6th May 2006

BAA announces further postponement of second runway plans

BAA has announced a further postponement of its controversial plans for a second runway at Stansted and now puts the likely completion date as 2015 or 2016. The announcement coincided with the launch of BAA’s defence against a hostile takeover bid from Spanish company Ferrovial and seems intended to ease BAA shareholder concerns about the commercial viability of a second Stansted runway [see Note 1].

Significantly, the announcement also comes just a week after BAA lodged a planning application with Uttlesford District Council for unlimited use of the existing Stansted runway in terms of passenger numbers. Stop Stansted Expansion (SSE) believes that BAA’s strategy will now be to intensify use of the existing runway to more than double the 22 million passengers a year presently handled.

With aircraft becoming ever larger, unlimited use of the existing Stansted runway could mean as many as 50 million passengers a year being handled on the existing runway and yet BAA is describing the application as “purely” a variation on the current condition limits. However, even on BAA’s lowest projection of 35 million passengers a year by 2014, Stansted would become bigger than Gatwick is today, making it the busiest single runway airport in the world.

BAA has stated that the existing runway is capable of handling 48 flights an hour, which equates to over 400,000 flights a year but BAA claims that, in practice, a figure of 264,000 commercial flights is the upper limit, plus a further 10,000 non-commercial flights.

BAA is of course aware of the Government’s intention to abolish all limits on the number of night flights from 2012 and this may well be a factor influencing the postponement of BAA’s plans for a second runway – knowing that, from 2012, the runway could be used intensively around-the-clock.

However, even using BAA’s figure of 264,000 commercial flights a year, an average of 190 passengers per flight would result in the existing runway handling over 50 million passengers annually – a projection which is by no means unrealistic due to the ever-increasing size of aircraft.

Over the past ten years the average number of passengers per aircraft at Stansted has more than doubled from 61 to 124 [see Note 2].

Ryanair, which accounts for 60% of all Stansted’s passengers, has already standardised its fleet on Boeing 737-800 aircraft with a seating capacity of 189 passengers and, in the future, BAA expects Stansted to handle more long-haul flights which use much larger aircraft. A Boeing 747-8, for example, has a standard seating capacity of 450 and the new Airbus A380 has a standard seating capacity of 555 [see Note 3].

SSE Economics Advisor Brian Ross commented: “This is BAA’s second postponement of its plans for a new Stansted runway in less than two years and is unlikely to be the last [see Note 4]. Whilst there is some comfort in this further postponement to 2015 or 2016, BAA ‘s intentions are now clear to intensify usage on the existing runway over the next ten years beyond what any of us previously imagined.”

Brian Ross continued: “This adds a whole new dimension to the planning application which BAA submitted to Uttlesford District Council last week asking for the abolition of all limits on Stansted’s passenger throughput. It should serve as a wake-up call to all of us in the local community, and to Uttlesford District Council in particular, who are being asked by BAA to approve an application which is beginning to look like a wolf in sheep’s clothing.”

NOTES
Note 1:  The postponement was announced when BAA published its latest 10-year investment plans on 3 May 2006 to coincide with publication of its defence document in response to the takeover bid from Spanish company Ferrovial.

BAA has claimed that the reason for the postponement is down to anticipated planning difficulties but the real reason is believed to be shareholder sensitivity about the questionable commercial viability of a new runway at Stansted.

SSE issued a statement on 8 February 2005, the same day that Ferrovial’s interest in BAA was first announced, correctly predicting that this would mark a setback for BAA’s plans for a new runway at Stansted: “Whether or not a bid materialises – and if so whether or not it succeeds – a second Stansted runway has became an even more difficult proposition as a result of today’s announcement.”

Note 2:  In 1995, Stansted handled 3.89m passengers on 63,272 commercial flights an average of 61 passengers per flight. In 2005, Stansted handled 21.99m passengers on 178,012 commercial flights an average of 124 passengers per flight. [Source: Official CAA statistics for UK airports]

Note 3:  The seating capacities quoted for the Boeing 747 and Airbus A380 aircraft are for standard configuration (three seat classes). The seating capacities are far higher in single class configuration with the 747 certified to carry a maximum of 548 passengers and A380 certified to carry a maximum of 853 passengers.

Note 4:  The Air Transport White Paper, published in December 2003, called for a second runway at Stansted to be opened by 2011/12. Since then, BAA has claimed in its press releases that:

“New runway project is on target for completion in 2012” – Alastair McDermid, Director of the Stansted second runway project (24 September 2004)

“It’s business as usual, and the project remains firmly on track” – Terry Morgan, Managing Director of Stansted Airport (22 February 2005)

“New Stansted Runway on Track for 2013” – Mike Clasper, Chief Executive of BAA (18 May 2005)

Campaigning against proposals to expand Stansted Airport