Category Archives: Environmental Issues

At last they admit it – flight taxes pay for bank bailouts

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At long last, Chancellor Alistair Darling has said what we’ve known all along – that flight taxes (Air Passenger Duty) are used to sort out the dodgy banks, and nothing to do with the environment. Speaking to Northeast website The Journal last week, Darlin said:

I am quite blunt about it, we need to raise money to pay for some of the things we have done. If unemployment goes up there is a cost obviously to the family, there is cost in increased benefits, Northern Rock has cost a lot of money.

Now to be honest, no-one is going to step forward and offer their sympathy for the bankers, but many would still say that the bailouts had to be made in order to save the financial services industry. So, should airlines be made to suffer so another sector can survive?

Well, Darling seems to think so:

But if you think about it, what we are doing is putting a pound on to your average ticket, which about three quarters of people travel on. And you consider the cost of an air ticket, I don’t think a pound is that unreasonable.

The problem of course is that it isn’t “just a pound” on the average flight ticket. Last year, air passenger duty was doubled overnight in a move which saw one of the few taxes to have been reduced under the Labour government get re-stealthed. To make matters worse and add insult to injury, taxes had to be collected on flights which were already paid for – as if the chancellor (and former transport minister) was more interested in act of vengeance than a fair tax. Of course, Mr Darling, as MP for Edinburgh Central, is a fully paid-up member of the “you shouldn’t fly but I will” brigade, and that’s long before we bring up the issue of MP’s expenses.

Unlike some airlines and passengers, I don’t have a problem with air passengers paying their way through a ‘reasonable’ level of taxation – and I fully accept that the aviation industry must pay for its environmental costs. But let’s not forget that whereas motoring taxes are supposed to pay for the upkeep of the roads, usage of airports is already covered by separate airport handling fees levied by the (predominantly) private companies who run Britain’s airports.

Environmental costs should be covered by a global carbon trading agreement, due to be discussed in Copenhagen next month. Of course there’s loads of other arguments about the benefits of switching passengers from short hop flights to high speed rail, but that’s for another time. Or maybe, if that’s where APD funds were being directed, the travelling public wouldn’t mind so much. Mr Darling, if you are reading this, that isn’t an excuse to double APD again on you’re next whim!

 

 

 

 

Airlines put Heathrow’s Third Runway in the Dragon’s Den

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And so to the final ‘dragon’ in my review of the arguments for and against Heathrow’s Third runway.

If we just looked at the airlines serving Heathrow, then support for a third runway would be overwhelmingly positive. But no frills airlines such as Easyjet and Ryanair, who are being asked to pay increased landing charges at Gatwick and Stansted in order to help fund Heathrow’s infrastructure improvements, are less keen. As I haven’t yet mentioned the alternative High Speed Rail, perhaps this is the place to consider what ‘rail based airlines’ might think.

Heathrow’s existing Tennants

British Airways are unsurprisingly the most vocal in favour of a third runway at Heathrow, as they already benefit from having a massive hub operation in Terminal 5, which they want to expand by having extra runway capacity. In terms of the environmental damage caused by airlines, BA boss Willie Walsh was in New York recently, arguing that airlines across the world could achieve a 50% reduction in CO2 emmissions by 2050 – but many environmentalists are cynical about the industry’s ability to meet such targets, and even those that believe they are achievable do not consider that a 50% reduction is enough. So how does this relate to Heathrow, which is after all, just one airport out of several thousands worldwide which operate passenger flights, albeit the busiest one in terms of international passengers? The current government have made reductions in CO2 emmissions part of the conditions which would have to be met in order for Heathrow to gain approval. Obviously, this is all immaterial if the Conservatives stick with their policy to block an additional runway at Heathrow, but as Willie Walsh argued on Questiontime back in January, politicians in opposition can always play a completely different role once the enter government. At last week’s CIMTIG meeting, BAA’s director for Runway 3 said that “Conservative policy is about going after easy votes. As a transport policy, it is indefensible.”

Virgin meanwhile are pinning their environmental credentials on a massive investment of ‘all Virgin profits for the next 10 years’ in alternative fuels. Clearly both of these airlines believe that the aviation industry can still grow and cut emmissions at the same time. BMI also support a third runway, although speculation is that they will have been snapped up by one of their larger rivals by the time it gets built!

Non Heathrow based airlines

Ryanair in particular have launched legal challenges against BAA over the fees they are charged at Stansted, and have repeatedly refused to pay passenger handling bills, as they claim they are being forced to payin advance for infrastructure which they will never actually use.

High Speed Rail as an Alternative

The Conservatives have said that they will spend £20 billion on a high speed rail line between London and Manchester, and that they will encourage more people to travel to Continental Europe by train, in order to reduce the demand for a third runway at Heathrow. However, as BAA management have pointed out, offering easier rail access to Heathrow will only end up making it far more attractive for customers from the North of England. Meanwhile, Eurostar already have a 75% market share for point to point travel between London and Paris and Brussels, so there is little that government policy could do to switch more people onto the trains, apart from ban these flights entirely – a move which would be very un-Conservative! Although there is potential to see Eurostar services extended to cities such as Cologne and Amsterdam, this is a commercial matter for Eurostar to decide, and there is very little that a UK government could do to influence this, when the track and station access needed to make this happen is in other EU countries.

Verdict: Just as it goes without saying that most of Heathrow’s neighbours will be against further expansion, it can also be taken for granted that the main airlines using Heathrow would want to see it expand. But this misses out on the wider picture, especially as it is the no-frills airlines who are investing most heavily in new aircraft and new routes. It is therefore not a foregone conclusion to assume that the airline industry as a whole would say ‘we’re in’.

Final score – some of the referee’s decisions may be controversial, but my verdict is 2-3 against.

Environmentalists put Heathrow’s third runway in Dragon’s Den

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Continuation from Heathrow’s Runway in Dragon’s Den | Neighbours | Passengers | Economy

I’m not going to look at the local environmental issues – these are covered under ‘Neighbours’. This section is about the contribution of Heathrow and the aviation industry in general to climate change.

So, the arguments against are well known and well practiced – aviation currently represents around 5% of the UK’s contribution to greenhouse gas emmissions, and this figure is set to keep rising as other industries clean up their act. There is a suggestion that if current trends continue, all other sectors would have to reduce their emmissions by 90%, rather than the previously suggested 80%, just to allow people to keep flying. The most efficient form of flying in terms of fuel usage per passenger kilometre travelled is to use no-frills airlines, as they offer the following environmental advantages:

  1. Point to point service meaning no wasteful connections.
  2. Younger business model almost certainly means newer fleet – especially in the case of Flybe, Easyjet and Ryanair.
  3. No frills airlines tend to operate routes with higher load factors, and are quicker to withdraw unprofitable routes.
  4. No frills airlines use less congested airports, cutting down on ground taxiing and pre-landing stacking.
  5. No frills airlines tend to ruthlessly cut costs – and lower costs usually go hand in hand with better environmental performance.

So how can Heathrow’s third runway possibly be justified in the face of such serious environmental concerns, and the lower environmental performance of traditional ‘legacy’ carriers?

Time to play devil’s advocate:

A new runway would reduce airfield congestion and stacking

More capacity means less congestion – this is a fair point, except that more capacity also means more flights to take up that capacity. And in Heathrow’s case, this would almost certainly mean going from being 99% full on two runways to 99% full on three runways. Result – some efficiency improvements might be created, but these would be counterbalanced by the increase in flights.

We still need hub and spoke networks

However much better the no-frills airlines might seem on paper, there will always be a need for some hub and spoke routes, and only Heathrow can serve these – not Gatwick or Stansted, even though those airports might have smaller noise footprints.

If Heathrow doesn’t expand, somewhere else will – and the UK loses out without any CO2 reduction

This is true to a point, but the passengers would still need to get to the other hub airports. Taking up slots with feeders into Frankfurt or Amsterdam will use up more runway space per passenger than operating direct flights to the destinations people want to go to (assuming long haul flights use larger aircraft), so whatever BAA claim, Heathrow will always cherry pick the most important and profitable destinations, rather than serve every route it can.

Expanding Heathrow means more direct flights, so less need for connections

With regards to flights into European hubs from other UK regional airports, passengers from cities such as Birmingham or Bristol are already more likely to transfer through Amsterdam or Paris, as they have feeder routes from most parts of the UK, whereas such a short route into Heathrow would not be viable. This is obviously more wasteful than a direct flight from Heathrow, so adding more capacity and building a high speed rail link into Heathrow would partially alleviate this problem.

Verdict: The environmental dragons would always be expected to shoot down any proposal for expansion at any airport. Although there are clearly some environmental benefits, these are often outweighed by other factors. For example, for every seat which an expanded Heathrow would enable to be filled on a point to point bases, how many other seats would just be filled by transfer passengers who might have gone elsewhere? Even if a clear distinction is made between the need to minimize the contribution made to climate change by aviation as a whole and the effects of one single airport, there is still an obvious correlation between more capacity and more flights. However much BAA try to massage the arguments, the concept of ‘sustainable aviation growth’ is always going to be an oxymoron.

Airport Neighbours put Heathrow in the Dragon’s Den

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Well, naturally you’d expect people living near Heathrow to be the first ones to declare ‘we’re out’ – except of course that Heathrow employs vast numbers of people in the immediate vicinity.

To give a true assessment of neighbours attitudes, we’d have to look at Heathrow in comparison with other London airports. Here, Heathrow doesn’t fare so well, as aircraft usually approach over Central London, giving a much wider noise footprint  than any other London airport, when measured in terms of people disturbed per passenger carried. Of course, the quietest option would be an airport out in the Thames Estuary (aka Boris island), but before that idea gets Londoners running for their cheque books, one has to consider the costs involved, estimated last week at £40bn, or £4,000 per head, assuming a division between 10,000,000 people living in and near London.

As the main argument in favour of a Thames Estuary Airport (TEA) is one of nuisance minimisation, rather than the facilitation of growth per se, should the costs of such  a proposal be loaded onto the 400,000 or so people who are most affected by Heathrow’s current noise? If so, the cost moves up to £100,000 per head, so I think this idea gets thrown overboard very quickly when using this argument!

Verdict: Turkeys will never vote for Christmas, and airport neighbours will never vote for expansion. The first group to say “We’re out”.

Heathrow’s third runway in the Dragon’s Den

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Last week, I attended a discussion organised by CIMTIG regarding the future of Heathrow Airport, and the aviation industry in general. Sadly, because of limited time, and the attempt to discuss the whole industry, rather than just Heathrow’s third runway, they didn’t explore as many of the issues as I would like them to have done – but it was still a very informative evening.

This week is the Conservative party conference, and we expect some further discussion from the government-in-waiting about why they believe there are better ways of handling demand than building another runway.

I’d like to put Heathrow’s third runway into a ‘virtual Dragon’s Den’ and see how it gets along. Prior to last week, I’d say I was probably against the plans, but the presentation from the BAA director responsible for the third runway gave a very strong case, so I’m firmily back on the fence. Let’s see if the proposal can survive in the den. So here we have it – billions sitting on the table, rather than the usual £250,000, and I think we need a majority of the ‘Dragons’ to ‘invest’, rather than just the usual one or two.

Introducing the dragons.

In other parlance, they might be known as ‘stakeholders’ or ‘investment solutions partners’, but as I hate both of those terms, I’ll definetely stick with Dragons!

  1. Airport neighbours
  2. Passengers
  3. The Economy
  4. The Environment
  5. Airlines

The article will follow later in the week. What do you think? Would you ‘invest’?

Don’t fancy flying all the way to Australia? Why not go by bus?

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When I first read about Oz-bus.com, I thought that April fools day had come early. A long distance bus service running all the way from London to Sydney – someone had to be taking the xxxx!

But it turns out that the service is real – and that they will take you by bus as far as the prevailing conditions will allow. This should essentially mean an overland journey to Iran, a possible flight across the border into Pakistan and then again to get through Burma, and a final flight between Bali in Indonesia and Darwin in Australia – but the rest of the journey is exactly as it says on the tin, by comfortable long distance coach, apparently limited to 35 passengers per trip, so I would presume a little bit more roomy than your average scoot through London on a crowded #73 Boris-baiting bendy bus!

With a one-way journey starting at £4399, you are going to spend a lot more than a business class flight, but we think this journey is going to be more about what you see on the way than what you do when you get there, so for a three month trip, this works out at a very reasonable £50 per day, including breakfast and basic accommodation.

I’ll have to admit to being a bit ‘bussist’ myself. If I’m going to do long distance surface transport, I’d rather go by rail or sea – but given a choice between a professional bus driver and the company of a 35 strong group, or going by car, I’d still take the bus any day. Oz-bus also offer an eastbound journey to New York – via China and Alaska, and journeys through Africa, so it really does look like they are carrying on where Eurolines and Greyhound leave off. It will be interesting to see if this kind of travel ‘takes off’ (very lame pun I know) as people look for low-carbon alternatives to flying, and it will certainly be an indicator of the ability for different countries to stimulate cross-border co-operation. Iran, Pakistan and Burma might be problem areas for now, but how long before the Facebook generation catches up and reaches parts Heineken can’t reach! Twitter has certainly lead the way in Iran at least, so let’s see!

The BNP v Eco-fundamentalists – both are equally fascist

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I have no problem with the vast-majority of environmental campaigners, but there are a dangerous few out there who seem to think it is perfectly reasonable to impose a total ban on all domestic flights within the UK. More worrying than this opinion being widespread is the way it is allowed out on news reports without any kind of counter-argument. Yet whenever there is a suggestion of the BNP getting more air time, there is uproar.

So what is so wrong with suggesting a ban on domestic flights, in the name of the environment?  As the United Kingdom is made up of many islands, a sizeable portion of travel within her borders is always going to be made by air. Even over-land, there are many journeys which are totally unrealistic to make by rail, especially for business travellers wanting to head to important meetings and make it back in a day. People who think that it is an easy switch from air to rail tend not to be the ones that take the trains all that often.

Where rail services have improved, such as between London and Manchester, the proportion of people travelling by train has increased, but there will always be some people who will want to choose to fly, or who want to take a plane because the next step of their journey is an onward flight to another destination. As the network currently stands, travelling by train from Manchester to Heathrow is a great deal less convenient than flying.

Of course, some communication can be done by electronic means, but if travel broadens the mind, then those people who seek to prevent people from travelling must have very narrow minds. Except that they masquerade as intelligent, educated people acting in our best interests. At least we know what we are getting with the BNP – mindless thugs who want to see certain sectors of the population sent away. But we should never forget that freedom to move within our borders is just as important as the freedom to cross borders. I have spent time in Saudi Arabia, where we had to get a ’50k pass’ to travel internally, and it was a bureaucratic nightmare.

The environmental damage caused by flying is already healthily compensated for by existing APD (Air Passenger Duty), which is levied twice on internal flights – both on the outbound, and on the inbound journey. Even moderate increases in APD, when not counter-balanced by our European neighbours, result in a huge discouragement to travel within the UK, as flights abroad are proportionally taxed at a lower rate.

So by all means, let’s have a reasoned debate about choices in travel mode, and about their environmental impacts. But let’s not be fooled by people who think an outright ban on domestic flights, or even steep increases in their taxes, is remotely in the UK’s best interest.