Transcript Regional Air Access to London’s Airports

The Future of Air Transport in
the UK
Scene-setting
Laurie Price
Regional Economic Development and Air Access
to Heathrow and Gatwick; Seminar
May 4th 2004
Agenda

The Aviation White Paper on the Future of Air Transport
in the UK laid out a general approach for the next 30
years, to general approval
BUT:

Three major problems still have to be resolved:
– Access to London’s hub airports from the regions
– Slot scarcity and slot allocation regulations
– The use of Public Service Obligations (PSOs)
Total Terminal Passengers at UK Airports 1972 2003
Total Terminal Passengers (millions)
200
1995 Introduction of Low-Cost Airlines
180
160
1985/86 Libya/Chernobyl
140
1983 Europe Deregulation
1988 Lockerbie
120
2001 Terrorist Attacks
1979 US Deregulation
100
80
1974 Fuel Crisis
60
1991 Gulf War
40
1982 Falklands War
20
1977 Bermuda II
1981 Fuel Crisis + Recession
0
1970
1975
Source: CAA Airport Statistics
1980
1985
1990
1995
2000
DfT Forecast of UK Terminal Passengers 20002030
600
Total UK
London Airports
Terminal Passengers (millions)
500
Regional Airports
400
3.45% p.a.
300
6.15% p.a.
3.20% p.a.
5.65% p.a.
200
7.20% p.a.
3.90% p.a.
100
0
1980
1985
1990
1995
2000
Source: CAA; DfT Forecast for RASCO/SERAS
2005
2010
2015
2020
2025
2030
Propensity to Fly by UK Region
Trips per Head
of Population
London
Scotland
+ 2.50
1.50 - 2.49
1.00 - 1.49
0.75 - 0.99
- 0.74
South East
Scotland
Northern Ireland
North West
Eastern
Northern
Ireland
East Midlands
North East
West Midlands
Yorks & Humber
North West
South West
Yorkshire and the Humber
E. Midlands
Wales
Wales
North East
W. Midlands
Eastern
ENGLAND
London
UNITED KINGDOM
South West
0.00
Source: CAA/ONS
0.50
1.00
1.50
2.00
2.50
3.00
International Passenger Journeys per Head of Population, 2000
South East
The problems
Regional Services

A key issue for the UK air transport industry and regional economies is the
access for regional air services to London’s hub airports of Heathrow and
Gatwick

Many regions have already lost their scheduled service links with Heathrow
and Gatwick, while the remainder are at increasing risk

In a free market, a good big’un will always beat a good littl’un: Heathrow –
Leeds will never be able to compete with Heathrow – Chicago for scarce
slots
Regional air services to London are under threat
INV
ABZ
Routes operated Summer 2003
DND
LHR and LGW services
GLA
LHR service only
(Services MOST at risk)
EDI
NCL
BFS
LGW service only
CAX
BHD
IOM
MME
No service to LHR or LGW
(but operated in 1986)
LBA
HUY
LPL
MAN
EMA
NWI
BHX
NQY
Source: OAG
PLH
Regional services
lost 1986-2003
LGW
LHR
7
11
EXT
*Note:
All these Regional Airports operated
services to LHR and/or LGW in 1986
GCI
JER
The problems
Slots and slot allocation priorities

Heathrow and Gatwick are full today – there are no spare slots

Slots are changing hands at Heathrow for up to £10m a pair, and the price
will continue to soar

In a free market, small aircraft travelling short distances will not be able to
compete in the long-term without some form of government protection

The EU is preparing to modify slot allocation legislation, but don’t hold your
breath

Slot shortages are a direct result of insufficient runways in the South East –
and we can see no extra runway for at least 10 years
Heathrow Summer 2001 Demand
DEPARTURE MOVEMENTS (Typical week - all times local time)
60
50
40
30
20
10
06
:0
0
07
:0
0
08
:0
0
09
:0
0
10
:0
0
11
:0
0
12
:0
0
13
:0
0
14
:0
0
15
:0
0
16
:0
0
17
:0
0
18
:0
0
19
:0
0
20
:0
0
21
:0
0
22
:0
0
0
CAPACITY
DEMAND
Source: ACL 2001
The problems
Public Service Obligations (PSOs)

These are used throughout Europe to provide air links to peripheral regions
that might otherwise not be provided

Normally, this involves the provision of some level of public subsidy, but it
ain’t necessarily so

PSOs can also be used to requisition scarce slots at congested airports to
protect links from peripheral regions, without any financial subsidy

The DfT is to hold a consultation on PSOs to see if they can help to solve
some intractable problems of access

It is hoped we can discuss some of these today…
Heathrow and Gatwick –
the only true London hub airports
Aug. 2003 Schedules
Heathrow
Gatwick
Stansted
Luton
London City
168
126
100
28
20
168
123
24
11
20
0
15
84
19
0
4,506
1,804
1,572
502
445
4,506
1,550
235
60
439
0
254
1,337
442
6
Long Haul Destinations
USA -
14
16
0
0
0
Long Haul Destinations
Other -
77
23
0
0
0
Passengers
(Year 2002 – millions)
63.1
29.5
16.1
6.5
1.6
ATMs
(Year 2002 – thousands)
461
235
155
58
54
Total Destinations served
Full Fare Low Cost Total Weekly Departures
Full Fare Low Cost -
Source: OAG
Public Service Obligations (PSOs)
According to the White Paper,
“The Government will apply PSOs where, in accordance with the existing EU Regulation 2408/92,
three criteria are met:

The route is to a peripheral region, or to a development region, or is a ‘thin’ route;

The air service concerned is vital to economic development for the region; and

A PSO is required to ensure an adequate level of service.”
Source: The Aviation White Paper, Dec. 2003
The Government’s PSO Pledge
“ We propose that, where there is an existing service, PSOs would be imposed only when an
airline’s withdrawal from a currently operated route would reduce the frequency level below an
adequate level. In judging whether there was an adequate service, we would take into account
the frequency of services, the timing of the services, and the seat capacity offered.”
Source: The Aviation White Paper, Dec. 2003
Implications

Unless we can rapidly offer additional runways in the South East and/or modify the DfT’s application of
PSO policy to peripheral routes to and from Heathrow and Gatwick, regional economies will remain at
risk

Airlines and airports favour the status quo – larger aircraft and longer routes spell greater profits. They
do not have to consider the wider economic benefits that domestic air services to London may bring to
the regions

The pressure for change must be applied by the regions
Air Transport White Paper –
Summary of recommendations for the South East

1 new runway at Stansted - 2011/12 – although this felt to be an optimistic timescale

1 new runway at Heathrow (if environmental conditions are met) – 2015-2020

Land for extra runway at Gatwick to be safeguarded in case no runway allowed at Heathrow, but no
development before 2019

Luton encouraged to lengthen its runway and maximise its number of movements as soon as possible
Stansted
Heathrow
Air Transport White Paper –
Summary of recommendations for the Regions

A new runway at Birmingham

Terminal expansion at Manchester and Cardiff

Runway extensions for Bristol, Liverpool and Newcastle

East Midlands granted permission to expand, but with strict night noise controls

Land safeguarded at Edinburgh for new runway and terminal

Land safeguarded at Glasgow for additional terminal capacity

Development encouraged at Prestwick, Aberdeen, Dundee and Inverness
These developments must be consistent with the Government’s environmental
objectives
The Government has proposed a framework of local controls to manage the environmental impact of aviation and airport development so
that:

Noise impacts are limited, and where possible reduced over time

Local air quality is maintained within legal limits across all relevant pollutants…

Loss of landscape and built heritage is avoided wherever possible, and otherwise minimised and mitigated to the greatest extent possible

All relevant water quality and other mandatory environmental standards are met

Surface access to airports is designed to help limit local environmental impacts

Impacts on biodiversity, such as disturbance of habitats and species, are minimised.
Source: Aviation White Paper, Dec. 2003
The Compromises needed

More runways in the South east, but less impact on the environment

More links from the regions to London, but no reduction of the necessary intercontinental
flights from Heathrow

More development of regional economies, but not at the expense of London and the South East
Summary

A political challenge for both local government and national government to achieve the best
results for the whole nation