| SSE NEWS ARCHIVE - April to June 2006
25 June 2006
THE PANEL REPORTS ON THE EAST OF ENGLAND PLAN
The Report recommends that specific policies
supporting expansion of Stansted airport are removed
In the words of the panel: "The decision on the future expansion of Stansted Airport is a momentous issue for the East of England Region, and one on which many participants and others maintain strong views. However, as we made clear during the EiP preparatory process, it is not for the East of England Plan or the EiP to review Government policy as contained in the Air Transport White Paper (AWTP) or to consider the fundamentals of air traffic growth."
"…the growth of traffic on the current runway is likely to proceed at whatever pace the market dictates until such time as the operator's long term confidence results in a decision to proceed with a second runway. Although supported by the AWTP, a second runway remains to be brought forward and considered through the proper statutory processes. It is in that sense immaterial whether the RSS 'supports' one runway or two, and we consider that the first sentence of draft policy ST5 and similar references in E14 and the supporting text are inappropriate."
Policy ST5 has been eliminated and policy E 14 has been modified.
OUR COMMENT: Exactly the same considerations apply to the current application by BAA to increase the number of flights each year and remove the cap on the number of passengers. It has to be considered through the proper statutory processes, which includes the Environmental Impact Assessment. Uttlesford Council have invited members of the public to put their view to the Development Control Committee during the first week in July. If you wish to participate contact the Council on 01799 510510. Don't forget that formal comments should be sent to the Council by June 30th. The reference is UTT/0717/06/FUL, the address, Uttlesford District Council, London Road, Saffron Walden, CB11 4ER
25 June 2006
NIGHT FLIGHTS MUCH WORSE FOR GLOBAL WARMING
Steve Connor, Science Editor - The Independent - 15 June 2006
Restrictions on night-time aircraft flights could help in the fight against
global warming as well as making life easier for people living near airports.
A study found the condensation trails, or contrails, left by the exhaust of
aircraft engines contribute more to global warming during the night than by
day. The effect was greater in the winter when nights are longer than during
The scientists behind the study, published in Nature, said the
results suggest rescheduling flights for the day could help minimise the
impact of aviation on climate change.
Contrails are clouds of tiny ice particles that reflect light and heat. They
have opposing effects on the Earth's natural greenhouse effect. They tend to
trap more heat leaving the ground than they reflect back into space.
But the amount of heat they trap depends on what time of day the contrails are
produced because during day the trails reflect more incoming sunlight from
space than they trap.
NIGHT FLIGHTS TWICE AS BAD FOR ENVIRONMENT - STUDY
David Adam, Environment Correspondent - The Guardian - 15 June 2006
A nationwide ban on night flights would significantly reduce the aviation industry's impact on the climate, a new study shows. Scientists have found that the warming effect of aircraft is much greater when they fly in the dark, because of the effects of the condensation trails (contrails) they leave.
Piers Forster, an environmental scientist at the University of Leeds who led the project, said: "Night flights are twice as bad for the environment. If the government wanted to reduce the likely impact of aviation on climate then it could ensure that more flew during the day."
Writing in the journal Nature today, Dr Forster and his colleagues say aircraft contrails enhance the greenhouse effect because they trap heat in the same way as clouds. During the day, their warming effect is not as pronounced because contrails reflect sunlight back into space, which helps to keep the planet cool. This means contrails are responsible for about half of the aviation industry's impact on climate.
Dr Forster added: "Aircraft currently only have a small effect on climate. However, the fact that the volume of air traffic is set to grow rapidly in coming years makes it important to investigate the effects of contrails on our climate."
Shifting all UK night flights to the daytime would save the equivalent of 2.5% of the UK's annual carbon dioxide emissions, he said.
The team studied flights crossing the UK at night, not takeoffs and landings from its airports, but campaigners say both will increase as air traffic increases. The number of overnight takeoffs and landings at so-called designated airports - Heathrow, Gatwick and Stansted - are currently restricted, but flights into other airports face few controls.
The scientists monitored air traffic over the UK and worked out that, although one in four flights occurred between 6pm and 6am, they contributed 60-80% of the warming that could be attributed to contrails. Winter flights had more effect than those in the summer, contributing 50% of the warming despite providing only 22% of traffic.
Nicola Stuber, a meteorologist at Reading University, said the warming effect of contrails was roughly the same as that caused by the carbon dioxide emitted from an aircraft's engines.
The team looked at contrails that lasted for an hour or more over south-east England, passed by aircraft heading for the north Atlantic. They combined flight data with measurements from weather balloons to predict whether flights would form contrails or not. They found that contrails formed more easily when conditions high in the atmosphere are very humid, as they are during the winter.
25 June 2006
MORE CONCERN ABOUT CLIMATE CHANGE
EU greenhouse gases rise again in 2004
ENDS Europe DAILY 2122 - 22 June 2006
The latest official EU greenhouse gas data has revealed that
emissions of the six Kyoto protocol gases increased for the second
year running in 2004. EU emissions rose by 0.4%, and 0.3% in the old
EU-15, the European commission and European environment agency (EEA)
reported on Thursday. They had increased by 1.5% the previous year
(EED 21/06/05 http://www.endseuropedaily.com/19041).
Commenting on the data, EU environment commissioner Stavros Dimas
called for greater decoupling between economic growth and greenhouse
gas emissions. He added that member states had a "major opportunity"
to reverse unsustainable emission trends in their national allocation
plans for the second phase of the EU emission trading scheme, due by
the end of this month.
EU-15 emissions are now just 0.9% lower than in 1990, against the
bloc's Kyoto commitment to achieve -8% during 2008-12. It would be
politically embarrassing for the EU if emissions exceed the 1990
baseline in 2005. Emissions of carbon dioxide are already 4.4%
higher than the baseline.
The rising trend in greenhouse gas emissions calls into question
official optimism that the EU can still meet its Kyoto emission
commitment with little or no recourse to overseas emission credits.
Only last December the European commission projected that the EU-15
could achieve -6.8% or even better by 2010 (EED 01/12/05
The main reason for the overall emissions increase in 2004, according
to the EEA, was a 1.5% rise in CO2 output from road transport.
Emissions of CO2 from the steel industry and oil refining were also
up. The agency also reports higher hydrofluorocarbons (HFCs)
emissions from cooling and air conditioning systems.
In country terms, the largest increases are in Spain and Italy. This
is due to a switch to fossil fuels in Spain to make up for a
shortfall in hydro power caused by drought. Higher CO2 emissions from
oil refining and road transport are to blame in Italy, EEA says.
Reductions were achieved in Germany, Denmark and Finland. Denmark
brought down its emissions from 6.3% above 1990 levels in 2003 to
1.8% below. Others like Luxembourg drifted further away from their
Kyoto target, with emissions going from 11.5% below levels to 0.3%
However, several countries seem to change their baseline emissions
year-on-year, which makes it difficult to track their progress
towards targets. In particular, previous EEA data show that the UK
revised its 1990 baseline upwards from 746 to 767m tonnes of
CO2-equivalent between 2002 and 2004.
OUR COMMENT: These figures do not include any contributions from aircraft emissions, rising world wide and especially in the UK - supported by the government's current expansion policy in the AWTP. Increasing air traffic in China and India is inevitable and justified, but if further damage to our climate is to be avoided the west must manage their own expansion, including tourist traffic. Other ways of travel need more encouragement.
17 June 2006
CLIMATE CHANGE A BIGGER SECURITY THREAT
THAN TERRORISM, SAYS REPORT
Richard Norton-Taylor - The Guardian - 12 June 2006
The government's obsession with the "war on terror" is counterproductive and distracting politicians from more fundamental threats to global security, a leading UK think tank warns today.
The most likely causes of future conflict are climate change, competition for natural resources, social and economic marginalisation and militarisation, it says.
The independent Oxford Research Group says in its report Global Responses to Global Threats that the effects of climate change - displacement of peoples, food shortages, social unrest - have long-term security implications far greater than those of terrorism, and notes that the Pentagon's office of net assessment takes the same view.
However, it adds that the response to climate change should not involve greater reliance on nuclear power because this would encourage the spread of nuclear weapons and increase the risk of terrorists getting hold of them.
Deepening global socio-economic divisions will be a serious trend, it says: "The marginalised majority is increasingly likely to support political violence against the rich minorities of the world."
Separately, Hans Blix, the former UN weapons inspector, will today in the Commons present MPs with his new commission's report on how to rid the world of weapons of mass destruction. Among his recommendations is a commitment by states to remove all their nuclear weapons from foreign soil.
The US has more than 100 nuclear weapons at its Lakenheath base in Suffolk, an arms control group says. A Greenpeace poll found 60% of Britons did not know or did not believe it.
17 June 2006
ACTION AND INACTION
Airline plan to pay for emissions is blocked by Germans
Ben Webster, Transport Correspondent - Times Online - 12 June 2006
GERMANY'S biggest airline is blocking a British plan to make passengers pay for the environmental damage caused by their flights.
Lufthansa has rejected proposals put forward by British Airways for an emissions-trading scheme, under which airlines would buy permits to cover their production of carbon dioxide.
Britain strongly supports the scheme and, with the backing of France and the Scandinavian countries, hopes to introduce it within Europe by 2008.
The scheme would add up to £6 to the cost of an airline ticket, depending on the length of the flight and the market price of permits. The European Commission is studying the idea and is expected to produce firm proposals in September.
But Lufthansa is lobbying heavily against the scheme in Brussels and is trying to persuade politicians from Germany and other countries to vote against it. The airline has infuriated BA by issuing statements claiming that the scheme could cost airlines more than £1 billion a year and burden them with an "unacceptable cost risk".
Wolfgang Mayrhuber, the chief executive of Lufthansa, said that climate change was a global issue and that it would be better to wait for a worldwide scheme covering all airlines rather than focusing on a solution within Europe.
He told The Times: "We want to understand the consequences before we go for emissions trading. It would be better to work on improving technology to reduce emissions as this will help everybody."
But BA believes that it is important to act now on aviation emissions because the industry is fast becoming the scapegoat of environmental groups across Europe. Aviation is the fastest-growing source of greenhouse gases, and flights within Europe are due to double by 2020.
Andrew Sentance, the head of environmental affairs at BA, said that Lufthansa had exaggerated the costs. While he was unable to say how much the scheme would cost airlines, he insisted that it would be affordable and far cheaper than the alternative of a flat-rate tax on flights.
Dr Sentance said: "We accept that there are risks to airlines, but we can work to manage those risks. It is better to co-operate with the policymakers devising the scheme. That way we can influence the outcome."
Roger Wiltshire, the secretary-general of the British Air Transport Association, which represents 13 airlines, including Virgin, bmi and BA, said that Lufthansa could undermine the whole initiative.
If airlines failed to co-operate with emissions trading, he said, the European Commission could seek to impose a tax on flights that would leading to a steeper rise in ticket prices.
Jeff Gazzard, the co-ordinator of the GreenSkies Alliance, a coalition of environmental groups, said: "Lufthansa are pretty determined not to pay one euro towards the climate damage their flights cause and are going all out to wreck the Commission's proposals."
17 June 2006
TURN DOWN HEATING TO HELP HIT KYOTO TARGETS, HOUSEHOLDS TOLD
Fiona Harvey - Euractiv.com - 1 June 2006
European households will be urged to turn down their heating and switch off electrical appliances as part of an official drive to reduce greenhouse gas emissions and meet Kyoto protocol targets.
The new European Commission campaign, aimed at raising awareness of how simple actions can have a significant impact on climate change, comes amid warnings from officials yesterday that consumers and the transport sector must take more responsibility for reducing emissions.
The campaign is an answer to complaints from industry leaders who say businesses bear too much of the burden of cutting greenhouse gas emissions, through the European Union's emissions trading scheme.
Stavros Dimas, the environment commissioner, told the Financial Times: "This is also good for people's pockets, as they will reduce their energy use."
Turning down heating systems by 1ºC and switching appliances off rather than leaving them on standby could reduce emissions from consumers, who account for a quarter of all greenhouse gas emissions in Europe, by between 5 and 10 per cent.
Mr Dimas said the EU had introduced a series of regulations aimed at reducing emissions, such as minimum standards for buildings and the labelling of electrical goods according to their efficiency, but consumers must be educated to change their behaviour. Drivers will also come under pressure to improve their fuel economy, by accelerating and braking more slowly and maintaining a good tyre pressure - moves that can reduce fuel use by a third.
The Commission also has a voluntary agreement with the car industry to reduce emissions from vehicles, which could become mandatory after 2008 if targets are not met.
Brussels is further putting pressure on member states to submit proposals for imposing emission cuts on businesses during the second phase of the emissions trading scheme, from 2008 to 2012.
The deadline for the proposals, which should be based on an average 6 per cent cut in emissions, is June 30 but at least one member state - the UK - is likely to be late.
Mr Dimas defended the emissions trading scheme, which has been criticised in recent weeks after revelations that member states had issued businesses with a surplus of permits to produce carbon dioxide.
For the scheme to work, companies must be issued with fewer permits than they need to cover their carbon dioxide output, giving them an incentive to cut greenhouse gases.
Mr Dimas blamed the surplus on business optimism: "Companies over-estimated what their growth would be, because businesses are always optimistic about their growth, and member states were too complacent [about the scheme]."
OUR COMMENT: Every section of society should be cutting carbon emissions. That includes aviation.
17 June 2006
WHAT OF THE FUTURE?
Plane fumes are not toxic
Dunmow Broadcaster - 8 June 2006
A. BOWDEN incorrectly claimed in the letters page on May 11 that Stansted Airport uses 30 per cent of the water supply in Essex. Given current headlines regarding water usage I want to clarify this issue.
Stansted Airport uses about 715,000 cubic metres per annum. When compared to the annual figure for Essex, which is over 473 million cubic metres, Stansted accounts for around 0.15 per cent of Essex's total usage.
Another point raised was that of washing aircraft and the water wasted doing this. Aircraft aren't cleaned for cosmetic reasons, but for reasons of safety. The ground handling agents at Stansted are currently trialling a dry wash system, which will remove the necessity to use water for this - but in the meantime, recycling systems are being installed into new vehicle washing facilities, which will stop water being wasted.
Finally, the comment that aircraft fumes are highly toxic is confusing and could easily cause needless stress to people living in the area.
Air quality is monitored by the airport and Uttlesford District Council. All government standards are being met and there are no highly toxic levels of nitrogen dioxide or any other pollutant present.
Environment Manager, Stansted Airport
OUR COMMENT: Mr Cornell may be technically correct at the present time, BUT what most residents are concerned about is the future, if Stansted expands, even to the full use of the present runway, what will happen to those toxic gases (mainly nitrogen oxides)? Will the extra water required mean that households may have to be restricted? This area is the driest in the UK and already we have a hosepipe ban and dire warnings about water shortages. BAA's assessment of the effects of their application to expand are as bland as Mr Cornell's letter and need a very careful analysis of their optimistic assumptions.
10 June 2006
MORNING MANOEUVRE DEFEATED GOLDMAN IN BAA RACE
The Lex Column - Financial Times - 9 June 2006
Until yesterday morning the future of BAA hung in the balance, in spite of the recommended offer of 9501/4p from a consortium led by Spain's Ferrovial. Some nifty regulatory footwork followed by a swoop into the stockmarket yesterday morning, finally forced a rival Goldman Sachs-led consortium to cede the field.
Ferrovial's triumph in the battle for the British airports operator must be all the sweeter, because Goldman might well have been willing to offer a higher price. Does that mean that BAA's board should have held off accepting the Ferrovial offer, which included a 1% break-up fee? Agreeing to a fee helped to scupper the chance of a slightly higher price for shareholders but this was not a dead cert.
Conceding a break-up fee allowed the BAA board to secure an offer that was considerably higher than had seemed feasible at the start of this saga. Nor is the lesson that break-up fees should be banned. The Takeover Panel rule limiting the size of break-up fees to 1% of the value of the bid - much lower than in the US - provides sensible protection for shareholders.
The BAA recommendation late on Monday was followed by some aggressive share-buying by Ferrovial on Tuesday and again yesterday morning, taking its stake to 29%. The latter was possible following the rather timely approval by the Australian Foreign Investment Review Board (both buyer and seller have assets there), no doubt expedited by the well-connected Macquarie Bank, which advised Ferrovial.
But whether it was lucky timing, clever tactics by Ferrovial, or even a subtle preference on the part of BAA's management, the airport operators have more cause to celebrate than complain.
OUR COMMENT: After weeks of financial manoeuvres the fate of Britain's major airports is finally decided. Like many other public services they are now in the hands of foreign companies. It remains to be seen what plans emerge from their new management, and whether Ferrovial will follow the government's environmentally disastrous expansion policies.
10 June 2006
RUNWAY CAMPAIGNERS VOW TO FIGHT ON
Annie Davidson - East Anglian News - 7 June 2006
A GROUP of determined campaigners who are battling the expansion of Stansted
Airport have promised to continue their fight when a new owner takes over. Yesterday airport operator BAA backed a takeover bid headed by Spanish firm
A decision will be made in two weeks time whether ownership of airports
including Stansted, Heathrow, Gatwick and Glasgow will be handed over.
And The Stop Stansted Expansion (SSE) campaign group, which is fighting
against plans for a second runway at the Uttlesford airport, said it hoped a
new owner would re-think the proposals.
Spokeswoman Carol Barbone said last night: "If it (Ferrovial) wants to make
a good return to its shareholders then not expanding Stansted would be the
best option for all concerned."
News of an 'alternative capital expenditure plan' for Stansted has been
outlined in a document by Ferrovial's bid vehicle the Airport Development
and Investment (ADI), which some have speculated could mean the second
runway plans are in doubt.
Mrs Barbone said: "When a company does a take over bid it means it thinks it
can run the other company more effectively and make more profit. It is difficult to see how Ferrovial could make a second runway
commercially viable. There is no evidence to date that BAA could do it."
But she warned that SSE would continue its fight against the second runway
for as long as it took to overthrow it. Mrs Barbone added: "If Ferrovial thinks it can get away with expanding on
the cheap at the expense of local residents and a heavy cost to the
environment it has another think coming."
A spokeswoman for Stansted Airport denied the expansion plans were in doubt
and said Ferrovial was fully committed to enhancing airport capacity in the
UK especially in the south east of England. Ferrovial said it had no plans to break up the UK estate and said it was
committed to the existing capital expenditure programme of BAA.
BAA resisted the approaches of Ferrovial for more than three months, but
admitted its own valuation had been reached after a late-night auction took
place ahead of a deadline for Ferrovial to table its final offer.
The US-based Goldman Sachs-led consortium, which made a rival offer, said it
was reviewing its position and urged BAA shareholders to take no action on
the Ferrovial offer in the meantime.
Ferrovial has more than 78,000 employees and a presence in 40 countries and
already owns 50% of Bristol Airport, all of Belfast City Airport and 20.9%
of Sydney Airport in Australia.
10 June 2006
CHOCKS AWAY FOR BAA'S FLIGHT TO HIGHER VALUE
Daily Telegraph - 7 June 2006
Spain's Ferrovial consortium is poised to clinch the airports operator. Alistair Osborne tracks the luggage to this point.
There's a tipping point in all bid situations when a company either sees off its predators or signals it is ready to succumb.
For BAA, that point was reached 12 days ago when the airports operator posted a half-baked final defence document. The promised £750m cash return was far too low to put the frighteners under any bidder, while the board's teasing 940p-per-share valuation simply gave suitors something to shoot for.
Even more telling, BAA and its defence team started muttering that breaking up its London airports monopoly - Heathrow, Gatwick and Stansted - could actually create value for shareholders.
Having spent its entire corporate life since 1987's privatisation arguing exactly the opposite, BAA's abrupt U-turn was as comic as it was jaw-dropping - even allowing for that morning's bombshell from the Office of Fair Trading, saying it was going to look at the case for breaking up the London airports.
While BAA's management - led by chief executive Mike Clasper and chairman Marcus Agius - are a good deal more enlightened than their predecessors, it was a bit late for the company to be changing its tune.
It is because BAA has for far too long thought like a monopolist that it is about to fall into foreign hands, with the Ferrovial consortium in pole position over a rival bid group, led by Goldman Sachs.
The Stop Stansted Expansion campaigners have an obvious axe to grind but in a catty press release entitled Bye Bye BAA, they made a good point: "Although privatised almost 20 years ago, BAA continued to behave like a Government subsidiary and considered itself immune from any threat to its position."
Few companies have ever been privatised with a dowry like BAA's - ownership of London's three main airports, including the world's busiest, Heathrow, which together handle 92pc of passengers coming into the capital. Moreover, although regulated, BAA was handed a growth business, with passenger traffic increasing by an average of 4pc a year as far over the horizon as anyone could see. Successive managements singularly failed to capitalise on this legacy.
As the first airports group ever privatised, BAA could have used its London base to build an impregnable position around the world, snapping up foreign rivals - a position now usurped by relative upstarts such as Ferrovial and Australia's Macquarie. Instead, before last December's £1.3bn acquisition of Budapest airport, its biggest overseas foray was the disastrous acquisition of retailer World Duty Free Americas.
Neither did BAA capitalise on the growth of low-cost airlines. Certainly, it priced landing charges at Stansted so far below the regulatory cap that Ryanair and easyJet were able to build soaraway businesses from their base at the airport. A more entrepreneurial BAA, however, might have tried to capitalise on the growth by taking a share of any revenues above a certain level, badgering industry regulator, the Civil Aviation Authority, if necessary, to allow it to do so.
Instead, for years, BAA sat back and managed the business as if it was a dull utility, while Heathrow and Gatwick (admittedly hindered by the snail-pace of planning approval for new facilities, such as Terminal 5) grew ever more congested. Content to screw the best deal possible out of the CAA, BAA failed to do the logical thing and gear up the business to maximise equity returns.
As Ferrovial said the result has not been pretty. Over the past one, three and 10 years, BAA has underperformed the FTSE Utilities index, FTSE 100 and FTSE All Share on the basis of total shareholder returns (capital growth plus dividends).
In an age of cheap money, this left BAA vulnerable to attack from a smart, financially driven bidder. While the Ferrovial consortium has paid a decent price - £10.3bn including BAA's 15.25p final dividend - it is not hard to see why it thinks it can improve BAA's performance.
For starters, it is using the private equity trick of gearing up BAA with about £7bn of additional debt to maximise equity returns. This adds risk, but given that 75pc of BAA's business has steady regulated returns, it's a risk it can take. The CAA is hardly likely to let Heathrow go bust. To soup up the returns, Ferrovial will use structured debt, with different forms of financing for BAA's regulated airports and the non-regulated ones, such as Budapest and its Australian interests.
Ferrovial is also hinting at selling off some of the non-core airports, possibly including one or more of BAA's Scottish trio, while analysts see plenty of upside from its direct involvement in construction projects. With a major construction wing, Ferrovial will repatriate many of the revenues ensuing from BAA's £9.5bn 10-year investment programme.
There is another opportunity too. Ferrovial has bought an option on breaking up BAA's London monopoly, whose regulated asset base will rise from £10bn today to £12bn by 2008 with the opening of Terminal 5 at Heathrow.
Currently BAA is allowed to make a 7.75pc return on its regulated airports, with Heathrow's regulated asset base (Rab) valued at about £7.3bn, Gatwick's £1.6bn and Stansted's, £1bn. Amid airlines' complaints that such returns - above BAA's cost of capital - encourage it to "gold plate" investment, analysts expect the CAA to reduce allowable returns at the next five-year review period from 2008. This, though, would do little to address a major problem - that BAA's charges for landing at its regulated airports are far to low, given the scarce capacity.
As Mark McVicar, an analyst at Dresdner Kleinwort Wasserstein, argued in a recent note, 20 years of utility regulation have left Heathrow "underpriced and undervalued in relative economic terms... Capacity can be better rationed through something closer to open-market pricing, having the effect of driving out the operators of small aircraft or uneconomic routes who are only using Heathrow because of the artificially low aeronautical charges, thereby freeing up capacity, lowering the investment requirement of BAA and reducing the planning and environmental pressure."
This a seductive political argument. Ferrovial could offer to break up BAA's monopoly in return for lighter regulation. It could sell Gatwick, for example, allowing it to compete with Stansted. Free of the regulators, Gatwick could be worth towards £1bn more than its Rab value, but there would be an even more dramatic impact on Heathrow. Assuming lighter regulation - effectively ending the current practice whereby retail revenues subsidise low landing charges -Heathrow could put its landing charges up.
McVicar reckons Heathrow's Rab value would rise by £3.3bn, worth more than 270p per share. Whether BAA would be allowed to keep this is a moot point. McVicar suggests a windfall tax, while another analyst, Andrew Fitchie at Collins Stewart, warns. "It remains uncertain how the regulator would deal with any windfall." Even so, it illustrates the value that Ferrovial - or Goldman - could potentially unlock in the future. It's a pity BAA was so slow in making the case itself.
10 June 2006
DEAL WILL HASTEN NEW RUNWAY, SAYS AIRLINE CHIEF
Ben Webster, Transport Correspondent in Paris - Times Online - 7 June 2006
FERROVIAL'S takeover of BAA will accelerate the building of a third runway at Heathrow, British Airways said yesterday.
Willie Walsh, chief executive of British Airways, said that the Spanish infrastructure group had indicated a firm intention to continue to develop Heathrow beyond the completion of Terminal 5 in 2008.
Speaking to The Times at the International Air Transport Association (IATA) conference in Paris, Mr Walsh said: "I have no doubt Ferrovial will be committed to investing in Heathrow. The conversations I have had with them indicated to me that they were serious investors interested in the long term.
"Given the premium they are paying, I am convinced they will be very focused on developing Heathrow and adding to its capacity. I am more optimistic now that the third runway will happen sooner rather than later."
BAA had pledged to build a second runway at Stansted before adding a third at Heathrow. However, by far the greater demand for extra capacity is at Heathrow, which will have room for 30 million extra passengers when Terminal 5 opens, but no extra slots on runways.
Mr Walsh welcomed statements by the Civil Aviation Authority (CAA) that bidders for BAA should not expect to be allowed to raise airport fees to cover costs of burdening BAA with debt. "I am confident that the regulator will do the right job and make sure that quality of service at Heathrow is safeguarded," he said.
Mr Walsh refused to be drawn on BA's view as to whether BAA should be broken up after the current Office of Fair Trading inquiry into its near-monopoly on airports in London and Scotland.
However, bmi, the second-largest customer of BAA, called for more competition between airports. Nigel Turner, bmi's chief executive, said: "Regulators must take a rigid stand and use any change in ownership as an opportunity to review some critical questions about the strategic importance of the UK's airports.
"Effective monopolies in London and in Scotland are not healthy for the consumer and airlines alike. Divestment of interests in Scottish airports is long overdue. Now must be the time to look at all of these ownership issues."
"Competition among airlines has been of tremendous benefit to travellers, yet this same healthy competition has been desperately lacking between the major airports of the UK."
Robert Milton, chief executive of Air Canada, voiced concern that the takeover of BAA would result in higher airport charges. "It's hard for us to paint a happy picture," he said.
Giovanni Bisignani, IATA's director-general, said that the CAA had let BAA make huge profits at airlines' expense. "The takeover is a wake-up call for the UK regulator," he said.
ClearSkies, which represents people living under Heathrow flight paths, said that it was mustering an international "armada" of volunteers to take direct action to block construction of a third runway. John Stewart, its chairman, said: "Such is the growing anger across the country about the effects of airport expansion that Heathrow residents will not be alone in opposing further expansion."
OUR COMMENT: Not even Ferrovial's bargaining skills can whisk away the pollution from Heathrow, already above legal limits. The official DfT Project for a sustainable Heathrow has been busy trying to achieve a promise of cleaner air with more flights. Their results remain to be published, - and examined.
10 June 2006
BUSINESS LEADERS CALL FOR BLAIR TO ACT ON ENVIRONMENT
Lucy Killgren - FT.com - 6 June 2006
Fourteen business leaders, from companies such as Shell, Tesco, BAA and Reckitt Benckiser on Tuesday wrote an open letter to the prime minister urging him to take tougher action on climate change.
The move, which was broadly welcomed by environmental campaigning groups, is backed by members of the Corporate Leaders Group on climate change which includes James Smith, chairman of Shell UK, Mike Clasper, chief executive of BAA and Sir Julian Horn-Smith, deputy chief executive of Vodafone as well as Lucy Neville-Rolfe, company secretary of Tesco.
The group, brought together by the Prince of Wales's business and environment programme, has put together an open letter which sets out seven areas of concern. It pushes for greater certainty about the long-term value of emissions reductions by setting targets for 2025. The letter also underlines the importance of low carbon technologies, scaling up low-carbon investment in fast-developing countries and improving energy efficiency in the commercial sector.
The move by the group contrasts with those in industry who have argued that stricter targets would be bad for competitiveness. The Confederation of British Industry has said in the past that business was performing well in keeping emissions down and it was now up to consumers now to do their bit.
In October last year the business body backed the government's goal of cutting carbon dioxide emissions relative to 1990 levels by 60 per cent by 2050. But it said that it would be difficult to meet the government's target to cut emissions by 20 per cent by 2010.
The signatories also called for the government to stimulate consumer action on climate change and raise public awareness as well as strengthening product and building regulation, including energy saving in the home through energy saving domestic appliances and electrical products.
Charlie Kormick, head of the climate change campaign at Greenpeace the environmental lobby group, said:
"This is a clear challenge from progressive businesses saying lets get real about climate change. Rather than lobbying to cut emissions targets, they are taking a longer term view. I think what is interesting is the range of players involved. This makes it harder for the heel draggers who oppose cuts in emissions."
Friends of the Earth, the campagning group also welcomed the move. Its director, Tony Juniper, said: "This is exactly what is needed if we are to tackle climate change and ensure that the British economy reaps the rewards of going green. Companies can lead by example and take steps to cut emissions from their own operations."
10 June 2006
RYANAIR SAYS FUEL COSTS COULD SLOW PROFIT GROWTH
Helen Thomas - FT.com - 6 June 2006
Ryanair said on Tuesday that profit after tax, adjusted for exceptional items rose 12 per cent to €302m in the year to March, from €268m. However, Europe's biggest low-cost airline warned investors only to expect growth of between 5 to 10 per cent in the current year if oil prices remained at $70 per barrel.
Ryanair had, at the nine month stage, fully hedged its fuel requirements to the end of March at $49 a barrel, but had still been unhedged for the 2007 financial year. On Tuesday, the company said it had now hedged 90 per cent of its needs from June to October at $70 per barrel.
Shares in the airline lost 1.9 per cent in early trade to €6.6.
Fuel costs rose 74 per cent last year, as the US dollar price of oil continued to skyrocket. Recent dollar weakness would help partially to offset the effects of oil prices, the company said.
Excluding fuel, unit costs fell 6 per cent, a smaller decline than some analysts had hoped for. Ryanair's net margin fell to 18 per cent across the year, down from 25.6 per cent in the more lucrative first half and a fall of 2 percentage points from last year.
"This robust performance validates our lowest fare/lowest cost model," said Michael O'Leary, chief executive, pointing out that other airlines fuel surcharges were driving customers to Ryanair. "We will continue to absorb significantly higher oil prices thanks to the benign yield environment and continuing unit cost reductions."
Mr O'Leary again took aim at BAA, the UK airports operator, whose board on Monday night agreed to recommend a takeover offer from Spain's Ferrovial after stonewalling its Spanish suitor for more than four months.
Ryanair's chief executive welcomed the announcement by the UK's Office of Fair Trading into BAA's control of the main London airports and accused BAA of "featherbedding its balance sheet, at the expense of airline users and the travelling public."
Ryanair's yields - average fare prices - rose 1 per cent across last year despite a 27 per cent expansion in capacity. Ryanair said that it expected to carry 42m passenger in the coming year, a 20 per cent rise, but warned that yields would remain flat.
Total revenues rose 28 per cent to €1.7bn.
The airline is close to finalising plans to launch a mobile phone service on board flights next year and website gambling to boost its ancilliary revenues. Last year ancilliary revenues - from sources such as commission earnings on internet sales of car rental, travel insurance and hotel bookings - grew faster than passenger volumes, up 36 per cent to €259.2m.
OUR COMMENT: A pity Ryanair did not join the business leaders' call to Tony Blair!
7 June 2006
AFTER ALL THE TALKING - GOODBYE TO BAA
BAA recommends Ferrovial takeover Offer
Financial Times News Alert - 6 June 2006
The board of BAA, the world's biggest airports operator, agreed late on Monday night to recommend a takeover offer of 950.25p a share from a consortium led by Spain's Ferrovial after a tense head-to-head fight against a rival bid from a grouping led by Goldman Sachs, the US investment bank. On Tuesday the BAA board said the Ferrovial offer represented an "attractive price" for BAA.
The airports group said Ferrovial offered 950.3p a share, including a proposed final dividend of 15.25p a share. In morning trade BAA shares were up 2.2 per cent at 948.3p. However, the Goldman Sachs consortium said on Tuesday in a statement that it had offered 955.3 p a share, also including the 15.25p final dividend, arguably offering BAA shareholders the better deal.
BAA would still be open to the Goldman Sachs consortium to return to try to win BAA board backing, however, for a higher offer by the June 16 deadline agreed by the Takeover Panel on Tuesday.
The Goldman-led consortium on Monday night appealed to the Takeover Panel on the grounds that Ferrovial had breached the 60-day timetable. The Ferrovial offer values the BAA equity at £10.3bn ($19.3bn). Together with net debt of £5.3bn it places an enterprise value on BAA of £15.6bn, making it one of the largest foreign takeovers of a FTSE-100 company.
It will be the biggest takeover ever made in the global airports industry, where BAA has widespread interests including seven airports in the UK and other operations in Hungary, Italy, Australia and the US. If Ferrovial succeeds in closing the deal it could face a far-reaching investigation by the UK Office of Fair Trading, which potentially could lead to the break-up of BAA's London airports monopoly.
7 June 2006
GOLDMAN MIGHT RAISE BAA BID
AS COMMONWEALTH BANK MAY ADD CASH
Bloomberg - 5 June 2006
Goldman Sachs Group Inc. may raise its offer for BAA Plc, the world's largest airport operator, after Commonwealth Bank of Australia said it's considering contributing more than A$1 billion ($751 million) to a bid.
Australia's largest asset manager is part of a Goldman-led group and is reviewing options, Sydney-based Commonwealth said today. BAA rejected an initial offer of 870 pence a share, or 9.4 billion pounds, from the group in April, and Goldman has until June 9 to say whether it will make a formal bid.
BAA, owner of London's Heathrow airport, is fighting off bids from Goldman and Grupo Ferrovial SA, Spain's second-biggest building company. Ferrovial will today raise its offer to 915 pence a share, the Wall Street Journal reported today, citing people familiar with the matter.
"They are monopoly-type assets and the revenue streams are very stable,'' said Peter Vann, who helps manage $1.1 billion at Constellation Capital Management in Sydney, which holds Commonwealth Bank stock. "Anything to do with infrastructure is popular and sexy, but there's growing competition for assets.''
Shares in BAA rose as much as 11 pence, or 1.2 percent, to a record 916 pence and were trading up 0.3 percent as of 9:05 a.m. in London. They've surged almost 39 percent since Ferrovial, based in Madrid, said on Feb. 8 it may bid.
"We continue to look at our options,'' a spokesman for the Goldman-led bidding group said.
Managing A$137 Billion
Commonwealth's Colonial First State Global Asset Management arm manages A$137 billion and is seeking investments in airports and utilities that it bundles into funds and manages for a fee. Macquarie Bank Ltd., Australia's No. 2 asset manager, oversees stakes in six airports, including Rome, Copenhagen and Brussels.
London-based BAA on May 30 rejected a 900 pence a share offer from Ferrovial. Goldman Sachs and its bidding partners said in April they were prepared to pay 870 pence a share. The Goldman-led group may offer 950 pence a share, the Financial Mail reported yesterday, without citing anyone.
Goldman's bidding partners include Borealis Infrastructure Management Inc., a unit of the Ontario Municipal Employees Retirement Fund, and American International Group Inc., the Sunday Times newspaper reported on June 4.
Colonial already owns stakes in airports in the Australian cities of Brisbane, Perth and Adelaide. Chief Executive Officer Warwick Negus, 44, worked at Goldman as an asset manager and banker for nine years. He quit in 2002 to start Australian fund manager 452 Capital before joining Colonial last year.
Commonwealth Bank stock was unchanged at A$44.10 at the close of trade in Sydney. It's risen 17 percent in the past year, the same as the gain in the eight-member S&P/ASX 200 Banks Index.
Colonial may join the bidding for BAA amid rising passenger traffic and steady earnings at the U.K. company, which also runs airports in Italy, Hungary and the U.S.
BAA last month forecast passenger growth at its three London airports, where fees are regulated, will be 3 percent a year for the next decade. BAA is fending off bids as the U.K.'s Office of Fair Trading said it may investigate BAA's dominance of U.K. airports. An investigation might lead to the breakup of the company's seven U.K. airports, which include Scotland's Edinburgh, Glasgow and Aberdeen.
The southeast of England will generate 300 million passenger flights a year by 2030, from 117 million in 2000, the Department for Transport has forecast.
'No Formal Decision'
Ferrovial has to make any higher bid by today, under U.K. takeover rules.
"No formal decision has been made by the consortium with regards to a possible offer,'' Negus said. "Colonial will continue to look to create new investment opportunities for our clients in both Australia and around the world,'' he said.
Colonial agreed in September 2005 to pay 25 million pounds for 13 percent of Inexus Group Holdings Ltd., a U.K. gas pipeline owner, as part of a group led by Sydney-based Challenger Infrastructure Fund.
"There's a fair bit of interest in infrastructure funds at the moment,'' said Paul Xiradis, who helps manage $5 billion at Ausbil Dexia Ltd. in Sydney, which holds Commonwealth shares. "Colonial sees management fees and performance fees, and they've seen money being made by the likes of Macquarie Bank.''
Sell Airport Stakes
Airports account for A$844 million of the A$1.12 billion of infrastructure funds managed by Colonial. It bought stakes in Brisbane and Adelaide airports when they were privatized in the past decade.
Ferrovial on March 29 added Macquarie Bank as an adviser on its BAA offer, removing a potential counter bidder. The builder also agreed to sell stakes in airports in Sydney and Bristol to Macquarie Airports, a fund set up by the Australian bank, for as much as 754 million euros ($976 million) should its bid succeed.
Citigroup Inc. is also advising Ferrovial, which is bidding with Caisse de Depot et Placement du Quebec, a Canadian pension- fund manager, and GIC Special Investments Pte Ltd., a Singapore- based investment company.
TO BE OR NOT TO BE
BAA - Bids, battles and speculation
BAA touts £2.5bn sale of Gatwick
George Trefgarne - Sunday Telegraph - 4 June 2006
BAA, the besieged airports operator, has valued Gatwick airport at £2.5bn, more than twice its book value, and has sounded out investors on the potential break-up of the company.
Executives of the airports company have spent the past week meeting shareholders to stress the hidden value in the group that could emerge if it stayed independent.
On Friday the Spanish construction giant Ferrovial launched a massive dawn raid on BAA's stock, but it largely failed as big shareholders such as Schroders, M&G and Threadneedle refused to sell their shares.
Under an Office of Fair Trading investigation, BAA's London monopoly could be broken up. But the so-called "break-up option" was also said to be a contributory factor in BAA's shares shooting up by 85p on the week to close at 905p, above the level at which Ferrovial is pitching its offer for the company.
The theory among BAA's major shareholders is that with an Office of Fair Trading investigation under way, BAA's London monopoly could be broken up, which could lead to a looser regulatory regime.
Ferrovial must now make a final offer by tomorrow and its bankers are holding a crunch meeting this evening to decide how to proceed. It is currently offering 900p a share and there is speculation that it will allow shareholders to keep a 15p dividend, thereby increasing its offer a third time. BAA claims the company is worth at least 940p.
A second consortium, led by Goldman Sachs, the investment bank, could also make a revised offer above its initial approach of 870p. It has been given a deadline by the Takeover Panel of the end of the week.
One person present at BAA's shareholder meetings said: "The top 20 shareholders, who own about 45 per cent of the shares, are pretty well rock solid. The discussion was all about the option value over a break-up. Should that value go to existing shareholders or be handed over to Ferrovial?"
The ownership of BAA affects millions of people. Not only are 10 per cent of its shares owned by 350,000 investors who bought when it was privatised 20 years ago, but London is the world's largest aviation city, handling 122m passengers a year.
Any break-up is months away at least. BAA believes it would be worth it only if the regulatory regime is loosened, because landing charges at Heathrow and Gatwick are massaged down by the Civil Aviation Authority. The OFT inquiry could take up to six months; if the matter were referred to the Competition Commission, the review could last another year.
One complicating factor is BAA's labyrinthine £8bn debt structure. About £2bn of its outstanding bonds are secured on specific assets, including Heathrow, Stansted and Gatwick airports.
According to one banker who has examined BAA's balance sheet in detail, a break-up of the company could trigger a cascade of penalties which would cost the company about £700m.
However, that is disputed. A different source claimed that BAA could sell 30 per cent of its assets without triggering the redemption penalties. As Gatwick makes up only about 15 per cent of BAA's assets, a sale would be possible without upsetting the company's delicate debt structure.
Until the OFT investigation began, BAA had always resisted the idea of abandoning its monopoly. A valuation of Gatwick at £2.5bn is reached by assuming that BAA could make a margin of £5 a passenger, £1 more than now.
On that basis, Gatwick's underlying profit this year would be £170m. If that were put on a multiple of 15, as used in recent airport deals, it would value Gatwick at £2.5bn. No one from BAA was available to comment.
BREAKING UP IS HARD TO DO
George Trefgarne, Sunday City Editor - Sunday Telegraph - 4 June 2006
Mike Clasper, BAA's chief executive, is jubilant. Ferrovial's attempt to buy a 15 per cent stake in the besieged airports operator on Friday was a spectacular flop. In the end it managed to acquire only around 3 per cent. The traditional long-only funds, such as Schroders and M&G, were having none of it. They are sticking with BAA as a long-term investment.
But this is, nonetheless, a critical weekend for BAA; Ferrovial could raise its offer tomorrow. Furthermore, even if that flops too, a consortium led by Goldman Sachs is waiting in the wings.
We are very close to the board being forced to talk to its predators and a fully fledged auction developing for the company. If that happens, Heathrow, Gatwick and Stansted, the busiest cluster of airports in the world, could be in foreign hands within months.
So Clasper needs to raise his game. Until now the company has relied on a conventional defence, promising a return to shareholders of £700m. For 20 years BAA has refused to contemplate the beautiful truth that it should be broken up.
If all the different airports competed with each other, the regulatory regime would be looser and value would be created. Ferrovial and Goldman know this and that is why they are effectively bidding for an option over the break-up value.
Now that the Office of Fair Trading has intervened, Clasper and his chairman, Marcus Agius, should advocate, publicly and forcefully, breaking the company up. In the short term, that would be fearfully difficult and expensive, not least because it might trigger a restructuring of BAA's gothic pile of debt, some of which is secured on individual airports.
But in the long term it is the right thing to do - for the company, for its shareholders and for the millions who use London's overcrowded airports every year.
GOLDMAN TO MAKE £10BN MOVE FOR BAA
Dominic O'Connell and Mark Kleinman - Sunday Times - 4 June 2006
A CONSORTIUM led by Goldman Sachs is preparing to launch a £10 billion counterbid for BAA in response to an expected increased offer from Spain's Ferrovial.
Ferrovial and its advisers, Citigroup and Macquarie, were holding meetings this weekend ahead of tomorrow's deadline for the submission of an improved offer. Ferrovial has already offered BAA shareholders 900p a share, valuing the airports group at £9.5 billion.
City sources expect Ferrovial to improve its offer in the hope of securing a recommendation to accept from the BAA board, which has said the company is worth at least 940p a share. But BAA's board is unlikely to grant a recommendation until it hears from the Goldman team.
Last month The Sunday Times revealed Goldman was preparing a "white-knight" bid, and it is understood the consortium is still keen to trump any Ferrovial offer.
Goldman has bolstered its team by recruiting Colonial Insurance, an Australian firm that is part of the Commonwealth Bank group. The other members of its consortium are two Canadian pension funds, Borealis and Ontario Teachers, and AIG, the American insurance giant. The Goldman group has until this Friday to decide whether to make a formal takeover bid for BAA or walk away.
Sources close to the Goldman camp said last night that they were serious about making an offer, but would not go hostile. Nor would they join the fray if Ferrovial offered a knock-out price, the sources said.
BAA, the owner of seven of Britain's largest airports, including Heathrow, Gatwick and Stansted, has been a target since Ferrovial confirmed its interest in February.
The battle heated up on Friday when Citigroup, which is advising and part-funding the Ferrovial consortium, mounted a raid on BAA's shares. Broking sources said the bank had sought 150m shares "a 15% stake" but it was not clear when the market closed on Friday how many shares it had actually bought.
Sources close to BAA said last night it was still confident of retaining its independence, but most transport bankers believe the company will fall to either Ferrovial or Goldman.
"I think two things are certain, that BAA will be sold and that BAA will be broken up," said one banker.
The Office of Fair Trading recently launched an investigation into BAA's market dominance that could result in a call for its break-up. Analysts also believe the company would be worth more if it were broken up.
Ferrovial said in its most recent offer that it would consider the sale of BAA‚s foreign airports to help reduce debt if it was successful in its bid. To allay fears about its ability to meet BAA's investment commitment, the runway at Stansted - a key plank of the government's airport policy.
Spanish group has told regulators that it would set up a special £2 billion debt facility to give flexibility on capital spending.
BAA BOARD REJECTS FINAL FERROVIAL OFFER
Richard Orange - Business Online - 4 June 2006
SPANISH construction giant Ferrovial will on Monday unveil a raised final offer for airports operator BAA that falls far short of the £10.2bn ($19.2bn, E148bn) the company's board is demanding.
The Business understands that Ferrovial's advisers presented their final offer to BAA on Friday in a last-minute attempt to win the management's support. But in an emergency board meeting on Friday night, BAA's board opted to reject the bid. This indicates that Ferrovial's final offer failed to meet the 940p per share that BAA has laid out as the bottom line to win board approval.
After the meeting, advisers of Ferrovial and consortium partners Caisse de Depot et Placement du Quebec and GIC Special Investments held talks well into Friday night to determine the exact terms of their offer. But by Saturday morning the final offer document was already being printed ahead of being posted to BAA shareholders for Monday's deadline. A bid of 910p would value the firm at £9.9bn.
The Ferrovial consortium last Tuesday hiked their initial 810p bid to 900p, adding more than £1bn to the offer price. BAA shareholders last week welcomed the increase, but many said they would need an offer of 950p before Ferrovial's offer becomes "interesting".
Stephen Furlong, analyst at Dublin-based Davy Stockbrokers, said he believed the Ferrovial-led consortium will come back with an offer nearer 910p. He said: "Clearly this is the last day that they can raise their price so they will be looking to prevent Goldman Sachs from coming in. At 900p the price is close, I would expect one final tweak to the bid – perhaps the low nines or 910p."
Ferrovial may be forced to go beyond the £10bn mark by the presence of a Goldman Sachs consortium on the sidelines. To pass the symbolic £10bn mark requires a bid of 923p.
The Ferrovial consortium's attempt to block a rival bidder by instructing its advisers, Citigroup, to buy a 14% stake in a dawn raid on Friday failed when only 3% of shareholders agreed to sell at the 900p offered. The news pushed BAA's shares to an all-time high on Friday, closing up 27p to 905p valuing it at £9.8bn.
A spokesman for Goldman Sachs said the consortium was still "actively looking" at the situation. He pointed out that the takeover panel would have forced Goldman Sachs to declare that it was no longer interested if it had not been able to convincingly demonstrate its readiness to bid. Goldman has until Friday to make its offer.
BAA shareholders, led by Schroder Investment, Invesco Asset Management, M&G Investment and Scottish Widows, will have 14 days to accept or reject the highest offer.
STANSTED? A PAWN IN THE BATTLE?
BAA will sell Gatwick to keep Stansted
Tony Quested - Business Weekly - 4 June 2006
Airport owner BAA would be prepared to sell Gatwick Airport so it could keep its prized assets of Stansted and Heathrow in any break-up ordered by competition tsars, Business Weekly understands.
Airport owner BAA would be prepared to sell Gatwick Airport so it could keep its prized assets of Stansted and Heathrow in any break-up ordered by competition tsars, Business Weekly understands.
Multi-billion pound investment has already been committed to the long-term development of both Stansted and Heathrow but Gatwick has reportedly been earmarked as a potential makeweight if the Competition Commission is called in to oversee an end to a perceived BAA monopoly of London's airports.
While some industry analysts have been predicting that Stansted would have to go in any break-up, management is taking a different view. The reasons Stansted is the most sought-after of the three BAA London airports are exactly what make it most attractive to keep and nurture - providing massive long-term benefits for the owner.
Gatwick, on the other hand, is under the twin clouds of legal restrictions and lack of real growth prospects so there are limits to the progress BAA could achieve there.
Gatwick as a stand-alone purchase would still make an attractive option for potential buyers without forcing BAA to part with the ŒCrown Jewels‚ Stansted and Heathrow. Expect a price tag of around £2.5bn to be placed on a Gatwick sale. BAA may even consider the Gatwick sell-off option even before the Office of Fair Trading makes any official recommendations to the Competition Commission, we understand.
OFT felt obliged to reveal that it was looking at BAA's so-called London monopoly to be fair to both BAA and the international consortia involved in hostile takeover bids.
Both the Ferrovial and Goldman Sachs-led groups are thought to be considering fresh offers for BAA.
The stakes were raised when rejected a hugely sweetened offer from Spanish group Ferrovial of 900p a share - valuing the UK business at £9.73bn. Although the offer was 11 per cent higher than the original bid, BAA smashed the hostile move out of court. It is believed that BAA has also rejected an approach from US bank Goldman Sachs. But the bidding won't stop there.
Ferrovial and Goldman Sachs are believed to be gathering even larger war chests to make an offer BAA can't refuse at well over £10 bn. Both the hostile bidding consortia are making sure their intentions are made known to BAA shareholders, caught in the middle like a card player with a stutter, not knowing whether to stick, twist or fold.
BAA's own defence strategy includes a pledge to return £750m to investors if a hostile takeover bid fails so there is hardly any need for stockholders to do much more than sit back and wait and see what unfolds. They are certainly not going to lose out.
Heathrow, Stansted and Gatwick together handle 90 per cent of passengers in the London area and 63 per cent nationally. The UK government is backing a second runway at Stansted amid growing clamour against the further growth of Heathrow, buoyed by BAA's commitment to invest £9.5bn in upgrading its airports over the next 10 years as well as focusing on the growth potential of its assets.
The Government is keen to see BAA stay in British hands, otherwise its entire long-term aviation strategy for the UK could be blitzed.
STAKEBUILDING IS THE PERFECT ATTACKING
AND DEFENSIVE STRATEGY FOR AN M&A GAME PLAN
Lina Saigol and Neil Hume - Companies UK - 3 June 2006
The purchase of a strategic stake in a listed company is one of the oldest M&Atactics in the City of London. Whether to block an unwelcome bidder or to gain a voice in the boardroom or to force a higher offer from a rival bidder, stake building is as in vogue as ever.
Grupo Ferrovial attempted yesterday to deploy the tactic as part of its hostile bid for BAA, the airports group which owns Heathrow and Gatwick.
However, the raid, launched ahead of this Monday's final deadline for Ferrovial to improve its offer, failed. Citigroup, the Spanish group's advisers, had tried to buy 150m shares, or about 13 per cent, at 900p.
The move echoed a more successful one by Nasdaq, the US-based stock exchange, which last month raised its stake in the London Stock Exchange to 25.1 per cent. Although this stake is not sufficiently large to block an alternative offer, it has acted effectively as a significant barrier for any competing bidder.
This is not a new tactic but a recent change in the Substantial Acquisition Rules (SARs) has made it easier to build stakes in public companies. SARs were introduced 26 years ago following a series of corporate assaults in the late 1970s and were designed to limit the speed at which a stake of more than 15 per cent could be acquired. This was designed to allow the board of the target company time to respond.
Under the old rules, corporate raiders could only acquire 14.9 per cent of a company in a day. They then had to wait a week before acquiring a further 9.9 per cent followed by a further seven days before picking up another 4.9 per cent. Now, there is no restriction on the speed at which a 29.9 per cent stake can be built in a public company. However, shareholders are still required to make a full offer for a company once their holding rises above this threshold.
Bankers and brokers are divided over whether the rule change will increase takeover activity. While the rules have made it easier to purchase a large stake, in practice it still remains difficult to buy more than 14.9 per cent in one day. This is because shareholders suspect a takeover approach or some other form of corporate action will follow a dawn raid.
Activist investors such as JO Hambro Capital Management say the rule change has made little difference because they only require a holding of 10.1 per cent to requisition extraordinary meetings. Moreover, they usually work with existing shareholders when they attempt to shake up underperforming companies.
However, activists such as Vincent Bolloré are unlikely to be shaken by the new rules. The French investor's modus operandi typically involves stalking a company by gradually building a stake over a long period.
Indeed, Mr Bolloré first started building a stake in Aegis last year and he now holds more than 29 per cent of the UK group. This device has helped unnerve the incumbent Aegis management but can also force them to radically restructure their business in order to maximise shareholder value.
"Buying stakes in target companies can be used to prevent a rival bidder from gaining full control of that target," says Liam Beere, managing director at UBS.
Indeed, Mr Bolloré became chairman of Havas last year after employing a similar tactic - he built a stake of slightly more than 20 per cent and demanded boardroom representation.
Another reason for building a stake during a hostile situation is that if a bidder loses out to a rival, the stakebuilder may still cover his costs by stirring take-over interest and achieving an eventual profitable exit.
Robert Tchenguiz, the property investor, recently acquired an 8.5 per cent stake in Mitchells & Butlers through Violet Capital, his investment vehicle.
The move came just a few days after the UK's second biggest pub group rejected a 550p-a-share cash offer from Mr Tchenguiz. Although under Takeover Panel rules Mr Tchenguiz cannot make another hostile bid for M&B for six months, he may very well be able to recover the costs of his earlier failed bid. As one corporate financier wryly points out: "Stakebuilding is just a bit of insurance cover."
REGULATORY SOUR SPOT
Dan Roberts - Companies UK - 1 June 2006
The trouble with market forces is they have a habit of rooting out political patch-ups and picking at the stitching until something comes loose. The queue of advisers looking to "help" Eurotunnel out of its denial phase is one example. Another is the upsurge of interest in acquiring regulated utilities, such as BAA.
Partly, this reflects the innocent desire to find safe long-term earnings streams to match the long-term liabilities of pension fund and insurance investors. It also reflects a desire to exploit the implicit tensions in many regulated industries, particularly the debate over how much debt companies can withstand.
Mike Clasper, BAA's chief executive, talks of finding the regulatory sweet spot by tweaking the balance sheet to give the most back to shareholders while reassuring the regulator there is enough flexibility to weather the ups and downs of running an airport. Ferrovial, which has to make its mind up today or tomorrow on whether to raise its takeover offer, clearly believes there is another sweet spot involving more debt. But what if neither is right? The more investors try to milk this monopoly for all it is worth, the harder it is to protect the interests of customers fully.
For this reason, the Office of Fair Trading's decision to review BAA's monopoly status is sensible. What is less clear is whether someone in government thinks this will somehow act as a deterrent to a bidder. Opening up London's airports to competition is just as likely to make them more valuable, especially if price regulation is partially lifted in exchange. Freeing Gatwick, for example, could add £900m to BAA's value, if it were priced on the same multiple as other unregulated airports, such as City.
The trouble is no one knows whether this will be the result of the OFT inquiry. For Ferrovial. even a 25 per cent chance of a break-up could provide the incentive it needs to bid a few more pence. For BAA shareholders, a bird in the hand may be worth more than two in the regulatory thicket. If the OFT and Civil Aviation Authority hoped their intervention might preserve BAA's awkward half-way status, it seems to have backfired.
7 June 2006
MEPS WANT "POLLUTER PAYS" PRINCIPLE
APPLIED TO AIR TRAFFIC
At last, some sanity. While business interests battle over the future of BAA and expansion prospects are promoted as the best option, the problems for the future remain unsolved. How to curb aviation emissions? How to prevent dangerous climate change?
News Airline - 1 June 2006
A draft resolution voted on by the European Parliament's Environment Committee suggests introducing a tax on kerosene and capping CO2 emissions from all flights departing and landing in the EU.
MEPs in the European Parliament's Environment Committee have voted unanimously in favour of a draft resolution calling for tough new measures to reduce the global warming impact of aviation and apply the "polluter pays" principle to the airline industry. The report will be submitted to the full House for approval at the July plenary session.
"Aviation is the fastest growing source of greenhouse gas emissions, with airlines currently taking almost no responsibility for the pollution they cause," said Caroline Lucas MEP (Greens/EFA, UK), the author of the draft resolution.
"The report recognises the need to level the playing field between aviation and other forms of transport," she said. To achieve this, MEPs supported the introduction of a kerosene tax for all domestic and intra-EU flights as a first step towards a global kerosene tax.
The Environment Committee also supported a Commission proposal to cap CO2 emissions for all airplanes departing from EU airports. Airlines would be able to trade their potential surplus 'pollution credits' on the EU 'carbon market' (Emissions Trading Scheme).
The Commission is expected to put forward a formal proposal to include aviation in the EU ETS by the end of the year.
2 June 2006
SPANIARDS OFFER ANOTHER £1BN
BUT HEATHROW OWNER REFUSES TO BUDGE
Andrew Clark, Transport Correspondent - The Guardian - 31 May 2006
The Spanish construction firm Ferrovial has seized the initiative in its struggle for Britain's dominant airport operator, BAA, by rasising its takeover bid by £1bn to £9.75bn and accusing the group's management over presiding over a litany of failures. Ferrovial, which had previously insisted that its interest was friendly, turned aggressive with a list of criticisms of BAA for falling short of traffic forecasts, proving unable to increase income from airport shops, delaying new runways and struggling to keep its costs under control.
The Madrid based firm increased its offer from 810p a share to 900p a share. The bid is likely to split invester opinion – some have indicated that "a number beginning with nine" would be sufficient, making for a potentially tense outcome.
Ferrovial pointedly stopped short of sayimg its offer was final, leaving the door open for negotiation. Insiders pointed out that the investment bank Goldman Sachs could yet step forward with a "white night" bid, having previously offered 870p a share.
BAA's chairman, Marcus Agius, was told of the higher offer by his Spanish counterpart, Rafael del Pino, at a brisk meeting in a neutral city venue, which lasted just 15 minutes on Monday afternoon. It was swiftly followed by a BAA board meeting, at which the directors unanimously rejected the approach. Mr Agius told the Guardian:, "It wasn't a long meeting because there wasn't a lot to talk about."
He said BAA had "no difficulty" in turning down the approach: "The number is higher but its still not a number we're willing to accept." Under the terms of Ferrovial's bid, shareholders would not be paid a final dividend of 15.25p due on August 11th. BAA argued that this meant that the offer was in effect only worth 885p a share.
The increased bid came less than a week after the Office of Fair Trading announced that it was considering a formal review of BAA's near momopoly. The company owns 7 airports in Britain including Heathrow, Gatwick, Stansted, Edinburgh and Glasgow. It handled 63% of passengers travelling to and from Britain last year.
Ferrovial was not deterred by the intervention but its advisers have expressed irritation at BAA's refusal to engage in negotiations over an acceptable takeover price.
In a lengthy critique, Ferrovial said BAA had undershot both its own and the Civil Aviation's Authority's traffic forecasts at its London airports for the last 3 years. It pointed out that retail income per passenger had been falling for the last 2 years and that a new runway at Stansted has been pushed back from 2012 to 2015 at the earliest.
The Spanish company has calculated that £100 invested in BAA a decade ago would have risen to £184, compared with £210 if invested into the FTSE Utilities index.
A source close to Ferrovial said: "Heathrow is not the most pleasant travelling experience and they (the Spaniards) have ideas in what can be done better."
BAA said the criticisms were "backward thinking" about events in the past. It has held out the prospect of a £750m handout to investors through a share byback if the takeover is rejected.
BAA's shares jumped 52.5p to 873p yesterday, staying below the bid price to indicate uncertainty about the takeover's chance of success.
Scottish Widows and Shroders, both shareholders which had publicly rejected Ferrovial's ear;ier bid, declined to comment on Ferrovial's higher offer. However, another large institutional investor told the Guardian: "It (the price) is getting there but we're not there yet. There's a lot of value in this franchise and 900p doesn't reflect a significant premium for it."
OUR COMMENT: It is clear that the protagonists in this battle have no thought for the environmental impacts of the services they are aiming to provide. We already know that the government is still refusing to consider any back tracking on their potentially disastrous aviation expansion policy. So, it is up to local people and local councils to make sure that, whatever happens to the ownership of BAA, they do not get permission to continue to expand beyond 25 mppa.
2 June 2006
MORE MUDDLED THINKING!
Airport owners must be brought down to earth
Carl Mortished - Times Online - 31 May 2006
WANT to know the future of airports? Visit your local bus shelter. It's drab and draughty, but it's functional and it's cheap, requiring minimal expenditure on maintenance.
It's an approach taken by Schiphol in the Netherlands at its new Pier H for low-cost carriers, an ugly steel corridor without loos. Kuala Lumpur built a new terminal in similarly austere style, and in Geneva the old terminal at Cointrin is to be refurbished sparingly for use by easyJet, the dominant carrier at an airport that used to pride itself on its VIP passenger profile.
The main problem with the bus shelter approach to airport terminals, apart from the lack of loos, is that it's bad business for airport owners and their friends in government. Politicians like flashy new bits of infrastructure that make great backdrops for press conferences, while endless building projects are essential if airport owners are to justify landing fee increases. BAA is accused by its domestic low-cost carriers of goldplating its Stansted expansion project. More telling is a lawsuit by Iata, the airline organisation, against Aeroports de Paris (AdP), the company that owns the three Paris airports — Roissy-Charles de Gaulle, Orly and Le Bourget.
Iata is seeking to annul the contract between AdP and the French Government, which permits landing fee increases of 5 per cent per year over the next five years. Carriers at Charles de Gaulle have borne the burden of a 26 per cent increase in fees over five years, those being some of the worst years in the history of commercial aviation.
The latest government- authorised increase is a particularly cynical piece of featherbedding as AdP is groomed for privatisation; an initial public offering to raise between €1 billion and €1.5 billion (£700 million and £1 billion) including €500 million of new money, is expected this week.
AdP does have a problem: it has been starved of capital under municipal ownership - the original ten-storey terminal at CdG, with its airborne escalators, now resembles a torture chamber for demented rodents. AdP says that it wants to spend €2.7 billion on new facilities and create more retail space, emulating the strategy of its main competitor, BAA. AdP also wants to boost its profit margin, currently 30 per cent of revenue, to BAA's lofty rate of 46 per cent, an extraordinary rent that is the principal lure for the various bidders that are circling the UK airports group.
Only yesterday Ferrovial, the Spanish building contractor, raised its offer to a princely £9.7 billion, some 21 times prospective earnings. BAA, too, reckons the coffers are full to the brim and the board, in an effort to persuade investors to stick with the current management, is promising a 40 per cent dividend increase and a £750 million share buyback.
The problem with airports is that they are not in the same business as airlines. BAA, privatised two decades ago, has seen its best business opportunities in stretching the rubber band that links it to its airline customers to virtual breaking point.
Airlines want two things from airports: low landing fees and rapid movement of happy passengers. Neither is in the interest of airport owners, who need to extract the maximum rent from the real estate they inherit. That means rack rents and fees and the imprisonment of passengers in vast shopping malls. There is a continuing struggle between the airlines that want to cosset premium passengers in cosy lounges and the airports' need for footfall in shops where the landlord dips into the retailer's turnover.
But what is of value to the airline? It is the right to land an aircraft, an obscure privilege that belongs to no one and which airlines trade secretly in an unregulated market. At Heathrow, landing rights can change hands for £10 million.
After two decades of pussy-footing, the Office of Fair Trading is finally going to have a proper look at the business of running parking bays for aircraft. BAA has toyed with a number of business models since its original sell-off, including non-airport property development and duty-free retailing. But the one that works best is squeezing more margin out of Heathrow, hence its big investment in a fifth terminal.
If the OFT is serious, it needs to go back to basics and consider what is of value and to whom. BAA should certainly be broken up, but so should AdP, and landing rights across Europe should be bought and sold freely at transparent prices on a regulated exchange.
2 June 2006
MP CALLS ON UTTLESFORD COUNCIL
Bishop's Stortford Citizen - 29 May 2006
STANSTED MP Sir Alan Haselhurst has called on Uttlesford District Council to "scrutinise rigorously" BAA's planning application for the existing runway at Stansted Airport.
The airport operator has submitted plans seeking an increase on the limits imposed three years ago by the council. It wants to have the current 25m passenger and 241,000 flights per year restrictions raised to 35m passengers and 264,000 flights.
But Sir Alan said BAA was becoming "more and more intrusive", adding: "The council needs to subject the application to scrutiny most rigorously in terms of health and enviromental impacts."
"We need to know what impacts the plans will make on noise, fumes and traffic build-up on roads and rails that are unfit for traffic. This has all been glossed over."
"The interesting thing is BAA arguing that all it wants is an increase on the limits imposed by conditions last time. Amazingly it says this does not require any construction works."
"This tells us a great deal about the way it operates by smoke and mirrors."
"The terminal is not yet expanded to accommodate 15m passengers but currently operates at 22m. BAA obviously has the scope in hand with regard to terminals and car parks."
"We've never got to grips with what BAA is up to."
2 June 2006
MEPS PUSH FOR INCLUSION
OF ALL EU FLIGHTS IN ETS
ENDS Europe DAILY 2106 - 30 May 2006
The European parliament's environment committee has called for all
flights to and from the EU to be included in the bloc's carbon
dioxide emission trading scheme (ETS). In a draft resolution adopted
on Tuesday MEPs said a revised ETS should cover all flights through
EU airspace. It also called for measures to tackle the sector's
non-CO2 climate impacts, such as the effect of contrails.
Green party rapporteur MEP Caroline Lucas said the resolution sent a
strong signal to the airline industry to take responsibility for its
emissions. "Given the non-CO2 impacts of aviation can be two to three
times more damaging than the CO2 impact, I welcome the committee's
endorsement of the need for these to be addressed in parallel," she
The resolution was adopted in response to a European commission
policy paper published last September on reducing the climate impact
of aviation (EED 27/09/05 http://www.endseuropedaily.com/19491). It
will now be forwarded to the parliament's plenary session.
Environment ministers backed the paper last year, also calling for
all flights, not just those within the EU, to be included in trading
(EED 02/12/05 www.endseuropedaily.com/19952).
MEPs said a separate pilot trading scheme for aviation should be set
up between 2008 and 2012, with the sector fully included only after
this date. The carbon allocation should be in line with the EU's
Kyoto protocol targets and allowances should be auctioned, MEPs said.
A global trading scheme for aviation emissions should be established
as soon as possible, they said.
Any move to include non-EU carriers in the ETS is likely to provoke
confrontation with the USA, which wants its airlines excluded from
the scheme (EED 30/11/05 http://www.endseuropedaily.com/19933). MEPs
called on the commission and council to defend this approach against
"possible attacks" by third countries.
The European commission is is due to publish draft revisions to the
EU ETS directive, including provisions on aviation, before the end of
the year. The decision on whether aviation will be incorporated into
the ETS before or after 2012 will depend on how quickly the revisions
can be finalised by EU institutions, a spokesperson told ENDS.
Meanwhile, a stakeholder working group set up by the commission to
make recommendations on the best way of integrating aviation into the
ETS has failed to offer proposals on key issues,
www.endseuropedaily.com/19491). The group's final report
reveals that no agreement was reached on which flights should be
covered by the scheme. A member of the working group told ENDS that
another key question - that of how to establish emissions limits for
aviation - was not broached due to a lack of consensus.
2 June 2006
UNFCCC TALKS SET THE SCENE FOR FUTURE ACTION
ENDS Europe DAILY 2106 - 30 May 2006
Kyoto protocol signatories have agreed a work plan to move towards
setting post-2012 emission targets during UN convention on climate
change (UNFCCC) talks in Bonn, Germany, which ended on Friday.
"We have set an ambitious agenda.. there is a strong sense of urgency
and there's clear consensus that there should be no gap after 2012"
said Michael Zammit Cutajar, chair of an ad hoc working group of
Kyoto parties set up to discuss what to do after the current Kyoto
protocol targets expire.
The ad hoc working group complements a "dialogue on long-term
cooperative action", involving all convention members, that met in
Two UNFCCC committees meeting alongside the ad hoc group adopted 30
conclusions and one draft decision. Most call for further discussion
leading to agreement at a later date. The meeting made little
progress in discussions on adaptation to climate change.
Some observers welcomed fresh ideas on, for example, deforestation in
developing countries. Environmental group WWF insisted the brakes
were off and the process was moving forward. Nonetheless, there is
general agreement that significant advances will have to wait until
2008-9 when there will be a review of the protocol.
The UNFCCC meetings demonstrated strong business interest in climate
change policy. For the first time, Carbon expo, a trade event held a
week earlier in Cologne, attracted more participants than the UN
meetings that followed. In Bonn, there were more interventions from
business than environmental NGOs.
At the UN talks, carbon trading and carbon capture and storage (CCS)
attracted most business interest. A third of the 45 side events
related to the carbon trade and two of three in-session workshops and
six side events related to CCS. This could indicate the development
of a new architecture to address climate change, say observers.
The ad hoc working group and associated UNFCCC committees will next
meet alongside the 12th meeting of parties (COP12) in Nairobi, Kenya,
in November 2006.
Meanwhile, UK climate change minister Ian Pearson has called on
parliamentarians in the G8 and emerging economies Brazil, China,
India, Mexico and South Africa to keep pressurising governments to
develop an international agreement on climate change.
Canadian and British MPs in Ottawa, Canada, Mr Pearson said they had
a key role to play in the Gleneagles dialogue - a forum for countries
to discuss actions outside the formal UN negotiating process.
27 May 2006
BAA SEEKS BENEFITS FROM OFT
BAA ready to negotiate over airports as it fights bid from Spain
Andrew Clark, Transport Correspondent - The Guardian - 27 May 2006
Britain's main airport operator, BAA, is to press for changes in the way it is regulated at its London terminals and is willing to negotiate over its ownership of seven international hubs in the UK.
The company is to use a tentative review of the airport industry by the Office of Fair Trading as an opportunity to argue for its long-term car parks, bureau de changes and in-terminal display advertising to be removed from the regulatory regime on the grounds that competitors provide similar services.
BAA's ownership of Heathrow, Gatwick and Stansted is the subject of vigorous criticism by airlines – as is its dominance in Scotland, where it operates Edinburgh and Glasgow airports.
In a surprise move, the OFT announced on Thursday it was considering a formal review of the company's position.
For the first time, BAA is prepared to contemplating divesting airports – a move which would generate huge interest from potential buyers and which, according to City sources, could prove earnings enhancing for its shareholders.
The open-minded approach comes as BAA strives to fight off a £8.75bn hostile takeover by a consortium led by Spanish company Ferrovial, which has offered 810p a share. Its Airport Development and Investment yesterday insisted that it was pressing on with its bid despite the uncertainty created by OFT's intervention. After falling steeply on Thursday BAA's shares recovered by 33p to 820.5p.
In a statement, the consortium simply said it "noted" the consumer authority's interest, adding: "If ADI is successful in its offer for BAA, ADI will, of course, cooperate fully with any review, if the OFT does, in due course, decide to initiate one."
Ferrovial's executives were taken completely by surprise by the OFT's announcement but have taken the view that they should get used to such regulatory interventions if they end up owning such a large part of Britain's strategic infrastructure. The consortium is still expected to raise its offer by the Takeover Panel's deadline of June 5th.
It is the first time the OFT has examined the ownership of Britain's airports since 1989. The government has looked at BAA's monopoly on several occasions and concluded that it creates no problem as long as its prices at Heathrow and Gatwick are tightly regulated.
However, MPs on the transport select committee have been critical – in 2003 they said the position was "deeply flawed", "ineffective" and "inappropriate".
Many airlines are anxious for change. Smaller carriers have often complained that BAA charges too much in landing fees and that it favours British Airways.
27 May 2006
AIR TRAFFIC CONTROL NEEDED
Leader - The Guardian - 27 May 2006
The combination of a bank holiday weekend, a half-term break and a wet spring means that in the next few days Britains airports are likely to be filled to the seams with travellers. The majority of those entering and leaving the country will go through one of London's major airports, including Heathrow and Gatwick, two of the busiest in the world. But both airports, along with Stansted, are owned by one company, BAA.
The three airports together account for nearly 55% of all passenger traffic in this country. The company also dominates Scotland, owning Glasgow, Edinburgh and Aberdeen airports. So it should not be a surprise that the Office of Fair Trading is considering an investigation into the ownership structure of UK airports – as John Fingleton, the chief executive of the OFT, put it: "You don't have to be a rocket scientist competition expert to see this might be a bit of an issue."
BAA is the private sector incarnation of the British Airports Authority, privatised 20 years ago by the Thatcher government. Like many of the sell-offs of that era, including BT and British Gas, the change in ownership effectively privatised a monopoly, one that has taken many years and a high degree of regulation to unpick. BAA has since grown to be the world's largest operator, running runways as far away as Australia. In the case of its airports around London, its operations are regulated in terms of the landing fees it can charge, although it earns considerable income from profitable retail leases. One small example is at Stansted, now home to the second busiest Starbucks coffee shop in the world.
The question is: does BAA's domination of the air-travel market hurt the interests of holiday makers? Do they pay more and get a worse service as a result, or do BAA's economies of scale work in their favour? And what about the environmental impact of BAA's ownership – would the battle against climate change be helped or hindered by breaking up its ownership in return for a lighter touch from the Civil Aviation Authority and central government? Michael O'Leary, the acerbic boss of Ryanair, certainly thinks BAA's near monopoly is a bad thing, and objects to his customers having to pay for the expansion of Stansted.
There are no simple answers to these questions – all the more reason for the OFT to decide on a full competition enquiry. The current hostile bid for BAA by the Spanish construction giant Ferrovial complicates matters, but the OFT should still go ahead.
27 May 2006
MORE ON THE TAKE-OVER BATTLE
BAA cashback to stave off bid
Herts & Essex Observer - 25 May 2006
BAA, which is fighting a hostile takeover bid from Spanish construction giant Ferrovial, said this week it was planning to offer a cash return to its shareholders.
As part of its defence to thwart the £8.8bn bid by the consortium, BAA said its proposed £750m capital return was conditional upon the offer from Ferrovial, or any other offer, lapsing.
BAA, which operates Stansted, has already advised shareholders to reject the bid.
Ferrovial has until June 5th to raise its offer.
27 May 2006
THE COSTS OF POLICING THE AIRPORT - WHO PAYS?
Letters - Herts & Essex Observer - 25 May 2006
Your report in Observer May 11th, "Essex police dispute with Stansted airport over £2m deficit", should come as no surprise to the community and must cause us all real concern.
Bearing in mind that the airport is a low price operation, not low cost, if the airport is unable to pay the real costs associated with security, then it should not be allowed to expand.
Expansion will need more policing with the consequential increase in costs. And why should the police suggest that the unpaid monies might need to be transferred to council tax.
If the police were accountable, unpaid bills would result in withdrawel of its services from the airport.
If the police took this action, the airport would have to find alternative security policing resources. If this was not done, then there would be no alternative, but for the airport to close as it would become a high security risk, a target for terrorists, a route for drug traffic and be a considerable threat to the local community.
Already the British public subsidises the aviation industry as a consequence of it not paying its fair share of tax such as VAT on aircraft and tax on aviation fuel.
We are now told that BAA Stansted is not paying a significant part of its airport policing bill, surely BAA does not really expect £2m to come from the local council tax payer.
Come on, BAA, its about time you and your industry started to pay your true costs, if you want to operate in a high security risk business, you and your customers should pay for minimising the risks.
27 May 2006
DON'T FORGET CLIMATE CHANGE - AVIATION ALSO HAS A RESPONSIBILITY TO TAKE ACTION TO CUT EMISSIONS
Global warming predictions are underestimated say scientists
Ian Sample, Science Correspondent - The Guardian - 23 May 2006
Climate change models have dramatically underestimated the extent to which global warming will raise temperatures, scientists warned yesterday.
The flaw means existing predictions for temperature rises are inaccurate and will have to be revised upwards by as much as 2C, suggesting the world could experience a hike of up to 7.7C by the year 3000.
British efforts to combat climate change have focused on preventing carbon dioxide levels rising above 450 parts per million, equivalent to a rise of 2C. If the world warms by more than this, many climate experts believe fragile ecosystems will be pushed beyond their "tipping point", triggering runaway global warming. The flaw came to light during a study of the effects of global surface temperatures on atmospheric carbon dioxide levels.
Scientists have long known that greenhouse gases raise temperatures by insulating the planet. But a less well known mechanism is that the warmer the planet gets, the more carbon dioxide is released naturally by soil and oceans. The result is a mechanism where atmospheric carbon dioxide creates warming that causes even more carbon dioxide to be released.
Peter Cox, scientific director for climate change at the Centre for Ecology and Hydrology in Dorset, with researchers from the US and the Netherlands, used ice cores from the Antarctic to study carbon dioxide levels trapped during a period called the Little Ice Age, from 1550 to 1850. They found carbon dioxide increased rapidly with warming, as soils decomposed faster and oceans lost more of the gas.
Because scientists have been unable to quantify the effect before, it has not been included in many climate models. But when it is taken into account, it lead to carbon dioxide levels that boosted temperatures by between 15 and 78%.
A recent report by the Intergovernmental Committee on Climate Change found that carbon dioxide levels were likely to double pre-industrial levels by 2050. The latest research pushes those estimates to between 1.6C and 6C, Geophysical Research Letters reports.
Lead author Margaret Torn, of the Lawrence Berkeley National Lab, said: "To predict the future you have to guess how much carbon dioxide levels will go up. That depends on the biggest uncertainty of all, what humans do."
23 May 2006
UTTLESFORD HITS THE HEADLINES
A very warm welcome from CO2 central
Patrick Barkham - The Guardian - 23 May 2006
Is it the plasma screens and halogen lights left glowing behind leaky Tudor windows? Or has the relentless trimming of lawns to within an inch of their lives put the residents of Thaxted at the top of the domestic carbon emissions charts? The commuter-belted swath of prosperous farms and historic villages that make up Uttlesford district council are best known as the homes of Jamie Oliver, Germaine Greer and Stansted airport. But the results of a study revealed yesterday show that its residents are the biggest domestic polluters in Britain.
The average household in leafy, tidy Uttlesford spews 8,092kg of carbon dioxide each year, more than double the comparatively clean, green dwellings of Camden in London, which on average produce just 3,255kg of CO2.
Two symbols of our energy crisis loom over the higgledy-piggledy, half-timbered houses of Thaxted.
The sails of the Essex town's stocky windmill stopped turning when it became uneconomic to grind flour with wind power in 1907. Overhead, more and more planes thunder overhead on their descent into Stansted.
Many residents are vocal campaigners against the airport's expansion. Most, however, seem unaware that their comfortable lifestyles, rather than the jets overhead, make them the biggest domestic polluters in the land.
Each year the average home here produces CO2 emissions equivalent to taking a Boeing 747 to Australia and back.
"There's all these huge pads out in the sticks where they leave their lights on all night and their big tellies on. That's where it's happening," said Joe Hobbs, an architect. Jake Roos, who has taken up the new post of the council's energy efficiency surveyor, agreed that affluence was the key problem.
"Uttlesford is a very affluent area and that has a knock-on effect in high carbon emissions. We try and lead by example but there is nothing else we can do to get people to save energy. It's not illegal to waste energy, unfortunately."
Domestic emissions make up 25% of the country's CO2 pollution. Keen to cut its share, the council is offering everyone two free energy efficient lightbulbs if they complete an energy-use survey about their home.
A grand total of none was collected yesterday from the office in Thaxted, although the council has handed out 5,000 - to nearly one in 10 homes in the area - since last August. Eileen Walsh, former chairman of Thaxted parish council, had another explanation for Uttlesford's unenviable record: farms - which require lots of energy to operate.
The area also has one of the lowest percentage of households connected to the gas network, which produces less CO2 than oil-fired, electric or open-fired central heating system. "I'm sure it's farming. It's also an affluent area and we like to heat our houses," said Mrs Walsh.
Some are already making strenuous efforts to tackle the problem.
Mr Hobbs lives in a new thatched house near Thaxted's old windmill, which is the energy-efficient exception to the rule. Planners rejected his first scheme for a grass roof but the one he built 18 months ago features traditional thatch, triple glazing with gas filling for thermal insulation and three solar panels to provide all his hot water. South facing, with state-of-the-art insulation, his home needs just one 4kw gas heater.
Mr Hobbs has also obtained permission to build a small wind generator in his garden; as it's adjacent to the historic windmill, the council could hardly refuse. But according to a local builder, Peter Wright, plenty of people have tried to fit solar panels and double-glazing but were refused on conservation grounds. There are 3,000 listed buildings in Uttlesford - nearly 10% of homes. Few can be fitted with panels or new windows; old homes are energy inefficient homes.
Affluent rural areas dominate the highest polluters in the report, which was commissioned by British Gas.
Second to Uttlesford is Teesdale, with an average of 7,731kg of CO2 per household, while Surrey Heath, Chiltern and South Oxfordshire are third, fourth and fifth highest polluters. The bottom five include three London boroughs - Camden, Westminster and Hackney - and Eastbourne and Norwich, both of which produce on average less than half of Uttlesford's emissions.
Ben Tuxworth, strategy director of Forum for the Future, said the study was a "wake-up call" to those who believed that reducing domestic emissions was a luxury for the wealthy. "Downward pressure on prices seems to mean that it's only the less affluent that bother to save energy. If the rich are using over three times as much energy as the poor, we need to incentivise them."
According to a Thaxted estate agent, Carl Fisher, even wealthy buyers do not want to spend on energy efficiency if they will not quickly recoup the cost.
"A lot of houses in the area have open fireplaces and they are well used," he said. "Residents are conservative - why spend money on anything that doesn't justify itself in the short term? There's an outdoor lifestyle here where people like to have their windows and backdoors open and probably have heating blasting out, costing them a fortune."
CITY CO2 HOTSPOTS TOP 10
City average kg of CO2 per dwelling per year
Reading 6,189||Nottingham 5,419
Leeds 5,333||Leicester 5,565
Bradford 5,539||Greater London 5,318
Sunderland 5,504||Sheffield 5,247
Birmingham 5,424||Aberdeen 5,175
OUR COMMENT: The average Uttlesford home, we are told, produces 8 tonnes of CO2 each year, the same amount of CO2 as a plane travelling to Australia and back. Put the equation the other way round, if Uttlesford expands its one runway, the additional flights will produce as much CO2 in a year as 618,000 houses like Uttlesford - high emitters. The difference is that while Uttlesford is trying to do something about reducing these high levels, Stansted airport (and government aviation policy) is doing its best to increase them. At the moment the airport's air traffic is probably responsible for producing about 6 million tonnes of CO2 during the year - compared to Uttlesford's 0.23 million tonnes from its 29,000 dwellings.
23 May 2006
THE EU CARRIES ON TRYING...
Talks begin on post-2012 climate framework
ENDS Europe DAILY 2101 - 19 May 2006
Parties to the UN climate change convention and its Kyoto protocol
started a fortnight of talks on climate change this week in Bonn,
Germany. The session includes the first UN-brokered discussions on
developing a framework for climate change policies after the Kyoto
protocol's caps on industrialised country emissions expire in 2012.
Debate on future action kicked off on Monday and Tuesday with the
first of four planned workshops under a "dialogue on long-term
cooperative action" between all parties to the convention agreed last
December (EED 12/12/05 www.endseuropedaily.com/20011).
The wide-ranging talks ended without formal conclusion. In a
statement the UN said there had been a "strong consensus on the need
to reduce emissions" and support for the use of economic incentives
and involvement of the private sector in climate protection.
During the discussions the Austrian delegation, speaking for the EU,
highlighted Europe's target of limiting global temperature rise to 2
degrees Celcius, and called for a focus on how developing countries
can achieve development goals while keeping down carbon emissions.
A facilitators' report on the workshop will be circulated in August
ahead of a second session in November. Two further workshops will be
held in 2007.
A second stream of talks on future action is now underway in an ad
hoc working group of parties to the Kyoto protocol. This is focusing
on measures to be taken by industrialised countries after 2012. In
the discussion the EU is promoting a goal of reducing emissions by
15-30% by 2020 (EED 27/03/06 www.endseuropedaily.com/20671).
Alongside the ad hoc working group, routine discussions are
continuing throughout the two weeks in committees on implementation
and on scientific and technical matters.
23 May 2006
MORE CHANCES TO BE HEARD OVER STANSTED AIRPORT
Uttlesford District Council starts to consider the airport expansion plans
Press Notice - Uttlesford District Council - 22 May 2006
Uttlesford District Council will devote an entire week to public meetings to let people express their views after receiving a major planning application from BAA Stansted.
The planning application is for the expanded use of the existing facilities at Stansted Airport including the removal of the limit of the number of passengers that can travel through the airport.
The council is anxious that the decision making process is as transparent as possible, and to this end the application will be explored through a series of special meetings of the Development Control Committee.
All the meetings are open to the public but uniquely there will be a week set aside for public engagement in early July, at which Stakeholders, objectors and others will be invited to participate, and also an interactive "public examination" of the proposal at the end of August.
Cllr Christina Cant, Chair, Development Services:
"This is an innovative approach to public engagement in the planning process that builds on the consultation exercise on the draft masterplan for the airport that we carried out last year."
"This is a significant proposal with widespread implications far beyond the district's boundaries and we want people to be involved in the decision making process."
"It is the council's intention to ensure that the current planning application is the subject of the most rigorous scrutiny by the Development Control Committee prior to making a decision, drawing on the advice of consultants and other experts where necessary."
23 May 2006
HERTS COUNTY COUNCIL IS ALSO CONCERNED
Council announce "reservations"
Daniel Barden - Bishop's Stortford Citizen - 18 May 2006
HERTFORDSHIRE County Council is keeping its cards close to its chest over plans to increase the use of the existing runway at Stansted Airport.
Airport operator BAA has submitted plans to Uttlesford District Council to have the limit on aircraft movements and passenger numbers lifted, to allow 264,000 flights and 35m passengers per year.
But the county council's strategic planning and partnerships executive member, Derrick Ashley, said the council had "reservations" about the development of the airport and its effects on the surrouding areas.
He added: "It's to early to give a formal response but we will be examining the application closely and looking into the impact it will have in great detail before preparing our response to Uttlesford District Council."
Uttlesford council will make the final decision after consulting with Hertfordshire and Essex county councils and East Herts District Council, but Mr Ashley warned as many residents as possible to make their views on the development heard.
"If this application goes through it could have a big impact on our county and it's crucial that everyone knows the facts.
"People must be clear this application is not about creating a second runway at Stansted - it's about increasing use of the existing runway "We anticipate a further application to create a new runway will be submitted next year. We don't have the capacity in Hertfordshire to cope with a second runway and we will do everything in our power to prevent it going ahead."
Copies of the application document can be viewed at East Herts council Offices, Pegs Lane, Hertford, and online at www.uttlesford.gov.uk/stanstedairport/default1.htm.
21 May 2006
REGULATOR WARNS OVER HEATHROW BID
Stephen Seawright - Daily Telegraph - 15 May 2006
The Civil Aviation Authority has made its starkest warning yet that any bid for airports operator BAA involving a high level of debt could run into regulatory concerns.
Fears have been raised about the £14bn of debt that will be taken on if an £8.75bn, 810p-a-share hostile bid for BAA, which operates Heathrow, Gatwick and Stansted airports, by Spanish infrastructure group Ferrovial succeeds.
The CAA said in a statement: "Higher debts mean higher annual interest payments, reducing net cash flow available to fund investment. Higher levels of debt can reduce a company's credit quality which might cause the airports difficulty as they seek to raise new finance."
It noted that BAA's latest capital investment plan is for investment at the three major airports of around £9bn over the next 10 years. The CAA added: "the scale of the investment programme... means that these airports are likely to experience negative cashflow... and continuing access to the debt and/or equity markets will be required in order to finance the growth."
BAA has advised shareholders to reject Ferrovial's offer. The CAA, which regulates airports, is currently working through a price control review and warned that it would not accommodate costs incurred from any deal to acquire to BAA in its decisions.
Harry Bush, the CAA's director of economic regulation, said: "The CAA has made it clear that it will not accommodate in price control decisions the costs and risks arising from any financial transactions entered into as a result of that bidding process."
"These will be for the owners and financiers of BAA - present or future - to bear."
BAA has also rejected an conditional 870p-a-share proposal from Goldman Sachs
21 May 2006
CONCERNS OVER EU CARBON TRADING
Will this prejudice the inclusion of aviation in the scheme?
BBC News Online - 15 May 2006
The European Commission has questioned the effectiveness of the EU's emissions
trading scheme, the cornerstone of its climate change policy.
Under the scheme, governments set quotas for the carbon dioxide emissions
produced by 9,400 large factories and power stations in 21 member states.
Carbon permits are issued to give firms a financial incentive to invest in
clean technology and cut emissions.
But the commission's report showed that states have issued too many permits.
The permits effectively make the right to pollute a tradeable commodity -
giving companies the ability to buy and sell permission to emit extra carbon
Emissions of carbon dioxide - a greenhouse gas - are widely thought to be a
key factor in global warming, increasing atmospheric temperatures around the
The Commission's reports showed a 2.5% surplus for 2005, with the 21 states
granting 44.2 million metric tons more carbon dioxide permits than needed.
Unlike many other states, the UK kept a tight rein on the number of pollution
permits it issued.
But as a result, it exceeded its quota of permits for 2005.
However, the UK has been in conflict with the EU over its level of permits,
with Britain now arguing that it set itself too tight a target when the
scheme was originally launched.
The EU has threatened to take legal action against the UK for exceeding its
national quota, set in April 2004.
But the UK government is claiming that it should be measured against the
revised quota it set in October 2004, which gave business more generous
When it emerged that the number of permits exceeded demand, prices slumped.
The price of carbon credits traded in Europe has already fallen by around 60%
over the past two weeks because some of the data from the report was released
"It's clear that most countries were too generous when handing out
allowances," said David Foster, head of emissions and weather derivatives at
Calyon, part of Credit Agricole.
"The dissemination of the information has been a farce."
The idea of the carbon-trading scheme was to raise the cost to firms of
continuing to pollute while creating a market to give an incentive to become
A MORE OPTIMISTIC REPORT
EU confirms firms' CO2 output below cap in 2005
ENDS Europe DAILY 2097 - 15 May 2006
Companies in the EU's greenhouse gas emission trading scheme (ETS)
emitted 2.5 per cent less carbon dioxide in 2005 than allocated to
them in government allowances, the European commission confirmed on
Carbon allowance prices hit a new low of E9 on Friday after figures
confirming the undershoot were temporarily posted on the internet.
But by close of business on Monday the price had rebounded to over
The commission said it was too early to conclude that member states
had systematically overallocated allowances, blaming the surplus
permits on rising energy prices, a mild winter and industry caution
during the scheme's inaugural year. But it said it would take the
new figures into account when judging second-phase allocation plans.
Monday's announcement marked an important ETS milestone: the first
publication of aggregate, externally-verified installation-level
emissions measured with a harmonised EU methodology. Figures for
only 21 of 25 member states were available, however: four countries
- Poland, Luxembourg, Cyprus and Malta - have yet to submit data.
The 9,000 or so installations covered by the announcement released a
total of 1,785m tonnes of carbon dioxide in 2005. This is 63.6m
tonnes less than the 1,847m tonnes of allowances distributed through
national allocation plans for the year. The figures confirmed the
initial reports of allowance surpluses that prompted the carbon price
to plummet last month (EED 27/04/06
Of the 21 reporting member states only six recorded emissions higher
than initial allocations: Ireland, the UK, Italy, Spain, Sweden and
Austria. Firms in these countries will have had to be net overall
buyers of allowances to meet their carbon caps. Five UK utilities
have launched legal action against the European commission over its
opposition to an increase in the UK's allocation, the Guardian
newspaper reported at the weekend.
Firms in the other fifteen member states will have been net sellers
of permits. Lithuania, Estonia, Latvia and Finland recorded the
biggest surpluses relative to their initial allocation. Germany
recorded the biggest surplus in absolute tonnage terms, with actual
emissions 21.4m tonnes lower than the original allocation to
The German government said on Monday that 9m tonnes of the surplus
was down to genuine efforts by industry to reduce emissions. The
rest was due to overallocation, it admitted. It said it would
attempt to reclaim the permits through an "ex-post" adjustment of its
Germany is fighting a legal battle with the commission for the right
to carry out ex-post changes to its allocation. Ironically, the
commission's opposition springs from a fear that the mechanism could
be used to bail out firms short of permits rather than vice-versa.
Despite the overall surplus of allowances, the commission's figures
show that 865 installations failed to buy enough to cover their
emissions. Three-quarters of the non-compliant installations are in
EMISSION SHORTFALL "WON'T ALTER PERMIT GUIDANCE"
ENDS Europe DAILY 2097 - 15 May 2006
The European commission will not alter its permit allocation guidance
for the second phase of the EU emission trading scheme despite the
surplus of allowances in many countries in the scheme's first year,
officials said on Monday. But the new emission data will influence
its decisions on second phase allocation plans, they added.
"We will not amend the guidance document," Artur Runge-Metzger, head
of the emission trading unit said on Monday. Released last December,
the document named countries that needed to significantly tighten
allocations in the 2008-12 second phase (ED 06/01/06
It also said the second phase allocation for 2008-12 across the 25
member states should be around 6% lower than the first phase
allocation to be consistent with Kyoto protocol targets. The
commission said its guidance still stood: "I don't think we'll come
up with a new figure," Mr Runge-Metzger said.
The official said it was too early to say whether the surplus of
allowances during the first year was due to over-generous
governments: "It would be premature to say there's been gross
overallocation". High energy prices, a warm winter and industry
caution during the scheme's start-up phase may have been responsible
for firms' having recording lower emissions than expected, he said.
But he said the finding that actual emissions were lower than
predicted in the first year of operation would affect the
commission's consideration of second-phase allocation plans (Naps),
due to be finalised by member states next month.
"We will look at the figures carefully, there's no doubt. We'll have
to take [them] into consideration, and [member states] will have to
too." The publication of first-ever real emissions data would help
member states produce more accurate Naps, the commission said.
Germany, which emerged with the biggest absolute allowance surplus,
is already considering revising its draft second-phase plan, Point
Carbon reported an official as saying on Monday. Meanwhile the
environment ministry in the UK, which recorded the biggest absolute
deficit, urged the commission to "improve the enforcement of tough
caps in phase two".
Other observers were less diplomatic. Green groups said governments
recording surpluses had "blatantly ignored the aims behind the
scheme". Green MEP Satu Hassi urged the EU to "learn from this
mistake" and set "much lower" allocations in the second phase.
Liberal MEP Chris Davies said many firms had duped their governments
into overallocating permits. "Companies in France, Germany and
elsewhere will only have themselves to blame if the European
commission ignores their views in the future and imposes tough
requirements," he said.
OUR COMMENT: When will aviation join? Joining is unlikely to solve the whole problem of reducing aircraft emissions but it could help. Only a halt to unlimited aviation expansion will ensure that all sections of the UK contribute to the need for a reduction in carbon emissions.
21 May 2006
THE NEW ENVIRONMENT MINISTER
SPEAKS TO THE GREEN ALLIANCE
Press statement - 17 May 2006
David Miliband's Speech on Climate Change
Before introducing Yvette Cooper who will be delivering the keynote speech today, let me set out some initial reflections on how we can meet the challenge of climate change.
In the 19th and 20th Centuries, progressives forged a new social contract between citizens and the state. Progressive values, new developments in social science, and popular concern came together to deliver social justice.
In the 21st century, we must find the same combination if we are to address environmental security. An environmental contract that sets out the rights and responsibilities of government, businesses, and individuals.
The ingredients are in place. Just as Charles Booth's maps of 19th Century London highlighted abject poverty, today new scientific evidence is bringing home the scale, impact and causes of climate change. The debate is no longer about whether climate change is happening but how it can be stabilised. The political challenge now is to translate the concern and fear many people feel over the future of our planet into hope and confidence.
An environmental contract is needed because citizens, businesses and government will not act if they feel their actions are not be backed up by others, or even undermined. People feel powerless in the face of threats such as climate change that require collaboration between individuals, businesses and governments.
This is the great political challenge we face: how to create the institutions that can address the sense of powerlessness people feel in an inter-dependent world. People are optimistic about their personal prospects but pessimistic about societal progress; optimistic about the things they have independent control over, but pessimistic about the areas where the future is interdependent.
Over the next few months, I want to work with you to develop an environmental contract that can provide a clearer definition of the powers and responsibilities of individuals, businesses, civil society and each department in government. A sense of shared purpose.
Let me set out some key principles we need to focus on as we develop this contract.
First, an environmental contract must bring together the Government's goals of economic opportunity, social justice and environmental sustainability. They can and must go hand in hand. Yes there are difficult decisions. Difficult trade offs. But also huge synergies. A low carbon economy can be good for business, good for the environment, and good for all citizens, including the most disadvantaged. Over the next few months we need to look at how to maximise those synergies and take an honest look at where the trade-offs are.
Second, an environmental contract needs to focus on creating a long term framework for change. In Government, we often over-estimate what we can achieve in short-term, but underestimate what we can do in the long-term. Climate change is the best illustration. By setting ambitious long term goals, Government can play a critical role in enabling a low-carbon economy. Our challenge is to focus not on short-term stunts and initiatives but find the right tools - whether it is information, incentives, or regulation that help alter the trajectory of the economy and society, in this country and abroad.
Third, an environmental contract must develop a shared understanding of the role of markets, civil society and government. Markets have the power to coordinate disparate activity and provide information and incentives, but only when the full external environmental costs are factored in. Government has a role to play – through information, incentives, regulation, planning, and procurement. Civil society must mobilise opinion and action on green issues in the same way that public concern was stimulated by the Make Poverty History campaign. We need to look at how each can play a role and how they can interconnect better. How government can tackle market failures. How formal politics can connect into the energy and participation within civil society.
Fourth, a new contract must stretch from the global and national to the local. The UK has played a leading role in shaping the European and international agenda on climate change. From multilateral agreements to practical projects. But our strength and credibility internationally relies on us leading the way domestically in creating a low-carbon economy. Our domestic goal is a 60 per cent reduction by 2050. That means each citizen's carbon footprint coming down substantially from the current 3 tonnes each year. If the challenge of climate change is to be met then no part of British society will be unchanged. It requires action right across society from individuals and businesses to Government.
Finally, let me move from the product to the process – how government must change the way it does business. Climate change does not fit neatly into any one department. Every department must be departments for climate change – from transport, and housing, to energy. But ways of working are also important.
Politics and government are changing dramatically. The old command-and-control model of manifestos and regulation won't work any more. The problems we face are more complex, the power of Government diminished, knowledge is more dispersed, and the need for partnership increased.
But too often our methods of policy making still operate as if the world has not changed: secrecy, hierarchy, monologue not dialogue are perceived to be the norm. The only way to change the terms of trade in which the Government is seen as unresponsive to the concerns of lobby groups and the public is to shift the balance of responsibility in policy making. We do not have all the answers just as we do not have all the tools. We need to be open about risks, to tap into the widest possible ideas base, think laterally and outside the box ourselves, and think of the public and stakeholders not as people to be handled or managed, but as agents who can contribute.
I hope that your future engagement with the Department will be undertaken in that spirit of openness and partnership. Please do write to me if you feel that we could be engaging more productively.
OUR COMMENT: Lots more words, not much detail, will actions follow? Has he any influence over the DfT and the DTI? Accept his invitation and write to him with your views!
21 May 2006
GIANT AIRLINER LANDS FOR TRIALS AT HEATHROW
Is this the answer to reducing aircraft emissions?
Only if it leads to fewer flights - and overall emissions are reduced
Kevin Done, Aerospace Correspondent - Financial Times - 19 May 2006
The 555-seat Airbus A380, the world's largest passenger jet, landed at London Heathrow yesterday for initial airport proving trials before it opens a new era in aviation with the start of commercial service in early January with Singapore Airlines.
The A380 superjumbo, with a maximum take-off weight of 560 tonnes and as tall as a seven-storey block of flats, is set to have a big impact on Europe's most highly congested aviation hub.
Heathrow will be one of the main airports for services by the double decker airliner, which is designed to fly the world's busiest trunk routes to airports, where there are few free take-off and landing slots. It offers one way of increasing passenger volumes without increasing aircraft landings.
As many as 10 of Airbus's initial 16 customers for the A380 are expected to fly the aircraft to Heathrow. They include Singapore Airlines, Qantas, Virgin Atlantic and Emirates. No orders have been placed by British Airways, one of the world's biggest operators of the Boeing 747-400 jumbo.
BAA believes that the superjumbo could be accounting for about 12 per cent of its business at Heathrow within a decade of its introduction, making one in every eight flights or 60,000 take-offs and landings a year by 2016. At present one in every nine flights at Heathrow is a Boeing 747 but introduction of the A380 with 35 per cent more passenger capacity could enable almost 10m more passengers to fly to and from the airport with no increase in air traffic movements.
Airbus still faces a tough fight to turn the vision into reality, however, and is yet to agree operating rules with the aviation authorities on separation distances be-tween the A380 and following aircraft for the approach to airports, which will be crucial to its ability to deliver more passengers than current aircraft.
Concerns have been ex-pressed about the size of the wake vortex, the degree of air turbulence created by the A380, before it is safe for smaller aircraft to follow it in to land.
Yesterday's test flight was conducted under interim rules, which demand a separation of 10 nautical miles, or about four minutes' flight time, compared with the five nautical miles needed for the Boeing 747, the level which Airbus hopes the authorities will eventually adopt for operations by the A380.
Charles Champion, Airbus chief operating officer and head of the A380 programme, said the interim rule was "not acceptable" for commercial service.
He would "not be surprised", however, if the separation was "slightly above" five miles at the first entry into service.
Airbus, already forced to delay its first A380 deliveries to Singapore Airlines and other early customers by six months, is struggling to meet its latest deadlines. Singapore Airlines said yesterday it would take first delivery in November with entry into service in December on flights between Singapore and Sydney.
OUR COMMENT: No orders for Stansted yet! The A380 was reputed to have cut fuel emissions by 20%, but, how much fuel /passenger does the airliner use compared to its rival the Boeing "Dreamliner" - which also claimed a 20% reduction but carries fewer passengers.
15 May 2006
Airport insists 'all systems go' on second runway date
Herts & Essex Observer - 11 May 2006
Stansted Airport this week reaffirmed its commitment to building a second runway by 2013 and accused Stop Stansted Expansion of "mischief making".
The SSE campaign group is claiming the date has been postponed after picking up on BAA's 10-year capital investment programme in which the company said it assumed opening it in 2015-2016, although seeking its delivery at the earliest possible date.
Brian Ross, SSE's economic adviser, said this amounted to a postponement of the controversial plans. He also said it was an attempt to ease shareholder concerns as BAA sought to fight off a hostile take-over bid from Ferrovial.
But a spokesman for Stansted said "nothing has changed". The comment by chief executive Mike Clasper was a more cautious view because it was a financial document and it was based on not knowing how long the planning inquiry would take or when the government would make its final decision. "It's a prudent financial decision. We are fully committed to 2013. Its all systems go", he stated.
The G2 planning application is still due to be submitted to Uttlesford District Council nect year. The spokesman added: "SSE are totally mischief making over this."
A fortnight ago BAA submitted its planning application on the existing runway to increase passengers from 25 mppa to about 35mppa – without the need for further building
Runway delay now 10 years
Harlow Star - 11 May 2006
THE proposed expansion of Stansted Airport is unlikely to take place for at least another decade.
In a delay which throws the Government's strategy for air travel growth into turmoil, British Airports Authority has confirmed the second runway it hopes to construct will not open before 2015.
The revised timetable means Heathrow Airport is now on track to open its new runway before Stansted, despite the Government's White Paper on air travel seeking expansion of Stansted first by 2012 and then Heathrow or Gatwick about three years later.
But the announcement has brought little cheer for campaigners fighting plans to expand Stansted, which has already seen its annual passenger numbers soar from 3.9 million in 1995 to almost 22 million.
Just last month BAA applied for planning permission for unlimited use of its existing runway and still intends to launch a planning bid for the new runway next year.
Stop Stansted Expansion spokesman Brian Ross said: "Whilst there is some comfort in this further postponement to 2015 or 2016, BAA's intentions are now clear - to intensify usage on the existing runway over the next 10 years beyond what any of us previously imagined.
"This adds a whole new dimension to the planning application which BAA submitted to Uttlesford District Council last week asking for the abolition of all limits on Stansted's passenger throughput."
Essex County Council planning cabinet member Peter Martin said the delay would not affect County Hall's stance. "It's still our view that the second runway is not needed and will have a huge impact on the environment of Essex," he said.
Harlow MP Bill Rammell said he believed past expansion of Stansted had been good for the local economy but opposed a new runway.
"BAA have applied to increase the use of the current runway and in my view they should maximise use of this one before another is built," he said.
Conservative Harlow prospective Parliamentary candidate Robert Halfon said: "This delay means we could have a Conservative government before it's too late to halt this unsustainable, uneconomic and above all environmentally disastrous plan to expand Stansted."
Lorna Spenceley, Parliamentary spokeswoman for Harlow Liberal Democrats, said: "We would much rather see clarity and a clear decision there will be no second runway."
15 May 2006
A GOLD PLATED SECURITY SERVICE?
Essex police dispute with Stansted over £2m deficit
Elizabeth Reed - Herts & Essex Observer - 11 May 2006
Essex police are facing a potential £2m budget shortfall because Stansted Airport Ltd will not pay for the full costs of airport policing.
The airport has refused to reimburse last year's £6.7m cost of airport policing. It has paid the constabulary just £5.7m, leaving £1 for 2005-06 unpaid and has not settled the estimated costs for the current year, it is claimed.
Essex police warned this week that if the airport did not pay its bills, then Chief Constable Roger Baker might have to ask the county's police authority to consider increasing the council tax by 1.4% to cover the balance.
Alternatively he might have to cut 25 frontline police officer posts from neighbourhood policing teams to meet the shortfall.
Robert Chambers, Essex Police Authority chairman and Saffron Walden county councillor said: "During the past 2 years Stansted Airport has refused to pay for a level of policing appropriate to the formal needs assessment by the force.
"These needs were not created by the force, or indeed local people, they are created by the nature and volume of the business. For this reason, the airport is required, by law, to pay, and not local people."
"These are the costs of airport business and I will not have them bankrolled by local taxpayers."
Stansted admitted it was in dispute over policing costs, primarily to do with a "difference of opinion" over the "necessary and appropriate levels of policing at the airport."
It said: "In these circumstances, there is a well established mechanism to resolve such situations, Department for Transport determination. Essex police applied to be in this process last December, and we are participating fully in this procedure. We hope the situation is resolved as soon as possible. In the meantime it is up to Essex police to decide on the appropriate actions they may need to instigate in advance of the DfT's decision."
OUR COMMENT: Does the Home Office not have an interest in airport security?
15 May 2006
AIRPORT PLANS TO MAXIMISE FLIGHTS
Dunmow Broadcaster - 4 May 2006
AIRPORT bosses at BAA Stansted have lodged their bid to expand passenger numbers from 22 million to about 35 million each year.
The move, if Uttlesford District Council backs the plans, would see use of the airport's runway increased to its full capacity, and an extension to the terminal to house extra passengers.
Nick Barton, Stansted's business development and planning director, said the environmental impact in terms of noise would not significantly change from now and the safety risk of having more aeroplanes overhead would increase only 'marginally'.
If the plans get the go-ahead, 6,000 new airport jobs would be created on top of the existing 10,000 jobs.
He said: "Last summer we launched our most comprehensive programme of public consultation to capture the opinions of as many people and firms as possible and we are very grateful to all those who took the time to visit our exhibitions and engage with us on the issues they believed crucial to the development of Stansted."
Increasing the runway to full capacity is expected to cost about £500 million in total. Mr Barton added: "We have identified a number of measures, including 18 new and improved bus and coach services, which will serve the airport and the wider community to further increase the use of public transport in the years ahead.
"With these measures in place there will be no discernable difference on the road network during peak hours."
Airport managing director Terry Morgan said: "It is vital we develop the airport to keep pace with demand for increasing numbers of leisure and business passengers and to serve the thriving regional economy."
During talks with the public, the main issues raised were noise and the effect of the increases on roads. Both of these, said Mr Morgan, had been taken into account in the planning process.
The increases in flights would take place during off-peak times such as mid-morning and mid-afternoon and would not increase during the night.
But Stansted Airport Consultative Committee chairman David O'Brien said: "Over the past 18 months the ACC has been at pains to ensure that additional facilities at Stansted meet user requirements and are provided in a cost effective manner."
"However BAA insists on wasting billions to build gold plated facilities that no-one wants and that consumers will be expected to pay for through higher airport charges."
OUR COMMENT: The built facilities have already been approved for 25 mppa. The application is for more passengers and flights. Reasonable noise, traffic and air quality are part of the ordinary standards expected for a satisfactory quality of life. These standards are already compromised for many residents and further expansion can only damage them further.
15 May 2006
SILVERJET IN £25.3M PLACING
Kevin Done, Aerospace Correspondent - Financial Times - 9 May 2006
Silverjet, the start-up UK low fare, all-business class airline has raised £25.3m in a share placement with institutional and other investors. The company, which will be listed on Aim, the junior market of the London stock exchange, is hoping to start flights on its first route between London and New York within six to nine months.
Trading in its shares, which have been priced at 112p giving the company a market capitalisation of £33.6m, will begin on Monday with 18.7 per cent of the equity held by directors of the airline and the remainder held by institutional and other investors.
Silverjet has been promoted by Lawrence Hunt, a 40-year-old UK entrepreneur and a member of the Foyle's of London bookshop family. He is a great grandson of William Foyle, one of the bookshop's founders and has been involved in several start up ventures in the technology and travel sectors. His last venture Rapid Travel Solutions was sold to Telewest Communications in 2001.
Mr Hunt, who is to be paid a salary of £150,000 for the first year, holds 12.95 per cent of the Silverjet equity after the flotation. The senior management includes Peter Evans, a former head of operations at Virgin Atlantic, and Martyn Bridger, a former head of inflight service at British Airways.
The airline, which will launch its first route with a twice daily service between London Luton and New York Newark airports, will be the third transatlantic all-business class airline to be started in little over a year.
The pioneers of the new breed of all-business class, long-haul carriers were the two US-based start-ups Eos Airlines and Maxjet Airways, which both launched their initial services on the route between London Stansted and New York JFK airports last autumn.
All three groups believe that they can make profitable inroads into segments of the business class market between the US and London, which has previously been dominated by British Airways and Virgin Atlantic from the UK and by American Airlines, United Airlines and Continental Airlines from the US.
Mr Hunt said on Tuesday that Silverjet would fly Boeing 767-200s each with 102 seats that convert into inclined flat beds. The aircraft normally have up to 245 seats in conventional two-class economy and business class configuration.
He said it was aiming for an average London-New York return fare of £999 excluding taxes, substantially below the current average fares for business class of £2,260 and below premium economy travel on the traditional airlines. It would also offer substantially discounted promotional fares.
Silverjet is currently planning to use a business aviation private jet terminal rather than the main commercial airline terminal at Luton airport and to offer a 30-minute check-in time.
It is targeting four main groups, small and medium-sized businesses, upmarket leisure customers, connecting passengers and bigger corporate clients.
Mr Hunt said the group planned to add three more all-business class routes from Luton within three years of launch to long-haul destinations most probably outside North America.
Arden Partners has acted as sole nominated adviser and broker to Silverjet for the Aim flotation.
The pre-IPO research report by Tim Richmond, Arden equity analyst, forecasts pre-tax losses of £14m and £10m in the first two years, a small profit in the third year and pre-tax profit of £30.5m on a turnover of £292m in the fourth year to March 2010 with a fleet of 10 aircraft.
Among Silverjet's US rivals Eos is currently flying one daily frequency between Stansted and JFK with a 48-seat Boeing 757 with fully flat bed business class seats and a concept that is seeking to compete with the top-of the market First Class and business class products of British Airways and Virgin Atlantic.
It was formed by a team of US aviation entrepreneurs led by David Spurlock, a former senior executive of British Airways, and raised $85m in equity funding from several US west coast private equity groups.
Maxjet Airways is flying 102-seat twin-aisle Boeing 767-200s in an all-business class configuration and a model that seeks to compete with low fares and a cabin closer to the traditional business class offering of the US carriers.
Maxjet added a second route at the beginning of April with a four times a week service between Washington Dulles and Stansted. It aims to add its third and fourth aircraft by July with a second daily service between New York and Stansted or the opening of a third route between Boston and Stansted the most likely next steps. It hopes to expand the fleet to six aircraft by the end of the year adding routes from other major US cities to Stansted.
Eos has so far built a fleet of three single-aisle Boeing 757s, but with its much higher prices and high end product is developing more slowly than Maxjet. It has delayed the launch of a second daily frequency between Stansted and JFK, originally planned for January, until September to allow its loads to build up.
Maxjet said recently that its average loads for March were above 50 per cent and in April the New York route had averaged 70 per cent. Forward bookings for May and June were also "looking strong."
OUR COMMENT: The introduction of long haul planes offering some extra comforts is obviously an attractive option especially for business travellers unable to "sleep off" the travel effects. It is, though, a great pity that a better balance is not being achieved between emissions created and the number of passengers carried. Surely in fuel use and emissions created it would be more economical to routinely incorporate some sleeping accommodation on larger scheduled flights. Will the extra environmental costs of such special flights be offset by the firms using them? Or perhaps included in their land based carbon emissions allocation, if the firm is involved in carbon trading?
9 May 2006
YOU DON'T HAVE TO BE A MATHEMATICIAN...
Letters - Herts & Essex Observer - 4 May 2006
Samantha Cox (Letters 27th April) asks SSE to start talking facts. I don't represent SSE, however, I can give her a few facts.
True, Atlanta Georgia, handles more passengers than Heathrow. The confusion probably arises from the fact that Heathrow is the busiest international airport and Atlanta handles mainly domestic traffic.
However, in case you didn't know, BAA is submitting plans to expand Stansted's capacity up to 45 mppa with the existing runway.
Bear in mind that the last public inquiry was instigated by their plans to expand to only 15 mppa. That application resulted in the Inspector granting the plans, but only on the promise (which was made in Parliament), that there would not be a second runway.
With a second runway, it doesn't take much of a mathmetician to calculate how many 2 times 45 mppa is… 90 mppa would then be more than the current through-put in Atlanta and if BAA had their way (already going from 15 mppa to 45 mppa don't forget), it could be even more. This would then make it busier than Atlanta currently is.
As large as Heathrow is, Stansted would be about 33% larger on the ground. Heathrow is approximately 12 square kms, whereas Stansted, with a second runway, would be 16 square kms. So not only would it be larger, it would also be handling more passengers.
Comparing the UK to the USA with its large open spaces and sparsely populated areas is a gross misjudgement. There are approximately 241 people per square km in the UK but only 30 psk in the USA. Also the highest concentration of those people live in the South East of England.
Another major international airport, handling anywhere near 90 mppa, would have a far more devastating impact on pollution and many more thousands of people here than the USA.
This is without mentioning our already overcrowded airspace.
Finally, as far as facts are concerned, it should be remembered that it was BAA that was castigated in the High Court for failing to disclose the facts, not SSE.
Indeed, SSE was given a special award by an all party parliamentary committee for it's campaign.
9 May 2006
WE MUST HELP SAVE THE PLANET
Leader - Herts & Essex Observer - 4 May 2006
The meeting in Bishop's Stortford this week organised by Friends of the Earth highlighted the scale of the environmental challenges we face.
The gathering, half-jokingly entitles "Stortford-on-Sea?", saw speakers from the green group - as well as MP Mark Prisk - spell out the cost of our modern lifestyles to the world's climate.
And, although we're unlikely to be living on the coast any time soon, things are set to get a lot less comfortable than we were used to.
Almost everyone aware of the issues would agree that progress has been haphazard and painfully slow. Here in Britain concerted measures to tackle climate change are only now being made - but is it a case of too little, too late?
Perhaps, but that doesn't mean we shouldn't try. The government needs to end its double-speak about cutting emissions, while simultaneously pushing for airport expansion.
Report on the meeting - extract from James Tout, Herts & Essex Observer, 4th May 2006
At the meeting Mark Prisk MP said he was in favour of a Climate Change Bill that would enforce year-on-year emission reductions up to 60% by 2050. He said cross-party agreement was vital. "We have got to recognise that we are in this together" he said. "We have a shared responsibility to tackle climate change. Government should and can take a lead, nationally and locally, business can be involved and we, as individuals can also play our part".
Questions from members of the public focused on the impact of Stansted Airport expansion on climate change, the rapid growth of emissions in developing countries and the prevalence of "gas guzzling" 4 by 4 vehicles in the area.
Mr Prisk said he supported a "polluter pays" principle in relation to aviation, with more tax on airline fuel. He also wanted to see aviation included in the EU's emissions trading scheme.
OUR COMMENT: Much has been said about the contribution of the expansion of Stansted's existing runway to 35-40 mppa to climate change. BAA considers only carbon emissions from the airport buildings and dismisses the much bigger contribution from aircraft as a matter for the EU emissions trading scheme. Both the government and BAA conveniently omit to say that as aviation is having favoured treatment, carbon emissions are bound to increase - all the EU trading scheme will do is allow aviation interests to purchase surplus allowances from other businesses that are actually endeavouring to cut down their own emissions. The overall CAP on emissions will remain, and sooner or later aviation will run out of surpluses to buy. Expansion will then be impossible.
Using government figures we calculate that the expansion of R1 from 25 mppa to 35 mppa could result in as much as an additional 450,000 tonnes of carbon annually,, and that by 2015 Stansted could be responsible for as much as 11.7% of the UK aviation total of 15 million tonnes of carbon. Total UK carbon emissions are predicted as being 142 million tonnes in 2015 (Review of the Climate Change programme 2005), aviation would therefore be responsible for 10.56% and Stansted itself 1.23%. Without R1 expansion Stansted's share falls to 0.91%.
These % figures are not large, but the extra carbon emissions from a 10 mppa expansion do represent a significant contribution to the UK carbon emissions, roughly equivalent to the emissions from 118,000 households.
9 May 2006
NEWS FROM THE CARBON TRADING SCHEME
Price crash leaves EU carbon market jittery
ENDS Europe DAILY 2091- 5 May 2006
The collapse in carbon prices under the EU emission trading scheme
over the last ten days has sparked alarm, but doesn't necessarily
bode ill for the long term, according to market experts.
The dramatic falls, from around E30 to lows of around E11 on Tuesday
caught most people unawares. They were triggered by several member
states releasing data showing that companies emitted less carbon
dioxide (CO2) in 2005 than they were allowed.
Over the weekend, the European commission wrote to governments asking
them not to release any more data ahead of the official publication,
on 15 May, of 2005 emissions for all EU-25 countries.
Despite this, Sweden and Lithuania both reported carbon allowance
surpluses earlier this week. Rumours that Germany, too, will report
a surplus, prompted further falls in permit prices on Friday,
according to analyst Point Carbon. However, these were later denied
by country's emission trading authority, the agency reported.
Spain is the only country so far to have reported 2005 emissions in
excess of its national cap to date. Other big players in the scheme
haven't reported figures. This week the UK dropped its legal case
against the European commission requesting 20m extra allowances for
the first phase of the ETS, which could suggest that it too will
report a surplus.
Most studies completed before the scheme was launched predicted that
prices would stabilise at around E16 per tonne, suggesting that
recent highs were anomalies that were destined to end.
Also, phase one allowances were based entirely on estimates of
emissions. Real data now available for the second phase should
minimise over-allocation, observers say. Consultancy ICF
International concluded that lower than expected emissions in 2005
were due to a mix of over-allocation and company action to reduce
The European commission has already indicated that it may set
stricter standards for second phase national allocation plans (naps)
if there is a clear surplus of allowances at the end of the first
The price crash hurt the related market in clean development
mechanism carbon credits this week, with trading ceasing entirely at
one point. Here also, market experts believe the market will
recover, predicting that CDM credits will probably be needed to meet
9 May 2006
BENEFITS OF CLIMATE CHANGE POLICIES ASSESSED
ENDS Europe DAILY 2091- 5 May 2006
Tough policies to combat climate change can simultaneously improve
air pollution, energy security and competitiveness in the EU, says a
report published this week by the Netherlands environmental
assessment agency. The monetary benefits of reduced air pollution
alone are estimated to offset the costs incurred by such policies.
Member states will have to spend around 1.7% of GDP on climate
policies by 2030 - alongside "broad international participation" -
for there to be a 50% chance of limiting global temperature increases
to 2 degrees, the authors say. Costs are expected to rise thereafter
to peak in 2050.
The study forecasts that such stringent climate policies could reduce
European oil and gas imports by 30% and 10%, respectively,
strengthening security of supply. Changes in energy supply are in
turn expected to cut particulate matter emissions by 35%, enough to
meet the 2030 targets set out in the EU thematic strategy on air
Strict policies on climate could also boost technological
development, the study says. The authors emphasise the value of
long-term standard setting rather than short-term market instruments
to drive innovation.
The report also details the likely impact on policy objectives of a
range of individual energy technology options.
In a related development, EU advisory body the economic and social
committee discussed energy issues at a hearing in Brussels on
Tuesday. Conflicting views emerged on the competing merits of
shifting to renewable energy, investing more in nuclear power or
aiming first and foremost to improve energy efficiency. Ulla
Sirkeinen, who is to draft an opinion on energy for the EESC,
concluded that the EU should set a strategic goal of a diversified
9 May 2006
Row takes off over Heathrow runway claims
Michael Harrison, Business Editor - The Independent - 6 May 2006
Plans for a third runway at Heathrow were put back on the agenda yesterday after air quality tests carried out at the airport showed that EU pollution limits in surrounding areas are not being breached.
British Airways, which commissioned the tests, said the results strengthened the case for another runway and demonstrated that pollution from aircraft was not a problem at Heathrow.
But campaign groups opposed to the expansion of the airport immediately accused BA of "fiddling the figures", arguing that the test procedures it had used were inadequate and designed deliberately to mislead.
A government White Paper in 2003 turned down a third runway at Heathrow in favour of a second one at Stansted on the grounds that nitrogen dioxide (NO2) levels around the west London airport would exceed the limits set down in an EU directive, which comes into force in 2010. It said the earliest a third runway could be considered was between 2015 and 2020.
But BA said yesterday the latest tests, carried out by AEA Technology and analysed at its National Environmental Technology Centre, showed that the limits were not being breached. BA said that at five of the eight test sites around Heathrow, levels of NO2 were below the limit of 40 micrograms per cubic metre laid down in the directive. The test sites where the limit was exceeded were inside the airport, on the perimeter and next to the M4 motorway while those where it was within the limit were in residential areas.
At the time of the White Paper, consultants working for the Department for Transport calculated that 14,000 residents living close to Heathrow would suffer NO2 levels above the EU limit even without the building of a third runway. But BA said its tests showed that few, if any, residents would be affected by excessive pollution. Willie Walsh, BA's chief executive, said: "The notion that flying is a selfish, antisocial activity that single-handledly threatens planetary catastrophe bears no relation to the evidence."
Clive Soley, the Labour MP who chairs the Future Heathrow lobby group, said: "These test results do improve things, which is a relief because I am concerned about the continuing decline of Heathrow. It is clear that the problem is pollution from road transport, not aircraft." The onus, he added, was now on the airport authorities to achieve zero emissions from vehicles within the airport perimeter.
But Pete Lockley of the Aviation Environment Federation, said: "The claim by BA does not stand up. They have used data from diffusion tubes, a method that the EU says is inadequate. It's totally irrelevant whether the pollution comes from aircraft or cars - pollution levels have to come down below the limits, full stop. The real question is whether the levels would remain below the legal limit if a third runway was built and mixed mode introduced. If they're at or around the limits now, where will they be with a third more planes taking off?" John Stewart, the chairman of the pressure group Hacan Clearskies, said: "It is no exaggeration to say that BA has been caught fiddling the figures. They seem to be deliberately seeking to mislead."
The DfT is soon expected to announce arrangements for monitoring the air at Heathrow as part of a review of the 2003 White Paper due to be published at the end of this year. Whether to sanction a third runway at Heathrow will be an early test for Douglas Alexander, the new Transport Secretary, particularly as BAA admitted this week the second Stansted runway may not be ready until 2015-16 - some three years later than planned.
OUR COMMENT: Isn't science wonderful! The origins of airport emissions can now be identified and we know that the culprits at Heathrow are those dangerous cars and buses, not the aircraft. They may be flying overhead and up and down runways all day but they are not causing any harm, your wheezy chest is entirely due to all those cars and lorries driving up and down the M4 and along other roads.
Exactly the same behaviour is happening at Stansted too, according to the Air Quality section of the recent Environmental Assessment accompanying the application for the expansion of runway one. Aircraft are just not producing those nasty emissions any more, or rather, it seems the nasties have been trained to go straight up into the sky rather than hang around near the ground and get blown out into local homes or Hatfield Forest. We await with interest further explanations of this newly recognised phenomenon.
6 May 2006
BAA FORMALLY REJECTS FERROVIAL OFFER
Toby Shelley - Financial Times - 3 May 2006
BAA formally rejected the takeover bid of 810p a share from Ferrovial, the Spanish infrastructure group, on Wednesday.
The statement came as Ferrovial said it might be prepared to raise its £8.75bn offer modestly if BAA's board recommended it to shareholders.
BAA's board argued that the value of its three London airports - Heathrow, Gatwick and Stansted - was growing fast due to investment and this would deliver greater returns to shareholders.
The regulated asset base will grow 20 per cent to £12bn in the next two years, the company said, adding that it would invest £9.5bn in expansion over the next 10 years. The brief defence statement said BAA exported skills built up at its London operations to its other airports. It pointed to a rate of return of 12 per cent from its Scottish airports and 14.4 per cent from Naples.
Mike Clasper, chief executive, said his priorities had been to improve performance and renew management. Half the executive committee has changed during his tenure.
Mr Clasper said of the Ferrovial offer: "It's not the right time. It's not the right price". Marcus Agius, chairman, Ferrovial's offer price did not take account of the value BAA generates and that it was trying to get the company on the cheap.
6 May 2006
BAA'S STANSTED EXPANSION APPLICATION
Campaigners stand firm
Bishop's Stortford Citizen - 4 May 2006
CAMPAIGNERS have urged Uttlesford District Council to stand firm against a planning application that could turn Stansted Airport into the biggest single-runway airport in the world.
Airport operation BAA has submitted plans to have restrictions on flight and passenger numbers lifted.
If agreed the number of flights could be increased from 241,000 to 263,000 per year - or 63 a day - while passenger numbers would soar from 25m to 35m.
But campaign group Stop Stansted Expansion has voiced concerns over the environmental impacts of airport development.
Campaign director Carol Barbone warned the council not to be "hoodwinked", adding: "The application will not be about bricks and mortar, but about the direct and indirect effects of an airport handling more passengers.
"In determining the application Uttlesford Council must account of its statutory duties to contribute to the achievement of sustainable development so that the people of this area are not sold short."
Mrs Barbone highlighted the importance of seeing beyond the gloss and pointed out that pressures on road and rail infrastructure, local air quality, water usage, landscape and climate change would be "enormous".
"BAA itself has acknowledged that the runway could handle 40m passengers a year whilst others have estimated 45m or even 50m passengers could be handled on the existing runway.
"The onus is on them to demonstrate how its proposals for further expansion on the existing runway could truly be sustainable in terms of the effects on local people and the environment."
6 May 2006
LOCAL AIRPORT EMISSIONS DO MATTER
Every emission counts
Dunmow Broadcaster - 4 May 2006
THE local airport operator wrote in the letters page of April 27, to tell us that UK aviation contributes only 0.1 per cent of total global carbon emissions into the atmosphere.
The implication of this response is that one-thousandth doesn't matter and it should be allowed to double or triple its effect on climate change.
My use of a hosepipe to water my garden probably equates to much less than one-millionth of the water used in south of England. But following the logic of the airport operator, I should claim exemption from the hosepipe ban. Of course, I won't.
It's about time the airport operator became responsible and stopped trying to convince us that more is less provided you compare it with something much bigger and worse.
The way in which Uttlesford District Council handles the planning application for Stansted Airport will be watched closely by many, the aviation industry, the government and especially the environmental groups.
People in and around Uttlesford district will expect a clear sign that councillors have a well argued case for whatever decision they make.
It will not be good enough to take what the airport operator says at face value.
Experience with the approved permission to grow to 25 million passengers showed how easily it is to be misled. To challenge proposals you need evidence of alternatives; benchmarks of best practice now and in the future.
Cllr Alan Dean
Member for Stansted , Uttlesford District Council
Member of the East of England Regional Assembly
6 May 2006
HEATHROW NOISE PLANS COULD 'PUT CHILDREN AT RISK'
Ian Morgan - 24hourdash.com - 27 April 2006
A BAA scheme designed to protect schools from aircraft noise could "put children at risk", say local government officers.
The airport operator's community buildings programme will provide £5 million a year over five years to help insulate schools and other public buildings under the Heathrow flight path.
But property experts from Hounslow Council claim the real cost of bringing schools in line with national noise standards in its borough alone is a staggering £103.6 million.
This figure represents a shortfall in funding for Hounslow's schools in excess of £80 million, say council chiefs.
Hounslow Council's head of environmental strategy, Rob Gibson, said: "We have long suspected that the BAA scheme was inadequate but these figures confirm our worst fears. There is a serious shortfall in funding that could put local children at risk and condemn a generation of young people to an education blighted by incessant aircraft noise.
"With the financial package BAA is proposing, it will take decades to finish the job. We need a scheme that will protect today's schoolchildren, not a scheme that may protect their grandchildren."
BAA rejected a council-backed scheme to protect schools from aircraft noise in the summer of 2005.
The council has subsequently undertaken extensive research into the cost of bringing its 79 schools in line with Government regulations.
According to this new research, the cost of meeting the noise and ventilation standards for schools laid down by the DFES in the borough of Hounslow alone is £103.6 million.
BAA's new scheme, which will provide £25 million over five years, is intended to resolve the problems experienced by those using schools and community buildings not just in Hounslow, but in the many boroughs under the Heathrow flight path.
Aircraft noise is becoming an increasingly serious problem in schools around the country and is expected to worsen as demand for air travel continues its upward trend.
In Hounslow's schools, more than 70% of teachers say that aircraft noise is a problem.
Their concerns are supported by recent scientific research showing that repeated exposure to aircraft noise impairs children's reading, comprehension and memory.
Officials from Hounslow Council have already held high level talks with the Department for Education and Skills about the issue and are pressing for a debate in the House of Commons.
Rob Gibson said: "We are doing all we can to ensure that local children can enjoy a first class education in schools that meet international standards for noise and ventilation."
Kathryn Harper-Quinn, Headteacher at Hounslow Heath Infant and Nursery School, added: "Schools under the flight path need quality insulation and ventilation because the disruption is considerable."
OUR COMMENT: The same concerns could apply to all schools situated in noisy areas round any airport.
6 May 2006
AIR FARES REACH A RECORD LOW
Andrew Clark, Transport Correspondent - The Guardian - 1 May 2006
The true extent of the budget air travel revolution has emerged in newly
released government figures which show that fares have plummeted dramatically
over the past decade to a record low.
Data disclosed by the Department for Transport under the Freedom of
Information Act reveals that the typical price of a short-haul leisure air
ticket has tumbled from £110 to £63 over 10 years - a fall of 43%. For
business travellers, average domestic and European fares fell 49% to £113
from 1994 to 2004 as corporate fliers increasingly occupied economy-class
seats and began using low-cost airlines.
The statistics were hailed by the aviation industry as proof that it had
delivered value despite challenges such as the terrorist attacks of September
11, fluctuating economic conditions and soaring oil prices. Easyjet, for
example, warned in February that its fuel bill would rise by £55m in the
first half of the year, adding that it expected a first-half loss of £45m.
Figures from the airline are due later this week. But environmentalists
warned that the statistics were further evidence of the damage being wreaked
as aviation's share of carbon emissions steadily rises.
The drop in prices has been delivered against a backdrop of steadily rising
demand. The number of holidaymakers flying to European destinations has leapt
from 36 million to 65 million annually over the same period.
6 May 2006
SHOULD THIS CUT PRICE CURRENT
AVIATION EXPANSION CONTINUE?
Global greenhouse gases continue to increase
ENDS Europe Daily, 2089 - 3 May 2006
Concentrations of major greenhouse gases in the world's atmosphere rose by 1.25% in 2005 to stand 21.5% above their 1990 level, America's National oceanic and atmospheric administration reported on Monday.
Noaa's latest annual index shows that global CO2 - which accounts for 62% of the climate impacts of long-lived greenhouse gases - rose by 2.1 parts per million to 378.9 ppm.
Nitrous oxide concentrations also continued a steady rise.
Levels of methane remained stable. Levels of two CFCs fell slightly.
6 May 2006
3C HOTTER - EARTH'S DANGER POINT
NOW SCIENTISTS SAY IT IS GOING TO HAPPEN
Mark Henderson, Science Correspondent - The Times - 4 May 2006
THE world will warm by 3C (5.4F) even under emissions projections for 2050
that leading scientists consider optimistic, the United Nations group that
studies global warming has said.
The increase, which would cause drought and famine for 400 million people and
devastate wildlife, is predicted by the Intergovernmental Panel on Climate
Change (IPCC) in its most confident assessment yet of how greenhouse gases
are affecting global temperatures.
A draft of part of the panel's fourth report, which the US Government has
released on the internet, shows that it has, for the first time, placed a
likely figure on the progress of global warming, indicating a level of
scientific certainty that it has avoided in the past.
It says that temperatures could increase by between 2C and 4.5C when
atmospheric carbon dioxide reaches double the pre-industrial level, but it
declares 3C to be the "most likely value" for such change. A 3C rise is the
level at which a Met Office conference last year judged that "dangerous"
climate change would occur. Previous reports from the IPCC, a traditionally
cautious body, have given only wider ranges of possibilities, which it
acknowledged to be highly uncertain.
While the panel does not indicate when this rise will occur, experts think it
probable that pre-industrial carbon dioxide levels will double by 2050, even
given successful efforts to contain greenhouse gas emissions.
Sir David King, Britain's chief scientific adviser, has argued that
stabilisation of carbon dioxide at this level - 550 parts per million - is
the best target that the world can hope for, and his view is endorsed by many
climatologists.A report issued by Sir David last month suggested that a 3C
rise would put 400 million people at risk of starvation because of lost
arable land and water shortages.
As the figure is a global average larger increases could be expected in areas
such as the South East of England, where a 4.5C increase could bring 25 per
cent more rainfall in winter and 60 per cent less in summer. More extreme
weather is also predicted, and rising sea levels would leave many coastal
areas at risk of flooding.
The draft document is the report of the IPCC's Working Group I, which examines
the physical science basis for climate change. The analysis of Working Groups
II and III, which consider detailed consequences and mitigation strategies,
have not been released.
Its contents came to light yesterday when the journal Nature reported that the
United States had published the draft on a website, inviting comments from
experts and other interested groups. The unusual manner of its release has
alarmed some scientists and environmental groups, who questioned whether the
Bush Administration was seeking to defuse its bold conclusions before the
final version is published in February.
Roger Pielke Jr, of the University of Colorado, told Nature: "If the report is
already out there in circulation, then the 'news' value is likely to be much
diminished when the official report is finally released." Friends of the
Earth said that the US Government had repeatedly tried to undermine the IPCC
in the past.
Apart from providing the most precise estimates yet of the likely course of
climate change, the document's language is much more confident than that of
the IPCC's third report published in 2001. It points to decisive new evidence
that the rising temperatures recorded over the past 50 years are the result
of human activity and not natural variation. The pattern of warming ocean,
surface and lower atmosphere temperatures, with melting ice at the poles and
falling temperatures in the stratosphere, now make it "highly unlikely (less
than 5 per cent)" that natural changes could be responsible.
Catherine Pearce, of Friends of the Earth, said: "The implications of a 3C
rise give a greater increase in urgency. What we need to see is reinforcement
of the current EU target of 2C."
CLIMATE CHANGE FINDINGS
# The document is a draft version of the IPCC's Working Group I, which is
considering the underlying science of climate change
# The rise in temperature when atmospheric carbon dioxide reaches twice its
pre-industrial levels is likely to be from 2C to 4.5C. The "most likely
value" is 3C. Values higher than 4.5C "cannot be excluded", but do not
correspond well with the data
# Climate change at present is "highly unlikely" to be the result of natural
# Global average temperatures have increased by about 0.65C since 1900, up
from the 0.6C estimate in last report
# The world faces future global warming of at least 0.1C per decade even if
all greenhouse emissions were to end today
# The IPCC report will be finalised at a meeting next month and published next
year. It will also contain two other reports into mitigation strategies and
likely consequences, details of which have yet to be released
# Details of how to access the whole report can be found at:
6 May 2006
'CLEAR' HUMAN IMPACT ON CLIMATE
Richard Black, Environment Correspondent - BBC News Online - 3 May 2006
A scientific report commissioned by the US government has concluded there is
"clear evidence" of climate change caused by human activities.
The report, from the federal Climate Change Science Program, said trends seen
over the last 50 years "cannot be explained by natural processes alone".
It found that temperatures have increased in the lower atmosphere as well as
at the Earth's surface.
However, scientists involved in the report say better data is badly needed.
Observations down the years have suggested that the troposphere, the lower
atmosphere, is not warming up, despite evidence that temperatures at the
Earth's surface are rising.
This goes against generally accepted tenets of atmospheric physics, and has
been used by "climate sceptics" as proof that there is no real warming.
The new report, Temperature Trends in the Lower Atmosphere, re-analyses the
atmospheric data and concludes that tropospheric temperatures are rising.
This means, it says, that the impact of human activities upon the global
climate are clear.
"The observed patterns of change over the past 50 years cannot be explained by
natural processes alone, nor by the effect of short-lived atmospheric
constituents (such as aerosols and tropospheric ozone) alone," it says.
Holes in the data
But there are some big uncertainties which still need resolving.
Globally, the report concludes, tropospheric temperatures have risen by 0.10
and 0.20C per decade since 1979, when satellite data became generally
The wide gap between the two figures means, says the report, that "...it is
not clear whether the troposphere has warmed more or less than the surface".
Peter Thorne, of the UK Meteorological Office, who contributed to the report,
ascribes this uncertainty to poor data.
"Basically, we've not been observing the atmosphere with climate in mind," he
told the BBC News website.
"We're looking for very small signals in data that are very noisy. From one
day to the next, the temperature can change by 10C, but we're looking for a
signal in the order of 0.1C per decade."
The report shows up a particular discrepancy concerning the tropics, where it
concludes that temperatures are rising by between 0.02 and 0.19C per decade,
a big margin of error.
Additionally, the majority of the available datasets show more warming at the
surface than in the troposphere, whereas most models predict the opposite.
For Fred Singer, of the Science and Environmental Policy Project, a prominent
climate sceptic, this suggests that the report's support for the concept of
human-induced climate change is spin rather than substance.
"The basic data in the report is quite OK," he said, "but the interpretation
that's been given is different from what the data says.
"In particular, [the authors] suppress the major result of the report; that
data do not agree with models."
Measuring tropospheric temperatures is far from a simple business.
Satellites sense the "average" temperature of the air between themselves and
the Earth, largely blind to what is happening at different altitudes.
To compound matters, instruments on board satellites degrade over time, orbits
subtly drift, and calibration between different satellites may be poor.
Weather balloons (or radiosondes) take real-time measurements as they ascend,
but scientists can never assess instruments afterwards; they are
Correcting for all these potential sources of error is a sensitive and
The report makes clear recommendations for the kind of infrastructure needed
to produce higher-quality data and resolve remaining uncertainties.
"I would be reticent to say the report provides a clear answer," said Peter
Thorne, "but I would say it provides a clear road-map.
"But we do now have overlap between what is happening and what we believe
ought to be happening."
6 May 2006
REDUCING GREENHOUSE GASES - WILL CARBON EMISSIONS TRADING MAKE ENOUGH DIFFERENCE?
Pollution fears as credits scheme falters
Tim Webb - The Independent - 30 April 2006
The price of carbon credits crashed by more than a half last week after
European countries said their levels of pollution would be less than
The price of carbon dioxide fell from just over €30 (£21) per ton to close at
€13.45 on Friday over market fears of a glut of unwanted carbon credits.
If prices remain this low, companies will have less incentive to cut pollution
levels. It would also threaten to render one of the cornerstones of the EU's
policy to cut carbon dioxide emission levels almost impotent.
The rout was sparked by the announcements from France, the Netherlands,
Estonia and the Czech Republic that their heavy industry had polluted less
than expected last year.
All 25 European Union countries participating in the emissions trading scheme
must report last year's emission levels by 15 May. If other countries also
announce lower than expected levels, the price of carbon will continue to
plummet. The UK has yet to report.
The scheme, launched last year, is designed to give companies an incentive to
cut pollution and to punish those that do not.
Each country must agree annually with the EU a national "allocation" of
pollution levels for heavy industry. Households, transport and light industry
are excluded from the scheme.
In turn, each heavy industry company is given an individual pollution target.
This should be lower than its previous pollution level.
If it exceeds this, it must buy in carbon credits to balance its books. Those
companies that pollute less than their individual targets can sell the
surplus on to the market.
Companies do not have to settle their carbon dioxide accounts for several
years. This means that if countries are polluting less than expected, there
will be less need to buy in credits, causing the price to fall, just as it
did last week.
The scheme has been beset by problems. The UK Government has taken the EU to
court over the method by which its allocation was set.
6 May 2006
£1BN WINDFALL FROM CARBON TRADING
Roger Harrabin, Environment Correspondent - BBC Online- 1 May 2006
Power firms could make a £1bn windfall profit from the EU Carbon Emissions
Trading Scheme, BBC News has learned.
The windfall is likely because many firms have benefited from increases in
electricity prices brought about by the scheme without needing to make any
extra investment in return.
Peter Bedson, from IPA Consulting, confirmed to the BBC that the unwarranted
profit could reach £1bn.
Environmental pressure groups have called the news a scandal.
Part of the problem, Mr Bedson said, is that firms have been given,
free-of-charge, the carbon emissions permits on which the scheme is based.
This, he explained, is like the government giving energy firms free money.
The WWF pressure group has demanded a windfall tax to re-direct the profits
into energy conservation.
The Conservatives said it was an example of government incompetence.
Their environment spokesman Peter Ainsworth said: "MPs warned the Department
of Trade and Industry (DTI) this would happen but they took no notice."
The windfall lies in the design of the EU emissions trading scheme, which
works by governments setting a limit for the total amount of carbon that can
be emitted from its heavy industry and the power sectors.
Instead of banning firms from exceeding the limit, governments hand the firms
free pollution allowances up to a certain level.
If a firm can cheaply cut its pollution by installing better technology it
will have carbon permits to spare.
If another firm is overshooting its pollution limit it will need to get hold
of extra allowances. The firms can then trade carbon permits on the EU
Economists like it because it gives maximum pollution savings at least cost.
But a true market scheme would see the permits auctioned, not given away by
The system means that generators using high-carbon fuels like coal need to buy
extra carbon permits.
That forces up the price of electricity overall, which benefits generators
using low-carbon fuels like nuclear and gas. This is where the power firms
have made their windfall profit.
Mr Bedson did a report on the issue for the DTI earlier this year.
Since then the price of carbon shot up and his revised estimates suggest that
the resulting windfall will reach around £1bn.
This will depend on the future price of carbon, which is in doubt since the
crash in the carbon price partly triggered by over-allocations of pollution
permits to French generating.
Green groups are particularly angry that despite knowing about the windfall,
the government have been fighting the EU in the courts to try to get the
carbon allocation for the firms increased.
Last week they confirmed they would abandon the fight. But the DTI wants to
compensate the generators by increasing their allocation under the next phase
of the scheme.
WWF, the Conservatives and the Lib Dems all want the government to set much
tougher limits on carbon emissions from the biggest polluters.
They all say the government should auction the permits.
Conservative environment spokesman Peter Ainsworth said: "All round Europe
governments are in cahoots with the lowest common denominator of business.
"The problem will not be sorted out until the market is made to work properly
by forcing firms to bid for their permits instead of being allowed to lobby
government for them free of charge. The DTI aren't competent to decide on
Attention will now be focused on the government's carbon targets for big
business under the next phase of the EUETS, which are due to be resolved
The government has said it will cut carbon emissions from big firms by between
three and eight million tonnes. But experts note that the cuts are not real
cuts - they are based on what industry is projecting it will emit in future.
So the three million tonnes cut is in fact an increase in pollution.
Government supporters will argue that there were bound to be problems when a
large complex scheme like the scheme was set up, but that it was vital to
design a scheme that would be supported by big business.
They will hope that problems will be ironed out in future year when the scheme
Problems are happening across Europe. The price of carbon crashed last week,
and the market is in disarray.
It will come to a head this week when governments reveal how many extra carbon
permits need to be purchased.
The scheme is a mainstay of the EU's policy for meeting its Kyoto obligations.
Critics of the Kyoto Protocol are already celebrating the problems in the
The UK government is failing in its carbon emissions targets. It planned to
cut CO2 20% by 2010 to tackle climate change - described by Tony Blair as the
biggest long-term challenge for mankind.
But under Labour emissions have gone up by more than 2%.
6 May 2006
IT'S NOT ONLY CO2 THAT'S A PROBLEM WITH AIRCRAFT
Blocking out the sun
The Ipswitch Evening Star - 3 May 2006
SEASIDE residents are today being urged to back campaigners fighting proposals for an extra runway at Stansted - amid fears they will see less sunshine in future.
Now it is spring, the contrails from jet planes flying over Felixstowe have once again become highly-visible.
Residents are again complaining on clear mornings, blue sky can be turned white as if it is cloud-covered in just a few hours thanks to sometimes more than a dozen contrails expanding several miles across in the upper atmosphere and joining up.
The concerns came as airport operator BAA today announced it expects the number of passengers using London's three main airports grow by 3 per cent per year to about 165 million by the middle of the next decade. Stansted's passengers are forecast to rise from 22.2 million to 40.5 million.
Air campaigner Jeff Topple, of Gosford Way, Felixstowe, said: "Yesterday at 5.45am the sky was beautiful and blue. Then a series of planes went over leaving these contrails in the sky.
"In just over an hour, by 7am, these trails had got wider and wider and the sky was turned white - the sun was gone completely.
"If we get any more planes going over I think we can say bye, bye sun.
The Evening Star's Air Fair campaign is highlighting the growth in air traffic following changes last year to the region's airspace to increase the possible number of flights per day by 30 per cent.
Planes are now permitted to fly 5,000 ft lower over the county, and experts say it means around 1,200 planes a day over east Suffolk - including Felixstowe and north Ipswich.
Government expects the number to increase 50pc by 2012 - with three million planes a year using UK airspace - and plans are in hand to expand Stansted and Luton airports.
Mr Topple said: "We need to back these people who are campaigning to stop the extra runway at Stansted - we need to get behind them because it will affect us a lot here in Felixstowe if we see more and more planes."
At one stage mid-morning yesterday, more than 18 contrails could be seen in the sky over Felixstowe - showing just how many aircraft are now flying over the resort.
What do you think of the effects of the planes' contrails? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN, or e-mail EveningStarLetters@eveningstar.co.uk.
6 May 2006
'CLEAR LEAD NEEDED' ON GREEN LIFE
BBC News Online - 2 May 2006
Environmental advisers to the UK government are urging more radical action to
promote green lifestyles.
The Sustainable Consumption Roundtable (SCR) says people need a clear lead
Its report, I Will If You Will, urges measures such as taxing flights,
rewarding water conservation and banning over-fishing of cod.
It says consultation shows that people want to adopt greener habits, but many
believe individual action is futile.
Action stimulated by regulation can be effective and go down well with the
public, it adds, citing the example of standards mandating energy-efficient
The SCR report comes after 18 months of consultations with members of the
public, businesses and other stakeholders across Britain.
"Going green can be smart and stylish," commented SCR co-chair Ed Mayo, "but
it is not yet simple.
"We want to call the bluff of politicians, to take action to make the
sustainable choice the easier choice."
In the mainstream
The report's main conclusion is that people are generally quite happy with
measures which bring positive environmental results, even at some cost to
themselves, so long as those measures are applied fairly.
This means, says the SCR, that government must take a lead in mandating and
implementing such measures rather than waiting for consumers or business to
"Government and business must focus fairly and squarely on mainstream
consumers, rather than expecting the heroic minority of green shoppers to
shop society's way out of unsustainability," it declares.
Among the concrete measures it proposes are:
* A tax, with an opt-out mechanism, on air travel to compensate for carbon
* Making on-site energy generation common in homes and public buildings
* Rolling out "smart" meters to raise awareness of energy consumption
* Creating a major cost incentive to buy efficient cars
* Removing threatened fish such as cod from sale until stocks recover
Government could take a clear leadership role, the SCR feels, by committing to
making all its own activities carbon-neutral.
The SCR is a joint initiative between the Sustainable Development Commission
and the National Consumer Council, supported financially by Defra and the
4 May 2006
STANSTED EXPANSION PLANS SUBMITTED
Kevin Done - Financial Times Online - 27 April 2006
BAA, the UK airports operator, has applied for planning permission to expand capacity at London Stansted airport from 25m to about 35m passengers a year.
Stansted, which has recently overtaken Manchester airport to become the third busiest in the UK measured by passenger numbers, is handling some 22m passengers a year.
BAA, which is fighting a hostile takeover bid by a consortium led by Ferrovial, the Spanish construction, infrastructure and services group, said it expected to reach the present planning limit of 25m passengers a year at Stansted by 2008. It would reach 35m a year by 2014.
The application, submitted to Uttlesford district council and aimed at making maximum use of the existing single runway, is separate to the ambitious scheme BAA is developing to build a second runway and terminal at Stansted, the so-called Stansted Generation 2 project.
OUR COMMENT: The Application is accompanied by an Environmental Impact Assessment consisting of 16 separate documents with a large number of appendices, all essential reading for serious objectors, since the weakness of the case lies in the statistics. They can be downloaded from www.stanstedairport.com/future. One fact is already clear. They succeeded in getting very generous conditions for the expansion to 25 mppa. This application is requesting 23,000 more flights and "about" 10 more mppa long before they have even reached their present limits. Many of the approved facilities and buildings have yet to be built. Why the hurry?
PUSH STARTS FOR RUNWAY ONE GROWTH
Sandra Perry - Herts and Essex Observer - 27 April 2006
The numbers game is now in full swing for people living in the shadow of Stansted Airport. Yesterday BAA kick-started the planning lottery when it submitted its bid for permission to expand the use of its existing runway. It is seeking approval from District Councillors to go beyond its current 25 mppa to 264,000 air transport movements a year, "about 35" mppa.
But others have pointed out that that could eventually mean anything up to 45mppa or even 50 mppa with future technological advances in aircraft size. BAA application for a second runway is due in 2007.
Bishop's Stortford Councillor Bernard Engel yesterday took BAA to task at the airport consultative committee over the imprecise phrasing. Speaking before the meeting, he said, if they want 35mppa, they should say that. If they want to go over that in the future, that should be considered at another time with another planning application.
He said a 10% growth in passengers might mean nothing to them, but it would mean 10% more traffic on the roads. He claimed BAA had dropped the phrase "full capacity" because it had been "frightened off". "It would be highlighted by myself and others as being a con. They don't want to be tied down, that's the crux of the matter."
The Herts County Councillor pointed out that Stansted had never used all its current 241,000 transport movements and now wanted the quota increased to 264,000.
Airport MD Terry Morgan's report said "that will enable us to grow to serve about 35 m passengers" to which Mr Engel commented: "Let us be precise. They use weasel words all the time."
On Tuesday night Stop Stansted Expansion campaign director Carol Barbone made a statement at the full Uttlesford council meeting, urging the authority to live up to its heavy responsibility and not "sell this area short".
The focus had to be on preventing any additional impact, within tight limits that were "truly sustainable", and Uttlesford must take its own independent expert advice.
"If approved, this will make Stansted the busiest single runway in the world" she told them. "The community is counting on you to do the right thing."
4 May 2006
RYANAIR CAR PARKING IS BREACHING PLANNING LAW
Council: we don't want FC to close
Toby Allansin - Herts & Essex Observer - 27 April 2006
Despite Blue's boss John Goodwin's claims, East Herts District Council insists it does not want to see the death of Bishop's Stortford Football Club. In last week's Observer Mr Goodwin, who will give up his seat on the board and stand down as chief executive and director of football at the end of the season, slammed the council.
He said the authority's determination to put a stop to the airport park-and-ride business operating at Woodside Park would deprive the club of £125,000 annual revenue and, as a result, could prove the final chapter in the Blues' 132 year history.
Yesterday a council spokeswoman said: "Mr Goodwin claimed the council's action would force the club to close, but every other football club of a similar size across the district appears to survive without running illegal operations. The council isn't looking to see the demise of the football club - just the cessation of the unauthorised park-and-ride use".
With the park-and-ride in place, the spokeswoman said the club was failing to deliver a number of services.
"The land currently used for the parking of up to 1000 cars was originally designated by the club for floodlit all-weather training pitches, grass training areas, youth pitches and car parking for spectators and visitors. These cannot be provided. The Council has a duty to protect green belt land from illegal use and development such as this. Green Belt land is one of the aspects of the district that residents value so much and we will continue to take action wherever appropriate to preserve such areas for the benefit of everyone rather than the profit of a small minority."
The park-and-ride has been running since 2000. In November Timelast Ltd., the football club and Mr Goodwin's son Bradley, chairman of Bishop's Stord FC Members' Parking Association, were fined £20,000 each for failing to comply with an enforcement notice in relation to the park-and-ride.
OUR COMMENT: The issue of off airport car parking has been a fractious subject ever since the airport was first approved. The intention was to maintain an "airport in the countryside" and not to allow the sprawling associated development that occurred first round Heathrow and then round Gatwick. The Countryside Protection Zone round the airport protects this intention and airport car parking is expected to be restricted to the airport itself. Bishop's Stortford is outside the Protection Zone but clearly does not want airport car parking filling up its own green and recreational spaces. In addition, BAA relies on car park revenue to fund the airport itself as the airlines charges are relatively low in order to attract the low cost airlines. What do Bishop's Stortford residents think about this illegal growth in their green belt? One reaction might be that the revenue received by the football club seems rather low for 1000 cars! But Ryanair, whose passengers use this car park, is renowned for getting a cheap bargain!
4 May 2006
BOSSES BACK BIGGER AIRPORT
The Dunmow Broadcaster - 20 April 2006
A SURVEY of the 2000 members of the Essex branch of the Institute of Directors shows both support for Stansted Airport expansion and awareness of its environmental impact. It also revealed that 60 per cent of those taking part had used Stansted for business travel up to five times in the past 12 months and 70 per cent had used the airport for leisure travel.
The business benefits were seen as "very important" by 55 per cent with a further 20 per cent seeing them as "important".
But 90 per cent agreed with the view that the environmental impact of expansion must be taken into account. Just 10 per cent of respondents were neutral on this point, with none viewing it "not important". Two-thirds of respondents supported the airport's expansion plans, with just under a third opposed and five per cent having no view.
Development along the M11 corridor and the increased urbanisation of North West Essex that will be spurred by expansion at Stansted was welcomed to some degree 50 per cent. Only 35 per cent were opposed and 10 per cent were neutral on the issue.
Essex branch chairman Paul Rolison said: "The business benefits are clear: Stansted plays a vital role in attracting inward investment into the region."
OUR COMMENT: No disagreement with Paul Rolison's statement BUT, look at the statistics - in order to get more business travellers Stansted needs more traditional routes used by business, not an ever expanding cheap recreational services to European airports prepared to charge the lowest landing charges. Environmental impacts must be taken into account, and Stansted could endeavour to be more business friendly to the business traveller without further expansion.
4 May 2006
BAA'S CUSTOMERS SAY "NO!"
Darling urged to block BAA Stansted investment
Saeed Shah - The Independent - 27 April 2006
Ryanair and other airlines that use BAA's Stansted airport yesterday hit out at its £550m plans to increase passenger numbers and expand facilities.
The Stansted Airline Consultative Committee (ACC), which includes Ryanair, easyJet and British Airways, was reacting to a planning application submitted yesterday to Uttlesford District Council to raise the number of passengers allowed through the airport each year from 25 million to 35 million. The ACC is also against a second, more ambitious project to build a second runway at Stansted. According to the airlines the new runway would cost £4bn but BAA said the real figure was £2.7bn.
The airlines have called for the Secretary of State for Transport, Alistair Darling, to intervene to block the runway scheme. BAA expects to make a planning application for it in summer next year.
David O'Brien, ACC's chairman, said: "Over the past 18 months the ACC has been at pains to ensure that additional facilities at Stansted meet user requirements and are provided in a cost-effective manner. However, BAA insists on wasting billions to build gold-plated facilities that no one wants and that consumers will be expected to pay for through higher airport charges."
Nearly 60 per cent of the traffic at Stansted comes from Ryanair's operation there. BAA charges airlines about £3 per passenger to use the airport. It has said this will go up to nearly £5 between now and 2008 to pay for upgraded facilities.
A spokesman for BAA said that Ryanair and other airlines were currently enjoying discounted charges at Stansted. Nick Barton, Stansted's business development and planning director, said: "Today is an important day for Stansted and is the culmination of two years of extensive and wide-ranging studies and consultation on our proposals."
4 May 2006
MPS EXPRESS THEIR CONCERNS
MPs call on Chancellor for an increase in air passenger duty
Michael Harrison, Business Editor - The Independent - 25 April 2006
Gordon Brown was urged yesterday to impose higher taxes on air travellers by a Labour-dominated committee of MPs who said an increase was urgently needed to help Britain meet its climate change targets.
The Commons Treasury Select Committee said that the Chancellor's justification for freezing air passenger duty (APD) in last month's Budget for the fifth year running was "incoherent and unconvincing", and called on him to make "the fullest possible use of taxation measures" to achieve the Government's environmental targets.
Specifically, the committee said the Government should give "serious consideration" to increasing the rate of APD, noting that tax receipts from the levy had fallen 8 per cent between 2000 and 2004, even though passenger numbers had risen 35 per cent. The committee said that if this trend continued then the APD risked becoming "an ineffective policy instrument" which did nothing to address the problem of aviation's contribution to rising greenhouse gas emissions.
The reason for the decline in tax receipts was Mr Brown's decision in 2000 to introduce a new lower rate of APD for short-haul economy flights of just £5. "It is telling that the only aviation-specific taxation measure contained in the Budget is to widen the scope of the European APD to include Croatia - meaning that it is now £15 cheaper to fly economy class to Croatia," said the MPs.
Over the four-year period, the number of chargeable passengers had risen by more than a third to 25 million, and greenhouse gas emissions had risen by 10 per cent or 800,000 tonnes, but tax receipts from APD had fallen from £931m to £856m.
The Treasury told the committee that the plan was to tackle carbon emissions from passenger aircraft by bringing aviation within the EU emissions trading scheme, which currently applies only to heavy industry. But the MPs said that time was running out to bring aviation into the scheme before 2012, and anyway this was only part of the answer. More had to be done at a domestic level.
John McFall, Labour chairman of the committee, said: "The UK is lagging behind on its domestic CO2 targets, and greenhouse gas emissions in the EU from international aviation rose 73 per cent between 1990 and 2003. In this context, the explanations offered by the Treasury about the behavioural effects of its environmental tax policies, and APD in particular, were unconvincing." In addition to action within the EU, the Government must act at a domestic level to curb greenhouse gas emissions from aircraft, he added.
Vince Cable, the Liberal Democrats' Treasury spokesman, said the freeze on APD "demonstrates the shallowness of the Government's green rhetoric".
4 May 2006
MORE TROUBLE FOR BAA
Airport operator fined £1.1m for checkpoint delays
Andrew Clark, Transport Correspondent - The Guardian - 26 April 2006
Frustrated airline passengers queuing at security checkpoints can console themselves with the knowledge that Britain's main airport operator is being fined more than £1m for keeping people waiting.
BAA, which operates seven British airports including Heathrow, Gatwick, Stansted and Edinburgh, yesterday admitted that congestion at checkpoints across the country had become far worse this year because of tighter rules on scanning electronic items in luggage. The company has a target of getting 95% of people through security within 10 minutes. At Heathrow and Gatwick this target is enforced by the Civil Aviation Authority.
Although BAA achieved its benchmark last year, figures published yesterday revealed that BAA's performance has collapsed since the beginning of the year. At Heathrow's Terminal 4 just 47% of passengers got through within 10 minutes last month. At other terminals, the figure ranges from 63-78%. The shortfall will mean a fine of £1.1m imposed by the CAA.
A BAA spokesman said the problem was down to a government rule introduced with little notice which requires travellers to remove laptop computers from their bags before going through security. He said: "The change has had an impact on us. The queues are now going down - but these figures reflect the fact that they are quite long."
If too many electronic items are in a bag, the x-ray image becomes distorted. This is causing increasing difficulty as many travellers cram laptops, palmtops, iPods and mobile phones into their hand luggage. There has also been a change in packing behaviour. Encouraged by low-cost airlines which levy a charge on hold luggage, travellers are carrying much larger suitcases into the cabin of aircraft.
BAA said it was recruiting an extra 150 security guards at Heathrow alone.
4 May 2006
LOW COST AT ALL COSTS?
Airline pulls out in charges row
BBC Online - 25 April 2006
Budget airline Ryanair is to pull out of its Cardiff to Dublin service in a row over proposed airport charges.
In a statement the company says it will transfer the service to Bristol International airport from 1 May.
A spokesman for Cardiff International airport said the proposed charges were less than the average that Ryanair publicly admits it pays across Europe.
Aer Arann says it will take over the 180,000 passengers-a-year route with a twice-daily service from next week.
Ryanair's deputy chief executive, Michael Cawley, said: "Cardiff Airport is pricing itself out of the low fares market."
"Cost increases of the order of 350% belong to an era when the lowest air fare from Ireland to the UK was 250 Euros."
The company says it will provide coach services to Bristol up to 10 May or offer refunds to customers who did not want to transfer to Bristol.
Cardiff International airport defended the proposed charges saying it was the latest in a string of airports to come under attack from Ryanair.
"Statements by the airline about their contract with Cardiff International Airport are incorrect but they are renowned for taking up such positions and have done this with a number of airports in the UK and their native Ireland," the Cardiff International spokesman added.
29 April 2006
BROWN URGES GLOBAL GREEN SOLUTION
BBC News Online - 20 April 2006
Mr Brown denies being rattled by Tory stress on green issues
Protecting the environment can boost rather than hinder economic growth, Chancellor Gordon Brown has said
In a speech to the United Nations in New York, Mr Brown said "great statesmanship" was needed to provide a global solution to climate change.
The chancellor has denied being rattled by Conservative leader David Cameron's recent emphasis on green issues.
Mr Cameron is visiting northern Norway to study the effects of global warming on glaciers.
During his US trip, Mr Brown is expected to discuss oil at a G8 meeting in Washington.
But his first task is his speech on the "global challenge of environmental change".
He told UN ambassadors boosting the economy and protecting the environment were far from being at odds with each other:
" Most of all I think there is now a shared understanding of the problem and a growing sense that we have got to build a shared consensus about how we solve it."
"Environmental sustainability is not an option, it is a necessity," he said.
"For economies to flourish, for global poverty to be banished, for the well-being of the world's people to be enhanced... we have a compelling and ever-more-urgent duty of stewardship to take care of the natural environment and resources on which our economic activity and social fabric depends."
Earlier, he told BBC News he was more optimistic than ever there could be an international consensus.
He said countries were increasingly recognising the need to act on high oil prices by moving to a more diverse range of energy supplies.
And there were huge opportunities to use new science and technology to meet energy needs in an environmentally friendly way.
This weekend Mr Brown will also propose a new World Bank project to encourage developing countries to use alternative sources of energy or use existing sources more efficiently.
He said: "I think companies and governments are now prepared to act in a way they have not been prepared to act before..."
"Most of all I think there is now a shared understanding of the problem and a growing sense that we have got to build a shared consensus about how we solve it."
The Tory leader has been trying to highlight his party's green credentials but the chancellor denied he was rattled and trying to hit back with a "Brown is green" message.
"The big issue on the environment is whether politicians can move beyond words to talking about substantive policies that are necessary," he said.
The government had taken action through the climate change levy and the Tories must propose an alternative if they wanted to scrap it - something they say they will do.
Mr Cameron cycles into work and is installing a wind turbine into his home while Liberal Democrat leader Sir Menzies Campbell is giving up his Jaguar car.
But Mr Brown was reluctant to give details of his personal contribution to the environment, aside from saying he is swapping his official car for a greener model.
He said there had to a mixture of individual responsibility and community action.
Mr Cameron says he wants to see first hand the effects of climate change during his Norway trip.
But some are saying he would be better off knocking on doors in the lead up to the local elections.
Other political parties have criticised his trip for being just a photo opportunity.
The Greens also attacked Labour's record, saying Mr Brown and Tony Blair had "abysmally failed" to act over the last decade.
The Greens' principal speaker, Keith Taylor, said: "Tony Blair has presided over the biggest expansion of the aviation sector - the fastest growing contributor to climate change - in a generation, with the full support of the Tories."
He also criticised road building under Labour.
29 April 2006
Focus: New race for the polls
The Sunday Times - 23 April 2006
Suddenly it's cool to be green and for once it's the Tories who are ahead of the game. Is David Cameron the new king of eco-chic? Can Gordon Brown seize the moral high ground? Isabel Oakeshott and Jonathan Leake report
At the annual dinner of the Soil Association, the good and the green gathered in the City of London last month to hear how to save the planet. The guest speaker delivered a passionate vision of a new future, on everything from growing his own organic tomatoes to improving school dinners. He received a rapturous ovation.
Who was this inspirational speaker? A beardy-weirdy environmental campaigner, a Hollywood do-gooder or a government minister? Nope; it was David Cameron, leader of the Tories, the blue party that has suddenly discovered the beauty of green.
"I thought it was time we broke out of the green ghetto," said Patrick Holden, the association's director, last week. "I thought if we held it in the City and got Cameron along it would start something big."
Once when something big and cutting edge was called for it was Tony Blair that trendy pressure groups called in. Now the green movement - long forgotten by Islington Tony - has found a new darling in Notting Hill Dave.
"The last few months have been amazing," said Leonie Greene, an energy campaigner with Greenpeace. "Greg Barker, Cameron's shadow environment secretary, is turning out to be outstanding. Cameron has done a great deal too, simply by making green issues fashionable again."
As pictures of the Tory boy wonder riding a husky-drawn sled across the Arctic to see the effects of climate change were beamed out last week, the prime minister, once master of the zeitgeist, must surely have felt outplayed.
"What Cameron represents is a new generation of people coming to power who have grown up with green issues and realise instinctively how important they are," said Holden. "Labour is looking old and tired by comparison."
The chancellor, Gordon Brown, tried to muscle in with a speech on climate change in Washington last week (only his second on the subject since coming to power in 1997) and a radio interview yesterday in which he said there was a moral imperative to cut greenhouse gases. But "eco-chic" he is not.
Labour strategists appear to have missed what Vanity Fair magazine described last week as a fashionable "new environmental revolution", leaving both Brown and the party looking dowdy and out of touch. To be green, it now seems, you do not have to be "exclusionary, righteous and judgmental".
"Once to be a good environmentalist you had to throw tomatoes at the WTO and go backpacking," said Roo Rogers, founder of OZOcar, a firm that runs a fleet of green limousines in Manhattan and which is setting up in London in September. "Now you can ride around in a hybrid car and check your e-mail at the same time."
It is this sort of thinking that gave rise to the new Tory slogan "Vote blue, go green".
With less than two weeks before local government elections on May 4, the Conservatives hope their new angst about the planet will attract thousands of students, urban twentysomethings and yummy mummies who would not otherwise bother to vote.
But is this sudden Tory fixation with the environment just an election gimmick or has something more fundamental changed?
IF A new Tory politics was afoot last week, Labour's response was a classic of old negative campaigning.
Spin doctors lampooned the Tory leader as a chameleon, depicting him as a "flip flopper" who will say anything to please.
It's a tactic that has worked well in the debating chamber. At prime minister's questions Blair likes nothing better than to cherry pick from a dossier of embarrassing Cameron quotes illustrating U-turns on issues ranging from "patient passports" to immigration.
But outside Westminster the tactic may prove more difficult. As Labour aides handed out mugs emblazoned with images of Dave the Chameleon last week, an unruffled Cameron declared the lizard cute, and asked for a copy of the cartoon to hang on his kitchen wall.
He then announced he was off to arctic Norway with the World Wildlife Fund to watch a glacier melt.
News of the trip was greeted with derision by Labour MPs, who declared themselves far too busy canvassing on Britain's council estates and high streets for such jaunts.
"He is turning into an absurd figure and those pictures are beyond parody," said one leading Blair aide on seeing the pictures of Cameron with huskies running on page after page of newsprint.
Tory central office went into overdrive, dubbing the venture "pure Cameron". Breathless officials claimed the trip had "hardly been planned"; it was just Dave, raw and untamed, doing what his conscience dictated.
"No research has been done," said one aide. "Perhaps it should have been. This is just pure Cameron campaigning on something he genuinely cares about."
The same officials were keen to point out that the green campaign was ruffling feathers in the world of big business. It was just a "happy coincidence" that the party's private polling has shown for some time that the Tory's biggest image problem is its associations with the City and big business, they added.
Cynics asked if this was the same Cameron who last November denounced wind farms as "bird blenders" when speaking about a controversial scheme in Wales.
Now he has switched his household energy supplier to "npower juice", which provides energy to the environmentally conscious consumer from the same area - though admittedly offshore.
Others attacked Cameron for running up unnecessary air miles. He had travelled to the Arctic in a private jet, it was revealed, burning 30,000 gallons of fuel and depositing five tons of CO2 in the atmosphere in the process.
On the icepack, Cameron's £275,000-a-year PR man, Steve Hilton, appeared to be very much in charge. Never once was the Tory leader allowed to don a hat, despite temperatures plunging to -15C. Nor would he wear a hard hat when the team clambered down a dizzyingly dangerous ice hole for a better view of the glacier.
"It's the ghost of William Hague in that baseball hat - it haunts them," said one Tory insider. Hilton is convinced the green agenda, spearheaded by a leader who is never, ever caught in silly headgear, is crucial to a Tory revival.
Focus groups suggest the environmental issue plays well with women, the young and the influential AB social classes. More importantly, however, it allows Cameron to portray himself as different.
To win a general election, Cameron knows he must put clear water between himself and the party's recent past. The green crusade, Hilton hopes, will signal that the Tories have changed.
Greg Barker, Conservative frontbench spokesman on the environment, has embraced the task with vigour. He has just taken delivery of a new four-wheel drive that runs on battery power except at high speeds and says his car symbolises the Tories' new approach to the environment.
"I sold my Porsche Boxster and bought this instead," he said. "It saves me £2,000 a year in congestion charges and makes me feel virtuous. You can have a better quality of life and save the planet."
Tory MP John Gummer, who co-chairs Cameron's environment policy review with billionaire Zac Goldsmith, agrees. "There is an awful lot we can do without feeling the pain. If all new houses have to be designed such that they use 40% less energy, the consumer won't even notice energy savings are being made."
Gummer and Goldsmith will not be reporting till next year - meaning Cameron can spend the rest of 2006 riding the crest of a green wave without committing himself to anything or explaining what his policies mean for taxes.
The results of the review are too early to call but both men appear to agree nuclear power no longer has a place in generating Britain's electricity.
For the Tories, such a view is remarkable. Gummer has two nuclear power stations in his constituency at Sizewell and has long been a supporter of the technology.
His association with Goldsmith appears to have triggered a conversion, however. "Nuclear power has two main flaws," he said. "Firstly, it's hypocritical to tell developing countries not to build nuclear power plants if we've got them and secondly, if you rely on it too much for your energy needs and there is an accident, then you've suddenly got a big problem with political acceptability."
If the Tories are really serious about the green crusade, there are even harder issues to face - such as what to do about aviation, the most rapidly expanding source of greenhouse gases. Are voters really ready to make sacrifices for the environment? What if it means no more cheap mini-breaks?
Goldsmith said this weekend: "The Conservatives are committed to making whatever choices need to be made, regardless of how difficult they are.
"On aviation, it's going to be hard but we know that all other efforts to reduce emissions will be irrelevant unless we address aviation and it's our job therefore to identify the least painful, most positive mechanisms for doing so. We can't simply ignore the issue as the government has done."
WHERE does all this leave Labour? In a Westminster restaurant last week, a twitchy Meg Munn, women's minister, agonised before ordering cod from the menu - ruminating about the effects of dwindling fish stocks. Cameron is making Labour feel nervy.
"Cameron is an opportunist who has jumped on the environment as a way of demonstrating that his party has broken with the tired old policies of the past," said Elliot Morley, the environment minister. "He is using it as a metaphor for change - but so far it is all vague words and no action."
Downing Street strategists are busy thrashing out a new government-wide "greener-than-thou" initiative in the guise of a "sustainable procurement policy" to be announced in June.
It will say that all proposed public spending should be "greened" - ranging from ministers being forced to give up limos for hybrid cars, to new buildings having to meet the toughest standards for emissions.
Labour is also keen to point out that Cameron's Conservatives appear to be going nowhere fast in the polls. A YouGov poll last week suggested Cameron's brief honeymoon period is over. Despite the damage over the "loans for peerages" scandal, Labour remains in the lead, on 35%, with the Tories on 33%, three points down since March.
Opposition within Tory ranks to change should also not be underestimated. So far few have had the nerve to challenge the new leader but discontent with the pace of Tory change is growing.
One distinguished senior Tory, broadly sympathetic to Cameron, said last week: "It's all a load of balls. I've worked out that it would take me till 2019 to recoup the set-up costs of solar panelling my house, and putting a windmill on the roof. Not to mention the hassle of getting planning permission. It's a nonsense."
A decade ago, Blair was also painting the political world green. As he soon discovered, it's easy to make promises in opposition but much more difficult to follow through in government.
Would Cameron be any different? As a Conservative prime minister, will he boldly go where Brown dared not last week, and further raise taxes on vehicle fuel? Would he really mothball Britain's nuclear power stations? And would he be the man to stop the cheap flights that many Britons now see as their right?
At least Cameron has given one indication that he is a man of action as well a promises. He, too, is to get a hybrid 4x4, like his environment spokesman.
Mind you, what the voters will make of the expense of such credentials is another matter: the Lexus can cost more than £40,000. That sort of green may be more associated with envy than environment.
OUR COMMENT: Long may these sentiments last! - and result in more action!
29 April 2006
MORE PROBLEMS FOR BAA
Air Police Cash Row
The Mirror - 22 April 2006
STANSTED airport is refusing to pay an extra £1.3million a year for armed police officers.
The Essex force said last April that the price would rise from an agreed £5.7million to £7million.
But owner BAA said the costs were exaggerated and it did not need the number of police supplied.
A police source said: "If a football club refused to pay they would be shut but we have no choice but to protect the public."
BAA says Stansted is being "over-policed" to generate funds for Essex.
An independent review of airport security including costs is being carried out.
29 April 2006
THE SUNDAY TELEGRAPH INVESTIGATES
MPs demand inquiry into BAA's future
Edward Simpkins - Sunday Telegraph - 23 April 2006
The UK's seven largest airports will be burdened with debt of £14bn if their owner, BAA, is bought by Ferrovial, the Spanish group, which posted its offer document last week.
The level of debt required by Ferrovial to buy BAA and then meet the company's existing spending commitments is raising concern among influential MPs. They fear that the debt burden will prove too expensive, leaving Ferrovial unable to deliver the upgrades to the UK's airport infrastructure set out in the Government's white paper on the future of aviation.
This weekend, the Opposition has suggested that the Ferrovial offer should trigger an inquiry by the Competition Commission into the structure of London's airports. Chris Grayling, the shadow transport secretary, said: "If all the London airports are owned by the same heavily indebted company there are strategic concerns for the UK. I would express some anxiety over that."
The Department of Trade and Industry, which could initiate an inquiry, refused to comment. However, Louise Ellman, a Labour member of the Commons Transport Select Committee, said the new owners of BAA must be able to pay for the proposed upgrades such as new terminal buildings at Heath-row and a new runway and terminals at Stansted. "It is important that the investment commitments are maintained," she said, "and that the company is a strong one that is able to make major investments."
Robert Goodwill, a Conservative member of the transport committee, said: "It is like the Manchester United scenario, where someone is buying the company with money they don't have. I would be concerned that such a highly geared airports operator would be unable to pay interest on its debts and meet its commitments."
Under the terms of the bid Ferrovial and its partners, GIC, an investment arm of the Singaporean government, and CDP, a Canadian pension fund, will put in £3.65bn in equity and borrow a further £6.58bn in debt to fund the purchase. However, the group will then have to find a further £5.6bn to fund BAA's existing spending commitments, including £1.4bn to complete Terminal 5 at Heathrow, £1.5bn to build the new Heathrow East terminal and an estimated £2.7bn for a second runway at Stansted. BAA already has £5.4bn of debt and Ferrovial's consortium will also have to redeem convertible loan notes worth £850m.
BAA believes that, should the bid go through, the group's gearing will soar to 400 per cent of its equity. That would threaten its credit rating and make its debt much more expensive. By contrast, BAA estimates that if it remains independent its debt will peak at £8bn in 2013 and its maximum gearing level will not exceed 108 per cent in 2009 and fall thereafter.
In February, the Civil Aviation Authority, the UK aviation regulator, warned that it would set airport charges in accordance with its statutory duties, not to accommodate financing arrangements made by bidders for BAA. It said bidders must recognise the scale of investment required in the UK's airports to accommodate demand for air travel and added: "This is likely to require the maintenance of credit quality sufficient to ensure the cost-effective financing of future investment."
Ferrovial's bid of 810p per share has been rejected. However, the offer could prove popular with BAA staff who stand to share almost £108m as their options will be cashed in at the offer price. Around half of them are held in a benefit trust with the rest reserved for senior management. Mike Clasper, the chief executive, could make £1.2m from his options.
Grayling added: "It is inescapable that there is going to be more substantive debate about the future ownership of the UK's airports."
SUNDAY TELEGRAPH BUSINESS COMMENT
George Trefgarne, Sunday City Editor - 23 April 2006
I hope Alan Johnson, the trade and industry secretary, is enjoying the spring sunshine this weekend because a mighty political problem has landed on his runway.
Rafael del Pino, a courageous Spanish construction baron, is intent on buying BAA, the owner of Heathrow, Gatwick and Stansted, which, together, are essential to Britain's place as a global economic hub and are used by nearly 100m people a year.
Yet del Pino is proposing to borrow so much money that it could put at risk vital investment at Heathrow and Stansted.
Indeed, reading the offer document, the del Pino consortium looks a bit like the Spruce Goose, Howard Hughes' giant flying boat that flew only once, in 1947. In the case of the Spruce Goose, the engines struggled to provide enough lift. And in the case of del Pino's Airport Development & Investment Limited, there is not enough equity.
As a consequence, it is groaning under the weight of its debt - if it succeeded, it could have borrowings of £14bn once BAA's existing debts and extensive investment programme are included.
Yet at the offer price, 810p a share, it will not succeed. BAA's shares closed at 863p on Friday and, in a little-noticed development, Richard Buxton of Schroders, its biggest shareholder, derided Airport Development's offer as "not a remotely interesting price". He said BAA was just the sort of share you should be able to hold "for 25 years". If del Pino raises his offer to, say, 900p a share, as many think he will, that could mean a further £1bn of debt.
The reason Airport Development is such an unairworthy beast is simple. Rafael del Pino wants to control it, as his family control Ferrovial, which means he wants more than half the equity himself. Currently he owns 64 per cent of the consortium, with the remainder held by GIC, an obscure Singapore government vehicle (the unions won't like that), and CDP, a Canadian pension fund. Del Pino has said he might be prepared to sell some of his portion, reducing it to 54 per cent.
Whatever the outcome, del Pino cannot afford to put in much more equity himself. Ferrovial is itself heavily indebted, with •18bn of liabilities, up from •12.5bn last year, and substantial contingent liabilities of •4.1bn relating to projects worldwide. And one of its subsidiaries, Cintra, owns half a toll road in Indiana where $3.8bn of investment is required.
Just imagine £14bn of debts sitting on our biggest airports like one of Hughes' vast flying machines. Assuming Airport Development had managed to borrow at an optimistic 1 per cent above Libor, interest payments would be £740m a year, or £2m a day, secured against landing charges, shopping revenues and car park fees. Yet one mishap - an accident, a terrorist incident, bird flu, a downturn in passenger numbers, an oil crisis, or, more likely, a prolonged strike - could bring the entire ungainly structure down with a bump.
Del Pino has said he will continue to invest at Heathrow and Stansted but his debts will be truly awesome. Unless Johnson wants to risk the political and economic consequences of yet more chaos at our dilapidated and overcrowded airports, he should not just rely on the existing review by the Civil Aviation Authority but recommend a fully fledged inquiry into BAA's structure by the Competition Commission.
That might result in BAA being broken up, which would mean competition breaking out at last between London's airports and a looser, more sensible regulatory regime being possible. Over to you, minister.
GOLDMAN PITCHED BOTH WAYS TO BAA
Iain Dey - Sunday Telegraph - 23 April 2006
The controversy surrounding Goldman Sachs' attempts to act as both a financial adviser and bidder for companies has widened with the revelation that it made overtures about taking over BAA while pitching for the mandate to defend the airport operator.
The Sunday Telegraph has learned Goldman was one of five investment banks invited to outline defence proposals to BAA after news broke of a potential bid from Ferrovial, the Spanish construction giant.
Although the Goldman team ran through a conventional bid defence proposal, sources say the bank then suggested it could buy a "significant" stake in the business as part of a refinancing involving other new investors. Bill Young, one of the bankers behind Goldman's new infrastructure finance fund, was part of the team presenting the pitch.
The structure was similar to the outline offer that Goldman then proposed to BAA on March 30, backed by AIG and two Canadian pension funds - Ontario Teachers and Borealis Infrastructure Management.
Last week Hank Paulson, Goldman's chief executive, warned his UK bankers to cool their involvement in approaches that could be considered hostile.
On Friday Goldman was dropped as joint corporate broker by BSkyB and replaced by Merrill Lynch. The move came just weeks after Goldman's private equity arm led a failed takeover attempt for rival broadcaster ITV.
A Goldman Sachs source said: "We made it very clear that the consortium's approach to BAA is friendly and supportive of management. They are the subject of a hostile bid from Ferrovial and the consortium offered the company a friendly alternative."
29 April 2006
NO EASY RIDE FOR BAA IN HUNGARY!
Strike expected at Ferihegy Airport
Alex Kahu - Budapest Sun - 20 April 2006
WITH negotiations between the management of Budapest Airport Zrt (BAA) and the Independent Trade Union of Air Traffic Workers (LDFSz) ending without an agreement last Friday (Apr 14), the trade union is planning to initiate a strike.
The President of the LDFSz, Attila Csorba, told the weekly economic paper Figyelô that the British management of the airport had made a "prestige decision" in not being willing to come to an agreement with an employees' organization which refused to accept the company's "minimalist" wage increase offer of 2.25%, and plans which would lay off 600 of the present work force, presented in Feb. (Five other trade unions representing 2,400 airport workers signed the agreement on Feb 8).
LDFSz leaders claim that BAA took an aggressive stance, and wishes to force the employees into strike, hoping that they would eventually give in, similarly to a recent situation in Britain leading to no compromise despite several weeks of striking.
"If they are not willing to negotiate further with us, we will call for the strike next week," Csorba announced last Friday. The strike would involve some 40 of the 70 fuel workers in the airport which are in a strategic position as they are responsible for refuelling the planes, and so could cause significant hindrance to air traffic.
If LDFSz decides to strike, other trade unions will lend moral support, while urging both parties to continue negotiations.
LDFSz is now demanding a Ft9,250 (4.5%) increase in basic salary, in addition to Ft9,000 extra-wage benefit, and continues to refuse to sign the Feb agreement which it thinks unfair.
BAA had been unable to comment by the time The Budapest Sun went to press.
29 April 2006
BA SLASHES FARES TO TAKE ON LOW-COST AIRLINES
Up to 50% reductions to European destinations
No charge for baggage, and free food included
Julia Finch, City Editor - The Guardian - 20 April 2006
British Airways will today throw down the gauntlet to low cost airlines easyJet and Ryanair by slashing prices from Heathrow and Gatwick to almost all its European short haul destinations. It will cut fares to places such as Berlin, Paris and Barcelona by up to 50%. The price cuts are part of an overhaul of the airline's fare structure, rather than a one-off promotion.
Unlike the low-cost carriers, BA will carry on offering its traditional extras, including free food and drink on all flights. There will also be no extra charges for hold baggage. Last month Ryanair imposed a £5 per bag fee on all passengers wanting to check in luggage, following Exeter-based Flybe, which started charging £4.50 per bag in February.
BA believes the combination of much lower fares with the convenience and flight transfers offered by Heathrow and Gatwick, and prime destination airports will win large numbers of passengers from the no-frills carriers.
Airline insiders said yesterday that BA had been experimenting with the new lower fares on a handful of its short haul routes in recent months. They have prompted a significant pick-up in the number of passengers carried. On some routes the load factor has improved by up to 9 percentage points, though BA's target for the new strategy is understood to be substantially lower than that.
Like the low-cost airlines, BA's new fares are likely to vary according to when they are booked and when they are scheduled to fly. The structure means that some passengers could pay a fraction of fares paid by others on the same flight.
While Ryanair achieves operating margins of 25%, British Airways - with its much higher cost base - is aiming for a 10% margin from all parts of the BA network. BA's short haul network has moved back into profit in the past 12 months, after many years of losses.
The new fare structure will be launched with an advertising campaign devised by BA's new agency, BBH. The airline switched agency last October, when new chief executive Willie Walsh ended BA's 23-year association with M&C Saatchi.
The new Heathrow and Gatwick fares come three months after BA announced a shake-up in its CitiExpress regional network, which was also designed to take on the low-cost operators. The network was rebranded as BA Connect and fares from 14 airports, including Manchester, Edinburgh and Birmingham, to continental destinations were slashed by up to a third to as little as £25 one way. The Club Europe cabin for business travellers was ditched and a single class introduced.
Today's price cuts come two days after BA announced higher fuel surcharges - for the sixth time in two years - after oil hit a record $72 a barrel. The £5 rise, which takes effect tomorrow, will take the levy to £35 for a one-way, long haul flight. The airline expects to spend £2.2bn on fuel this year - £600m more than a year ago. The surcharge on short haul flights remains unchanged at £8 one way and £16 return.
Mr Walsh, who was hired from Aer Lingus and is known as "The Slasher", last month outlined a plan to cut costs by £450m in the next two years. He cut 600 managers just before Christmas - including 50% of the airline's top executives -and last month announced a further 1,000 job losses at the airline's call centres and travel shops. He has laid out plans to tackle BA's £2bn pension deficit, which will mean some staff working longer for lower pensions. The plan has prompted threats of industrial action, which could be timed for the summer holiday season.
The way to Go
British Airways' strategy to slash fares on its short-haul routes from Heathrow and Gatwick, together with the price cuts from regional airports announced earlier this year, is designed to put it toe-to-toe with easyJet and Ryanair - a strategy it tried before with the launch of a completely separate airline.
In 1998 BA's then chief executive, Bob Ayling, selected one of the airline's most promising young executives - US-born Barbara Cassani - to set up a standalone, no-frills carrier called Go. Ms Cassani had a £25m budget and built the Stansted-based airline from scratch into a business with 900 staff and serving 23 European cities.
EasyJet's Stelios Haji-Ioannou tried to prevent Go ever taking off. He went to court, claiming BA was illegally subsidising Go, and when that failed he gatecrashed the airline's maiden flight, along with nine colleagues - all dressed in orange easyJet boilersuits.
But Rod Eddington's arrival as chief executive at BA led to a rethink. He believed BA should stick to its main market and that Go was competing against its parent. He put it up for sale and in 2001 Ms Cassani led a £110m management buyout, backed by the 3i venture capital group. A year later easyJet bought Go for £374m - turning Go executives into millionaires.
OUR COMMENT: What a time to start an air fare war! Not a very responsible action for the UK's premier carrier and a reflection on the neglect by the government of aviation's increasing contribution to emissions responsible for climate change. Why should aviation be exempt from pressure to cut emissions? Is the rest of industry less important?
29 April 2006
LETTER FROM COUNCILLOR ALAN DEAN
Limit Stansted capacity
Saffron Walden Reporter - 20 April 2006
THE chief executive of BAA Plc recently wrote in a national newspaper accusing people living near airports of hiding behind 'bigger arguments about climate change'.
He implied that concern about climate change was a cover for objections to more local forms of nuisance such as aircraft noise and car pollution.
Last Wednesday night, April 12, more than 150 people turned out from all over the Uttlesford district to a meeting about climate change in the Saffron Walden council offices.
They came to learn about the steps householders can take to change and reduce their energy consumption.
There were more members of the public present at that meeting than have attended past council meetings about Stansted airport.
BAA is doing its best to manipulate the debate about aviation and climate change to its advantage.
It is seeking measures such as emissions trading that are unlikely to reduce the escalating growth in greenhouse gas emissions for aeroplanes.
They want a two-runway airport that would encourage more carbon dioxide to be generated than from every home and car between the Thames and The Wash.
It isn't the people of Uttlesford who are hiding behind climate change. They are embracing it and wanting to act to reduce it.
It is BAA that is trying to camouflage its intentions. The only realistic way to limit the impact of aviation on climate change is to limit runway capacity and the number of planes that can fly.
Member for Stansted Mountfitchet and Uttlesford District Council
29 April 2006
TRUST ADDS WEIGHT TO AIRPORT PROTEST
Dunmow Broadcaster - 20 April 2006
THE National Trust, which owns and maintains Hatfield Forest has added its weight to the campaign against expansion at Stansted Airport.
It has announced it is strongly opposed to an extra runway saying it stands by inspector Graham Eyre's conclusion.
At the 1984 public inquiry he said that a second runway would be 'an environmental catastrophe' and an 'unprecedented and unacceptable environmental and visual disaster'.
Hatfield Forest is example of a medieval hunting forest, which is home to trees aged at over 1000 years, and several hundred species of rare moths, flies, plants, fungi and lichen. There are also 21 species of mammal including rare dormice and Daubenton's bat.
Keith Turner, area manager for Suffolk, Essex and Hertfordshire for the National Trust said: "Any expansion to Stansted Airport would greatly impact on this National Nature Reserve and Site of Special Scientific Interest.
"Inevitably, extra surface access infrastructure by way of road and rail and the consequent increase of nitrogen emissions would greatly affect the future of the forest and its inhabitants."
Other major intrusions, he said, would include noise pollution caused by increased air traffic, leading to public loss of enjoyment and tranquillity.
The National Trust has also pointed out that making it easier for people to holiday overseas has created an £18 billion balance of payments deficit at the expense of the domestic industry and not surprisingly these figures do not appear in BAA's economic case for expansion at Stansted Airport.
Keith Turner said: "The National Trust takes an active involvement in aviation and related issues and feels that the monitoring and forecasting of the industry is flawed."
"Aviation is the fastest growing source of carbon dioxide emissions, the most significant cause of climate change."
"Forecasts for future growth in air travel are unrealistic being based as they are on anomalies within the tax system with no VAT on aviation fuel."
20 April 2006
CLIMATE CHANGE THREAT GETS WORSE
Scientists condemn US as emissions of greenhouse gases hit record level
Steve Connor, Science Editor - The Independent - 19 April 2006
The United States emitted more greenhouse gases in 2004 than at any time in
history, confirming its status as the world's biggest polluter. Latest
figures on the US contribution to global warming show that its carbon
emissions have risen sharply despite international concerns over climate
The figures, which were quietly released on Easter Monday, reveal that net
greenhouse gas emissions during 2004 increased by 1.7 per cent on the
previous year, equivalent to a rise of 110 million tons of carbon dioxide.
This is the biggest annual increase since 2000 and means that in 2004 - the
latest year that full data is available - the US released the equivalent of
nearly 6,300 million tons of carbon dioxide into the atmosphere.
Scientists in Britain condemned the increase, saying that it showed how the US
was failing to take a lead in the international attempt to curb greenhouse
gas emissions despite being the worst offender.
Professor David Read, the vice-president of the Royal Society, said that the
US and Britain needed to take urgent action to reduce greenhouse gas levels
in order to honour their commitments to the United Nations Framework
Convention on Climate Change.
"The figures published this week show not only that the US emissions are not
decreasing, but that they are actually increasing on an annual basis,"
Professor Read said. "And while the UK appears to be doing slightly better,
its carbon dioxide emissions have been rising annually for the past three
years," he said. "The US and the UK are the two leading scientific nations in
the world and are home to some of the best climate researchers.
"But in terms of fulfilling the commitment made by their signature to the UN
convention to stabilise greenhouse gas levels in the atmosphere, neither
country is demonstrating leadership by reducing their emissions to the levels
required," Professor Read said.
The US accounts for about a quarter of the total global emissions of man-made
carbon dioxide or the other gases such as methane that can exacerbate the
earth's greenhouse effect, which traps sunlight and heat.
Under the UN climate change convention, America is required to publish its net
contribution to greenhouse gas emissions, which takes into account pollution
sources, such as cars and industry, and "sinks", such as forests.
The figures show that the total US emissions have risen by 15.8 per cent from
1990 to 2004, mainly due to increased consumption of electricity generated by
burning fossil fuel, a rise in energy demands caused by increased industrial
production and a rise in petrol consumption due to increased travel. Fossil
fuel combustion alone accounted for 94 per cent of the carbon dioxide
emissions produced by the US during 2004, the figures show.
Carbon dioxide levels in the atmosphere are now a third higher than they were
before the Industrial Revolution began in the 18th century, and probably
higher than they have been for at least 10 million years.
Scientists have suggested that if the international community is to try to
stabilise carbon dioxide levels at twice pre-industrial levels then countries
such as the US and Britain need to reduce emissions by about 60 per cent by
the middle of this century.
Professor Read said there was mounting evidence to suggest that rising
temperatures caused by greenhouse gas emissions were beginning to cause
serious climate effects, such as a drop in annual rainfall in east Africa
because of rising water temperatures in the Indian Ocean.
"If emissions continue to rise, we can expect even more impacts across the
world," Professor Read said. "The developing world will find it difficult to
adapt to climate change and the industrialised countries, which are primarily
responsible for the rise in greenhouse gas levels, should realise that they
would also struggle to adapt to a world in which, for instance, sea levels
are several metres higher," he said.
"The science justifies action now by all countries to both adapt to climate
change and to reduce greenhouse gas emissions."
GREENHOUSE GAS CONCENTRATIONS
REACHED NEW HIGHS IN 2004
UKCIP News for April 2006
Globally averaged concentrations of carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) in the Earth's atmosphere reached their highest-ever recorded levels in 2004, according to the first annual Greenhouse Gas Bulletin published by WMO on 14 March.
CO2 was recorded at 377.1 parts per million (ppm), CH4 at 1783 parts per billion (ppb), and N2O at 318.6 ppb.
These values supersede those of pre-industrial times by 35%, 155% and 18% respectively, an increased over the previous decade by 19ppm, 37ppb and 8ppb in absolute amounts.
You can read the bulletin at www.wmo.int/web/arep/gaw/ghg/ghg-bulletin-en-03-06.pdf
20 April 2006
WERE ALL THOSE FLIGHTS ESSENTIAL?
'Carbon tax' to compensate for G8 presidency aviation
Colin Brown - The Independent - 13 April 2006
A carbon "tax" will raise £100,000 across Whitehall departments to compensate for the 10,000 tons of carbon dioxide caused by extra air travel associated with Britain's presidency of the G8 and the summit at Gleneagles last year.
The money will go towards environment projects in the developing world over the next three years to offset the harmful effects of the air travel by G8 leaders, but that is seen as a small sum to pay for global warming.
The campaign group Friends of the Earth said: "We think carbon offsetting is an awareness tool, but it is not a solution. The Government needs to reverse its policies allowing growth in aviation, if it is serious about climate change - no Terminal Five at Heathrow, and no expansion at Stansted."
The Government's carbon emissions offsetting scheme may be aimed at showing the world that Tony Blair is serious about tackling global warming but it will not apply to the air travel by the Prime Minister and his ministers between Labour coming into power in 1997 and 2005.
The Department for Environment, Food and Rural Affairs said as part of the cross-government commitment on climate change, all Defra's flights, including those by ministers, were to be offset "at least" from 1 April last year - a year earlier than the rest of Whitehall, which brought in the policy at the start of this month.
Margaret Beckett, the Secretary of State for Environment, Food and Rural Affairs, who is believed to be on an Easter break with her husband, Leo, on the Spanish island of Tenerife, has also given a commitment that all emissions from last year's EU presidency will be offset along with the G8 summit.
Britain is buying "carbon credits" to offset the aviation emissions attributable to the UK delegation flying to last year's UN conference on climate change in Montreal. A township in Kuyasa, South Africa, will be the first project to benefit from the scheme. The money raised for travel associated with the G8 summit will go on installing solar water heaters, ceiling insulation and compact fluorescent light bulbs in thousands of homes in deprived neighbourhoods over the next three years.
As ministers faced accusations of hypocrisy for using jets for short hops, Mrs Beckett's junior environment minister, Elliot Morley, urged holidaymakers to donate towards the Travel Foundation, a voluntary carbon-offsetting scheme set up by operators such as First Choice Holidays and Thomas Cook.
20 April 2006
LOW BUDGET AIRLINES STRIKE BACK
WITH A "SCIENTIFIC" STUDY...
Read with care!!!
GreenSkies - April edition
"An end to sloppy thinking and hysterical persecution":
for a balanced debate on the environment
BRUSSELS – March 20, 2006 – The European Low Fares Airline
Association (ELFAA) has commissioned one of Europe's leading
economics consulting firms, Frontier Economics, to prepare a report
that provides an objective assessment of the economic issues relating
to proposals to include aviation in the European Union's Emissions
Trading Scheme (EU ETS).
Speaking today following the publication of the Frontier Report,
Secretary General for ELFAA, Jan Skeels, said: "Contrary to common
misconception, aviation is not a major emitter and in fact its
contribution to EU emissions accounts for only 4% of EU15 CO2
emissions and will only account for around 5% of EU25 CO2 emissions
This shows that too much of the debate thus far has been
based upon inaccurate and one-sided information. The result is that
some of Europe's biggest offenders in terms of emissions, in
particular road transport, are getting off lightly and aviation is
being characterised as a major problem.
ELFAA members are in favour of the principles behind the EU's
Emissions Trading Scheme. However aviation brings many benefits to
consumers and the European economy generally so it must therefore be
demonstrated from a cost benefit perspective that it is appropriate
to include aviation in the ETS and that doing so would actually be
environmentally effective and not damage economic growth.
airlines have made huge investments in the latest technology aircraft
and have been at the cutting edge of reducing fuel burn and
increasing efficiency. They will continue to do their utmost to
minimise fuel burn as it is a major and growing cost item. It is
therefore questionable whether the inclusion of aviation in ETS would
have any additional benefit.
If it can be demonstrated that including aviation will actually
positively impact on emissions without damaging the growth of this
important industry, ELFAA would be calling for any scheme to include
the largest possible proportion of European flights. Restricting the
scheme to only intra-EU flights would only capture less than 1% of
total EU emissions and therefore be a waste of time.
Furthermore, there is a trend in some Member States to impose taxes
on air travel under the guise of "environmental taxes", or in the
case of France "a tax for third world development". This is sloppy
thinking and simply puts more money into the pockets of governments
with no benefit to the environment or developing countries.
Air transport is a crucially important sector in achieving economic
growth, competitiveness and integration – which are the main pillars
of the European project. The EU must start to properly consider the
wider implications of bad regulation in aviation on European
competitiveness and growth. We hope that policy makers will seriously
consider the findings of the Frontier Report before coming to any
conclusions on including aviation in the EU ETS."
OUR COMMENT: Special pleading, as ever. Their figures for CO2 emissions are out of date and seem to relate back into the 90s before budget airlines were in existence. The most recent UK estimates are given in the Tyndall Report but even the DfT estimates that aviation might be responsible for as much as 25% by 2030!
20 April 2006
THIS IS PART OF THE PROBLEM - CAN WE AFFORD IT?
UK airports traffic takes off
This is Money - 19 April 2006
BRITAIN'S airports handled almost 14 million more passengers last year despite holiday airlines enjoying their smallest share of the market for 20 years, figures out today showed.
A total of 229 million passengers passed through UK airports in 2005 - an increase of more than 6% on 2004, the Civil Aviation Authority (CAA) announced.
At 13.4%, the proportion of passengers flying on UK charter flights was the lowest in the last 20 years, the CAA added. In contrast, the proportion of passengers at UK airports flying on UK scheduled airlines reached 50.5% last year - the highest level for 20 years.
Big growth on routes to North Africa, Poland and Italy helped boost passenger numbers, the CAA said.
Airports that enjoyed large traffic increases last year included Kent International at Manston (104% more passengers), Bournemouth (up 68%) and Coventry (up 56%).
Passenger numbers at the London area airports increased 4% to nearly 134m, with Heathrow handling nearly 68m customers in 2005. Traffic at regional airports rose 9% to 95m, with Blackpool numbers up 42%, Exeter up 36% and Liverpool up 32%. Regional airport passenger numbers have now doubled from the 47m handled in 1995.
Air transport movements (landings and take offs of commercial aircraft) increased 6% last year to 2.3m. The biggest increase was at Luton where movements rose 17% to 11,200.
In 2005, UK airport passengers were predominantly bound for, or arriving from, destinations in Europe. The number of passengers on flights to or from Europe totalled 129m, an increase of 8m, or 6%, on 2004. The largest growth was on routes to Italy, up by 1.0m passengers (an increase of 11%), Ireland, up by 0.9m (9%) and Poland, up by 0.8m (85%).
The next most popular destinations were either other UK airports or North America, each of these destinations accounting for more than 20m passengers. There were 26m passengers on UK domestic flights, up by 4%, while passengers on flights to and from North America rose 3% to 22m.
Despite this increase, passenger numbers between the UK and North America have not quite returned to their pre-September 11 levels of 23m a year - a figure last achieved in 2000.
Passenger growth on North Africa routes was up 38% last year, with Australasia up 33% and the Indian subcontinent up 27%.
The total number of passengers carried from UK airports by non-UK EU airlines broke 50m for the first time in 2005, rising 13% on the 2004 total of 47m.
20 April 2006
BAA UNDER PRESSURE AGAIN
BAA Investors Demand Plan to Boost Stock After Bids Rejected
Bloomberg Online - 18 April 2006
BAA Plc shareholders say Chief Executive Officer Mike Clasper, who rejected two takeover bids for the owner of London's Heathrow airport, needs to show how he will increase returns and profit.
"BAA should have a plan of what they want to do,'' said Peter Braendle, who includes BAA stock in the $44 billion in assets he manages at Swisscanto Asset Management in Zurich. "It will be difficult for management just to keep refusing.''
The world's largest airport operator on April 16 said that a 9.4 billion-pound offer ($16.6 billion) from a group led by Goldman Sachs Group Inc was too low. Eleven days earlier Clasper rebuffed an 8.75 billion-pound bid from a team led by Grupo Ferrovial SA, Spain's second-biggest builder.
London-based BAA, which operates airports in Hungary, Italy and Australia as well as seven in the U.K., benefited from an increase in travel that lifted earnings. Heathrow is Europe's busiest airport, handling 67.4 million passengers in the year ended March 31.
Shares in BAA have surged 28 percent since Madrid-based Ferrovial said on Feb. 8 that it and other investors may bid for the airport operator. The stock closed in London on April 13 at 841.5 pence, valuing the company at 9.1 billion pounds.
BAA in a statement on April 16 rejected an 870 pence-a-share offer from a group led by Goldman Sachs because it "clearly fails to reflect'' the company's value. Ferrovial and its bidding partners made a formal offer of 810 pence a share on April 7.
Duncan Bonfield, a spokesman for BAA, declined to comment yesterday on what steps the company may take to fend off unsolicited takeover offers.
Ferrovial and its partners in the offer, a Canadian pension fund and Singapore's government-owned investment company, said they may increase the amount by a "small'' amount if BAA lets them examine its accounts.
BAA has refused to engage in talks with Goldman Sachs and Ferrovial or open its accounts. BAA, which has more than 12,500 employees, became a private company in 1987 under a plan by British Prime Minister Margaret Thatcher's government.
Clasper must "make some arguments that BAA shareholders are better off sticking with the existing arrangements than accepting an offer,'' said Markus Hesse, an analyst in Frankfurt at Bank Sal Oppenheim, with a "neutral'' rating on BAA stock.
As part of BAA's defense, Clasper, 52, may seek to borrow more against the company's assets, which also include London's Gatwick and Stansted airports. Ferrovial or Goldman Sachs would probably do the same if either took over the airport company, analysts said.
BAA's level of debt compared with earnings before interest, tax, depreciation and amortization is less than what some airport operators are taking on.
BAA could raise its debt ratio 9 times and pay investors a special dividend of 340 pence a share, according to Michael Carter, an analyst in Milan at ING Groep NV.
Bristol Airport in southwest England, owned by Ferrovial and Macquarie Bank Ltd., has a debt-to-ebitda ratio of 16.6 times and Sydney airport, with the same owners, has a ratio of 13.1. BAA now has a 3.1 ratio, according to an estimate from JPMorgan Chase & Co.
Goldman's approach is the second that it has made for a U.K. infrastructure asset in the past month. Associated British Ports Holdings Plc, the biggest operator of U.K. ports, on March 29 rejected a 2.2 billion-pound offer from Goldman.
Ferrovial, founded in 1952 and controlled by Chairman Rafael del Pino's family, is using profit from a Spanish construction boom to expand into managing toll roads and other public infrastructure in the U.S., Chile, Italy and Ireland.
Ferrovial has until May 7 to submit its formal offer to BAA's investors. BAA will then have two weeks to make its defense. BAA said it hasn't heard from Goldman since March 30, when the world's second-largest securities firm made an approach.
"BAA is going to have to manage the capital structure of the company in a more aggressive way,'' said Carter at ING, who has a "buy'' rating on the stock. "Investors like aggressive balance sheets.''
While shareholders may welcome a return of cash, BAA's bondholders will be wary of any increase in borrowing that would lead to a cut in the company's credit ratings.
Moody's Investors Service on April 7 said it may cut BAA's credit rating from Baa1, the third-lowest investment grade. Standard & Poor's grades it two steps higher at A.
BAA tapped bond investors to fund the building of a fifth terminal at Heathrow. The company also sold debt in December to pay for the acquisition of a controlling stake in Budapest airport. BAA plans to spend 2.7 billion pounds adding a second runway at Stansted airport.
"Given the capital requirements they have, under almost any scenario BAA can't afford to alienate the bond investors,'' said Neil Sutherland, who includes BAA debt in the $57 billion he helps manage at Axa Investment Managers in London.
The yield on the 250 million pounds of BAA's bond maturing in 2021 rose 17 basis points to 5.3 percent on Feb. 8, the day Ferrovial said it may bid. The yield, which moves inversely to the price of the bond, rose 6 basis points to 5.41 percent on April 13.
Clasper, who works from BAA's headquarters near London's Buckingham Palace, may provide details to investors on a plan to tap faster passenger growth in eastern Europe after the purchase of a majority stake in Budapest airport in December.
Budapest Ferihegy International Airport in December predicted that passenger traffic will double by 2008. That compares with BAA's forecast of an increase of about 3.5 percent annually at its U.K. airports in the next two years. BAA also said in March that it's seeking to expand in China, the world's fastest-growing major economy.
"They've realized that there is scope to increase shareholder value and that's why they moved into Budapest,'' said Frank Skodzik, an analyst in Frankfurt at WestLB AG, with a "hold'' rating on BAA. "China looks attractive as well.''
17 April 2006
THE WEEK'S NEWS ON BAA'S BATTLES
BAA plots special payout
Edward Simpkins - Daily Telegraph - 9 April 2006
BAA, the owner of Britain's seven largest airports, has drawn up secret plans to hand back large quantities of cash to shareholders in the event of a higher hostile bid.
On Friday BAA "emphatically rejected" an offer of 810p per share from a consortium led by Ferrovial, the Spanish infrastructure group, that valued BAA at £8.75bn.
However, BAA, which owns Heathrow, Gatwick and Stansted airports, fears that Ferrovial or a rival bidder could return with a much higher offer, closer to 900p per share, and has prepared plans for a special dividend of up to £1bn to keep shareholders onside.
BAA is also planning to say that it will implement a wide--ranging review of its costs, in addition to the "Delivering Excellence" efficiency drive that the company announced in November. It has also asked its regulator, the Civil Aviation Authority, to loosen the regime governing -Stansted.
To fund a special dividend BAA is likely to have to raise additional debt. In February the company raised almost £2bn, bringing its net debt to £5.3bn. However, the CAA warned last month that whoever ends up owning Britain's airports must not jeopardise any expansion of airport capacity required in the South East.
Shares in BAA closed at 847p on Friday, substantially above the offer price, clearly indicating that the market expects a higher offer to materialise. Before the offer was announced BAA shares were trading at between 600p and 650p.
FERROVIAL SEEKS NEW BLOOD FOR BAA TAKEOVER
Dominic O'Connell - Times Online - 9 April 2006
FERROVIAL may bolster its consortium bidding for the BAA airports group by recruiting more partners over the next few weeks.
The Spanish group, which announced a hostile offer for BAA on Friday, said it was prepared to offer up to 10% of its share of the consortium to one or more new investors.
If all 10% were taken up, Ferrovial's share of the consortium would drop from 64% to 54%, its offer document said.
The document also confirms the bid will be financed by a banking syndicate comprising Citigroup, Royal Bank of Scotland, Banco Santander, HSBC and Calyon.
The Ferrovial-led consortium already has two other members: CDP, a Canadian pension-fund investment group, and GIC, the private-equity investment arm of the government of Singapore.
BAA is the largest airports company in the world, and owns seven UK airports — including the London triumvirate of Heathrow, Gatwick and Stansted.
The Ferrovial consortium lodged a bid of 810p a share for BAA, an offer that values the airports company at £8.75 billion.
The move puzzled the City, as the price was the same as that rejected by BAA three weeks ago. BAA shareholders said on Friday that they would still not support an offer at that level.
But sources close to Ferrovial said the move had been designed to give more time to refine and improve the bid. Before Friday's announcement, Ferrovial was working on a Takeover Panel-imposed deadline of April 24 to come up with a firm offer.
"We would still like to do this deal with a recommendation from the BAA board, but it was clear we would not be able to reach agreement with them by then. So we had to start the longer bid timetable ticking, which meant making a formal offer," the source said.
The lodging of the offer would also make it easier to open discussions with BAA shareholders and its pension trustees. Ferrovial has made its offer conditional on reaching agreement with the trustees on a plan to deal with the BAA pension deficit.
The Ferrovial consortium now has 28 days in which to lodge a full offer document, and another 60 days in which to complete the deal.
Transport bankers expect the consortium to raise its offer, but are divided about what level it would be prepared to go to, and what would constitute a knock-out bid.
YET ANOTHER CUSTOMER!
BAA rejects £9.4bn bid from US bank
The Guardian - 17 April 2006
BAA rejected a take-over approach from a group led by Goldman Sachs that would have valued the airports operator at ££9.4bn.
The friendly offer came a week before a hostile £8.75bn bid from Spanish construction group, Ferrovial.
BAA, which operates Heathrow, Gatwick, and Stansted airports, said both offers undervalued the company, raising hopes among some of the shareholders of a higher bid.
Goldman Sachs, the US investment bank, has been involved in a several high profile take-over attempts in the UK in recent months, without much success. The bank was recently involved in bidding for ITV.
17 April 2006
WILL THIS INCREASE COMPETITION IN EUROPE?
US law changes will herald Open Skies
Edward Simpkins - Daily Telegraph - 9 April 2006
The US government is expected to agree rule changes by the end of this month that will allow an Open Skies agreement between Europe and the US to be implemented when winter schedules are adopted in October.
The agreement is expected to be confirmed at an EU ministers' transport committee meeting in early June and later signed at a summit meeting between President Bush and European leaders.
The agreement is being hailed as an historic breakthrough and could trigger the emergence of transatlantic budget carriers, just as the European Open Skies agreement saw the rise of airlines such as Ryanair and EasyJet.
The agreement would allow any European airline to fly to any US destination. Currently, for example, only British Airways and Virgin Atlantic can fly from Heathrow to around 12 cities in the US.
One of the main beneficiaries is likely to be BMI British Midland, which has a large number of landing slots at Heathrow it wants to convert from European short-haul to more profitable long-haul business to the US. Virgin and BA are also expected to expand the range of destinations they serve.
There have been fears that the negotiations to replace a number of restrictive unilateral treaties between European countries and the US could collapse if Washington is unable to deliver a relaxation of its rules concerning foreign control of US airlines.
Currently there are strict tests relating to the nationality of managers at US airlines, which must be 75 per cent owned and controlled by US interests. Attempts to relax the restrictions have run into difficulties, with ambitious politicians in Congress claiming that foreign control of transport infrastructure creates a security risk.
However, last week the US Department of Transportation (DoT) said it expected to be able to pass the rule change and officials on both sides of the Atlantic are optimistic that agreement can be reached within the next few weeks.
The DoT said on Tuesday: "The secretary [Norman Mineta, the US transportation secretary] has met with the Senate and is confident that the department will be able to reach agreement on language that properly addresses airline safety and security while allowing for the kind of investment that carriers need to maintain their international competitiveness."
In February, John Byerly, the assistant transport secretary who has been leading the negotiations with the EU, urged the House of Representatives to back the text of a treaty that was agreed in November following negotiations stretching back almost three years.
"I am convinced and hope that you will agree that this agreement, historic by any measure, more than meets the fundamental American objectives of securing our existing open skies rights in Europe, expanding those rights to all of the European Union, and establishing a template of opening markets and encouraging vigorous airline competition," he said.
The EU will refuse to back the agreement unless the rule change loosening US control of airlines is passed. The changes will not see the 75 per cent ownership rule relaxed but strict provisions relating to the nationality of management are expected to be simplified. The effect will be to allow foreign managers control over "purely economic" decisions.
17 April 2006
WILL STANSTED'S BUSINESS FLIGHTS INCREASE?
MAXjet seeks $50m for expansion
Abigail Townsend - The Independent - 9 April 2006
MAXjet, the business-class-only airline, is in talks with US hedge funds to raise $50m (£29m) to buy more planes and expand further into America and Europe. The US carrier, which has its hub at Stansted, started flying last November and offers flights to New York and Washington Dulles International only.
Gary Rogliano, chief executive, said the group wanted the extra funds to open new routes to the US before looking at launching services from Stansted to mainland Europe. American cities currently being considered include Boston, Orlando, Las Vegas, Chicago or Dallas, and San José.
After it completes its expansion plans, the group said it would then look at a possible initial public offering (IPO). "We would most likely float in two and a half years," said Mr Rog- liano. "I cannot see us being taken over. We have looked at AIM [the UK Alternative Investment Market], but we could list in the US, or both. We're a US company but we want to look and smell like a UK company as well."
MAXjet only offers business-class seats but bills itself as a low-cost provider, with return flights to New York from £854 and to Washington Dulles from £999. Mr Rogliano said both fares were cheaper than those offered by mainstream rivals such as British Airways or Virgin Atlantic.
The company is backed by a number of wealthy individuals and already has financing of around $90m. One of the few known backers is Ken Woolley, who founded the Richmond Ice Cream Company (now Richmond Foods) and has invested in another airline, the US domestic carrier JetBlue.
MAXjet currently has two aeroplanes but intends to have six by the end of this year and then 11 by the end of 2007.
Mr Rogliano claimed that MAXjet, which carried around 3,000 passengers in March, would be able to break even once it had three planes, and said that raising cash from hedge funds was particularly suited to the company's current stage of development. "They can move fast and are getting big in aircraft," he said.
He remained confident that the group would be able to compete with established carriers in the UK and US, as well as the rival business-class-only airline "eos", which offers full-price fares to the US. "We have the right product, service and price point. It's all about the execution and treating the passenger as a customer. We're not just throwing peanuts at them."
MAXjet has 102 seats on each of its two Boeing 767s, which amounts to more seats than eos has on its planes. It does not offer flat beds - unlike eos - but Mr Rogliano said the flights were not long enough to justify them.
MAXjet and eos launched last year amid much publicity, and both are investing heavily in marketing campaigns. However, some industry experts fear that the model will prove hard to sustain in the long term in an era of cut-price, no-frills aviation.
17 April 2006
BAA WIELDS THE AXE IN BUDAPEST
Ferihegy to cut costs, staff and then expand
Airport reveals ambitious plans to make it competitive regionally
Budapest Times - 10 April 2006
The new owner of Budapest's Ferihegy airport, British company BAA plans to cut jobs and sell businesses, including refuelling, ground handling and airport shuttle bus services in order to reduce landing fees that are among the top 25% in Europe in a move to attract new carriers. The aim is to transform Ferihegy into the most successful in the region, meaning competition for Vienna and Prague airports.
The company which acquired 75% plus one vote of Budapest Airport Zrt. in December last year for HUF 465 billion (EUR 1.82 billion) and in return got a 75-year concession to operate the facility, plans to cut the current 2,500 workforce by 18% over the next three years, Chris Woodruff, the airport's chief executive officer told Bloomberg newswire. "It's clear internally and externally that we've got to bring airport charges down by becoming much more efficient,'' he said, adding that in some cases "Budapest is more expensive than BAA's own airports in Western Europe."
Fees for airlines have been reduced by 5% in Budapest since BAA took over, and carriers are being encouraged to start new routes by discounted fees, including landing costs lowered by up to 50% in the first year.
Traffic at Ferihegy airport grew by 23% last year, and low-cost airlines such as easyJet and SkyEurope have added routes, however BAA estimates that fees are 20% higher than at Prague's Ruznye International Airport and reducing costs is essential for further growth.
The long-term aim of the British company is to make Ferihegy the most successful airport in Central Europe.
"From April we will be reducing fees and backdating them to January. Moreover, we want to build a bigger departure lounge with more restaurants and shops. There will also be more gates so that more aeroplanes can be handled at the same time," Woodruff said.
BAA has also been able to increase the number of airlines flying to and from the airport. Six more will begin flying to Budapest starting in the summer and five more destinations will become accessible. The operator is spending EUR 261 million over six years to merge Ferihegy Terminals 2A and 2B, expand parking and build new transport connections, as well as expanding its cargo capacity to avoid having to turn away long-haul customers who then go to Bratislava in Slovakia or Vienna in Austria.
Airlines are hoping for positive developments from the change of ownership. For months airlines have been complaining about the excessive landing charges at Budapest Airport. There are already positive signs: "Communication has clearly improved. It is more open and direct," said Austrian Airlines representative Heinz Götz. In addition, he hopes for a more reasonable relationship between price and performance.
There are already indications of that too. Although the recently renovated Terminal 1 has so far served low-budget airlines, that should soon change, Woodruff said in an interview with daily Népszabadság.
Because the building, which is legally protected, cannot be extended, its capacity is limited, and some airlines have had to use the significantly more expensive Terminal 2.
One of the first steps on the road to improvement is that the new owner has declared war on dishonest taxi companies. Dodgy taxis have been a thorn in the side of locals and tourists alike for many years. It is widely known that the taxi service at the airport is unacceptable with most complaints at the airport being about taxis, said Woodruff.
Budapest Airport plans to award airport pick-up rights to just one transport company, with tenders issued this month, and the successful company selected in June. This only affects those travellers who would choose a taxi from the queue at the airport. There is restriction when calling a taxi on your own.
Woodruff also plans infrastructural changes. There will be a car park for waiting cars and a room for taxi drivers.
Stewart Wingate will take over as CEO of Budapest Airport three months earlier than planned, on July 1. In December last year, Woodruff announced that he would lead Budapest Airport as CEO only for nine months, in order to manage the transition of the company following privatisation. BAA said it has progressed faster than anticipated.
OUR COMMENT: Will the local residents be looking forward to a bigger, noisier and more polluting neighbour? Any advice needed?
17 April 2006
BISHOP'S STORTFORD COUNCIL'S REPLY TO BAA
ON THE R2 "CONSULTATION"
Stansted Generation 2: December 2005 Consultation
21 March 2006
The Council feels that all of the options contained in the above document are unsustainable and are totally unacceptable. In 1984 Inspector Graham Eyre concluded, following a lengthy public inquiry, that a second runway would be an environmental catastrophe and would constitute an unprecedented and wholly unacceptable major environmental and visual disaster. No reference had been made to this judgement. A second runway today would be an even greater disaster than in 1984 for the following reasons:-
i) The capacity would be well over 40mppa;
ii) Therefore, the damage to the environment would be even more serious;
iii) Noise and air pollution would become intolerable;
iv) The quality of life would be destroyed for even more people not only as a result of the tremendous increase in air traffic noise and pollution, but also from the resultant infrastructure and additional housing;
v) Land take from the countryside around the airport would seriously detract from the at present rural environment and valued landscapes of Hertfordshire and Essex and in the immediate vicinity there would be a loss of residential properties, listed buildings and ancient woodlands;
vi) Additionally, and most importantly, there is now an even greater awareness of the dangers of global warming, which as it is well-known, are vastly exacerbated by air travel itself. Also, it must be borne in mind that car emissions would be seriously increased, as over 60% of the passengers at present arrive and depart by car.
The East of England Regional Assembly has ruled out a second runway in its draft East of England Plan and the Sustainability Appraisal Report, which it commissioned, ruled out the full use of the existing runway.
Your Consultation Document makes reference to allowing local residents to express their views. It is well known from a survey carried out by Uttlesford District Council in 2002, that 89% of residents who returned their ballot papers expressed a strong preference not to have any additional runway at Stansted. Many residents from well outside the radius covered by this survey have also expressed strong opposition to a second runway.
Additionally, Hertfordshire and Essex County Councils, East Herts Council, Uttlesford District Council, Town Councils and many Parish Councils from well outside the radius covered by any surveys, have also expressed strong opposition to a second runway.
How can your Consultation document be expected to be taken seriously when it is blatantly ignoring the East of England Plan, Local Structure and District Plans, the views of local residents contained in the aforementioned survey, the view of Hertfordshire and Essex County Councils, Uttlesford District Council, East Herts Council, Town Councils and numerous Parish Councils, as well as local action and environmental groups. It would be wonderful if the views of local residents were to be taken seriously.
It is not only showing a total disregard to local opinion (in view of the forgoing) to consult on the siting of a second runway, but also it would appear to compromise the planning procedure to decide on the positioning of a runway for which a planning application has yet to be submitted and, therefore, for which permission has not been granted.
The Consultation document seems to contain an absence of any information about the impacts of carbon emissions, the effect on local air quality and the implications in respect of flight paths and surface access. In fact, there would seem to be no environmental impact assessment for each of the options, nor a full health impact assessment. No transport assessment has yet been published and no information has been supplied for flight paths for landing and take-off for a second runway. The full effect of noise and air quality pollution seems to have been ignored and yet these issues will have a dramatic and far-reaching effect on the residents of a large part of Essex and most of East Hertfordshire. The only plans showing noise contours are based on a high level of noise, but a much lower level of noise already has a disturbing and intrusive effect on the rural areas. In addition, noise and pollution would be greatly exacerbated by all the necessary additional infrastructure and housing that would be necessary to support an airport of this vastly increased size and magnitude.
The G2 document should have contained an analysis of the environmental benefits and perceived economic disadvantages of no second runway being constructed. This possibility should also have been canvassed in the questionnaires, which have been sent to local residents.
On economic grounds there would seem to be no justification for additional land take. The document considers the possibility of Code F (new airbus A380) using the proposed second runway. However, from the forecast contained in the document it is envisaged that by 2030 only 3m passengers will be using such aircraft out of a total passenger usage of 76mppa. Surely there can be no justification for considering additional land-take to provide for what amounts to only an additional 4% passenger throughput. The document states that the existing airfield layout can with some modification accommodate the new Code F aircraft.
The document has attempted to give quite detailed estimates of the projected costs for the options considered, but it has not attempted to demonstrate that the construction of a second runway would generate sufficient profits to make it a financially viable option. BAA operates seven airports in the UK and Stansted is the least profitable one. A comparison of the profits at Stansted Airport (£2.10 per passenger) does not favourably compare with Heathrow (£6.02 per passenger) or Gatwick (£3.62 per passenger). It is only because of the profit from car parking, retailing and commercial activities that the overall profit comes nearer to that of Gatwick.
The CAA has ruled that, for the five year period from 2003, charges at Stansted must be calculated on a stand-alone basis, thus preventing any cross-subsidy from Heathrow and Gatwick. BAA has made it clear that it will seek to change this ruling from 2008. Mr Mike Clasper (BAA Chief Executive) has stated that if the CAA will not change its ruling, or is prevented from doing so by legal challenges, (from British Airways and other substantial users of Heathrow) then he cannot give an estimate of the date when a second runway at Stansted will be operational. If the CAA requires charges to continue to be made on a stand-alone basis after 2008, a second runway will certainly not be operational by 2013. Why produce 2005/2006 costings when it will only be in 2008 that BAA will know the CAA's ruling on the basis of charges for the five years commencing in 2008? It is only when this ruling is known that BAA will be able to make a meaningful estimate of its prospect of making an operational profit from the second runway.
Operational profits depend on passenger numbers, which with the cheap flights operated by the low cost airlines, helps fuel the present and perceived passenger usage. What guarantees will BAA give to such airlines that the current deal granting substantial discounts on landing fees will be renegotiated when the current contracts are due for renewal. What is also not accounted for is additional economic changes which would render future cheap flights a thing of the past. It is highly conceivable that Government action will be taken in the future to impose taxation on aviation fuel, no account has been taken on what effect the proposed expansion of Luton will have on passenger numbers at Stansted, nor what effect future measures which might be taken to prevent global warming will have.
Stansted Airport promotes itself as 'an airport in the countryside' but surely the destruction of so much land, not only for an additional runway but also for the necessary immediate facilities, ie. buildings, car parks, etc. and for the other infrastructure, ie. road and rail networks, and all the necessary increase in housing, will make this statement totally inaccurate. Stansted will become an airport in an intensely developed urban area, created by its own expansion. Light pollution alone will destroy the concept of a rural environment.
Ancient woodlands, important hedgerows, historic field patterns, archaeological sites, picturesque rural landscapes and green lanes cannot be replaced. What about the effect on the water courses and water resources? These are already stretched to the limit – even the additional housing that would result from an airport of the size envisaged would seriously jeopardise these fragile resources. If the serious impact of noise pollution is taken into account on what is left of our treasured landscape and heritage, a vast area will further lose its tranquil rural status.
In conclusion, Bishop's Stortford Town Council is opposed to the provision of a second runway at Stansted and would appreciate it if you were really to listen to the views of local residents, who in the main are opposed to this dramatic expansion.
17 April 2006
MINISTER ACCEPTS POLLUTION FAILURES
Keith Hall - 24 dash.com - 7 April 2006
The Government has claimed that its new measures to tackle air pollution could extend life expectancy, cut environmental damage from acidic air pollution and generate benefits of £1.4 billion a year.
They claim air pollution currently reduces life expectancy in the UK by an average of eight months.
Measures outlined today in a review of the Air Quality Strategy for England, Scotland, Wales and Northern Ireland are designed to reduce the impact on average life expectancy to five months by 2020.
Despite significant reductions in emission of many pollutants, air pollution still harms health and causes environmental problems.
The Minister for Local Environment, Ben Bradshaw, is demanding better progress.
"Although our air is cleaner in overall terms than at any time since the industrial revolution, air pollution is not declining as quickly as expected."
"We need to move faster and take further measures to move us closer to meeting our objectives."
"Pollutants from our cars, ships and industrial plants are still having a marked affect on our health, reducing the average life expectancy in the UK by eight months."
"This can't continue. The measures outlined in this Review would - if implemented - be a significant step forward in improving public health and our environment."
It is understood that in the past fifteen years the quality of urban air in the UK has improved and between 1990 and 2001 improvements helped avoid 4,200 premature deaths per annum and 3,500 hospital admissions.
The Government says it is continuing to meet objectives for pollutants like carbon monoxide, 1,3-butadiene, benzene and lead, as well as meeting its current objectives for all air pollutants in over 99% of the UK.
However, it has admitted some problems as the country will miss its targets for reductions in nitrogen dioxide, ozone and particles which can cause respiratory and cardiovascular problems, and in 2005, pollution across the UK is expected to have reduced average life expectancy by 8 months.
In 2003, pollution in UK led to more than 50% of natural and semi-natural habitats exceeding harmful levels of acidity.
The UK Government strategy is to design a package of measures which will reduce average exposure to air pollutants for everyone, which they claim if implemented, will see an increase in life expectancy of three months by 2020. These measures are to include:
1. New tighter European vehicle emissions standards (so called Euro-standards);
2. Incentives for cleaner vehicles;
3. Further reductions in emissions from small combustion plants;
4. Further reductions in emissions from ships;
Mr Bradshaw says this will produce the most comprehensive environmental study ever carried out by Government.
"In the past we have concentrated on the 'hotspots' where we may not have been hitting our air quality objectives."
"This consultation suggests a much more wide ranging approach for pollutants such as fine particles (PM2.5), which is cost effective, and geared towards improving public health in the UK."
An updated strategy is due to be published by the end of 2006 and will provide a clear, long-term vision for air quality.
OUR COMMENT: Ben Bradshaw has completely forgotten about the part played by aviation in causing air pollution. Write and tell him!
17 April 2006
THE EU KEEPS TRYING
EEA draws European emission trading lessons
ENDS Europe DAILY 2076 - 7 April 2006
The European environment agency has drawn lessons for improving the
EU emission trading scheme in a review of initial member state
reports delivered last summer. This early experience points to a
need to align national implementation approaches and to move towards
more harmonised rules, it notes.
Based on their experience in just the first few months of emission
trading, member states were asked to report on their experience with
aspects of the scheme ranging from compliance monitoring at
participating companies and the operation of registries to fiscal
treatment and access to information.
Member states reported a wide variety of practices across different
aspects of the scheme. For example, some said they carried out spot
checks on participating installations, while others did not. The
legal nature of emission allowances varies between member states.
Some countries have set up a single regulatory authority; others
have set up several.
AIRLINE CHIEF URGES CAUTIOUS START TO TRADING
ENDS Europe Daily, 2079 - 12 April 2006
Rules for including the aviation sector to the EU's emission trading
scheme must be simple and practical to ensure rapid and consistent
implementation across the industry, British Airways (BA) said last
At a conference in Ireland BA chief executive Willie Walsh
said the scheme should initially apply only to flights within the EU,
should allocate based on previous emissions, and should not take into
account the effects on the upper atmosphere.
BA and other British
airlines and airports have been the strongest advocates of joining
Legislative proposals are expected this summer.
17 April 2006
GOOD NEWS - BUT WHERE WOULD R2 TRAFFIC GO?
Stansted link road plan scrapped
Herts & Essex Observer - 13 April 2006
Plans for a new airport link road that would cut a huge swathe through several rural communities have been dropped.
Planners at Stansted Airport announced on Monday that they had scrapped proposals for a possible north-East road linking the M11 and the A120, which would pass close to Elsenham and through Pledgdon Green, Broxted Church End and Little Easton.
Instead they are considering upgrading the existing links round junction eight of the M11 or providing a new access route.
The decision to scrap the link road has been welcomed by the campaign group Stop Stansted Expansion (SSE) which said it was a relief to those under threat.
BAA is now to start work on environmental surveys to determine which scheme would be best.
The findings will form part of a public consultation to be held later this year on road and rail requirements for the proposed second runway.
Alistair McDermid, the airport's second runway (G2) project director, said the plans for the link road had "removed an element of uncertainty" for communities to the North and East of Stansted.
"Only after all views have been taken into account will the exact nature of the scheme to be included with our planning application for a second runway be decided", he said.
OUR COMMENT: R2 could not be built without a considerable extra land-take for road space and new rail lines. There are villages all round the existing airport, and rail tracks have to go all the way into London, a lot more homes and countryside would have to be demolished/built on. In addition, the M11 is already congested and would need widening - more concreting, more expenditure, more compensation. Who pays for what?
7 April 2006
MIKE CLASPER SAYS THAT AIR PASSENGERS
MUST COVER THE COST OF THEIR CARBON EMISSIONS
Has he consulted all his airline customers?
Comment by Mike Clasper - Society Guardian - 5 April 2006
You may be surprised to discover the chief executive of an airports authority sneaking on to the Guardian's environment pages. But I'm delighted to have the opportunity to dispel a couple of myths and, I hope, provide some reassurance on aviation and climate change.
I can imagine the picture that many of you hold in your mind. George Monbiot painted it recently in the newspaper's comment pages (February 28) when he said that the growth in aviation is "the greatest future cause of global warming". In case we hadn't got the point, his piece concluded: "Flying kills".
Let me be clear about one thing: I agree that climate change is one of the largest problem we all face. I'm not in denial, but nor do I think that we should face that problem with our vision blurred by false facts and foolish projections.
The truth is that aviation accounts for only a small proportion of greenhouse gase emissions: around 5%. Power generation and road transport each account for about a quarter. Of course, as other industries get cleaner, aviation's portion will rise, but it won't rise anything like as dramatically as scaremongers say if we take the right action now.
What is the right action? It is to put a price on all carbon emissions and to ensure that there's a well functioning global market that we can trade our way to a lower total. This approach will produce the maximum environmental benefit for any given economic cost. By pricing carbon, the cost of flying - along with the cost of many other carbon-emitting activities - will rise.
The environmental cost will be priced into our decisions. We will be able to choose between dirty power stations, gas-guzzling cars or flying. On that point, Monbiot was wrong to suggest we will be closing down runways, for the simple reason that people place a high value on mobility. This is obviously vital for an island economy such as Britain's, but it is also valued socially and culturally. One of my company's biggest area of growth is flights to and from India - reflecting potent family, cultural and business ties. And we all enjoy overseas holidays. Why shouldn't we, so long as we're meeting the full environmental cost of our journeys?
How far are we away from that happy state of affairs? Further than I'd like, but we're on the way. After a lot of hard work, not least by BAA, we've now reached agreement to include aviation in the EU emissions trading scheme, ideally as early as 2008. Now we need to persuade the Americans and others to join us. Not easy, but we'll get there, if we keep up the political pressure.
And that should be the focus of Guardian reader's attention. When people living near airports argue against expansion, for understandable local reasons, they should not hide behind bigger arguments about climate change. Nor should you let them mislead you with other myths, such as the one that says aviation benefits from huge subsidies. That's just not true. Aviation pays significant taxes – unlike, for example, railways or buses.
The right way to address the environmental impacts of aviation is to price them into fares. Every penny. That way, we can all make free and responsible choices. I'm in favour of that. Are you?
OUR COMMENT: Yes, Mr Clasper, we are in favour of pricing environmental costs into air fares. Congratulations on realising the need to support fully the option to make a start by establishing the EU emissions trading scheme. However, your picture of a happy public making choices - and clearly you expect them to spend their money on flying even with higher fares - is surely optimistic. They might prefer to spend more money on the higher electricity prices at home, or higher car prices.
At present, we do not know whether the EU trading scheme will be successful in reducing carbon emissions enough to avoid the worst dangers of climate change. More action may be needed, such as adding to the taxes you claim that aviation already pays (what are these taxes, apart from airport passenger duty? Fuel is tax free, unlike that for trains and buses). After all, the object of the exercise is to reduce carbon emissions and someone has to make reductions. You seem to assume that it will not be aviation - you clearly are still expecting to expand some of your airports to accommodate extra flights. Surely this is rather a rash assumption, spending all the shareholder's profits without a firm commitment to a continued demand for a more expensive air travel?
We take exception to your suggestion that those directly affected by airport expansion should not concern themselves with the bigger arguments about climate change. Are you seriously suggesting that the general public should not interest themselves in matters that will affect their children's lives? Or are you just trying to persuade us that an expanding airport is so essential for our local and national life that we must ignore such major problems, leaving it to others such as yourself to solve. Not a very responsible way of life to advocate.
We recommend you to study the Tyndall report on the likely scenario if aviation expands at the rate suggested by government. Its conclusions must strike us all as common sense, certainly not a myth. To reduce carbon emissions everyone and every business activity has to play its part. If aviation expands, someone else has to make extra cuts. Is that fair?
7 April 2006
THE AIRLINES HAVE TO COOPERATE
IF EMISSIONS ARE TO BE REDUCED
Ryanair threat to sue BAA if Stansted charges are tripled
Unison - Ireland Online - 3 April 2006
RYANAIR has threatened legal action against BAA, the world's largest airport operator, if it goes ahead with plans to triple charges at Stansted Airport.
OUR COMMENT: No comment!
7 April 2006
EUROPE: AIRLINES FACE PEAK-HOUR CONGESTION CHARGE
Raphael Minderin - Strasbourg Financial Times - 5 April 2006
Airlines could face congestion charges for using European airports at peak times, under proposals to be unveiled today by Jacques Barrot, European Union transport commissioner.
Peak-time charging for airlines, which would be offset by lower fees for flights taking off and landing at other times, is among the proposals Mr Barrot will make at a meeting of airlines, airport operators and trade unions starting in Brussels today.
Mr Barrot told the FT that "modulating charges could be very helpful", but he insisted he had "no ready-made answers" and would listen to all arguments to solve the "undeniably growing tensions" between airlines and airports over charges.
If an agreement could not be found, he indicated he was ready to arbiter the dispute by drafting new legislation.
The meeting was convened after airlines complained to the Commission that some of Europe's largest airports charged excessively high and arbitrary fees.
The complaints have been spearheaded by the International Air Transport Association (Iata). Its chief executive, Giovanni Bisignani, asked Brussels this year to regulate charges to end the "horror story" facing airlines at Charles De Gaulle and other European airports that allegedly overcharge.
Airport operators will say tighter rules on the sector would be counterproductive at a time when it is becoming "as open to competition as any other business" - a trend underlined by Ferrovial of Spain's takeover bid for BAA, which runs three London's airports.
They will also say recent infrastructure and capacity improvements mean "airlines are not bearing the full cost of the aeronautical infrastructure that they use", said Olivier Jankovec, director of strategy at the Airports Council International Europe, which represents 400 European airports.
He said airports would be "favourable" to a system of congestion charges, as long as it was not compulsory. Give the different traffic situation across Europe it would not make sense to have a one-size-fits-all model.
But, Anthony Concil, Iata communications director, said "the timing [of flights] should be irrelevant" to the issue of charges. He added: "Rather than congestion charges, we should focus on having more efficient infrastructures."
Mr Barrot is also concerned about possible cross-subsidisation by airport operators that use fees from busy airports to support inefficient ones. Brussels also wants to introduce more competition for ground handling. However, Mr Barrot insisted further market opening would be "gradual" to avoid a clash with German and other trade unions.
Earlier this year the EU dropped an attempt to open port services to more competition following strikes at big ports and violent protests by dockers at the European parliament in Strasbourg.
7 April 2006
NGO DRAWS LESSONS FROM PHASE-1 EMISSION TRADING
Environment Daily 2073 - 4 April 2006
National allocation plans (naps) for the second phase of the EU
emission trading scheme must set stricter emission limits, more
clearly reward emission reductions by firms, and be more transparent,
says Climate action network Europe (CAN-Europe) in a report published
The NGO calls phase-1 naps a "major disappointment" and notes that,
of 25 member states, only Germany and the UK required industry to cut
emissions below historical levels. All sectors should be required to
make absolute emission cuts in the second phase, it maintains.
The NGO would like to see EU-level rules to ensure continuous
reductions in caps post-2012. It calls for maximum use of auctioning
of emission allowances in the second phase. Product-specific
benchmarking is a second-best alternative, the group goes on.
It calls on member states to be more open in drawing up naps. Only a
few countries carried out the two public consultations demanded by
the European commission in phase-1.
Finally, CAN-Europe demands caps on individual installations' access
to the Kyoto project mechanisms (joint implementation and the clean
development mechanism) to ensure action at EU level continues to be
the focus of emission reductions.
BIG INVESTORS BACK AVIATION CARBON TRADING
Environment Daily 2075 - 6 April 2006
A group of British pension fund managers has added to calls for
aviation emissions to be capped under the EU's carbon trading
In a statement last week the Institutional investors' group
on climate change (IIGCC) said the move was "necessary... to encourage
business and the public to adjust their investment and consumption
patterns to reflect the demands of a lower-carbon economy".
commission proposed the move last year (EED 27/09/05
http://www.environmentdaily.com/19491). Most airlines support it as
the cheapest way of tackling the sector's emissions, but other
sectors fear inclusion will raise permit prices. See IIGCC statement
7 April 2006
EU COURT REPELS JET FUEL TAXATION CHALLENGE
Environment Daily 2075 - 6 April 2006
The European court of justice (ECJ) has upheld the principle of zero
tax on aviation fuel, throwing out a complaint from German railway
operator Deutsche Bahn that it was anti-competitive.
Deutsche Bahn argued that as rail and air transport were in direct
competition, the exemption violated EU anti-competition laws. It
took the European commission to court after the EU executive refused
to initiate an investigation into whether this was the case.
In its ruling, delivered on Tuesday, the ECJ dismissed Deutsche
Bahn's argument. "The Court finds that the principle of equal
treatment has not been infringed upon in the present case. As regards
their operational characteristics, their costs structure and the
regulations to which they are subject, air and rail transport
services are not comparable for the purpose of the principle of equal
treatment," it said.
The ECJ further cited international agreements like the Chicago
convention as the basis for its ruling. "In light of the practice of
exempting aviation fuel from excise duties, enshrined in
international agreements, competition between EU air transport
operators and operators in non-member countries would be distorted if
the EU legislature unilaterally imposed excise duties on that fuel."
German airline Lufthansa cheered the ECJ's ruling. The airline said
it was fair both because the court upheld the difference between rail
and air transport and because government-owned Deutsche Bahn itself
received state subsidies.
Allianz Pro Schiene, a German pro-rail transport lobby, said the
decision was a blow to efforts to establish sustainable transport,
because it cemented the anti-competitive advantage airlines had over
Follow-up: European Court of Justice http://curia.eu.int/en/transitpage.htm
OUR COMMENT: So, the EU Court takes the ICAO agreement as the arbitrator of taxing aviation fuel. We wait to see if there is an Appeal. Fortunately aviation emissions are not in the same category - they could be taxed.
4 April 2006
LIVING WITH AIRCRAFT NOISE
A BLIGHT OR A BLESSING IN DISGUISE?
The House of Lords debates the problem
Hansard Report - 8 March 2006
Lord Hanningfield moved Amendment No. 4:
After Clause 11, insert the following new clause—
"COMPENSATION: AIRPORT EXPANSION
(1) The Secretary of State may direct specified aerodrome authorities to introduce compensation arrangements for property owners whose properties have been adversely affected by proposals for airport expansion.
(2) The terms of the compensation arrangements will—
(a) ensure that the property owner is financially no worse off than if the property had not been adversely affected by the airport expansion proposals; and
(b) include advance guarantees to purchase any properties affected.
(3) Such arrangements are to be introduced as soon as practicable following the Secretary of State's direction."
The noble Lord said: My Lords, the implications of the burgeoning aviation industry are felt far and wide, but nowhere more so than by those communities living in the shadow of our major airports. We have already discussed several times today the problems that those communities suffer on a daily basis, but they pale in comparison to the plight of those communities threatened by airport expansion. It is important to recognise that due to the distinctive character of aviation, the blight suffered far exceeds the territorial extent of the physical development. The difference is significant. When one builds a railway line, one does not expect the train to leave the tracks and create noise and nuisance over a mile away. The inherent nature and attendant problems of aviation make it unique, which has consequences for the way in which we must compensate for the blight that it can cause.
The amendment is designed to address the problem of generalised blight, which materialises as soon as any major airport expansion plans are made public. The problem was recognised in the 2003 air transport White Paper, when the Government signalled:
"The airport operator will need to put in place a scheme to address the problem of generalised blight resulting from the runway proposal".
I declare at this juncture my interest as leader of Essex County Council, since much of my understanding is drawn from my experience of Stansted airport's expansion plans. BAA's home owner support scheme has proved woefully inadequate; so inadequate that Takeley parish council—which is the major village involved—decided to pursue legal action. The case was before the High Court at the time of the Grand Committee. Although provision for judicial review was not granted, the case remains significant in two respects. First, it is clear evidence of the strong feeling in local communities that this approach to compensation is inadequate, arbitrary and unfair.
Secondly, the case gives the argument that I advanced in Committee a significant new dimension. The legal team acting on behalf of Takeley parish council argued that,
"the White Paper envisages a scheme to provide redress to those affected by 'generalised blight' and paragraph 12.16 envisages the relevant class of beneficiaries to be 'local people', without limiting such redress to those within a particular noise contour . . . By limiting the compensation scheme to providing redress for those 'worst affected' rather than minimising the impact on local people as envisaged by the White Paper, it failed to address instances of generalised blight which fall outside the boundary, and it is based on an irrational distinction between properties falling inside the boundary and those falling outside it".
There is a line somewhere, and there is a house on one side and a house on the other side. It causes particular hardship.
Consequently, at the hearing it was argued that the Secretary of State had acted unlawfully by granting policy support for the construction of a new runway at Stansted while failing to ensure that appropriate measures were in place to compensate those impacted by generalised blight. Since those were measures that the Government committed themselves to in the White Paper, the legal team argued that the Secretary of State thereby infringed the European Convention on Human Rights. I will not go into the more legal processes, but obviously people felt very strongly about it.
I am no lawyer, but it seems that the present practice of encouraging airport operators to introduce a voluntary compensation scheme has failed the Government's stated purpose in the White Paper. The nature of the existing arrangement has the potential at least for the Government to be found in breach of their obligations under the convention.
In light of that potential and the obvious unfairness of current voluntary compensation schemes, it would seem eminently sensible to accept the amendment and give statutory force to an equitable compensation proposal that chimes with the Government's sentiments and policies as set out in the White Paper. I beg to move.
Lord Smith of Leigh: My Lords, I shall raise two issues on the amendment. First, I was not clear from the outline of the amendment given by the noble Lord, Lord Hanningfield, how it cuts across the right that property owners have under existing legislation. Compensation is payable to householders, not on a voluntary basis but on a compulsory basis under the Compulsory Purchase Act 1965 and the Land Compensation Act 1973. I am not clear whether we are asking for additional compensation for particular groups of owners. Are they getting double the money that other people get? I was not clear on that, and I hope that the noble Lord can help.
I wish to challenge the presumption on which the amendment is based. It assumes that airport expansion or development will have a negative impact on property prices. I challenge that very rigorously. Airport development is a catalyst for economic activity, investment, new jobs and higher incomes in the areas immediately surrounding airports. The increased wealth and new job opportunities increase demand for property conveniently located near the airport, and generally prices tend to rise rather than fall. The experience in Manchester is evidence of that. The area of the conurbation experiencing the highest house prices is south Manchester, which is conveniently located for the airport. People do not move away from airports. The Minister will know from his experience in Oldham that house prices in Oldham do not reflect the distance from the airport. Far from it; other factors comes into play. There is a presumption in the amendment that is wrong. House prices may well rise because an airport expands. When an expansion is announced—a new runway or a new terminal development—clearly some local will not like it. We understand that.
Lord Hanningfield: My Lords, the problem is the blight envelope. There is no definite site for the runway, so the potential envelope for the development of the airport covers a very wide area. It is not that the houses will be lived in; they could well be demolished. People just do not know. Those are the people who are blighted. There is a cut-off and other people are just over the other side. It is not that those houses will be lived in and become valuable assets later on; they probably will not even exist, all depending on the siting of the runway. They are blighted for some years because of the uncertainty of the situation. That is why the scheme of compensation is not seen as adequate by local people.
Lord Smith of Leigh: My Lords, I thank the noble Lord for his intervention, and I think we can understand that. What scheme of compensation does the noble Lord regard as being adequate? A limit must be drawn somewhere. Presumably wherever the line is, be it three miles further down from the current line or whatever, there will be someone over the road from that line and they will think it is not fair and they will want more money. Clearly, there are short-term effects of any development, and one has sympathy with individuals affected by this case. Legislation is there to protect people who are adversely affected by any development—whether at an airport or another development—and I think that protection should be adequate.
Lord Davies of Oldham: My Lords, I have a long response, because this is an extremely difficult issue. I am grateful to my noble friend, who has reduced my response by a third. He emphasised in such a cogent way that of course the noble Lord, Lord Hanningfield, can identify issues with regard to airport blight, but it would be a far cry from reality if we looked on the development of all airports as bringing nothing but blight to their localities—very far from it.
I hear what the noble Lord says about the proposals regarding Stansted, but I recall that Stansted was first developed with its first runway nearly 30 years ago. The same kind of arguments could have been put at the time; I am not sure whether they were as I do not have that power of total recall that is necessary on such occasions. I remember gloom and doom suffusing quite a large part of the area, even among people living some 25 miles or 30 miles away, who subsequently would say that the airport has produced very real benefits as well. After all, a lot of people who live in the vicinity of airports earn their living through the airport. So I am grateful for that context, although I am going to address the noble Lord's amendment and stick strictly to the issues.
The issue of generalised blight is presently before the courts, primarily in connection with the voluntary blight compensation schemes introduced by the operator of Stansted airport, but potentially with wider implications. A permission hearing in that case took place on 13 and 14 December, resulting in a decision by the judge to refuse the claimants permission to apply for judicial review. We believe that the claimants will shortly be seeking permission for leave to appeal to the Court of Appeal. In view of this, I do not think that it is appropriate for me to comment further on the particulars of any specific schemes to address generalised blight. I am therefore obliged to step away from that illustration.
This is a difficult and complex issue that cannot be addressed in the way that the amendment suggests. Let me make the obvious proposition, which is the bedrock of my argument: why should airport development be singled out in this way? I know that as we are discussing the Civil Aviation Bill the noble Lord is properly discussing airport blight, but the concept of generalised blight is extensive and not only airports generate that issue. The operation of the property market as a whole has long been dependent on the general acceptance that the ownership of any land or property carries with it an associated risk that external factors may give rise to conditions adversely affecting its enjoyment or eventual resale value, and the assumption of caveat emptor applies.
A wide range of factors—natural and man made—can result in property blight. The noble Lord is identifying one factor. Generalised blight can occur before the true effects of the proposed development are known, and in many cases even before a planning application is submitted. An issue that can arise in some cases is finding the right balance between accepting such risks as inevitable—a concomitant risk of property ownership—and compensating those whose private interests are being threatened by schemes intended for the wider public good. The law already provides for compensation where land would be taken by the proposed development; for example, where compulsory purchase would be necessary. The noble Lord will recognise that we have law covering such eventualities.
In addition, the law already provides for compensation for loss of value arising from certain indirect effects of future development during construction, such as construction noise or dust, under the Compulsory Purchase Act 1965. Additionally, under Part I of the Land Compensation Act 1973, those affected by future development, including airport development, but whose land will not be taken by the development, can claim compensation for loss in the value of their property attributable to the operation of the development. But this does not apply until 12 months after the development has been used for the first time; for example, 12 months after a new runway is brought into operation.
It is an important and necessary principle of statutory blight compensation under Part I of the 1973 Act that it is assessed after the works have been completed and brought into use when the true consequences, both positive and negative, can be assessed objectively. This is not the case with generalised blight, which depends primarily on the attitude of potential purchasers of a property to a proposal for development nearby, which furthermore may not be granted planning approval. Such attitudes are highly susceptible to misperception, misrepresentation and uncertainty. In many cases generalised blight can be the result of all three. It can also give rise to a current of anxiety and in some cases even to irrational concern which, in turn, can undermine the strength of the property market to an unwarranted degree.
While proposals for development may coincide with a reduction—or indeed an increase—in property values, the causal link between the proposed development and depreciation or, in some cases, appreciation is much more difficult to establish than in the case of statutory blight. It was in recognition of these factors, during preparation of The Future of Air Transport White Paper, that discussions were held with major airport operators to consider what steps they could take on a voluntary basis to help stabilise the housing market around their airports if proposals for new runways were taken forward in the White Paper, with the aim of helping those worst affected and with a genuine and urgent need to move.
The position is set out in paragraphs 3.18 and paragraphs 12.13 to 12.17 of the White Paper. For example, it says in paragraph 11.41, in the case of Stansted airport, that:
"The airport operator will need to put in place a scheme to address the problem of generalised blight resulting from the runway proposal".
That is exactly what the British Airports Authority has done. It has consulted on and put in place three schemes to address different aspects of the generalised blight arising from the proposals for a second runway at Stansted. The schemes are similar to others in the past in connection with major road and rail proposals, such as the channel tunnel rail link. BAA has brought forward similar voluntary schemes at Heathrow, Gatwick, Edinburgh and Glasgow. The airport operator at Birmingham is currently consulting on revised voluntary compensation schemes and the operator at Luton is expected to bring forward its own proposed mitigation measures shortly. These voluntary schemes do not affect the statutory rights of property owners in due course.
Beyond the clear policies set out in the White Paper the Government contend that they should have no role in determining the scope or terms of non-statutory schemes brought forward by airport operators to address generalised blight. They are, necessarily, voluntary schemes for the reasons I have explained. The main concern and causal factor where generalised blight is associated with proposals for new airport runways is anxiety about future aircraft noise. It is sensible therefore for voluntary blight schemes to use forecasts of future noise to identify areas likely to be affected. One consequence of that approach is that some people in areas forecast to experience low levels of aircraft noise feel aggrieved at not being included within the scheme, which is intended for those who experience higher levels. However, voluntary generalised blight schemes that are not related to recognised causal factors can have the perverse effect of spreading generalised blight and making the situation worse.
The effect of the amendment would be to bring generalised blight within a statutory planning framework for the first time, but it would do so for one economic activity only: civil airports. The Government contend that that is the basis why the amendment should be rejected. Generalised blight is not an issue unique to airport development. It can arise from any major development or infrastructure project. The effect, therefore, would be discriminatory. Other comparable areas, such as other transport modes, heavy industry, chemicals manufacture, waste disposal and energy generation, would continue to be subject to the established position, while civil airports alone would be expected to compensate for generalised blight, whether or not the perceived risk of depreciation in property values was soundly based.
The effect would also be discriminatory in other ways. Where airport expansion involved the development of new surface access infrastructure or major improvements to existing road and rail infrastructure, as it often does, the amendment is not clear as to whether the owners of properties said to be blighted by the airport-related road and rail proposals should also be compensated under the airport scheme. Indeed, would that be necessary, to avoid unfair discrimination, even though road and rail infrastructure seldom serves just one role, such as an airport?
If the effects of the airport-related road and rail proposals were included in the airport compensation schemes directed by the Secretary of State, the result would then be discrimination between property owners affected by airport-related road and rail proposals but not those who suffer road or rail proposals elsewhere. That also would be unfair and irrational. The effect of the amendment would be to place a major obstacle in the way of airport development, due to the potentially high costs it could bring to any project, but more so, the high degree of uncertainty as to what those costs might be in the absence of a clear causal link between the effects of the proposed development and property values. It would deter airport operators from bringing forward proposals for airport expansion, which would harm the competitive position of UK civil aviation and damage the wider economy.
The amendment would also make it difficult for airport operators to consult properly and widely on their development proposals at an early enough stage—when genuine options are on the table—to allow for the views of consultees to be taken into account. Consultation is indeed a requirement in many cases, but, if consultation were to carry the risks and burden of compensating for generalised blight, that would obstruct the necessary development of the nation's infrastructure and export to other countries the jobs and the wealth to which my noble friend Lord Smith referred.
Finally, the territorial application of the proposed amendment is not clear. Although most aspects of civil aviation are reserved matters, most local planning matters are devolved.
I conclude by saying that successive governments have looked at the matter closely. That happened most recently when we considered planning and transport issues between 1997 and 2001, when relevant Ministers found good reasons not to introduce legislation that would bring generalised blight in the statutory framework. We all know the consequences of generalised blight; we all recognise the social and economic problems that obtain there, but we have looked at this very closely, and we reached our judgments on the basis that it would be wrong to introduce, as this amendment would, for one relatively narrow area of economic and planning activity compensation for a concept that is much wider than the noble Lord has indicated. I hope that he will feel able to withdraw the amendment.
Lord Hanningfield: My Lords, I thank the Minister for that comprehensive reply. This issue is rather different. From my local government career, I am very familiar with blight for all sorts of reasons and in relation to all sorts of issues. The area of this airport expansion is enormous—miles by miles. The proposal is not just to add a bit to a runway or to an airport. It encompasses several villages and a great chunk of Essex and therefore affects lots of people.
The Government came up with a policy statement, which has since been overruled in a judicial review, about siting a runway miles away from the existing runway. That would blight a great chunk of the county. If the runway had been close to the existing airport, one could perhaps accept a lot of the Minister's arguments. I hope that the Government will have learnt a lesson from this for the future. If you come up with a policy statement, you can blight great chunks of countryside even when the development might not happen. Of course, the whole process takes seven or eight years, so you have blighted these properties and this area of land for a long while.
I will not press the amendment today, but I wanted to air the issue again. It is a policy area that any government must consider. I am talking about blighting a whole area. It is not like what would happen with a waste plant, road or rail line; a great chunk of countryside is affected. Before announcing such a proposal, any government must think carefully about how it will impinge on hundreds of people's lives, properties, homes and livelihoods for many years. Whatever wealth is ultimately generated from the expansion of the airport, the process takes so long that it harms a lot of people and makes a lot of people unhappy. I hope that we have had enough debate to ensure that, any time the issue arises again, governments will think rather more deeply about it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Aviation Bill has now been returned to the House of Commons for the third reading. There is an amendment improving the Noise Quota system but the government has indicated that this will not be accepted.
4 April 2006
WE'LL LISTEN TO YOU, SAY AIRPORT CHIEFS
Airport operators have vowed to take residents' views on board
as they plan a second runway at Stansted
Helen Orrell - Essex Chronicle - 30 March 2006
BAA received more than 1,000 responses to its public consultation, which
closed this week after three months of exhibitions and meetings. Terry
Morgan, the airport's managing director, said: "I'd like to say a huge thank
you to all those who have taken part in the consultation exercise, to the
thousands of people who visited our website for information, to all those
who came along to our exhibitions and to those who wrote or e-mailed with
their comments and ideas."
"We will now carefully consider all the comments we have received and will
do our best to reflect the many views expressed during the consultation."
The company announced four possible locations for a second runway in
December. Three lie to the south-east of the airport and one to the
north-west, 475 metres from the existing runway.
BAA also revealed its preferred site, Option A, which is 2,275 metres east
of the existing runway.
It covers 627 hectares of land with 87 properties in the Molehill Green,
Bambers Green and Burton End areas, of which 25 are listed buildings.
OUR COMMENT: If BAA took notice of most people's views instead of just listening, no second runway would ever be built!
4 April 2006
FLY AND BE DAMNED
Mark Lynas - New Stateman - 3 April 2006
We could close every factory, lock away every car and turn off every light in the country, but it won't halt global warming if we carry on taking planes as often as we do. A voluntary no-flying movement offers the only hope, argues Mark Lynas
Some tout wind turbines or nuclear power. Others insist on micropower or biodiesel. Everyone has a preferred solution to global warming. But few seem to have realised that all their efforts will come to nothing if an increasing number of jet aircraft continue to take to Britain's crowded skies.
Aviation is the fastest-growing source of greenhouse-gas emissions, already accounting for eight million tonnes of carbon dioxide each year - more than 10 per cent of the UK total. The sheer rate of growth is staggering: at 12 per cent per year, aviation is growing faster here than even in the boom economy of China.
This will be an environmental catastrophe, yet instead of trying to rein in the destructive surge in flying, government ministers are assiduously promoting its growth. The Labour government plans to bulldoze communities across the country for new runways and access roads, pushing the Kyoto goals out of reach for ever and giving a terrible boost to global warming.
A recent letter from Tony Blair to the campaign coalition Stop Climate Chaos shows just what a master of doublethink he has become. The government's initiatives on global warming will "reduce carbon emissions by over seven million tonnes by 2010", he crowed. Even if this were true (which is doubtful), the growth in the aviation sector would more than wipe out these gains by the end of the decade. Blair claims to think that "climate change is, without doubt, the major long-term threat facing our planet", yet the actions of his government make him just as culpable for the coming crisis as more familiar demons such as ExxonMobil or George W Bush.
It has often been said that unlimited growth is the ideology of the cancer cell. If so, then aviation's tumours are metastasising all over Britain. No major city today is complete without its own local airport, offering cheap flights to an ever-increasing list of domestic and international destinations. Heathrow is already making plans for a sixth terminal - even while the fifth is still a gigantic building site - and a third runway. Twelve other airports, including Aberdeen, Edinburgh, Southampton, Norwich and Swansea, are planning large-scale expansions. Six, including Stansted, Edinburgh, Glasgow and possibly Gatwick, may almost double in size with new runways.
As an unavoidable consequence, aviation emissions will double by 2020 and quadruple by 2050, a prospect that makes a mockery of all other national efforts to combat global warming. According to a recent report by the Tyndall Centre for Climate Change Research, even if we were to shut down the rest of the economy in order to save on greenhouse-gas emissions, aviation alone would bust the sustainable emissions budget by the middle of the century. Without heating, lights, cars, factories or any of the other sources of pollution, the growth in flying alone will propel us into a future of melting ice caps, spreading deserts, rising sea levels, vanishing farmland and collapsing ecosystems.
The stance of our presumed prime minister-in-waiting, Gor- don Brown, is if anything even worse than Blair's - although at least Brown doesn't bother trying to make us believe he knows or cares much about global warming. His Budget tossed a few crumbs in the direction of the environmental movement (pre-sumably with one eye on David Cameron's shiny new micro wind turbine) but, like Bush, Brown insists that nothing should get in the way of economic growth - not even the planet.
A stark example of Brown's poverty of imagination emerged in the Budget: householders, he said, would get support to fluff up their loft insulation, supposedly saving 35,000 tonnes of CO? per year. Big deal: this is the same amount that a single jumbo jet pumps out in the course of 25 return trips to Miami. And Brown is the biggest aviation enthusiast of all.
He's too canny to draw attention to this openly, of course. You need to read the small print - in this case a couple of paragraphs buried right at the end of chapter three of the pre-Budget report, under a section entitled "Meeting the Productivity Challenge". "The government is committed to meeting the demand for additional runway capacity in the south-east," the report says, in the name of which "a second runway at Stansted should be delivered as soon as possible".
The document goes on to commit the government to sup- porting Stansted expansion with a "package" of "surface access improvements" - code for new roads and motorways, all of which will be built at public expense, to funnel ever more traffic into the expanding airport.
Clear-sighted MPs on the Commons environmental audit committee have rightly lambasted the government's approach as the same old model of "predict and provide", which brought chaos and endless traffic growth to British roads. Ministers "predict" an increase in aviation passenger journeys from 180 million passengers per year at present to 476 million by 2030. This, the MPs point out, is the equivalent of another Heathrow every five years.
A government truly committed to achieving climate-change goals would rein in demand in the interests of sustainability and future generations. Instead, as the committee charges, "the Department for Transport has forecast future demand and then provided the framework to meet practically all of it. It is actively promoting growth on the scale envisaged", rather than being a neutral arbiter.
Just as building new roads created more traffic to fill them, building new runways and airports will encourage more people to adopt lifestyles that include lots of flying, such as second homes in Malaga, weekend shopping breaks in Prague, or family ties in Sydney.
Just look at where the big money is being spent. The private sector's price tag for Stansted's proposed runway is £2.7bn, somewhere between ten and a hundred times the amount the government puts into its entire climate-change programme, windmills, loft insulation schemes and cycle lanes included.
The government's one response to these concerns has been to seek the inclusion of aviation in the European Emissions Trading Scheme. The vague idea seems to be that airlines would buy carbon credits on the open market to cover their emissions, necessitating equivalent cuts in other polluting sectors of the economy. What happens when there aren't enough credits to go round? The answer seems obvious: given that the rest of the European economy won't want to roll over and shut down, the airlines will just bust the budget.
But maybe there's a technofix, where the white knight of technology miraculously rides to the rescue? The industry claims that its jet engines are becoming steadily more efficient, but the truth is that any likely emissions reductions will be quickly swamped by the increase in flights.
A bolder approach would be to launch aircraft which burn either hydrogen or biofuels. Alas, no experts believe such a thing is even on the radar for decades yet. Hydrogen is too bulky to work as a fuel, and in any case its combustion output of water, when injected high in the stratosphere, would contribute to global warming rather than reducing it. As for biofuels, they don't have the energy density of kerosene (the standard fossil jet fuel), and the business of producing them in large quantities is already endangering food security and boosting deforest- ation across the tropics. There is simply no possibility that they could be produced in the volume needed to slake the thirst of jet aircraft in the long term.
Another solution we are offered is carbon offsets, a sort of voluntary "tax" on airline tickets which goes to plant trees or fund renewable energy projects in the developing world. One of the companies offering offsets is Climate Care, which uses cash wrung from guilty frequent flyers to fund small-scale projects such as biogas digesters in India or low-energy school lighting in Kazakhstan. The projects undoubtedly bring benefits to their recipient communities, but it is far from clear whether or not they really neutralise the hugely damaging atmospheric impact of flying. Their psychological impact is also questionable: are they simply salving the consciences of people who might otherwise scale back their flights?
In this dreadful, dark picture there is one glimmer of hope. A no-flying movement is beginning to take shape, with many people voluntarily committing not to fly at all for non-essential trips. It is already a sufficiently large market to be taken seriously by the newspaper travel supplements, which are starting to provide information on train or shipping alternatives. And there are benefits. Travel to the Alps by train and you get a real sense of geography, of evolving culture and changing climatic zones. Arrive by air and all you see is identikit airport terminals and thousands of other culture-shocked, aggravated travellers. Slow travel, like slow food, is about clawing back quality of life.
Perhaps it is to this incipient movement that Gordon Brown and Tony Blair should look if they want to avoid going down in history - as they surely will on present form - as villains or fools who chose the wrong side of the struggle against global warming. No, Mr Brown, Stansted's second runway should not be "delivered as soon as possible". No, Mr Blair, Heathrow should not be given a sixth terminal and a third runway.
As the writer George Monbiot has pointed out, the farmland around Heathrow village once grew some of the best apples in England, and the cargo planes bringing out-of-season strawberries from California are touching down on grubbed-out orchards and market gardens. If we begin to rein in aviation, perhaps Britain can flower once again.
Here's a positive vision for the future: rather than opening new runways, the government should be closing them down.
4 April 2006
BLAIR BLOCKED PLAN TO CUT EMISSIONS
Geoffrey Lean, Environment Editor - The Independent on Sunday - 2 April 2006
Tony Blair personally frustrated measures to cut Britain's emissions of the
pollution that causes global warming, despite repeatedly calling for action,
The Independent on Sunday can reveal.
The Prime Minister did not back proposals from his Environment Secretary,
Margaret Beckett, that aimed to get the Government's strategy to fight
climate change back on track.
As a result, ministers had to admit last week that they would not meet a
target, which was set in three election manifestos, for cutting pollution.
The revelation comes as new official statistics show that Britain's carbon
dioxide emissions - the main cause of global warming - have risen for the
third year in a row. This means that emissions have risen, by 2 per cent,
instead of falling since Mr Blair came to power nine years ago.
Labour has promised in its manifestos since 1997 to cut carbon dioxide
emissions by 20 per cent, from their 1990 level, by 2010. With just four
years to go, the latest rise means that emissions are down only 5.3 per cent
Mr Blair told a climate change conference in New Zealand last week that
failure to take action on global warming would be "absolutely disastrous". He
added: "I don't want it on the conscience of me, or my generation, that we
were told what this problem was and did nothing about it."
The Government's new programme, announced on Tuesday, makes little progress,
though. Work began in a panic after ministers realised that their previous
plans would probably reduce emissions by only 14 per cent by the target date.
This new policy review, however, contains almost no new measures and, even by
ministers' estimates, may only increase the reduction to 15 per cent. Downing
Street sources privately concede that even this may be optimistic.
Mr Blair chaired the committee that conducted the review and failed to back a
58-point plan put forward by Mrs Beckett. The plan included a measure that
aimed to enforce speed limits to save fuel.
Privately the Prime Minister shows little interest in measures to cut
pollution, preferring international talks, where he increasingly mirrors the
position of President George Bush.
4 April 2006
MORE POSITIVE SIGNS FROM THE EU
Sweden adopts 2020 climate change target
Environment Daily 2071 - 31 March 2006
Sweden's greenhouse gas emissions should fall by 25% by 2020 compared
with 1990, "breaking its dependence on fossil fuels", the government
said on Thursday.
The commitment follows an agreement with the
opposition Left party. Indicative sectoral targets for 2015 will be
developed to support achievement of the overall goal.
In the case of
transport, the government has already set an "ambitious" goal of
stabilising emissions by 2010. Sweden's existing national target of
a 4% cut in emissions from 1990 to 2010 remains unchanged.
POLAND ADOPTS ENERGY POLICY PROGRAMME
Environment Daily 2071 - 31 March 2006
The Polish government accepted a long-awaited programme for energy on
A key goal is to curb the sector's negative environmental
impacts by reducing emissions of carbon dioxide, sulphur dioxide,
nitrogen oxides and fine particles.
It also aims at developing
currently unexploited sources of renewable energy and increasingly
cogenerating heat and power.
The plan is expected to lead to major
changes in the structure of Poland's energy sector.
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