SASIG February 2016 Bulletin

Contents:

Upcoming Meetings

Forthcoming Industry Events of Interest

Editorial

Parliamentary News

Parliamentary Questions

Government News

London and South East News

Regional News

National and Other Industry News

European News

 

UPCOMING MEETINGS
The next SASIG meeting will be held on Friday 8 July, 2016 at 11am.
Venue: Westminster Suite, Local Government House, Smith Square SW1P 3HZ, location map 

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FORTHCOMING INDUSTRY EVENTS OF INTEREST

8^th to 9^th March (9.00-17.00) – ACI Europe Economics and Finance, discussing airport competition, regulation and finance, and air transport markets in transition. Location: Millennium Gloucester Hotel, London

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EDITORIAL

February was a quieter month for major policy announcements as the Government’s focus shifted to the EU negotiations and the forthcoming Referendum and Budget. That said, the Transport Select Committee’s report on surface access links to airports was published, highlighting that poor surface access restricts growth, adversely affects passenger experience, and forces airport users, local commuters and airport employees to choose transport which exacerbates environmental concerns. More significantly however, their inquiry revealed a lack of leadership on strategic planning by Government on airport surface access and highlighted the confusion the absence of a South East runway decision has created about the role of regional airports.

DfT remained relatively quiet on airport matters save for the Secretary’s of State’s speech to BATA being widely trailed by officials as a succinct summary of Ministers thinking at this stage. Meanwhile the Aviation Directorate in DfT is being quietly but substantially expanded to cope with the work required to reach a final decision on runway options; prepare, consult upon and secure Parliament’s support for a National Policy Statement; and then to receive and ultimately determine a runway DCO (Development Consent Order). In parallel, they have commenced a review of the airspace and noise component of the 2013 Aviation Policy Framework and SASIG has been invited to be one of a small number of key stakeholders to work with them on this initiative. Finally, there is clearly going to be significant engagement from DfT on the EU Aviation Package, although what happens after 23rd June we will have to see.

The planned meeting between Aviation Minister, Robert Goodwill, and a delegation from SASIG was postponed until 14 March, but will allow issues of a particular significance to SASIG members to be raised at a timely point in the policy cycle. SASIG has also been approached by Sustainable Aviation, the industry-led group looking at future technological and procedural changes to improve aviation’s environmental performance – this is again a sign of how SASIG is seen as an important stakeholder amongst key policy-makers and influencers.

Given the scope of the aviation related policy work that is in prospect over the next 18-24 months, it has been agreed that three Technical Working Groups will be established by SASIG covering:

– Environment, Planning and Airspace
– Surface Access and other Infrastructure
– City and Regional Economic Development

First meetings are likely to be in the second half of April/early May and further information on these can be found in the papers for the 4 March SASIG meeting; the Secretariat will be sending round invitations to attend and agendas in due course.

And finally, the industry’s attention was drawn to the sale of London City to a consortium of Canadian pension funds at EBITDA multiples of over 45 (previous highest was Belfast City at x28), and to arguments in the South West and North East about the potential impact of devolving APD. A looming issue will be the Government’s plans to create seven large local authority pension funds from the existing 89 and its intention to require them to invest in infrastructure, including potentially airports. This may be an issue that SASIG wish to examine further in the coming months.

Chris Cain,
Head of Secretariat

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PARLIAMENTARY NEWS
8th February – Transport Committee hears evidence from Secretary of State on Government’s plans for South East airport expansion, at a meeting at Portcullis House, chaired by Louise Ellman MP.
25^th February – Lord Adonis advises Prime Minister that Britain will be a “laughing stock” if the Government fails to make a decision on a new runway this year, as the UK’s competitiveness would be “severely damaged” by further delays.
26^th February – Transport Committee publishes report on surface transport to airports, agreeing that poor surface access restricts growth, affects passenger experience and has a negative effect on the environment.

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PARLIAMENTARY QUESTIONS

QUESTION 2: Question asked by Jim Shannon (Strangford) on 10^th February: “To ask the Secretary of State for Transport, if he will take steps to reduce the costs of (a) travel by road and train to airports in the UK and (b) airport parking.”
A: Question answered by Robert Goodwill on 25^th February: “In terms of train costs and airport parking, I refer the Right Hon. Member to the answer I gave to his question on 9 February 2015, http://www.parliament.uk/business/publications/written-questions-answers-statements/written-questionsanswers/page=1&max=20&questiontype=AllQuestions&house=commons%2clords&uin=25274. In terms of travel by road within the UK, decisions on taxation, including fuel duty, are a matter for HM Treasury.”

QUESTION 3: Question asked by Baroness Jones of Moulsecoomb on 8^th February: “To ask Her Majesty’s Government how much the Carbon Airports Commission calculated that air fares would need to rise in order to comply with the capped model, and what estimate they have made of the increase in air passenger duty that would be necessary to achieve that increase.”
A: Question answered by Lord Ahmad of Wimbledon on 15^th February: “The Airports Commission included an estimate of the impact of air fares in the carbon capped case in Chapter 4 of their interim report, copies of which are available in the Libraries of both Houses. There are no such estimates alongside the updated forecasts in their final report, nor is there consideration of the interaction between carbon prices and air passenger duty.”

QUESTION 4: Question asked by Mr Gavin Shuker (Luton South) on 8^th February: “To ask the Secretary of State for Transport, what the value is of awards made to each route from the Regional Air Connectivity Fund.”
A: Question answered by Mr Robert Goodwill on 15^th February: “In December 2015 Government announced that 11 new air routes would be supported with start-up aid funding through the Regional Air Connectivity Fund for three financial years. The amount of funding provided to support individual routes will be paid in arrears and will be determined once routes begin operations and will depend on factors such as the number of passengers carried.”

QUESTION 5: Question asked by Jim Shannon (Strangford) on 10^th February: “To ask the Secretary of State for Transport, if he will take steps to reduce the costs of (a) travel by road and train to airports in the UK and (b) airport parking.”
A: Question answered by Mr Robert Goodwill on 25^th February: “The Department for Transport meets regularly with airport operators and the issue of the treatment of VAT in airside retail shops has been reviewed. The Chancellor announced on the 31 December 2015 a review into airport sales to make sure VAT savings are being passed on to shoppers. It would therefore not be appropriate for me to comment at this stage whilst HM Treasury is undertaking this review.”

QUESTION 6: Question asked by Richard Burden (Birmingham, Northfield) on 25^th February 2016: “To ask the Prime Minister, if he will make an assessment of the potential merits of each proposal on noise mitigation from aviation in the letter to him of 18 February 2016 from the Aviation Environment Federation.”
A:  Question not yet answered.

QUESTION 7: Question asked by Richard Burden (Birmingham, Northfield) on 23^rd February: “To ask the Secretary of State for Transport, how much of the Regional Air Connectivity Fund has not yet been allocated.”
A: Question not yet answered

QUESTION 8: Question asked by Dr Tania Mathias (Twickenham) on 10^th February: “To ask the Secretary of State for Transport, which body is responsible for enforcement of aircraft noise abatement requirements.”
A: Question answered by Mr Robert Goodwill on 22^nd February: “The Government sets noise abatement procedures at Heathrow, Gatwick and Stansted. These are set out in Noise Abatement Requirements Notice(s) made under section 78 of the Civil Aviation Act 1982. At other airports these are agreed locally often through local planning agreements. Where the Government sets the procedures these are monitored by the airports’ noise and track keeping systems which receives data from National Air Traffic Services (NATS) radars and permanent noise monitors located around the airport. Adherence to the noise abatement procedures are reported via the airports flight performance report which will be available on the airports website. Fines are imposed at Heathrow, Gatwick and Stansted airport for breaching noise departure limits.”

QUESTION 9: Question asked by Dr Tania Mathias (Twickenham) on 10^th February: “To ask the Secretary of State for Transport, if he will bring forward legislative proposals to update the Heathrow Airport London (Noise Abatement Requirements) Notice 2010 to require higher minimum rates of climb for aircraft taking off from Heathrow Airport.”
A: Question answered by Mr Robert Goodwill on 22^nd February: “The requirements are kept under review to take account of any relevant new evidence. However, I have no plans at present to update the Heathrow Airport London (Noise Abatement Requirements) Notice 2010.”

QUESTION 10: Question asked by Dr Tania Mathias on 10^th February: “To ask the Secretary of State for Transport, what assessment his Department has made of the rates of climb of aircraft taking off from Heathrow Airport compared to other (a) UK and (b) European airports.”
A: Question answered by Mr Robert Goodwill on 22^nd February: “The Department for Transport (DfT) has not made any assessment of rates of climb from Heathrow airport compared to any other airports. The Government is aware of an independent report published last year on climb rates at Heathrow airport.The airport is working with the industry and the CAA to understand the issues and what this means from a noise perspective. DfT sits on the Heathrow Noise Community Forum where this work programme is being taken forward.”

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GOVERNMENT NEWS
11^th February – Goodwill tours Cornwall Newquay Airport and opens Aerohub Business Park, hearing about how the airport and its enterprise zone are boosting economic growth in the region.

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LONDON AND SOUTH EAST NEWS
3^rd February – British Airways owner IAG threatens to move to other airports if landing charges rise, vowing that it will refocus operations in Spain or Ireland if Heathrow and LCA become too expensive.
6^th February – Construction firms urging Government to build runway at Heathrow, with the bosses of some of Britain’s biggest building companies writing to the Chancellor to call for Heathrow expansion
8^th February – Pension fund suggests “effectiveness and credibility” of Government’s new infrastructure commission hinges on whether a new Heathrow runway is built, by intensifying investors’ concerns about the risks of investing in infrastructure.
8^th February – Heathrow boss insists third runway could be built at Heathrow without breaching EU air pollution limits, going on the offensive after claims that air quality would be a problem if the third runway was built at the West London airport.
8^th February – Sceptical MPs told to expect new runway at Heathrow or Gatwick by 2030, as the transport secretary insists that the government has made progress on the issue and still hopes to make a final decision by July.
9^th February – BA will fly from Stansted for the first time, launching flights to four sunshine resorts – Faro, Malaga, Palma and Ibiza – from May 28^th.
9^th February – Heathrow CEO urges David Cameron to agree for the new runway to be built at Heathrow , to “secure our country’s future”.
9^th February – Heathrow CEO says the airport must “engage” with the government and airlines before making any commitment to night flights ban, as he spoke publicly on expansion for the first time since December.
10^th February – Luton Airport ceremony takes place to mark beginning of £110 million redevelopment, to increase capacity by almost 6 million passengers annually.
10^th February – Residents and businesses from south west invited to express views on planned new rail link to Heathrow, which would be ready by 2024 if the project gets the go ahead.
10th February – Gatwick beginning tendering process for second runway, seeking expression of interest from consulting firms to help it develop its mooted expansion plans.
10^th February – Gatwick announces acceleration and expansion of its investment programme, costing £2.5 billion to allow the airport to cope with rapid passenger growth.
10^th February – Ryanair announce three new routes from Stansted, flying from November 2016 to Hamburg, Toulouse and Timisoara.
11^th February – Over 1.66 million passengers used Stansted during its record January, making it the airport’s busiest ever January.
11^th February – London Heathrow Airport records busiest ever start to the year, with a record 5.5 million passengers in January.
13^th February – EasyJet launch new route from Stansted to Zakynthos in Greece, flying throughout the summer from May 28^th onwards.
14^th February – Five bidders short-listed to make offers for London City Airport, expected to make final bids in a deal which could value the business at £2 billion.
16^th February – CityJet and Flybe join threats to leave London City Airport if the new owners raise airport charges, after an investigation showed that fees are likely to be raised should the airport be sold at the £2 billion asking price.
16^th February – Patent approval granted for extended runway option at Heathrow Airport, with plans proposed by the Heathrow Hub to extend the northern runway to 6,800m.
16^th February – Claims that City Airport could have sold for over £2 billion if its owners had waited, as five bidders “line up” for Friday’s auction deadline.
17^th February – Gatwick chief executive says traffic forecasts for passenger growth should be re-examined by ministers, as they were “nearly ten years out”.
23^rd February – Heathrow boss claims “Brexit” would strengthen the case for a third runway at Heathrow more pressing, despite supporting Britain remaining within a reformed EU.
23^rd February – Total passenger numbers at Heathrow reached 75 million in 2015, as the airport approaches its 70^th year.
26^th February – Major Canadian pension fund buys London City Airport for £2 billion, adding to their ownership of UK airports – they already own Belfast International, Birmingham, and  Bristol Airports.
26^th February – Willie Walsh announces BA will “take its business elsewhere” if prices at City Airport increase, with the airport’s new owners announced today.
28^th February – Pro-expansion group described anti-third runway Boris Johnson as ‘out of touch’ with his constituents, as 61% of his constituency voted in favour of Heathrow.

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REGIONAL NEWS
1^st February – Business North group aims to revive Northern Powerhouse agenda after setbacks, by providing ideas and support.
1^st February – Doncaster Sheffield Airport announces flights to Disneyland Paris, to be operated by Flybe with flights beginning in March.
4^th February – Liverpool John Lennon Airport operators – EasyJet, Ryanair and Wizz Air- report January passenger growth, with EasyJet reporting a 6.3% rise in traffic.
5^th February –  Liverpool John Lennon Airport celebrates three new routes, with Chief Executive Andrew Cornish confident that more destinations and airline operators will follow this year.
5^th February – Thomas Cook Airlines expands winter 2016 schedule at Birmingham and Glasgow, with increased frequency of flights to Gambia, Tenerife , Lanzarote and a new flight to Gran Canaria.
8^th February – Hainan Airlines increasing aircraft capacity at Manchester Airport, before Beijing route launches in June.
9^th February – Ex-pilot says that Alderney airport ‘needs urgent attention’, with a resurfaced runway needed to avoid damage to aircraft.
9^th February – Manchester Airport’s Escape Lounge overhaul costing £1.6 million, increasing its capacity within Terminal Two.
9^th February – Record passenger surge in January at Belfast International Airport, with an almost 20% increase in people flying into and out of Belfast International Airport during the first month of the year.
10^th February – Ryanair announces new routes from Stansted to Hamburg, Toulouse and Timisoara from November 2016, with seats already on sale.
10^th February – Ryanair announces Manchester winter routes to Hamburg and Nuremberg, beginning from November and operating daily.
10^th February – Turkish Airlines confirms increased weekly flights from Edinburgh Airport to Istanbul to ten flights per week, indicating the airline’s popularity at the airport.
10^th February – New 7 month contract for Intra Wales Air Service awarded to Van Air, with the Czech airline working in partnership with Citywing.
10^th February – Passenger numbers up at Cardiff Airport for 8^th consecutive month , with January passenger numbers up 42% on last year
11^th February – Edinburgh airport bosses accused of downplaying community opposition to a trial flightpath in the report, receiving criticism from local communities.
11^th February – Edinburgh Airport sees ‘massive’ jump in international passenger numbers last month, up over 11% on the same month last year.
11^th February – Residents concerned that Belfast City Airport could become one of the noisiest UK airports, as Environment Minister considers airport’s application to remove cap on number of seats it can sell.
11^th February – Addleshaw Goddard to advise Manchester Airport Group on £1 billion 10 year project, which will see Terminal Two of the airport doubled in size, and linked to an improved Terminal Three.
12 February – Four UK airports owned by Manchester Airports Group (MAG) report strong start to 2016, with January traffic up almost 10%, after record passenger numbers in 2015.
12^th February – Edinburgh and Glasgow airports see rise in passenger numbers in January, up 11.4% and 13.5% respectively – with Glasgow celebrating its 50^th anniversary year.
12^th February – Bristol Airport claims scrapping APD in Wales would create a “significant commercial disadvantage” to the South West, costing the South West economy £843 million and over 1,500 jobs.
12^th February – Campaign against plans for new Edinburgh Airport flight path begins, following a report published by the airport with findings from a 2015 trial.
12^th February – Aberdeen International Airport experiences 17% fall in passenger numbers, with a fall in the number of people using domestic fixed wing flights.
13^th February – Number of people passing through Edinburgh Airport increased last month, with “massive” jump in number of international passengers.
15^th February – Flybe push for link between RAF Northolt and Liverpool John Lennon Airport, pressing the Government to create a direct London-Liverpool link.
16^th February – Liverpool John Lennon Airport reports 19% boost in traffic, as it handled over 38,000 passengers in one weekend.
16^th February – Flybe offers more Euro 2016 from Cardiff Airport to various areas of France, including Paris, Toulouse and Bordeaux.
16^th February – Nordic Aviation launches new thrice-weekly service between Tallinn and Edinburgh for this summer, making it Scotland’s only flight to Estonia.
16^th February – New figures show 3.6 million passengers flew from airports in Northern Ireland in the year from quarter 4 in 2014 to quarter 3 in 2015, with total air passenger flow of 7.2 million.
17^th February – Birmingham Airport sees record passenger growth, on both short and long haul routes, with traffic growth of 9% last month compared to this time last year.
17^th February – Three potential investors declare interest in purchase of Manston Airport, months after Thanet District Council blocked RiverOak’s attempted purchase.
17^th February – Jet2.com launches three new routes from Edinburgh to Spain, with 9 more routes to follow this year.
18^th February – Jet2 announce return of direct flights from Newcastle to New York, running between May and September this year.
19^th February – Newcastle International Airport continues expansion by adding 1900 more parking spaces, as part of a multi-million pound contract.
19^th February – Aer Lingus to double frequency of flights between Liverpool John Lennon Airport and Dublin, with 4 flights per day from the beginning of May.
19^th February – New team to oversee Airport City Manchester development, as the project enters its next phase with land acquired, and clear financial, marketing and delivery plans in place.
21^st February – After four years of no progress at Blackpool Airport, bosses say progress at Warton Enterprise Zone will get underway in 2016.
22^nd February – New route announced from Manchester Airport to Pakistani Benazir Bhutto Pakistani airport, to be run by Shaheen Air from March 15th.
24^th February – New video shows how Manchester Airport will look after its £1bn transformation, with a public square, glass super terminal, and latest technology.
24^th February – Conservative MP dismisses proposals to improve road links between Leeds and Leeds Bradford Airport as “completely inadequate”, suggesting that a new rail link would be better.
24^th February – Former Defence Secretary Liam Fox tries to stop devolution of APD to Welsh National Assembly, suggesting it would jeopardise future of Bristol Airport and support of SW Conservative voters.
25^th February – Ministers suggest George Osborne’s March Budget announcement could include steps to protect Newcastle Airport, as Scotland prepares to lower air tax.
25^th February – Manchester Airport calls for an ‘APD holiday’ on new long haul flights, as its managing director Ken O’Toole announced at the Northern Powerhouse Conference.
26^th February – MP Louise Ellman calls on Government to do more to link John Lennon Airport to UK transport networks, as part of the Parliamentary Transport Select Committee’s inquiry on surface access at UK airports with over 1 million passengers per year.
28^th February – Reports of record-breaking 2015 cargo levels at Robin Hood Airport, with Doncaster’s airport celebrating the most freight handled since the airport opened.
29^th February – Railway line to Leeds Bradford Airport branded ‘unachievable’, leaving locals disappointed with the alternative tram-train system option costing £360m.

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NATIONAL AND OTHER INDUSTRY NEWS

1^st February – Ryanair report increase in traffic, revenue and profit levels, in its latest update to financial markets.
4^th February – Cheaper fares at Ryanair leads to soaring passenger numbers after the Paris attacks, with 7.5 million passengers last month.
4^th February – MPs praise Manchester Airport in Parliament as a key component to realising the Northern Powerhouse vision, at a special debate on the subject of regional airports.
4^th February – Transport for the North’s Chief Executive writes about how transport will help drive the Northern Powerhouse, by boosting the economy and helping business growth.
9^th February – UN agrees new pollution controls requiring airlines to become more environmentally efficient, releasing a third less carbon dioxide.
11th February – Rumours of a “heated meeting” negotiating price to buy Cardiff airport, between a senior civil servant and the Welsh government team.
11^th February – Gatwick Airport CEO publicly calls for UK to remain in EU, after Gatwick was recognised as one of the fastest growing in the continent after January’s busiest every January.
12^th February – UN Secretary – General highlights importance of aviation’s vital role in sustainable development and climate change, speaking at the ICAO.
16^th February – Businesses from Nottingham, Leicester and Derby come together to highlight East Midlands Airport’s economic potential, at a meeting of the Power of 3 (Po3) three-city collaboration.
16^th February – UK airports call for government to give ‘clarity’ on APD in upcoming budget, with AOA CEO Darren Caplan saying that “the issue cannot be allowed to drag on for any longer “.
17^th February – Heathrow publish latest Fly Quiet league results, airlines’ noise performance from October to December 2015, showing a clear trend towards quieter and newer planes at Heathrow – with Virgin Atlantic given as an example of an airline making substantive changes.
17^th February – Flybe calls for APD to be abolished or reconsidered, saying that the tax discriminates against smaller airports and domestic passengers.
17^th February – UK airports urge Chancellor to cut air tax by at least 50% in next month’s Budget, with the Airport Operators Association (AOA) arguing that the UK rate should be no higher than that of its closest competitors.
18^th February – New frameworks build Gatwick’s readiness for runway decision, with expressions of interest sought for planning and design work, and three new frameworks worth £75 million published.
22^nd February – ‘Carbon Tsar’ Simon Sturgis appointed at Gatwick, to ensure the airport becomes UK’s leading low carbon airport by 2025.
23^rd February – Heathrow releases 2015 results showing it as “Europe’s best hub airport”, with 75 million passengers last year and its highest passenger service ever.
24^th February – Ryanair announces its support for the “remain camp”, campaigning against a Brexit after chief warned vote for UK to leave EU could trigger fares rise.
26^th February – Industry guidance on automation in Air Traffic Management (ATM) released by CAA, in a document discussing the challenges and opportunities presented by the automation of ATM. The document can be found here.
26^th February – International Airlines Group (IAG) saw 64% increase in profits in 2015, helped in part by falling fuel prices which drove up its profits at BA, Iberia, Vueling and Aer Lingus, and is expected to drive up operating profits by €1 billion in 2016.
28^th February – Mystery consortium creating ‘4 runway airport plan’ for a new airport near London, to rival or replace Heathrow with a £40-60 billion project.
29^th February – Airports begin to see ‘Olympic effect’ with lower passenger numbers reported, with UK passengers staying at home and overseas visitors deferring journeys.

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EUROPEAN NEWS

5^th February – ACI Europe figures releases traffic report showing growth of 5.2% in passenger traffic in 2015, at airports within the European network.
9^th February – Commission welcomes landmark agreement with International Civil Aviation Organisation (ICAO) on the first ever global CO2 standard for aircraft emissions, with the deal made at a meeting in Montreal.
23^rd February – East Midlands Airport boss says Britain has benefitted from ‘open skies’ policy of EU, as he joined 200 fellow business leaders in signing a letter calling for the UK to remain within a reformed EU.
23^rd February – Heathrow CEO makes statement on EU referendum, suggesting Britain would be better off in a reformed EU.
24^th February – EU and China formally launch EU-China Aviation Partnership Project, a cooperation programme in the field of civil aviation.

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SASIG WEBSITE ADDITIONS 

• DfT External Advisory Group Meeting Papers from meeting held on 28 January 2016
• DfT EU Aviation Strategy Update since 15^th January – includes various items from Dutch Aviation Summit and DfT Aviation Package Industry Engagement Event.
• Meeting papers for the 4 March meeting are available here.