, but it is now over £40."
Analysts believe that Ryanair is at a turning point in its corporate history as it decides whether to maintain its focus on growth or permanently adopt the conservative path taken this winter. The first strategy would consolidate Ryanair's position as Europe's dominant carrier, but the alternative would reduce capital expenditure and allow it to return cash to shareholders.
Stephen Furlong, senior equity analyst at Davy Stockbrokers in Dublin, said: "Ryanair has got into a more mature phase of its growth story. The breakneck growth of the past 20 years is over and Ryanair will now take stock, weed out underperforming routes and then go again."
Ryanair's decision to reduce the number of flights has made it easier to fill its aircraft. As a result, load factor, a measure of how close each aircraft is to capacity, was maintained at 80 per cent last month.
RYANAIR'S NEW FEES: £1 FOR YOUR TICKET,
£5 FOR YOUR SANDWICH - £100 FOR YOUR BAG
The no-frills airline will be increasing some of its charges
by up to 150 per cent next summer
Simon Calder - The Independent - 10 December 2011
Passengers planning to fly Ryanair next summer, beware: charges on Europe's biggest budget airline will soar in 2012. Checked-in bag fees paid in advance increase by two-thirds, while travellers checking in a bag at the airport without booking ahead face a fee of £100 - up 150 per cent.
The airline has divided 2012 into low and high seasons, with the latter stretching across the summer from June to September, as well as Christmas. In peak season, the cost of checking in a single 15kg bag rises from £15 to £25, totalling £200 for a family of four on a return trip. The price for a second bag will be even higher, at £45.
Ryanair claims such fees are intended to change passenger behaviour in order to keep costs - and therefore fares - low. Stephen McNamara, a spokesman for the airline, said "Over 70 per cent of Ryanair passengers will be unaffected by these changes as they already travel with no checked-in bags."
But Ryanair's cabin-baggage rules are less generous than its rivals. The maximum volume is 44 litres, compared with the industry standard of 63 litres, as used by easyJet and British Airways. BA also allows a laptop or handbag up to 32 litres. The weight limit for Ryanair is 10kg; for BA, 23kg; and for easyJet there is no maximum. Ryanair enforces its limits strictly. The charge for passengers who breach the airline's strict size or weight is £40.
Rival travel firms formed a long queue to respond to Ryanair's fee increases. A British Airways spokesman said, "With free food and drinks, free baggage and free check-in, booking with BA gives you the best possible value for money." Andrew Kelly, marketing manager for the ferry firm DFDS Seaways, said, "You can now take four people in a car from Dover to the Continent during peak season for less than the airport baggage charge on Ryanair for two cases." Diane Poole, a spokeswoman for Stena Line, said: "The beauty of travelling by ferry is that there are no restrictions on baggage."
Ryanair claims the lowest average air fares in Europe: last year a typical flight cost £35. But in a snapshot of fares between London and Barcelona's main airport, departing on the first Saturday in August, Ryanair turned out more expensive than both its nearest rival, easyJet, and British Airways - even before baggage and other fees were added.
GEORGE OSBORNE'S AIRPORT HINT
HAS THAMES ESTUARY IN A SPIN
Chancellor believes massive investment
in new aviation hub will boost UK economy
Dan Milmo and Patrick Collinson - The Guardian - 3 December 2011
There is a geometric beauty to the view from Kent's Isle of Grain, as alignments of mudflat, estuary and sky dominate a horizon that, in the wake of this week's autumn statement, could soon be scarred by dozens of airliners in the cause of economic prosperity.
George Osborne dropped the clearest hint yet that the government is warming to the notion of an airport on the Thames estuary, possibly built on this peninsula, as he pledged to "explore all options for maintaining the UK's aviation hub status". For residents of Grain village, it was confirmation that kickstarting the British economy poses a threat to their homes. "It's ridiculous," says Jackie Jones, a housewife and Grain resident of 21 years, walking her two dogs on the shoreline. "The economy has gone downhill so much that something has to happen. But I am not sure that pouring billions of pounds into this is the way forward."
The chancellor begs to differ. He is sold on the idea that infrastructure investment can boost the UK by providing economic links for business and unlocking cash from British pension funds. He also unveiled a memorandum of understanding with the National Association of Pension Funds and the Pension Protection Fund to invest up to £20bn in projects such as power stations and high-speed rail lines, as well as the four-runway airport that would be built right over a quiet village in north Kent. A national infrastructure plan published this week mentioned 500 projects. All they need now is the money.
The Thames airport, unthinkable even a year ago, is becoming ever more feasible. Boris Johnson has campaigned for a new London hub airport in the face of increasingly weak opposition from the Conservative party. Tuesday saw the government come close to conceding that London's mayor has given them a get-out from opposing new runways at Heathrow, Gatwick and Stansted.
Johnson's main lobbyist on a new airport is Daniel Moylan, deputy chairman of Transport for London, which runs the capital's tubes and buses. He says: "I welcome the fact that the chancellor has said Britain must have a modern hub airport, and confirmed that there will be no expansion at Heathrow. This gives impetus to the search for a new location and the mayor is keen that it should be to the east of London. An urgent debate needs to take place." Johnson has pushed his own idea of a floating airport - dubbed "Boris Island" - situated opposite Grain and off the Isle of Sheppey.
The renowned architect Lord Foster made an arresting contribution last month with proposals for a £50bn hub on Grain, in a project drawn up by his Foster & Partners, economics consultancy Volterra and planning specialist Halcrow. As well as an airport carrying 150 million passengers a year, it includes a new Thames flood barrier and a high-speed rail line that will connect to the High Speed One and High Speed Two routes. The plans are suitably futuristic but £50bn is a towering bill, dwarfing even the £32bn needed to build the HS2 route from London to Birmingham, Manchester and Leeds. For all the infrastructure headlines in the wake of Osborne's statement, it was only a sketch of complex planning and funding needs.
There is, however, optimism about funding. Ben Hamer, an executive director at Halcrow, says initial discussions about the project have already taken place with sovereign wealth funds - the investment arms of rich states - and major banks. The issue for Halcrow is getting cross-party political backing. That, in turn, will help secure the seed funding to get the project up and running, followed by the multibillion-pound investment in constructing the site.
"If the government says it would love a Thames hub airport that would be a very strong market signal to investors that the risk of getting this through planning are going to be acceptable," Hamer says, adding that there has been strong interest from Asia in the project. "They are looking for flagship projects."
He also says that general interest from the financial sector appeared to be strong, and will be further bolstered by the chancellor's announcement of a pension-fund-backed infrastructure programme. "We are having discussions with finance houses and we have invested a lot of our own time and energy on preparing the ground for funding."
One scenario could involve the government taking the financial risk out of building the airport by paying a construction firm an agreed sum, plus costs, to put it together. Underwritten by the state, this would keep the cost of capital low. The asset would be handed over to the state on completion and sold to UK pension funds on a 30-year-lease - rather like High Speed One, the lease for which has been sold for £1.4bn to a Canadian grouping of the investment firm Borealis Infrastructure and the Ontario Teachers' Pension Plan fund. The new airport owner would pay off its multibillion-pound investment by pocketing the revenues over the ensuing three decades.
The issue with this plan is the involvement of the government at the beginning. In the absence of public money - a fair assumption under current spending constraints - construction of a Thames hub would rely on loans raised from the banking sector. But with beleaguered banks determined to shrink their balance sheets - and warned this week by Bank of England governor Mervyn King to put aside even more capital - the proposal could remain stuck in the mud.
One possible solution lies in the national infrastructure plan. Osborne pledged just £5bn in new government cash for infrastructure projects but indicated that UK pension funds were ripe with untapped financial potential. "We need to put to work the many billions of pounds that British people save in British pension funds, and get those savings invested in British projects. You could call it British savings for British jobs," he said in the autumn statement, adding that the government was exploring guarantees and ways of letting city mayors borrow against future tax receipts in an echo of the vast municipally funded works that built Britain's water, sewerage and road network in the Victorian era, as well as hospitals and schools.
Pension funds, which face the challenge of paying out fixed incomes to retirees when investment returns are at historic lows, like the concept of projects with reliable long-term income streams, such as toll roads and bridges. Airport landing fees and rentals from retail premises and parking could form an attractive income. Last week saw the creation of the Insurers' Infrastructure Investment Forum, a joint initiative between the Association of British Insurers and the government, whose first task will be to create A-grade "infrastructure bonds" that will be attractive to pension funds.
But relying on pension funds for financing airport construction is still a remote prospect. Richard Abadie, infrastructure partner at PricewaterhouseCoopers, and a one-time Treasury official overseeing public-private partnerships, says: "You have to ask: why isn't pension fund investment in infrastructure happening already? They don't believe the returns are high enough, and they don't want to take construction risk. It's banks that traditionally take on project finance risk and only after that will pension funds and insurers invest in the long-term cash flow to match their liability profiles. But the banks are under huge pressure to reduce their balance sheets." He cited RBS's recent decision to sell £5bn of its project finance loans to Mitsubishi, and new 'Basel III' bank capital requirements that will further constrain lending.
An alternative is for Britain to create a state infrastructure bank to channel loans into major projects. It could be structured along the lines of the European Investment Bank or state banks that are behind huge construction projects in Brazil, India, Mexico and some US states.
Until then, Lord Foster's island airport may remain on the drawing board. Decades ago, the original estuary airport project was opposite Grain, on the north bank of the Thames at Maplin Sands. It was conceived in the boom years of the early 1970s, and in 1973 an act paving the way for construction was passed in parliament. But the project was one of the earliest casualties of the 1973-4 oil crisis and subsequent recession. As a new credit crunch beckons, proponents of the scheme will be hoping that history does not repeat itself - although the residents of Grain will not agree.
BIRDS MAY KEEP ESTUARY AIRPORT GROUNDED
Philip Pank - The Times - 3 December 2011
Thousands of migratory wading birds took wing as the tide filled the Thames Estuary. One of the great sights of coastal Britain, these winter visitors may thwart plans for an airport in the estuary, just as they did a decade ago.
George Osborne told Parliament this week that he would look at all options other than expansion at Heathrow, including an airport in the estuary, to maintain Britain's standing as a global airline hub. But as his mandarins return to the North Kent marshes they will find a nascent protest movement driven by concerns over quality of life and the destruction of protected wetland habitat. They will also walk into a fierce debate about the Government's promotion of green issues and localism, which opponents say would be undercut by the imposition of a vast infrastructure project.
Advocates of a new airport say that it is vital to stop Britain falling out of the front rank of the world economy. Our very future as a trading nation and tens of thousands of jobs depend on increasing aviation capacity, they say. Some, including Boris Johnson, back an island airport off the Kent shore of the estuary. Lord Foster of Thames Bank, architect of airports in Beijing and Hong Kong, and of the terminal at Stansted, proposes four parallel runways onshore at the Isle of Grain.
But a visit to the estuary illustrated the drawbacks. The shore is a winter home to 47 species on the Royal Society for Protection of Birds "amber list" - endangered birds with fewer than 300 breeding pairs in Britain. As flocks of dunlin, knot, curlew and turnstones massed on the mudflats yesterday, a skein of Brent geese flew over Grain Coastal Park, at the end of Lord Foster's runways, at the perfect height to be sucked into airliner engines.
The threat of catastrophic bird strike and the destruction of wetland habitat protected by EU and global treaties were both cited when the Government abandoned plans for an airport ten miles upriver at Cliffe in 2005. "They will cull all the birds but then they will sterilise the land. If you want to stop attracting birds to go near an airport you need to make sure the land is not attractive to them," said Samantha Dawes, conservation manager for the RSPB.
Lord Foster's plans would destroy five nature reserves and disrupt hundreds of hectares of marshland designated as a Special Protection Area under the EU Birds Directive and the Ramsar Convention, a treaty designed to preserve wetland habitat. Boris Island would damage the Outer Thames Special Protection Area, a vital wintering ground for red-throated divers. The RSPB, backed by a million members, sees the Thames Estuary as a test case.
There are signs that Mr Osborne is ready for that fight. He said in his Autumn Statement that he would stop the "gold plating of EU rules on things like habitats" putting "ridiculous costs" on British business. The Government then announced that it would review the EU Habitats and Birds Directives.
In the estuary, councils and residents are also ready. Robin Cooper, director of regeneration for Medway Council, said that up to 6,000 homes would be destroyed on the Hoo Peninsula. "We have not seen that kind of move in this country since the slum clearances of the 1960s," he said, adding that an airport handling 150 million passengers a year would put impossible strain on transport across the South East. "To add another 150 million people in to the most congested part of the country would create gridlock."
There is no room to house the likely airport workforce of almost 100,000. "We physically could not accommodate that number of houses," Mr Cooper said. Noise and air pollution would affect 250,000 residents in Kent and many more on the Essex shore.
Yet to an outsider like Boris Johnson, the attraction of an airport on flat land near the capital that spares the 5 million Londoners who live under Heathrow's flight paths is compelling. The Kent shore already has much heavy industry. The Isle of Grain is surrounded by three power stations. It is home to London Thamesport, a container terminal, and it ships in 20 per cent of the gas brought into Britain. Five vast gas storage tanks and chimneys spewing sulphurous waste into the sky have not put off the birds.
In Great Expectations Dickens portrayed the Medway marshes as a forbidding place. The villagers of Cliffe, Grain, All Hallows, Stoke, Cooling and High Hallstow are ready to fight off this latest onslaught. "We all work together and we would certainly work together to defeat these proposals," said Gill Moore, founder member of Friends of the North Kent Marshes protest group. "It seems so strange that the Government is promoting its localism Bill, which is supposed to give us more of a say, when as far as I can see we could have a massive hub airport just imposed on us."
The Government predicts that Heathrow, Gatwick and Stansted will be full by 2030, but it has ruled out expanding them. Teresa Villiers, the Minister of State for Transport, said: "We've got no plans to build an airport in the Estuary, or in Medway, or in Kent." Mr Johnson told LBC radio: "And that's the problem. They've got no plans. I think you'll find they need to get one."
North Kent marshes are protected by EU Birds Directive and Ramsar Convention Hundreds of hectares of unique wetland habitat are threatened. Flocks of geese and gulls are dangerous to aircraft.
The Government would have to prove a compelling case in the national interest. It would have to convince a judge that all possible alternatives had been properly considered and found unworkable.
OUR COMMENT: And, that such an expansion of aviation could be allowed in the context of the effects on climate change.
BORIS TELLS TORIES TO BACK AIRPORT
In a new report, the London mayor claims his 'fantasy island'
would generate enough money to pull us out of economic gloom
Sunday Times - 20 November 2011
Boris Johnson will raise the stakes tomorrow in his battle to convince the government of the need to build an airport in the Thames estuary, and insist that the project is no longer viewed as a "fantasy island".
The mayor of London will publish a study detailing how the new airport would boost Britain's economy and create tens of thousands of jobs.
In a move that will heap pressure on George Osborne, the chancellor, to back the scheme, Johnson will deliver a speech in which he will argue that the airport would help to drag Britain out of recession.
The mayor is convinced that the project has growing support within the government and that, crucially, a number of powerful figures inside No 10 now believe it is viable. Among them is Steve Hilton, the prime minister's influential strategic adviser. Some figures close to Osborne say the chancellor is also beginning to warm to the idea and are urging him to offer his support publicly. His official spokesman declined to comment.
In the speech tomorrow, Johnson is expected to say that the attitude in the government towards the estuary airport has shifted as a result of a realisation of the enormous economic benefits it could bring. Using defiant language, Johnson is expected to say: "This is not fantasy island any more. It is a credible proposal, which has growing mainstream support."
The mayor is adamant that the project, including new rail links, a bridge over the Thames and even a tidal power station, would reinvigorate the economy. He will argue that the improved air links to countries with fast-growing economies, such as India, China and Brazil, will lead to long-term growth and investment. He intends to discuss the estuary airport proposal and its implications for the wider economy with Osborne when they next meet. Johnson will warn that the failure to build his proposed airport would threaten business travel and tourism worth £62 billion a year to Britain.
Last night Daniel Moylan, the mayor's adviser on aviation and the deputy chairman of Transport for London, increased the pressure by calling on Osborne to use his autumn statement to back the estuary airport idea. Moylan said that "a new hub airport will fuel economic growth now and in the future". Lodon was already losing vital investment to neighbouring countries with better airport connections, he said.
"Inward investment in France from Brazil was nearly £2 billion, and it was far less in Britain. One of the reasons we think is there are lots of flights to Brazil from Paris and very few from London," he said. "If you look at the newly rich countries, the Brazils, they're all taking their tourism and investment to countries they have good aviation links with - and that is no longer Britain," said Moylan.
The Department for Transport (DfT) is already examining the potential for an estuary airport as part of a consultation on the future of aviation in the UK. In submissions to the DfT's consultation, several powerful bodies have asked the government to give serious thought to increasing airport capacity in the southeast by building an airport. The influential Institute of Directors, which will host the mayor's speech, has urged the government to take seriously Johnson's plans.
The expansion of Heathrow has been ruled out by the government. Justine Greening, the new transport secretary, was a key figure in the campaign against the building of a new runway there. Some ministers, however, favour the expansion of regional airports rather than the creation of a new hub.
Critics of the proposed estuary airport, dubbed "Boris Island" when it was first suggested, say it would lead to increased pollution and may damage bird life in the area. A number of proposals for a new airport have been made. The most recent was one by the architect Lord Foster, who unveiled plans for a four-runway site built on reclaimed land on the Isle of Grain. It would cost between £40 billion and £50 billion.
Airports in the southeast are expected to reach full capacity by 2030. About 125m passenger trips are made from London's airports every year, but the capital is already lagging behind other European cities in terms of links to foreign destinations.
OUR COMMENT: Some dubious information provided as facts. And wildly optimistic forecasts for a very very expensive project!
THE WESTMINSTER HALL DEBATE ON THE FUTURE OF AVIATION
Three important contributions
16 November 2011
1) John McDonnell - Labour, Hayes & Harlington
"Despite everything that has been said by all the major parties, the blight in my constituency continues because of BAA's continuing angst and lobbying for the third runway. It needs to be made even more explicit now to BAA that that is not going to happen. I say that... because BAA has bought up nearly two thirds of Sipson and refuses to sell the properties to families. It has made them available to families on short-term licences of up to two years and no more, although it now tells us that those licences are possibly renewable. It is destabilising the village. In addition, the threat of the third runway that BAA keeps mooting is still blighting the villages of Harmondsworth, Longford, Harlington and Cranford Cross. One solution - I say this to the Government on a cross-party basis - is to agree to put in place a similar covenant to the one at Gatwick that will ensure for generations that there is no further threat of a third runway in the area and that is legally enforceable and binding."
2) Maria Eagle - Shadow Secretary of State for Transport
"In addition to the Government's more immediate work that they must conclude... I believe that the best way forward is the establishment of a cross-party commission to set out our long-term aviation strategy for a generation or more. We should not have rows from one Parliament to the next about an element of the strategy, but set out a long-term plan. We must not repeat the party political wrangling that turned the proposed third runway at Heathrow into a political football. We must also agree that we will then stick to that agreed strategy, whatever the outcome of the next election. Any terms of reference for such a cross-party examination of capacity will inevitably start with an understanding that the answer for the south-east will not be to fall back on the proposed third runway at Heathrow. We have accepted that the local environmental impact means that that is off the agenda. The cross-party body must have the freedom to look at all options for growth, including in the south-east, while prioritising making the best use of existing runways and airports. A bigger prize is available for us all if we put political battles to one side and develop a long-term strategy for aviation to which everybody can sign up. It is time to move on and find an alternative way forward. On carbon emissions, I hope the Minister will agree with me that we will simply not achieve the goal set out in the Climate Change Act 2008 to reduce emissions by at least 80% by 2050, compared with 1990 levels, unless aviation does more. That is why we believe that future aviation growth must go hand in hand with a greater cut in aviation emissions than we agreed when we were in Government."
3) Theresa Villiers - Minister of State for Transport
"We want to open a new chapter on the aviation debate. We are interested in working on a cross-party basis, as has been discussed today. Our goal is to move away from the polarised opinions that have dominated the discussion in the past. We want to develop a broader consensus for the change we need to deliver a flourishing air transport sector that can support economic growth, while addressing its local environment impacts and playing its full part in combating climate change."
OUR COMMENT: Refreshing "Common Sense" from the Minister and the Shadow Secretary of State!
RECORD CO2 EMISSION INCREASE REPORTED FOR 2010
ENDS Europe DAILY - 4 November 2011
Global energy-related carbon dioxide emissions rose by a record
amount in 2010, according to a preliminary analysis by US government
scientists. The figures are based on energy data published by oil
giant BP in the summer.
The US Carbon Dioxide Information Analysis Centre (CDIAC) said global
carbon emissions from fossil fuels and cement production rose by 512
million tonnes, or 5.9%, to 9.1 billion tonnes in 2010. This is
equivalent to 33 billion tonnes of carbon dioxide.
The rise appears linked to recovery in the global economy, with Asia
leading the way. Carbon emissions in the Asia Pacific region jumped
by 300Mt, or 8.3%. European and Eurasian countries added 63Mt, an
increase of 3.6%. The increase in North America was almost identical.
Although European emissions rose relatively little, Finland's output
jumped by 13.55% - the highest rate in the world. It was followed by
Brazil (11.6%), Peru (11.6%) and China (10.4%).
2010 also saw a near-record increase in the atmospheric concentration
of CO2, according to separate data gathered at Mauna Loa in Hawaii by
the US National Oceanic and Atmospheric Administration. NOAA measured
a rise by 2.5 parts per million over the year, the fourth largest
increase since records began in 1959.
UK AIR POLLUTION 'PUTS LIVES AT RISK'
The EU-permitted number of high-pollution days
for 2011 was exceeded in April
ENDS Europe DAILY - 4 November 2011
The government's failure to meet EU standards on air pollution is "putting the health of UK residents at risk", says the Environmental Audit Committee. Bad air quality costs the nation £8.5-20bn per year via poor health, it says, and can cut life expectancy by years. Continued failure to meet EU standards could result in swingeing fines.
The committee says ministers' "apparent tactic" to avoid fines is to ask the European Commission for repeated extensions rather than curb pollution.
"The government needs to act now, as government did in the 1950s, to save the health of the nation" - Environmental Audit Committee report.
The government's latest request to the commission - to delay having to meet standards on nitrogen dioxide (NO2) until 2015 - is being taken to judicial review by environmental lawyers ClientEarth.
By some measures, the UK has been in breach of EU rules since 2005, the committee's report notes. It last reported on air pollution 18 months ago, and says that since then, there is "no meaningful evidence" to suggest progress towards meeting standards. Yet evidence on the health impacts, it says, has become clearer.
Nationally, the government accepts that air pollution takes seven or eight months off Britons' life expectancy. But for the 200,000 people most directly affected, the shortfall is two years. "It is a national scandal that thousands of people are still dying from air pollution in the UK in 2011 - and the government is taking no responsibility for this," said committee chair Joan Walley MP. "It is often the poorest people in our cities who live near the busiest roads and breath in diesel fumes, dangerous chemicals and bits of tyre every day."
Recent UK research indicated that tyres and brakes are a significant source of airborne particles, in addition to vehicle exhausts. On particulates, the UK is improving. Six years ago, eight places in the country exceeded EU standards. Now, only London does; but the London picture is startling. EU regulations allow legal limits to be exceeded for 35 days per year. This year, the quota was reached in April. The committee urges policies that would change transport methods in UK cities
A more problematic area is nitrogen dioxide. Currently, 40 out of 43 "assessment zones" across the country exceed the EU standard. The government's own projections, released in June, indicate that 17 will still be in breach in 2015, with Greater London taking even longer to clean up, despite the avowed intention of everyone connected with the Olympics to make them the "greenest games ever".
Government plans for curbing NO2 pollution include financial incentives for switching haulage from road to rail, research on how retailers could deliver goods outside peak times, and differential pricing for vehicles emitting lower levels of pollutants. And the London administration of Mayor Boris Johnson has set age limits for black cabs, invested in cycling, and implemented the London Low Emission Zone.
The Environmental Audit Committee says that even so, the air pollution issue is just not taken seriously in government. "There are no air quality actions for Defra or the Department for Transport in their departmental business plans," it says, and few government departments "appear to understand the importance of the issue".
A spokeswoman for the Department of Environment, Food and Rural Affairs said the government was working towards full compliance with EU standards, and that significant progress had been made. "We are investing significant sums of money to facilitate further reductions in pollution around transport, including over £1bn to promote the uptake of ultra low emission vehicle technologies and to support local transport authorities to deliver sustainable transport measures," she said. "We welcome the committee's continued interest in this work, and we will fully consider their recommendations before providing a written response in due course."
The government's response to the committee' previous report was rooted in the localism principle, with responsibility being devolved downwards to local authorities. The committee warns that this could mean EU fines being passed down to local authorities as well. "Under the banner of its localism agenda, the government is dumping the problem on local authorities who simply do not have the resources to tackle what is a national problem," said Alan Andrews, air quality lawyer at ClientEarth. "It is simply putting off taking action while behind the scenes it lobbies the EU to weaken limits."
The committee says government should urgently implement incentives to retrofit old vehicles with equipment to reduce pollution and set up a network of Low Emission Zones in the worst-affected areas. And it warns that meeting the NO2 standard would be impossible in the event of a third runway being constructed at Heathrow - an option that is currently ruled out by Coalition policy.
The committee's call to action is partly couched in historical terms; air pollution in London causes as many deaths now as in the bad old days of the "pea-souper" smogs, it calculates. "It is estimated that around 4,000 people died as a result of the Great Smog of London in 1952. That led to the introduction of the Clean Air Act in 1956. In 2008, 4,000 people died in London from air pollution and 30,000 died across the whole of the UK.
The government needs to act now, as government did in the 1950s, to save the health of the nation."
OUR COMMENT: It also needs to be realized, and acted on, the fact that as well as carbon dioxide aircraft also emit NO2 and those living round airports, notably Heathrow, could be at risk.
O'LEARY DEMANDS QUICK DECISION OVER STANSTED SALE
The Competition Commission has been urged by Ryanair to end "interminable delays" and judicial reviews over the sale of Stansted by BAA
Travel Weekly - 7 November 2011
The call came from the no-frills carrier's chief executive Michael O'Leary as he reported a 20% rise in half year profits to ?544 million. O'Leary said the competition watchdog must "expedite the early sale of Stansted to allow competition to deliver lower costs, and improved customer service".
His comments follow BAA agreeing to sell Edinburgh airport but seeking a judicial review over demands to also divest itself of Stansted.
"We regret the decision of the Ferrovial/BAA monopoly to further delay the sale of Stansted - and instead bring forward the sale of Edinburgh - to comply with the UK Competition Commission's 2009 break-up recommendation," O'Leary said. "While the Competition Appeals Tribunal considers this pointless judicial review, these delays allow BAA Stansted to continue to charge excessive fees and generate monopoly profits, even as Stansted's traffic declines from 24 million passengers in 2007 to less than 18 million in 2011."
He was speaking as Ryanair revealed that ancillary sales rose 15% to ?487 million, slightly faster than traffic growth in the first half. Passengers carried grew by 12% to 44.7 million in the six months to September, with revenues up by 24% to ?2.7 billion as fares rose by 13%. "The recession and higher oil prices continues to force competitors to consolidate, and cut capacity and routes, which creates further growth opportunities for Ryanair as European airports compete aggressively to win our route and traffic growth," O'Leary said, announcing plans to open a 48th base at Warsaw (Modlin).
He described last week's provisional agreement to allow British Airways parent International Airlines Group to buy BMI from Lufthansa as an "expected development in the continuing consolidation process among Europe's high fare airlines". "The fact that IAG/BA will control over 60% of the short haul slots at Heathrow will mirror Lufthansa's 60% share of Frankfurt slots and Air France's 60% share of Charles de Gaulle slots."
"We believe this takeover will be rubber stamped in due course by both the EU and UK competition authorities. This will highlight, yet again, the EU's blatantly discriminatory prohibition on Ryanair's failed 2006 offer for Aer Lingus and the UK OFT's more recent unjustified, and in our view out of time, investigation into a five year old failed merger between two Irish companies.
"This OFT wild goose chase and waste of public funds continues despite the fact that Aer Lingus has repeatedly ignored Ryanair's 29% shareholding including denying our lawful EGM requests over the last five years. The reality is that all the evidence over the past five years points to the fact that - as the EU previously found - Ryanair has no control or influence over Aer Lingus."
OUR COMMENT: He would say that, wouldn't he!
THE SATURDAY INTERVIEW: RYANAIR BOSS MICHAEL O'LEARY
Loathed by anti-capitalists and by many who have flown with his airline, has Ryanair's Michael O'Leary joined the fat-cat aviation mainstream?
The Guardian - 18 November 2011
The great French philosopher Blaise Pascal once wrote: "All human evil comes from a single cause, man's inability to sit still in a room." By that token, I suggest to Michael O'Leary he is one of the world's most evil men, enticing millions of hitherto stay-at-home Brits and other Europeans to jet around their continent, befouling its air with carbon emissions and defacing its landscape with excrescent airports.
"For fuck's sake," says O'Leary. "For a start, the French have never produced a great philosopher. Great wine maybe, but no great philosophers. Ryanair is responsible for the integration of Europe by bringing lots of different cultures to the beaches of Spain, Greece and Italy, where they couple and copulate in the interests of pan-European peace."
That's probably not how they see it down there, I say, pointing out the window towards the tent village of anticapitalist protesters around St Paul's cathedral. To them, he's just another capitalist chancer destroying the planet and imposing a bogus narrative on his profiteering. "We're bringing cultures together!" counters O'Leary. "There hasn't been a war in Europe for 50 years because they're all too busy flying on Ryanair. I should get the Nobel peace prize ? screw Bono." Or perhaps he should stand for Ireland's presidency next time round? "I don't think I could get elected as Ireland's ratcatcher."
It's 8.30am on Thursday and the boss of Europe's most successful low-cost airline should perhaps already be thinking of switching to decaff. "Nothing destroys the environment like two world wars. The idea that we're destroying the environment is nonsense. My cattle probably cause more carbon emissions than my fleet of aeroplanes." One of Ireland's richest men, O'Leary breeds Aberdeen Angus cattle and horses. He winks. "That'll get Guardian readers going."
Perhaps, but what's more likely to get them going is the prospect of downloading porn on Ryanair flights. Last week, O'Leary announced his company's recession-bucking results at a press conference. But what the assembled hacks reported was the fact that the man who charges passengers for checking luggage in and for inflight food was now going to charge them to watch inflight porn.
"I was asked what the next thing would be and I said, 'Probably passengers paying for access to the internet. They'll watch whatever's on their tablets ? gambling, racing, pornography.' Next question: 'Are you going to have porn on your flights?' I said: 'Of course, if that's what's on people's tablets.' And then somebody was twittering: 'What about the child sitting next to you?'"
But they had a point, hadn't they? After all, watching porn is one thing in the privacy of a hotel room, and quite another as you're descending into Warsaw with a shameful grin and a five-year-old glimpsing your screen from across the aisle? "Oh, for the love of God!" says O'Leary. He's unrepentant, not least because the resultant media frenzy, he reckons, caused a 25% spike on Ryanair's website and a 10% rise in ticket sales. "It's brilliant. The gobbier I get, the more cheap headlines I get, the more tickets we sell." Is there any such thing as bad PR? "Only if it's about safety. Otherwise, probably not."
O'Leary is a past master at manufacturing headlines out of things that remain pie in the sky. No wonder he's known by sceptical industry-watchers as Michael O'Really. A couple of years ago, he announced coin-operated inflight toilets, or "pay-per-pee" He says: "I still want to do that, but it rests on a misperception to suggest we'd make money from charging for using toilets. We'd give that money to an incontinence charity."
Instead, Ryanair would make its money, he claims, by stripping two out of three loos out of every plane, and installing six extra seats. He says that would lower all the fares on every flight by about 5%, making Ryanair more attractive - if only in price terms. "By getting rid of baggage check-in, we got people checking in on the website. We got rid of check-in desk rental charges, check-in staff, baggage-handling staff and lost bag departments - and we reduced ticket prices as a result."
At today's press conference at the London Stock Exchange, O'Leary is to share a platform with people whom, as he puts it, he's been "kicking the crap out of for years" - EasyJet's Carolyn McCall, Virgin Atlantic's Steve Ridgway and British Airways' Willie Walsh. Surely, I say, this is when he stops being the punk outsider he's posed as since becoming Ryanair's CEO in 1994, and joins the fat-cat aviation mainstream? "I think you'd find it hard to find anyone who thinks I've joined the mainstream."
These airline executives are putting aside their differences to call on the government to scrap the air passenger duty (APD). They claim it's destroying the UK's tourism industry. In 2009, passengers paid £1.9bn in APD and it's set to rise to £3.6bn by 2015, particularly if - as they expect - George Osborne seeks more duty to plug the deficit in his autumn statement later this month.
But there is a counter-argument. Why not increase APD even more, perhaps even prohibitively, to reduce air traffic and encourage Britons to stay at home rather than spending their holiday money abroad? It's an economic and environmental win-win, surely? "That's horseshit. It's not about Britons. It's about visitor numbers being down 20% over the past five years, while in continental Europe they're up."
"Brits are taxing themselves out of the tourism industry. Tourism is a great way of generating entry-level jobs. Everybody's first job was in a hotel, a bar, a restaurant. These jobs have been devastated in recent years by this stupid tax on UK visitors. No wonder there's so much youth unemployment in Britain. We need Tory toffs to scrap this bloody stupid tax - they'd make far more out of the increased money the visitors spent if they did than they get from APD."
After the press conference I join O'Leary on the Gatwick Express from London Victoria as he heads home. His business is booming, with new flights landing at new airports. (His scouts have found another one notionally near Warsaw, for instance, to which Ryanair's passengers will fly next year, for much less than the £30.80 day return for this rail journey.) This winter Ryanair will buy 30 new planes, and another 20 next year. He aims to increase passenger numbers from 75 to 85 million over the next two years. Is he recession-proof? "That's too strong a word. But low-cost travel doesn't follow economic trends. It continues to grow so long as we lower the cost. In recession, the Ikeas, Lidls and Aldis and the discount airlines do well."
Won't the Eurozone crisis harm business? "Depends what happens. If Greece goes back to the drachma, that'll probably cause a boom in tourism, because property prices will collapse. That would be good for us in the short term. We'd probably increase our flight numbers. Whatever happens, there's no going back from the era of low-cost air travel."
Isn't he bored with fighting over Europe's uninteresting aviation market? "It's very hard to get bored. We kick the crap out of BA, Lufthansa and Air France and it's not many industries where the Irish can beat the Brits, the Germans and the French." Doesn't he yearn to revolutionise the long-haul market instead? "We have a plan to be a low-cost transatlantic airline offering 10 Euro-seats across the Atlantic. But there's a backlog of long-haul aircraft deliveries, because Airbus and Boeing made such a balls of delivering their long-haul planes - they're between three and a half and four years behind - that there's no spare long-haul capacity around."
But if he did fly Ryanair to the US, he would be taking the low-cost model back home. In 1987 O'Leary, now 50, was sent to the USA by Tony Ryan, former head of Guinness Peat Aviation and Ryanair's first chief executive, to study the business model of Dallas's no-frills Southwest Airlines. At the time, Ryanair was operating one plane out of Waterford airport and losing money, and O'Leary had been hired to advise Ryan on his personal income tax.
In Dallas, O'Leary met Herb Kelleher who ran his airline on four principles: fly one type of plane to cut engineering costs; keep overheads down; turn aircraft around quickly; ditch air miles. Ryanair under O'Leary copied those basics. In the subsequent 24 years, Ryanair has grown inexorably. But the airline's 20% increase in profits in the six months to the end of September was made possible in part by a 13% increase in average fares, which helped to offset a 37% rise in fuel costs. And over this winter, Ryanair will withdraw 80 of its aircraft to reduce winter losses and cut its soaring fuel bills. "I'm in a very long line of Irish transport innovators," says O'Leary. "We built all the roads and most of the railway lines, and now we're proving that you can fly across Europe for 20 quid and make money from it."
But for how much longer? O'Leary must be worried about the emissions trading scheme due to be introduced by the government in January, to encourage airlines to reduce their environmental impact. "The whole pandering to the idiotic environmental lobby, which has been trying to persuade us wrongly that global warming is a fact of life, is stupid. It's not that I say there isn't global warming: I say that there isn't evidence to support it. And even if there is, and it warmed by one or two degrees, France would become a desert, which would be no bad thing, and the Scots would grow wine and make buffalo mozzarella."
He's enjoying himself, this grotesque defender of deregulation, this climate-change sceptic, this calumniser of politicians, this right-wing bruiser with a runaway mouth. I ask him which politicians he admires. "Not since Thatcher and Reagan left the scene at such tragically early ages have I admired any politician. For all the abuse they got, those two fundamentally changed the US and UK economies. Governments since have pissed that away by wasting money on the NHS and all these other useless quangos. Governments never create jobs ? they should just get out of the way."
He describes this week's dismal youth unemployment figures as "an absolute tragedy", then adds: "But one of the great crimes perpetrated in the UK economy recently is the old Labour attitude of getting rid of competition. Getting rid of exams, closing down football pitches - idiotic. Life's about competition. We're not all fucking equal. Sadly, there are people who are faster than me and better-looking than me, so I had to find other ways to compete. Kids need to learn those lessons."
I wonder if he plans to teach the four children he has with his ex-banker wife, Anita Adamson, those lessons. "I'll make sure they're hard-working. My kids won't inherit my wealth. I'll give them money for a nice house but, other than that, go and provide for your own family."
Did his parents teach him the competitive spirit modern kids lack? O'Leary was raised on a farm in Westmeath. "Fucking hell, I don't know. This is psychoanalytical Freudian shite! Life's not about looking backwards. I grew up without much money and I wanted some. I was never going to inherit anything. Nor should I have done... Everybody should provide for themselves and their families. That's the reason I get out of bed in the mornings."
EASYJET PAYS MAIDEN DIVIDEND AFTER PROFITS SOAR
Low-cost airline easyJet is to make its first ever dividend a bumper payout,
as promised, after a 31.5 percent rise in full-year profit that was helped by
costs cuts and a rise in business travellers
Reuters - 15 November 2011
EasyJet said on Tuesday it would pay a special dividend of 34.9 pence on top of an ordinary dividend of 10.5 pence, making a total payout of 195 million pounds ($310 million). Its shares were down 3.2 percent at 354.4 pence at 8:55 a.m.
The carrier had said in September it would return around 190 million pounds after "a robust" second half. The payout could appease Stelios Haji-Ioannou, its largest shareholder and founder, who has criticised plans to buy new aircraft and wants the dividend doubled.
The Luton, southern England-based company reported an underlying pretax profit of 248 million pounds, at the upper end of forecasts, on revenue 16 percent higher at 3.45 billion in the year to September. The rise was led by an 11.8 percent increase in passenger traffic - with one million more people using easyJet for business travel - and a 1.3 percent fall in underlying costs per seat.
Looking ahead, industry body IATA expects airlines to suffer over the next year due to waning consumer confidence, sluggish international trade and high fuel prices. EasyJet chief executive Carolyn McCall echoed that caution. "The macroeconomic environment remains challenging for all airlines as weak consumer confidence across Europe slows the rate at which higher fuel prices and increased taxation can be passed onto passengers," she said.
"Against this backdrop easyJet is taking a cautious approach to capacity deployment... capacity in the first half of the year is planned to be flat, with growth of around 4 percent for the full year."
Analysts have been calling for airlines to cut capacity to ease fierce price competition in Europe and improve paper-thin margins. EasyJet had been expected to report a full-year profit of 206-254 million pounds, with the average at 243 million, according to a Thomson Reuters I/B/E/S poll. "The results are just ahead of our and consensus expectations and we would expect the cautiously confident outlook commentary to comfortably sustain 2012 consensus forecasts (213 million pounds)," said RBS analyst Andrew Lobbenberg, who holds a 'buy' rating on the stock.
EasyJet's larger European peers have struggled to overcome high oil prices and sluggish demand. German group Lufthansa and Air France-KLM have cut profit forecasts this year after results were battered by high fuel costs and slashed plans to expand capacity next year.
EasyJet said around 45 percent of its winter seats had already been sold, adding first-half passenger revenue was expected to grow by mid-single digits. The airline's fuel costs rose a quarter to 917 million pounds during its 2010/11 year. At current fuel prices and exchange rates easyJet said it expected its fuel bill to rise around 220 million pounds in its 2011/12 year.
OUR COMMENT: Not much justification for their strident calls for a cut in APD.
REGIONAL NUMBERS DON'T ADD UP, SAY AIRLINES
Airline bosses have ridiculed government forecasts that envisage
small regional airports ranking among the world's largest
David Robertson - The Times - 7 November 2011
The recent predictions by the Department for Transport have been attacked by airline experts, who claim that they show the Government does not have a realistic aviation policy. One claim is that Cardiff airport will grow from 1.3 million passengers a year to 12 million by 2050. This implies that a crowd four times the size of the Welsh population will pass through Cardiff's terminal.
Humberside airport had 283,000 passengers last year, according to the Civil Aviation Authority, but is forecast to grow to 12 million - more than 12 times the population of the region. Exeter had 730,000 passengers last year but is expected to grow to 11 million, while Nottingham East Midlands will grow from 4.1 million to 25 million - nearly as many as Gatwick, the world's busiest single-runway airport.
Steve Ridgway, the chief executive of Virgin Atlantic, said: "These figures are just ridiculous. They bear no relation to reality."
The estimates are contained in Aviation Forecasts and are part of the Government's consultation on the future of the industry. Analysts said that they appeared to have been skewed by the Government's policy of preventing new runways at London's airports. If growth at Heathrow, Gatwick and Stansted is frozen, projected increases of between 4 and 5 per cent a year will have to spill over to other airports. Another explanation might be that the figures have been exaggerated to validate the argument in favour of regional airports.
Chris Tarry, of CTAIRA, an aviation consultancy, said: "Some forecasts are more wrong than others and this one appears to have been dreamed up. All this is designed to show is that there will be plenty of regional growth so you don't need to grow London. The real issue is there needs to be additional capacity at Heathrow and Gatwick. Humberside is not Heathrow and never will be."
The aviation industry traditionally has operated on a "hub and spoke" model, where passengers from regional destinations or secondary cities are flown into a central airport, such as Heathrow, for a long-haul flight to another hub, such as New York. A rival "point-to-point" theory argues that more fuel-efficient aircraft will allow airlines to operate direct long-haul services from secondary cities.
Most analysts accept that both theories can co-exist, but when fuel prices are high, hubs are likely to dominate because airlines need to guarantee a large pool of passengers. As a result, the industry is almost united in its call for the Government to rethink the ban on a third runway at Heathrow - or come up with a radical alternative, such as sanctioning a new airport on the Thames Estuary. The DfT is expected to publish its new policy on aviation next year.
A spokesman for the Department for Transport said there was "significant uncertainty" in any attempt to forecast airport use and that it was "unsurprising" that government figures differed from industry predictions. "The primary purpose of the DfT's forecasts is to inform long-term strategic aviation policy, and not to provide detailed forecasts at every individual airport within the UK," the spokesman added.
UTTLESFORD GIVES AIRPORT'S NOISE UNIT
A CLEAN BILL OF HEALTH
Stansted Airport's noise unit has been recognised for its customer service and levels of expertise following a recent audit by Uttlesford District Council
BAA Press Release - 4 November 2011
The review, carried out in July, looked into the workings of the Flight Evaluation Unit (FEU), a department set up to handle public enquiries and complaints about flights into and out of the airport. The findings judged the Unit to be 'well run' and that public complaints received proper consideration and response.
Stansted Airport's head of health, safety and environment, Dr Andy Jefferson, was delighted with the outcome: "We welcome the results of this audit which reflect the hard work and commitment demonstrated by the noise communications team. The local community can be confident that the airport is delivering a valuable service that reassures and addresses the issues that are most important to them."
"We will, however, not become complacent and the recommendations made in the report will be taken forward with the members of our independent motoring body, the Noise and Track Keeping Working Group. So, together with our partners in the aviation industry and our local community colleagues we will continue to work hard to minimise the airport's effects as far as we possibly can."
Audited by the local authority regularly, the FEU was also singled out for praise for unveiling a new range of 'excellent' noise factsheets which were recognised to be 'informative and a useful addition to the publications available to the community'. Auditor Ann Lee-Moore, Principal Environmental Health Officer at Uttlesford District Council, said: "Our findings from the audit of Stansted Airport's Flight Evaluation Unit, found that complaints were properly logged and responded to and that a clear audit trail was available to verify that process. Similarly, as in the previous audit, the unit was well run, adequately resourced and responded properly to the complaints and concerns of the public. We also made some recommendations to further improve the service offered by the Unit and these are currently being considered by the airport."
OUR COMMENT: A somewhat misleading use of the phrase "Clean Bill of Health" to describe the work of an airport noise unit! Bearing in mind that operations by aircraft following the airport's Code of Practice when taking off or landing still create enough noise under flight paths to create significant stress in affected residents. Recent research has established that this has been associated with a higher incidence of raised blood pressure in areas with higher noise levels around the airports studied.
SUPERJUMBO FIRST FOR STANSTED AIRPORT
BOEING'S new superjumbo, the 747-8 Freighter, touched down
on UK soil for the very first time at Stansted today
Herts & Essex Reporter - 4 November 2011
The state-of-the-art jet, which flew in direct from the manufacturer's factory in Seattle, will be the first of three to be based at the airport by IAG Cargo, the parent company of British Airways and Iberia.
The fleet will operate scheduled cargo flights to destinations such as Hong Kong, Atlanta, Houston and Shanghai. Stansted's managing director Nick Barton said: "We're delighted IAG Cargo, through its brand British Airways World Cargo, has selected Stansted as their UK base from where its three new generation 747-8F will operate. Stansted is already London's second busiest cargo airport and third overall in the UK, and the introduction of these planes will increase our operational capabilities and provide a boost to businesses in the region looking to expand and exploit new markets and opportunities."
In total, nearly 200,000 tonnes of cargo passes through Stansted each year and Mr Barton said: "We have invested millions in upgrading our infrastructure to accommodate the new generation of super jets, and last year we gained official approval to operate the world's largest aircraft. Today is a major milestone in the history of the airport as we welcome the first 747-8F."
Code F approval permits aircraft with an 80m wingspan to operate on the airfield. The airport previously held code E status that allowed a maximum 65m wingspan. In fact, the 747-8's wingspan is nearly twice the length of the first-ever flight - 120 ft (36.5 m) - made by the Wright brothers in 1903.
Mr Barton said: "The arrival of these fantastic new jets not only increases our operational and business capabilities but they also bring significant environmental benefits as they are 30 per cent quieter and produce 16 per cent less emission than the aircraft they replace. This is also very welcome news as we continue to drive down our operational effects on the communities around the airport."
A water cannon salute performed by the airport's fire service showered the arrival and staff gathered and welcomed the plane to its new home just before 7.30am this morning.
OUR COMMENT: We await reports of the noise experience for residents. Officially the aircraft is advertised as quieter than older models but this remains to be seen, especially as some flights are at night.
NOTHING GROWS WITHOUT ROOTS (?)
London Evening Standard - 4 November 2011
ANY MP who takes the Tube to work emerges at Westminster station blanketed in ads by Heathrow owner BAA. They declare "nothing grows without routes" and "no island can afford to be an island" - warning, after the decision not to allow a third runway at Heathrow, that London could be cut off from emerging markets and growth as a result.
That's the line British Airways, too, takes about its agreement to buy rival airline bmi today. Willie Walsh, chief executive of BA parent IAG, plans to use some of bmi's short-haul slots to expand BA's long-haul network; that, he claims, would be "pro-consumer, pro-jobs, and pro the UK economy".
It's part of BA's early push to secure backing from competition regulators, claiming Londoners will have more choice with an increased number of direct routes to more destinations in Asia. Unsurprisingly, rival airlines aren't convinced. Virgin claims consumers will lose out if BA owns 53% of Heathrow's closely coveted slots. Even now, no other airline comes close to BA's existing haul of around 45%. Sir Richard Branson's carrier has only 3%.
Heathrow does need more direct flights to BRIC countries. But any carrier which manages to buy bmi will likely use its purchase to do just that: it doesn't have to be BA. As Chris Tarry, aviation analyst at Ctaira puts it: "The growth markets are in Asia and BA is mainly focused on North America. BA will move to where the market demands it to. But so too will the whole of the aviation industry."
Virgin is particularly keen. It claims its offer for bmi is still under serious consideration. And analysts point out it won't worry the competition authorities so much. But whoever wins, wiping bmi from the skies will leave a bumpy ride for Londoners. Competition for domestic routes is likely to fall, which could lead to higher prices. Expect turbulence before this deal comes to its final destination.
OCTOBER TRAFFIC FIGURES - BAA'S AIRPORTS
Scottish Airports continue to grow as UK demand softens
BAA Report - 11 November 2011
BAA saw an overall softening in demand in October after seven months of continuous growth, reflecting weakness in wider economic conditions. Passenger numbers at BAA airports fell by 1.3% during October 2011 compared with the same month the previous year. Domestic traffic fell by 9.9%, offset by increases in European scheduled and North Atlantic traffic of 1.2% and 1.1% respectively.
BAA's Scottish airports saw passenger numbers up 2.1%. Aberdeen continued its recent strong performance with a 7.6% increase in passengers last month. Glasgow was up by 0.3% overall and recorded increases of 35% in European scheduled traffic and 47% in North Atlantic passengers.
Edinburgh continued its strong and resilient growth with passenger numbers up 1.8% compared to the same month the previous year. Passenger growth has been helped by nearly twenty new routes that have started operating at the airport since the beginning of the year.
At Heathrow, despite a drop of 1.3% in total passengers, its first monthly fall since December 2010, record traffic was seen over the school half-term period. There was a 17% decline in passengers on domestic routes which closely matched a 16% drop in the number of seats offered on these routes by airlines. Excluding the domestic market, Heathrow's traffic increased marginally with European scheduled traffic up 1.7% and North Atlantic up 0.3%.
Stansted saw lower levels of capacity particularly on domestic routes which was the major factor accounting for a drop of 4.9% in total passengers. However, 81.8% of seats were filled on Stansted planes - a record for October. Southampton recorded a drop in passengers of 3%.
In total BAA's airports recorded a drop of 0.8% in the total number of commercial aircraft movements handled despite an increase of 0.5% at Heathrow, which produced another monthly record of aircraft movements. Cargo volumes were impacted by disruption experienced amongst cargo operators, which contributed to a 7.5% decline in cargo tonnage passing through BAA airports during October.
BAA Chief Executive, Colin Matthews, said: "Edinburgh Airport has shown itself to be a strong and resilient asset throughout the economic downturn with passenger numbers growing by more than 8% this year. The reduction in passengers at Heathrow is indicative of the softening in the global economy. We remain cautious about predicting growth in the coming months."
ICAO COUNCIL BACKS ANTI-ETS DECLARATION
ENDS Europe DAILY - 3 November 2011
The International Civil Aviation Organization (ICAO) has intensified
political pressure on the EU to abandon plans to extend its emissions
trading scheme (ETS) to international aviation. The expansion will
come into effect in January 2012.
ICAO's governing council approved a non-binding statement on
Wednesday urging the EU to rethink its stance. But the European
Commission rejected the call, insisting it remains on track to bring
international flights into the ETS as planned.
Twenty-six of the governing council's 35 members backed the
statement, which was first issued as a joint declaration
by a group of developed and emerging
economies in September.
The statement insists that the sector's greenhouse gas emissions must
be addressed through ICAO and calls on the EU to work collaboratively
with other nations. EU climate commissioner Connie Hedegaard said it
was disappointing to see discussions "once again focus on what states
should not do instead of what they should do".
The Association of European Airlines (AEA) responded to the statement
by accusing the EU of getting tangled in politics and failing to use
the debate around the ETS to engage other nations constructively.
"Europe is right to demand concrete action and deliverable
environmental results, but its approach lacks essential international
buy-in," said AEA's secretary general Ulrich Schulte-Strathaus in a
The move by ICAO adds to already intense international pressure on
Europe to change course. Earlier this week the four BASIC countries -
Brazil, China, India and South Africa - raised the stakes further by
explicitly linking the ETS extension to progress in global climate
Following a meeting held to prepare for climate talks due to begin in
Durban at the end of the month, ministers from the four countries
warned that the EU's plans "violate the principles and provisions" of
the UN climate convention (UNFCCC) and would "jeopardise the effort
of international cooperation in climate change".
India has been advancing similar arguments for some time. In a paper
recently circulated by the UN, it argued that by extracting money
from developing country airlines to address climate change, the EU's
aviation emission trading plan would "turn the UNFCCC-Kyoto balance
of obligations on their head".
Meanwhile, the US House of Representatives last week passed An anti-ETS bill would, if passed, ban US airlines from participating in the ETS. China and India have both made legal and trade threats against the scheme. US airlines have brought a legal challenge to the Court of Justice of the European Union.
UN AVIATION BODY WEIGHS IN AGAINST EU CARBON PLAN
Allison Martell and Barbara Lewis - Reuters - 3 November 2011
The United Nations body responsible for civil aviation weighed in against the European Union's emissions trading scheme on Wednesday, increasing pressure on the EU to back down in what threatens to become a serious trade dispute.
After months of rhetoric on both sides, the U.N.'s International Civil Aviation Organization adopted a working paper from the United States, China and two dozen other nations urging the EU not to include non-EU carriers in its plan. The ICAO said the paper had been adopted by "a clear majority," although European countries had expressed strong reservations. Under the EU's proposals to put a price on pollution, airlines will have to buy permits to help offset greenhouse emissions from jetliners operating in, to and from Europe.
"It is disappointing that ICAO discussions once again focus on what States should not do instead of what they should do to curb growing aviation emissions," Connie Hedegaard, the EU's top climate action official, said in a statement. "Unfortunately ICAO has missed again today the opportunity to tell the world when it will (put forward) a viable global solution."
The aviation industry on Wednesday also called for urgent action to prevent disruption to trade and tourism as a result of the plan, which has already sparked tit-for-tat legislation in the U.S. Congress. The EU rules are to take effect on January 1, and the airlines said they could lose 1.2 billion euros in 2012, or a quarter of this year's profits.
Opposing nations say the plan would infringe a "cardinal principle of state sovereignty" by basing its charges on the distance flown by each flight, which means calculations would include foreign airspace, in violation of a 1944 pact that gives each country exclusive authority over its skies.
It would also discriminate against nations located furthest away from Europe.
TICKET PRICES SAFE
With billions riding on new regulations, environmental measures have increasingly spilled over to trade tensions. European bioethanol producers targeted U.S. farmers Wednesday in a dispute that could lead to import tariffs on the green fuel. Under the EU aviation plan, airlines would have to adopt an emissions trading scheme that has been running since 2005.
Airlines would be allocated tradeable pollution allowances, with each permit representing a tonne of carbon dioxide. Each time a flight to, from or within the EU emits that much CO2 an allowance must be handed back from the same pot or acquired. Airlines failing to obey face fines of 100 euros per missing permit, or 10 times their current market value. In extreme cases they could be banned from the 27-nation bloc.
The 26 objecting nations warned of a "chaotic situation" as other countries tried to come up with competing schemes. "The Council's decision today is one more skirmish in the airlines' continuing battle to evade pollution regulation," said Pamela Campos, a lawyer with the Environmental Defense Fund who attended the ICAO meeting, said in a release.
Tony Tyler, director general of the International Air Transport Association, which represents 230 airlines, said earlier that the industry was ready to adopt market-based tools to control emissions, but urged the EU to act internationally. He said the carbon plan would hit profits and make it harder to invest in cleaner aircraft, although competition would limit the impact on consumers.
The airport industry, which often squabbles with airlines over landing charges, backed the carriers by calling for urgent action to avert a trade conflict. Environmental groups say air travelers have had an easy ride on pollution and adding aviation to the EU's prime tool for controlling greenhouse emissions would address this.
"Emissions have doubled in 20 years and a plane ticket is about the cheapest way a person can heat the planet right now in terms of CO2 per dollar," said Dudley Curtis of the T&E environmental lobby group, based in Brussels.
The Republican-led U.S. House of Representatives voted last week to ban U.S. airline compliance with the scheme, raising the prospect that flights could be disrupted. It remained unclear if the Democratic-controlled Senate would back the move, which the EU has criticized as an attack on its laws.
(Reporting by Allison Martell in Toronto and Barbara Lewis in Brussels; Additional reporting by Tim Hepher, Timothy Heritage and Juliane von Reppert-Bismarck; Editing by Christian Plumb and Janet Guttsman)
OUR COMMENT: Successive Governments and airlines have defended their lack of an effective policy for a reduction in CO2 emissions from air transport by claiming that the ETS would largely solve the problem. What now? The scheme would be spineless and unfair to EU airlines if it did not include all aircraft.
QUESTIONS RAISED OVER AIRLINE'S ROLE
IN INTERNATIONAL EMISSIONS DISPUTE
International Civil Aviation Organization (ICAO) Council
to discuss EU-ETS on 2 November
Transport & Environment - 31 October 2011
There appears to be a link between US aviation industry lobbyists and recent international political pressure against EU plans to cap aviation emissions according to documents revealed today by Transport & Environment (T&E), the sustainable transport campaigners.
Later this week the International Civil Aviation Organization (ICAO), which regulates the industry, will consider whether to adopt a declaration signed in September in India by 21 countries against inclusion of aviation emissions in the European Union Emissions Trading System (EU-ETS).
According to files seen by T&E, that declaration appears to have been drafted with the assistance of American government officials supervised by the one time head lawyer of United Airlines. Dr Julie Oettinger, previously head of international and regulatory affairs for the airline, joined the US government's airline regulator the Federal Aviation Administration (FAA) as head of policy, international affairs and the environment in June 2010, six months after United Airlines launched a major legal action against the EU proposal in the UK high court. The computer file of the India declaration, seen by T&E, shows the document's author as 'FAA'. US involvement was also confirmed by an Indian official who said, ahead of the declaration, "The US wanted a platform, we were more than enthused to be one?"
Further questions have been raised about the role of the former airline lawyer because the US government includes no reference to Dr Oettinger's senior regulatory affairs position at United Airlines immediately prior to joining the FAA in her official biography on the FAA website.
The true nature of the international opposition is also in question as it emerged that airlines from eight of the 26 countries calling for ICAO action against the EU-ETS are actually exempt from the EU scheme. US airlines will be responsible for 10% of the emissions covered but airlines from other big countries supporting the resolution such as India and Brazil are each responsible for just 1% each according to EU figures. Two thirds of the emissions covered by the scheme come from European airlines, who have not joined the calls for ICAO action. Neither have Australia or Canada.
Bill Hemmings, programme manager for aviation at T&E said: "The developing world is being asked to fight a proxy war on behalf of American airlines who balk at the thought of paying the equivalent of a 1 cent a litre tax on kerosene to fight climate change. The aviation industry is sending its lawyers to work in Europe and inside the US government to fight climate change policy but it should be sending its engineers to work to make cleaner planes."
The ICAO Council is being asked to oppose a regional emissions trading scheme yet the organisation recommended such schemes over a global measure as early as 2004, having ruled our other climate protection measures such as kerosene taxation or en-route emissions charges.
EU BIOFUELS POLICY 'NOT SUPPORTED BY SCIENCE'
Transport & Environment - 26 October 2011
More than 150 scientists and economists have written to the Commission calling for it to recognise that biofuels production can have indirect impacts on land-use, and for the resulting emissions to be taken into account in assessing which biofuels help in the fight against global warming. The letter comes as one branch of the biofuels industry has broken away from the rest by saying it would support indirect land-use change (Iluc) being a factor in assessing which biofuels will count towards the EU's renewable energy target and hence qualify for support.
The letter was organised by the Union of Concerned Scientists, an American not-for-profit group that has taken positions on indirect land-use change in statements to other bodies. The letter says: "Without addressing land-use change, the European Union's target for renewable energy in transport may fail to develop genuine carbon savings in the real world. It could end up as merely an exercise on paper that promotes widespread deforestation and higher food prices."
The scientists join a growing list of people and bodies warning the EU that ignoring Iluc could cause the EU's biofuels target to increase greenhouse gas emissions, not reduce them. The Commission's position is still that 'scientific uncertainty' prevents it from taking Iluc into account, and the scientists' letter does admit there are uncertainties in estimating the magnitude of indirect land-use emissions from biofuels. "But," it adds, "a policy that implicitly or explicitly assigns a value of zero is clearly not supported by the science. All the studies of land-use change indicate that the emissions related to biofuels expansion are significant and can be quite large."
In a letter to European Voice, T&E?s biofuels policy officer Nusa Urbancic said: "This 'scientific uncertainty' is a bit of a stretch. Numerous scientific and public bodies agree that Iluc is real and should be accounted for when calculating total emissions from biofuels - the list could hardly be more venerable. We never took the Commission for a bunch of flat-earthers, but on this issue we are getting the sense of an administration in denial."
Another organisation to come out in support of accounting for Iluc is a group of bioethanol producers, whose fuels stand to gain an advantage over biodiesel if the EU factors in land-use impacts. In a letter to the energy commissioner Guenther Oettinger and the climate commissioner Connie Hedegaard, the bioethanol lobby group ePure says it will support a policy that "differentiates between good and bad biofuels pathways and addresses Iluc directly".
Urbancic added: "This is not just about environmental gains and social justice, it's also about ensuring investment certainty for the biofuels industry. Doing nothing on Iluc will leave the industry in turmoil because no biofuel producer will be able to plan properly for the future."
INDUSTRY 'FAILED TO MAKE ITS CASE' ON HEATHROW & APD
Travel Weekly - 1 November 2011
The travel industry "failed to make the case" for a third runway at Heathrow and against Air Passenger Duty and must await the next election for policies to change, according to a Transport Select Committee MP.
Conservative MP Kwasi Kwarteng told a Guild of Travel Management Companies (GTMC) conference in London yesterday: "The aviation industry was complacent. It did not make its case sufficiently."
Kwarteng said: "It is a very competitive industry. Businesses were at loggerheads and did not spend enough time coming together to lobby the government. Aviation failed to make its argument." He added: "The most obvious things need to be spelled out again and again. Hopefully things are changing."
Kwarteng told the GTMC: "The third runway [at Heathrow] is off the agenda for this parliament. The government's mind is set. Parliament runs out in three and a half years. We have to see where we are then."
However, he denied the recent appointment of Justine Greening as transport secretary was a deliberate snub to the industry. Greening led opposition in parliament to a third runway at Heathrow. He said her promotion "was not a dig at the industry. It was a natural progression for a very capable minister."
Kwarteng was elected MP for Spelthorne in Middlesex last year and said 15% of his constituents work, or have family members who work, at Heathrow. He told the GTMC: "We did have a different policy [on Heathrow] and some people [in the Conservative Party] regret we changed it."
He said the political climate for airlines had improved since the general election, but insisted: "The industry needs to be much better at marketing itself." Kwarteng said: "Parties were outbidding each other before the last election with how green they could be. People are more sympathetic now to what you are saying."
However, he held out no hope of an early reduction in APD. Kwarteng said: "I can't honestly say that ill happen next year. I can't tell you when we will have any relief. The exchequer is going to be very reluctant to give up any revenue sources. There is not much ketchup left in the bottle."
He told the GTMC the industry must accept the need to make its case over several years. "The answer is better lobbying," he said. "There is an openness in this government. People have identified there is a problem. The timeframe for debate might be three to five years."
TIME TO FORGE A CROSS-PARTY CONSENSUS ON AVIATION
AND HIGH SPEED RAIL FOR THE LONG TERM - MARIA EAGLE
Speech to the Airport Operators Association by Labour's Shadow Transport Secretary, Maria Eagle MP - 31 October 2011
"The UK's airports are central to our economic prosperity and could be key drivers of the growth without which we have no prospect of emerging from the dangerous economic situation we are in. That's why I am so pleased to be at your annual conference, and why the theme you have chosen could not be more apt, and this conference could not come at a more critical time.
It's a year since Ed Miliband asked me to take on the role of Shadow Secretary of State and I have done all I can to get to know the industry, and many of you personally, over the past months. You work in an impressive industry at the cutting edge of British innovation, science and technology - and what has struck me is your commitment not just to the industry, but to wider UK PLC. I thank you for that commitment, and the contribution you make every day to generating the growth and jobs in what you rightly say are tough economic times.
I also have to say that, following Ed's recent reshuffle, I couldn't be happier to be continuing in this role and ensuring that - on the opposition side at least - you have some continuity. I am sorry that the government has not learnt from our own mistake - and I do believe it was a big mistake - to see the Department for Transport as a revolving door department. It's bad for the sector. It's bad for good governance. And particularly for an industry that needs a long term consistent vision from government. That said, I do wish Justine Greening well in her new job. It's to her credit that she honoured her predecessor's commitment to speak to you today so early into her new brief.
Philip Hammond is of course now off to tell the Armed Forces that they have to be 'better not bigger'. His first task will be to tackle the failure of long term infrastructure and investment planning that is going to mean we have brand new aircraft carriers before we have the planes to go on them. Runways without planes: his aviation policy in reverse, you might say.
A Strategy for Jobs and Growth
This time last year of course, Philip Hammond addressed your conference. Re-reading what he said to you I was struck at the complacent tone - not just on the aviation sector, but on the economy as a whole. Considering the state of the economy today, it is frankly incredible that he was able boldly to declare: 'we have moved from the danger zone... to safety.'
I don't suppose from where you are sitting, in a frankly precarious business, it seems like UK PLC is out of the danger zone. On the contrary, far from moving to safety, we have moved right to the edge of the precipice. Of course we need to bring down the deficit. And we would have halved it across this parliament. I've been criticised for refusing to oppose all of the reductions in spending by the DfT. Backing the decision to cut nearly £2bn from our road building programme and taking £1bn from the costs of Crossrail for example. Scrapping public bodies, even those doing good, and significantly cutting the staff and running costs of the DfT.
But let me also be clear: I would not have cut investment in transport so far or so fast. The DfT accounts show quite clearly the impact on vital investment in infrastructure with rail spending down 41% to £2.9bn and road spending down 18% to £3.8bn in the last year. The speed and scale of cuts to public investment, combined with the complete lack of a credible strategy for growth, are the reason the government has failed, as Philip Hammond claimed, to 'move us to safety'.
Despite this government complacency, you have had to hold your nerve and survive a worldwide financial and banking crash. You live day to day with the consequences, as businesses and families cut back on spending and investment. And our economy faces stagnation.
And I believe that the government's failure to set out a plan for growth is a major failure of leadership. It is failing your industry. It is failing Britain. And it is failing millions of families up and down the country, something we can see more clearly every day.
A fragile economy did not need a hike in VAT. A fragile economy did not need faster and deeper cuts in public investment than any other major country. A fragile economy did not need a massive cull of public sector jobs, with no plan for the private sector to fill the gap.
The result? Our economy has flat-lined. Confidence has gone. Unemployment is up, reducing the deficit by £46 billion less than planned as tax income falls and benefit payments rise. The government's strategy is hurting, but it isn?t working. We need an alternative: a real plan for growth. That's why Ed Miliband and Ed Balls have called on the government to take 5 steps now to help our economy.
First, repeating the bank bonus tax, using the money to build 25,000 affordable homes and guaranteeing a job for 100,000 young people.
Second, bringing forward long-term investment projects to get people back to work and strengthen our economy for the future. And that means genuinely bringing forward investment. Government talks about bringing forward investment but the reality is that they have kicked many projects into the long grass such as vital rail electrification, new rolling stock and rolling out electric car charging infrastructure. And, when the DfT contributes a third of the money, investment from the Regional Growth Fund should actually deliver transport improvements.
Third, reversing January's damaging VAT rise now for a temporary period, providing immediate help for our high streets and businesses, including your own. The rise in VAT on fuel alone has caused real hardship to families and businesses, just at the time transport costs are being hiked across the board, with rail fares up by an average of 8% every year for three years, hitting commuters hard.
Fourth, an immediate one year cut in VAT to 5% on home improvements, repairs and maintenance - to help homeowners and small businesses.
And, finally, a one year national insurance tax break for every small firm which takes on extra workers, using the money left over from the government's failed national insurance rebate for new businesses. Because getting people back into work, easing the cost of living crisis facing households is the best way to also boost spending, including on family holidays and business travel.
A plan for growth. That is how to speed our recovery. To genuinely move us 'from the danger zone... to safety'. So, yes we are in tough economic times. And any government would be facing them. And any government would need a plan for the deficit. The choice is whether government is part of the solution, or part of the problem. And with no plan for growth, I fear we have a government that is failing to provide the leadership we need.
The need for an aviation strategy
Nowhere is that lack of leadership more evident than in the failure to set out a credible long term strategy for aviation. A year into opposition, let me be honest with you. I do not stand here today with a fully formed set of transport policies, half way through our two year policy review.
Yet for the government to say that they need the best part of the parliament to come up with an aviation policy, when they have had thirteen years in opposition to do so, is frankly incredible. Not least for a crucial sector on which our economy depends. For an industry that contributes more than £11bn to UK GDP - more than 1% of the total, over 200,000 jobs directly and 600,000 indirectly across the UK.
Consultation after consultation. Relentless industry engagement. Scoping documents. Taskforces. None of this makes up for the lack of a policy, let alone a strategy. With the economy on the brink, to hold out the prospect of a policy late in the latter part of a five year parliament is frankly not good enough. It is a total failure to prepare for government. And a total failure of the kind of leadership that is needed now more than ever.
The government must change course. Better not bigger is a slogan not a policy, and I am not sure I have heard one so widely ridiculed. So let me be very clear. Any serious strategy for aviation and its crucial role in the UK economy cannot start from a position that rules out additional capacity in the South East.
It is a nonsense to apply a policy to a single region of the country in this way. We need a strategy that works for the South East as well as for our vital network of regional airports which are so crucial to our economy, many of which I have been able to visit over the past year. And of course, my own constituency includes Liverpool John Lennon Airport, so I am clear about the value and future potential of our regional airports.
Setting a long term strategic direction for aviation, both in London, the wider South East and across the country, is a vital part of delivering the growth and jobs the country needs.
Our offer to government
So I have discussed with Ed Miliband how best Labour can, from opposition, support the industry. And how we can help enable the government to set out a clear long term strategy for aviation. Our conclusion is the best thing that we can do for the sector is to make a constructive offer to David Cameron and Justine Greening. To help them get out of the hole they have dug themselves into. To offer them some additional capacity even. So Labour is offering to take the politics out of aviation. To put aside party differences.
I today say to the government: let's work together on a joint aviation policy for the good of the nation. This is a clear unambiguous offer with no catches. Because aviation matters to our country. To our economy. To businesses and families up and down the country. Yours is an industry that needs stability for the long term. And a long term plan that straddles parliaments and governments. And as an industry you need and expect your politicians to up their game.
So, in addition to the more immediate work that the government must conclude, let's establish a cross-party commission to set our long term aviation strategy for a generation and more, not a parliament. Let's not repeat the party political wrangling that turned the proposed third runway at Heathrow into a political football. And let's agree that we will then stick to that agreed strategy whatever the outcome of the next election.
Third runway at Heathrow
When parties work together, they both have to accept where they got things wrong. They both have to set aside firmly held views and entrenched positions. Let's be frank, the Prime Minister has made clear that his opposition to a third runway at Heathrow is not up for grabs. And Ed Miliband has been clear that he does not believe we were right on this issue in government.
I know that, over the past year, many of you have urged us to hold to our election position and take on the government over this issue. But any terms of reference for a cross-party look at capacity will inevitably start with an understanding that the answer for the South East is not going to be to fall back on the proposed third runway at Heathrow. The local environmental impact means that this is off the agenda.
So, we will accept the decision on Heathrow, but we expect the government not to seek to set additional caveats on the options that we will jointly explore if they agree to our offer to work together. Any cross-party body needs the freedom to look at all options for growth including in the South East, while prioritising making best use of existing runways and airports. I say to you candidly: there is a bigger prize for us putting political battles to one side and developing a long term strategy for aviation. It's time to move on and find an alternative way forward.
High speed rail
I want to make one additional practical proposal to government that will be of benefit to Heathrow. The proposed high speed rail line, HS2, was a scheme that we first set out in government. It involves investment across several spending review periods and parliaments and it is a project that requires clear cross party support. I have looked very carefully at this project over the past year and concluded that there was no credible alternative way of addressing the capacity issues on our existing main rail lines between North and South. And while reducing journey times is important and brings with it economic benefits, it is the need to increase capacity that makes this new line so essential.
But if the main purpose of this major investment is capacity, not speed - then it's right that we strike the correct balance between the benefits of reducing journey time between specific cities and ensuring the line contributes to the wider economy. And that isn't a balance we got right in the plans we began and the government is taking forward.
I am convinced it is a huge mistake not to connect direct to Heathrow from the start. Taking the line via our major hub airport would remove the need to build an expensive spur later while opening up the prospect of private sector funding, potentially saving the taxpayer billions. It would lead to a new route that makes better use of existing transport corridors and avoids an area of outstanding natural beauty where residents were wrongly insulted as 'NIMBYs' by Tory Ministers. It also opens up the opportunity to connect to the Great Western mainline, bringing the benefits of the high speed line to the South West and Wales. And we have to find a more coherent way of linking to HS1, so that the opportunity to develop through services from the continent to the Midlands and beyond can become a reality.
Consulting on this new route would allow time for work to be completed on the precise route for the rest of the HS2 line and the entire project to be taken forward in one piece of legislation, as Labour has consistently demanded. The delay of up to 18months now would not cause any delay to the actual start of work on the project or its final delivery date.
Creating a major new transport hub to the West of London at Heathrow, rather than several miles away at a site with inadequate other transport connections, and mirroring the hub in the East at Stratford, is the joined up thinking that is too often lacking in our transport planning.
So, while we will do nothing to put at risk or delay this vital project, I am today urging the new Secretary of State to agree to revise the plans for connecting to Heathrow so that we get this right for the long term.
There is one other long term challenge that I want to address - and that is CO2 emissions. Because the choice for us is whether we are remembered as the last generation not to take climate change seriously, or the first generation to recognise the need to act. Therefore, any cross-party look at the long term future for aviation must also begin with a clear agreement on need to reduce its contribution to climate change.
From all the dialogue we have had over the past year, I know that this is something on which you are relentlessly focussed as an industry. You can be proud of the huge advances that have been made and the way that the industry is rising to the challenge. It's been clear to me as I have visited NATS at Swanwick and been shown how they are leading in Europe and beyond on how air traffic management can contribute to reducing emissions. Or, as I saw two weeks ago, when I joined the Prime Minister at the official opening of the new £400 million factory in Wales which will assemble the wings for Airbus? A350X. Yet, I realise that, despite all the advances that are being made, the emissions challenge is tougher for aviation than almost any other sector.
But the reason we need to place emissions at the heart of our future aviation strategy is clear. Without immediate action we know we face a risk of global warming of more than 2 degrees with appalling consequences for human welfare and ecological systems. And transport remains a major contributor to CO2 emissions. The industry is right to point out that while 22% of UK emissions come from surface transport, just 6% is as a result of aviation. But we all know that the forecasts of a potential growth in air passenger numbers of 200% by 2050 would see this percentage increase without action. So the question is not whether the sector must experience major change but how that change should be brought about.
In government, Labour introduced the Climate Change Act which requires that emissions are reduced by at least 80% by 2050, compared to 1990 levels. To put us on target to achieve this, the Committee on Climate Change?s 4th Carbon Budget sets an interim target of 50% by 2025.
In government, we agreed that aviation should not be included in this target. Instead we worked with you to agree a plan to reduce aviation emissions in the UK to below 2005 levels by 2050. The government has failed even to reaffirm their commitment to this target. And, as you will know, the Committee on Climate Change has also made clear in principle that international aviation should in future be included as well. We believe that the government should agree to this once the committee brings forward its advice on accounting methodology.
However, Ed Miliband and I believe that even the commitment we made in government fails to meet the scale of the challenge we face. Frankly, without aviation playing a greater role, we will not achieve by 2050 the broader 80% cut in emissions on 1990 levels to which we have committed. Therefore, future aviation growth must, we believe, go hand in hand with a greater cut in aviation emissions than we agreed when in government.
We will therefore be urging the Committee on Climate Change to set out what it would mean for aviation to go further than the target we set in government and relieve the burden on other sectors to ensure we can achieve our wider goal for 2050. And then the Carbon Budgets that have been set should be updated accordingly.
I know the energy and determination with which the industry will rise to this challenge. As you will know, the industry's own 'Sustainable Aviation Roadmap' makes clear that, by 2050, it is possible to get absolute levels of emissions down to levels seen at the turn of the century - even as passenger numbers are projected to grow by a factor of 3. So we all agree that it is possible to do more.
This should therefore not be seen as a threat but an opportunity. Fuel efficiency improvements in aircraft engines and airframes. Improvements in air operations, both in terms of more fuel efficient practices and air traffic management. The use of alternative fuels, produced sustainably.
The UK should be at the forefront of developing the new technologies that enable the aviation industry to thrive while reducing emissions. Delivering jobs and growth. Green jobs and green growth. Enabling aviation to grow, sustainably.
Let me conclude by thanking you again for the invitation to speak to you today. We are half way through our policy review, just eighteen months after losing an election. Something we have in common with every other party I might add. So, while I have set out today some of our initial thinking, I want to continue to work and engage with you over the months and years ahead. I am, however, clear that the appointment of a new Transport Secretary provides an opportunity for a fresh start. The offer we have made to her, and to the Prime Minister, today is serious and genuine. I hope she responds positively. And I urge you as an industry to encourage her to do so.
CALL TO REFORM AIRPORTS POLICY
A report from the British Chambers of Commerce suggests
Air Passenger Duty increases should be scrapped
UK Press Association - 31 October 2011
The Government should abandon its opposition to airport expansion and scrap proposed Air Passenger Duty (APD) increases, a report from a powerful business group has said. Failure to deliver a strong aviation policy will hinder jobs and growth, said the report from the British Chambers of Commerce (BCC).
The Government could either "mark time and meander its way on" or come up with a long-term aviation policy that boosted businesses and economic recovery, the BCC said.
The Government has ruled out expansion at south-east England airports, which has meant scrapping Labour's plans for an extra, third, runway at Heathrow in west London.
The BCC report, entitled Flying in the Face of Jobs and Growth, said current aviation capacity would not cope with the projected 335 million passengers at UK airports expected by 2030. The BCC said the Government should increase both the range and frequency of flights, ensure there was sufficient airport and airspace capacity and keep air transport prices competitive.
The report said that in other European countries, expanded hub airports, such as those at Amsterdam, Paris and Frankfurt, were increasing the potential for investment and economic competitiveness. The chamber argued that an additional runway at Heathrow, which was falling behind rival airports, would address the capacity issue and ensure the UK had a hub airport that can compete with other countries.
The report recommended the scrapping of planned increases in the APD airport departure tax which had increased massively since 2007. Analysis in the report showed that a 5% year-on-year rise in APD could cost the economy at least £70 million by 2015, £190 million by 2020 and £660 million by 2030; and reduce the number of jobs by as much as 25,000 by 2015, 71,000 by 2020 and 250,000 by 2030.
BCC director general John Longworth said: "Identifying the link between air travel and economic performance is easy. What's harder is to convince the Government of the need for a clear plan to ensure aviation can play its full part in ensuring economic recovery."
FOSTER REVEALS £50B THAMES AIRPORT
TO RIVAL 'BORIS ISLAND'
Philip Pank - The Times - 2 November 2011
Britain must capitalise on its Victorian heritage and the experience of booming Asian economies to overhaul its transport system, the architect Lord Foster of Thames Bank will argue today as he unveils plans for a new hub airport in the Thames Estuary.
The four-runway airport, built partly on reclaimed land, will be served by the country's busiest railway station with high-speed connections to London, the North and mainland Europe. A new barrage across the River Thames will connect the airport to the capital, provide flood defences for the next century and more than double the area of building land protected from floods along the estuary.
Inspired by the great British engineering feats of the 19th century and recent vast developments in Asia and Latin America, the £50 billion scheme is designed to put Britain back at the heart of world trade. The airport, located on the Hoo Penninsula on the Isle of Grain, could handle 150 million passengers a year, restoring London's place as pre-eminent aviation hub and making possible new air links with China, Brazil and other emerging markets.
Passengers would fly into London over water, sparing five million people living under the Heathrow flight paths from noise and air pollution.
A railway station beneath the main terminal building is designed to handle 300,000 passengers a day with links to the forthcoming Crossrail network and main lines to the London terminals within 30 minutes. A new orbital high-speed railway around East London would connect the airport to the planned HS2 railway linking London, Birmingham, Manchester and Leeds, and to the Channel Tunnel rail link.
A deep-sea port on the north bank of the river, and the ports of Felixstowe, Liverpool and Southampton, would be linked to the railway, allowing freight to be taken off heavily congested passenger routes and clearing capacity in the London bottleneck.
The orbital railway would take 4,000 lorries a day off the M25 and reduce many train journeys across London by an hour, Lord Foster claims.
Power for the airport and surrounding homes would be generated by tide turbines north of the runways and along the new flood defences. Power cables, water pipes and broadband cables would run along the orbital railway and to the North in a "green spine" running the length of the country.
If it sounds too good to be true, Lord Foster argues that the country simply cannot afford not to invest in a scheme of such epic proportions if Britain wants to compete on the world stage. "We can't just stand still and watch everything clog up to a standstill," he told The Times.
The project would allow London to "leap frog" Paris, Frankfurt and Amsterdam which have all built runways to meet growing demand for aviation, he said. Lord Foster insists that a £50 billion price tag is realistic. "We need to recapture the foresight and political courage of our 19th-century forebears if we are to establish a modern transport and energy infrastructure in Britain," he said.
Backers of the project, which include Foster + Partners and Halcrow transport consultancy, acknowledge that political support will be vital. If the Government were in favour, they say, sovereign wealth funds and international investors would be willing to put in money. The plans emerged as the Government and Labour ruled out a third runway at Heathrow.
Boris Johnson, the Mayor of London, has already proposed a hub airport in the Thames Estuary, but his point man on the project, Daniel Moylan, told The Times that Mr Johnson would welcome Lord Foster's contribution to the debate. "The Government needs to take proposals like this seriously," he said.
The scheme would inevitably run into opposition from people living in the village of Grain whose homes would be destroyed and by environmental groups. The Environment Agency has already earmarked part of the site for tidal mudflats to offset other infrastructure projects.
OUR COMMENT: It also seems that neither the Coalition Government nor the Labour Party are likely to support the project.
THE WINTER CHILL THAT STRETCHES
FROM STANSTED TO AGADIR
Data collected from airlines show that they expect to reduce the number
of seats flying from Stansted to such places as Agadir by 7.9% this winter
David Robertson - The Times - 30 October 2011
Stansted will be squeezed increasingly tightly this winter as Britain's taste for the short-term break wanes amid the downturn.
Winter is always tough for airlines because people travel less, but bookings this year are expected to be even worse than normal because of the weak economy. Stansted's reliance on low-cost carriers and charter airlines catering for the winter escape makes it especially vulnerable.
Data collected from airlines operating at the Essex airport show that they expect to reduce the number of seats flying from Stansted by 7.9 per cent during the winter season. According to data from Airport Co-ordination, the company responsible for arranging schedules at Britain's airports, easyJet will cut the number of seats it offers from Stansted by 11 per cent to 1.5 million this winter.
Ryanair, Stansted's biggest operator, has already said that it will cut the number of aircraft based at the airport to 24, from 40 during the summer. The ACL data shows that compared with last winter, Ryanair will be flying 4 per cent fewer seats, at 5.1 million. Thomas Cook, the charter operator, will reduce the number of seats available by 30 per cent to 25,000.
Chris Tarry, of the aviation consultancy CTAIRA, said: "Winter is going to be very tough for the airlines this year. On many routes, carriers will lose less money if they don't fly and so they are cutting capacity and either grounding their planes or moving them to more attractive places."
Stansted's traffic has been sliding since 2008 and a further contraction this winter will make it even harder for the airport's owner BAA to find a buyer, if it is required to do so. The Competition Commission has ruled that BAA must dispose of Stansted to break up the company's monopoly in the South East of England. BAA has appealed against the decision.
According to the ACL data, the number of flights leaving Stansted will fall by 1.8 per cent this winter. The steeper decline in seats available suggests that airlines will switch to smaller aircraft. EasyJet is cancelling its Stansted to Newcastle service this winter and is also reducing services to Munich and Grenoble from the airport. Ryanair is cancelling services to Agadir in Morocco, Altenburg and Lübeck in Germany, Gerona in Spain, Pau in France, Trapani in Italy, Ibiza and Prestwick. Thomas Cook is halting flights to Monastir in Tunisia and Rovaniemi in Finland.
ACL data for Heathrow show that the country's biggest airport will be subject to a 1.1 per cent reduction in the number of seats operated this winter. According to ACL, British Airways will cut the number of seats flown from Heathrow by 5 per cent. BA said that this figure was not correct.
A spokesman for BAA said: "Both Stansted and Heathrow are great airports but they operate in different markets."
STANSTED AIRPORT GRANTS AVAILABLE
FOR COMMUNITY PROJECTS
Herts & Essex Observer - 31 October 2011
APPLICATIONS are being invited in the latest round of grants from the Stansted Airport Community Trust. Last month, trustees awarded £71,000 to local organisations and will now accept the next batch of bids from community and voluntary groups in parishes within a 10-mile radius of BAA's Essex base.
Applications for grants of up to £2,000 from sports clubs, churches, village halls, Scout and Guide groups etc for items of a capital nature, such as repairs, disabled access, heating systems, hearing loops, lawnmowers and cricket nets, will be welcomed. The closing date for the next round of applications is January 31, 2012.
To apply, contact SACT, PO Box 11, County Hall, Chelmsford CM1 1LX or email firstname.lastname@example.org for an application form or advice. The trust does not fund projects for parish councils or individuals and does not grant money for completed projects.
SSE CAMPAIGN WINS PUBLIC RELATIONS 'OSCAR'
Saffron Walden Reporter - 27 October 2011
A PRESSURE group's overwhelming success has earned them the top award at the 2011 PR Week Awards. Stop Stansted Expansion (SSE) lifted the winning trophy after derailing plans for a second runway at the airport.
The prestigious ceremony was held in the famous ballroom at London's Grosvenor House Hotel and was attended by more than 1,000 public relations professionals. Alistair Campbell, former communications chief at No 10, presented the trophy to SSE volunteers Maggie Sutton and Mike Fairchild who represented campaign director Carol Barbone. In their commendation, the judges said SSE had "successfully scuppered BAA's plans to build a second runway at Stansted Airport," describing the campaign as "highly impressive".
The judges contrasted SSE's relatively tiny budget with BAA's £200m war chest saying this was "proof that successful lobbying is not about contact books and huge budgets". Much of SSE's success was attributed to its targeting of individuals and organisations that could influence the runway decision, including Parliamentarians, media, local authorities, environmental groups, BAA's shareholders and the local community.
SSE formed alliances with opponents of expansion at other airports to reinforce its advocacy at public inquiries, in three judicial reviews and in the High Court and Court of Appeal. The quality of SSE's briefings was praised in the House of Lords during the passage of the Civil Aviation Bill. Celebrity support was given by Terry Waite, who became SSE's patron, Jamie Oliver, Will Self and the Kaiser Chiefs.
The judges noted the pledge by all three political parties ahead of the last election to oppose a second runway at Stansted. BAA formally withdrew its second runway application in May 2010 after the first policy announcement by the coalition government opposed the Stansted plans. SSE's campaign was also singled out for special mention by Tim Minchin, who performed the cabaret at the awards ceremony.
"This latest award is a tribute not just to the specialists who led our public affairs blitz against BAA but to the unswerving support of our army of community volunteers whose opposition to BAA's ambitions simply could not be ignored," said SSE's campaign director Carol Barbone.
STANSTED CALLS FOR GROWTH TO 35M PASSENGERS
Cambridgefirst Online - 24 October 2011
Stansted Airport has the space and permission to serve 35 million passengers a year on its existing single runway - and has the capacity to help meet demand for air travel in the South East. That is the key message in the airport's response to the Government's consultation to develop a new sustainable framework for UK aviation.
The airport's response stresses that aviation is a key sector of the UK economy - with Stansted a driving force for growth in the East of England.
Stansted says it supports a new sustainable framework that strikes the right balance between social and economic benefits within clear environmental limits.
It calls for reform of the industry to ensure best use of available capacity and fairer taxation - and says passengers' interests need to be put first. And the airport says its track record shows growth can be achieved whilst minimising the impact.
"We welcome this opportunity to contribute to the important debate on the future of the UK aviation industry and to ensure the Government is properly informed of the issues and perspectives that are relevant to London Stansted," said airport managing director Nick Barton.
"We believe making best use of London Stansted's permission to serve 35 million passengers a year will be the most sustainable approach to serving point-to-point demand in the short to medium term. But there is a pressing need for an updated aviation policy to provide a clear, long-term framework for the future of the sector, and we welcome the Government's commitment to deliver this by 2013."
"London Stansted has a key role to play in supporting both policy development and the delivery of a sustainable aviation framework. We believe that the combination of the innovation brought about by the low-cost airlines, together with increased utilisation of Stansted's spare capacity, will bring significant benefits to consumers and the economy, and at the same time protect the environment."
Mr Barton added that a "dynamic and innovative" aviation industry supports the UK economy and jobs. "Stansted is the largest single-site employer in the region with over 10,800 jobs - and is critical to our international competitiveness," he said.
OUR COMMENT: Can the airport successfully meet "environmental limits" at 35mppa AND can they explain exactly what these limits are and how they assess them? However, no mention of a second runway - perhaps they realize that it would be unsustainable by any definition!
CAN GROWTH TAKE OFF WITHOUT A THIRD RUNWAY?
David Wighton - The Times - 17 October 2011
Justine Greening, the new Transport Secretary, hates aircraft noise. This will create a headache for business leaders.
The implosion of Liam Fox's career has caused some serious and unexpected collateral damage. The fallout from the Defence Secretary's resignation has blown a hole in hopes of reopening the debate over the third runway at Heathrow. The mini-reshuffle that resulted has brought Justine Greening into the Cabinet as Transport Secretary. Bright, young and a good media performer, Ms Greening impressed many in the transport world as a junior Treasury minister, not least for steering the Government through a U-turn on air passenger duty.
From the aviation industry's point of view there is just one small snag. Ms Greening is the MP for Putney, which sits right under the flightpath to Heathrow, and she has been one of the most prominent opponents of expansion at the airport.
The scrapping of plans for a third runway was one of the Conservative Party's most controversial election pledges. Many Tory MPs agree with Lord Adonis, the former Labour Transport Secretary, who wrote in The Times recently that it was an act of national self-mutilation to rule out new runways, not just at Heathrow, but also at Gatwick and Stansted.
Ms Greening's appointment is a particular blow to these critics because there were signs that the ground was shifting slightly within government. The industry has convinced many doubters that London needs a hub airport with more capacity if Britain is to remain internationally competitive. One of the arguments deployed by the opponents of a new runway - the increase in carbon emissions - seems to be losing its traction.
Preventing expansion at Heathrow would merely move flights elsewhere, to other UK airports or to Amsterdam, Paris, Frankfurt or Dubai. Concerns about emissions are in any case increasingly taking a back seat in government as the economy has weakened. There has certainly been a shift within the Treasury, where ministers talk about the need to reopen the debate.
That debate now centres largely on noise. A third runway would involve a new flight path over the capital, subjecting a fresh swath of London to aircraft disruption. Supporters point to the huge improvement in aircraft volume over the past 20 years. According to the Department for Transport, 2 million people in London were subjected to aircraft noise in the 1970s, a figure that is now down to a quarter of a million.
Nobody disputes that there will be further advances in reducing aircraft noise. The question is, who should benefit from those advances, local residents or the wider economy? George Osborne, the Chancellor, is said to be convinced that it should be the wider economy, while the other camp includes Theresa Villiers, the minister responsible for aviation at the Department for Transport.
It is unclear where Prime Minister David Cameron stands - his wife, Samantha, is said to be fiercely anti-noise - but the appointment of Ms Greening suggests that, at the very least, expansion at Heathrow is not his top transport priority.
People who have discussed transport with him recently say that the priority is clearly High Speed 2, the proposed new rail line from London to Birmingham and the North. The plan has run into stiff opposition, not just from MPs whose constituencies would be affected, but also from those who question the economic benefits.
Philip Hammond, the former Transport Secretary who is replacing Dr Fox at Defence, was a very strong advocate, and some in the rail industry had predicted that HS2 would be put on the back burner if he was reshuffled. But the Prime Minister appears totally committed and is said to hope that Ms Greening will be more effective at selling the idea. Even the most optimistic third runway supporters concede that the ruling out of expansion in the coalition agreement with the Liberal Democrats makes it politically impossible to change course while the coalition lasts.
This puts the Department for Transport under pressure to come up with an alternative. It recently refloated the idea of a high-speed rail link between Heathrow and Gatwick to form a "virtual hub". But experts question whether it would be possible to get passengers between the two airports quickly enough to compete with single-site hubs. Another option would be to use Northolt, which is closer to Heathrow, although the orientation of its runway is a problem.
Supporters of the third runway admit that Ms Greening's appointment will lend weight to those arguing for the most radical solution: a new £50 billion airport in the Thames Estuary. In his response to the Government's aviation strategy consultation, Boris Johnson, the London Mayor, warns that without a new airport London will become "a destination on the end of a branch line" and risk losing international business, tourism and trade.
Many business leaders are loath to give up hope of a west of London solution. They are sceptical of claims that any new airport could be financed without some public money (whereas the third runway would be privately funded) and point out that the transport budget is going to be very constrained for years because of HS2. Shifting the airport to the east would redraw the entire economic geography of the South East, causing upheaval for all the businesses that are located west of London partly because of proximity to Heathrow. This huge disruption means that the fight for expansion at Heathrow must continue while other options are explored.
Given the self-imposed constraints, it is hard to see how the Government's aviation strategy, due next year, could come up with a credible long-term solution. But Ms Greening could at least provide some short-term respite if she was prepared to take on local community lobbies.
More immediately, she faces a decision on whether to cut back night flights from Heathrow to Asian destinations such as Hong Kong and Singapore. The industry argues that the flights are vital if Britain is to compete with Paris and Frankfurt, but most Tory MPs in West London want them banned. Ms Greening's decision will show whether she can stand above her constituency interest. It will also be another test of how far Mr Cameron and Mr Osborne are prepared to go to support growth.
AIRPORT EXPANSION BACK ON GOVERNMENT AGENDA
Deborah McGurran - BBC News - 24 October 2011
The government's consultation on what its future aviation policy should be closed in October and the aviation industry is pushing hard to be allowed to expand, particularly in the South East.
In its submission, the Board of Airline Representatives in the UK (BAR UK) says the lack of a clear aviation policy is damaging the UK and hindering business development. "The capacity constraints in London and South East England need to be addressed as a matter of priority," it says.
BAR UK, which represents 86 carriers using British airports, argues that the lack of slots is inhibiting business expansion. And with no plans in the pipeline to expand any airports, some airlines, it claims, are considering their future investment in the UK.
A poll of its members reveals that 94% are concerned about the lack of additional capacity at Heathrow. They believe that the capital is the most important destination in Britain: 74% of all visitor arrivals in the UK are at London airports.
"The government's ditching of the previous administration's aviation policy has effectively banned any new runways at the three largest London airports and set back the economic role of aviation by over 10 years," says the report. "This then begs the question, if Heathrow is full but is unable to add capacity, and other London airports are not considered practical alternatives or not allowed to expand, then how is the UK economy likely to be affected?"
BAR UK would prefer to see a third runway at Heathrow but the campaign group Stop Stansted Expansion is already on alert. "The industry is lobbying hard at the moment," says its spokesperson Carol Barbone. "If they don't get a third runway at Heathrow then it's very likely the issue of a 2nd runway at Stansted will be back on the agenda again."
Those are words that will prick up many ears. There are other options: Southend is starting to grow, and Luton would like to be allowed to take more flights, but the airlines feel those airports are too small to become hub airports. There are also several plans to build in or alongside the Thames off the coast of Essex including the so-called "Boris Island". But sources in the Department for Transport have told us that those schemes in their present form aren't seen as being practical.
Both the Conservatives and Liberal Democrats went into the last election promising no more airport expansion in the South East in this parliament, but many MPs privately admit that this position can't be sustained after the next election. And Labour, which put the Stansted 2nd runway plans on hold just before the general election, will neither say yes or no on whether they would back expansion in the future.
Ed Miliband told us last month that the issue "would have to be revisited" at some stage. He said the important thing was for Britain to draw up proper targets for greenhouse gas emissions first and then see what room there was for any airport expansion.
"The government must back airport growth," says Ed Anderson from the Airport Operators' Association. "We create ?50bn of wealth a year and are responsible for 9,000 jobs in the UK economy. There must be no more delays."
The industry was lobbying hard at this year's party conferences, and around Westminster at the moment there are dozens of posters highlighting the advantages of London's airports. The airlines and airports argue that their planes and operations are more environmentally friendly these days. They believe they have a strong case to be allowed to expand.
If the government buys their argument and gives the green light to further airport growth it is almost inevitable that our region will be affected.
RYANAIR EYES FRESH PHASE OF GROWTH
Andrew Parker in London - Financial Times - 23 October 2011
Michael O'Leary, Ryanair's chief executive, told the Financial Times he was looking to take a large delivery of aircraft between 2015 and 2021, and was in talks with US, Chinese and Russian manufacturers. His comments are his most explicit yet about taking the Irish airline on a second phase of growth following rapid expansion over the past decade.
Mr O'Leary insisted he would only buy aircraft at "cheap prices", but one analyst questioned whether Ryanair could strike a cut-price deal with Boeing or Airbus, the established commercial aircraft makers. Another analyst said further expansion could hurt profitability at the airline.
Ryanair has an all-Boeing fleet, and Mr O'Leary acknowledged it faced increased operating costs if it bought aircraft from a different manufacturer.
Ryanair is talking to three manufacturers - Boeing of the US, China's Comac and Russia's Irkut - about a deal to buy 200-300 narrow-body aircraft from one of them.
Such a deal would enlarge Ryanair's fleet from 300 to 500 - some new jets would replace older ones - and enable the airline to increase passenger numbers. "I would like to grow to 120m, 130m passengers," said Mr O'Leary. In 2010-11, 72.1m passengers flew with Ryanair.
At 130m passengers, Ryanair would consolidate its position as one of the world's largest airlines. Lufthansa, Europe's largest airline by revenue, flew 91m passengers in 2010. Southwest Airlines, the US low-cost carrier, flew 88m passengers in 2010.
Mr O'Leary said demand for low-cost air travel in the deteriorating economic meant Ryanair could continue to increase market share on European short-haul routes at the expense of flag carriers including Lufthansa and British Airways.
Ryanair's expansion in recent years has focused on Italy and Spain, and Mr O'Leary said the airline now had big growth opportunities in Scandinavia and eastern Europe. He outlined the case for deploying 50 aircraft in Scandinavia and 100 in eastern Europe.
Mr O'Leary added that Ryanair could pay two more special dividends before it placed a new aircraft order. Ryanair paid a maiden dividend worth ?500m last year, and is considering a similar payment to shareholders in 2012-13. Mr O'Leary said a third special dividend might possible in 2014-15 if Ryanair had not finalised an aircraft order by then, but he ruled out the company making an annual pay-out to shareholders.
AIRLINES: DEMAND FOR CLARITY ON UK AVIATION POLICY
Aviation and Transport Online - 21 October 2011
Travelweekly.co.uk (Staff) reports that the Board of Airline Representatives in the UK has warned the lack of a clear aviation policy is damaging the economy. The government's review of the sector was the "last chance" to devise and implement the visionary strategy required to ensure Britain remains competitive, said BAR UK chief executive Mike Carrick.
Speaking as the deadline for the Department for Transport's consultation closed, Mr Carrick said the effective banning of any new runways at the three largest London airports had set back the economic role of aviation by over 10 years. "The UK can only maintain one hub airport and for the foreseeable future that has to remain as Heathrow," he added.
Traveldaily.co.uk (Staff) quotes Abta chief executive Mark Tanzer who said: "The government's imposition of punitive levels of air tax in the form of Air Passenger Duty and lack of support for the growth of airport infrastructure or runway capacity is having a negative impact on the industry and is a real missed growth opportunity for the UK economy".
British Airways chief executive Keith Williams added that the proposed 'Heathwick' virtual hub, created by means of a high-speed rail link between Heathrow and Gatwick, would not help resolve capacity issues around London.
BUSINESS LEADERS WARN UK WILL SUFFER
WITHOUT ADDED AIRPORT CAPACITY
ABTN Online - 20 October 2011
The Institute of Directors (IoD) has urged the government to make a decision quickly on the future of airport capacity in the UK.
Simon Walker, director general of the IoD, said members would like to see "concrete proposals for more capacity in specific locations".
The organisation surveyed 1,245 of its members, of which 40% believe that airport capacity expansion in London and the South East would have a positive impact on the productivity of their business, compared to 4% who think it would have a negative one. Meanwhile, only 23% of those asked think a high-speed rail link to Birmingham would improve productivity.
Proposals for increased capacity should be dealt with "in no longer than 12 months", said Walker: "We cannot have another debacle like Terminal 5, where it took eight years for a decision to be made."
He warned that the UK is already lagging behind other countries, in the IoD's response to the Department for Transport's consultation "Developing a sustainable framework for UK aviation".
"Aviation is vital to UK trade and investment, but we are already falling behind our competitors in Europe," said Walker. The IoD chief also spoke out in support of a new hub airport in the Thames estuary: "If it can be done in Hong Kong, there is no reason why it can?t be done here."
OUR COMMENT: Presumably the 56% who did not vote had no concerns about the present services available.
PRIMARY AIRPORTS PROVIDE EASYJET PLATFORM
FOR FUTURE EXPANSION
Airport Business Online - 24 October 2011
The easyJet vision is to 'Turn Europe Orange'. It currently operates at 130 airports in 30 countries, offering 560+ routes, and continues to build on its pan-European presence, which currently sees 60% of customers originate outside the UK, while over a third of flights do not touch the UK. A 20th base will open at Lisbon Airport during the 2011 winter season, while another will open at London Southend Airport in April 2012.
Prior to joining easyJet, the present CEO Carolyn McCall spent 24 years in publishing with the Guardian Media Group - the final four years in the position of Group Chief Executive. She arrived with a proven track record of successful operational delivery in a fast-changing, consumer facing business, alongside government and lobbying experience. Her first priority was to address operational issues, which last summer saw a high level of cancellations and poor on-time performance. McCall attributes this to the airline not having the right number of crew in the right locations at the right times, coupled with industrial action by air traffic controllers across Europe. "I focused on punctuality and reliability, which are issues linked to customer satisfaction. One of the first things I did was to appoint a new Operations Director - Warwick Brady," she said.
Resolution of the dispute with easyGroup IP over the terms of the 'easyJet' brand licence was another priority. easyGroup is the private investment vehicle of entrepreneur Sir Stelios Haji-Ioannou. It is owner of the 'easy' brand and licenses it to all of the 'easy' branded businesses, including easyJet, which Stelios founded in 1995 and in which he remains the largest single shareholder (38%). A revised agreement was announced in October 2010, which confirms easyJet's worldwide rights to the use of its brand on a basis that protects its current commercial activities and provides clarity and certainty over the terms of the licence. The rights will continue for a 50-year term, with a minimum commitment of 10 years in return for an annual royalty payment of 0.25% of easyJet's revenues. The payment is fixed at £3.9 million (€4.4m) and £4.95 million (€5.6m) for the first two years of the agreement.
McCall explained that, importantly, it gives easyJet the operational flexibility and commercial freedom to grow its business. Consequently, in March, the airline joined the Nectar loyalty programme in its first commercial initiative since the new brand licence agreement. It means Nectar points can be exchanged for easyJet flights - every 500 points is worth £2.50 (€2.80). "It offers greater flexibility for our existing customers, as well as opening up opportunities to new Nectar customers. Unlike traditional flight point schemes, it allows customers to choose to get a discount on any flight, any day, across the easyJet network," explained McCall.
Nectar is the UK's largest loyalty programme. It was launched in 2002 and now has more than 18 million cardholders. The launch members were Sainsbury's and BP, and other current members include the AA, Expedia, Ford, Hertz and Vision Express. Cardholders can save up points for rewards with the member companies. Rewards include money off shopping, travel, eating out, and general merchandise.
It was also announced in March that easyJet had formed a partnership with VisitBritain - the UK's national tourism agency - to jointly market Britain as a tourist destination over the next four years. The deal is worth around £18 million (€20.5m) in cash and marketing in kind, and aims to capitalise on opportunities such as the Queen's Diamond Jubilee and London Olympic Games in 2012. The four-year campaign aims to deliver four million extra overseas visitors, £2 billion (€2.3bn) more visitor spending in the UK, and 50,000 new jobs across the country.
Focus on business travellers
London Southend is a good example of a strong collaborative approach between airport and airline. The airport is being redeveloped in a way that suits the easyJet model. It is about to open a new terminal, has extended the runway and is putting in a new rail link with excellent service into central London.
The leading positions that easyJet has built at primary airports, such as London Gatwick, gives it the platform for future expansion in Europe. Over the past five years, easyJet has grown from being a UK-centric airline to one that has developed a significant presence in mainland Europe, with valuable positions at slot-constrained airports. easyJet is number one at London Gatwick, Milan Malpensa and Geneva, and number two in Paris. The figures speak for themselves: 84% of easyJet's routes involve at least one slot-constrained airport. "We are focused on the breadth and depth of the network and have a leading presence on Europe's top 100 routes. Leading positions drive yields as we offer time sensitive customers a quality schedule," said McCall.
The strength of easyJet's business model is centred on offering low fares to convenient airports. Its success is reflected in a 2010 performance that delivered a robust financial result against a difficult economic backdrop. Pre-tax profit grew by £99.3 million (€113.4m) to £154 million (€175m) driven by strong revenue performance - total revenue grew by +11.5% to £2.97 billion (€3.4bn). The airline is focused on increasing total revenue per seat, which in 2010 was £53.07 (€60.61) - an increase of +3.3%, which is attributed to the strength of the route network, good route management and growth in ancillary revenues.
"The trend in the industry is that revenue per seat is going down - we want to be against that trend. The key way of growing revenue per seat and getting more yield is from business passengers, and our product is relevant to those passengers," commented McCall. "The new Flexi fare gives passengers unlimited flexibility to change their booking, within a four-week window, up to two hours before departure. Flexi fare also gives automatic speedy boarding and a checked-in hold bag, catering to the needs of business travellers. 18% of easyJet?s passengers are currently travelling on business and we'd like to grow that to 23% over time."
She explained that France is a compelling investment opportunity. Comparing summer 2011 with summer 2010, easyJet's biggest increase in weekly flights is in France (+133 flights). Meanwhile, the UK, which is still easyJet's biggest country market by far, increased less (+94 flights). "In France, LCC market penetration is still relatively low at 24%. easyJet is the second biggest carrier there with three bases, including the two Paris airports and Lyon. It is still an immature market for low-cost carriers and we are in a really good position." McCall also believes the new Berlin Brandenburg Airport Willy Brandt will present opportunities for easyJet.
Cooperation and partnership
McCall: "We're a point-to-point carrier specialising in quick turnarounds. We don't want to overcomplicate that with too many long routes. We are not planning to look at long-haul. There is a lot more room to grow organically from where we currently operate."
McCall is of the opinion that airports need to reflect changes in the airline market, specifically the rise of point-to-point low fares airlines. "Too many airports still focus on addressing old business models. Passengers value simple and efficient infrastructure and good, quick service," she said. "The road ahead needs to be one of cooperation and partnership. We work very closely with airports on enhancing the passenger experience. I am ensuring that every part of easyJet is aligned behind improving the passenger experience."
The airline places a strong emphasis on service on the ground, with McCall reporting virtually no complaints regarding its onboard service and very positive feedback on the cabin crew. "The vast majority of complaints are related to service on the ground - queuing, communication issues and baggage issues, for example. We communicate with passengers via mobile and it is critical we get a ground agent to work with customers as we would work with them."
London Southend Airport is a good example of a strong collaborative approach between airport and airline. The airport is being redeveloped in a way that suits the easyJet model. It is about to open a new terminal, has extended the runway and is putting in a new rail link with excellent service into central London. easyJet will base three A319s at London Southend from April 2012, operating 70 weekly flights to eight destinations - Alicante, Amsterdam, Barcelona, Belfast International, Faro, Ibiza, Malaga and Palma de Mallorca. These are expected to deliver 800,000 annual passengers.
"Southend designed the terminal around us and the customer experience is fantastic," said McCall. "We will move three aircraft from Stansted to Southend, as the catchment areas overlap. A lot of crew from Stansted will also relocate to Southend. Economically it will be good for us, as the cost per passenger is lower. Interestingly, London Southend is also the closest airport (that easyJet can use) to the London Olympics site. That is not the reason for opening a base there - we would have done that anyway. But we will use the fact to promote our first Southend services."
easyJet's 200-strong fleet includes 25 Airbus A320s, which has enabled it both to extend its network to longer range destinations such as Israel, Egypt and Turkey and to fly a higher number of passengers at highly slot congested airports. The airline took delivery of its 200th Airbus in May.
While easyJet will be shifting aircraft to London Southend, that does not necessarily mean it will be reducing capacity at London Stansted. Deepening the frequency of its existing routes is central to its strategy for organic growth.
Taxation suppresses demand
easyJet fiercely opposes Air Passenger Duty (APD), which McCall says suppresses demand. She is forthright in describing taxes on aviation, such as those in the UK, Germany and Austria, as "horrendous". "We support the EU Emissions Trading Scheme (ETS) as more effective. We're increasing efficiency and reducing emissions. We're committed to sustainability and our strategy is to grow efficiently and profitably," commented McCall. "The long-term impact of volatile oil prices is that air fares will rise. We are facing the triple whammy of high oil prices, the EU ETS coming in 2012, and APD in the UK. APD is ridiculous - I don't see why the government is adding an environmental tax and APD, which is also supposed to be for the environment."
In May, easyJet published an independent report by Frontier Economics on the UK Government's proposed changes to APD, which would see the aviation tax rise from £12 (€13.7) to up to £16 (€18.3) per person for flights up to 2,000 miles and reduce the rates and number of tax bands on long-haul services. The report claims that the proposals would reduce UK passenger numbers by three million per year, increase CO2 emissions by up to 360,000 tonnes per year, reduce tourist spending in the UK by £475 million (€542m) per year, reduce UK GDP by £2.6 billion (€3bn) per year, and lead to the loss of up to 77,000 jobs.
"This independent report shows that the Government's proposals on APD would be bad for the environment and the economy. APD has already risen by +140% since 2007 on short-haul flights," said McCall. "This report provides convincing evidence that the Government should not impose further increases in APD on short-haul flights and should rethink its policy on aviation taxation. easyJet is in favour of a move to a per plane tax. Four out of five British passengers would be better off under such a tax and, more importantly, it would encourage the industry to fly more efficiently."
Potential for organic growth
easyJet's 200-strong fleet includes 25 Airbus A320s, which has enabled it both to extend its network to longer range destinations such as Israel, Egypt and Turkey and to fly a higher number of passengers at highly slot congested airports. In March, the airline launched services from London Gatwick to Amman in Jordan. At five hours the route is easyJet's longest and McCall says the airline has no plans to fly further. "We're a point-to-point carrier specialising in quick turnarounds. We don't want to overcomplicate that with too many long routes. We are not planning to look at long-haul. There is a lot more room to grow organically from where we currently operate. Egypt also works well for us; UK-Egypt traffic is holding up very well." On the subject of the LCC/network carrier relationship, McCall explained that it is not on the easyJet agenda to pursue any code sharing or feeding arrangements similar to those between Air France-KLM and GOL, or Lufthansa and JetBlue. "Given that our entire world view is that we want it to be simple and uncomplicated, it would have to be materially beneficial to easyJet for us to do it," she commented.
easyJet will adopt a conservative approach over the next 18 months, keeping its fleet size flat because of a combination of high oil prices and consumer confidence remaining fragile. So, while the economic outlook in Europe remains uncertain, easyJet appears well positioned for future success, with a strong balance sheet and a robust European route network. "My long-term vision is for easyJet to be Europe's preferred short-haul airline and we are on the way there. We have the most number of routes on the most valuable city pairs and I intend to build on that. We are on our way and there is a lot of potential for organic growth," concluded McCall.
OUR COMMENT: It seems odd that the Report on the effects of a rise in APD (which may reduce the number of passengers) is quoted as finding an actual rise in CO2 emissions as well as a loss in profits from tourism. Have they allowed for a possible increase in UK holidays by UK citizens, and for the likely fall in the balance of payments?
AIRPORTS: WE CAN BOOST UK GROWTH,
SAY HEATHROW CHIEFS IN AD CAMPAIGN
Aviation & Transport - 19 October 2011
The London Standard (Craig Woodhouse) reports that Heathrow operator BAA is targeting MPs with a £100,000 advertising campaign involving a series of posters at Westminster Underground station stressing the airport's importance as a link to emerging economies. The poster campaign, featuring the slogans: 'Only Heathrow brings growth to our doorstep', Nothing grows without routes', and 'Right now, no island can afford to be an island,' will be followed by a series of newspaper adverts. Simon Baugh, director of media relations at BAA, said the campaign, which is being launched during the final weeks of a government consultation on aviation policy, was part of an attempt to build 'public consensus' over protecting Heathrow's status as a hub.
Separately, John Olsen, the former Cathay Pacific executive spearheading plans for a new airport in the Thames estuary, described plans for a high-speed rail link between Heathrow and Gatwick as a 'sick joke'. Condemning the idea of a 'Heathwick' joint hub, Olsen called on new Transport Secretary Justine Greening and London mayor Boris Johnson to back his proposals for a £15bn airport on North Kent's Hoo peninsula.
Commenting, The Times (Irwin Stelzer) suggests that there is a solution that would provide immediate additional capacity while longer-term proposals to expand UK aviation capacity are reconsidered: relaxing restrictions on the use of Heathrow's existing runways would enable it to handle an additional 60,000 flights a year at modest cost.
GATWICK MASTERPLAN FORECASTS
100 EXTRA FLIGHTS PER DAY
Crawley Observer - 24 October 2011
FORTY million passengers per year will pass through Gatwick Airport by 2020, according to a draft masterplan.
More than 100 extra flights per day are forecast within 10 years, from 664 a day in 2010/11 to a predicted 784 in 2020/21. The airport insisted this growth could be achieved by sticking with a single runway - though refused to rule out a second runway in the future.
Gatwick chief executive Stewart Wingate said: "Our ambition is to compete to grow and become London's airport of choice. Today we set out our vision for the future and how we can grow to handle 40 million passengers by 2020. Our plans focus on continuing to improve service levels by investing in the airport, our employees and in the communities we serve. I encourage those who live and work around Gatwick to share their views with us."
The airport published its draft masterplan on Thursday which will now be subjected to a three-month consultation exercise. Cllr Ken Trussell will contribute to Gatwick consultative committee GATCOM's response to the draft plan on behalf of Crawley Borough Council. He said: "Our initial response is that we are pleased to see that Gatwick Airport Ltd share our vision of maximising the two terminal one runway approach as we move forward. We will be making our formal response to their Master Plan once we have had the opportunity to study it in more detail."
The draft highlighted the £2bn the airport pumps into the London and South East economy and the 33,200 jobs - including 23,000 on-site - Gatwick provides. A third of Gatwick workers live in Crawley and with passengers at 40 million per year an additional 13,800 jobs would be created by 2020.
Brendon Sewill, chairman of Gatwick Area Conservation Campaign (GACC), said: "The master plan forecasts an increase in the number of flights from 243,000 a year to 280,000 and we will be fighting to ensure that this does not mean more noise. The airport admit that it will mean more climate change damage, making Gatwick one of the most polluting sites in the south of England."
Jeremy Taylor, chair of the Gatwick Diamond Business Association and member of the Gatwick Consultative committee (GATCOM), said: "There's no question that there will be direct employment as a result of this growth and that's where we would hope some of the 13,000 jobs would come from. But gone are the days when for every million passengers you would expect to get 1,000 employees. What's increasingly important is how the number of passengers adds dramatically to the local economy, for example increased demand for hotel accommodation and cleaning services. So it's these indirect jobs where we would expect to see a big difference."
"Plus with the greater number of flights and improved activity Crawley and Gatwick will become more attractive to existing business, and more will want to come here."
A drop-in session will be held at the County Mall on October 29 and 30, 9am - 5pm,to discuss the plans.
BORIS JOHNSON RENEWS CALL FOR
THAMES ESTUARY LONDON AIRPORT
Simon Bull, Content Editor - London 24 - 17 October 2011
London Mayor Boris Johnson has made a renewed call for a major international airport to be built in the Thames Estuary.
The Mayor warns the UK is in danger of becoming an "aviation backwater", losing out on lucrative business from Asia, unless something is done to increase airport capacity in the south-east of England. He has been a long-time advocate for a Thames Estuary airport, with the plan being dubbed 'Boris Island'.
Responding to a government study, Mr Johnson insists extra runways are essential. He states: "Without those runways we will lose business to our European competitors and we risk relegation from economic powerhouse to merely a bit part player in the global economy. We cannot go on as we are and I respectfully urge the government to make it a priority to consider plans to build a full service, round the clock, multiple runway hub airport of the type that so many of our neighbours already boast."
Daniel Moylan, the deputy chairman of Transport for London, who is leading on aviation matters for Mr Johnson, says the Thames Estuary is the "obvious location" for a new airport: "Several ideas have been put forward to try and address our increasing lack of runway capacity. But I remain to be persuaded of there being any workable solution other than the creation of a new hub airport. And the obvious location for a 24-hour airport with the least possible impact on the local population is the Thames Estuary. A true 'airport city' of the type never seen before in the UK would provide the capacity we need and provide vital support to the UK economy."
The Mayor argues expanding the UK's only "true hub airport" at Heathrow is not an option because the "local environmental consequences of growth are too great there" and regional airports cannot be converted. The benefits of a high-speed rail network are not enough to solve the aviation capacity problem, argues Mr Johnson.
It is estimated London's airports will be running at full capacity by 2030, with Heathrow already at 99 per cent. Mr Johnson says this could lead to opportunities from rapidly growing Far East economies such as China being missed. European competitors are gaining an advantage and snapping up business at the capital's expense, he says.
He backs up this argument with figures showing Frankfurt, Paris Charles de Gaulle and Amsterdam Schiphol airports offer approximately 17,500, 15,000 and 11,000 seats a week to mainland Chinese airports respectively, while Heathrow only offers 9,000.
Additionally, there were one million visitors from China to France in 2009, while the UK only managed to attract 89,000 visitors from mainland China and a further 143,000 from Hong Kong. An extra £1 billion in tourist revenue could potentially be generated if the UK welcomed the same number of Chinese visitors as France, the Mayor says.
OUR COMMENT: With all these plans for expansion and the threats of dire economic damage if expansion plans are restricted, what about the effects on climate change? All the champions of ever more flights should include in their plans CO2 forecasts with details of how this can be achieved. Meantime, will the ETS make a significant difference?
EU 'WON'T GIVE IN TO THREATS OVER AIRLINES AND ETS'
ENDS Europe DAILY - 21 October 2011
Threats over the EU's inclusion of aviation in its emissions trading
scheme (ETS) are worrying and not the right way to go, a European
Commission official said on Friday. All flights landing and taking
off from European airports will soon be covered by the scheme.
Speaking at a morning seminar held by ENDS Europe at the Carbon Show
in London, Damien Meadows of the commission's climate department
insisted the move was the best way to reduce airline emissions. "We
will not give in to threats," he said.
Mr Meadows acknowledged that, although anEU court adviser
has shown airlines' inclusion in the ETS is legally sound, Europe is facing a serious political challenge from a group of countries including the US, China and India. In late September, the group adopted a joint declaration urging the EU to spare its
He pointed out that so far no formal threat has been made by these
countries. There have been reports that China would retaliate by
cancelling the purchase of Airbus aircraft but this threat, if true,
has not yet materialised. Interestingly, China Eastern Airlines this
week announced it had ordered 15 Airbus 330 aircraft.
The official deplored that September's joint declaration made no
reference to the need to discuss market-based mechanisms as part of
the International Civil Aviation Organization (ICAO). "The politics
have changed," he said, noting that in the past there had been
greater willingness to recognise such instruments within ICAO.
The official reiterated that the commission was willing to discuss
equivalent measures with third countries. Discussions have already
taken place with Russia and China, and working groups have been set
up but he did not give further details. One seminar participant noted
that it could take years before any equivalent measure is agreed.
Simon McNamara from the European Regions Airline Association warned
about the risk of turning the ETS into an intra-EU scheme if too many
derogations are given to countries outside Europe. This would be
unfair on EU airlines, especially if the agreed equivalent measures
are less ambitious than emission caps set under the ETS.
Mr Meadows replied that the ETS would not become an intra-EU scheme
as the derogations foreseen in the 2008 directive on aviation and
emissions trading only apply to incoming flights from non-EU
countries. He also said the commission would be as transparent as
possible regarding negotiations on equivalent measures.
CALIFORNIA ADOPTS EMISSIONS TRADING SCHEME
ENDS Europe DAILY - 21 October 2011
California's emissions trading scheme (ETS) adopted by the state's
Air Resources Board on Thursday has been described by the European
Commission as a further important step towards the development of
carbon markets worldwide.
This is the first state-administered scheme in the US. The plan was
unanimously adopted by the board after a contentious public hearing.
It follows a decision to launch an ETS in Australia in 2015.
California is the world's eighth largest economy.
A commission spokesman said Brussels is actively working with the
state's authorities to make the Californian and European ETS schemes
compatible. But discussions are at an early stage, he said. It is
impossible to say if the two systems can be linked.
The EU is also holding discussions with other countries. In
September, the Swiss government said negotiations with Europe were
progressing well. The move should increase liquidity in Switzerland's
scheme. This scheme began in 2008 but over-supply of allowances and
the limited size of the market means trades are rare.
During phase 1 of the California ETS (2013-14), the state will
provide the majority of carbon allowances. A second phase will begin
in 2015. The state expects 85% of emissions to be covered. The first
carbon auctions will begin in August 2012.
According to a law passed by the state in 2006, California must
return to 1990 emissions levels by 2020. This represents a 15% cut
from a business-as-usual scenario.
Businesses are allowed to emit up to 90% of the benchmark set for
their sector. Eight percent of a company's emissions can be covered
using state-certified offset projects. These credits can be bought,
but only from US sources.
Carbon allowances worth about $10bn are expected to be traded by
2016, making it the world's second-largest scheme after the EU ETS.
The US congress has already rejected the idea of having a national
cap-and-trade system, leaving states to set up their own. Other
states are likely to follow if California's ETS is successful.
AVIATION ROWS AWAIT HIGH-FLYER
Anushka Asthana, Chief Political Correspondent - The Times - 15 October 2011
Justine Greening became one of the Conservatives' fastest-rising stars last night when she was propelled from the role of junior minister in the Treasury into the Cabinet.
As the new Transport Secretary, she will be asked first to turn her attention to aviation policy, which her predecessor, Philip Hammond, was tackling.
The Government is facing pressure from the business lobby, which says that Britain can remain competitive only if airport capacity is increased, and by environmental groups who want such expansion to be severely limited.
Ms Greening, 42, is the MP for Putney, in southwest London, not far from Heathrow, and has been a key figure in campaigns against a third runway. In March last year she was pictured toasting a High Court ruling that blocked the move.
Ms Greening grew up in Rotherham, South Yorkshire, and attended a comprehensive school. She studied economics at the University of Southampton.
She is replaced in the Treasury by Chloe Smith, the MP for Norwich North. She was elected to the seat in 2009 after the Labour MP Ian Gibson stepped down over the MPs' expenses scandal.
Greg Hands, the MP for Chelsea & Fulham, becomes an Assistant Whip in the House of Commons.
CC PUTS SCOTTISH AIRPORT SALE FIRST
Competition Commission News Release - 7 October 2011
The Competition Commission (CC) has decided to bring forward the requirement for BAA to sell either Edinburgh or Glasgow Airport.
The CC confirmed in July its original decision of March 2009 that Stansted Airport and one of either Glasgow and Edinburgh airports should be sold, rejecting BAA's contention that there had been a material change of circumstance since that time, the delay having been caused by BAA's subsequent appeals. The CC had also confirmed in July that Stansted should be sold first.
Subsequently, however, BAA had appealed that decision to the Competition Appeal Tribunal (CAT). In view of the real risk of delay arising as a result of this second appeal and also given the fact that BAA is not challenging the Scottish airport sale, the CC has now decided that it would be in the interests of affected passengers and airlines to proceed with the sale of either Glasgow or Edinburgh Airport first.
Preparations for the sale of Stansted will be dealt with before the sale of Glasgow or Edinburgh is completed. The CC will therefore now consult on legal undertakings setting out the revised process and expects the sale process to begin shortly, following a decision from BAA over which of the two Scottish airports it wishes to sell.
Chairman of the BAA Remedies Implementation Group and a member of the original Inquiry Group which reported in 2009, Laura Carstensen, said:
"We feel this is the best approach in view of the further delay caused to the Stansted sale by this second appeal. It is frustrating that we cannot proceed with the Stansted disposal until this new challenge from BAA has been dealt with but in the meantime we will press ahead with the Scottish sale and as a result passengers and airlines in Scotland will enjoy the benefits of greater competition even sooner than they would have done otherwise. We have concluded that there is no reason why they should have to wait for the end of this new attempt by BAA to delay the implementation of our remedies, particularly as the sale has already been delayed by the original legal proceedings in 2009."
"We look forward to starting the sales process very shortly. In addition, we expect that the change will cause no substantial delay to the Stansted sale beyond that which would probably have arisen anyway, given the likely timescale for dealing with BAA's appeal. The change also means that the Stansted sales process will not be affected by the run-up to the 2012 Olympics."
"Our decision provides certainty that will enable the Scottish airport sale to be proceeded with now, without being at risk of delay from the litigation."
In July, the CC concluded a consideration of whether there had been any material changes in circumstances since it published its final report on BAA in March 2009 that should give it cause to reconsider the implementation of the airport sales. The March 2009 decision was subject to a legal challenge by BAA, which eventually culminated in the required by that original decision. The CC concluded that the sale of the airports is fully justified and that passengers and airlines would benefit from greater competition with the airports under separate ownership, despite the current Government's decision to rule out new runways at any of the London airports. The decision to sell Stansted first was because of its relative scale.
The Court of Appeal reinstatied the CC's findings in October 2010. In February, the Supreme Court refused BAA permission to appeal further.
FERROVIAL SELLS BAA STAKE BELOW 50%
Evening Standard - 10 October 2011
FERROVIAL today announced the long-awaited sale of some of its stake in the Heathrow Airport owner BAA, selling 6% to a US rival for ?325 million (£281 million).
A year ago, the Spanish infrastructure group said it would sell up to 10% of its holding in BAA. Today, however, it disposed of only 5.9% to infrastructure group Alinda Capital Partners - which owns gas, ports and water interests including South Staffordshire Water in the UK - and added that it was not planning on selling any more.
Íñigo Meirás, Ferrovial's chief executive, said: "We would like to underline our commitment as a long term investor in BAA remains in place. Heathrow is one of the best infrastructure assets in the world."
The sale values BAA at £4.76 billion. It takes Ferrovial's ownership of the airports company down to 49.99%. When Ferrovial led a consortium of investors to buy the business in 2006 it paid £10.3 billion. Today it said it would use the proceeds of the sale to buy new infrastructure and services projects.
The ?325 million sale comes just a week after BAA lost its latest appeal in the two-year battle between it and the Competition Commission over the ruling that BAA must sell Stansted airport and either Glasgow or Edinburgh airport. BAA has said it will press ahead with plans for a judicial review of the decision.
The other shareholders in BAA are GIC, the Singapore sovereign wealth fund, which has a 17.7% stake, and Britannia Airport Partners which owns just under 26.5%.
EU COURT ADVISER REBUFFS AIRLINE ETS CHALLENGE
ENDS Europe DAILY - 6 October 2011
An adviser to the European Court of Justice has rejected all claims
made by a group of airlines in a legal challenge against their
inclusion in the EU emissions trading scheme (ETS). The measure does
not breach international law, she concluded.
In a widely anticipated legal opinion delivered on Tuesday, advocate
general Juliane Kokott said the airlines' arguments were based on a
misinterpretation of the laws invoked in this matter, including EU
ETS rules on aviation adopted in 2009.
The European Commission, which is under extreme pressure to scrap the
rules, immediately reacted by saying it had been vindicated by the
legal opinion. The European court has yet to deliver its ruling, but
judges in previous cases rarely substantially deviated from advice
given by an advocate general. A ruling is expected in early 2012.
The court is being asked to interpret several international laws and
the 2008 directive on the inclusion of airlines in the ETS, in a case
brought to the High Court of England and Wales by a group of North
American airlines. The group argues that the directive breaches the
Chicago convention, the Kyoto protocol and the Open Skies agreement.
It also claims the directive breaches a principle of customary
international law relating to the sovereign rights of third countries
flying over the high seas. It says the EU wants to regulate segments
of a flight falling outside its jurisdiction, namely the high seas.
But Ms Kokott has strongly rebuffed this claim, saying it is based on
an "erroneous and highly superficial reading of the directive". She
says there is insufficient evidence to prove that the principle of
customary international law cited by the airlines actually exists.
The UK, France, Norway and Germany do not recognise it, she points
The claimants' interpretation of the 1944 Chicago convention on
aviation is also incorrect, the adviser says. As well as the fact
that the EU is not bound to this convention, it cannot be interpreted
as prohibiting fees or charges for entering, leaving or transiting
though national or regional airspace, as argued by the airlines.
The convention must be understood as merely prohibiting
discrimination against airline access to airports on grounds of
nationality. And even if one could interpret it differently, she
says, the EU ETS is not a tax and does not discriminate against
Airlines flying in and out of EU airports will receive 85% of their
carbon allowances for free in 2012. The remainder will be auctioned.
"It would be unusual, to put it mildly, to describe as a charge or
tax the purchase paid for an emission allowance which is based on
supply and demand according to free market forces," says Ms Kokott.
In a final blow to the airlines, she destroys the group's argument
that Kyoto only allows CO2 reductions through the International Civil
Aviation Organization (ICAO). "There is no reference to any kind of
exclusivity in the actual wording of [the protocol]," she says.
In a statement issued on Thursday, the Air Transport Association of
America (ATA) said it was disappointed by the opinion but held out
hope that the European court may not necessarily follow Ms Kokott's
recommendations. The airlines also enjoy support from several non-EU
countries such as India, China and Russia.
The inclusion of foreign airlines in the ETS has also become a major
political issue. At a meeting in New Delhi in September, these
countries and many others urged the EU to think again about the
issue. India has even threatened to retaliate if the plan goes ahead.
The challenge for the European Commission is therefore not just to
win the legal battle but to convince other countries of the
legitimacy of its plan. On Thursday, climate commissioner Connie
Hedegaard reiterated that she was keen to "engage constructively"
with these countries and discuss the appropriateness of equivalent
GOVERNMENT'S AVIATION POLICY 'A JOKE',
SAYS RYANAIR BOSS
The British Government's policy on aviation is "a joke",
the chief executive of Ryanair said today
Oliver Smith - Daily Telegraph - 11 October 2011
Michael O'Leary described plans for a rail link between Heathrow and Gatwick - currently being considered by the Government as part of an aviation review - as "harebrained", and criticised the continued increases in Air Passenger Duty (APD), which he says is putting off visitors and stunting growth.
"The Government has no aviation policy," said Mr O'Leary. "Britain is becoming the laughing stock of Europe. The Government keeps increasing APD and then blocks all airport expansion."
He said there was "no demand" for a rail link between London's two largest airports and suggested that the only way to solve capacity in the south-east would be to build a third runway at both Heathrow and Gatwick.
Mr O'Leary also said that APD - which is predicted to rise by up to ten per cent next year - was responsible for a fall in annual visitors numbers to Britain, from 35 million to 28 million since 2007. During that time the tax has been increased by between 240 and 425 per cent, while many European countries - including Ireland and the Netherlands - have phased out their versions of APD.
BATTLE LINES DRAWN ON APD
'Green' air fares levy is just a tax grab on hard-up households admits Osborne
Ray Massey, Transport Editor - Daily Mail - 10 October 2011
A controversial 'green' levy that adds hundreds of pounds to family holidays is a simple tax grab on hard-pressed households, the Chancellor has admitted.
Air Passenger Duty has been dressed up as an environmental measure designed to discourage air travel. But in a leaked letter, George Osborne says: "APD is fundamentally a revenue raising duty and currently raises around £2.5billion per year." Last night one senior aviation figure said: "The cat is out of the bag with this admission. It's a tax grab, pure and simple."
Mr Osborne is expected to announce a rise in APD for 2012 in next month's autumn statement. At present, a family of four flying economy to Florida pay a total of £240 tax.
APD was introduced by the Tories in 1994 as a straightforward way to raise money but was swiftly rebranded as a 'green signals' tax by Labour. The idea was to discourage plane use, but it is loathed by many who have seen it vastly inflate air fares. Mr Osborne's admission that the tax, divided into four bands according to the length of flights, is nothing more than a way of raising cash comes in a letter dated August 12 to Olivier Jankovec, director general of the Brussels-based Airports Council International.
The Chancellor says his intention is to 'improve on the current system' by simplifying it on 'a revenue neutral basis', while extending the tax on business jets. There has been mounting criticism by airlines and consumer groups of Government plans to retain the controversial tax.
Travel expert Bob Atkinson of travelsupermarket.com said: "British families are facing pressure on the amounts they pay for their air fares because of increases in flight tax, the forthcoming EU emissions trading scheme and the soaring cost of fuel."
Willie Walsh, chief executive of British Airways' parent company, International Airlines Group (IAG), has previously said increasing APD would have 'a huge negative effect', accusing ministers of using the air tax to reduce the economic deficit.
Heading upwards: Air tax is expected to rise in next month's autumn statement
Louise Ellman, who chairs the Commons transport select committee, said: "There is great ambiguity as to whether the Government is telling us that this is a green tax or a revenue raising tax." The Labour MP said that in recent years APD had been modified 'to provide green signals. Now it's not clear'.
Mr Osborne has published a consultation document setting out options which could increase APD from the current level of £12 to £16 per person for economy flights of up to 2,000 miles. That could mean a family of four flying economy to Spain seeing their air tax rise from £48 to £64. But for many middle-class families who upgrade to 'premium economy' or above, the tax would soar from £24 to as much as £32. A family of four would see their air tax increase from £96 to £128.
Currently, passengers who travel between 2,001 and 4,000 miles face a £60 tax in economy, totalling £240 for a family of four heading to Florida.
For journeys of 4,001 to 6,000 miles, such as the west coast of America, the tax is £75 per head in economy. Flights in excess of 6,000 miles, for example to Australia, are taxed at a rate of £85 in economy and £170 in premium economy and above.
Last night Treasury officials acknowledged that the Chancellor's comments in his leaked letter - describing APD as 'fundamentally a revenue raising duty' - represented Government thinking. But they denied the views were 'secret' or ambiguous.
£600M FLIGHT TAX GRAB THREAT TO UK RECOVERY
Last month, MPs and peers warned Chancellor George Osborne
that air fares would shoot up next year
Tracey Boles - Express Online - 9 October 2011
THE Treasury took at least £600 million from businesses last year in flight taxes, threatening the economic recovery, new research shows.
This year the total could rise to £840 million, acting as a further drag on efforts to rebalance the economy. More rises in the unpopular flight tax, known as air passenger duty (APD), are in the pipeline next year. The new figures, published today by a coalition of airlines and tour operators, called A Fair Tax on Flying, show that in 2010 passengers on business flights forked out £600 million on leaving the UK.
Half the cost was levied on UK business travellers, the other half on foreign business travellers heading home after a trip to the UK.
More than 13 million flights in 2010 were classed as business flights. The Government is considering a double-inflation increase to APD from next year and is expected to give an update at the end of November in the Autumn Statement.
Treasury data shows that, in the five years to April 2016, APD revenues are expected to leap from £2.15 billion per annum for the 2010/11 financial year to £3.6 billion per annum.
Simon Buck, chief executive of the British Air Transport Association, said: "APD is a tax on doing business in the UK. If we are to rebalance our economy and attract foreign investment, we must be cost competitive with our European rivals who, in most cases, impose little or no equivalent tax on flying."
"How can we expect UK businesses to be able to compete abroad when they pay such high taxes on taking a flight to do business face to face? And how can we expect to attract new investment from the emerging world economies if we make it more expensive for foreign investors to come to the UK to do business?"
Mike Carrivick, chief executive of industry association the Board of Airline Representatives in the UK, said: "This horrendous amount of tax on business travellers shows that all sectors of the economy are being dragged down by APD. It is undoubtedly passed on to consumers and directly affects international trade at the very time we are trying to stimulate economic growth. It's time to reduce APD, not increase it further."
Mary Rance, chief executive of tourism trade body UKinbound, called it a "stealth tax" on exports.
Last month, MPs and peers warned Chancellor George Osborne that air fares would shoot up next year if APD rises again, making foreign holidays too expensive for many families. Britain already pays the highest aviation tax in Europe.
PARTY CONFERENCES: INDUSTRY GUNG-HO FOR GROWTH
Airport Watch - October 2011
Carol Barbone, from SSE writes: The Liberal Democrat, Labour and Conservative party political conferences have been attended in force this autumn by the aviation industry, keen to press its case at every opportunity, and in far greater numbers than usual.
Not unexpectedly, jobs and growth arguments were used by the airlines, airport operators and their allies as a springboard to present the industry as a potential saviour of the UK economy - provided, of course, that the Government changes its tune and decides to support airport expansion and encourage the aviation industry to grow by reducing the taxes on air travel. For many industry representatives, 'airport expansion' was a metaphor for 'Heathrow expansion' - underlined by the comments made by big union guns at several fringe meetings. Boris Johnson's henchman, meanwhile, was pressing the case for the idea of an estuary airport to be explored further.
Environmental concerns were presented as having been largely solved with the forthcoming entry of aviation into the European Emissions Trading Scheme which will allow 'permits to pollute'. Everyone knows the scheme needs to be tightened to make real progress and a way of addressing the non-CO2 effects of aviation emissions needs to be found.
The problems of noise were dismissed with the line that 'aircraft are quieter now than they were 40 years ago' even though there are far more of them. No heed was paid to surface access, air quality or community issues by the industry which considers the environmental box to have been fully ticked with the imminent arrival of the ETS (interpret this as 'local concerns don't count').
Air Passenger Duty increases, meanwhile, have largely been portrayed as 'an attack on hard working families' and the main reason for the drop in passenger numbers at many airports, conveniently ignoring that some airports, such as Heathrow were busier than ever this summer.
The arrival of the EU ETS, meanwhile, will be reason enough (claims the holiday sector) for abandoning APD altogether to avoid a double environment tax on the hardworking families who might otherwise be deprived of holidays in the Caribbean or Australia. It is already being cited as the cause for the drop in some flight and holiday numbers - completely disregarding the effect of exchange rates, job cuts and fear about what's around the corner as influencing factors on people's holiday choices. There were exceptions, though: Birmingham Airport is very keen to scoop up the
overspill from Heathrow and is pressing strongly for a higher rate of Air Passenger Duty to be applied to the big south east airports to encourage passengers to switch to the less-congested regional airports (for which read Birmingham).
As in previous years, Stop Stansted Expansion's own representations enabled a more balanced debate at all three conferences, much to the ire of the industry, correcting misinformation and generally redressing the balance in front of key Ministers and MPs so that the industry didn't have it all their own way. The Campaign for Better Transport and AEF were present too, and Chris Crean from Friends of the Earth was spotted in Birmingham, pressing their arguments on aviation issues with conviction and competence in a manner which thoroughly upset the self-righteous ranting of some quarters of the aviation industry.
At times the industry's attitude caused even the Aviation Minister Theresa Villiers to put her foot down and point out where the aviation industry's reputation for arrogance had come from. "We're standing firm on the no-new-runways policy since that's our electoral mandate", she said at one meeting, adding that abandoning APD increases would cost the Exchequer around £1.5bn and would have to come from another area.
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