SSE NEWS ARCHIVE - January to March 2008

The much trumpeted opening of Heathrow's Terminal 5 descended into farce on Thursday amid cancelled flights, delayed baggage, long queues and environmental protests.

The difficulties are embarrassing for both BAA, the airports operator, and British Airways, the sole occupier of the new terminal, which was officially opened by the Queen earlier this month.

The £4.3bn Terminal 5, which started receiving passengers on Thursday morning, was forced to cancel 34 short-haul flights due to what British Airways described as "minor problems" chiefly in the computer system, that led to three flights leaving without any luggage on board.

The baggage system appeared to be at the heart of the difficulties, with some passengers having to wait more than two hours at the carousel to receive their luggage, after staff had apparently been allocated to the wrong locations to retrieve bags from flights. Other staff were having difficulties with the car park and the employee security screening system.

The flight cancellations led to long queues of passengers lining up at ticket desks to seek refunds or alter their flight plans.

British Airways, which now has its home at T5, said it had suffered "a few minor problems" during the first day of operation. "This is not unexpected following one of the most complex and largest airport moves in history," British Airways said in a statement.

"These teething problems have included car parking provision, delays in staff security screening and staff familiarisation with the terminal. We have also had some baggage performance issues. These issues are being resolved and we are sorry for any inconvenience this has caused."

BAA was not immediately available for comment.

The situation was not helped by a protest staged by environmental campaigners earlier in the morning. Around 11am, approximately 250 protesters staged a demonstration against further airport expansion, including the mooted construction of a third runway at Heathrow.

It should have been a proud moment as Rafael del Pino welcomed the Queen to the official opening of Heathrow airport's gleaming Terminal 5 this month. Ferrovial, the Spanish conglomerate he heads, owns BAA - and with it, London's main airports. It has transformed itself from the construction company Mr Del Pino's father founded in 1952 by snapping up not just airports but toll roads, car parks and other service companies.

But since June 2006, when Ferrovial (along with Singapore's government investment arm and Quebec's state pension fund) bought BAA, the purchase has given the company little but grief. "BAA is still a great asset. We are not sorry we bought it," says Iñigo Meirás, head of the airports division at Ferrovial. Outsiders, though, are concerned that the financial burden Ferrovial took on to buy BAA has undermined its ability to manage it.

"It's difficult to get away from the fact that BAA is simply too indebted," says Andrew Fitchie, transport analyst at Collins Stewart, the London stockbroker. "There will be a reckoning."

The fear is that Ferrovial is struggling to cope with both the financial and operational challenges the company faces - and that if BAA goes down, it could even take Ferrovial with it. Even at the time of the £16bn deal, at the height of the credit boom, the Spanish group and its partners were considered by many to have paid a lofty price for the airports operator.

If BAA were to collapse, there would be huge political repercussions, even possibly a backlash against foreign ownership of UK companies. "[BAA's] future is of central importance to the United Kingdom's transport infrastructure," parliament's all-party transport committee said this month. "BAA's monopoly position in the UK airports sector is unnecessary." The Competition Commission, meanwhile, will this year deliver its verdict on whether the UK's largest airports should remain under a single owner or whether BAA should be broken up.

Ferrovial concedes that the financial risks BAA faces have started to bite. "The financing of the BAA deal was well thought out, with all possible negative and positive scenarios taken into consideration," says Mr Meirás. "However, I would have to say that almost all the negative scenarios have been played out and none of the positive."

The purchase was predominantly financed by debt. Even Ferrovial's £2.5bn "equity" contribution was funded largely by debt at the Ferrovial group level, secured in turn against its stake in BAA and other parts of the Spanish group. Since the take-over, not only have credit conditions deteriorated but the financial terms under which BAA operates have been made less generous. Its regulator, the Civil Aviation Authority, has said airlines must pay more to use London's airports. But it has reduced the return BAA is allowed to make between now and 2013.

Ferrovial is not just facing financial headaches. Faith in its ability to manage BAA,which contributed more than onequarter of Ferrovial's ?15bn (£11.7bn) revenues last year, has also been shaken during the 21 months of its ownership. It failed, for one, to anticipate operational problems such as the security crackdown in August 2006. As chaos descended on London's airports after the discovery of an alleged plot to blow up transatlantic flights, BAA floundered.

"We estimate that literally in the space of an hour on that night our security workload went up 400 per cent," says Tom Kelly, BAA's director of corporate and public affairs. But the scale of the task elicited little sympathy from passengers, politicians or the media, which condemned the airport operator for the resulting queues, flight delays and baggage mishandling as well as inadequate facilities in Heathrow's older terminals.

BAA's new owner responded, with some justification, that it could not be held accountable for the years of underinvestment at the root of Heathrow's problems. But users of Heathrow and Gatwick airports, who according to the Association of European Airlines suffered the worst flight delays in Europe last year, are starting to vote with their feet: passenger growth is slowing. Ferrovial, long accustomed to uncritical admiration for its global ambitions in Spain, was caught off guard by the public relations crisis.

Amid an exodus of senior managers Stephen Nelson, BAA's chief executive, is the most telling casualty. Unlike other departing staff, Mr Nelson, who formerly ran BAA's retail operations, was promoted to his latest position by Mr Del Pino himself.

Ferrovial'sproblems with BAA are fast approaching crunch time . The group has tried to refinance more cheaply some of the debt it loaded on to BAA, as well as £4.5bn of bonds issued by the airports operator. Its plan - to raise the money in a securitisation backed by the assets of Heathrow, Gatwick and Stansted airports - did not seem unreasonable at the time of the takeover. Others including Australia's Macquarie were using similar models. But the uncertainty at BAA, as well as the turmoil in the credit markets, has derailed the refinancing timetable.

Ferrovial says it expects the securitisation to go ahead by June. But if this deadline is missed, credit rating agencies would be likely to downgrade BAA's bonds to "junk" status, triggering a bondholders' option to demand repayment. Investor anxiety over BAA's ability to service its debt is reflected in the cost of insuring against a default. The price for this on BAA senior five-year credit default swaps, around 20 basis points before the takeover, has risen to about 400 basis points, according to Thomson Financial.

But even if Ferrovial concludes a refinancing successfully, that solves only one of its problems.BAA must still generate enough cash to service its own borrowings as well as further Ferrovial debt. Yet BAA's operational cash flow, some £1bn in 2007, remains insufficient to meet debt service payments as well as its tax and capital expenditure bill. Since BAA has promised the regulator a £4.7bn investment programme running to 2013, it must therefore borrow to pay for that as well.

So, as global credit conditions continue to deteriorate, BAA needs to raise nearly £12bn in all. Ferrovial, whose shares have fallen 35 per cent over the last 12 months, is not in a position to bail out BAA since it faces severe cash flow constraints itself.

With finances so stretched, Ferrovial has few options. It has already sold a number of BAA's "non-core" businesses, such as World Duty Free, in order to pay down debt. But as Collins Stewart's Mr Fitchie points out: "The problem is that, as BAA sells assets, it is slowly diluting both its value and its cash flows."

Even if Ferrovial sold one of the London airports - as it may be forced to do by the Competition Commission - this would merely result in forgone earnings rather than change the overall ratio of debt to assets, thus bringing no improvement in its ability to service that debt.

Ferrovial - and BAA - will not run out of cash immediately. But the outlook for London's airports is grim, and the day when Mr Del Pino can feel full pride in his purchase appears far off.

On a wing and a prayer: Ryanair's fuel hedge is about to run out, exposing the major airline to the full blast of spot prices, which have recently soared to record highs, impacting on its profit margins.

DUBLIN stockbroker Goodbody has cut its Ryanair forecasts for the third time in three months, but still believes the Irish airline will emerge from the current aviation crisis "stronger and fitter" than ever.

Goodbody's analyst Joe Gill, traditionally one of Ryanair's most bullish commentators, now believes the airline's earnings per share will plunge by 48pc for the year ending March 2009. The prediction is based on a new assumption of jet fuel staying at $1,000 a ton, as forecast by easyJet earlier this week.

"While this profit decline is dramatic, it should be judged against how the airline industry normally behaves during a cost/revenue crisis," Mr Gill's report notes.

"Heavy losses are incurred and weaker carriers disappear. Our new forecast implies Ryanair stays profitable at a time when oil prices are at record highs and consumer sentiment is weak. On the assumption that oil normalises, we expect a sharp profit recovery at Ryanair as it continues to grow while competitors stall or exit the industry entirely."

Mr Gill's comments come at the end of one of Ryanair's most volatile ever weeks on the Irish stock exchange. Ryanair's shares opened the week at ?2.81 before losing about 6pc of their value in Monday's St Patrick's Day massacre as investors deserted the Iseq in their droves.

Tuesday saw something of a Ryanair recovery, with the shares closing up 2pc at ?2.77, before easyJet's Wednesday morning profit warning plunged the shares down as much as 10pc in morning trading before closing down 8pc at ?2.55. Then came a dramatic recovery on Thursday with shares soaring as much as 10pc as oil prices retreated before closing up 8pc at ?2.75.

The extreme volatility in Ireland's aviation sector, largely created by Ryanair's turbulence, prompted investment house Cantor Fitzgerald to declare on Thursday that it would no longer invest in Irish airlines. On the same day the UK investment house also issued a moratorium on investing in Irish financials and Irish plcs with a value below ?1bn.

BAA has agreed to sell some of its jointly owned airport office space and other development sites to a trust controlled by Surinder Arora, the hotel entrepreneur, for £265m ($525m).

The transaction frees up some much-needed capital for the highly leveraged airport operator, owned by Spanish infrastructure group Ferrovial, and adds to Mr Arora's burgeoning airport property empire.

BAA and its partner, Morley Fund Management, put the entire assets - which are valued at about £1.1bn and owned by their joint venture, Airport Property Partnership - up for sale last year but failed to secure a quick deal as the credit crunch kept potential buyers at bay. "We're very excited about the whole transaction," Mr Arora said. "This fits in very nicely with the rest of the property portfolio within the family trust."

The deal is not the first between BAA and Mr Arora, who left India for England aged 13 and started his career as a British Airways customer services agent.

He has since amassed a fortune of more than £200m through Arora Holdings, the largest family-owned hotel chain in the UK, whose portfolio includes a £180m development at Heathrow's Terminal 5 and a hotel in Manchester, co-owned with Sir Cliff Richard. He is also the co-owner of Wentworth golf club. In 2006 he bought nine airport hotels owned by BAA Lynton, the operator's commercial property arm.

Since acquiring BAA in 2006, Ferrovial has sought to sell non-core assets in an attempt to reduce the £9bn debt raised to pay for the deal. Ferrovial has struggled to refinance this debt but a deal is due for completion by the summer.

Rather than trying to sell a mixed portfolio, it is understood BAA was advised by Morgan Stanley to separate a group of 33 mainly Heathrow-based office assets from the remaining three-quarters of the portfolio, which are industrial holdings. A source close to BAA said it secured a good price given the challenging market conditions. BAA is in talks to sell the remainder of the assets.

ONE of Britain's largest airlines, Easyjet, will mount a legal challenge over the stiff price increases imposed at Heathrow and Gatwick. A judicial review of the Civil Aviation Authority (CAA) decision could threaten the planned refinancing of BAA, the company that owns and operates the London hubs.

Easyjet has retained London law firm Lane & Partners as its adviser and informed the CAA and BAA nine days ago of its intention to seek a judicial review. It is expected to formalise a claim to the High Court within a month. If the court accepts it has a case, arguments could take another six months, with a decision possible by the end of the year, legal sources said.

Ryanair said yesterday that it would join the action, and BMI British Midland is also expected to participate. Sir Richard Branson's Virgin Atlantic is as yet undecided. British Airways is unlikely to take part.

Easyjet's legal move is the culmination of a bitter row between airlines, the CAA and BAA. Airlines accused the CAA of failing to police BAA and of approving overgenerous price increases.

The CAA ruled this month that airline charges at Heathrow would increase 23.5% to £12.80 per passenger a year from April. Charges in the four subsequent years could rise 7.5% above annual inflation. Its decision led to outrage among airlines. The CAA defended the rise by saying that the large capital investment required at Heathrow and Gatwick had to be paid for. If the judicial review goes ahead, it will be the first time the CAA has been challenged since it began regulating airports 20 years ago.

A lengthy legal battle could have serious ramifications for BAA, which was bought last year for £10.3 billion by a consortium of investors led by Spain's Ferrovial. The group has since struggled to refinance the loans taken on to buy the company.

When the new prices were announced, BAA said that they would "enable [BAA] to proceed to finalise the details of the refinancing for the first time". Analysts said banks and bond investors were unlikely to take part if there was any prospect the courts could overturn the ruling.

The CAA said yesterday it had no record of being notified of Easyjet's intentions, but would "vigorously defend" its position.

Easyjet said: "We do not believe the CAA has acted correctly in its review of BAA's pricing. It has not followed the necessary process and has shown a systematic bias in favour of BAA."

Meanwhile, BAA's annual report, published on its website on the same day the new prices were set out, shows the company is at the limit of the covenants on some of its existing borrowing. "Restrictions... reach the maximum allow [sic] level at 31 December, 2007," the report said.

The Government's claims that expansion at Heathrow can be achieved without breaching air quality limits have been undermined by a report from their own environmental advisers. The Environment Agency's criticisms of the 'Adding Capacity at Heathrow' consultation echo those made by local authorities campaigning against a third runway.

The councils, who are all members of the 2M Group, are now calling on transport secretary Ruth Kelly to make an urgent statement on the EA's findings.

The agency, which is the leading public body for protecting the environment, warns that the material used to justify the Government's conclusions on likely NO2 levels cannot be relied on. It says that there are arguments for postponing irreversible investment decisions in the face of uncertainty.

The full report is available on the EA's website. The key conclusion states: "We do not think that the evidence presented is sufficiently robust to conclude that the proposed Heathrow development will not infringe the NO2 Directive, bearing in mind the uncertainties that need to be addressed."

"This is because the assessment of air quality pays insufficient attention to these uncertainties and to the range of possible future scenarios for issues like road traffic, meteorological variability, climate change, background air quality and atmospheric chemistry."

The report goes on to warn: "It is likely that worsened air quality will result in increased morbidity and mortality impacts as well as a range of other impacts. These air quality impacts will be present irrespective of whether air quality remains within EU guidelines and are likely to be especially important given the very high population density of the SE region."

H&F Deputy Leader and Cabinet Member for Environment, Councillor Nicholas Botterill, said: "The Government's own scientific advisers are telling them what local councils and other campaign groups have said all along - the figures just do not add up. More and more evidence is emerging of the lengths that the Department for Transport and BAA went to so they could be sure of getting the answers they wanted from these environmental tests."

"I'm not surprised that the Environment Agency has serious doubts about the evidence used - but what really disturbs me is the thought no one bothered to seek its advice before."

OUR COMMENT: History repeats itself. The objectors at the recent G1 Stansted inquiry raised similar doubts about air quality figures, some of which have been recently confirmed and are still being debated.

Pat Dale

AN ALLIANCE of councils against a second runway at Stansted united on Monday, under the banner "CO2" (Councils Opposing a 2nd Runway).

The coalition of authorities, together representing more than three million people, came together at the Houses of Parliament on Monday afternoon to demonstrate the strength of feeling against BAA's second runway at Stansted proposals. They were joined by the "2M Group" of London councils standing against the expansion of Heathrow.

CO2 is currently made up of Essex County, Uttlesford District, Hertfordshire County, Suffolk County, Braintree District and East Herts District councils, with other authorities expressing interests in joining up.

Lord Hanningfield, Essex County Council leader, said: "CO2 will be a powerful force that will campaign on behalf of local residents to oppose this unwanted and unnecessary runway and will take the fight directly to BAA and the Government."

"A new runway would put unbearable strain on our local services and infrastructure, which is already at breaking point, and it will of course cause huge environmental damage. The Government's aviation strategy needs a total rethink."

A BAA spokesman said that the formation of CO2 did not affect the airport operator's stance on the need for a second runway at Stansted. He said: "The councils involved with this have been opposed to a second runway since the Future of Air Transport white paper in 2003. They've come up with a nice new name for it now, but they've been in that camp for a long time."

Leader of Uttlesford District Council (UDC), Cllr Jim Ketteridge, said that all political parties in the district were united in their belief that a second runway would be seriously detrimental to the area.

"As the local authority with Stansted Airport within its boundaries," he said, "we remain strongly opposed to a second runway. It is a stance supported by all political groups on the council. We have a strong mandate in opposing the application following the result of a referendum held in the district."

UDC's deputy leader, Cllr Jackie Cheetham, will join a large number of politicians and dignitaries at a rally being organised by Stop Stansted Expansion (SSE) next month. Representatives from various councils and groups including the Society for the Protection of Ancient Buildings, CPRE, Friends of the Earth, Greenpeace and The National Trust will join a large number of MPs and MEPs to hear from a selection of authoritative speakers.

Carol Barbone, SSE campaign director, said: "The level of opposition to BAA's plans is unprecedented as we prepare to fight - and overturn - its wholly unsustainable proposals."

The rally is taking place at the Rhodes Centre in South Road, Bishop's Stortford, at 8pm on Wednesday April 2.

The Sustainable Development Commission warned the Government that it urgently needed to "raise its game" to reduce its environmental footprint.

Ministers were accused of hypocrisy and extravagance after the Conservatives calculated that Whitehall departments and major public bodies clocked up more than 300 million "air miles" last year. The Tories said the flights would have been enough to take politicians and civil servants to the moon 1,280 times or make 12,240 journeys around the world.

The figures came after the Sustainable Development Commission, an environmental watchdog, warned the Government that it urgently needed to "raise its game" to reduce its environmental footprint. It called on Whitehall to set a target for cutting air travel in favour of greener alternatives.

The Tories calculated the total journeys by public bodies after obtaining details of the amount of carbon offsetting by the Government in 2006-07. It was the first time Whitehall has disclosed the figures for carbon offsetting.

The highest air travel totals were recorded by the Foreign Office (90.5 million miles), the Ministry of Defence (43.4 million, excluding military travel) and the Department for International Development (42.2 million).

But several largely domestic departments also ran up large totals. The Cabinet Office, including Downing Street, accumulated 38.5 million miles, HM Revenue and Customs staff covered 17.3 million miles and the Home Office accounted for 9.4 million miles.

Ministers and officials from the Department for Communities and Local Government covered 555,000 miles travelling to four continents, while the Department for the Environment, Food and Rural Affairs covered 1,658,000 miles to the likes of Thailand and Australia.

Officers from the Metropolitan Police travelled 16.9 million miles, Transport for London 1.6 million miles and the Greater London Authority 637,000 miles.

The Tories estimated the total travel by ministers and civil servants over the period to be 306 million miles. They claimed the price of the tickets to the taxpayer would have been £50m, excluding expenses such as hotel bills and the cost of food. Francis Maude, the shadow Cabinet Office minister, said: "Ministers - and Ken Livingstone - are failing to practise what they preach on the environment, as they and their civil servants jet around the world on foreign jaunts. Labour ministers should start showing some social responsibility and set clear targets to reduce unnecessary travel, in order to reduce carbon emissions and save taxpayers' money."

Tony Bosworth, senior transport campaigner for Friends of the Earth, said: "Tackling aviation growth is essential to cutting climate change emissions. The Government should be setting an example and not use planes where there are good rail alternatives available."

A spokesman for the Cabinet Office said: "The Government would never indulge in unnecessary air travel, but no one should try to suggest Britain's interests can only be pursued over the phone. For example, Defra sent delegations to important international environmental talks, helping to secure crucial environmental commitments."

The Independent disclosed last week that two thirds of cabinet ministers travel in vehicles occupying the top emissions bands.

Between April 2006 and December 2007, ministers and staff from the Department for Environment, Food and Rural Affairs and its agencies spent £1.8m on 2,361 separate flights to foreign countries

Britain's climate change emissions may be 12% higher than officially stated, according to a National Audit Office investigation which has strongly criticised the government for using two different carbon accounting systems. "There is insufficient consistency and coordination" in the government's approach, the NAO said.

Using one system, which the government presents to the UN and in public, Britain emitted 656m tonnes of COP2 in 2005, and claims an improvement on 1990 figures. However, the lesser known and more accurate data in the government's national environmental accounts show emissions to be in the region of 733m tonnes in 2005, a NAO report says today.

"There are two different bases on which the government reports emissions: that required for the UN, and the environmental accounts prepared for the Office of National Statistics?(which are) more comprehensive as they include aviation and shipping emissions. They present UK progress in reducing emissions in a markedly different light", says the report. The report says there have been "no reduction in UK emissions" if measured by the national accounts method.

The figures contained in the report fly in the face of consistent government claims that it is reducing emissions. Last week the environment minister, Phil Woolas, said in a Commons written answer: "UK greenhouse gas emissions have fallen by 16.4% since 1990. We remain on course to nearly double our Kyoto Protocol target over the 2008-12 period."

Last night opposition parties and environment groups accused the government of misleading the public at a time when the UK claims to be leading the world in achieving reductions.

"This report raises profound questions about the credibility of the government's approach to reducing carbon emissions. In the absence of reliable and honest reporting the results could be potentially disastrous", said Peter Ainsworth, shadow secretary of state for the environment.

"Labour's claim that Britain's carbon footprint is shrinking is a scam. The figures on aviation are being fiddled, meaning the government can give the green light to airport expansion without most of the subsequent rise in emissions being counted", said Robin Oakley of Greepeace.

The 40 page NAO report found that government departments interpreted data in different contexts and for different purposes, "in one case within the same document on successive pages".

The report said the government's many targets and timetables for reducing different combinations of greenhouse gases were confusing. The UK has a Kyoto target of 12.7% reduction in all greenhouse gases by 2012, an EU target of 20-30% of CO2, three domestic goals ranging between 20-60% CO2 and is in the process of drafting a new climate change bill.

"The targets can be assessed against different bases. There is 'considerable scope' for aggregating and presenting data in different ways", the NAO said.

OUR COMMENT: This pick and mix counting mixture makes it all the more important for the aviation and shipping emissions to be included in the coming Climate Change Bill, which will soon be voted on. Ask your MP to press for this change, it is time that the question of potential damage from ever increasing aviation emissions is properly assessed - it should not be left to the as yet unknown conditions of an EU trading system. Why is aviation so favoured? Other industries are equally important to the economy. All sources of greenhouse gases should be included in the bill.

Pat Dale

Plans to double the size of the UK's third busiest airport are to face opposition from six local authorities representing 3.2 million people.

A second runway at Stansted would put "unbearable strain" on local services, according to authorities in Essex, Suffolk and Hertfordshire which pledged to "vigorously campaign" against a proposed expansion announced last week by the airport operator BAA. Uttlesford District Council - which covers Stansted - has been asked for permission by BAA to build the runway and a second terminal, although a final decision will almost certainly be made by ministers following a public inquiry. If approved, the £2.5bn development would open in 2015 and serve 68 million passengers a year by around 2030.

The county councils in Essex, Hertfordshire and Suffolk, and district councils serving Braintree, East Hertfordshire and Uttlesford, said a second runway was "unwanted and unnecessary". Local politicians announced they were forming a cross-party group named Councils Opposing a 2nd Runway (CO2) and called on the Government to "totally rethink" its aviation strategy.

Matthew Knowles, a spokesman for the Society of British Aerospace Companies, said the expansion was designed to meet demand from the public for flights that would bring money into the economy.

OUR COMMENT: What demand? Why is Ryanair advertising thousands of ?free? or very cheap seats?

Pat Dale

Last month, the low-cost airline Ryanair warned that its profits could halve this year because of high fuel costs and low consumer confidence. So why is it giving away a million free flights - it will even pay the taxes - which, it says, are worth £34m?

Its cheery chief executive, Michael O'Leary, promised the CO2-laden bonanza if his horse won at Cheltenham last week; it didn't, but he still decided to go ahead, or so the airline's spin machine has it. Actually, Ryanair has run this promotion before - in May last year, when it was struggling to fill its planes.

"It brings a lot of new customers to our website," says Caroline Baldwin, the UK head of sales and marketing. Is it to fill empty planes? "No, not at all," says Baldwin, who is sticking to the horse story. Strange, then, that so far this year, Ryanair's load factor - the measure of how full the planes are - has been 2% down on the same time in 2007.

Last month, the airline was forced to declare the taxes and charges in its advertised rates following pressure from the Office of Fair Trading. The consumer magazine Holiday Which? said Ryanair was the worst airline when it came to its hidden charges - book a free flight (actually, it charges a nominal 1p) from London to Oslo, say, and if you don't watch it, you can be charged £5.77 for travel insurance, £3 for priority boarding, £21 to check two bags in at the airport and a credit card charge. Then there is the inflight food and drink, car hire, hotels, financial services ... "The hope is that we would make money from those ancillaries," admits Baldwin.

O'Leary has said that it is his ambition to be able to offer all of Ryanair's seats free one day, with all the money coming from the add-ons. Cost to the environment isn't included.

Out of date food scavenged from a smelly skip has been served to easyJet passengers, an ex-catering worker claims. He was told to climb into a car park bin to find sandwiches because there was not enough food for an inflight meal order.

The 10 packaged Bacon Bloomers were dusted down and unwittingly given to passengers on no-frills flights out of Luton. They were two or three days past sell-by dates.

The Mirror launched a surveillance operation and other staff at the world's largest inflight caterer Gate Gourmet confirmed that they had also reused discarded food.

The 20-year-old anonymous former worker said: "I climbed into the skip bin to fetch old food that had been thrown away. The food was buried under discarded items. I was told there was not enough food in the warehouse and the company wanted to avoid complaints. It was treated as a bit of a joke."

Another employee added: "I wouldn't fly easyJet and I would never buy the food. We know how we did it."

Neil Harding, 28, who worked at the Luton warehouse until January, said: "If there is a mix-up in the order and after things have been disposed of, they realise there is a problem with that day's delivery. That was when food was fished out of the bins and used a day or two later than it should be."

Mr Harding also claimed some staff had not yet had criminal record checks as required by the Department of Transport. He said: "Food is packed in the warehouse and sent into the hold of the planes.

"It is therefore essential that no one could work there who could be considered a threat to security. This was not the case." And containers were not made tamper proof, he said.

Others said prepared food was left on the floor. Tables were hurriedly brought in after easyJet said it wanted to inspect the place because of complaints.

One manager said: "Now everything is made on tables, nothing on the floor." Staff claimed the firm could not cope after winning a contract in October to supply meals and drinks for up to 60 Luton easyJet flights a day.

Airports operator BAA has admitted to the holders of £4.7bn of bonds that the Competition Commission could scupper its plans to refinance £10bn of debt.

José Leo, BAA's chief financial officer, said the owner of seven airports including Heathrow, Gatwick and Stansted had figured the possible forced sale of airports into the structure of its proposed refinancing.

"We are obviously conscious that the commission's report might ask BAA to sell an airport, so we have to be ready for that," he said.

However, he admitted in a two-hour conference call: "The commission can make decisions and express views that could be incompatible with my plan. It is out of my hands."

Mr Leo was making BAA's biggest presentation yet to the holders of nine classes of sterling and euro-denominated bonds that predated 2006's £10.1bn takeover of the airports operator by a consortium controlled by Spanish company, Grupo Ferrovial. Including debt, the takeover totalled £16.3bn.

BAA wants to "migrate" these bondholders into a new securitised vehicle backed by the London airports. But the bondholders are ready to fight their corner over the transfer terms.

Discussions have only just started via the Association of British Insurers and bondholders questioned whether BAA could achieve its refinancing, as planned, by the end of the second quarter - particularly given the worsening credit crunch.

Mr Leo, who ducked all detailed questions on the refinancing, dismissed the "noise in the press" that the Civil Aviation Authority had last week helped the company by hiking landing charges at Heathrow and Gatwick.

"No one can argue that the outcome of the CAA report is a gift to BAA," Mr Leo said, stressing the CAA had made an "unprecedented" cut to BAA's cost of capital.

The airport operator BAA has used an elaborate network of lobbying and PR groups, headed by senior Labour figures with access to the government, to promote its controversial plans for a third Heathrow runway.

Among the Labour insiders recruited to front pro-aviation lobby groups are Brian Wilson, a former industry and energy minister, and Lord Soley, a former chairman of the parliamentary Labour party.

Jo Irvin, now a member of Brown's inner circle in Downing Street, not only headed BAA's public affairs department but also fronted one of the prime lobby groups backing Heathrow expansion.

Another Labour apparatchik, Stephen Hardwick, was closely involved in the same lobby group, as well as being employed as director of public affairs for BAA.

Opponents of the third runway claim the links between BAA and the government have given it an undue influence over aviation policy. John McDonnell, a Labour MP, said: "BAA dominates the government's aviation policy. There have been a number of front organisations over the years that have promoted aviation. They are all funded by the industry and are largely paid lobbyists."

Details of BAA's lobbying groups - and its close links to government - are now to be examined by a parliamentary inquiry into lobbying.

It comes after a Sunday Times investigation last week revealed that BAA and the government "fixed" environmental targets while researching the impact of a third runway.

BAA funds two key groups - Future Heathrow, led by Soley, and FlyingMatters, which is headed by Wilson and has also investigated opponents of expansion.

Their precursor was Freedom to Fly, which was set up at a time when BAA was concerned that its arguments for more air travel were not being given the same prominence as those of environmental groups, which were warning of the dangers of growing carbon emissions.

The group was chaired by Brenda Dean, the Labour peer, and was supported by other aviation companies, including British Airways, and unions. The director was Irvin, who is now a special adviser in Downing Street on trade unions.

Freedom to Fly, which was closed after the 2003 aviation white paper was published, was followed by Future Heathrow, the lobby group headed by Soley. As well as BAA, the group's backers include British Airways, the pilots' union Balpa and the London Chamber of Commerce.

Earlier this year, during the consultation on a third runway at Heathrow, the group held a reception in a dining room at the Commons to lobby MPs about the benefits. Ruth Kelly, the transport secretary, was among the guests mixing with BAA executives and other senior figures from the aviation industry.

BAA is also one of the biggest backers of FlyingMatters, contributing £48,000 in 2007-08. The lobby group operates from offices a short stroll from Westminster where it campaigns for airport expansion and investigates groups opposing BAA's plans.

Last year a FlyingMatters investigation found that Uttlesford district council had spent £228,000 in legal fees on opposing BAA's plans to expand Stansted. Michelle Di Leo, director of FlyingMatters, said: "The terms of the debates on aviation were being set by those opposed to a growth in air transport. Our main objective is to rebalance the public debate."

She said the information about Uttlesford district council was released in response to a freedom of information request from FlyingMatters and it was legitimate to examine the use of public funds. She added that groups opposing airport expansion were well funded and it was reasonable to question the source of those funds.

The aviation industry uses Whitehall as a key recruiting ground for new personnel. Tom Kelly, who was Tony Blair's chief spokesman, was appointed BAA's public affairs director last year. Julia Simpson also left Downing Street last year, where she worked as an adviser to Blair, to become British Airways? head of corporate communications.

The lobbying firms used by British Airways - Brunswick and Lexington - also have close links to Labour. Alan Parker at Brunswick is a friend of Gordon Brown, and Mike Craven at Lexington was formerly chief media spokesman for the Labour party.

William Dinan, of Spinwatch, which campaigns for more transparency about lobby groups, said such groups - including environmental campaign groups - should be required by law to disclose their backers and the amount of funding they were receiving.

He has given evidence to the lobbying inquiry being conducted by the Commons public administration committee and is to submit further written evidence on BAA's lobbying network this week.

Joss Garman, a spokesman for Plane Stupid, which is campaigning against the third runway, said: "It was always extraordinary that a government which claims to be concerned about climate change would even consider building a third runway at Heathrow. Now, as a light is shone into the murky corners of the lobbying process, we're beginning to understand how it was that Brown put his credibility at risk."

A BAA spokesman said the groups FlyingMatters and Future Heathrow were broad-based coalitions and the company's involvement was disclosed on their websites. He said the groups worked to promote the social and economic benefits of airport expansion.

Soley, who is paid £28,000 a year by Future Heathrow, said his group had relatively meagre resources when compared with the groups campaigning against airport expansion. He said detailed questions should be asked about the sources of their funding.

The Government is facing a legal battle over its plans to expand Heathrow amid fresh claims it colluded with the airport to hide noise and pollution increases.

In a move that could seriously delay the building of a third runway, an alliance of green protesters and London councils is poised to take court action after confidential documents suggested that the Department for Transport failed to assess properly the full impact of the project.

Whitehall memos indicate that civil servants skewed their study to fit data supplied by Heathrow owners BAA, which claimed that the extra 230,000 flights a year would lead to minimal increases in air pollution and noise levels.

Just as damagingly, the Environment Agency, the Government's own watchdog, has concluded that the DfT failed to carry out proper work on the impact on public health and warned there could be more deaths among residents from pollution.

Lobby group HACAN ClearSkies said there were now "very, very strong grounds" for a lawsuit and that it would work with Greenpeace and authorities such as Wandsworth Council to claim the DfT had failed to carry out its statutory duties. The groups are to meet barristers today.

In a separate move, Tory MP Justine Greening today wrote to the Parliamentary Ombudsman Ann Abraham to complain that Cabinet Secretary Sir Gus O'Donnell repeatedly failed to act on claims that civil servants had acted in cahoots with BAA and tried to cover up the facts.

Ms Greening, whose Freedom of Information Act battle has led to the release of confidential files on the affair, said that the way the public had been misled was "completely indefensible". She also backed a fresh legal challenge on the grounds that the public consultation on the expansion, which ended last month, was flawed.

Gordon Brown believes that a third runway at the airport is vital to maintain Britain's competitive edge and BAA insists its figures on noise and pollution will stand up to scrutiny.

But an official involved in "Project Heathrow" - the DfT unit that researched the impact of the runway - has backed critics' claims about the consultation. "They knew exactly what results they wanted and fixed the inputs to get there. It's appalling," the official told the Sunday Times.

It was also alleged that BAA instructed DfT officials on how to "strip out" data which indicated environmental targets would be breached. The study reduced the likely carbon emissions caused by not including incoming international flights.

John Stewart, chairman of HACAN ClearSkies, said: "If the civil servants involved did collude with BAA, we have to ask whether they should remain in post. Similarly, we have to ask if Transport minister Jim Fitzpatrick knew any of this."

Greenpeace executive director John Sauven said: "The Environment Agency's move to disown the consultation is the final blow to Brown's dodgy runway dossier."

DISGRUNTLED residents in a tiny Suffolk village last night vowed to fight plans to move an aircraft flight path over their homes - claiming the decision would shatter their tranquil existence.

The idyllic lifestyle enjoyed by the few hundred residents of Thorpe Morieux, near Sudbury, could be lost forever if plans to move an aircraft holding area serving Stansted Airport are given the go-ahead.

Now concerned villagers, who warned other neighbouring communities could also suffer, have revealed they will fight any attempt to move the flight path - just weeks after residents in Sudbury were celebrating the switch away from their skies.

Thorpe Morieux resident Frances Bee said: "We feel Thorpe Morieux is one of the last areas of tranquillity and that is why people move here."

"With such a small village, you accept certain things like having no shop, school or limited public transport. But you accept that because this area is quiet and beautiful and residents are looking for a less hectic pace of life. Now that could be shattered by these plans."

"We believe the basic design principles are flawed as it has shifted focus to low population areas. By definition, this means areas which are quiet and will be affected by the noise much more than any town."

Mrs Bee believes villages like Lavenham, Needham Market, Cockfield, Felsham and Monks Eleigh could also suffer. And South Suffolk MP Tim Yeo, who met with worried residents on Saturday, has urged villages to join forces to fight the plans.

"I think residents in Thorpe Morieux have got a very strong case and I have always thought it was wrong that flight paths should be shifted to areas of less population density when any noise can be heard more," he told the EADT.

NATS - formerly the National Air Traffic Service - last month launched a three-month consultation period proposing to shift the stacking zone over the Sudbury area. A spokesman said the new proposals had been based on guidelines from the Civil Aviation Authority (CAA) advising avoidance of centres of population.

He added: "We would encourage people to get involved in the consultation process and not just sit back and be unhappy. We can then use this feedback to consider our position before a final decision is made."

Mrs Bee urged residents to attend a Thorpe Morieux Parish Council meeting on Thursday evening, when members will be discussing the new flight paths.

BAA Group airports in the UK handled 10.2 million passengers in February, an increase of 3.5% on the same month last year. Traffic in the first 28 days of the month (i.e. ignoring the extra leap year day) was down by 0.5% on last February.

European scheduled traffic was up by just 0.1% while European charters rose by 1.5%. North Atlantic activity was 1.1% lower, while traffic on other long haul routes was, in aggregate, up by 1.0%. Domestic traffic continued its recent softness with a 3.7% decrease.

Again adjusting for the leap year distortion, there were mixed results for individual airports. Heathrow?s traffic was up by 0.1%, Gatwick?s by 3.4% and Edinburgh by 3.9%. Moving in the other direction were Stansted (-7.6%), Glasgow (-5.7%) and Aberdeen (-1.2%).

In total, and before adjusting for the extra day, air transport movements were up by 0.8% but down 3.0% after adjustment. On this latter basis Gatwick (+0.6%) was the only individual airport to handle more movements in February.

The headline result for air cargo was an increase of 8.9% largely driven by a 12.7% increase at Heathrow. The leap year adjusted total figure was an increase of 5.3% (Heathrow 9.3%).

I'm sure the Queen is used to being put in an invidious position by her government of the day, but I'm afraid she finds herself in a real stinker having to open Heathrow Terminal Five amid the fierce controversy about air travel's effect upon climate change and the role of the bloated, Spanish-owned airport operator, BAA.

No doubt her people have thought up something nice she can say about the colour of the carpets or the loyalty and diligence of the construction workers to get round the fact that this shiny new terminal, and indeed the Government's whole "predict and provide" aviation policy, is built upon broken promises, cowardice and deceit.

Don't get me wrong, I'm as much of an eco-sinner as anyone, having spent more hours in the air and queuing in the miserable, sardine-like conditions at Heathrow than most of my fellow countrymen. I just think that the nation needs to be honest with itself about aviation policy, that aviation cannot be allowed to be a special case, and that fliers should pay their environmental costs.

Let's just spell out some of those many broken promises. Number one was in 1980, when an inquiry inspector gave permission for Terminal Four on the condition that there would neither be a fifth terminal or a major expansion of Heathrow.

Number two, was the promise by BAA, during the lengthy T5 inquiry, that a fifth terminal would not lead to a third runway. Number three was the inspector's agreement when T5 was given permission in 2001 that there should be a limit of 480,000 flights a year. The Government's plans for a third runway would lead to more than 700,000.

Then cast your mind to the nice bit of Essex where the Government's endorsement of a new runway at Stansted now threatens 1,000 acres of medieval homes and woods and to make Thaxted, Great Dunmow, Saffron Walden and Bishop's Stortford into a kind of giant Hounslow within a generation. There, to get the first runway, the Government of the day in the 1980s undertook that a second runway would never be built.

We all want to fly. Just do we have to do it for £10, with no hot meal, amid an orgy of Tie Rack, bookshop, car showroom, shopping mall sprawl which apparently has no end? Who is all this good for, us or BAA - which seems to have been colluding with the Government to rig the results of the consultation over the expansion of Heathrow?

Alistair Darling's new plane tax will hardly restrain flying at all. The Queen can't say this, so I will: there must be a limit, for the climate's sake, to the growth of aviation and building no more runways would be a good place to start.

Greater choice and opportunity for millions of air travellers comes a step closer today as BAA submits its Generation 2 (G2) planning applications for the development of a second runway at Stansted Airport.

The proposal is the result of four years of intensive and rigorous planning work to deliver this key milestone of the Government's Air Transport White Paper. Stansted is to be the location for the first new runway in the South East of England for over 50 years. The two-runway, two terminal airport is expected to be open in 2015, serving 68 million passengers a year in around 2030.

Key features of the development plans include:
* The creation of over 13,000 new jobs by 2030
* UK economic benefits of £9 billion - much within the £100 billion Eastern region economy
* Reduction in land required from around 700 hectares to 442 hectares
* Extra 208 hectares of existing land adjacent to the extended airport boundary dedicated to a comprehensive nature conservation and landscaping scheme to reduce and offset the effects of the development
* The number of residential dwellings required down by over 25% with the number of listed buildings lost reduced from 29 to 13, with 10 of these to be dismantled and rebuilt
* The number of people within the 57 dBA leq air noise contour down from over 11,000 in the White Paper to under 5,000

Around 70 stringent sustainability targets, including:
* By 2030 Stansted's carbon dioxide (CO2) emissions from energy use will not exceed those in 2006
* By 2030, water supplied to Stansted will be no greater volume than that used by the single runway airport operation at present
* 10% or less of waste to landfill by 2030
* By 2030, 70% of waste generated by the airport's operation will be recycled

* Investment planned in road and rail improvements to build upon Stansted's UK leading position for public transport use by passengers

Sir Nigel Rudd, Chairman of BAA, said: "BAA is proud to reach this significant milestone in the future development of Stansted. We remain fully committed to building a second runway, a project that is central to government policy in delivering additional runway capacity in the South East. This important project will bring huge benefits to the East of England and UK economy, and will increase choice and opportunity for millions of business and leisure travellers."

Alastair McDermid, BAA Director for Stansted Generation 2, said: "Stansted represents all that is best in a modern, mobile and dynamic economy so I'm very proud of the exciting and innovative G2 plans we present today."

"To help shape this vision we have listened very carefully to the views of thousands of people, and I firmly believe we have planned the best airport project of its time. Our proposals represent a significant investment by BAA to deliver the sustainable and responsible growth of air travel in the UK. They allow the national and regional economies to compete in an increasingly global market place and share in the huge social and economic benefits available. At the same time we have worked extremely hard to minimise the environmental impacts that were anticipated by the Government when it published its Air Transport White Paper in 2003."

"The potential benefit of a second runway is enormous for business growth, for the creation of thousands of new jobs, for supporting inward investment and for boosting inbound tourism. And the social and cultural benefits of even greater opportunities for leisure travel and to visit friends and family cannot be underestimated."

"But this is not growth at any cost. The global issue of climate change is one which we take very seriously and is recognised as requiring international action. There is agreement that the best way of addressing the challenge is through a global emissions trading scheme, and BAA has been leading the call for the aviation industry to be part of that."

"We want to make sure passengers have the best possible experience as they travel through Stansted, that it's efficient and cost effective for airlines and that it's an airport which in terms of its environmental credentials is at the leading edge of what it's possible to do."

PROPOSALS - expected to be announced tomorrow - for a second runway at Stansted Airport would mean "significant environmental damage", warns Essex County Council which says it intends to fight the controversial plans "tooth and nail".

Airport operator BAA is due to reveal its plans at a press conference in the morning, but already opposition is being voiced against the move which the county council says would also place a "huge strain" on existing public services and infrastructure.

County council leader Lord Hanningfield said: "This is not what the people of Essex want and it is not what the people of Britain need."

He added the proposals "totally contradict the government's so called commitment to protecting the environment as well as reducing emissions."

He added: "Indeed it is odd for a government who claim they want to improve the environment of this country but who also seem committed to the expansion of aviation on unproven suppositions."

"If it goes ahead, it will have a severe impact on the quality of life of hundreds of thousands of Essex residents with more pollution, traffic, noise and will place huge pressure on already overstretched infrastructure and public services.

"For these reasons we are strongly opposed to a second runway and we will fight it tooth and nail. It is time for the government to go back to the drawing board and rethink its aviation strategy."

BAA will unveil a planning application to expand the airport, which is the third busiest in the UK. The plans face fierce opposition from environmental campaigners and local residents, but business leaders say the scheme is essential to the growth of the economy.

The Stop Stansted Expansion (SSE) campaign group claims the development would ruin 1,000 acres of countryside and ancient woodland.

"The application must serve as a rallying call - not just for local people who seek to safeguard this unspoilt area of countryside but for all those who care about our legacy to future generations," said Peter Sanders, of SSE. "We will fight BAA's plans tooth and nail."

Lord Hanningfield, leader of Essex County Council, said: "This is not what the people of Essex want and it is not what the people of Britain need. If it goes ahead, it will have a severe impact on the quality of life of hundreds of thousands of Essex residents, with more pollution, traffic and noise."

He added: "It is time for the Government to go back to the drawing board and rethink its aviation strategy."

David Frost, director general of the British Chambers of Commerce, said the development was much-needed. "With the UK economy now facing a slowdown, it could not be more crucial that the country's third busiest airport is permitted to expand," he said.

The Civil Aviation Authority (CAA) is today publishing its decisions for price controls for Heathrow and Gatwick airports for the five years from 1 April 2008 to 31 March 2013. The CAA's package of price caps and incentives will enable and encourage BAA to deliver genuine service quality improvements and to invest to raise the level of facilities and service that can be delivered to passengers and airlines. The outcome for passengers should be decently modern airports and consistently high service standards.

The CAA has set the following maximum charges:

Heathrow
£12.80 per passenger in 2008/09, an increase of £2.44 on a like-for-like basis, representing a 23.5 per cent increase in real terms from the current (2007/08) price cap, with allowed charges subsequently increasing in each of the following four years by no more than retail price index (RPI) inflation plus 7.5 per cent each year.

Gatwick
£6.79 per passenger in 2008/09, an increase of £1.18 on a like-for-like basis, representing a 21.0 per cent increase in real terms from the current (2007/08) price cap, with allowed charges subsequently increasing in each of the following four years by no more than RPI inflation plus 2.0 per cent.

At both airports, the difference from the CAA's November proposals is in the first year increase, which is £0.83 per passenger or 7 percentage points greater at Heathrow and £0.72 per passenger or 12 percentage points greater at Gatwick.

The main reasons for the differences since November are (i) additional investment, particularly at Heathrow, the need for which has largely been endorsed by the airlines operating at each airport; and (ii) additional security costs at both airports, but with greater impact at Gatwick, which, in the CAA's view, are necessary both to reduce queues for passengers and to meet Department for Transport security requirements and the Government's drive to restore more normal arrangements across the UK for passengers' hand baggage. Otherwise, these decisions are aligned with the recommendations made by the Competition Commission, updated for subsequent airport-airline agreements, information received since the Commission completed its report, and the final round of consultation on the CAA's November 2007 proposals.

The CAA recognises that the resulting increases in airport charges are significant. However, these higher airport charges are essentially paying for the modernisation of Heathrow and Gatwick, in terms of both facilities and service, for the direct benefit of the passenger. At Heathrow, this entails paying for the full capital and operating costs of Terminal 5 as it comes into service on 27 March 2008, the construction of the Heathrow East Terminal by 2013, and bringing the rest of the airport up to comparable modern standards. At Gatwick, the next quinquennium will see the construction of a major new pier, the redevelopment of the South Terminal check-in area and forecourt access, and a new baggage system.

In terms of service, the CAA's decision provides for shorter security queuing times, enhanced levels of service across the airports (such as more reliable equipment and cleaner terminals), and greater and more immediate information to passengers from BAA (including displayed in the terminals themselves) of how it is performing against the standards it has been set.

It is important that airlines and passengers receive the services that they are paying for in airport charges. The CAA therefore confirms its earlier proposals for stronger incentives on each airport in the coming five-year period to deliver higher and consistent service quality and improved infrastructure.

These stronger financial incentives include:

Investment
A greater proportion of the investment programme at each airport will be subject to triggers?, under which penalty payments are incurred each month for late delivery of specified outputs from projects. The CAA has decided to set triggers covering over 60 per cent of Heathrow's and Gatwick's respective capital programmes for Q5, under which around 5 and 4 per cent respectively of airport charge revenue would be at risk during Q5 in the event that these projects were not delivered on time.

Service quality
A broader range of services will be subject to financial incentives, with enhanced targets most notably for passenger security processing, which should deliver a quicker and more reliable experience for passengers - queues less than 5 minutes for 95 per cent of the whole day. The CAA proposes to increase the maximum level of rebates for poor service performance from 3 to 7 per cent of total airport charge revenue (up to around £63 million at Heathrow in 2008/09, and £17 million at Gatwick). The CAA has also introduced bonuses for performance above target, to promote continuous improvement in service beyond the enhanced minimum standards set by the CAA. These bonuses can be up to 2 per cent of airport charge revenue for passenger service performance above targets, delivered consistently across all terminals (up to around £20 million at Heathrow in 2008/09, and £5 million at Gatwick).

The CAA has maintained its earlier proposals for the price caps to be based on a pre-tax real weighted average cost of capital of 6.2 per cent at Heathrow and 6.5 per cent at Gatwick as recommended by the Competition Commission. Before doing so, the CAA has analysed recent turbulence in the financial markets, but found that while there had been movement in some individual components of the cost of capital, overall the Competition Commission's recommendations remained valid.

Commenting on these decisions, which are informed by the recommendations of the Competition Commission and build on agreements reached between the airports and airlines, as well as over two and half years of consultation, Dr Harry Bush, CAA Group Director, Economic Regulation, said: "These decisions build on the enduring themes of the CAA's previous regulatory proposals in this review. Passengers and airlines deserve better than they have been provided with at Heathrow and Gatwick in recent years. However, the resulting improvements in airport facilities and service standards - some £5 billion of investment over the next 5 years and a halving of security queuing times - have to be paid for in increased charges."

"But airlines and passengers need to be sure that they are getting the enhanced facilities and services that they are paying for. Hence, the CAA's emphasis on greater financial incentives - with BAA being penalised a lot more if it fails service standards and earning bonuses if it exceeds them (but only if passengers in every terminal benefit)."

"The price caps have been carefully based on investment programmes emerging from airport-airline discussions and also on a shared airline-airport desire to improve quality of service, in particular for passengers at security. The CAA hopes that the constructive engagement between airports and airlines that underlies much of this pricing decision will continue in the future to the benefit of their shared customers."

Airlines on Tuesday launched a sharp attack on the economic regulation of the three London airports, as the UK Civil Aviation Authority announced a big increase in the charges BAA can set at Heathrow and Gatwick.

The CAA said it was increasing the price cap at Heathrow by £2.44 or 23.5 per cent in real terms to £12.80 per passenger for the coming year from April 2008. Charges in the four subsequent years could rise by 7.5 per cent a year above inflation.

Harry Bush, CAA group director for economic regulation, said "improvements in airport facilities and service standards - some £5bn of investment over the next five years and a halving of security queuing times - have to be paid for in increased charges."

British Airways, the biggest operator at Heathrow, which is about to benefit from the opening of the £4.3bn Terminal 5 at the airport on March 27, said the big jump in charges "demonstrates conclusively that the airport regulation system has failed, to the detriment of customers".

Airports operator BAA said it remained committed to spending £4.8bn in the next five years on its UK airports, but claimed the returns it was being allowed by the CAA were too low.

It said the CAA review "does not recognise sufficiently the scale of the task we are embarked on; the pressures of handling such large infrastructure projects; the full cost of the increased security requirements; as well as the impact of the credit market turmoil."

Ferrovial, which acquired BAA in 2006 in a highly leveraged takeover, has been struggling to refinance about £9bn of BAA debt.

BAA said it intended to implement the refinancing, including an investment grade, ring-fenced structure backed by designated assets - Heathrow, Gatwick and Stansted and the Heathrow Express rail link - by the end of the second quarter.

It said the plans for the refinancing were "well advanced" and it was "actively engaging with key parties including the rating agencies".

Paul Ellis, British Airways? general manager for airport policy and infrastructure, accused the CAA of giving in to pressure from BAA and of agreeing too big a rise in charges.

"When BAA's new owners, Ferrovial, bought them, the CAA said they would not be influenced by Ferrovial's high debt levels. In practice, they have ignored their own policy and caved in to intense pressure from BAA by setting excessive price increases. Heathrow passengers will pay, on average, 17 per cent more than the Competition Commission recommended in September 2007."

British Airways said "urgent changes" must be made to current UK airport regulation.

The structure of BAA is being investigated by the Competition Commission and one result of the probe could be a call for the breakup of BAA's London airport monopoly. BAA owns seven airports in the UK, Heathrow, Gatwick and Stansted in London, Glasgow, Edinburgh and Aberdeen in Scotland and Southampton.

Plans to change motorway junctions and trunk road access to Stansted Airport to accommodate increased traffic have been announced.

A new junction to be called 8b, close to the existing junction 8 and 8a, is proposed on the M11 in Essex. Existing roads taking traffic onto Thremhall Avenue, an airport approach road, could also be changed.

Proposals are to be submitted for work, funded by the airport's operator BAA, to start in 2012 and finish in 2015.

Transport Minister Tom Harris, has announced the Highways Agency's preferred route.

Best traffic option

"The announcement confirms our commitment to a safer and less congested M11 and A120," he said.

"These improvements, once delivered, will also be a boost to the economy, both nationally and regionally.

"The Highways Agency has proposed this route as the best option for traffic needs in the future."

A separate statement said the road access plans are "essential" to the proposed expansion at Stansted Airport "to provide safe and easy routes for road users in addition to the expansion of rail and other public transport facilities".

Work depends on the outcome of a planning application, which is expected to be submitted soon, and comments from those taking an interest in the project.

BAA, the UK airport operator, on Monday announced it had sold a chain of 58 duty-free stores to Italy's Autoúgrill in a £545m ($1.1bn, ?717m) deal.

The sale of World Duty Free raises much-needed cash for Ferrovial, the Spanish infrastructure group that acquired BAA in 2006 in a highly leveraged deal.

Autogrill, controlled by the Benetton family, has exclusive rights to run stores at London's Heathrow, Gatwick and Stansted airports thanks to a 12-year BAA concession.

The deal cements Autoúgrill's position as the world's biggest food and drink provider at service stations, airports and rail stations. Last year it acquired Alpha Airports, operator of retail outlets and catering services in smaller UK airports.

Autoúgrill, listed on the Milan stock exchange, aims to save costs by combining World Duty Free and Alpha. It is also announced on Monday that it had taken full control of Aldeasa from the UK's Imperial Tobacco. The joint venture operates more than 200 airport shops in Spain, Portugal, Latin America and Africa.

Ferrovial decided to sell WDF and other non-core assets to reduce the £9bn of debt it raised to fund its £10.1bn purchase of BAA 18 months ago alongside two financial partners.

It has since had to increase costly security checks and been hit by a public campaign over delays and lost baggage. The credit crunch last year forced Ferrovial and its partners to postpone a £9bn securitised bond issue.

The company hopes to have debt restructuring ready by the middle of this year. Pricing the deal also depends largely on final tariff caps at Heathrow airport, to be published on Tuesday.

Ferrovial was advised by Merrill Lynch and Autogrill was advised by UBS.

Autogrill's acquisition of Aldeasa has to be approved by the European Commission, and Imperial expects to complete the sale by May.

The sale will raise ?275m in cash for the cigarette maker, plus the repayment of ?80m of debt. Imperial said the enterprise value of ?355m represented 9.2 times earnings before interest, tax, depreciation and amortisation.

Imperial acquired the interest in Aldeasa when it bought Altadis, the Spanish tobacco group, in January. It paid ?12.6bn for Altadis and is buying out the minority shares in Logista, its logistics business, for ?910m.

When it launched the offer for the Gitanes and Gauloise cigarette maker last summer, Imperial said it would partly finance the deal by a rights issue of up to £5bn before the mid-July anniversary of making its formal bid.

Imperial said those plans had not changed despite the turbulence in financial markets.

Autogrill and Altadis had been joint owners of the Aldeasa business since 2005, which had total sales of ?830m in 2007.

Furious environmental campaigners have hit out at an airline that sent a plane on a 4,000-mile journey with just five passengers on board. With enough room to fit 245 passengers, the American Airlines flight made the nine-hour trip on 22,000 gallons of fuel - a total of 4,400 gallons per passenger.

However, the lucky five passengers were treated to a luxury flight from Chicago to Heathrow when they were upgraded to business class and were waited on by two cabin staff each.

American Airlines came under criticism when the flew a Boeing 777 with just five passengers on board. Each passenger on the plane had a massive carbon footprint of 43.2 tonnes of CO2 and it has been branded one of the worst "environmental crimes".

The flight had been fully-booked, but an 11-hour delay due to a mechanical failure meant most passengers made other travel arrangements.

Richard Dyer, of Friends of the Earth, said: "Flying a virtually empty plane is an obscene waste of fuel. Through no fault of their own, each passenger's carbon footprint for this flight is about 45 times what it would have been if the plane had been full."

The average car would have to drive 123,000 miles to clock up the same carbon footprint or a British household would five years to use up the same amount in gas and electricity.

Environmentalists have reacted angrily to the airline's decision. Campaigners said it was an obscene environmental crime and was the worst case of its kind they had come across.

Rather than cancel the near-empty flight AA90, American Airlines decided to go ahead with the controversial trip went ahead as more passengers were waiting at Heathrow for the plane to arrive.

Norman Baker MP, the Liberal Democrat spokesman for transport, said: "I have heard of planes flying at two thirds full before but this is the worst example I have come across. It is a climate change crime. It shows the ludicrous nature of the aviation industry."

"For an airline to think it sensible to fly aeroplanes which are virtually empty and where the crew outnumber the passengers is madness. I hate to think of the size of each passenger's carbon footprint on that flight."

"I understand the airline has a timetable to stick to and you can't leave people stranded but I can't believe there wasn't an alternative rather than fly a near-empty plane across the Atlantic."

Anita Goldsmith, for Greenpeace, accused the US airline of putting profit before the environment. She said: "Aviation is the fastest growing source of climate changing emissions, yet here we have another example of the reckless approach the industry takes when it comes to a choice between profit and convenience over the environment and all our futures."

Environmentalists have been campaigning for the government to force airlines to pay for carbon offsetting rather than passing it on to passengers.

Mr Baker said: "This case shows the need for the aviation industry to pay its own tax on fuel rather than the passenger which would give companies the incentive to fill their planes."

Mr Dyer, of Friends of the Earth, added: "Governments must stop granting the aviation industry the unfair privileges that allow this to happen by taxing aviation fuel and including emissions from aviation in international agreements to tackle climate change."

Flight AA90 had been due to take off from Chicago's O'Hare International airport at 3.10pm on Friday, February 8. It did not leave until after 5am the next day and arrived in London at 5pm.

Anneliese Morris, spokeswoman for American Airlines, said they thought long and hard about cancelling the flight but did not due to the number of passengers waiting in London. She said: "This situation is very rare. Exceptional operational circumstances meant that we had to operate this flight from Chicago to London with just five passengers on board."

"The flight operated with a full complement of crew as they had to position in London to operate one of the flights back to the US. The decision to do so is never taken lightly, but we had to consider the knock-on impact cancelling this flight would have had on our schedule out of London on a weekend when all of the flights were extremely busy."

"Our goal is to operate our fleet as efficiently as possible to provide our customers with excellent service while being a responsible environmental citizen."

David Learmount, of Flight International magazine, said that had American Airlines cancelled flight AA90 it would have taken days to transfer the Heathrow passengers onto other planes. He said: "The average load factor across the Atlantic is 88 per cent, that is every plane flying between the US and the UK is 88 per cent full."

"To transfer 250 passengers onto other planes would take days to clear the flight, because there will be five passengers on one plane here and 10 on another there. The bulk of the passengers will spend two or three days stuck in a hotel being paid for by the airline."

The world's biggest passenger jet will swoop into Heathrow for the first time on March 18, heralding a new era in air travel. The Airbus A380 is a double-decker "super-jumbo" ready to fly you to the future - but it will be landing at an airport mired in the past.

Heathrow, the busiest international airport on the planet, has become a byword for misery and chaos. Last month it was found to have the highest number of flight delays in Europe, with more than a third of aircraft suffering problems. To compound the pain, British Airways, Heathrow's largest carrier, has one of the worst records for lost luggage, according to the Association of European Airlines.

Though the Queen will open Heathrow?s £4.3 billion terminal five on March 27, bringing more check-in space and luxury shops, it will serve only BA customers and won't alleviate the congestion in the skies. Airbus reckons Heathrow will eventually be serving 90 super-jumbos a day.

Yesterday a former senior executive of a leading airline summed up the mess. "The bottom line is that it's a third world airport," he said. "It's a national disgrace."

By contrast, that first A380 flight will have come from Changi airport in Singapore, whose history is the antithesis of the UK's main hub. When Singapore's old airport became overcrowded, the city-state government had a choice: continue to expand the existing site, which was hemmed in by urban development, or build a new airport from scratch.

Officials chose the latter and Changi rapidly rose out of land partly reclaimed from the sea. The new airport, which opened in 1981, has proved a huge success, winning almost 300 passenger service awards.

The same dilemma now faces Britain. Should the government keep adding to Heathrow, which has grown piecemeal for 60 years while urbani-sation has hemmed it in all around? Or is it time for bolder solutions?

Ministers and BAA, the private company that runs the airport, seem intent on expanding Heathrow by building a third runway and sixth terminal by 2020. The move would see the number of flights soar by 40% - more than 200,000 extra flights a year over London.

The proposals have provoked uproar. On Wednesday, the deadline for a government consultation on the third runway, five members of the pressure group Plane Stupid bypassed security at parliament and took their protest to the roof of the House of Commons as Gordon Brown arrived for Prime Minister's Questions.

Thousands of residents in west London, faced with more pollution, congestion and noise, have attended meetings to oppose the plans. The normally mild-mannered National Trust has spoken against the proposals. Ken Livingstone, the mayor of London, has accused shambolic Heathrow of "shaming" the capital, and the London Assembly is opposed to a third runway.

Into the political confusion stepped Boris Johnson, the Tory mayoral candidate. It was time, he said, to reconsider plans for a brand new airport to the east of London in the Thames estuary. Johnson, who will launch his transport manifesto tomorrow (though it will concentrate on roads and trains rather than airports), said: "If you look at what is going on in other countries around the world - in Hong Kong, in Washington - it's not impossible to move the capital's biggest airport."

For inspiration showing what is possible, look east. Beijing last week opened a giant airport terminal that could house all five of Heathrow's terminals put together. The Norman Foster-designed building will increase capacity from 35m passengers to 85m - and the Chinese are looking for a site for a second new airport.

Meanwhile, the Gulf emirate of Dubai plans to open a monster six-runway "air resort" - complete with golf course and beach - in 2015.

Some environmental campaigners oppose all new airports; but expansion seems inevitable, especially if technological innovation reduces environmental damage from emissions. So if Britain is to meet the demands of future aviation, can it keep tacking extra runways onto existing sites? Or should it think altogether more radically? What are the alternatives to expanding hellish Heathrow? An entirely new airport was once the authorities' preferred option. In 1971 the Conservative government decided that Maplin Sands, off the south Essex coast in the Thames estuary, was a suitable site. Although the scheme met with objections from bird-watchers and conservationists, it was killed off three years later primarily because of a shortage of funds.

Nevertheless, similar proposals have persisted. When the current government drew up its long-term aviation strategy in 2003, it was still considering a variety of new sites close to the Thames. The schemes included a £9 billion (at 2003 costings) two-runway operation at Goodwin Sands on the east coast of Kent, as well as an ambitious four-runway hub built on an artificial island three miles out from the Isle of Sheppey.

Such sites have a huge advantage over Heathrow: located away from residential areas, they open up new airspace and potentially allow flights to take off and land 24 hours a day.

"If you located an airport properly in the Thames estuary, virtually all the flight movements would be over the North Sea," said Sir Peter Hall, president of the Town and Country Planning Association. "There would be no constraints on development at all."

At present air traffic controllers have to handle 1.4m flights a year over London. Often the distance between aircraft is at the minimum safe level. Expansion of existing airports will mean more flights and stacking over residential areas.

At the end of this month a new aviation agreement, known as Open Skies, will scrap restrictions on routes, generating more transatlantic flights and new routes to and from Europe. It all adds up to a booming industry. What are the drawbacks of a new site to the east?

A KEY hurdle for all the schemes has been their accessibility from central London. "Airports are not just runways; they are runways with the transport infrastructure around them," said Dieter Helm, a professor of economics at Oxford University specialising in transport and infrastructure. "You can have an airport anywhere if you're prepared to put in a bullet train that goes from it to your urban centre."

"But what we are appallingly bad at in the UK is any form of integrated transport strategy. If Maplin Sands had been built in the 1970s, how would people have got there from London? The answer would have been the A12." However, high-speed rail links are now a reality. One new airport proposal given serious consideration by ministers was located at Cliffe, on the Hoo peninsula in north Kent. A short new line could have connected it to the high-speed Channel Tunnel rail link, allowing travellers to get into central London in 26 minutes.

Costing some £13.3 billion for four runways, such an airport could handle 113m passengers a year, compared with the 67m passengers now served by Heathrow.

Officials at the Department for Transport (DfT) concluded that the airport "could attract a substantial number of passengers and generate large economic benefits".

Another scheme, called Thames Reach, envisaged an offshore airport close to the Cliffe site. It would involve building a £2 billion tunnel beneath the Thames to allow passengers to connect with London's planned east-west Crossrail link.

Such schemes are ambitious and expensive, and Cliffe was rejected on the grounds of high construction costs and the destruction of wildlife habitats.

But given that the cost of a new terminal and runway at Heathrow is put at up to £13 billion, the obstacles are more a matter of political will than financial or technological challenge.

True, there were serious concerns about bird strikes damaging aircraft on take-off and landing at Cliffe. And Steve Norris, the former Tory transport minister, is sceptical about Thames Reach. "You'd turn Crossrail into nothing more than an airport railway," he said. "There would be virtually no room for the traffic for which Crossrail was originally planned."

But one of the biggest hurdles to breaking the Heathrow stranglehold remains the array of vested interests centred on the existing system.

The government seems set on adding new runways at Stansted and Heathrow, with Gatwick possibly being allowed to build a second runway after 2019. All those airports are operated by BAA - which also owns Southampton, Edinburgh, Glasgow and Aberdeen airports. It has led some critics to question its "cosy relationship" with the government.

Last October Tom Kelly, former official spokesman for Tony Blair, joined BAA to head its communications strategy. A former director of public affairs at BAA has become a special adviser to Gordon Brown, and several key Labour officials have worked for BAA or pro-aviation lobby groups.

"BAA and government have regularly been in bed together over the past 15 years, with BAA seeming to take the role of the dominant partner," said John Stewart, chairman of Hacan, a pressure group representing residents under the Heathrow flightpath. Anti-expansion campaigners have even accused the two parties of "rigging" the Heathrow consultation, citing minutes of meetings obtained under the Freedom of Information Act which suggest that BAA closely worked with the DfT to "sell" the proposals to the public.

Those proposals may suit BAA, which makes a fortune from corralling passengers at airports where they have nothing to do but shop; but they are unlikely to relieve the horrors of Heathrow.

The government had originally envisaged a second runway at Stansted by 2012, although the timeframe for this appears to have slipped. It would increase capacity at the Essex airport from 24m passengers a year to up to 68m.

But experts believe the expansion would do little to solve capacity constraints on Heathrow. This is because Stansted mainly serves low-cost airlines, such as Ryanair, flying shorthaul European routes. Other airlines, catering for different markets, would still concentrate on Heathrow.

WOULD better transport links to London help? Stansted was originally conceived as a four-runway airport, so connecting it to the capital with a high-speed rail link could alter its dynamic and ease the pressure.

Yet the government remains intent on concentrating on Heathrow. Ruth Kelly, the transport secretary, has made it clear that "fundamentally we need a global hub airport" - and that, in the government's view, means expanding Heathrow.

It claims the economic benefit of a third runway would be around £5 billion a year. Critics, including the environment committee of the London Assembly, believe the figure has been exaggerated.

What is clear is that the regulatory regime and BAA's financial interests help to maintain the status quo. The landing charges BAA demands of airlines at Heathrow are linked to the revenue it generates from its retail activities on the site.

Livingstone once accused the airport operator of keeping passengers "almost as prisoner in this ghastly shopping mall so they can extract vast sums of money... in appalling conditions". The more money that BAA makes from leasing space to shops and restaurants, the lower it can set its landing charges. "This produces the bizarre outcome that one of the most congested airports in the world has some of the lowest landing charges," said one academic expert.

Stephen Nelson, who is stepping down as chief executive of BAA, has said that a third runway at Heathrow may not be enough. A fourth may later be required to meet demand.

Last week up to 2,500 angry residents, environmental campaigners and politicians gathered at Central Hall in Westminster in the biggest rally so far to oppose the third runway at Heathrow. If it were to go ahead, it would wipe out the village of Sipson, destroying about 700 properties.

"I found out on my 50th birthday that I was going to have a major road 10ft from my back door," said Christine Taylor from Harlington. "My life is going to be completely shattered if these plans go ahead". The discontent spreads far wider than those who stand to see their property demolished or blighted. In Hammersmith, Chiswick and other areas of west London, public meetings have been thronged by residents horrified at the thought of thousands more planes flying overhead.

"There's absolutely no doubt that expansion of the airport is a massive vote loser," said Norris, whose Quality of Life Commission for the Conservatives has called for a moratorium on airport expansion.

Justine Greening, Tory MP for Putney, said: "Like it or not, we are going to have to look at other options. A responsible government cannot just bury its head in the sand."

Aviation experts agree that the Heathrow site is far from ideal. "Unlike almost every major airport in every major city in the world, the prevailing wind flightpath takes aircraft right over the centre of London," said David Learmount, operations editor of Flight International magazine. "From that point of view Heathrow has always been an appalling idea."

ONLY a powerful political lead will overcome the inertia generated by the existing infrastructure and vested interests. For a new airport in the east to succeed would probably require the closure or severe restriction of Heathrow.

That is the lesson from Montreal, where the authorities built a new airport for the Olympics in 1976 while keeping the existing one in operation. After the games, people carried on using the old airport at Dorval because it was closer to the city centre, leaving the new one to become a white elephant.

But it's not too late to change course. BAA's stranglehold is under review. The structure of the airport operator is being investigated by the Competition Commission, which could lead to the break-up of the operator's monopoly in the south-east. If the government can back the spending of £9 billion or more on the Olympics, why not support a new airport?

"The brutal reality is that a third runway at Heathrow will only buy London time," said Matthias Hamm, a director of Thames Reach airport. "Ultimately, the government has got to step up to the plate and find an alternative long-term solution to airport capacity forUK citizens. Or they may well look back and think, as some now look back on the plans for Maplin, Cliffe or Goodwin Sands, that it would have been better to have seized the opportunity for a new airport earlier."

It would appear that air travel is about to receive a significant shot in the arm. From this month the European Union's "open skies" agreement comes into force, which means any European-based airline will be able to fly from any city within the EU to any city within the United States, and vice versa. This will mean a host of extra transatlantic flight routes. This follows the opening this week of a new Norman Foster-designed terminal to serve Beijing airport. And closer to home, Heathrow Terminal 5 is due to open later this month too.

We are living in an age of accelerating demand for air travel and these new terminals and international agreements are its fruits. But there are other, less palatable, fruits too. We got a taste of a growing backlash against the aviation industry this week when protesters managed to climb on to the roof of the House of Commons and roll out banners objecting to plans for a third runway at Heathrow. Then there is the growing evidence of the environmental harm inflicted by this industry. Aviation is the fastest growing source of greenhouse gas emissions. And the contrails left by planes are particularly damaging to the global climate. In the opinion of many scientists, we can either have international aviation growth on the present rate or we can have a stable global climate. We cannot have both. At the very least, the present rate of aviation expansion will mean our own Government missing its target of a 60 per cent cut in C02 emissions by 2050.

Many will regard the implementation of open skies as a setback for the struggle to prevent runaway climate change. To some extent this is true. The immediate consequence of the liberalisation of transatlantic air routes will be an increase in the number of flights. But it is important to make some distinctions here. It would have been quite wrong for the EU to have turned a blind eye to the traditional and uncompetitive stranglehold of national carriers on popular routes (in particular New York to Heathrow). Moreover, responsible support for open skies has to be accompanied by pressure on national governments and international bodies to act to reduce overall demand for air travel.

As this newspaper has long argued, the best way to do this is to start taxing the aviation industry fairly and properly. It is time that the price of air travel corresponded more closely with its environmental costs. The fact that airlines, by international convention, have never been subject to fuel tax or VAT has amounted to a vast hidden subsidy to this method of transport and one that urgently needs to be removed. The liberalisation of air routes should actually be complementary to this process. As we have seen in the recent row about energy bills, if there are doubts about the competitiveness of a market, environmental levies imposed by regulators can become discredited by association in the minds of consumers.

Thankfully, the issues surrounding the proposed extension of Heathrow airport are much more straightforward. The Government should be blocking Heathrow from building a new runway on international environmental grounds. Incidentally, a ban on all UK airport expansions should also help to mitigate the environmental impact of open skies. If the number of landing slots at Heathrow does not increase, there is a clear limit on the number of flights that can pass through the airport, no matter the identity of the carrier.

Open skies, resistance to Heathrow expansion, aviation taxes: there is a common theme here. It is time for governments to stop mollycoddling the airline industry and to get serious about curtailing the sector's greenhouse emissions.

Ruth Kelly, the transport secretary, on Monday firmly rejected proposals to ration air travel "crudely" by halting airport expansion or imposing punitive taxes.

In spite of a groundswell of opposition to a third runway and sixth terminal at London's Heathrow airport, Ms Kelly underlined ministers' support for "sustainable growth of aviation".

Last week the government completed a three-month public consultation on a third Heathrow runway that could boost air traffic capacity at Europe's most congested airport by 50 per cent by 2030.

In recent days environmental protesters have penetrated security at Heathrow and the Houses of Parliament, drawing attention to the growing resistance to expansion and warning of conflicts to come. Protest meetings during the consultation were attended by thousands of opponents, including most of the local authorities and MPs from the areas around Heathúrow.

Under the plans, an additional runway and a further terminal would be built to the north of the airport and would come into operation by about 2020. They would require the demolition of about 700 homes, including the community of Sipson, a local primary school and a community centre.

Ms Kelly told a conference at the Royal Institute for International Affairs on Monday that climate change was "one of the biggest threats facing the global community today".

Aviation was making a growing contribution to global warming, she said, with worldwide emissions rising at 6 to 7 per cent a year.

She warned, however, that if the UK took unilateral action to restrict aviation growth, competing countries and airlines would be "free to grow and absorb business from the UK. As a result there would be no overall emissions savings, just damage to our economy."

"Seeking unilaterally to curtail growth would be economically damaging and would push up fares, making air travel once again a luxury only the rich could enjoy."

Ms Kelly said sustainable growth in aviation could be made possible through advances in technology. Most important, however, she called for aviation to be included in a global scheme for emissions trading.

Until I was 28, and got my first job in television, neither my family nor I had any money. One result of this relative penury was that, by my mid-20s I had only been in an aeroplane four times: twice in infancy aboard internal flights in the Socialist Republic of Bulgaria, and then by Vickers Vanguard return to Lyons at the age of 13. That was it. Every other trip abroad or at home was by train and ferry or Bedford Dormobile. I didn't cross the Atlantic till I was 27.

It is, then, with something more than jaundice, that I read the words of those who have, since their youngest days, left microscopic traces of their privileged DNA in airports on all continents, but who now rail against the "hypermobility" of others. Hypermobility - the capacity of millions of people to move around the world - we are told, destroys communities, weakens social bonds, creates pollution and threatens environments. "The business plan [for air travel expansion] cannot be faulted," says George Monbiot. "The more hellish our lives become, the more we seek to escape from them." Who has never been on holiday to, say, a Greek island for any reason other than a need to flee from Hades? What bloody condescension!

The relatively rich have always travelled - first by coach and boat, then by car and plane. Hypermobility is the fancy name for when the not-so-rich can travel as much as the rich used to. Mine has opened the world to me: Cairo, Colorado, Berlin, Beijing, Dublin, Rio and Bombay. And I have loved being in all these places. For others it might be Skiathos, Ljubljana and New York for work. Naturally most - since their time is limited - want to travel by air, and so we require more and larger airports and a greater number of flights.

Of course, there are big problems. Most obviously there are the carbon emissions, with air travel probably making an increased contribution to the greenhouse effect. But any overall plan to reduce emissions doesn't necessarily have to impact on the number of flights we take, providing the slack is picked up somewhere else. In other words, if we think that the ability of the mass of people to see the world into which they were born is a good thing, then we may trade it for other reductions. It's our choice.

Still, the desire to limit carbon emissions is the best reason for opposing the proposed expansion of Heathrow, on which the Government will decide this summer. I can respect those demonstrators who are prepared to scale high rooftops - always provided that they themselves renounce any air travel, and even if their leader, by all accounts, managed to get in two round-the-world-trips in his gap years, before seeing the light.

But what about all the other objectors? Which, to judge from the comment pages of the main newspapers, consists of just about everybody. The National Trust is against the Heathrow expansion, as are all the important London mayoral candidates. The Lib Dems are opposed, as are it seems - though it is hard to be sure - the Conservatives. My guess is that the Archbishop will come out against it soon.

The campaign is largely co-ordinated by a group called Hacan Clearskies, originating in the Heathrow area. To its credit Hacan is not just against a Heathrow expansion, but against expansion at Stansted too. In fact there's an evening event soon featuring Zac Goldsmith (whose family travel everywhere by camel) and Terry Waite, OBE. "We", says Hacan, "oppose the Government's aggressive go-for-growth policy." But it isn't primarily the Government's policy, it's the traveller's policy. No one, except civil servants and soldiers, flies because the Government tells them to. People fly like I fly and you fly, because they want to see Prague.

It isn't surprising that people who live in the vicinity of Heathrow are unenthusiastic about expansion. A few will have to move, and many Londoners may get extra flights overhead, though the noise will still be far less than in the days of Concorde. In August we were told about a poll being conducted in West London by Friends of the Earth to see if local people were willing to take the train instead of flying, if rail travel was made more affordable. But I can find no trace whatsoever of the result. Was it possible that many of these Londoners actually wanted the Heathrow expansion to go ahead? Is this the great secret we are all sharing, that actually we hope the third runway and sixth terminal get built as quickly as possible, but we really don't want to be heard to say so?

But wait, says Baldrick, I have a cunning plan. Never mind emissions, the problem is that Heathrow is in the wrong place. Let's put it somewhere where it won't offend anybody. An island, say, off the coast of Kent or Essex. The idea has been suggested here by Kit Malthouse, also by Sir Peter Hall, president of the Town and Country Planning Association, and by Boris Johnson.

Ooooh! It'd be like Singapore moving its airport to Changi on reclaimed ground, claim excited proponents. It'd be like China opening the new Beijing airport. It'd be like that island airport in Japan.

Changi airport is seven miles from Singapore city centre: an offshore London airport would be at least 35 miles from Charing Cross. Let alone how far it would be from Birmingham or Southampton. That's a lot of new road, while Heathrow currently has the Express, the Underground, the M4 and the M25. By the way, the Japanese airport is sinking and the Chinese Government enjoys certain advantages over ours: it doesn't have to hold inquiries and it doesn't tolerate objectors.

As Boris may discover. The Essex Echo last week carried comments by local Conservative MPs and councilors who were "dismayed" at the idea for an international airport suddenly appearing just offshore. The report ended in the familiar coda, "Despite repeated attempts by the Echo, Mr Johnson could not be contacted for further comment on the issue." In the past year airport expansion plans have been fought off successfully or abandoned at Luton, Manchester and Birmingham. It would be, as a correspondent to this paper wrote yesterday, 2070 before Estuary airport was up and running.

My conclusion? You don't want the Heathrow expansion, fine. But to be consistent, please don't step on an aircraft yourself.

OUR COMMENT: Surely there is a middle way - don't fly too often or unnecessarily. Then present airport capacity need not be expanded. BUT airports need to be well managed, up to date and air traffic to be better distributed.

Pat Dale

The UK needs a "modal shift" from road to rail if greenhouse gas emissions from transport are to be curbed, a report concludes.

The Institution of Mechanical Engineers (IMechE) says changes are needed to government policies on transport pricing, energy and town planning.

A train journey can produce about one tenth of the carbon emissions generated if the same trip is made by air. The report's authors say substantial investment in the railways is needed.

"New developments should take account of what we can learn from the Japanese system" - Bill Banks, IMechE

"We have ambitious government targets for transport emissions, but transport emissions are static," said Cliff Perry, vice president of IMechE's Railway Division and a former head of Thameslink under British Rail.

"Eighty-five percent of transport emissions come from roads, so if we are serious about doing something, we must hit road transport."

Learning Japanese
Comparing emissions between various forms of transport is not a straightforward matter, as factors such as the efficiency of engines, the number of people on board and, for electric trains, how the electricity was generated all affect the final equation.

IMechE calculates that on average London to Paris trips, people travelling by car generate two and a half times more CO2 than those relaxing in a train, while an air passenger produces 10 times more.

Road pricing is set to spread to more areas of the UK
But achieving a substantial shift from road to rail would need a coherent policy covering issues such as how secure passengers feel, the convenience of connections, the cost of tickets, and reliability. Emissions from electric trains are of course much lower if the electricity comes mainly from low-carbon sources.

The report's authors said Britain could learn much from countries with superb rail systems, such as Japan, where trains routinely arrive and depart on the minute, equipment failures are rare, and where many railway stations form centrepieces of cities and districts.

"Spatial planning has to be considered, and new developments should take account of what we can learn from the Japanese system," observed Bill Banks from Strathclyde University, deputy president of IMechE.

Train companies should consider offering services like wi-fi internet access throughout, and improving catering services so that rail travel becomes something to look forward to.

Top prices
The report's authors acknowledge that the price of rail tickets can be prohibitive, sometimes costing many times more than the air equivalent.

One remedy they suggest is proper pricing of all transport options to include environmental impacts. They also suggest tickets could include references to the relative carbon output of different modes of transport.

Whatever changes are made, IMechE considers the "modal shift" will necessitate some investment in infrastructure, including new high-speed lines that can carry more trains significantly faster than the UK's existing stock.

AIRPORT action group Stop Stansted Expansion (SSE) has condemned BAA's air quality information amendments which were given to the Secretaries of State last month.

BAA provided updated research on air quality effects in the Stansted area, which it has gathered while preparing the G2 application air quality assessments for a second runway. The new data was submitted after the closure of the recent G1 inquiry, which plans to increase the passenger numbers at the Essex base beyond the current 25 million a year limit, but BAA believes the new data will not make any difference to the G1 inquiry case.

Stansted's planning and business development director, Nick Barton said: "As soon as we received the results of these latest air quality tests we decided to inform the Secretaries of State."

"We now predict NOx levels are likely to be slightly higher in 2014 in parts of Hatfield Forest and East End Wood than previously predicted. The levels in Hatfield Forest will still be less than those experienced today, and levels in East End Wood virtually the same."

However, SSE has reacted to the new data by writing to the Government Minister responsible for the G1 application outcome, condemning BAA's air quality amendments.

SSE states that BAA made false claims at last year's public inquiry and has now written to Hazel Blears, the Secretary of State for communities and local government, maintaining that: "If the true position had been provided to Public Inquiry, the debate on the air pollution effects of the proposed development would have assumed a radically different complexion."

The SSE letter also notes that the campaign group is seeking legal advice on the implications of the new pollution data.

"If BAA cannot get its facts right on an issue as important as local air quality, what confidence can local residents have in any of its figures?" said SSE campaign director Carol Barbone. "Once again this is a case of BAA understating the damage that would be caused by its expansion proposals."

Stansted is capped at 25 million passengers a year and it is expected that BAA will submit the G2 application for a second runway in the coming weeks.

Cheap flights. More flights. Multiplying routes. At the end of a week that has seen protests against airport expansion, predictions of further airport chaos, and record oil prices, British travellers are showing no sign of shaking off their addiction to CO2-heavy cheap flights.

A record number of new air links will open from the UK to Europe this summer. The Independent has identified 100 entirely new short-haul international routes to be launched from Britain when the summer schedules begin at the end of this month.

More than a dozen new domestic links have also emerged, some as short as 150 miles. And, as from 30 March, when an "open skies" policy takes effect, Heathrow will see transatlantic flights increase by a quarter - adding up to 524 extra flights a month.

It is dizzying stuff. We have never been better informed about the environmental dangers of flying but the brutal truth is unavoidable. Flying is a British boom industry.

The spring of 2008 is likely to prove the most dramatic in Britain's aviation history. Even before the summer schedules, a dozen new routes are being launched - starting at 8.30am today with the maiden flight of Flywatch from Southend to Le Touquet in northern France.

On 18 March, the world's biggest airliner will touch down at Heathrow for the first time in commercial service; the Singapore Airlines Airbus A380 has been described as "the plane built for Heathrow", allowing an airport bursting at the seams to increase passenger numbers. And at 4am on 27 March, Heathrow's Terminal 5 is due to open, with a protest "flash mob" planned for later the same day.

Then there is the coming transatlantic boom when "open skies" takes effect, allowing any European or American airline to fly from Heathrow to the US - providing it can find slots at the world's most desirable international airport.

The unprecedented expansion of aviation is revealed in figures prepared by the timetable specialist OAG. Its database shows that, during the month of April, nearly 200 new departures a day are expected from UK airports. OAG calculates a year-on-year increase of 5,853 flights from the UK to Europe for April. The net growth will be slightly smaller because some flights from April 2007 have been discontinued, but the data supports the evidence of a bigger-than-ever rise in new routes.

Given the shortage of slots at airports in the South-east, it is no surprise the majority of the 100 new links are from provincial cities. Birmingham, Bournemouth, Bristol, East Midlands, Edinburgh and Exeter all see substantial growth; Belfast, Leeds-Bradford and Liverpool get an expanded range of destinations, too.

Studying the new schedules reveals many "city pairs" that traditional airlines would never contemplate. To France alone, Birmingham to Poitiers, Edinburgh to La Rochelle and Bristol to Bergerac are among the improbable new options this summer. Yet these are exactly the sorts of journeys that environmental campaigners say should be made by train.

When Eurostar's new London home at St Pancras opened three months ago, part of the plan was that connections to and from provincial cities would be simpler and more appealing. Yet the airlines evidently believe that, for example, travellers from Leeds would rather fly direct to Avignon rather than make the straightforward one-change journey by train.

France, despite being 20 minutes closer by rail than it was last summer, wins the largest share of new routes: 29, most of them in the west of the country. Poland and Spain tie for second place with 14 new links each. Flights such as Bournemouth to Wroclaw demonstrate the UK's increasingly strong links with Poland, while Liverpool to Santiago de Compostela shows the expanding horizons of pilgrims and second-home buyers.

Both those services are operated by Ryanair, which now carries more passengers than any other international airline. Driving the firm's expansion is the deal negotiated with Boeing just after the terror attacks of 11 September 2001, when it and easyJet were the only major aircraft buyers; Ryanair receives a new 189-seat 737 from Boeing's factory in Seattle every 12 days on average.

Despite a growing chorus of politicians demanding that the rate of expansion of aviation should be slowed, public funds continue to support new routes. Ryanair's choice of Edinburgh as its 27th European base was sweetened with the help of funds from the Scottish government; passengers bound for the Danish town of Billund will, in effect, be subsidised. And the US carrier Eos will benefit from a £40 tax break for each passenger when it launches business-class only flights from Stansted to Dubai and Newark, New Jersey, in July.

The spectacular expansion after "open skies" is introduced has been revealed in another analysis by OAG. In the first full month, there will be 524 more US-bound flights from Heathrow than in April 2007 - despite the airport being, in effect, full. Air France and KLM are leasing slots previously used for short-haul flights to the big US carriers previously locked out of Heathrow.

For each European route that is replaced by a transatlantic link, there is an additional cost for the environment. On an average April day, there will be 91 departures from Heathrow to America, a 24 per cent rise. The increase in supply is likely to reduce fares, which in turn will encourage more people to fly.

BAA, the Spanish-owned company that runs Heathrow, is hoping for a windfall from the new flights; long-haul passengers typically spend far more at the airport than short-haul travellers. A further boost will come when the Airbus A380 becomes a regular visitor at Heathrow.

At the other end of the scale, the appetite for short hops appears undiminished. Fourteen new domestic links are scheduled for the summer, including one from Newquay to Southampton - a distance of just 150 miles. Our love affair with aviation begins to look like a dangerous obsession.

Additional research by Harriet Lam

A NEW swathe of residential areas could be blighted by aircraft noise and pollution for the first time after regulators warned there is not enough airspace to cope with airport expansion in southeast England.

The Civil Aviation Authority (CAA) and National Air Traffic Services (NATS) say expansion in the southeast "would not [leave] sufficient airspace capacity to accommodate the scale of predicted traffic growth on the basis of current and predicted technology".

Families in the south Midlands and East Anglia face the prospect of planes circling above their homes if ministers proceed with plans to build new runways at Heathrow and Stansted.

Experts believe new queuing "stacks" will have to be created to deal with the overspill from London's crowded skies. The capital's airspace is already among the most congested in the world, with 1.4m flights over London last year. A third runway and sixth terminal at Heathrow will lead to 225,000 extra flights a year by 2030.

The CAA and NATS warning came in a submission to the Competition Commission, which is examining BAA, the company that runs Heathrow, Stansted and Gatwick. The Guild of Air Traffic Control Officers said the new stacks would be in addition to a reorganisation of flight paths announced last month.

A Department of Transport spokesperson said safety was the Government's top priority and it had worked with both the CAA and NATS to develop proposals for a third runway at Heathrow.

Barring a last-minute change of