Meetings (ITM), says that while Heath- row expansion is a “top priority”, more needs to be done to keep up with the UK’s European competitors. “A second runway is also needed at Gatwick, and investment must be made to improve capacity at other airports in the south and across the regions,” he adds. Some still believe that this process will ultimately lead nowhere – Willie Walsh, CEO of British Airways’ parent company International Airlines Group (IAG), is “sceptical about the deliverability of any runway expansion at Heathrow”. Even if Heathrow gets clearance for a new runway, a row is brewing over who will pay for it. Walsh has vowed that IAG will “not pay” for the runway, adding it would be “outrageous to burden passengers with the cost of such expensive infrastructure”. The British Air Transport Association
(BATA), which represents UK-based air- lines, is concerned a new runway would be “pre-funded” with passengers paying higher airport fees before construction is completed. IATA has also fired a salvo in Heath-
row’s direction on this subject, with CEO Tony Tyler saying: “Pre-funding the construction is not an acceptable option for airlines. Pre-funding would mean that airlines serving Heathrow today would foot the bill for new competitors to come into the market.” This seems to explain Easyjet’s enthu-
siastic support for Heathrow expansion at the expense of Gatwick, where it is cur- rently the largest operator. CEO Carolyn McCall says Easyjet would establish a base at Heathrow if a new runway is built so it could offer competition on many domestic and European routes. So who will pay for a third runway?
Will corporate travel budgets ultimately pick up a big chunk of the tab? Julie Cope, operations director for Chambers Travel, believes that “ultimately the cost will sit with the consumer” through higher airfares and airport taxes, although fares could eventually come down due to the extra capacity provided. Paul East, chief operating officer of
Wings Travel Management, says there is a “fine balance” for airports when choos- ing how to fund expansion. “If Heathrow believes it’s going to be able to increase
BUYINGBUSINESSTRAVEL.COM
So who will pay for a third runway? Will corporate travel budgets ultimately pick up a big chunk of the tab?
landing charges to pay for it – the airport will become uneconomical,” he adds.
INTERIM PLANS With a new runway at least ten years away, what happens in the interim with Heath- row already full and Gatwick approaching capacity? Other airports have suggested they can step into the breach during the next decade, including London City (LCY). The airport is allowed to increase flights from 75,000 to 120,000 annually, but cannot
utilise this new capacity because Mayor Boris Johnson has blocked permission for the extra aircraft stands needed – a decision which the airport is appealing against. “We simply require permission to
expand the airport’s existing infrastructure in order to inject much-needed capacity into the London system,” says the airport’s CEO, Declan Collier. “Extra capacity could be in operation at LCY within 18 months.” Meanwhile, Birmingham has urged the
government to “move ahead with caution so as not to damage the ability of regional airports to grow”, with the airport’s CEO Paul Kehoe highlighting its flights to Beijing as a sign of the importance of direct routes from UK regional gateways. “The Midlands is a powerful engine of growth and needs direct aviation to succeed,” he adds. Now the Airports Commission has finally made its long-awaited – and fairly predictable – recommendation, the funda- mental political arguments have resumed after several years in the long grass. Over to you, Mr Cameron – we will be watching.
AIR PASSENGER DUTY AND THE REGIONS…
TRAVEL ISSUES DID NOT GET MUCH OF AN AIRING during the UK general election campaign, but the impact of the devolution of Air Passenger Duty (APD) to Scotland, and potentially Wales, did merit one mention by Prime Minister David Cameron. Regional airports in England have expressed their concern about the impending devolution of APD to the Scottish Parliament, especially with the ruling Scottish National Party vowing to cut rates and, eventually, abolish the tax on flights from airports north of the border. The government is also currently examining
the case for allowing APD to be devolved to the Welsh Assembly. Cameron has
admitted these moves could “harm” some regional English airports and the Treasury has published a discussion paper on “options for supporting English regional airports” following the devolution of APD.
Newcastle
International’s CEO, David Laws, has predicted that the abolition of APD in Scotland would “penalise people from the north-east that want to fly from their local airport”, and lead to the loss of around 1,000 jobs in the
region by 2025, with a “significant impact” on passenger numbers. Bristol airport’s CEO Robert Sinclair adds: “Without similar measures for regional airports in England, devolution of APD to Wales would simply result in the redistribution of passengers from Bristol and other English airports to Cardiff, but with no benefit to UK plc.” The government says it is looking at three options for English airports, including devolving or varying APD rates within England, or providing aid to regional airports.
BBT SEPTEMBER/OCTOBER 2015 61
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