Heathrow-2

[Dannyboy39]

First of all, for the sake of argument I support a third runway at LHR, as well as a second usable runway at LGW. No airport should be prevented from expanding and thus becoming inefficient and problematic for passengers.

I do balk at one argument made by the LHR side over routes though - over routes, both domestically and internationally. There could be up to another 240,000 annual movements, or around 650 movements per day. In the initial phase, I'd expect only about half these to be taken up, before the runway fills up again. For every 10 slots assigned, at least 2 needs to be assigned to a domestic route and 1 assigned to a route not already operated by someone else.

1) Only two airlines in the UK have the capability in their current form to operate routes to additional domestic airports - these routes need to be operated by smaller E-jet, ATR or C-series equipment. Only BA Cityflier and FlyBE have the fleet, unless there is a new entry, to operate these routes profitably and efficiently.
2) If these routes were profitable, wouldn't BA (or another airline) be operating them already?
3) Because of point 2) there would need to be government / airport guarantees (can't say I'm a fan of this approach) for certain % of slots being used for certain routes, otherwise the usual suspects will just be doubling down on typical dense routes. Heathrow have stated that Dundee, Prestwick, Carlisle, Norwich, Durham/Tees, Humberside, Doncaster/Sheffield, Liverpool, Derry, Isle of Man, Newquay, Jersey, Guernsey could be operated in addition to those domestic routes currently operated.
4) Internationally, many routes that LHR have highlighted as potential new markets surely are limited and would prove extremely costly to operate:

From west to east:
United States - Portland, San Antonio potentially limited J traffic and easy connections through existing hubs? Certainly think Orlando and Memphis could work; the former already operated from LGW.
Central America - Guatemala City, San Jose, Panama City - think these are definite growth areas by a time a runway is built, but I think limited to a 787 (or going via MAD).
South America - Quito, Lima - certainly think these would work. Caracas, Belo Hortizonte, Porto Alegre - sceptical about these; the latter two could work if done on the same trip.
Africa - Think Dakar, Entebbe, Dar es Salaam, Durban and Khartoum could work. BA have tried Monrovia previously and pulled out - no suggestion that this is a growth area. Mombasa did have a huge charter presence which seems to have tailed off due political instability. Extremely sceptical about Port Harcourt, Lilongwe and Harare. These routes are bread and butter though against the ME3 who will easily beat everyone on price.
Middle East - Baghdad not exactly going to be a big business/tourist destination anytime soon. Damman high J potentially.
South Asia - Peshawar is one of the most dangerous places in the world, so that's a no from me. Think Goa, Kochi, Thiruvanathapuram, Kathmandu, Kolkata could all work, albeit with lower yields. Think India will become a huge aviation powerhouse by 2030. Having worked over there for 2 months last year it was staggering the increase in human development and just the shear scale. The airlines over there are putting in huge aircraft orders. Again though, bread and butter for the ME3.
China - Wuhan, Chongqing, Nanjing, Fuzhou - probably just scratching the surface for that country.
South East Asia - Penang, Denpasar - I'd say Indonesian aviation is about 10 years behind India, but the likes of Lion are making huge strides in that region.
Far East - Surprised Osaka isn't being operated already.
Oceania - Brisbane is the obvious one, but will depend on "Project Sunrise" - the economics don't really work on Perth...

[Fairdealfrank]

I think we can safely assume that if the payback period for R3 is 100 years, it isn't going to happen.

Not payback period, OPENING DATE!!! It was an optimistic estimate for an approximate ending of the dithering, indecison and procrastination on the part of the government.

You may want to read the more recent comments he’s made when the Arora Group suggested they could build it more cheaply.

Is it correct that the Arora Group proposal is for a shorter rwy that doesn't cross the M25 motorway or demolish its hotels? If so, it will be cheaper as it avoids years of disruption on the motorway and can open earlier, so it may become a viable option, time will tell.

But cost is exactly the point. WW is absolutely correct to baulk at cost figures anything like those mentioned. IAG is far better served by the status quo. IAG can expand at Madrid, Barcelona, Dublin, Gatwick and more. Especially if they do eventually take over Norwegian.

Possibly, but the most profitable is Heathrow. Why do you think that carriers are so determined to acquire Heathrow slots at any cost?

I also disagree with your suggestion that the cost of expanding Heathrow should only be compared with other airport upgrade projects. The fact that entire new twin-runway airports can be built in various other countries (including those with high real estate prices) for a fraction the cost of upgrading Heathrow by one third is utterly damning. That's the point and it is valid.

The clue is in the words "various other countries".

First of all, for the sake of argument I support a third runway at LHR, as well as a second usable runway at LGW. No airport should be prevented from expanding and thus becoming inefficient and problematic for passengers.

Of course Gatwick should have a second rwy, but not instead of a third at Heathrow. In other words, if there is to be only one new rwy, it should be at Heathrow (obviously). If there ares to be two new rwys, then one each at Heathrow and Gatwick. If there are to be three, then two at Heathrow and one at Gatwick. The latter option would bring the rwy capacity of London's two main airports to the same as Paris's: 4 at LHR/CDG and 2 at LGW/ORY. this completely unlikely, but not unreasonable, as London's aviation market is much larger than that of Paris. However, even if governments were not the main obstacle to expansion, the profitability aspect would play a large part in determining commercial viability of such expansion as UK airports are privately owned,

Apologies if the NIMBYs are having a collective heart attack at the thought of three new rwys in the south east.

1) Only two airlines in the UK have the capability in their current form to operate routes to additional domestic airports - these routes need to be operated by smaller E-jet, ATR or C-series equipment. Only BA Cityflier and FlyBE have the fleet, unless there is a new entry, to operate these routes profitably and efficiently.

There may well be new entrants, smaller carriers cannot entertain LHR operations at present, mainly because of slot acquisition costs. This changes dramatically with a new rwy. Of the additional (free) slots 50% would go to new entrants.

2) If these routes were profitable, wouldn't BA (or another airline) be operating them already?

Even if thin domestic routes are profitable, the shortage of slots, makes other routes MORE profitable. Even if some routes are not profitable AT PRESENT, with a new rwy, everything changes, not least the abundance of available of slots and, consequently, the ending of the secondary slot market. This allows an increase in new, perhaps thinner, international routes, many of which will need feeder flights from other UK airports to be viable.

3) Because of point 2) there would need to be government / airport guarantees (can't say I'm a fan of this approach) for certain % of slots being used for certain routes, otherwise the usual suspects will just be doubling down on typical dense routes. Heathrow have stated that Dundee, Prestwick, Carlisle, Norwich, Durham/Tees, Humberside, Doncaster/Sheffield, Liverpool, Derry, Isle of Man, Newquay, Jersey, Guernsey could be operated in addition to those domestic routes currently operated.

It makes sense to ringfence a certain amount of slots for domestic operations, it also makes sense for PSO London flights to use LHR as it increases the potential for flight connections not on offer at other London airports. It is also important for as many domestic routes as possible to be linked to Heathrow in order to boost connectivity and rebalance the economy.

4) Internationally, many routes that LHR have highlighted as potential new markets surely are limited and would prove extremely costly to operate:

From west to east:
United States - Portland, San Antonio potentially limited J traffic and easy connections through existing hubs? Certainly think Orlando and Memphis could work; the former already operated from LGW.
Central America - Guatemala City, San Jose, Panama City - think these are definite growth areas by a time a runway is built, but I think limited to a 787 (or going via MAD).
South America - Quito, Lima - certainly think these would work. Caracas, Belo Hortizonte, Porto Alegre - sceptical about these; the latter two could work if done on the same trip.
Africa - Think Dakar, Entebbe, Dar es Salaam, Durban and Khartoum could work. BA have tried Monrovia previously and pulled out - no suggestion that this is a growth area. Mombasa did have a huge charter presence which seems to have tailed off due political instability. Extremely sceptical about Port Harcourt, Lilongwe and Harare. These routes are bread and butter though against the ME3 who will easily beat everyone on price.
Middle East - Baghdad not exactly going to be a big business/tourist destination anytime soon. Damman high J potentially.
South Asia - Peshawar is one of the most dangerous places in the world, so that's a no from me. Think Goa, Kochi, Thiruvanathapuram, Kathmandu, Kolkata could all work, albeit with lower yields. Think India will become a huge aviation powerhouse by 2030. Having worked over there for 2 months last year it was staggering the increase in human development and just the shear scale. The airlines over there are putting in huge aircraft orders. Again though, bread and butter for the ME3.
China - Wuhan, Chongqing, Nanjing, Fuzhou - probably just scratching the surface for that country.
South East Asia - Penang, Denpasar - I'd say Indonesian aviation is about 10 years behind India, but the likes of Lion are making huge strides in that region.
Far East - Surprised Osaka isn't being operated already.
Oceania - Brisbane is the obvious one, but will depend on "Project Sunrise" - the economics don't really work on Perth...

BTW, Auckland is missing from the list, as are several West Indies destinations currently at LGW (the latter has already started: VS now does LHR-BGI).

By the time the third rwy is up and running there may well be another generation of aircraft available with much improved economics: cleaner, more fuel efficient and even quieter than the current crop. What looks uneconomic now may not be then. Of course many routes currently operated to/from LGW will shift to LHR, that is something that won't change.

[Dannyboy39]

That isn't my own list - that is the list on Heathrow's own website. I am extremely sceptical on many of those destinations, but that said most would likely only be operated by home carriers.

Re Auckland (not already operated by ANZ?) - EK can barely make it profitable from DXB with all their advantages, let alone on a 1-stop from LHR. You're burning more fuel just carrying it. On that subject, I note that the inaugural PER-LHR leg was done with 94T on the 787 with another hours flying time available; not as high as I was expecting.

For me, the following will be operated from LHR pretty quickly:
UK & Ireland: Jersey, Guernsey, Cardiff, Isle of Man, Liverpool, Newquay, Derry, Knock
Europe: Alicante, Naples, Porto, Valencia, Bordeaux, Heraklion, Seville, Dubrovnik (a lot served by an EZY hub)
North America: Orlando, Cancun, Memphis, Bermuda, St Lucia, Punta Cana, San Jose de Costa Rica, Port-of-Spain
South America: Quito, Lima
Africa: Dakar, Entebbe, Dar es Salaam, Khartoum
Middle East: Baghdad, Damascus (eventually), Erbil
South Asia: Goa, Kolkata
China: Chengdu, Shenzhen, Chongqing, Nanjing, Xiamen, Tianjin
Far East: Osaka
Oceania: Brisbane

Potential new entrants (airlines):
Air Transat, easyJet, Iraqi Airways, Montenegro Airlines, Nouvelair, Tianjin Airlines, Xiamen Airlines, Wizz Air

[DaveReidUK]

Originally Posted by Fairdealfrank

This allows an increase in new, perhaps thinner, international routes, many of which will need feeder flights from other UK airports to be viable.

So introduce more marginally viable international routes which only make sense if you assume additional feed from new, unprofitable UK domestics ?

I think I might be missing something here ...

[Prophead]

Ozzy,

You baulk at the cost of £17bn for LHR expansion yet seem completely willing to accept TFL's figures for the access cost. I noticed you quoted them at £10bn - £20bn but then went on to use their highest figure to aid your highly biased argument.

Why is the figure from TFL not open to as much scrutiny? Also, you cannot compare a new build project on open fields away from the city with expanding a site like LHR and all it's constraints.

Navpi

Do you honestly believe that EZY (who will no doubt be in their own terminal) will offer the same supposed seamless connectivity as IAG !

The connectivity is built into the airport with baggage transfer tunnels and rapid transport systems.

On a second point, UK MPs are being promised the earth by the Heathrow propaganda machine, if its not a direct flight its a juicy new logistic hub.
They are visiting EVERY Chamber Of Commerce in the country with the same promise and same presentation,
It really is Emperor’s new clothes stuff !

https://www.heathrowexpansion.com/ot...choice-for-us/


What do you know that the managers of these 40 airports do not? They have agreed that LHR expansion would be good for their business and their local area. But it is still a project that will only benefit the South East UK apparently.

[OzzyOzBorn]

Prophead - I accept only that TfL can do their sums. But if you're suggesting that I think spending that amount on access works is OK then you are mistaken. Meanwhile, £17Bn + £20Bn = £37Bn. I used £30Bn. Looks like I chose a lower number for my "highly biased" argument. On your second point about getting better value away from areas with the highest real estate prices I agree. Hence why I suggest Stansted as a great alternative choice, especially since it specialises in the highest growth no-frills sector.

[Prophead]

But whilst you are talking growth and looking into the future, LHR is at capacity NOW and was when the original application was approved years ago.

Enabling more capacity at LHR will likely free up capacity at Gatwick so you solve more than one problem. This is why LHR makes sense.

It is not, and never has been about sticking a runway somewhere in the SE. It is about creating a hub that can give access to the regions and is the reason 40 regional airports are behind the plan. You say that is a supremely terrible idea and the SE should be given extra runways that only serve the SE yet you then say;

Interested parties argue that English regions already deprived of state infrastructure investment for two generations will be locked out for at least another decade if projects in London are allowed to monopolise national funding yet again

So the argument against the imbalance of funding spent on London & the South East is to deny a nationally beneficial project and instead just give the SE more flights?

Just because you and others choose not to believe that the regional flights will be forthcoming does not make that so and we can all make up arguments to support our choice. The truth however is that LHR want to create the infrastructure to support these routes and the regions want to have them. That is a win/win for the whole of the UK as far as I and many others are concerned.

[DaveReidUK]

Originally Posted by Prophead

Just because you and others choose not to believe that the regional flights will be forthcoming does not make that so

To be fair, the Airports Commission made it clear that they didn't believe it either.

[Trash 'n' Navs]

Originally Posted by OzzyOzBorn

But cost is exactly the point. WW is absolutely correct to baulk at cost figures anything like those mentioned. IAG is far better served by the status quo.

I also disagree with your suggestion that the cost of expanding Heathrow should only be compared with other airport upgrade projects. The fact that entire new twin-runway airports can be built in various other countries (including those with high real estate prices) for a fraction the cost of upgrading Heathrow by one third is utterly damning. That's the point and it is valid.

Strange. Your OP said

IAG, Heathrow's largest airline operator by far (incorporating British Airways) opposes the R3 proposal unequivocally.

Now you’re equivocating. Could you confirm they’re opposed ‘unequivocally’ or only on cost grounds?

[OzzyOzBorn]

Willie Walsh opposes unequivocally because the stated all-in cost, even in the best case scenario, is an astronomical £25Bn. And far more likely to be £30Bn+. Senior airline executives tend to have a good grasp of crazy numbers like that. Those figures are all the reason he needs to be 'unequivocal'. And anyone else with an ounce of sense too.

Prophead - you're back to your default position of justifying R3 on operational convenience without regard to cost. IT IS ALL ABOUT COST. Circa £30Bn all-in is too much many times over. Despite wishful thinking, afew extra regional domestic flights don't come close to offsetting that inconvenient reality.

And yes, the core issue is limited runway capacity in the SE specifically. It is not a matter of national benefit, though wasting billions would be a matter of national concern. There is no 'win-win' option if thirty billion is wasted trying to make Heathrow work. But one new runway each for Gatwick and Stansted at a combined lower price just might be. And they're home to the no-frills behemoths - the sector driving the real growth in demand for runway access.

[PAXboy]

Dannyboy39

2) If these routes were profitable, wouldn't BA (or another airline) be operating them already?

Sadly not. On the airline side, BA bought up the small carriers simply to obtain their LHR slots. The flights were then shoved off to LGW and, eventually sold on. Leaving BA with slots on the cheap.
On the BAA side, following privatisation, the for-profit company naturally went for profit and changed the way it charged airlines. It used to be that airlines were charged per seat on the aircraft. They changed it to per aircraft landing. Thus it cost similar amounts to land a 744 as a 146.

If R3 is ever built, the rules would have to change. But (as i always repeat) no one need worry about that as it won't get built.

[Prophead]

Prophead - you're back to your default position of justifying R3 on operational convenience without regard to cost. IT IS ALL ABOUT COST. Circa £30Bn all-in is too much many times over. Despite wishful thinking, afew extra regional domestic flights don't come close to offsetting that inconvenient reality.

Lets look at some figures shall we:

Without using your predetermined overspend lets just use a figure of £15bn for the Airport part which is what seems to be agreed at the moment. (It may be much lower if the Aurora plan goes ahead).

This part of the project is privately funded. A figure of £15bn will probably give back a tax income on the construction of around 30% (probably more). Therefore this privately funded project will give the taxpayer £4.5bn or likely more.

After completion we have the boost to the economy created by this greater connectivity to the regions. The British Chamber of Commerce has said it would double cargo capacity and connect British businesses to up to 40 new long-haul trading routes. They say the project will pump £187bn into the economy, create up to 180,000 new skilled jobs and double the number of apprenticeships at the airport to 10,000.

So ask yourself what the taxpayer would end up receiving from that? Even halving that figure would bring significant tax income never mind the boost to the economy. Putting a new runway at Gatwick or Stansted will not give anything like this.

Now you talk about the road upgrades and TFL's £20bn figure. This is where the scrutiny should be focused. It would seem everyone is concerned about the privately funded part and nobody has asked TFL to break down these figures. The project is likely to be completed somewhere around 2030 if it gets the go ahead soon. As has been said many times the road network around that area will need significant upgrading whether LHR goes ahead or not. What we should be asking TFL is, how are their figures broken down? We then need to see those figures against spend should the airport not be expanded and how much will be saved by TFL over the next few 20 or 30 years by having an upgraded M4/M25 junction. Then we can add in the tax income from expansion and we will be somewhere near a true figure.

You still have not answered my question though Ozzy, How is scrapping a project that would be beneficial for the whole of the UK and building one only helping the SE a reasonable answer to the North/South funding imbalance?

This is the issue with using those big figures when arguing against large construction projects. It's the same with the £52bn figure regarding HS2. The true cost to the public is likely much lower. Taxable income from privately funded projects that then help grow the economy and modernise the country should be encouraged.

[Heathrow Harry]

How do you get a tax take of 30%??

most of the payments will be corporate and those guys pay v little tax. PAYE will be only a small portion...

[Prophead]

Why would most payments be corporate?

All the workers wages will be taxed. This goes not for actual site workers but all suppliers and designers/managers.

Suppliers and contractors will be paying Corporation tax on profits and VAT. Materials likewise.

Compensation payments are likely to be taxable.

Pretty much everything included in the figure will be taxed, maybe more than once.

[SWBKCB]

After completion we have the boost to the economy created by this greater connectivity to the regions. The British Chamber of Commerce has said it would double cargo capacity and connect British businesses to up to 40 new long-haul trading routes. They say the project will pump £187bn into the economy, create up to 180,000 new skilled jobs and double the number of apprenticeships at the airport to 10,000.

You still have not answered my question though Ozzy, How is scrapping a project that would be beneficial for the whole of the UK and building one only helping the SE a reasonable answer to the North/South funding imbalance?

some huge assumptions here. How do we know all these new routes to unserved destinations will appear? BA and co could be operating them now rather than multiple JFK's if there was money in it. What happens if BA decides that what is more profitable for them is more JFK's? or any new entrant decides the same? The national interest and those of private airlines might not always align...

[Prophead]

Passengers for many of the LH flights will be fed from the SH operation on the shorter runway. There may well be more flights to JFK but it will be because there are more passengers coming in from the regions and will utilise the extra capacity freed up on the existing 2 runways. This would be seen as a success.

People seem to think the regional traffic will be looked upon as less important in the same way it is now. The transformation into a hub and the extra slots created will change things dramatically and that regional traffic will be a large source of passengers onto any new LH routes.

There are assumptions made in regards to every project including the assumptions that LoCo traffic will be the main growth area in Gatwick or Stansted. Nobody has a crystal ball and we are not going to get cast iron commitments from anyone. If we needed that before commiting to any project then we would still be travelling by horse and cart on mud tracks.

[Trinity 09L]

Been away for few days, a shorter runway? So no M25 diversion?

[Prophead]

I just meant shorter than the others. The new runway in other words.

[ETOPS]

Meanwhile the first phase of the new Istanbul airport is slated to open on the 29th Oct 2018 at an initial cost of 5.5 billion Euros. The eventual cost of completion estimated at a further 4.7 billion Euros making 10.3 billion Euros in total. This for a whole new airport and terminal.............Where do we get £30 billion for one runway and one terminal?

[DaveReidUK]

Originally Posted by Prophead

Passengers for many of the LH flights will be fed from the SH operation on the shorter runway.

There is no plan for any "SH operation on the shorter runway".

While the latest announced plans include an option whereby R3 could be marginally shorter (by 300 metres) thaan originally planned, there is no suggestion that the three runways would not be rotated as originally envisaged. A slightly shorter runway would still meet the performance requirements set out in the revised draft NPS.