Aviation White Paper Disaster - Government assumptions set to waste billions
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Aviation White Paper Disaster - Government assumptions set to waste billions
The government's aviation white paper contains a key forecast that air travel will double by 2030. This forecast is the key justification for a whole raft of airport expansion projects across our country with costs running into billions.
The issue is that the forecast is based on flights getting cheaper, GDP growth averaging 2.25% both unlikely and the real clanger, that oil price will stabilise at $25!!!
Aviation White Paper Disaster
The issue is that the forecast is based on flights getting cheaper, GDP growth averaging 2.25% both unlikely and the real clanger, that oil price will stabilise at $25!!!
Aviation White Paper Disaster
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Hello,
I am the author of this article (my website tracking has brought me here!) and I'd be very interested to hear any feedback from the industry. What is the opinion amongst aviators of the white paper's forecasts?
Chris
I am the author of this article (my website tracking has brought me here!) and I'd be very interested to hear any feedback from the industry. What is the opinion amongst aviators of the white paper's forecasts?
Chris
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civ 101
I am not in aviation, never have been, neither am I an economist, nor an expert in computer modelling.
However, I have knocked around for over sixty years, travelled a lot by air in that time and have interested myself in civil aviation purely from the perspective of an amateur. I have prefaced my post thus because you asked for the opinion of aviators.
Governments have to make future estimates on all sorts of things from economic growth to the number of civil servants needed in future years.
Some things, like the number of pensioners vis-à-vis workers in the year 20xx can be predicted fairly accurately. Others such as the likely demand for air travel in 2015 or 2030 are clearly much less precise. The likely variables have to be assessed and a prediction made.
It seems that in this particular model the glaring unknown, the price of oil, has been forecast very optimistically. This single factor will have more bearing on the long term health of civil aviation than anything else. It seems likely that demand for travel will continue to grow significantly but not if the price of air tickets reaches the stratosphere (my metaphors will only be aviation-linked
)
$25 a barrel does seem a very low figure, especially as the insatiable demand for oil by such new world economic superstars as China will keep oil prices relatively high, if not sky high in the years to come.
An associated argument as far as the UK is concerned is how much increased air travel is necessary for the good of the economy of the country, the government’s major reason for wanting to push ahead so vigorously with its airports expansion plans.
Even a recent CAA report suggests that the massive increase in passenger journeys in recent years on the budget airlines is for leisure travel abroad, mainly by the wealthiest 25% of the country, and that this trend is likely to continue so long as air travel is affordable, with doubtful benefits to the overall economy of the UK. See link.
http://www.traveldailynews.com/new.a...category_id=53
Forecasts can of course be under-estimates. I note you come from Bristol as I do. In my possession are leaflets and other documents produced by Bristol Airport in 1993 that looked forward to the next ten years. In 1993 one million passengers used BRS and the ten-year plan projected 2 million by 2003. In fact, by then the airport had reached 3.8 million, and is now past the 5 million mark. The reason for the under-estimate is quite simple: no-one then could have foreseen the massive impact that lowcost (budget) airlines would have on the scene. So forecasting future demand is a very imprecise science although perhaps it is really an art.
Estimates of future growth must be made and it is equally damaging to the country as a whole to get them too low as too high. The White Paper wants clear plans from airports for the period up to 2015 and indications for the 15 years after that. Perhaps the wisest course might be to slow down the time span a bit.
I am not in aviation, never have been, neither am I an economist, nor an expert in computer modelling.
However, I have knocked around for over sixty years, travelled a lot by air in that time and have interested myself in civil aviation purely from the perspective of an amateur. I have prefaced my post thus because you asked for the opinion of aviators.
Governments have to make future estimates on all sorts of things from economic growth to the number of civil servants needed in future years.
Some things, like the number of pensioners vis-à-vis workers in the year 20xx can be predicted fairly accurately. Others such as the likely demand for air travel in 2015 or 2030 are clearly much less precise. The likely variables have to be assessed and a prediction made.
It seems that in this particular model the glaring unknown, the price of oil, has been forecast very optimistically. This single factor will have more bearing on the long term health of civil aviation than anything else. It seems likely that demand for travel will continue to grow significantly but not if the price of air tickets reaches the stratosphere (my metaphors will only be aviation-linked
)$25 a barrel does seem a very low figure, especially as the insatiable demand for oil by such new world economic superstars as China will keep oil prices relatively high, if not sky high in the years to come.
An associated argument as far as the UK is concerned is how much increased air travel is necessary for the good of the economy of the country, the government’s major reason for wanting to push ahead so vigorously with its airports expansion plans.
Even a recent CAA report suggests that the massive increase in passenger journeys in recent years on the budget airlines is for leisure travel abroad, mainly by the wealthiest 25% of the country, and that this trend is likely to continue so long as air travel is affordable, with doubtful benefits to the overall economy of the UK. See link.
http://www.traveldailynews.com/new.a...category_id=53
Forecasts can of course be under-estimates. I note you come from Bristol as I do. In my possession are leaflets and other documents produced by Bristol Airport in 1993 that looked forward to the next ten years. In 1993 one million passengers used BRS and the ten-year plan projected 2 million by 2003. In fact, by then the airport had reached 3.8 million, and is now past the 5 million mark. The reason for the under-estimate is quite simple: no-one then could have foreseen the massive impact that lowcost (budget) airlines would have on the scene. So forecasting future demand is a very imprecise science although perhaps it is really an art.
Estimates of future growth must be made and it is equally damaging to the country as a whole to get them too low as too high. The White Paper wants clear plans from airports for the period up to 2015 and indications for the 15 years after that. Perhaps the wisest course might be to slow down the time span a bit.
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The government has wasted MILLIONS by launching a consultation which included total non-starter options like Rugby and Cliffe.
But it was local residents who chose to take the bait and take them seriously.
Projections are very difficult to get right however they are modelled - but one thing we know from the predominant form of transport (the car) is that high fuel prices combined with high taxation does NOT stop growth in road use. It might slow it down, but we have been building towns for the last 50 years on the assumption that the majority of people will have cars to get around them. It will take another 50 years to modify this trend.
Personally, I think that the runways proposed for STN, BHX etc, are white elephants - but if they are built, it will be private money which funds them. That might mean that BILLIONS get wasted, but that is not the government's problem.
But it was local residents who chose to take the bait and take them seriously.
Projections are very difficult to get right however they are modelled - but one thing we know from the predominant form of transport (the car) is that high fuel prices combined with high taxation does NOT stop growth in road use. It might slow it down, but we have been building towns for the last 50 years on the assumption that the majority of people will have cars to get around them. It will take another 50 years to modify this trend.
Personally, I think that the runways proposed for STN, BHX etc, are white elephants - but if they are built, it will be private money which funds them. That might mean that BILLIONS get wasted, but that is not the government's problem.
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Regardless of the Government's forecasts, all of the affected airports are operated by commercial companies, with the usual commercial constraints. The normal tendency is to try and build major infrastructure (terminals, aprons or runways) just in time. This is why a terminal extension or replacement project is usually preceded by a period of uncomfortable overcrowding - you must have noticed! Airport companies do not want to undertake mjor construction, just to have it lie unused whilst costing huge amounts in interest and maintenance/running costs.
Given the long lead time in planning for such projects, airports have plenty of time to reconsider, and often delay, modify or even abandon plans rather than waste money. The "huge waste" scenarios mentioned above are only likely in the event of a sudden collapse of the market, occurring just after the investment is complete.
Given the long lead time in planning for such projects, airports have plenty of time to reconsider, and often delay, modify or even abandon plans rather than waste money. The "huge waste" scenarios mentioned above are only likely in the event of a sudden collapse of the market, occurring just after the investment is complete.
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I would agree that the forecast vis-a-vis the future oil price seems wide of the mark and any price stabilised above +/- $50/barrel will almost certainly depress economic growth not just in the UK but throughout the 'developed' world, and will impact more than just the aviation/airline industry.
However, the argument that the UK Government is wasting and is likely to waste billions of pounds of public funds on unnecessary airport expansion is just not correct because the proposed expansion at Edinburgh, Birmingham, Heathrow, Stansted, Luton, Gatwick, etc., would all be funded by the private sector simply because these airports are all privately owned. Thus, if the business case stacks up, funding will be negotiated on a commercial basis ~ and if for any reason it doesn't, then the airport companies concerned won't spend the money (it's doubtful that they'd even be able to raise the necessary capital or achieve the required return on investment anyway).
The various rail improvements (e.g. London's "Crossrail") are not directly linked to airport expansion and in any case, irrespective of whether these are funded via a Public/Private Partnership (PPP) any improvement/development of the UK's rail infrastructure has got to be good both for UK plc and on environmental grounds.
I agree that for internal i.e. domestic air travel over sectors of up to about 250 miles, a reliable and high-speed rail alternative would be entirely viable but this is unlikely to be achieved without significantly increasing public investment (otherwise, the cost of long-distance rail travel simply increases to a point where the law of diminishing returns kicks in) and if oil stays well above $50 the impact on HMG's tax revenues will rule this option out notwithstanding G Brown's ongoing impersonation of Mr Micawber...
Long-distance rail travel cannot however, compete with air travel to the Continent beyond 200 to 250 miles i.e. Paris/Brussels and maybe Amsterdam/Rotterdam simply because of capacity constraints through the Channel Tunnel and so there will remain a demand for flying to/from Continental Europe (and of course, to/from Eire, CIs, IoM, etc) together with long-haul, and with a population across Europe and N Amercia that will become increasingly older and indeed, retired, leisure activities (to which flying is very much associated) will remain a boom industry even if the growth figures used by HMG prove somehwat optimistic.
However, the argument that the UK Government is wasting and is likely to waste billions of pounds of public funds on unnecessary airport expansion is just not correct because the proposed expansion at Edinburgh, Birmingham, Heathrow, Stansted, Luton, Gatwick, etc., would all be funded by the private sector simply because these airports are all privately owned. Thus, if the business case stacks up, funding will be negotiated on a commercial basis ~ and if for any reason it doesn't, then the airport companies concerned won't spend the money (it's doubtful that they'd even be able to raise the necessary capital or achieve the required return on investment anyway).
The various rail improvements (e.g. London's "Crossrail") are not directly linked to airport expansion and in any case, irrespective of whether these are funded via a Public/Private Partnership (PPP) any improvement/development of the UK's rail infrastructure has got to be good both for UK plc and on environmental grounds.
I agree that for internal i.e. domestic air travel over sectors of up to about 250 miles, a reliable and high-speed rail alternative would be entirely viable but this is unlikely to be achieved without significantly increasing public investment (otherwise, the cost of long-distance rail travel simply increases to a point where the law of diminishing returns kicks in) and if oil stays well above $50 the impact on HMG's tax revenues will rule this option out notwithstanding G Brown's ongoing impersonation of Mr Micawber...
Long-distance rail travel cannot however, compete with air travel to the Continent beyond 200 to 250 miles i.e. Paris/Brussels and maybe Amsterdam/Rotterdam simply because of capacity constraints through the Channel Tunnel and so there will remain a demand for flying to/from Continental Europe (and of course, to/from Eire, CIs, IoM, etc) together with long-haul, and with a population across Europe and N Amercia that will become increasingly older and indeed, retired, leisure activities (to which flying is very much associated) will remain a boom industry even if the growth figures used by HMG prove somehwat optimistic.
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On page 77 of the document entitled The Future Development of Air Transport In The United Kingdom: South East, issued by the Department of Transport, which was written in July 2002, it was stated that by 2015 Luton would be used by 8 million passengers and by 2030 10million passengers. This year Luton will be used by 9.3 million which makes it around 20 years ahead of prediction.
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govt white paper
At least the white paper brought out the professional environmentalist friends of the earthg et al,and no doubt cost them time and money. That can't be a bad thing,bearing in mind our experience of them re Doncaster Finningley
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Channel tunnel
The tunel is no where near full.
In fact it has less trains using it than last year not the car shuttles have been cut back.
It was another case of bad goverment projections.
What is clogged up are the rail lines into the south of london.
That is why the eurostar has few trains in and out of waterloo in the rush hours.
In 2007 they will have there own line to Kings cross and that opens up a large area north of london.
A lot of slots at airports could be opened up by doing less 200-300 sectors.
In fact it has less trains using it than last year not the car shuttles have been cut back.
It was another case of bad goverment projections.
What is clogged up are the rail lines into the south of london.
That is why the eurostar has few trains in and out of waterloo in the rush hours.
In 2007 they will have there own line to Kings cross and that opens up a large area north of london.
A lot of slots at airports could be opened up by doing less 200-300 sectors.
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LTNman
Luton may be running (flying?) ahead of the SERAS forecasts that you quote, but it still has some way to go to fulfil its ambitions as described in its response to that same document (published in November 2002). On page 23 it says:
"LLAOL estimate that, at the very least, LTN ought to be able to handle 480,000 ATMs on its two independent runways, resulting in 72mppa at an average load of 150 passengers per flight."
Luton may be running (flying?) ahead of the SERAS forecasts that you quote, but it still has some way to go to fulfil its ambitions as described in its response to that same document (published in November 2002). On page 23 it says:
"LLAOL estimate that, at the very least, LTN ought to be able to handle 480,000 ATMs on its two independent runways, resulting in 72mppa at an average load of 150 passengers per flight."
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LTN ought to be able to handle 480,000 ATMs on its two independent runways...
There is no way - given the current environmental restrictions - that any new parallel runway at LTN could be operated simultaneously with the existing one, as major changes to minimum noise departure routes would be required.
The likelihood of any relaxation is remote, despite what some optimists might like to believe.
BTW befree, Eurostar will from 2007, operate into St Pancras International, not Kings Cross; and I agree that a significant number of runway slots could be released if travel by high-speed rail became a viable alternative to air travel.
Ironically, more people are using the UK railways than at any time since 1958 and much of the demand is coming from people taking advantage of the cheap 'APEX' fares now on offer over the trunk routes from the South and SE to the NW, NE and Scotland - cheap fares in response to the low-cost airline industry's head-on competition.
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Re: Aviation White Paper Disaster - Government assumptions set to waste billions
Originally Posted by GEENY
Another Bristol Brabazon?
Originally Posted by CAP493
However, the argument that the UK Government is wasting and is likely to waste billions of pounds of public funds on unnecessary airport expansion is just not correct because the proposed expansion at Edinburgh, Birmingham, Heathrow, Stansted, Luton, Gatwick, etc., would all be funded by the private sector simply because these airports are all privately owned.
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Re: Aviation White Paper Disaster - Government assumptions set to waste billions
It's an interesting debate, and it's true that some of the assumptions made in the White Paper can already be seen as wide of the mark, but I don't see that any extra infrastrusture will be built if the investors (who will pay for this infrastructure) feel that the return will be inadequate. The Government's belief that expansion will be beneficial is not enough to persuade hard-nosed financial institutions to back it if they don't see a clear return.
Aviation is expanding, right now, at something like 5% annually in UK. That expansion is fuelled by the efforts of the low-cost sector, who have placed orders for sufficient aircraft to allow that expansion to continue for some years yet. Inevitably, that expansion will be limited by infrastructure capacity unless some increase in that capacity is created. How much increased capacity will be required is the question which this White Paper attempted to answer, and I think the authors were acutely aware that previous aviation expansion predictions were well below what actually occurred. Therefore, I think that the White Paper's predictions can be taken as being on the generous side!
What the White Paper did not tackle was whether Governments should enable all the capacity increases the industry would like; there seems to have been relatively little debate within the Government along the lines that road-building has generated, and where a conscious and deliberate policy of restricting capacity has been adopted. Such a policy for aviation may well come to pass in the medium term, I suspect.
As for the effects of oil (prices and production) on aviation expansion are concerned, high oil prices will slow growth but will increase investment in alternative aviation fuels research - which is already well advanced. The aeroplanes being produced today will still be flying in 40 years time - though they may not have as many runways as the White Paper predicts!
Aviation is expanding, right now, at something like 5% annually in UK. That expansion is fuelled by the efforts of the low-cost sector, who have placed orders for sufficient aircraft to allow that expansion to continue for some years yet. Inevitably, that expansion will be limited by infrastructure capacity unless some increase in that capacity is created. How much increased capacity will be required is the question which this White Paper attempted to answer, and I think the authors were acutely aware that previous aviation expansion predictions were well below what actually occurred. Therefore, I think that the White Paper's predictions can be taken as being on the generous side!
What the White Paper did not tackle was whether Governments should enable all the capacity increases the industry would like; there seems to have been relatively little debate within the Government along the lines that road-building has generated, and where a conscious and deliberate policy of restricting capacity has been adopted. Such a policy for aviation may well come to pass in the medium term, I suspect.
As for the effects of oil (prices and production) on aviation expansion are concerned, high oil prices will slow growth but will increase investment in alternative aviation fuels research - which is already well advanced. The aeroplanes being produced today will still be flying in 40 years time - though they may not have as many runways as the White Paper predicts!
