11 FEBRUARY 2013
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With the importance of resolving the question of new runway capacity for the UK so critical, many in the industry will have received the first two publications from the Davies Airports Commission covering Guidance and Aviation Demand Forecasting with eager anticipation.
The good news is we have a timescale. The bad news is that the industry and other interested parties are going to have to repeat a lot of detailed work at their expense to respond. This is in marked contrast to the Government's recent commitment to HS2 when all the studies for that were paid for by Government.
The two initial documents extend to almost 60 pages, with some 60 primary bulleted, plus a number of supplementary, questions. Those questions are targeted at proponents of particular schemes, inviting them to make comprehensive responses and provide significant information, albeit not detailed design.
It will be more difficult for individuals, businesses, regional bodies and development agencies to respond with their views on air service needs and in particular securing guaranteed access to the hub. How are they meant to respond if there are no schemes to react to? Most will not have the expertise or experience to respond to issues of location and layout and the associated cost and environmental impact; nor will they have the money or resources to do the required work; particularly in the short timescales allowed.
One option, the immediate use of the existing runway at Northolt to secure UK regional access to Heathrow, is owned by Government. Will it be responding to Sir Howard with a scheme?
Sir Howard Davies’s foreword says (page 4, 5th paragraph), “but we cannot simply return to these past recommendations. Looking back it is remarkable how much has changed since the last review”. Then having outlined some of the issues facing the industry he concludes (page 5, 4th paragraph), that “for all these reasons we need a new look and a fresh start”.
Many would question that view after 50 years of procrastination, study and lack of action. Most would agree with Sir Howard that we need to do something, but we should be building or finding immediate solutions, not engaging in further study.
Some will also be concerned that there is no one on the Commission from an airline background, to provide the fundamental understanding of air transport economics, markets, competition, costs, yields, load factors, pricing and operations. Indeed some will question the focus on the drivers that influence Aviation Demand (Figure 3.2 Discussion paper 01 on Airline Demand Forecasting) produced by the commission. There is no reference to the influence of frequency, network, schedules, capacity, products, competition or access on demand for air services; suggesting it has been written by someone who has never prepared a traffic forecast or budget for an airline, new route or service.
The Government response to the House of Commons Transport Select Committee Inquiry into UK Regional Air Services in 1998 generated one of the most comprehensive reviews of UK Air Transport ever undertaken by a Government. A five-year study which culminated in the publication of the Future of Air Transport White Paper of December 2003.
Some might question whether Sir Howard is right about the impact of change, when in reality nothing has happened that changes the need for new capacity or the ability to deliver that capacity, since the White Paper, apart from in two key areas:-
TRAFFIC: A reduction in overall growth in passenger numbers at some UK airports, primarily in the Regions due to the recession. But crucially, not at the UK hub at Heathrow, where traffic has continued to grow at the expense of its network and frequency to short haul destinations; as slots used for short haul operations have been substituted by more profitable long haul operations. The overall reduction in traffic is equivalent to some two years normal growth and consistent with the change in growth cycle following previous recessions since 1970.
Also during that period, long haul operations have become dominated by the long haul twins – primarily the Boeing 777 and Airbus A330, which have largely replaced the 747s. This situation will continue based on the combined orders for the new Boeing 787 and Airbus A350, 250 – 350 seat long haul twins of some 1.300 aircraft compared with the 280 orders and deliveries so far for the 550 seat A380. Combined with the forecast increase in passenger and freight traffic, this is a trend which has serious implications for the need for additional runway capacity at the UK’s hub.
Readers of a certain vintage may recall the Amsterdam Airport campaign late last century promoting itself as "London's Third Airport". The advertising is now being resurrected describing AMS as "London's Third Runway". The loss of the bmi feeder routes into Heathrow now means that foreign carriers are diverting passengers to Continental hubs. Other than BA, Heathrow airlines are feeling the pain.
NOISE: There has been a continuing reduction in aircraft noise both from individual aircraft and in aggregate terms as airlines have accelerated the introduction of quieter, more fuel efficient aircraft types. This means that previous assessments of the noise implications of either increased intensity of runway use or new runway development will be wrong, as the noise impact will have reduced substantially.
The fact that airports are in different ownership does not change the market or the response of the airlines who deliver the services. The growth in the Low Cost sector has in part been at the expense of the Charter Sector. The demand still exists but just flies in different aircraft! Signing the EC US Open skies agreement and the resulting transfer of services from Gatwick to Heathrow was merely a reaffirmation of the trend following the abandonment of the Traffic Distribution Rules in 1991; it is about markets and location.
It is ironic that the Coalition Government supports aviation technology but doesn't provide the infrastructure to allow British made wings and engines to fly unfettered from our hub for the good of the UK’s competitive position, its economy, employment and influence! It and Sir Howard need to get on the right track to secure our future.
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