Silver,
Whilst I fully accept the concept of a business being worth more dead than trading, I just don't accept this as the case in respect of LHR.
Afaik, the land on which LHR is also property of BAA, not the govt, so hypothetically, any asset stripper could go round buying up airports and selling the land on.
Getting planning permission on any land formerly used as airport, considering the noise caused by aircraft and the air pollution issues (more due to the road traffic around the airport than the a/c), would be the relatively easy part.
PLH has closed and is likely to be turned into houses, but not LHR. Why not? I suggest because it's value as an airport is more than its value as housing or offices. So I don't buy the £12bn figure and certainly not £40bn. However, one difference between retaining an airport on this site and a brand new city is that the tallest structure at LHR is the control tower, whereas LHR City could theoretically have no height constrainst, if they could get past the nimby lobby, who would be dealt a mammoth positive in not having an airport there (not that they'd appreciate that though, they never do).
Even if we take £4bn for BAA, I put it to you that the value of LHR is still more than 50% - combine SOU, GLA, ABZ, STN, you still get barely half the traffic from LHR, and the ability to generate revenue from this traffic is lower still.
FV's lawyers would no doubt see this potential though - so they'd fight for a higher valuation if going down the CP route, otherwise the govt would have to nationalise the whole company - then we're into the kind of territory only entered by the very socialist governments you so ardently despise.
FDF,
Before Ferrovial could be bribed or cajolled into selling LHR, or subject to a compulsory purchase order, etc., the alternative has to be up and running. So WHO PAYS?
Foster has stated that he has spoken to 'stakeholders', including private sources who would back the construction and running of the airport. I'd like to know which airlines are keen on the idea, and how people expect a return, but even going on ther figure of £10bn for LHR, this is still only 1/5th of the £50bn price tag for the overall scheme (airport + barrage + road / rail links).
I have asked SS before though and I will ask again - given £30bn of the above project costs on airport and related infra, given an unknown fee for buying out LHR, at what rate would you set the PSC in order to have a profitable operation and get a return on capital?
Afaik, LHR sh PSC is around £27, already one of the highest in Europe. Remember upto 65m pax pa, you are just replacing LHR, not adding any new capacity.
Before Ferrovial could be bribed or cajolled into selling LHR, or subject to a compulsory purchase order, etc., the alternative has to be up and running.
This is a very key point, again one which SS keeps glossing over. There have been cases - Stapleton > DEN eg, where one airport has been closed down, and everything moved overnight to start fresh in the morning. But moving across from LHR to Thames Island? No move of an airport this size has been done before.
Therefore, chances are that such a move would take place in stages. And as with many before, closing down LHR would prove much harder than expected.
A second runway at LGW is prohibited. The very powerful anti-airport lobby there achieved a binding agreement to prevent airport expansion there for 40 years. this expires in 2019. LGW expansion is fraught with difficulty, and will not solve the lack of capacity at the national hub, LHR.
Exactly, 2019! Considering how long LHR T5 took to get through planning, there's no way any new runway in the SE will start build before 2020 at the earliest.
LGW expansion is politically easier than LHR, as there are less marginal seats, and less people full stop.
I question how much of the appeal of LHR is due to all the majors being there, and hence other airlines wanting me-too, and how much is because of proximity to London.
I just don't see any UK govt present or future backing LHR R3, and as for a fourth, I'd sooner see a huge invasion of Danish bacon winging its way across from the farms of Jutland.
So, the question is - can expansion at LGW be done in a way as to mitigate these two disadvantages?
1) Offer swanky new terminals at LGW for Star (no more feeder to LHR after bmi sale) and Skyteam. The likes of Flybe can provide some domestic feeders, dare I see that as Easy moves more and more towards being a 'proper' airline, they may be a possibility of deals there too for s/h connects?
2) Assuming that most LHR connects are indeed within same airline or alliance as I suspect (if you have figs to contrary, please provide), LGW could then be established as viable connection hub in its own right too (way beyond its limited facilities at present).
3) Save the £5bn earmarked for pointless Heathwick line, and upgrade rail links from LGW to London. Billions on Crossrail will improve E-W travel across London, but this is still just a regional link, doesn't even serve LHR5, or the long distance station complex either side of the British Library. At the very least, implement something along the lines of Crossrail3, enabling through service between Brighton, Gatwick, Central London (xrail tfer at TC Road), Watford, Milton Keynes and points north. Probably the most expensive tunnel in history by cost per mile, but it is only c. 3 miles between Euston and Victoria.
Daft? Unworkable? Look at New York - JFK handles c. 46m pax pa with terminals for each player, whereas EWR is the 'hub', with c 33m pax pa, dominated by United / Continental. Which is 'the' New York Airport? Personally, I prefer EWR as it is a neater design, and better connected by rail throughout NE corridor. Ditto for LGW's potential - but restore the xcountry link through Reading as an easier, non sexy win too!
Also, nothing is more silly than the current arrangement with same airline (BA-BA) connections having to sometimes go between LHR & LGW.