GBP 1.7B Stansted Development Coming Soon?

[hkskyline]

UK PRESS: BAA To Spend GBP1.7B On Stansted Development
4 December 2005

LONDON (Dow Jones)--U.K. airports company BAA PLC (BAA.LN) is this week expected to unveil plans to spend about GBP1.7 billion on the first phase of a controversial new runway and terminal project at Stansted airport, the Sunday Times reports.

The development will allow the Essex airport to handle 50 million passengers a year, compared with today's 21 million, the report says. But the runway won't be ready to take flights before 2013 at the earliest, with construction work unlikely to start until 2009, the report says without quoting its sources.

BAA, which is expected to make the Stansted announcement Friday, is down to the last two in the bidding for Budapest airport, with Germany's Hochtief AG (HOT.XE).

Newspaper Web site: http://www.timesonline.co.uk

[TheFly]

The article also stated that the whole project would be delayed longer by planning law issues and that the fees per passenger charged to airlines were to more than double in 2008....Ryannair and Easyjet already said they will pull their routes....Luton anyone!

[Monkey]

I reckon they should build the first of the SE's new runways at Heathrow where it's neede more. Neither Ryanair and Easyjet, the largest users of Stansted, nor the largest users of Heathrow (British Airways etc) want to see the expansion from Stansted first. BAA would also rather expand Heathow first.

[TheFly]

Agreed. The only really practical solution would be a new airport in the Estuary..with rail links so good you're not bothered...why.... shuts 3 airports and noise (and jobs!!) and opens one mega airport half in the sea.

Cost...dunno £30b all in...
but
Heathrow already T5 £4b...T2 £2b
Stansted £4b
Gatwick runway+terminal...£2b??
Heathrow runway £2-3bn??

so £15bn just for the next 10-15 years....or expandable airport...if Denver can do it I am sure London can!

[Monkey]

^ No the Estuary proposal is the worst of the lot! Thankfully it has been abandoned. Right now they should expand Heathrow and afterwards Stansted. What's the point of building an entirely new airport on the Thames Estuary when they can just add some more runways in the spacious fields around Stansted? For the price of merely preparing the land at the Estuary they could build a Maglev from Stansted to central London.

[TheFly]

Fair enough..but I think with Frankfurt and CDG and even Amsterdam's expansion at a single location, within 10-15 years they will be getting close to Heathrow in size....I think the demand is there for Heathrow but not the landing slots....

realistically when would another runway at Heathrow be operational...if at all!! In 20 years CDG and Frankfurt will have added 2/3 runways probably!!

[Monkey]

^ They already have far more runways than Heathrow. I think Paris has four and Amsterdam five. Charles de Gaulle operates more flights too. However Heathrow flights are in much bigger planes and more full. If the government refuses to add new runway capacity at Heathrow then they should just add all the new runways and expansion at Stansted.

[TallBox]

Originally Posted by Monkey

^ They already have far more runways than Heathrow. I think Paris has four and Amsterdam five. Charles de Gaulle operates more flights too. However Heathrow flights are in much bigger planes and more full. If the government refuses to add new runway capacity at Heathrow then they should just add all the new runways and expansion at Stansted.

Yes, was surprised to read in the Times(?) that Heathrow only operates 470,000 commercial flights, compared to Atlanta's 900,000 and similarly high numbers for a few other US airports. Passenger capacity disparity is obv due to larger planes though, as you point out.

[TheFly]

It may happen...BA (not that chesnut again) cannot REALLY want Gatwick and Heathrow providing long haul...just makes no sense at all... if Stansted were to attract BA long-haul due to the availability of peak slots then maybe they would take over eventually..but without strategic planning (Government) and incentives (for BAA) this just won't happen...just end up piecemeal....like New York...not a problem for overall services but means a city is ringed by flights when one location could serve it well.

[Bob]

The estuary idea apeals to my nature of simplifying complex set ups. However I don't think it would work. Heathrow is simply in the right place for the people that want to use it. It is quite close to central London and people from both North, South and West of London can get to it. There is very little East of London.

The problem is of course Heathrows' proximity to London. If the new runway were built several hundred thousand more people would fall below the new flightpath. I think this is totally unacceptable and I strongly oppose a 3rd runway. Ideally Heathrow would be slightly north and a bit further west so that no flightpaths go over central London. But it isn't and we're stuck with it.

My solution would be:
-New runway at Stanstead
-New runway at Gatwick
-Split up BAA and have a different company owning each of Stanstead, Gatwick, Heathrow.
-Investment at Manchester. (loads of people seem to travel from the North to London's airports)
-New North - South high speed rail line to reduce pressure for domestic flights and to an extent UK to Paris / Brussels / Netherlands traffic.

[TallBox]

I think Heathrow should be milked as much as possible - it is, after all within an urban conurbation, so it's not like we're destroying vital natural habitat. I'd support a sixth terminal and third runway, probably submerging the northern perimeter road... maybe some local land acquisition could be useful too .

I think Gatwick should receive a second runway and a proportional increase in capacity - useful because of the excellent North-South links like the M23, Gatwick Express and trains to Victoria.

Stansted, in my opinion, should be the last option as it is in the lush lands of the country... seems a waste to build there when other places are available.

The Cliffe Airport project is a non-starter anyway. What a stupid name anyway. I used to know a guy called Cliff.

[hkskyline]

New Stansted runway to cost a third of initial estimates; still opposed by airlines
By JANE WARDELL
9 December 2005

LONDON (AP) - Airport operator BAA PLC unveiled its plans Friday to build a second runway at London's Stansted Airport, putting the cost of the project at 2.7 billion pounds (US$4.7 billion; €3.9 billion) -- 30 percent below previous government estimates.

Airlines like Ryanair and easyJet that are based at the airport, however, fear increased charges from BAA to fund the expansion. Stansted ACC, a lobby group formed by airlines at the airport, said the revised cost was still too high, and called for alternatives to be found.

Local residents and environmental groups also have been strongly opposed to the runway, which is expected to boost the British economy and be ready by 2013.

BAA Chief Executive Mike Clasper said the project's environmental impact would be reduced as much as possible.

"We've worked very hard in the last two years to ensure that Stansted G2 (runway two) will deliver great value to the U.K. economy, to our airlines and to people using the airport," Clasper said.

The second runway will boost Stansted's total capacity to around 76 million passengers a year by 2030, from the current 35 million.

The blueprint, released Friday, provides a base for discussions with local communities, airlines and other stakeholders before its submission for formal planning approval in 2007.

Ryanair and easyJet, which account for about 90 percent of Stansted's business, are worried they will have to increase ticket prices to effectively fund the expansion.

Stansted ACC said it believed the total cost of the project would come closer to 4 billion pounds (US$7 billion; €6 billion) with extra charges, and said BAA had acknowledged the plan would increase airport charges by 300 percent.

"It is manifestly clear to the 20 million passengers now using Stansted that the success of the airport to date has resulted from airlines driving fares down," the group said. "The BAA plan defies logic."

Stansted ACC also criticized the monopoly held by BAA on Britain's airports.

BAA operates seven airports across the country, including London's Heathrow, Europe's busiest airport, where it is building a fifth runway and terminal to accommodate an increase in passenger numbers. The new Heathrow terminal is due to open in 2008.

The plans announced Friday for Stansted revealed a shorter runway than initially envisioned, and BAA said 87 rather than 100 properties would be lost, 25 rather than 29 listed buildings would go and fewer people would be affected by noise.

Carol Barbone, campaign director for the Stop Stansted Expansion Campaign, said the BAA proposal would still cause catastrophic damage to the environment.

"We are looking at the breakup of villages and the loss of homes and heritage for which there is no justification," Barbone said.

"Regionally we are looking at the possibility of 1 million extra passengers traveling to and from Stansted -- mostly coming by road. The impact of that alone would be very substantial, not counting the extra air traffic."

The campaign group said it had 6,000 members made up of local residents, local authorities, local lawmakers and other members of the public.

[hkskyline]

Bigger Stansted 'Could Spell End of Cheap Flights'
BY JAMES TOZER
10 December 2005
Daily Mail

A PROPOSED multi-billion-pound expansion of Stansted Airport could spell the end of cheap flights, budget airlines warned yesterday.

They said the charge per passenger which is levied on carriers would have to triple to pay for the controversial plans, inevitably leading to higher ticket prices.

The airlines' predicted costs would spiral to £4billion and affect other airports, potentially increasing fares across the board.

Stansted's owner, BAA, yesterday unveiled scaled-down plans for a second runway at the Essex airport, which it says could be ready by 2013, costing £2.7billion.

If it goes ahead, Stansted would handle more passengers than Heathrow's current annual total of 68million, though a third runway could be built there.

BAA says a second runway would boost passenger figures at Stansted from 20million a year today to 50million by 2013 and 76million by 2030.

But the airlines using Stansted, including Ryanair and easyJet, are unanimously opposed to the scheme, known as Stansted G2.

They fear the expanded airport will be a white elephant unable to attract the passengers it needs to be viable. Their warning comes on top of fierce opposition from local residents in the region.

Campaigners say it would have a catastrophic effect on the environment, breaking up villages and destroying historic buildings.

BAA has already said it will raise the charge per passenger from £3 to £5, but it could go as high as £8.

Worse still, from the airlines' point of view, charges for passengers at Heathrow and Gatwick could also go up under a crosssubsidisation deal.

The plan was labelled ' goldplated folly' by David O'Brien, operations director of Ryanair and chairman of the Stansted airport users' committee.

He said: 'Our ability to provide low fares is entirely dependent on airline costs.

'If you increase the charge by £1 across 20million passengers, that's £20million, which will inevitably impact on ticket prices.

'Stansted has built its success on low fares, but by trying to quadruple passenger numbers when the airlines themselves say there isn't demand for that sort of capacity, BAA risks creating a supersized Millennium Dome.'

Instead, the airlines back plans to expand Luton Airport for a much cheaper £1.5billion. It is just 25 miles away from Stansted and owned by the local council rather than BAA.

Such a move would also suit people living around Stansted.

Peter Sanders, chairman of the Stop Stansted Expansion Campaign, accused BAA of an irresponsible land-grab, which would damage the local environment.

' The rural character of the region would suffer a major transformation as a result of the proposals in the unlikely event of their ever being allowed,' he said.

But BAA chief executive Mike Clasper said the plan made sense.

'We've worked very hard in the last two years to ensure Stansted G2 will deliver great value to the UK economy, to our airlines and to people using the airport.'

The Government wants a second runway at Stansted completed by 2012. Heathrow's third short runway is not expected before 2015.

BAA wants to build the 3,350 yard-long runway at Stansted a mile east of the present one.

It would mean bulldozing 87 properties, including 25 listed buildings.

The runway would be part of phase one of the airport's expansion, costing £1.7 billion.

Other plans include new taxiways, 42 aircraft stands and associated piers to provide access to and from the aircraft, a new terminal and control tower with road connection from the M11.

[hkskyline]

Regulator rules out cross-subsidy for Stansted
By Michael Harrison
21 December 2005
The Independent

The airports operator BAA will not be allowed to cross-subsidise the cost of a new runway at Stansted by imposing higher charges on airlines using Heathrow and Stansted, the industry regulator said yesterday.

Instead, the Civil Aviation Authority indicated that BAA might be permitted to charge airlines at Stansted more during the construction phase of the project provided the money was repaid in later years.

BAA has cut its estimate of the cost of the project from £4bn to £2.7bn, and says the first phase of the scheme, enabling Stansted to increase capacity from 35 million to 50 million, could be ready by 2013 at a cost of £1.7bn.

Ryanair, the biggest operator at Stansted, accounting for 60 per cent of its traffic, claims this is still too expensive. It says a new runway could be built for £400m, and will fight attempts by BAA to construct 'a gold-plated Taj Mahal'. Attempts by the CAA to encourage 'constructive engagement' between BAA and the users of Stansted on a future pricing formula have failed.

In its initial observations on the airport-charging formula for 2008- 2013, the period which will cover the building of the runway, the CAA said each of BAA's three South-east airports would continue to be regulated on a 'stand-alone' basis. This means Stansted, Heathrow and Gatwick must each fund their investment needs from the airlines using the airport.

BAA initially said if this were the case then a second runway at Stansted would not be justified until several years after the target date of 2011/12 set out last year in the Government's airport White Paper. It then floated the idea of a 'public interest levy' on airlines at Heathrow and Gatwick to help fund the expansion of Stansted, provoking a furious response from carriers such as British Airways who face an increase in landing charges to pay for Terminal 5.

BAA said it believes the second Stansted runway could be funded on a stand-alone basis in time to open in 2013, provided it gets a 'favourable settlement' from the CAA. Harry Bush, at the CAA, said it had been presented with no evidence that a move away from stand-alone regulation would be in the interests of airport users overall, and could put airports which compete with Stansted at an unfair disadvantage.

But the regulator said BAA might be allowed to test the appetite for the precise timing of when to build a runway at Stansted by being given the flexibility to increase landing charges by an extra amount during the 2008-13 period. The more airlines were prepared to pay, the better indication it would give BAA of the demand for a second runway. This could result in BAA bringing forward revenues due to be earned in the following five years, although these would have to be repaid.

[hkskyline]

Tories query Stansted expansion plans
11 February 2006
Financial Times

The Conservative party is to challenge the government's plans to expand airports in south-east England, and is questioning the need for rapid growth in air travel.

Chris Grayling, shadow transport secretary, has raised particular concerns over the plan for a new runway at Stansted airport, a central plank of Labour's strategy for aviation, suggesting it was economically unviable.

His comments to the Financial Times are the latest example of Conservative attempts under David Cameron to broaden the party's appeal by stressing its environmental and social credentials.

Questions over the government's strategy for air transport have been raised again as BAA, the airports operator, prepares its defences against a possible takeover bid from Ferrovial, the Spanish infrastructure, services and construction group.

Environmental groups have argued that a successful bid would make BAA's controversial Pounds 2.7bn project to build a second runway at Stansted less likely to go ahead. They believe a new management could take the view that it is financially unviable.

Mr Grayling said he was concerned about Stansted's expansion relying on cross-subsidy from Heathrow.

"I am anxious about a plan for a significant expansion of an existing airport which doesn't stand on its own two feet economically and which needs cross-subsidy from our main international business hub to be viable," he said.

Mr Grayling added: "One of the things we will do in our policy work over the next couple of years is look at how to balance the real role aviation plays in our economic future, while at the same time recognising there are real environmental issues. That may require a sceptical view of a future where we've got aviation growth that rises up at a very rapid rate. There is a question about how far we can sustain, for environmental reasons, massive aviation growth."

Mr Grayling predicted that a takeover battle for BAA would be bound to push the issue of Stansted's planned expansion up the political agenda.

"Is it prudent to expand an airport, which has environmental consequences, when there is clearly no economic case to do so?" he asked.

However, Mr Grayling's comments surprised senior Labour MPs. One former transport minister said they did not make any political sense. "That would be a real flip-flop if they came out against airports, because the whole business community is clamouring for this. It affects inward investment."

The CBI said it was in favour of expanding the south-east hub, but declined to comment on Tory policy, saying it was still evolving.

Michael Roberts, director of business environment at the employers' organisation, said: "Our view is that Stansted, as part of total runway airport capacity in the south-east, is one of the areas where we need to see airport expansion."