Tag Archives: high speed trains

How About High Speed 2 Wheels?

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For a long time, when asked about the need to reduce the environmental impact of aviation, my stock answer would be that transferring shorthaul flights on to high-speed rail services should be an obvious aim for governments. Yet, the more I have learnt about this governments high-speed two proposals, the more I have felt that it would be a very poor investment indeed, whether measured on economic or environmental grounds. Yes, having high-speed trains would shift some people from shorthaul flights onto less polluting rail services, but it has to be remembered that this big switch has already been largely made, especially on flights from London to Leeds, Liverpool and Durham Tees Valley, which no longer operate.

So if high-speed 2 is a bad investment, what would be a better investment? Obviously, any comparison between rail and air travel is about longer distance intercity journeys, whereas the vast majority of journeys take place within built-up environments, or are commutes between outlying towns and city centres. What if all the money collected from air passenger duty was actually put towards genuinely environmentally beneficial projects? Few things are better for the environment than high-quality off-road walking and cycling tracks, using existing historic transport corridors, especially disused railway lines. Yet, this can be done for a fraction of the cost of building new ones — the figure quoted by cycling charity Sustrans is that new cycle paths can be built for around £200,000 per mile, compared to the £155,000,000 per mile cost of high-speed 2.

Now, can these really be comparable, when high-speed 2 must surely carry far more people at much higher speeds? Yes, it might well do, but its entire business model is based on very ambitious estimates of user figures. Why put so many billions of pounds into such an inherently risky project? Whether high-speed 2 is viable or not (and we are certainly in the no camp), investing in better facilities for pedestrians and cyclists would still provide a much quicker win, both in terms of transport and human health.

What does Warren Buffett’s train investment say about airlines?

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So, Warren Buffett has invested some $26 billion buying American freight operator BNSF, with news commentators hailing this as an ‘all-in’ bet on the future of the US economy. But there’s more to it than that – it is, of course, a huge leap of faith into the future of railways, even if lumping coal isn’t exactly as glamarous as swish new high speed train sets. But Buffett has never been about style over substance, and trains in Europe are usually associated with massive subsidies.

In typical long-term Buffett style, he has talked about growth potential of rail in the USA over the next 3 decades, and even if this investment is in freight railways, there is no doubt that passenger rail networks will also see substantial development over this period.

Compare this to Buffett’s attitudes towards airlines, after he lost 75% of his $385 million investment in US Airways back in 1995. He pointed out that the he didn’t think the US airline business had ever made money – and this was in an industry without the kind of state carrier subsidies which were common elsewhere in the world. Buffett is quoted as saying, in respect of the Wright brothers’ first flight:

“If there had been a capitalist down there, the guy would have shot down Wilbur. One small step for mankind, and one huge step for capitalism.”

Has anything changed in the airline industry since 1995? Well, there’s been plenty of deregulation across the pond, and plenty of former big names are no longer with us. In Europe, we have Ryanair’s Michael O’Leary echoing many of Buffett’s sentiments, describing the current situation facing European airlines as a ‘bloodbath’, and the ‘perfect storm’. Of course, Ryanair are one of the few airlines to buck the trend, whereas this morning’s announcement from Lufthansa that they can’t find a suitable bidder for bmi, and that consequently bmibaby are shedding jobs hardly comes as a surprise.

Despite all this, Warren hasn’t been put off from investing in flying alltogether, having ditched his own private jet, aka ‘The Indefensible’ back in 1998, in favour of buying private jet hire company NetJets.

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!