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Another runway at Heathrow

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Another runway at Heathrow

Old 14th Jul 2015, 01:31
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If LHR Ltd and other investors are prohibited from building a third rwy, do you really think that they will invest in northern infrastructure?
NO. What a bizarre question. All my postings have made abundantly clear that my objections relate to the public element of funding requirements.
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Old 14th Jul 2015, 09:02
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m25 and lhr r3

FdF re yr " the above and m25 widening will be needed without a 3rd rwy":
its only 7 years since it was extensively widened prior to opening of t5 ( in 2008). at that time a 3rd rwy was very much in the frame, remember it only got the thumbs down when the coalition came in in 2010. so the planners of the widening must have reckoned that their scheme was all that was required for next 20/30 years of a 3 rwy lhr. they surely didnt say we are only building this for a seven year life cos we think/know we will all be back here still arguing in 2015. ( maybe they gambled on r3 not going ahead ).
so my conclusion is that without r3 the roads infrastructure round lhr will not be improved for many years yet.
PS I am a lgw 3rd rwy man+ completion of lhr's redevelopment = two london Main airports. btw lgw to central london is only 14 miles longer than lhr to central london. hardly of any consequence in the overall scheme of things.
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Old 14th Jul 2015, 09:27
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Having just connected T5 to T2 and vice-versa, can I say it was the most unpleasant experience. Both terminals appeared unable to cope with the passengers they had. These are the two latest Terminals. Based on my experience I won't be doing that again- I don't see how an expanded LHR would make that experience any better.
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Old 17th Jul 2015, 21:44
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Boris Johnson U-turn over Heathrow expansion resignation threat - Telegraph

Blah blah blah hot air talk.
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Old 25th Jul 2015, 05:49
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AirportWatch | Heathrow boss rules out footing the £5 billion bill for road and rail works ? wants taxpayer to pay

Well there's a thing...........direct from the CEO and unequivocal.

They ain't paying!

I wonder if THIS will be subject to same scrutiny / review as the meagre sums and I mean meagre, required to upgrade many road/rail improvements in the North ?

And you wonder why we think we are being had for mugs up here !
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Old 25th Jul 2015, 08:08
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Bagso, I think you will find that this is the first salvo in a long process of negotiation. When HAL is eventually told that they will not get planning permission for R3 unless and until these works are carried out, their view will inevitably change.

It's much the same as what happened with T5, when HAL was told that it couldn't open the terminal until the Piccadilly Line (and HEX) extensions were completed. Miraculously HAL suddenly got its cheque book out.

Ultimately HAL's negotiating position is very weak.

And of course it all sets a precedent for airports elsewhere in the UK. If HAL has to pay for a wide range of highway-related works that are not solely required by R3, what's to stop MAG having to pay for future widening of the M56 etc etc? It's just another example of aviation in the UK being regarded as a cash cow.

Last edited by BasilBush; 25th Jul 2015 at 08:20.
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Old 25th Jul 2015, 08:44
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Basil - This notion of contributing to public infrastructure costs would not be a new precedent in MAG's case. They actually contributed around GBP50M to the construction of the new Metrolink tram route which opened in late 2014. MAG also subsidises various public transport services to the airport.
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Old 25th Jul 2015, 09:09
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You're absolutely right, Shed. But if you look at the history of airport development over the past 40 years you can see a gradual shift between what is funded by public authorities and what is funded by airports.

Historically it was generally accepted that all surface access costs were publicly funded, eg the original Piccadiily Line to Heathrow in (?) 1977. But when the line was extended to T4 LUL demanded (and got) a contribution from BAA. By the time T5 came along BAA/HAL had to fund the lot.

The boundary between public funding and airport funding has been consistently moving in the same direction. Airports are now expected to fund a lot of projects that were previously publicly funded. The debate over R3 surface access is just a continuation of this.

What's sauce for the goose is sauce for the gander. If HAL eventually has to cough up for a range of surface projects that are only partially attributable to R3 then it's inevitable that all other future airport projects will also be regarded as a funding opportunity. A case can certainly be made that growth at MAN (for example) contributes to congestion on the M56, M60 etc. From there it's only a matter of time before MAG is asked for a contribution to costs. And that is different from MAG currently having to make a contribution to projects (eg Metrolink) which are much more directly related to the airport.
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Old 25th Jul 2015, 09:31
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I'm fairly confident that the cost of road improvements around the M56 would be a fraction of what is at stake here......

But by all means IF you are going to spend £5bn re LHR can we have "proportional investment" here, relative to an airport number 3 in the UK !!!!!

On that basis I would have absolutely no objection at all.

The problem is the investment amounts up here are truly meagre by comparison and whilst the M E N may "gush" about a couple millions spent here and there they don't seem to understand that the odd billion in the South East is a thousand times more.

A few of our MPs who support this without so much as opening the report would do well to have a few maths lessons.
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Old 25th Jul 2015, 09:43
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I don't disagree with you Bagso, that our MPs and journalists are sadly lacking in basic numeracy!
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Old 25th Jul 2015, 15:31
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Amsterdam......2787 Hectares
Paris CDG........3238 Hectares
Heathrow.........1214 Hectares
Give up......move away....build Boris Island. Has "EGLE" been reserved for London East????
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Old 25th Jul 2015, 16:24
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Thunderous applause...

...greeted the recent announcement that the enquiry into the need for another runway at Heathrow is to consider all other UK airports and options. The enquiry will be conducted by the former Master of the Scrolls, His Honour the Lord Strut of Oleo, and is expected to have reached its conclusions in as short a period as 25 years, but in an earnest endeavour to further accelerate the decision-making process Lord Strut has already set out the enquiry's main conclusions, which he has summarised as follows:

1) The challenge - how to best improve the UK's aeronautical infrastructure for the common good, within the constraints of current planning, economic and financial considerations.

2) The solution - a muti-faceted approach to include the following radical innovations:

(a) On the ground. The extension and combination of key airports into one or more super-airports by incorporating all existing runways, motorways and other transport resources together, thus eliminating the need to actually travel to the airport. People would live within it and their travel and all other requirements would be met within the perimeter of the airport, which would become a totally integrated community in its own right, linked as necessary to other super-airports by benign high-speed computer controlled driverless robot-directed transporters.

(b) In the air. Manufacturers to be encouraged to maximise aircraft passenger carrying ability by, for example, much greater use of so-called 'soft' passenger compression techniques, including strapping, layering, and tranquillising, together with subliminal or implanted messaging to reinforce the pleasures of the air-travel experience. Aircraft passenger capacities could further be enhanced by providing opportunities to enjoy exterior wing and fuselage-mounted seating or strap-hanging arrangements on many short sector routes. That should appeal to a new generation of low-cost entrepreneurs who could be franchised by main carriers on an ad-hoc basis to also offer aerial towing opportunities for either commercial or private passenger or freight pods. Air traffic arrangements should also be modified to include computer-controlled synchronised landing and take-off 'convoy' streams to maximise aircraft movements.

Who pays? Clearly, to enable aircraft manufacturers, airport operators, airlines and all the other associated machinery of commerce to maximise appropriate returns on their development, innovation and application costs passengers and all other airport users will be required to make the major contribution. This, however, would be overseen by a new independent air-travel regulatory body, strictly mandated to maximise efficiency, profit and consumer satisfaction whilst remaining firmly outside the constraints of central government or any other involvement.

The benefits. The public and, in fact, all air travel and transport users will be able to enjoy their work, rest, leisure and other requirements within the compass of the new super-airport without worries about inter-hub delays, congestion or any other difficulties. This will serve to promote a new, true Democracy of the Air. A very rosy prospect indeed.

The public are invited to submit comments and suggestions through the usual channels
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Old 26th Jul 2015, 11:40
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Interesting comparison between HAL and MAG this week

Heathrow's account for year to Dec 2014 was EBITDA of £1,567,000.

Corporation tax paid?

£34 million on net profit of £101m

http://t.co/uQ1Q8dtL55

They will need to raise and payback from future profits 10x this figure just to get to a billion pounds that's possibly doable, but by scale they will then need to escalate this to a further 20x £1bn to even think about the massive
investment in a 3rd runway and additional terminal.

The investment required is a mammoth 200 times current yearly earnings is it not and that's before a plane has even landed on the new runway.

Would shareholders sanction this?
I assume this has all been agreed.

To me the figures look way out of kilter viz a viz the income coming in.

Are these figures a cause for concern ?

Contrast these with MAG who announced pre tax profits last week of £90m a not disimilar figure.

However their future investment by comparison is currently only a modest £1bn in the mega terminal at Manchester.

Last edited by Bagso; 26th Jul 2015 at 13:29.
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Old 26th Jul 2015, 14:31
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Bagso

Actually Heathrow's EBITDA was £1,567,000,000. Your figure is missing three zeros. By way of comparison MAG's EBITDA was £284,000,000.

EBITDA is a measure of cash profits, before depreciation and interest on debt. Profit before tax (PBT) is after both depreciation and interest. Heathrow's relatively low PBT (and low tax charge) is largely a result of the fact that it is very highly debt-funded, much more so than MAG. This financial structure is due to the perceived low risk of Heathrow, such that it is able to gear up to such a debt-heavy capital structure. The regulatory structure also gives Heathrow a strong incentive to maximise debt.

As for Heathrow's ability to finance R3, Davies has shown that this will require a substantial uplift in airport charges. But Davies felt this was achievable, even if HAL has to fund the £6bn in surface access costs.

HAL's shareholders are very keen to proceed with T5. Obviously Ferrovial have a special interest, given their involvement in construction... But the other shareholders (eg pension and sovereign wealth funds) are looking to achieve predictable returns on what is perceived as a regulated low risk investment. They have a lot of money to invest and they need to put it somewhere.

Last edited by BasilBush; 26th Jul 2015 at 17:17.
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Old 26th Jul 2015, 21:37
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And HAL achieved that profit whilst constructing T2. Sometimes I think, Bagso, you expect R3 to be paid for upfront in cash. They basically will just move on from one construction project to the next, with a similar level of capex to that they have sustained since the start of T5...
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Old 27th Jul 2015, 07:28
  #476 (permalink)  
 
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And if anyone is in any doubt as to whether the issue of financing R3 has been adequately addressed, see the documents at https://www.gov.uk/government/public...cial-viability
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Old 27th Jul 2015, 10:19
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Agree with Basil. The financial arrangements have been pretty thoroughly analysed. From the point of view of the investors ( pension funds and the like), probably the most important thing will be a guarantee from the regulator that the RAB formula which generates the revenue flow will be fixed for the payback period, and clarity on how various contingencies such as everything from cost overruns to terrorism risk will be handled. Probably there will be floor and ceiling type arrangements but this sort of financial engineering is known territory.
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Old 27th Jul 2015, 13:14
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Yes, that's right anothertyke. The regulator (CAA) is currently consulting interested parties on how economic regulation might evolve to reflect the new runway capacity. For anyone interested the material is at https://www.caa.co.uk/default.aspx?c...0&pageid=16228
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Old 27th Jul 2015, 18:03
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m25 and lhr r3

FdF re yr " the above and m25 widening will be needed without a 3rd rwy":
its only 7 years since it was extensively widened prior to opening of t5 ( in 2008). at that time a 3rd rwy was very much in the frame, remember it only got the thumbs down when the coalition came in in 2010. so the planners of the widening must have reckoned that their scheme was all that was required for next 20/30 years of a 3 rwy lhr. they surely didnt say we are only building this for a seven year life cos we think/know we will all be back here still arguing in 2015. ( maybe they gambled on r3 not going ahead ).
Perhaps "widening" was the wrong word, perhaps "reconfiguring" would have been better. The reason it will have to be done anyway is that this stretch of the M25 has too many junctions on top of each other and this does not help.

It encourages local traffic and junction-hopping on what was designed as a bypass, and that means mass lane changing which slows everything down. This has never been addressed in all the previous widening schemes.


Amsterdam......2787 Hectares
Paris CDG........3238 Hectares
Heathrow.........1214 Hectares
Give up......move away....build Boris Island. Has "EGLE" been reserved for London East????
Never going to happen. Expand the hectarage, use the open land safeguarded for the purpose since the 1940s.

Forget Boris Island, that particular ship sailed in the 1970s.



As for Heathrow's ability to finance R3, Davies has shown that this will require a substantial uplift in airport charges. But Davies felt this was achievable, even if HAL has to fund the £6bn in surface access costs.
Not a problem at LHR, carriers (and therefore their pax) will pay it. The same cannot be said for LGW: the rise in airport charges will be relatively greater and there is no guarantee that carriers will be happy to pay it.

Last edited by Fairdealfrank; 27th Jul 2015 at 18:24.
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Old 28th Jul 2015, 13:41
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Here's an interesting twist from today's E'nin Stannit.

Nicola Sturgeon: Decision over third Heathrow runway will be decided by SNP vote

Nicola Sturgeon today blew the battle between Heathrow and Gatwick wide open by saying her 56 MPs at Westminster will vote for the airport that gives a better deal for Scots.

In an exclusive interview with the Standard, SNP transport spokesman Drew Hendry declared the party was “neutral” between a third runway at Heathrow and a second at Gatwick.

The SNP would decide which airport to back after hearing how each would answer Scottish demands for cheaper ticket prices and guaranteed connections with international flights.
Article continues at
Nicola Sturgeon: Decision over third Heathrow runway will be decided by SNP vote - London - News - London Evening Standard

All good spectator sport!
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