UK CAA - No Backbone
Join Date: Jun 2006
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Missing the Point
One thing everyone seems to be missing is the desperate use of "security" to drive up the cost/income.
Once they have got a suitable price hike, then we will see a drop in the need for security, starting with the stupid bits that don't really make life any safer in the skies. This will make BAA even more profitable.
The only question is whether BAA & the CAA are working in collusion to do this.
Its just an old trick rehashed.
Once they have got a suitable price hike, then we will see a drop in the need for security, starting with the stupid bits that don't really make life any safer in the skies. This will make BAA even more profitable.
The only question is whether BAA & the CAA are working in collusion to do this.
Its just an old trick rehashed.
Join Date: Nov 2002
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Spitoon, with regard to BAA retailing I think you'll find that the increase in this activity was to "beat the regulator". As a company with a requirement to satisfy shareholders ( with dividend payments and a growth in share price ), the company had to find new ways to fund these payments, over and above the "allowed" rate of return and there are only two ways to improve profit margins and they are to increase income and to cut costs - every company knows and does this. If BAA hadn't done this, it would be accused of lack lustre management and sitting back, content to take the regulated return which in turn would impact it's share price, management and financial credibility and borrowing credit rating. (Bear in mind that these credibility issues come from short term city boys). The Regulator kick started this also by imposing a fairly hefty RPI minus 8 formula in the early years.
As each 5 year period was reviewed, and forecasts made for the following 5 years, it became a bit of a game really, BAA had to put in a forecast that looked reasonable, but beatable internally. In a way it became a circular argument, BAA input forecast retail income of £x, but needed to do £x+y to beat the eventual settlement. They would achieve this, so next time the forecast was £x+y, so reality needed to be £x+y+z.....hence, more shops.
If you read the CC report you'll see that they, and the CAA, now explicitly remark on both retail income and general cost forecasts, in the vein that they are under and over stated respectively. Mind you, it's about time someone understood this regulatory game......it would appear that the airlines haven't for the last 15 years, and the new owners and their advisors certainly didn't when they took over last year ( it says as much in one of the analyst briefing notes on the Ferrovial web site ! ).
As for cash flow, I'm afraid you are very wrong. From an operational point of view, it's positive, but after investing in Terminal 5 year on year, the bank balance is very much negative. The 2005/06 BAA accounts show cash in from operations of £977m but an outflow on investment of £1,517m, that's an outflow of over £500m, with debt up to £5.3bn.
Only Gatwick makes a significant positive cash flow. Which is interesting because that's the airport touted as 'for sale'. In the event of BAA break up, would they get rid of the "cash cow" (LGW) or the future earner (STN) ? If it's a competition issue, which one is the Heathrow competitor ? Now, or in the future ?
Red Top - I don't think it's that simple. Dft set the security requirements, BAA have to respond accordingly (eventually) and they would love to speed up the process NOW to get people through the search area and into the lounge where the shops are. It must be costing a fortune in overtime and temporary staff right now.
As each 5 year period was reviewed, and forecasts made for the following 5 years, it became a bit of a game really, BAA had to put in a forecast that looked reasonable, but beatable internally. In a way it became a circular argument, BAA input forecast retail income of £x, but needed to do £x+y to beat the eventual settlement. They would achieve this, so next time the forecast was £x+y, so reality needed to be £x+y+z.....hence, more shops.
If you read the CC report you'll see that they, and the CAA, now explicitly remark on both retail income and general cost forecasts, in the vein that they are under and over stated respectively. Mind you, it's about time someone understood this regulatory game......it would appear that the airlines haven't for the last 15 years, and the new owners and their advisors certainly didn't when they took over last year ( it says as much in one of the analyst briefing notes on the Ferrovial web site ! ).
As for cash flow, I'm afraid you are very wrong. From an operational point of view, it's positive, but after investing in Terminal 5 year on year, the bank balance is very much negative. The 2005/06 BAA accounts show cash in from operations of £977m but an outflow on investment of £1,517m, that's an outflow of over £500m, with debt up to £5.3bn.
Only Gatwick makes a significant positive cash flow. Which is interesting because that's the airport touted as 'for sale'. In the event of BAA break up, would they get rid of the "cash cow" (LGW) or the future earner (STN) ? If it's a competition issue, which one is the Heathrow competitor ? Now, or in the future ?
Red Top - I don't think it's that simple. Dft set the security requirements, BAA have to respond accordingly (eventually) and they would love to speed up the process NOW to get people through the search area and into the lounge where the shops are. It must be costing a fortune in overtime and temporary staff right now.
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No doubt the honeymoon is coming to an end for all those in the CAA. They haven't moved with the times and they have allowed the Airlines to make their own rules up as they go along. The shake up has been brought on by themselves, a combination of many errors during the last 6 years. Lets not forget the CAA is a Government agency and has to be accountable to the people that put them there in the first instance.
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The CAA is no different to any other Public Sector setup.
Steal taxpayers money, use it to build high quality office accomodation and car parking, give the staff 100% secure jobs, lots of cushy benefits and early retirement on fabulous pensions. Remove any other incentives to do a proper job to complete the process of setting up an organisation which achieves very little, very slowly at enourmous cost.
CAA, HM Government, Armed Forces, NHS, Royal Mail, Police, Firemen etc etc. All expensive failures.
Steal taxpayers money, use it to build high quality office accomodation and car parking, give the staff 100% secure jobs, lots of cushy benefits and early retirement on fabulous pensions. Remove any other incentives to do a proper job to complete the process of setting up an organisation which achieves very little, very slowly at enourmous cost.
CAA, HM Government, Armed Forces, NHS, Royal Mail, Police, Firemen etc etc. All expensive failures.
As Ron and Edna say, the UK CAA is no different to the Australian equivalent - in fact I'd say they'd run rings around CASA. Australian aviation is ever increasingly becoming self regulating (or self administrating as they like to call it but essentially it means the same thing).
Few qualified or current (operationallly) flying staff so they're reliant on the industry to largely regulate themselves.
As has been proven time and again in virtually every industry SELF REGULATION DOESN'T WORK.
VH-MLE
Few qualified or current (operationallly) flying staff so they're reliant on the industry to largely regulate themselves.
As has been proven time and again in virtually every industry SELF REGULATION DOESN'T WORK.
VH-MLE
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Has Europe left the CAA powerless
Is it the problem that Europe (and our own Government) has given to much say in the regulation of the industry to EASA and taken away the ability of our own regulator to use common sense. If the rules put in place are from politicians (and how much do they know about aviation apart from their club class seats, that we pay for) what hope is there for the national regulator to do something, we in the industry need to pressurise the MEPs to take the noses out, by writing and telling them that the systems are so much XX
XX
.
XX.
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I for one am looking forward to the report due out next year and I don't think it will be very complimentary.
I am looking forward even more to the BBC Dispatches programme after they put an undercover reporter into the CAA. I reckon heads will roll.
I am looking forward even more to the BBC Dispatches programme after they put an undercover reporter into the CAA. I reckon heads will roll.
POOR UNDERFINANCED OVER REGULATED HEATHROW ....... !!!!!
Come on, chaps, pull the other one.
"Financial developments (at Heathrow) in 2006 were positive, with revenues of 1,544.12 million euro and profits of 608.82 million euro"
and THAT'S from Ferrovial's own website !
http://www.ferrovial.com/en/index.asp?MP=21&MS=759&MN=3
So on revenue of just over £1bn for the year they make 40% profits. No wonder they paid £10.3bn for it.
By the way, the Heathrow figures do not include the World Duty Free operation, which is a separate division of BAA, with revenues of a further 575 million euro.
http://www.ferrovial.com/en/index.asp?MP=21&MS=769&MN=3
Come on, chaps, pull the other one.
"Financial developments (at Heathrow) in 2006 were positive, with revenues of 1,544.12 million euro and profits of 608.82 million euro"
and THAT'S from Ferrovial's own website !
http://www.ferrovial.com/en/index.asp?MP=21&MS=759&MN=3
So on revenue of just over £1bn for the year they make 40% profits. No wonder they paid £10.3bn for it.
By the way, the Heathrow figures do not include the World Duty Free operation, which is a separate division of BAA, with revenues of a further 575 million euro.
http://www.ferrovial.com/en/index.asp?MP=21&MS=769&MN=3
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<<Steal taxpayers money, use it to build high quality office accomodation and car parking, give the staff 100% secure jobs, lots of cushy benefits and early retirement on fabulous pensions. >>
Acbus1 - you don't work for the Daily Express by any chance? That's the sort of tripe they write.
Most of the staff receiving "fabulous pensions" have contributed to them and, compared to workers in the private sector, they are not well paid. I worked for one organisation - variously known as Min of Aviation, BoT, CAA and NATS - for over 30 years but do not recall receiving any "cushy benefits". Please elucidate?
Acbus1 - you don't work for the Daily Express by any chance? That's the sort of tripe they write.
Most of the staff receiving "fabulous pensions" have contributed to them and, compared to workers in the private sector, they are not well paid. I worked for one organisation - variously known as Min of Aviation, BoT, CAA and NATS - for over 30 years but do not recall receiving any "cushy benefits". Please elucidate?
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Elucidation?
Unfair prices charged for the services given. Anyone think the CAA charges are outrageous? Universal agreement against the CAA there, I think.
Anyone been to CAA Gatwick? I thought I'd stumbled across one of the plusher airport hotels! Staff buses, on site parking, a restaurant on a par with aformentioned hotels, massive choice, subsidised prices. "Everyone out" if the aicon doesn't control the temperature to required limits (a neighbour gets extra holidays for exactly that reason).
Public Sector. 100% secure jobs. Remember? Come on! Wake up at the back!
On site parking (free), staff buses, fabulous restaurant, hotel standard offices, aircon.....jees! you tell us!
The great UK divide. Private sector workers pay for their pensions. Trouble is, they don't often see them when its pay out time. Final salary pensions are dying in the Private Sector. Inflation proofing is virtually non existant. Many pensions are rendered worthless before retirement as schemes close. Retirement at 65, severe penalties for early retirement (assuming its granted). Retirement at 68 due to be enforced. Public sector? Final Salary, early retirement, normal retirement at 60 maximum (much less for many sectors), full inflation proofing, cast iron security.
As if 100% secure jobs isn't enough. Given that protection, who needs to perform? The salary wil keep coming in, because you ain't going to be sacked or made redundant! Just sit back and wait for the pension. Why bother working too hard?
Which also completes my elucidation, as requested.
This is acbus1, Daily Express, home computer, elucidating on the bl**din obvious.
Steal taxpayers money.
use it to build high quality office accomodation and car parking.
give the staff 100% secure jobs.
lots of cushy benefits
and early retirement on fabulous pensions.
Remove any other incentives to do a proper job
to complete the process of setting up an organisation which achieves very little, very slowly at enourmous cost.
This is acbus1, Daily Express, home computer, elucidating on the bl**din obvious.
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The report is by the competition commission and has indicated that the Government agency has not regulated the various airports around the UK in the manner it should of. It said that the CAA has no backbone.
The CAA’s mission is to provide best practice regulation and expert advice that are independent and enable civil aviation to best meet the needs of its users and society in a safe and sustainable manner.
Best practice regulation in a safe and sustainable manner is hardly REGULATION FOR SAFETY. There is no leadership from the very top.
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Slight problem, though.
The CAA has managed to get the Transport Select Committee on their side by pressing the 'anti-EASA' button. As a result they have started to regain some confidence that they will not only survive, but even grow.
They are still very much the bully, as they are happy to pick on the small guys (GA) whilst buckling under from pressure from the airlines and airport operators.
The CAA has managed to get the Transport Select Committee on their side by pressing the 'anti-EASA' button. As a result they have started to regain some confidence that they will not only survive, but even grow.
They are still very much the bully, as they are happy to pick on the small guys (GA) whilst buckling under from pressure from the airlines and airport operators.
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They are still very much the bully, as they are happy to pick on the small guys (GA) whilst buckling under from pressure from the airlines and airport operators
