UK Hub Airport Decision
THE UK’S HUB AIRPORT DECISION AND THOSE WHO ARE INVOLVED?
A collective noun for a gathering of UK Airport Operators could be…a hub!
Hub and hubs certainly was the subject that dominated the two-day conference event in London this week.
The large gathering of so many high-flyers from the world of air transport were there either as delegates or speakers and made it one of their best attended according to the AOA Chairman Ed Anderson.
As diverse in personalities as Michael O’Leary from Ryanair and venture capitalist such as Jon Moulton who has investment access to billions of pounds through UK Regional Growth Fund in which he is a member of their Advisory Board.
Politicians from both sides of the House of Commons, Robert Goodwill MP, Parliamentary Under Secretary of State for Transport made his first public speech whilst the Shadow Minister for Aviation Labour’s Gordon Marsden MP was in his role too having come from Business Industry and Skills brief.
Although Mr O’Leary does have great deal to say on just about every issue involving air travel which in turn makes him a popular speaker for sure but much of the conference was hanging on every word from Sir Howard Davies who is Chairman of the Airports Commission.
He will be the man who will to some degree decide on what could be the UK’s air transport policy for the next 50 years. As his report about the UK maintaining its international hub status and its location is what the delegates were itching to get a clue about.
In truth I thought many were waiting for any kind of verbal slip from him as he spoke or as he was questioned by Radio 4’s John Humphrys even a Freudian slip would have done, something that the conference could go away and make plans with or indeed planes with but alas and alack Sir Howard came through with not one.
Whether he has made that decision or not at the moment well he has to sit on it for another 20 months as the current Government don’t want him to blurt out any clues until after the next election in 2015, that in it’s self is quite a task to not once at party, function or family gathering mention the decision or decisions.
Mind you some bets from the experts are on runways at Heathrow, Gatwick and Stansted! Michael O’leary was quick to jump in with the quote “That will be p***ing off the NIMBY’s at all three London airports”. Gatwick CEO Stewart Wingate says that their case is strong with land ready to build on and finance they just need a green light.
It is not just the airport infrastructure in the South East that is on Sir Howard’s mind in reaching a decision, he has to look into the whole country and also environmental impacts such as sustainability, noise and pollution. Road, rail connections in and around any such development all have to be taken into account plus looked at in a huge amount of fine detail.
There were lots of positives to come out from various speakers like London City has increased its business trade by 65%, Ryanair is the biggest carrier with 81 million passengers flying with them now, Willie Walsh CEO of International Airlines Group which includes BA Iberia he predicts that all of IAG will be in profit next year!
Now for the bad s, well as far as the UK airline industry is concerned, firstly APD or Air Passenger Duty this was a question that was fired at nearly every speaker.
The amount that UK passengers pay is the highest in the world many countries are in fact dropping their own charges as they have realised that it helps to drive tourism away and that some tourists from the UK would rather fly to a European hub airport where the taxes there are lower or none at all. Netherlands have dropped their charges Ireland will be doing similar, others like Denmark, Norway and Malta have too!
For instance a family of four flying to Florida fro the UK pays an APD of £268, fly from Germany and that drops to £154. Charges like those in the UK do impact and affect tourism was the argument coming from the industry. As Mr O’Leary says the airline industry is an “efficient tax collector for a lazy Government” another speaker said that “we are more highly taxed and eye wateringly so” referring to APD.
Other complaints include Visa’s some changes have been made but more needs to be done to make it easier to get tourists into UK PLC and spend their money there, rather than in Europe where it appears to be more attractive to those coming from the emerging market of China for instance.
Another moan from one speaker who said that fixed terms for Ministers of Transport would be a help as often Ministers are changed frequently and never got to tackle what are often very long term projects when it comes the airline industry.
The current Under Secretary of State who spoke had just started his job but will he still be there in 2015 after the election or will he have been moved on even before then?
Around the country there are many what are called regional airports but even within the industry they admit that larger is better, although some are run efficiently and are profitable some have recently been taken into what is public ownership like Glasgow Prestwick and Cardiff according to one investment speaker. One speaker said Exeter he believed was bought for far too much money and it also came with loads of debt!
Local airports are important and do feed into larger hubs so good connections around the UK are essential. Even a big player like Virgin Little Red a short haul operation has recently been flying with aircraft at 33% or 34% capacity in the previous 6 months. But Joe Thompson Director of Short Haul did say that they are building passenger numbers and November is already 30% higher than the last few months, and those passengers are going on to fill long haul seats on their other routes that would not normally be filled.
A clearer picture of UK airports will emerge in December when an interim report will be filed by Sir Howard but in the meantime we will all still have to wait and see.
Its rather like being in the clouds and then suddenly descending and there laid out before you is the earth and a clear view of it all but it looks like we will be the clouds for yet some time to come!
