HEATHROW
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The benefit to LGW is that their proposal says the new runway would cost £5-9bn (quite why that margin is so wide I'm not sure...but still!) whereas LHR north west option is £17bn, so double the cost.
Therefore, although the business case is nowhere near as good as LHR's (especially if LHR gets a third runway) I agree with davidjohnson6 that there must still be a very good case for extended capacity by 2025, even with a third runway at LHR?
IMHO LGW would be better focussing on distancing itself further from competitors such as LTN/STN, rather than trying to catch up to LHR.
But I suppose it's all moot anyway, as we have already said that the Davis Commission will only propose one option, not two...
anothertyke; I thought similar; LHR has needed a third runway for at least a decade now, and even if it were agreed tomorrow it would be another decade before it was operational, so in reality if LGW were to be allowed a second runway but not before 2030 then surely the traffic will be there by then, even accounting for some of their current operators moving services back to LHR as discussed above?
Therefore, although the business case is nowhere near as good as LHR's (especially if LHR gets a third runway) I agree with davidjohnson6 that there must still be a very good case for extended capacity by 2025, even with a third runway at LHR?
IMHO LGW would be better focussing on distancing itself further from competitors such as LTN/STN, rather than trying to catch up to LHR.
But I suppose it's all moot anyway, as we have already said that the Davis Commission will only propose one option, not two...
anothertyke; I thought similar; LHR has needed a third runway for at least a decade now, and even if it were agreed tomorrow it would be another decade before it was operational, so in reality if LGW were to be allowed a second runway but not before 2030 then surely the traffic will be there by then, even accounting for some of their current operators moving services back to LHR as discussed above?
Last edited by Libertine Winno; 21st Feb 2014 at 14:22. Reason: Edited for anothertyke...
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Growth forecasts at LGW upon which the business case for a second runway depend upon, are based on there not being an overnight huge capacity increase at LHR and consequently losing a substantial part of their existing traffic to LHR.
There's two sets of LHR carriers with existing and concurrent operations at LGW, those who are there simply because they can't grow at LHR and those who offer service in a complimentary fashion.
Virgin and BA long haul fall into pot one, BA short haul probably into pot two. (debateable). Aer Lingus serve the region in addition to LHR, whereas Air China, Icelandair and TAP might be expected to consolidate to LHR. Vietnam would also be a better fit for LHR Ithink. There is then the danger that LGW would remain doing what it has always done so well, taking holidaymakers to the sun, with a core easyJet, Monarch, Thomson and Thomas Cook operation. I suspect Norwegian might be tempted by LHR. In any case, constrained capacity at LHR drives LGW growth, if that restriction goes, much of the strength of LGW's growth, perhaps all of it in the short term, is lost.
There's two sets of LHR carriers with existing and concurrent operations at LGW, those who are there simply because they can't grow at LHR and those who offer service in a complimentary fashion.
Virgin and BA long haul fall into pot one, BA short haul probably into pot two. (debateable). Aer Lingus serve the region in addition to LHR, whereas Air China, Icelandair and TAP might be expected to consolidate to LHR. Vietnam would also be a better fit for LHR Ithink. There is then the danger that LGW would remain doing what it has always done so well, taking holidaymakers to the sun, with a core easyJet, Monarch, Thomson and Thomas Cook operation. I suspect Norwegian might be tempted by LHR. In any case, constrained capacity at LHR drives LGW growth, if that restriction goes, much of the strength of LGW's growth, perhaps all of it in the short term, is lost.
Also think this exodus from LGW would be negated by an influx of services from LTN and STN, along the lines of what U2 has done in recent years.
Would also expect the holiday “bucket and spade” business to remain at LGW.
LGW would save money by not having the immediate expense of a second rwy, but the management may have to revisit its policy on charges for smaller aircraft.
#3088 A variant on that theme would be for Govt to say 'Either LHR R3 or LGW R2 is worth doing. Let's have a preferred option but keep the other one in play just in case something goes wrong with the numbers on the preferred one.' There's a lot more work to be done to nail down the costs of the Heathrow and Gatwick schemes ; the relative costs and the relative public funding component could yet be significant to the decision. Everything has its price-- or almost everything!
#3089 Another variant is to say for example ' On the modest growth scenario, we need one more runway in each of the next two decades, so the financial cases should assume (say) R3 by 2026 and R2 by 2036.' Just because R3 and R2 simultaneously is out doesn't imply that sequentially is out. And I presume R3 and R4 at Heathrow would be a sequential plan anyway.
Yes, on a phased arrangement it is sensible to have a third and fourth at LHR before a second at LGW.
But I suppose it's all moot anyway, as we have already said that the Davis Commission will only propose one option, not two...
…let’s hope it’s the correct one!
anothertyke; I thought similar; LHR has needed a third runway for at least a decade now, and even if it were agreed tomorrow it would be another decade before it was operational, so in reality if LGW were to be allowed a second runway but not before 2030 then surely the traffic will be there by then, even accounting for some of their current operators moving services back to LHR as discussed above?
LHR was declared “full” by the government in 1977, so it is arguable that it has needed extra rwy capacity since then.
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QR will launch a sixth daily flight - operated by an all business class A319 (40 seats)
Press Release | Qatar Airways
Press Release | Qatar Airways
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Latest Financials = Job Cuts
25 February 2014
Heathrow Airport is planning to cut a fifth of its core workforce despite turning its first profit since 2006, reports The Daily Telegraph.
The airport is undergoing a ‘major’ restructuring to cut costs, said the Telegraph.
This is in order to meet what Heathrow has previously described as a ‘draconian’ ruling by the Civil Aviation Authority that it must reduce charges for airlines in real terms from April.
Colin Matthews, Heathrow’s chief executive, said the cuts are likely to affect around 200 staff but no front-line roles, such as security, will be affected.
Results out yesterday showed that Heathrow had swung to a £426m pre-tax profit last year from a £33m loss previously, helped by the £1.5bn sale last February of Stansted.
Heathrow employs 7,000 people in total but 1,000 of those roles are part of its ‘central’ head office structure, which is the focus of the restructuring, said the Telegraph.
Matthews told the Telegraph: ‘We are talking about people who used to work in our headquarters.
‘We used to be a company that ran more airports.
‘We have been reducing the costs and we need to do so significantly now to get in line with the amount of money we are allowed to make from airlines.’
From April, Heathrow’s airport charges will be reduced in real terms by 1.5% below the rate of inflation every year until 2019.
The airport is examining whether to appeal against the CAA’s ruling but has already started to push through a cost-cutting programme, which has also involved management agreeing to pay freezes, said the Telegraph.
Apparently they make around £ 21 per passenger from "aviation" related charges plus £ 6.80 from parking, shops etc
Heathrow Airport is planning to cut a fifth of its core workforce despite turning its first profit since 2006, reports The Daily Telegraph.
The airport is undergoing a ‘major’ restructuring to cut costs, said the Telegraph.
This is in order to meet what Heathrow has previously described as a ‘draconian’ ruling by the Civil Aviation Authority that it must reduce charges for airlines in real terms from April.
Colin Matthews, Heathrow’s chief executive, said the cuts are likely to affect around 200 staff but no front-line roles, such as security, will be affected.
Results out yesterday showed that Heathrow had swung to a £426m pre-tax profit last year from a £33m loss previously, helped by the £1.5bn sale last February of Stansted.
Heathrow employs 7,000 people in total but 1,000 of those roles are part of its ‘central’ head office structure, which is the focus of the restructuring, said the Telegraph.
Matthews told the Telegraph: ‘We are talking about people who used to work in our headquarters.
‘We used to be a company that ran more airports.
‘We have been reducing the costs and we need to do so significantly now to get in line with the amount of money we are allowed to make from airlines.’
From April, Heathrow’s airport charges will be reduced in real terms by 1.5% below the rate of inflation every year until 2019.
The airport is examining whether to appeal against the CAA’s ruling but has already started to push through a cost-cutting programme, which has also involved management agreeing to pay freezes, said the Telegraph.
Apparently they make around £ 21 per passenger from "aviation" related charges plus £ 6.80 from parking, shops etc
Pictures of the new T2 released..
First look at Heathrow's £2.5bn Terminal 2 - Transport - News - London Evening Standard
First look at Heathrow's £2.5bn Terminal 2 - Transport - News - London Evening Standard
Another brilliant bit of journalism by the Standard, renowned for its accuracy when it comes to aviation affairs:
"When the [original T2] opened in 1955, with the red tape cut by the Queen when she was just 29, check-in took place in large tents with wooden floors. A dining table at the back hosted stacks of newspapers under a banner bearing the name 'WH Smith'."
"Terminal Five opened with a big bang and tried to deal with 1700 passengers on its first day"
"When the [original T2] opened in 1955, with the red tape cut by the Queen when she was just 29, check-in took place in large tents with wooden floors. A dining table at the back hosted stacks of newspapers under a banner bearing the name 'WH Smith'."
"Terminal Five opened with a big bang and tried to deal with 1700 passengers on its first day"
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U2 and LHR
Turns out that it is not high airport charges that keeps U2 out of LHR.
easyJet debunks Gatwick's Heathrow myth - Telegraph
Have always suspected that it's the high costs of slot acquisition and delays (queues to take off, stacking to land) that keeps no-frills carriers out of LHR.
Rwy expansion would eliminate this.
easyJet debunks Gatwick's Heathrow myth - Telegraph
Have always suspected that it's the high costs of slot acquisition and delays (queues to take off, stacking to land) that keeps no-frills carriers out of LHR.
Rwy expansion would eliminate this.
Paxing All Over The World
article quoted by Heathrow Harry:
Ah yes, the sweet smell of de-regulation. The Tories must be so proud to be able to interfere with their great god 'the free market'.
This is in order to meet what Heathrow has previously described as a ‘draconian’ ruling by the Civil Aviation Authority that it must reduce charges for airlines in real terms from April.
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'Runway expansion would eliminate this.'
Is it the consensus that slot values at LHR will fall to zero with R3 in place?
Is it the consensus that enough taxiways and gates can be provided to balance with the additional runway capacity and eliminate 'normal' operating delays?
At the opening year of R3, how much will charges need to rise for cost recovery reasons? What's the commercial model look like?
Actually I agree with FDF or even go further--- entry at LHR by the likes of Easyjet is an essential part of the rationale. But there are questions...
Is it the consensus that slot values at LHR will fall to zero with R3 in place?
Is it the consensus that enough taxiways and gates can be provided to balance with the additional runway capacity and eliminate 'normal' operating delays?
At the opening year of R3, how much will charges need to rise for cost recovery reasons? What's the commercial model look like?
Actually I agree with FDF or even go further--- entry at LHR by the likes of Easyjet is an essential part of the rationale. But there are questions...
In 10 years time, demand for LHR slots will likely be considerably greater now, balanced of course by a likely R3. A normal airport should have peak and offpeak periods - LHR right now has only peak (except for 10 pm on Saturday night)
By thd time R3 opens, peak time slots should still trade at a high price - the only difference is we might see space at off peak times for a few extra not-so-wealthy destinations. If Easyjet want into LHR and do not get slots from an open application to ACL in 2025, they will have to pay heavily for commercially useful slots
By thd time R3 opens, peak time slots should still trade at a high price - the only difference is we might see space at off peak times for a few extra not-so-wealthy destinations. If Easyjet want into LHR and do not get slots from an open application to ACL in 2025, they will have to pay heavily for commercially useful slots
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Remember that with the IAG/BMI merger 'remedy' slots being available for another couple of years until the 3-year period for applications is up, there is still a way easyJet could pick up LHR slots for free if they really wanted to...the only constraint being the destinations to which they could fly with them.
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Me thinks it is quite a clever ploy by Ms McCall to the Gatwick management to say that just because we have over 50 aircraft based it doesn´t mean we are not loooking at other options so do not try and and blackmail us on fees etc.
Unfortunately I do not believe a third runway at Heathrow or a second at Gatwick or Boris Island etc. will ever be built - kicked into the long grass whoever is in power.
Unfortunately I do not believe a third runway at Heathrow or a second at Gatwick or Boris Island etc. will ever be built - kicked into the long grass whoever is in power.
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Gatwick will never get a second runway. It just doesn't make sense spending anything expanding an airport, where given the choice, most of it's airlines would rather fly from to Heathrow.
If a third runway was built at Heathrow (the only realistic option), then Gatwick would become pretty empty. I suspect Easyjet would have no problem leaving Gatwick if there was space at Heathrow.
One runway and two terminals is ample for Gatwick.
If a third runway was built at Heathrow (the only realistic option), then Gatwick would become pretty empty. I suspect Easyjet would have no problem leaving Gatwick if there was space at Heathrow.
One runway and two terminals is ample for Gatwick.
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Growth at Gatwick is partially driven by restricted capacity at LHR.
Absolutely, however it is in my view a little extreme to suggest that on that basis alone expansion at Gatwick isn't justified, third runway at Heathrow or not.
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Maybe I was a little too harsh on Gatwick. I do actually think that the traffic levels and passenger throughput will increase, but not necessarily in the way that Mr Wingate predicts. In a perfect world, both Heathrow and Gatwick should have runways built and at the same. The airports should be then left to develop in their own rights.
However, I think there is still too much concentration on stealing business from Heathrow (Long Haul), without carving out a niche which is specific to Gatwick. I thought Flybe was an important part of Gatwick's business model and I really had to "double take" when I read of the entire "fees" saga, forcing the airline out. I think the board at Gatwick need to work to keep airlines, even those operating turboprops.
Heathrow has it's niche, Long haul and transfer... it's a hub. Gatwick isn't... except for Norwegian. It's point to point. And it's good at it. Keep building on that and maybe the second runway is more justified. I don't see the point of attracting a load of business which may move around the M25 in a few years. Attract the airlines who will stay and don't have one eye on Heathrow. There are plenty of airlines out there who don't want Heathrow.
However, I think there is still too much concentration on stealing business from Heathrow (Long Haul), without carving out a niche which is specific to Gatwick. I thought Flybe was an important part of Gatwick's business model and I really had to "double take" when I read of the entire "fees" saga, forcing the airline out. I think the board at Gatwick need to work to keep airlines, even those operating turboprops.
Heathrow has it's niche, Long haul and transfer... it's a hub. Gatwick isn't... except for Norwegian. It's point to point. And it's good at it. Keep building on that and maybe the second runway is more justified. I don't see the point of attracting a load of business which may move around the M25 in a few years. Attract the airlines who will stay and don't have one eye on Heathrow. There are plenty of airlines out there who don't want Heathrow.
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If a third runway was built at Heathrow (the only realistic option), then Gatwick would become pretty empty. I suspect Easyjet would have no problem leaving Gatwick if there was space at Heathrow.
One runway and two terminals is ample for Gatwick.
One runway and two terminals is ample for Gatwick.
Do not see U2 quitting LGW where it is "number one". Under those circumstances, could see U2 quitting STN and/or LTN in the long term.
However, I think there is still too much concentration on stealing business from Heathrow (Long Haul), without carving out a niche which is specific to Gatwick.
I thought Flybe was an important part of Gatwick's business model and I really had to "double take" when I read of the entire "fees" saga, forcing the airline out. I think the board at Gatwick need to work to keep airlines, even those operating turboprops.