The UK's Future of air transport policy White Paper has major implications for the wider airline industry
Few policy papers of recent times have been as eagerly awaited as the UK government's blueprint for airport development over the next 25 years.
With one in five international airline passengers travelling through a UK airport for part of their journey, the implications of the report stretch far beyond that nation's shores. There are even major implications for international aviation relations, given the central role that access to London Heathrow is playing in the talks between Brussels and Washington on transatlantic open skies.
On top of this, it seems likely that if they want increased flights into Heathrow, airlines may have to invest in more environmentally friendly aircraft. The London airport region arguably faces some of the most severe environmental and congestion challenges in the world, and the paper makes it clear that additional capacity will be accompanied by tougher environmental standards, including noise- and emissions-related charges.
The proposal, outlined in the Future of Air Transport policy paper, to award a second runway to London Stansted in 2011-12 had always been seen as the most likely outcome of the report. However, the government's support for a third runway at Heathrow during 2015-20 was far from certain, and although this is dependent on stricter regulations on emissions and noise, airlines are clearly pleased with the outcome.
What has delighted, and even surprised, the Heathrow-based carriers, however, is the possibility of a significant capacity boost in the medium term through a relaxation of noise-related operational restrictions. At present, Heathrow's two runways are generally used in segregated mode, with one used for landings and the other for take-offs. The proposal is to review this system, opening up the possibility of mixed-mode operations.
A fully mixed-mode operation would add around 15% capacity to the airport, although the policy paper hints that mixed-mode during peak hours only is the preferred option. The UK's Civil Aviation Authority and air traffic control provider NATS are working with the government to put forward a consultation document on mixed-mode, as well as the so-called Cranford agreement. Named after the closest suburb to Heathrow, at which a crucial public meeting took place in 1952, the Cranford rules have for decades prohibited easterly take-offs on the northern runway. These would now need to be rescinded before mixed-mode operations could be introduced.
Mixed-mode benefits
The potential benefits of mixed-mode operations are huge, and could have major benefits for international aviation relations. Under the existing US-UK bilateral only two carriers from either side can serve the transatlantic from Heathrow: United and American Airlines, alongside Heathrow alongside British Airways and Virgin Atlantic.
A transatlantic open aviation area would open up Heathrow to Delta, Continental, Northwest and US Airways, as well as new European players, including bmi. As Washington is quick to point out, however, access rights are meaningless unless there is also access to slots.
Mixed-mode operations would provide a convenient solution to this impasse. Industry insiders estimate that around 20 daily slot pairs would be enough for the US carriers denied access to Heathrow, with Delta, the largest of four carriers, getting six or seven. Providing these slots in a mixed-mode environment would be "easy" according to one observer, and the UK would also be able to liberalise bilaterals with countries such as India and South Africa, where attempts to gain more traffic rights for UK carriers have stalled over the lack of available slots at Heathrow.
There is optimism that it may be possible to make progress on these operational issues around 2008, just as the new Terminal 5 comes on stream, alleviating another capacity problem for the airport - space for passengers.
All this may be fine as far as the industry is concerned, but significant local issues must still be overcome. Alternating runways is designed to give respite to those living below the Heathrow flight paths, with a daily directional switch around at 1500h. Any change to this is likely to meet stiff local opposition at local level.
Community gains
However, the government may be able to offer at least some local communities something in return. Most arrivals approach Heathrow from the east, descending over densely populated areas of south and west London. This was originally designed as a noise abatement measure due to the fact that departing aircraft are noisier than arrivals, but there are many who believe that with modern aircraft climbing swiftly to altitude at a much faster rate than they did 20 years ago, this needs to be looked at again. "It is not clear that long-standing principles still apply," says Andrew Cahn, director of government and industry affairs at BA. "Technology changes, flight patterns change, where people live changes, engine noise levels change. This is a chance to relook at these issues." The government seems to agree and has made clear that alongside the Cranford agreement, westerly preference will be reviewed - whereby aircraft approach from the east over London in both westerly winds and winds from the east of up to 5kt (9.3km/h).
While mixed-mode would free up capacity in the medium term, a third, short runway around 2015-20 is a distinct possibility, but would require environmental criteria to be met. On the noise side, the policy paper says further development should depend on there being no net increase in the total area of the 57dBA noise contour compared with the level of noise during the summer of 2002, which covers an area of 127km2 (49 miles2).
It is also clear that noise charges are high on the agenda. From 2007, the UK will have to carry out noise mapping at many airports to identify day and night noise problems and introduce action plans to deal with them. In addition, the government is to begin consultations this year on a new night noise regime for Heathrow, Gatwick and Stansted and plans to amend section 78 of the Civil Aviation Act of 1982, so that night restrictions will be based on a noise quota alone, without an accompanying limit on movements (currently 16 at Heathrow). The paper says this will provide, "a more effective incentive for airlines to acquire, use and develop quieter aircraft".
Tackling emissions will be at least as tough as noise, as mandatory air quality limits covering nitrogen dioxide (NO2) that will come into force from 2010 will require significant improvements in and around Heathrow. However, it is not just the airlines that will have to meet this challenge. The paper makes it clear that tackling emissions from cars will be crucial if a third runway is to get the go ahead. A study into the contribution of ground traffic to air pollution around Heathrow is to be carried out.
Economic incentive
The government supports the idea of some form of economic incentive for airlines to introduce greener aircraft, opening up the clear possibility of emissions charging at Heathrow. This is likely to punish secondary carriers operating more polluting aircraft, mainly from the developing world, much more than it will the major network carriers.
The paper also calls for various other measures, including a cleaner vehicle fleet and more efficient taxiing of aircraft, while the study presumes that road charging will cut pollution from cars travelling to the airport and on nearby motorways. There is also a presumption that there will be a slow build-up of aircraft movements on the new runway.
Given this background, the government feels that the 2015-20 timeframe will provide time for improvements in both aerospace and automotive technology that will ensure that mandatory legal limits are not breached.
If the industry reaction to the UK White Paper has been positive, the reaction from local councils has, unsurprisingly perhaps, been much less so. Six local authorities are threatening legal action on the basis that the UK government failed to allow the public the chance to comment on two schemes for new hub airports in the Thames Gateway to the east of London. They claim these were seen by ministers and their advisors as serious proposals. The councils say secretary of state for transport Alistair Darling does not have the authority to make a firm recommendation either for or against a new hub. The only new hub airport proposal subjected to public consultation in the white paper was Cliffe, also to the east of London, rejected on environmental and cost grounds.
"Our concern is that Darling has known for some time that these are credible, serious proposals, yet he has persisted in offering the public only Cliffe," complains Edward Lister, leader of Wandsworth council in southwest London. "We asked the secretary of state to reopen the consultation on the aspect but he refused to do so. Our legal advice is that this failure to reconsult coupled with the rejection of Cliffe leaves the White Paper open to judicial review."
Lister also warns that mixed-mode operations will add 20,000 extra flights a year, breaching the 480,000 limit promised under the enquiry into Terminal 5. Airport operator BAA has made it clear that to make full use of the third runway it would require a sixth terminal.
Environmental pressure group Friends of the Earth, meanwhile, warns that the expansion plans will threaten the UK's environmental targets. The group notes that the House of Commons Environmental Audit Select Committee recently concluded that the proposed growth in emissions "could totally destroy the government's recent commitment to a 60% cut in carbon dioxide emissions by 2050 [from 1990 levels]."
The government reaffirms this commitment in the White Paper, but notes that international flights fall outside the national inventory for greenhouse gases. The paper states that while the exemption of aviation kerosene from fuel tax is "anomalous", a unilateral approach to taxation "would not be effective in the light of international legal constraints".
Emissions trading
Instead, the UK intends to push the case for emissions trading within the European Union (EU), by which industries such as aviation can purchase emissions allowances from other industries to keep within set limits. "We intend to press for the inclusion of intra-EU air services in the forthcoming EU emissions trading scheme, and to make this a priority for the UK presidency of the EU in 2005, with a view to aviation joining the scheme from 2008, or as soon as possible thereafter," it states.
The environmental challenges at Stansted will be less challenging than at Heathrow, but will still need to be overcome. One issue that appears to be receding is the issue of cross subsidisation from other BAA-owned airports, including Heathrow, to fund development. BA's Cahn points out that the White Paper makes it clear that there is room for only one hub airport in the London area, and as a result, he believes the cost of new facilities will be much lower than feared. Ryanair's Michael O'Leary has made it clear he expects BAA to minimise costs involved in the development of Stansted, where his airline is the biggest player.
London Gatwick has been asked to set aside land for a second runway in the event of a third runway at Heathrow proving impossible. This is seen as unlikely by an airline industry that seems confident that the challenges can be met at Heathrow. Much can happen between now and 2015, however, and while the reaction to the proposals so far has been relatively muted, as more concrete plans - including flight paths - are put forward, opposition is likely to pick up. And by 2015 the environment may be far higher up the political agenda than it is today.
Future of air transport
London
Two new runways by 2030. First new runway at Stansted around 2011-12. New runway and sixth terminal at Heathrow around 2015-2020 providing environmental criteria can be met. Review of the Cranford agreement, segregated runway operation and westerly preference at Heathrow to open way for possible mixed-mode operation, boosting capacity in the medium term. Land to be set aside at Gatwick for a second runway after 2019 in case new runway at Heathrow proves impossible. No new hub airport at Cliffe in Kent. No strong case for a second hub airport in the London region.Rest of UK
New second runways for Edinburgh and Birmingham International.Environment
Support for noise and emission charging systems. Support for emissions trading scheme in Europe around 2008.REPORT BY COLIN BAKER IN LONDON
Source: Airline Business
