Stansted thinks big while Luton thinks small
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Stansted thinks big while Luton thinks small
While BAA plans to spend a total of £8.69bn (€12.97bn) on its three London airports TBI the operator of Luton revealed its spending plans for its flagship airport as it takes on Stansted and Gatwick for new business. Paul Kehoe the chief executive of Luton Airport today announced that just £20 million would be spent on redevelopment and expansion, but not for two or three years or until passenger figures warranted the move. Compare this with what BAA are spending, £7.19bn (€10.73bn) at Heathrow, £841m (€12.55m) at Gatwick and £662m (€988m) at Stansted. But then BAA know that airlines will flock to its airports while TBI assume the same and has all but given up the fight for new airlines.
It is clear that TBI have neither the vision nor the money to expand Luton to its full potential. A very sad day for an airport whose catchment area is only second to Heathrow.
On a more positive note executive jet movements are breaking all records with a growth rate of around 30%.
It is clear that TBI have neither the vision nor the money to expand Luton to its full potential. A very sad day for an airport whose catchment area is only second to Heathrow.
On a more positive note executive jet movements are breaking all records with a growth rate of around 30%.
Last edited by LTNman; 29th Apr 2004 at 21:22.
Sad and unjust
BAA is effectively a monopoly, and it certainly acts with all the arrogance of a monopoly.
It is cross-subsidizing the development of STN with profits earned at LHR and LGW. Their only London-area competitor is Luton, which is far smaller and has been short-changed by decades of Local Authority mis-management. They find it easy to rubbish Luton, and can give the world's airlines a 'choice' of three London area airports.
Whilst aviation-related charges are capped, the money that BAA can earn from concessions and property rental is unlimited, and with the increase in property values combined with air traffic growth, they win both ways. TBI on the other hand is a small company with comparatively few resources.
The only solution to this situation is for BAA to be broken up, with London airports split into 2 or three unrelated companies, and perhaps a division of EDI and GLA (which are probably operated to the detriment of Prestwick).
The Government had their opportunity to do this last year in their Whit Paper, but failed. I'm afraid Luton will remain the poor relation unless airlines at LHR/LGW start to object to BAA cross-subsidizing their competitors at STN.
It is cross-subsidizing the development of STN with profits earned at LHR and LGW. Their only London-area competitor is Luton, which is far smaller and has been short-changed by decades of Local Authority mis-management. They find it easy to rubbish Luton, and can give the world's airlines a 'choice' of three London area airports.
Whilst aviation-related charges are capped, the money that BAA can earn from concessions and property rental is unlimited, and with the increase in property values combined with air traffic growth, they win both ways. TBI on the other hand is a small company with comparatively few resources.
The only solution to this situation is for BAA to be broken up, with London airports split into 2 or three unrelated companies, and perhaps a division of EDI and GLA (which are probably operated to the detriment of Prestwick).
The Government had their opportunity to do this last year in their Whit Paper, but failed. I'm afraid Luton will remain the poor relation unless airlines at LHR/LGW start to object to BAA cross-subsidizing their competitors at STN.
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LGS is absolutely right. If Luton had been part of the BAA it would not be the little place it is now. As a local authority run airport in the London area it didn't have the clout to get itself centre stage.
It never ceases to amaze me that the "far sighted" BAA just pour money away like water. It's not difficult to make a fortune when:
a. the Government of the day gives you a virtual monopoly, the world's most important hub - LHR, and LGW too!
b. a green light to develop your third airport which when it opened was home only to Air UK c. 300,000 pax per annum. Not bad for a £400m development.
c. a blind eye to a shady deal which allowed BAA to poach the new low cost carrier Ryanair from LTN to STN with little or no charges.
d. a planning process and cosiness that means BAA acts like it is still part of Government.
e. a white paper that effectively endorses a monopoly position and the received wisdom that only BAA has the answer.
f. cross subsidies from the airlines at LHR to allow FR and the others to operate low cost from a £1.5bn facility - although this should change this year as the CAA ERG have said no more subsidies - sorry Michael - big aeronautical charges on the way.
g. The CAA ask BAA how much will it cost - oh a billion for the toilet seats - well you can rip off all your customers and make a guaranteed return on that - no worries.
So it seems to me that our regular customers (airline passengers)at LHR are paying for all the infrastructure at STN and indeed for BA to have a nice new shiny terminal in LHR T5 (c £6bn!!!) whilst we get oldsville T3 CTA.
Given that all companies should seek to manage their cashflow it seems sensible to me that if Luton has spare capacity then why speculate needlessly. It seems stupid to build things if your not going to use them. Would you add a room on to your house for the sake of building only to use it in five years time? LTNman if it were your money you'd keep it in the bank wouldn't you until you needed to use it?
I don't know what TBI will do with its £20m at Luton but the squander bugs at BAA would probably spend that on the manhole overs on the road to T5 - oops sorry that should be £200m.
BAA in London needs competition, despite TBI Luton's valiant efforts at competing, I don't think that Goverment will let them do so effectively as the airport express steam train that is BAA, the DfT and the competition commission has left the station and is well on its way to concretising most of Essex, Middlesex and Sussex - that is lot of ....
Well you know...plus ca change. Long live competition????
AA
It never ceases to amaze me that the "far sighted" BAA just pour money away like water. It's not difficult to make a fortune when:
a. the Government of the day gives you a virtual monopoly, the world's most important hub - LHR, and LGW too!
b. a green light to develop your third airport which when it opened was home only to Air UK c. 300,000 pax per annum. Not bad for a £400m development.
c. a blind eye to a shady deal which allowed BAA to poach the new low cost carrier Ryanair from LTN to STN with little or no charges.
d. a planning process and cosiness that means BAA acts like it is still part of Government.
e. a white paper that effectively endorses a monopoly position and the received wisdom that only BAA has the answer.
f. cross subsidies from the airlines at LHR to allow FR and the others to operate low cost from a £1.5bn facility - although this should change this year as the CAA ERG have said no more subsidies - sorry Michael - big aeronautical charges on the way.
g. The CAA ask BAA how much will it cost - oh a billion for the toilet seats - well you can rip off all your customers and make a guaranteed return on that - no worries.
So it seems to me that our regular customers (airline passengers)at LHR are paying for all the infrastructure at STN and indeed for BA to have a nice new shiny terminal in LHR T5 (c £6bn!!!) whilst we get oldsville T3 CTA.
Given that all companies should seek to manage their cashflow it seems sensible to me that if Luton has spare capacity then why speculate needlessly. It seems stupid to build things if your not going to use them. Would you add a room on to your house for the sake of building only to use it in five years time? LTNman if it were your money you'd keep it in the bank wouldn't you until you needed to use it?
I don't know what TBI will do with its £20m at Luton but the squander bugs at BAA would probably spend that on the manhole overs on the road to T5 - oops sorry that should be £200m.
BAA in London needs competition, despite TBI Luton's valiant efforts at competing, I don't think that Goverment will let them do so effectively as the airport express steam train that is BAA, the DfT and the competition commission has left the station and is well on its way to concretising most of Essex, Middlesex and Sussex - that is lot of ....
Well you know...plus ca change. Long live competition????
AA
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Very interesting three posts. Could any of you explain how the 2nd runway at Stansted has a price tag of £4m? That must work out at over £1m PER METRE!
Will it be plated in gold, and designated for the Sultan of Brunei's private 747's only?
Surely if FR have to pay towards these costs, they would switch to Luton?
Will it be plated in gold, and designated for the Sultan of Brunei's private 747's only?
Surely if FR have to pay towards these costs, they would switch to Luton?
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Luton need to be bulldozed and rebuilt. It won't ever be able to compete with STN let alone LGW and LHR.
Problem with STN is wheel chair assist and general ground handling is poor.
Problem with STN is wheel chair assist and general ground handling is poor.
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Sorry, £4 billion. That reminds me of all the local papers here putting a £6.9m price tag on Rugby airport, when even £6.9bn was conservative.
Even so, how would a two runway airport in the Midlands only cost a little bit more (according to the White Paper) than a single extra runway at Stansted with no other extra infrastructure? Even if the terminal expands / a new one is built, I believe the original structure was about £120m. With inflation, that might be £1/2bn now? There won't be any new rail route and presumably no new control tower etc...
Or how can they build a whole 6 runway airport at Denver for $5bn - even that was something like 4x over budget. I just don't see how the price of tarmac can be that high. Land in the South East may be pricey, but that part of Essex is not exactly Mayfair.
Even so, how would a two runway airport in the Midlands only cost a little bit more (according to the White Paper) than a single extra runway at Stansted with no other extra infrastructure? Even if the terminal expands / a new one is built, I believe the original structure was about £120m. With inflation, that might be £1/2bn now? There won't be any new rail route and presumably no new control tower etc...
Or how can they build a whole 6 runway airport at Denver for $5bn - even that was something like 4x over budget. I just don't see how the price of tarmac can be that high. Land in the South East may be pricey, but that part of Essex is not exactly Mayfair.
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Have to agree with what has been said above. Remember, TBI submitted 'grandiose' plans to the goverment for a second runway at LTN and talk of 80m plus passengers a year by 2030. Basically all 'pie in the sky', it was never going to happen.
The goverment , in their white paper, have said no to a second runway, but given the indication that they would be happy to see LTN expand to 30m in the same period, with a single runway, possibly extended to 3000m.
In reality, 30m pax by 2030 is probably highly unlikely, given the expansion approved at STN, LGW & LHR, and even if if was reached, it equates to an average of only about 900,000 extra pax each year, for the next 25 years, which is single digit growth, and this is the best figure.
Unless BAA are broken up, nothing is going to change much, and LTN will always struggle against the 'Wolf' but nevertheless it will continue to provide new jobs and increased revenue to the local economy. So TBI, have, to a large extent, accepted that LTN( and they, TBI ) will always be the 'minnow', as far as the main London airports are concerned, and have to carve out their niche as best they can. At the moment there is spare capacity availabe and i'm sure they will tweak with the odd million here or there over the coming months in areas that may need it but large scale developments costing 'millions' is some way off.
Of course, they could always sell out to someone with bigger clout, both financially and with a more agressive management structure, and things could well be different again, but not vastly so I don't think, unless of course it was BAA, and that won't happen either.
The goverment , in their white paper, have said no to a second runway, but given the indication that they would be happy to see LTN expand to 30m in the same period, with a single runway, possibly extended to 3000m.
In reality, 30m pax by 2030 is probably highly unlikely, given the expansion approved at STN, LGW & LHR, and even if if was reached, it equates to an average of only about 900,000 extra pax each year, for the next 25 years, which is single digit growth, and this is the best figure.
Unless BAA are broken up, nothing is going to change much, and LTN will always struggle against the 'Wolf' but nevertheless it will continue to provide new jobs and increased revenue to the local economy. So TBI, have, to a large extent, accepted that LTN( and they, TBI ) will always be the 'minnow', as far as the main London airports are concerned, and have to carve out their niche as best they can. At the moment there is spare capacity availabe and i'm sure they will tweak with the odd million here or there over the coming months in areas that may need it but large scale developments costing 'millions' is some way off.
Of course, they could always sell out to someone with bigger clout, both financially and with a more agressive management structure, and things could well be different again, but not vastly so I don't think, unless of course it was BAA, and that won't happen either.
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BAA - Big and Awful Airports. TBI - They Build Intermittently.
Have to agree with the above. Tough call but the market is growing and Stansted will get permission to lift its movements to gain 35m+ pax . However, unless the airlines act together BAA will continue to dominate the scene for a long time to come.
Have to agree with the above. Tough call but the market is growing and Stansted will get permission to lift its movements to gain 35m+ pax . However, unless the airlines act together BAA will continue to dominate the scene for a long time to come.
I too cannot understand how the second runway at Stansted will cost £4bn; greenfield motorway construction costs (not including land purchase) are currently running at about £20m per mile for the carriageway building, the runway is twice as wide (although without any expensive difficulties like bridges) and about 2 miles long. So say £80-100m for the runway construction contractor.
Where does the rest of it go ?
Where does the rest of it go ?
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Stansted terminal designers named
http://news.bbc.co.uk/1/hi/england/essex/3666801.stm
The terminal architects also designed Cornwall's Eden Project
A new terminal at Stansted Airport is to be designed by the architects behind Cornwall's Eden Project.
Grimshaw, which also designed London's Eurostar train terminal, is to start design work for the Essex airport's controversial new building.
Owners BAA said: "Modular development will allow for phased construction in line with capacity requirements."
Campaigners have pledged to fight new developments at Stansted, including a second runway.
We have a world-class architect to help us deliver a world-class airport.
Project director Alastair McDermid
Grimshaw chairman Sir Nicholas Grimshaw said he was excited by the Stansted project.
"It seems to me to offer the opportunity to develop the first in a new generation of airports.
"I believe our approach to the design of flexible buildings and to sustainability will greatly help us to take this project forward."
Stansted Generation 2 Project director Alastair McDermid said: "We have a world-class architect to help us deliver a world-class airport.
"There can be no better symbol of the new Europe than this building of contemporary style and efficiency."
Other Grimshaw creations include terminal facilities at Zurich Airport, the new British Airways terminal at Manchester Airport and the Rolls-Royce factory at Goodwood in West Sussex.
http://news.bbc.co.uk/1/hi/england/essex/3666801.stm
The terminal architects also designed Cornwall's Eden Project
A new terminal at Stansted Airport is to be designed by the architects behind Cornwall's Eden Project.
Grimshaw, which also designed London's Eurostar train terminal, is to start design work for the Essex airport's controversial new building.
Owners BAA said: "Modular development will allow for phased construction in line with capacity requirements."
Campaigners have pledged to fight new developments at Stansted, including a second runway.
We have a world-class architect to help us deliver a world-class airport.
Project director Alastair McDermid
Grimshaw chairman Sir Nicholas Grimshaw said he was excited by the Stansted project.
"It seems to me to offer the opportunity to develop the first in a new generation of airports.
"I believe our approach to the design of flexible buildings and to sustainability will greatly help us to take this project forward."
Stansted Generation 2 Project director Alastair McDermid said: "We have a world-class architect to help us deliver a world-class airport.
"There can be no better symbol of the new Europe than this building of contemporary style and efficiency."
Other Grimshaw creations include terminal facilities at Zurich Airport, the new British Airways terminal at Manchester Airport and the Rolls-Royce factory at Goodwood in West Sussex.
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So Luton's management says "£20 million will be spent on redevelopment and expansion, but not for two or three years or until passenger figures warranted the move".
Unfortunately, if you're competing with the likes of a commercially agressive cross-subsidised Stansted and BAA, you need to provide the infrastructure ahead of the need. This is an absolute concept of modern-day business practice.
For decades, Luton has failed to provide the necessary facilties ahead of demand thereby generating new business in its own right instead of because of slot constraints elsewhere.
The local Council failed totally to capitalise on its asset when it owned and operated the airport and now, it simply creams off over £20M each year with no significant re-investment being made, and laughs all the way to the bank.
TBI's management not only has to compete with BAA and its abuse of dominant position, but it also has to contend with a local Council that bleeds the airport white, offers virtually no active support, panders to a minority of local NIMBYs (= voters), and has hopeless counsellors and officials whose outlook is set firmly in the 1970s - you only have to look at the town itself to see this.
The local roads are a nightmare, the Airport access road is totally inadequate, and the prospect of significant improvements in the short or medium-term are remote.
Contrast this with the recently-completed M11 link into STN (funded partly by BAA and partly by the DfT i.e. the British taxpayer!), central government's active support for development at STN, the buckets of LHR siphoned-off cash available for development and improvements, and the undoubted proactivity of STN's planners and commercial department staff, and it's hardly suprising that LTN remains a poor and struggling relation.
This will never change whilst the playing field's about as level as the Andes...
Unfortunately, if you're competing with the likes of a commercially agressive cross-subsidised Stansted and BAA, you need to provide the infrastructure ahead of the need. This is an absolute concept of modern-day business practice.
For decades, Luton has failed to provide the necessary facilties ahead of demand thereby generating new business in its own right instead of because of slot constraints elsewhere.
The local Council failed totally to capitalise on its asset when it owned and operated the airport and now, it simply creams off over £20M each year with no significant re-investment being made, and laughs all the way to the bank.
TBI's management not only has to compete with BAA and its abuse of dominant position, but it also has to contend with a local Council that bleeds the airport white, offers virtually no active support, panders to a minority of local NIMBYs (= voters), and has hopeless counsellors and officials whose outlook is set firmly in the 1970s - you only have to look at the town itself to see this.
The local roads are a nightmare, the Airport access road is totally inadequate, and the prospect of significant improvements in the short or medium-term are remote.
Contrast this with the recently-completed M11 link into STN (funded partly by BAA and partly by the DfT i.e. the British taxpayer!), central government's active support for development at STN, the buckets of LHR siphoned-off cash available for development and improvements, and the undoubted proactivity of STN's planners and commercial department staff, and it's hardly suprising that LTN remains a poor and struggling relation.
This will never change whilst the playing field's about as level as the Andes...
