THE HEATHROW DEBATE - WHAT'S THE ANSWER?

We posted a news story on our LinkedIn page yesterday about business travellers wanting another runway at Heathrow Airport. Richard Charman, research manager at HRG, posted a reply. See below. Food for thought, isn't it? We'd love to hear what you think - @btshowlondon or Business Travel Show group on LinkedIn. 

If you look at the IoD's own member research - it shows a significant regional split on where expansion should be focused. Having read numerous submissions my gut feeling is that Gatwick may be given an additional runway, Manchester Airport will get an additional runway, Birmingham Airport will have a significantly expanded runway by the end of 2014, Boris Island or similar will be promoted as a long term alternative to Heathrow, by the Government, whilst expansion at a number of other airports will also be permitted. It is already happening at Llydd Airport.  Personally, I would like Heathrow Airport expanded to accommodate two more runways but, I do not see how the Government can get that through Parliament or the courts because of the environmental impact. The promotion of one additional runway might be acceptable - but some argue that is only an interim not, a long-term solution. The likely outcome of the Davis Commission exercise is an attempt to direct development to a number of airports around the country to try and encourage balanced airport expansion because this implies balanced economic development - such simplistic logic ignores failed attempts to get airlines to use Stansted which is currently a white elephant used many by low cost airlines. Such a scenario could do a great deal of harm to UK earnings from aviation and encourage expansion at airports outside the UK. We are already suffering significant political and economic damage as a result of the imposition of Air Passenger Duty which should be abolished or as a minimum reduced significantly.

By Richard Charman

DEAR PATRICK MCLOUGHLIN, PLEASE PUT PARTY POLITICS TO ONE SIDE FOR THE SAKE OF UK PLC

In the first cabinet reshuffle since the Coalition Government took power, anti-third runway Transport Secretary Justine Greening has been ousted and Patrick McLoughlin has taken her place. Not much is known about Mr McLoughlin transport-wise, apart from the fact he has a fear of flying and he represents the most landlocked constituency in the UK.

 

No doubt, airport expansion, and the issue of a third runway at Heathrow in particular, will be top of his agenda this morning. Speaking on behalf of the business travel industry – if I may – I urge Mr McLoughlin to use this opportunity to put party politics to one side, to not succumb to the NIMBYs (not in my backyards) who will fight against expansion at whichever airport affects them most, and to focus solely on what’s good for UK PLC.

As the Government continues to dither and decisions are delayed, cities like Amsterdam, Frankfurt and Paris – all with world-class, well-connected hubs – continue to attract global corporations and the UK continues to slide down the scale as a centre of global commerce. 

Our lack of airport capacity is also preventing us from introducing new routes to the BRIC countries, which is essential to fuel economic growth long term.

In my opinion, that means putting a plan in place to create a long term transport strategy that will support the UK as a centre for business and fuel its economy over the next 20-30 years. And in the short-medium term look to airports such as Gatwick, Luton and Stansted to ease the capacity issues at Heathrow that everyone is getting so blindsided by.

As event director of the Business Travel Show, I’d like to extend an invitation to Mr McLoughlin to address the business travel industry at our event in London next February where he will meet a very eager audience keen to question him about the issues affecting our business including airport expansion, APD, green taxes, and high speed rail and franchises.

David Chapple, event director Business Travel Show, david@businesstravelshow.com

VIRGIN TAKES OFF AT HOME

Richard Branson and Virgin have somewhat hijacked the news over the last two weeks, haven’t they?

It started with Virgin being outbid by FirstGroup for the West Coast Mainline franchise that it has been running for the last 12 years. You can read our blog post with the details of FirstGroup’s bid here. Branson, it was reported, was livid, issuing an aggressive statement questioning the Government’s decision and FirstGroup’s competence almost immediately. This was followed by the announcement of an appeal and the launch of an online petition, which garnered 150,000 signatures. Branson even offered to run the service on a not-for-profit basis if the Government agreed to postpone the contract signing for two months.

Yesterday (28 August 2012) it was reported that Virgin had its lawyers working over the Bank Holiday weekend and is now planning a last minute legal challenge to prevent the Government from signing the contract, which is due to happen tomorrow and, which, according to the Transport Secretary Justine Keeling, is going ahead.

It’s all very gung-ho for the transport industry and I’m genuinely looking forward to the outcome. But what I find really interesting is the surprise announcement – released in the midst of this melee -that Virgin is proposing a three-times-daily airline service from London Heathrow to Manchester from next March.

When it was announced, many assumed Branson was simply throwing his toys out of the pram having lost West Coast Mainline. But I doubt this very much. I think the domestic airline has been part of the Virgin plan for some time and the timing of the announcement was merely coincidental.

The airline lost £80.2m last year. It has also lost its code share deal with BMI following BMI’s acquisition by IAG and its alignment with BA, which means it’s lost a significant chunk of its feeder routes, so something had to be done. And that something, it would seem, is the launch of a UK domestic network.

My question is: “Does this signal more of a strategic change in direction for Virgin Altantic, or will the IAG competition trustees charged with reallocating the BMI Heathrow slots see it as nothing more than smoke and mirrors to make them look like more of a credible option for those slots?”

The trustees will award these slots from summer 2013 and the decision will be made in the next couple of months, which also makes me think twice about the timing of the announcement.

Whatever the reason, though, the move by Virgin is potentially good news for the corporate travel buyer, as the likes of Virgin and BA start competing on value, service and price leading to increased frequencies and flight options, as well as better value for money.

David Chapple is event director of the Business Travel Show – you can challenge him on Twitter @btshowlondon or at david@businesstravelshow.com