Good morning Bagso
On your last point, about the risk of the taxpayer picking up the table if Heathrow has some form of financial distress.
1. The risk of financial distress for HAL is extremely low, given that it is a regulated utility.
2. Even if HAL were unable to service its debts there would be no risk of the airport closing, such that Government would have to step in. HAL is extremely cash generative - for every £1 it takes in through the till 58p is cash profit (ie before interest & depreciation). It would therefore be in the interests of shareholders, banks, bond holders and all other parties for HAL to continue to trade while it sought to restructure its debts. Restructuring of debts might involve an extension of maturities or similar, or a forced refinancing, or at worse a partial default. In such cases it's the banks and bond holders that take a hit, not the taxpayer.
3. There is no realistic likelihood of the taxpayer standing behind HAL's debts. The comparison with the Channel Tunnel is inappropriate - I stand to be corrected but I don't think the taxpayer had to bail out the tunnel itself. You may be referring to HS1, for which taxpayer guarantees were there from the start because nobody in the financial community (of which I was one at the time) believed the projections, and we were right. (An investment banker of my acquaintance described the traffic forecasts as "completely potty"). By contrast, there is plenty of evidence for Heathrow's projected growth. (By the way, if there ever is a suggestion of taxpayer support for R3 I'd be inclined to be on the barricades with you and Shed).
Last edited by BasilBush; 31st Mar 2015 at 09:17.