Political inertia over third runway at Heathrow increasing ticket prices, study

Political inertia over the need for a third runway at Heathrow, the UK’s only hub airport, is increasing ticket prices for air travellers, according to independent research by Frontier Economics.

While demand has increased over the years, Heathrow has been unable to add more flights for a decade – pushing up prices. According to the new report by Frontier Economics, passengers travelling through Heathrow are already paying an average of £95 more for a return ticket than they would do if Heathrow had a third runway.

The un-met demand is expected to increase in future, and Frontier Economics estimates that by 2030 the average return ticket price could be £300 less with Heathrow expansion than with a two-runway Heathrow.

Colin Matthews, Heathrow’s Chief Executive, said: ‘This research shows that not building a third runway at Heathrow will add hundreds of pounds to the cost of a family holiday, be a disincentive to doing business in the UK, and increase the cost of the goods and services that are imported and exported through Britain’s most important trade gateway.

‘This additional burden on both the cost of living for families and on businesses is entirely avoidable. The private sector stands ready to invest in the infrastructure Britain needs. Government has it within its power to lower prices for consumers by taking a clear decision to support expansion and end the years of prevarication that are now causing fares to rise and routes to be constrained.’

The Frontier Economics’ study also claims that a third runway will create a greater choice of routes for passengers. Expanding Heathrow could add 40 new direct connections to London in total, with many of those routes going to destinations in rapidly growing economies such as Calcutta, Lima and Mombasa.

Additionally, Heathrow will also work with government and airlines to ensure that expansion delivers improved air links between Heathrow and other parts of the UK including Inverness, Liverpool, Newquay and Humberside, the airport said.

In comparison, adding a second runway at Gatwick would reportedly only add between five and seven new routes, mainly to package holiday destinations.

However, the report argues that there would be even greater benefits to passengers if both Heathrow and Gatwick were allowed to expand, since having spare capacity at both airports would allow the greatest scope for competition.

 

Gatwick CEO says growth figures justify expansion

London Gatwick airport’s CEO has responded to the latest growth figures by stating that the airport is ripe for expansion.

Figures released today for March this year show that Gatwick handled 2.7 million passengers last month, which was an increase of 5.1 percent or 131,500 passengers over the figure for March 2013. The record month was a finale to a record year for the airport. The only downturn for the month was a reversal of 21.7 percent on traffic to North American destinations, primarily because US Airways ceased its routes to Gatwick during 2013.

Passenger numbers for the year ending March 31, 2014 were 4.8 percent higher than for the year ending March 31, 2013. Europe, and Spain in particular, accounted for 1.4 million more passengers, while 600,000 more passengers used the airport for Nordic routes, and the introduction of easyjet’s Moscow route in March last year meant a significant increase in traffic to Russia.

Stewart Wingate, London Gatwick chief executive, said: ‘This has been a successful and exciting year for Gatwick that has seen steady growth, the completion of spending over £1 billion on improving the passenger experience and offering new routes that satisfy the demands of business and leisure travellers.’

‘These successes only add to the obvious case for expansion at Gatwick. A new runway could be delivered at Gatwick more cost effectively than at Heathrow, with significantly less environmental impact. It would also provide the connections and economic benefits the UK needs much more quickly.’

 

Local businesses support Gatwick expansion plans

Local businesses at Gatwick Airport have expressed their support for plans to expand the airport, according to This Is London.

Backing the Gatwick Airport submission, Rosemary French, executive director of the Gatwick Diamond Initiative (GDI) business forum, has written to the chairman of the Airports Commission, Sir Howard Davies, on behalf of 100 individual businesses and 12 business membership organisations, representing 5,500 businesses and neighbouring areas.

Ms French said: ‘Expansion at Gatwick with a second runway, alongside the maintenance of Heathrow as a two-runway airport, is the best next step in aviation provision for London and the South-east, because it is the most cost-effective of all the options, does not use public money, and the environmental implications are smaller.’

The Gatwick Diamond Initiative involves 38,000 businesses, which contribute £19 billion Gross Value Added (GVA), and has a population of 406,000 that are economically active.

Speaking of the Gatwick expansion in environmental terms, Ms French said: ‘We believe that the environmental blight that a third runway at Heathrow will bring to London communities is wholly unnecessary when a second runway could be built at Gatwick with far less environmental, noise and air pollution impact.

‘Gatwick already handles 9,233 passengers for every person affected by noise, compared to 261 passengers handled by Heathrow, according to the Airports Commission’s own report.’

According to officials at Gatwick airport, 19,000 jobs will be created as a result of a second runway, while the GDI is confident that the expansion could create up to 40,000 jobs by 2030.

The airport is also claimed to be the best connected in the UK especially to Central London.

Ms. French added: ‘Gatwick has a main railway line running through it that connects directly to London Bridge, St Pancras International and Victoria, as well as south to Brighton and the coast.

‘An expanded Gatwick Airport would be a catalyst to bring further improvements to the area with faster, more efficient public transport and surface access infrastructure, enabling employees to be attracted from neighbouring communities in London, Kent, West Surrey and East Sussex.’

Groups opposed to the expansion have however questioned the validity of local business support for the project.

 

London City Airport plans to double its passenger capacity

London City airport (LCY) has revealed expansion plans that will see the airport double its passenger capacity over the next ten years.

The airport has submitted an application to the London Borough of Newham for approval to commence a £200 million expansion project. The proposals will enable up to 120,000 aircraft movements at the airport and effectively double its passenger numbers to six million over the next ten years,

The proposed plans include extending the terminal and adding a new taxi lane and new parking stands for larger planes. The airport is not proposing a second runway as it already has permission to handle up to 120,000 flights yearly under an application granted in 2009.

Based in the Royal Docks, LCY serves the business and political centres of Canary Wharf, The City and Westminster, and handles 70,000 flight movements and 3 million passengers per annum.

According to Declan Collier, chief executive of the airport, the expansion of LCY is vital, not just to satisfy the increasing demand for business travel, but also for the development of the Royal Docks and the east of London.

‘The airport currently employs just under 2,100 people, of which more than 60 percent are local. The proposed development has the potential to create as many as 1,500 new jobs, providing further employment in east London,’ Collier said.

‘In terms of the wider UK economy, the airport already contributes £750 million every year – through business and leisure tourist spend, the operation of businesses on site, productivity savings and air passenger duty – and when this project is completed, we can expect to double that amount,’ he added.

The airport, owned by American infrastructure fund, GIP, which also has Gatwick and Edinburgh airports in its portfolio, is also in discussions with the Davies Commission regarding the optimal use of existing infrastructure, proposals for new infrastructure as well as its capacity to accommodate more short-haul flights that will help relieve pressure on other airports.

Cruise.co.uk gets new investment, plans international expansion

Online cruise website, Cruise.co.uk, has secured new investment from private equity firm, Risk Capital Partners, which will become the majority shareholder in the specialist agency.

Without disclosing the value of the investment, Cruise.co.uk said that the investment would add impetus to its plans to expand in the UK and overseas, particularly in the Irish and Australian markets. Cruise.co.uk has served 65,000 customers and generated revenue of £64 million in the last year.

The investment move is Risk Capital Partners’ first in the travel sector. Chaired by Luke Johnson, the company has previously owned the restaurant chains, Giraffe and Pizza Express.

Cruise.co.uk managing director, Seamus Conlon, said that the company had looked for an entrepreneurial VC with a proven track record of developing companies.

Conlon said: ‘We have spent some time getting to know Risk Capital Partners and are excited they have decided to invest in our business. Their acumen and results in the leisure space will be of huge value to us and we look forward to their expertise helping to shape the future of the business. We are well placed to take advantage of these shifts, and help customers and staff get together to share their experiences.’

Johnson said: ‘As more people research online, leading websites have engaged with users and harnessed social media techniques.

‘Cruise.co has a wealth of content in addition to market leading prices. There is as a great opportunity to replicate this model into international markets where cruising and online research are growing rapidly.’

The new investment represents the second private equity investment in the company after a management buyout from previous owner, Carnival Corporation, was backed by venture capitalists, Forward Group, in 2007.

Since the 2007 buyout and a change of name from Victoria Travel to Cruise.co.uk, the specialist agency has grown rapidly, with a focus on user-generated content. Cruise.co.uk has more than 200,000 reviews and opinions on its website and has more than 85,000 members on its cruise discussion forum. When it acquired the cruises.co.uk domain name, it was the most expensive URL in the UK.

 

London Southend Airport Announces Terminal Expansion

London Southend Airport, an airport in the UK, has announced that it is in the process of expanding the terminal.

The expansion will include a new arrivals facility, which is expected to be complete by May 2013. The construction of all phases of the development is likely to be completed by the end of 2013.

The extension of the airport terminal, which will cost GBP10 million, means that passengers will have a maximum wait time of four-minutes for security check, and a 15 minutes transit time from aircraft to train for passengers that only have hand luggage, as the airport is located almost next to a railway station. The new extension will add 90 metres to the existing terminal building.

The expansion will also include a greater number of check-in desks and baggage drop off points, an increase in the size of the departure lounge, improved baggage reclaim facilities and a larger immigration area. The airport will also be offering more retail and catering facilities to passengers.

The project is expected to add around 300 new jobs to the economy, from additional operations at the terminal.

The managing director of the airport, Alastair Welch, said, ‘Our aim is to ensure that we deliver a very special level of customer service in Southend and this extension will allow us to ensure we can continue to deliver those high standards as the airport grows.

This is also further evidence of the role the redeveloped airport is playing in supporting the regeneration of the wider Essex economy.’

 

UK Government Announces New Airports Commission

The UK government has announced the setting up of an independent commission to look at ways to increase airport capacity in the southeast of the country.

Patrick McLoughlin, the new transport secretary, has announced that former CBI chief, Sir Howard Davies, will head the new commission. The commission will be investigating ways of adding capacity at airports, in order that the UK may retain its supremacy as the most significant aviation hub in Europe. It will also offer guidelines for implementing additional capacity at UK airports.

The commission will be required to publish its report by the summer of 2015 and present it to the new government, which is expected to have taken control by that time.

Patrick McLoughlin said in a statement, ‘This is a very difficult debate, but the reality is that since the 1960s Britain has failed to keep pace with our international competitors in addressing long term aviation capacity and connectivity needs.

Germany, France and the Netherlands have all grown their capacity more extensively than the UK over the years, and so are better equipped, now and in the future, to connect with the fast growing markets of emerging economies.

The government believes that maintaining the UK’s status as a leading global aviation hub is fundamental to our long-term international competitiveness. But the government is also mindful of the need to take full account of the social, environmental and other impacts of any expansion in airport capacity.’

Airport capacity is currently a contentious issue in the UK, with divided opinion on the upgrading of existing airports or the construction of new ones.

 

Ryanair Announces New and Expanded Routes

Ryanair, an Ireland-based low cost airline, is offering new and expanded routes between the UK and destinations in Ireland and Europe.

The airline has expanded its service between Kerry, in Ireland, and London Stansted Airport to a daily return flight, an increase on its previous three return flights per week.

The new services commence from November 7, 2012, and will complement the airline’s daily return flight service between Kerry and London Luton Airport. The airline is offering a EUR16 Seat Sale for the newly expanded service.

The airline sales and marketing manager, Maria Macken, said, ‘Ryanair is pleased to announce increased frequencies on its Kerry-London Stansted route, which will operate daily from 7th November giving passengers in the South West a choice of two London destinations for winter 2012.

This is great news for tourism in the South West as Londoners, keen to snap up good value hotel and golf breaks in the region, now have even more options when travelling to Kerry.’

The airline has also announced two new winter routes from Manchester to Gdansk and Riga, from November 2012. The new winter schedule from Manchester Airport will include 18 routes, catering for around 1.3 million passengers per year.

Announcing the new route, the airline head of communications, Stephen McNamara, said, ‘Ryanair is pleased to announce 2 new Manchester routes to Gdansk and Riga from Nov 2012 as we grow our winter Manchester schedule to 18 routes, which will deliver over 1.3m passengers per annum at Manchester Airport, sustaining over 1,300 ‘on-site’ jobs.’

 

London Luton Airport Announces Expansion Plans

London Luton Airport, an airport in the county of Bedfordshire in the UK, is expanding its capacity, according to Luton Borough Council, the owner of the facility.

Luton Airport is gearing up to expand its capacity by around 50 percent, as the airport’s owner has extended the airport operational contract with the current operator. The airport contract with London Luton Airport Operations Limited (LLAOL) to operate the facility, has been extended by three years, to 2031.

The airport is currently drawing up detailed plans to increase its capacity from the present annual limit of 11.5 million passengers, to a proposed 18 million passengers, while staying within the present border and runway capabilities of the airport.

Robin Harris, the chairman of London Luton Airport Limited (LLAL), the parent company of the airport’s owners, said, ‘Given Luton airport’s position as the single biggest asset owned by the people of Luton, this agreement and its potential benefits for wealth in the region’s economy are momentous.

LLAL is delighted at this step forward and at the benefits it will bring to Luton airport and to the region’s residents.’

Glyn Jones, the managing director of LLAOL, said, ‘The agreement will allow LLAOL to continue the successful work which we have been carrying out at London Luton Airport since 1998.

Last year the airport was the UK’s fastest growing major airport and this agreement will enable both parties to continue to deliver sustainable growth together, developing the airport in a positive way for partners, residents and passengers.’

 

PrivateFly.com Expands in Europe

PrivateFly.com, an online search engine for private jet charter that is based in the UK, has reported that it plans to expand into France, Germany and Central Europe, inspired by its robust UK business.

PrivateFly booking service has around 7,000 charter aircraft registered worldwide in its portfolio, and has recently reported a steady UK sales growth for the financial year ending in May 2012. The company has since re-launched its UK website, with the addition of an iPad app, to increase its portfolio of existing mobile applications.

The company chief executive officer and founder, Adam Twidell, said, ‘We already have many international customers, together with an established aircraft network in these markets. But PrivateFly’s translated platforms and multilingual teams now allow our European expansion to fully take off. Our focus is initially on the established French and German markets, and on other fast-growing markets in Central Europe, including Poland and the Czech Republic. We will extend our reach further later in the year.’

In September of last year, the company acquired a GBP2m funding from eight private investors in a finance offering. The funds are being used to explore new international markets, to upgrade its platforms, and for a real-time integration of price and availability of aircraft operators.

The company chairman, Richard Carrick, said, ‘PrivateFly’s experience in the UK has proven the success of our model, transforming private jet charter through innovative technology. We are looking forward to bringing the same enhanced response speed, price and ease of booking to our new European customers.’