HEATHROW
In the great scheme of things, 30% transferring pax is not that much
Rather less than 30, I'd suggest.
The Economist
Interesting point you make. I spent 40 years in telecoms and the Economist was seldom right about anything in that industry. Over time I have chatted to others in major industries Aviation and Finance among them and they had a similar view of the august publication -interesting to read about other industries than their own but never believed what it said about their own industry-bit of a theme there.
At Uni my Business management economics lecturer told us that when studying economics always remember that economists do not know how to forecast because they are historians not scientists and like historians seldom have a consistent analysis of past events.
Having said all that LHR needs a third parallel and if the Government tried to make it clear that the folks in Sipson would get honest and fair compensation as opposed to the normal practice of cheating people in that position it would all go smoothly.
The dimwit NIMBYS in Kew and Richmond will soon change their views when they understand that when LHR goes further into decline and they have to travel 90 miles to the Kent coast for a flight or mix with those awful Essex people at Stanstead.
PB
At Uni my Business management economics lecturer told us that when studying economics always remember that economists do not know how to forecast because they are historians not scientists and like historians seldom have a consistent analysis of past events.
Having said all that LHR needs a third parallel and if the Government tried to make it clear that the folks in Sipson would get honest and fair compensation as opposed to the normal practice of cheating people in that position it would all go smoothly.
The dimwit NIMBYS in Kew and Richmond will soon change their views when they understand that when LHR goes further into decline and they have to travel 90 miles to the Kent coast for a flight or mix with those awful Essex people at Stanstead.
PB
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I thought Fairdealfrank's point was that 30% is a low number relative to AMS, ORD and other top league airports, not low in some absolute sense. So there is plenty of headroom for that % to rise if capacity increases. The questions for Davies are --- if we put more capacity in,(a) how will it get used, and (b) how will the punters respond and then (c) how will it cope with growth? As an observer of the scene, not an expert, I think a weakness of the exposition of the case, perhaps inevitable because of the way slot allocation works is that it is treated as kind of obvious that we need more capacity but we never quite commit to what we would do with it. What would be the balance between strengthening ( frequencies on core routes), widening (Chongqing, Chengdu etc), transfers from LGW and elsewhere, and regional feeders? Davies needs to come up with a proposition--- this is what you could have ---which is not necessarily going to be what any individual airline would ideally want.
Davies needs to come up with a proposition--- this is what you could have ---which is not necessarily going to be what any individual airline would ideally want.
The conventional wisdom is that, were there to be a step increase in capacity (i.e. from a new runway), then it would be market forces that would determine who flies where and how often, to make use of the additional capacity.
You can't tell BA, for example, that it's going to have to operate a daily service to, say, Chengdu, when the airline's view is that a better use of that particular aircraft is to add another daily JFK rotation.
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Thanks, hmmm I wonder if the'conventional wisdom' is going to end up winning the day. Maybe another version of the question is--- faced with a large number of slots to auction and a lot of possible ways of doing it, will they go for just letting the chips fall where they may? Suppose BA isn't very rich that year.....
By the way, for the very large capacity increases are there forecasts around of the effect on existing slot values on the airlines' books?
By the way, for the very large capacity increases are there forecasts around of the effect on existing slot values on the airlines' books?
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Transfer Traffic is 34% according to CAA figures 2011, it's even higher now !
This from AIRPORT magazine January where I suspect The Spectator took their byline.
The most recent CAA figures for 2011 provide an interesting analysis of the UK's three largest intercontinental gateways Heathrow, Gatwick and Manchester. In 2012 Heathrow handled a total of 69 million passengers, by way of comparison over the same period, Manchester the largest long haul airport outside the South East handled 20million pax but curiously it is Manchester where the impact of APD is felt most. Unlike the South East most international long haul passengers using Manchester will either originate or terminate their journey in the NWest, some transfer to a short domestic flight to another UK destination, on that basis and using the Government formula all will pay APD.
Contrast that situation with the the South East and specifically Heathrow where a whopping 34% of total passenger numbers is purely international transfer traffic, the definition is important “International transfer passengers” are deemed to be those who simply fly in from one “international location” and then fly out to another “international destination”.
Had they been destined for another UK domestic airport they would of course have been subject to APD, but the simple fact is that this type of passenger totally escapes that tax and in effect pays nothing.
In effect, of the 69m pax who used Heathrow in 2011, a staggering 24million transfer passengers fell into this very specific category and paid no APD at all. This massive loop hole allows Heathrow to benefit from what in effect is a significant hidden subsidy compared to other UK airports.
At Manchester of course where domestic transfer traffic is significant but international transfer traffic is modest 87% of passenger pay a level of APD. This anomaly raises even more questions and impacts on the wider issue of the clamour for additional runway capacity at Heathrow. Often held up as a bastion of UK economic activity, it's really difficult to see what contribution the 24m tfr passengers are actually making to the UK economy, hopefully they might buy a burger between the jog to a international connecting flight but far from actually contributing to the UK economy by spending money like the humble businessman, holidaymaker or tourist using Manchester, all they actually appear to be doing is clogging up Heathrow's runways.
This from AIRPORT magazine January where I suspect The Spectator took their byline.
The most recent CAA figures for 2011 provide an interesting analysis of the UK's three largest intercontinental gateways Heathrow, Gatwick and Manchester. In 2012 Heathrow handled a total of 69 million passengers, by way of comparison over the same period, Manchester the largest long haul airport outside the South East handled 20million pax but curiously it is Manchester where the impact of APD is felt most. Unlike the South East most international long haul passengers using Manchester will either originate or terminate their journey in the NWest, some transfer to a short domestic flight to another UK destination, on that basis and using the Government formula all will pay APD.
Contrast that situation with the the South East and specifically Heathrow where a whopping 34% of total passenger numbers is purely international transfer traffic, the definition is important “International transfer passengers” are deemed to be those who simply fly in from one “international location” and then fly out to another “international destination”.
Had they been destined for another UK domestic airport they would of course have been subject to APD, but the simple fact is that this type of passenger totally escapes that tax and in effect pays nothing.
In effect, of the 69m pax who used Heathrow in 2011, a staggering 24million transfer passengers fell into this very specific category and paid no APD at all. This massive loop hole allows Heathrow to benefit from what in effect is a significant hidden subsidy compared to other UK airports.
At Manchester of course where domestic transfer traffic is significant but international transfer traffic is modest 87% of passenger pay a level of APD. This anomaly raises even more questions and impacts on the wider issue of the clamour for additional runway capacity at Heathrow. Often held up as a bastion of UK economic activity, it's really difficult to see what contribution the 24m tfr passengers are actually making to the UK economy, hopefully they might buy a burger between the jog to a international connecting flight but far from actually contributing to the UK economy by spending money like the humble businessman, holidaymaker or tourist using Manchester, all they actually appear to be doing is clogging up Heathrow's runways.
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In effect, of the 69m pax who used Heathrow in 2011, a staggering 24million transfer passengers fell into this very specific category and paid no APD at all. This massive loop hole allows Heathrow to benefit from what in effect is a significant hidden subsidy compared to other UK airports.
In effect, of the 69m pax who used Heathrow in 2011, a staggering 24million transfer passengers fell into this very specific category and paid no APD at all.
The 24 million figure is all transfer traffic, not merely international/international transfer passengers (the ones who don't pay APD). Although the proportion of transfer traffic that's domestic/international has been gradually falling over many years, it still accounts for around 20% of that figure, i.e about 5 million.
Heathrow: Facts and figures
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At Manchester of course where domestic transfer traffic is significant but international transfer traffic is modest 87% of passenger pay a level of APD. This anomaly raises even more questions and impacts on the wider issue of the clamour for additional runway capacity at Heathrow. Often held up as a bastion of UK economic activity, it's really difficult to see what contribution the 24m tfr passengers are actually making to the UK economy, hopefully they might buy a burger between the jog to a international connecting flight but far from actually contributing to the UK economy by spending money like the humble businessman, holidaymaker or tourist using Manchester, all they actually appear to be doing is clogging up Heathrow's runways.
Come to think of it, the Dutch seem quite keen on the idea too.
And the Germans.
And the French.
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North West
In fairness I think the article was eluding to the cost of additional runways with reference to the APD mix.
In France, Germany, Holland etc they have either scrapped or lowered APD to fairly low rates, we havn't therefore I "think" it was more about context.
UK passengers pay APD, but those who are in transit INT-INT do not !
Personally I think we should have had a 4 runway system at LHR years ago, adding one runway will make bugger all difference as the capacity will have been used up by the time it is built !
BUT having said all that I have to agree it seems perverse that we are leveling half of West London to in effect, put in an extra runway where no cost is bourne by a significant proportion of the people using it !
I think it was more about UK pax being penalised !
In fairness I think the article was eluding to the cost of additional runways with reference to the APD mix.
In France, Germany, Holland etc they have either scrapped or lowered APD to fairly low rates, we havn't therefore I "think" it was more about context.
UK passengers pay APD, but those who are in transit INT-INT do not !
Personally I think we should have had a 4 runway system at LHR years ago, adding one runway will make bugger all difference as the capacity will have been used up by the time it is built !
BUT having said all that I have to agree it seems perverse that we are leveling half of West London to in effect, put in an extra runway where no cost is bourne by a significant proportion of the people using it !
I think it was more about UK pax being penalised !
Last edited by Bagso; 3rd Apr 2013 at 07:42.
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@ North West
The International/International transfer PAX add nothing to the local economy through tax or spending locally, but the point is that without them it would mean that many routes are unviable because they wouldnt have enough PAX to make it economical. This is the basic premise on which a hub works, and is the key difference between London having a lack of runway capacity (which it doesn't) to a lack of hub capacity (which it does!)
The reason they add to the economy is that, with a far greater choice of flights to be able to sustain, means that many more companies will do business here, tourists from far and wide will be able to visit easily and international students can come to study here with direct flights back to their home cities. This is hugely beneficial to the economy as a whole, with estimates varying at somewhere around the UK losing £13bn a year in lost business due to LHR's capacity issues (though this is, by definition, very difficult to accurately state!)
In summary, that is why the middle east is investing so heavily in hub airports, and why AMS, CDG and FRA are so keen to retain their status.
The International/International transfer PAX add nothing to the local economy through tax or spending locally, but the point is that without them it would mean that many routes are unviable because they wouldnt have enough PAX to make it economical. This is the basic premise on which a hub works, and is the key difference between London having a lack of runway capacity (which it doesn't) to a lack of hub capacity (which it does!)
The reason they add to the economy is that, with a far greater choice of flights to be able to sustain, means that many more companies will do business here, tourists from far and wide will be able to visit easily and international students can come to study here with direct flights back to their home cities. This is hugely beneficial to the economy as a whole, with estimates varying at somewhere around the UK losing £13bn a year in lost business due to LHR's capacity issues (though this is, by definition, very difficult to accurately state!)
In summary, that is why the middle east is investing so heavily in hub airports, and why AMS, CDG and FRA are so keen to retain their status.
Last edited by Libertine Winno; 3rd Apr 2013 at 09:51.
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International transfer passengers add plenty to the local economy by buying their tickets on the local carrier. That money ultimately goes into the pockets of the local employees and the local industries that service the carrier. It's no different to the City (which Cameron is bending over backwards to protect) taking revenues from international deals which have little or nothing to do with the UK.
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BUT having said all that I have to agree it seems perverse that we are leveling half of West London to in effect, put in an extra runway where no cost is bourne by a significant proportion of the people using it !
Airlines are charged passenger handing fees by HAHL for connecting traffic and pax in transit make a sizeable contribution to retail and catering revenues, a share of which goes to HAHL.
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The point about demolition of houses is actually an interesting one; the previously agreed/now not agreed 3rd runway at Sipson would result in the demolition of around 700 properties, including one grade 1 listed church. The Policy Exchange proposal (referred to in the Economist) would result in around 710 properties demolished, none grade 1 listed.
Seems much more logical to go for an extra runway if it is basically the same amount of destruction, and more importantly no new people affected by an additional approach path from the runway 3 at Sipson?
It also shows that 'half of West London' might be something of an exaggeration
Seems much more logical to go for an extra runway if it is basically the same amount of destruction, and more importantly no new people affected by an additional approach path from the runway 3 at Sipson?
It also shows that 'half of West London' might be something of an exaggeration
Tarom to Iasi
Hadn't noticed this for a while, but Tarom are launching a 2x weekly Heathrow-Iasi route in north-east Romania later in April.
I note separately that the 2x weekly Gatwick-Chisinau route is moving to Stansted, and Blue Air fly Luton-Bacau 5x weekly
I'm somewhat dubious that a route into Heathrow like this can work, particularly when Cluj and Timisoara have to rely on Wizzair to Luton. Can anyone see a strong reason as to why this Heathrow-Iasi route might work ?
I note separately that the 2x weekly Gatwick-Chisinau route is moving to Stansted, and Blue Air fly Luton-Bacau 5x weekly
I'm somewhat dubious that a route into Heathrow like this can work, particularly when Cluj and Timisoara have to rely on Wizzair to Luton. Can anyone see a strong reason as to why this Heathrow-Iasi route might work ?
Last edited by davidjohnson6; 4th Apr 2013 at 15:12.
Has Heathrow not beeen buying up the Sipson houses in this manner over the years ?
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Quote: "The point about demolition of houses is actually an interesting one; the previously agreed/now not agreed 3rd runway at Sipson would result in the demolition of around 700 properties, including one grade 1 listed church. The Policy Exchange proposal (referred to in the Economist) would result in around 710 properties demolished, none grade 1 listed.
Seems much more logical to go for an extra runway if it is basically the same amount of destruction, and more importantly no new people affected by an additional approach path from the runway 3 at Sipson?"
The Policy exchange proposal involves diverting/tunnelising the M25 and the demolition and resiting of a reservoir. That makes it an expensive long term project. trouble is, we don't have the luxury of time.
So we may need the third rwy scheme as well, as a stopgap, unless we keep the existing LHR rwys and have 2 more parallel rwys crossing the M25. That means not touching the reservoir, and forgetting about ALL four rwys being west of the M25.
Apart from that, the principle (keeping LHR as a 4-rwy airport and using land west of the M25 to expand it) is sound.
Quote: "It also shows that 'half of West London' might be something of an exaggeration"
No change there: never let the truth get in the way of a good story. Fear is always a good motivator.
Quote: "Having been involved in various road etc projects over time, as soon as it gets into the programme (long before work starts) the roads budget/local authority start buying up the properties affected as they come on to the market in the normal course of events. They can then be rented back out in the interim. By the time you come to start the project the vast majority are typically in your ownership, and compulsion cases end up being very few.
Has Heathrow not beeen buying up the Sipson houses in this manner over the years ?"
Indeed it has, for a long time. The village community was ripped out of Sipson many years ago as many the long-standing residents moved out, expecting their houses would soon be be demolished for the rwy. Most of its current residents are transient as a result of being on 6-month leases, consequently the whole area is blighted.
Seems much more logical to go for an extra runway if it is basically the same amount of destruction, and more importantly no new people affected by an additional approach path from the runway 3 at Sipson?"
The Policy exchange proposal involves diverting/tunnelising the M25 and the demolition and resiting of a reservoir. That makes it an expensive long term project. trouble is, we don't have the luxury of time.
So we may need the third rwy scheme as well, as a stopgap, unless we keep the existing LHR rwys and have 2 more parallel rwys crossing the M25. That means not touching the reservoir, and forgetting about ALL four rwys being west of the M25.
Apart from that, the principle (keeping LHR as a 4-rwy airport and using land west of the M25 to expand it) is sound.
Quote: "It also shows that 'half of West London' might be something of an exaggeration"
No change there: never let the truth get in the way of a good story. Fear is always a good motivator.
Quote: "Having been involved in various road etc projects over time, as soon as it gets into the programme (long before work starts) the roads budget/local authority start buying up the properties affected as they come on to the market in the normal course of events. They can then be rented back out in the interim. By the time you come to start the project the vast majority are typically in your ownership, and compulsion cases end up being very few.
Has Heathrow not beeen buying up the Sipson houses in this manner over the years ?"
Indeed it has, for a long time. The village community was ripped out of Sipson many years ago as many the long-standing residents moved out, expecting their houses would soon be be demolished for the rwy. Most of its current residents are transient as a result of being on 6-month leases, consequently the whole area is blighted.
Last edited by Fairdealfrank; 4th Apr 2013 at 17:31.
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Whatever the merits of extra capacity a few less informed observers keep jumping on the bandwagon, this week it was an engineering consortium who claimed that there was a requirement to connect with new markets.
On this occasion I agree, BUT is it neccessary to connect JFK every 45 minutes, Hong Kong every hour, etc etc etc ......could these slots not be released, we don't need flights to long haul destinations every hour!
Many flights also seem to fly half empty, if you check the pax figures, many seats appear ringfenced and bought on a "just in case basis".
Both premise seem barmy !
On this occasion I agree, BUT is it neccessary to connect JFK every 45 minutes, Hong Kong every hour, etc etc etc ......could these slots not be released, we don't need flights to long haul destinations every hour!
Many flights also seem to fly half empty, if you check the pax figures, many seats appear ringfenced and bought on a "just in case basis".
Both premise seem barmy !
Many flights also seem to fly half empty
Average load factor for flights to/from Heathrow last year was 75.6%, which by industry standards is pretty good going.
So for every flight that arrives or departs almost full, there are likely to be others that fly with 50% or fewer of the seats filled.
That's how scheduled operations work, particularly on short- and medium-haul where you can't realistically expect loads on each half of an inbound/outbound rotation to be equal because of time-of-day considerations.
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@ Bagso
The North Atlantic routes are some of the most lucrative in aviation, hence why BA runs most frequency on them.
If the Government were running the slots at LHR under a 'best for the UK as a whole' principle then absolutely, more flights would go to emerging economies. However, BA are controlling the train set so will ultimately do what is best for their profits!
The North Atlantic routes are some of the most lucrative in aviation, hence why BA runs most frequency on them.
If the Government were running the slots at LHR under a 'best for the UK as a whole' principle then absolutely, more flights would go to emerging economies. However, BA are controlling the train set so will ultimately do what is best for their profits!