Thursday 15 January 2009

BAA & Airlines get bailout; Greens get knotted


I have mixed views on the Government's approval of this. Having grown up near Heathrow I know the pollution and noise is really very bad; at the same time we need to increase capacity as we all travel abroad more in the future. As an Island nation, getting away from it all is an issue for us...

The real difficulty is in the long term economic analysis. Looking 10 years hence is nearly impossible. You can get some things roughly right like population growth. But from today could you estimate GDP growth for the UK for 2010-2020? Could you extrapolate airline growth after the age of Ryanair and Easyjet; how likely is that to continue?

Most of all is the price of oil. Last year when oil went over $100 a barrel lots and lots of airlines went bust. Remember XL?
So what will the price of oil be in ten years? Blimey, the futures markets are struggling at the moment to guess a few months.

Hence this decision is an entirely political one at heart. Business has trumped Green issues here. BAA and the airlines get their futures more secure and lots of construction jobs are assured for the best part of a decade. The Unions will be pleased - I will be interested to see their spin on this later today.

Politically too I think this is a nice play for the Tories who can say we would not have done it, when they probably would have done if they were in Government.

Hopefully my BA shares will rise a bit today; took a pasting today along with everything else.

12 comments:

Mark Wadsworth said...

If it wasn't a Nulab government that had nodded this through, I would say 'hurray'.

CityUnslicker said...

That is the thing with Nulab - they have ideology only when it suits them so they are very hard to predict.

Old BE said...

I would be interested to see the figures. If we built an internal rail system which was good enough to remove the need for internal flights, what capacity at Heathrow would be freed up?

idle said...

I doubt this will go ahead. The Tory transport woman said as much this morning, given that her party is elected. Once Dave has made a public pronouncement on it, it will become a more important commitment (or hostage to fortune).

The economy being what it is, a Tory victory in 17 months is a short-odds favourite. The planning regs being what they are, there will be little progress made before the next election.

So it won't happen.

Letters From A Tory said...

It's not just big business that Labour have sucked up to - the unions have had a big lobbying role as well.

Of course, the decision to approve Heathrow has nothing to do with the latest unemployment figures.

CityUnslicker said...

point well made Idle

Anonymous said...

"lots of construction jobs are assured for the best part of a decade"

Yeah, if BAA can find the money to finance the build a long time before they get revenue from it in the current environment.

Three reasons I'm against this:

1] I use Heathrow once per month and on a Friday evening the number of flights queued up on approach is staggering. I can't believe it is safe to increase the number of planes using that airspace significantly.

2] T5 was given the go ahead on the grounds BAA needed it but they were not thinking of expanding the runways. Now they are claiming they need an extra runway to justify T5! The corrupt shouldn't be rewarded for their lies to the public.

3] The A380 airbus. Bigger planes means more passengers with fewer flights. Do we really need an extra runway when airlines should be encouraged to make better use of existing slots?

Also, how can an extra runway be a good idea? I thought they came in pairs?

Anonymous said...

They should be building an island in the Thames estuary with 5 runways. LHR is in the wrong place... having major flightpaths straight over the middle of a major city is really not very smart.

There is the small matter of the fully-loaded Liberty ship full of ammo which sank off Sheerness in 1944 but after all these years it is unlikely to blow up. And if it did, it would only level Sheerness & half Canvey island, so no harm done.

roym said...

Ideology is all well and good, but what happens when you're a slave to it?

Why can't UK citizens have a well considered, practical consensus? Yes heathrow is in the wrong place and 3 of the 5 terminals are stupidly positioned are but we cant go back 50 years to correct that.

Anon; The A380 isnt quite what you need for frequent medium hops to NY or Dubai is it?

SW; The thames estuary is a non-starter if ever I saw one. Aviation expansion is only a go for NuLab because the private sector will pick up the tab. cant quite see BAA throwing Heathrow away to start anew elsewhere, and I really cant see a new player entering the market.

As Idle says, this will never happen anyway, especially with McGowan throwing that spanner in the works! Dave will arrive and scrap it, but I wonder if the planning will be far enough down the line by then for BAA and/or whoever is lined up for the construction to cause trouble? mind you in 18 months time there'll probably only be a set of A3 sketches.

I wonder if this will get the go ahead from Dave instead?

http://www.wandsworth.gov.uk/NR/rdonlyres/eyizqg7f2ngvzdldnpciw6ijoi7ojobl4ttvlrfgfahtnta5k6md7multfjeirgyxriubweovu6atf3u5sbaorcqdob/2M+High+Speed+Rail+Booklet.pdf

What an amazing turnaround that might see a major outlay on rail by a conservative govt. I think this is what I mean by ideology

Anonymous said...

"Anon; The A380 isnt quite what you need for frequent medium hops to NY or Dubai is it?"

But two points to this:-

Are we going to have bigger aircraft and more of them TOO? Sounds pretty unsustainable to me. Wasn't this the government that was going to give us joined up thinking on transport - with better railways? Where are the plans to connect Heathrow by rail to the regions north and west of London? Right now if you feel you want to take a train to Heathrow from the West (as most business travellers do) then you need to go to Paddington first then change trains onto the hyper expensive Heathrow Express. No wonder people consider taking a domestic flight on this tiny island rather than saving valuable flight slots by taking the train instead.

With regard to the A380, the point I was making was that the airline industry justified the A380 on the basis that with European and Asian hubs becoming overcrowded they would need to make more efficient use of available hubs - so the philosophy was to move from smaller aircraft to bigger aircraft. The fact is that many flights out of Heathrow are filling the limited numbers of slots with tiny aircraft with less than a hundred seats. Better use of available slots would improve passenger throughput dramatically.

By the way the business community is not crying out for more flights from Heathrow for two reasons 1] its 30% cheaper to fly out from Stansted. 2] if we really need to fly out from Heathrow we can simply price the tourists out of the "spare" seats - business class passengers always get priority as do executive club card carriers. Heathrow will remain a popular hub for transit passengers - but only if BAA improve the woeful facilities at T3.

Anonymous said...

A runway parallel to the M4, and that close to it. There's going to be bother some day!

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