Outside Influences

Coathanger16 said:

In terms of airport size or city size?

Airports wise, MAN is 5.4 times bigger than LPL, whilst BRS is 5.7 times bigger than CWL.

In terms of city size, yes Bristol and Cardiff are similar, certainly more so than Manchester and Liverpool. But then again Bristol and Cardiff combined is 32% bigger than Liverpool, yet they have almost 250% more weekly flights to Amsterdam. Combined, the populations of Manchester and Liverpool are double that of Cardiff/Bristol, yet they only have 67% more weekly flights. Surely that demonstrates a weak link at Liverpool?



The argument of overlapping catchment I accept for long haul - it happens to pretty much every airport within 100 miles of MAN & LHR - not so sure it works so much for short haul. Sure it still comes into play, but not to such a greater extent. I'd feel OK driving over an hour to MAN/LHR for a direct long haul rather than a one stop option from my local airport. Not so OK if I was only going to Spain say.

Click to expand...

I think LPL could do with a bit more capacity on both the Amsterdam and Paris route by easyjet with the extra capacity they are adding in 2018, maybe we will see some extra schedules. They still have gaps to fill, so will see. Someone mentioned if KLM had the route to themselves they would probably still be there, I'd agree with that, and although they offered transfer connections, Easyjet are often cheaper and not forgetting they had been operating the route for many years before KLM, so better known.

Dobbo said:

I agree the demand is there in LPL's
catchment, but that catchment is substantially overlapped by MAN's catchment which gravitates towards MAN. This situation doesn't really exist at any of the other UK regionals KLM flies to.

I don't know if Cardiff-Bristol is a similar distance to Liverpool-Manchester or not, but it is certainly easier to travel between the later because the Severn estuary isn't there. Also, the size gap between Cardiff-Bristol is nothing like the size gap between Liverpool-Manchester.

Click to expand...

I think these days both Liverpool and Manchester Airports compliment one another. Liverpool Airport won't ever get to the Manchester size but it does offer extra choice now which it really didn't before to LoCos. Resulting in increased convenience for Northwest passengers, without need of driving way out of the Northwest area.

In case anyone thinks I have an axe to grind, I'm not a liverpudium , I moved to the Northwest from Kent in my early 20s and I'm very happy here and won't be moving south again. I work in Liverpool, a city I like and have been welcomed. I live in Cheshire about half way from both airports . I use both airports, in fact I'm writing this in Thailand after an excellent flight MAN-IST-BKK with Turkish, which hopefully I will get to write a review on soon.

Since the last 1.5 pages have had references to Liverpool, I have taken the liberty of copying the posts into the General thread of the Liverpool Forum in the hope that it might stimulate more debate on that airport's pages.

http://www.parliament.uk/business/c...parliament-2017/airports-nps-evidence2-17-19/

Parliament TV 1645 Head of Corporate Manchester gives evidence re Heathrow connectivity.

Tim Hawkins for Manchester and then Neil Pakey.
I doubt they will be singing from the same hymn sheet!

I shall be throwing popcorn at the screen when Pakey comes on....

Shock: LHR sets out phasing plan and drops promise to keep charges at current level.

http://www.constructionenquirer.com/2017/12/18/heathrow-drops-new-airport-terminal-to-save-2-5bn/

Heathrow’s Executive Director Expansion Emma Gilthorpe said: “The Secretary of State set us the challenge to deliver an expanded airport for Britain with passenger charges staying close to current levels." (My emphasis).

The previous position was that passenger charges would not increase to pay for Runway 3 and associated infrastructure. This is therefore a change of position and implies what was suspected all along - LHR cannot deliver R3 without increasing charges (it is unlikely to be practically deliverable even if it can get through the economic, environmental, and competition hurdles). To enable it to increase charges this requires no new capacity at (for example) LGW.

The reality is the consumer is being shafted by government propping up a monopoly at LHR when a far cheaper alternative delivering genuine choice and competition in the London airport system is being blocked by government.

The question here will be by how much. LHR is already has some of the highest airport charges yet that doesn't seem to put passengers off.

Seen elsewhere that current passenger charges are around £22. Even if that were to double, that's still only adding £22 to the price of a ticket - what effect will that have on passenger demand? Looking at flights to Singapore in March:

LHR (BA): £499
LHR (SQ): £629
MAN (SQ): £738

Dobbo said:

The reality is the consumer is being shafted by government propping up a monopoly at LHR when a far cheaper alternative delivering genuine choice and competition in the London airport system is being blocked by government.

Click to expand...

And what option might that be?

I'm sorry @Coathanger16 but that is a bad argument.

LHR can charge a monopoly price in that scenario is because LGW is prevented from expanding. If both were expanded, LHR's costs would be kept in check.

Taking your example, check out the prices Norwegian charge for LGW-SIN. My personal view is that Norgweian are a basket case, but that structure offers genuine choice for the consumer and allows people to travel when they otherwise would no.

The blocked option is LGW runway 2.

Dobbo said:

LHR can charge a monopoly price in that scenario is because LGW is prevented from expanding. If both were expanded, LHR's costs would be kept in check.

Click to expand...

Yes I won't deny expanding LGW also would help keep LHR charges down, but as you point out there is already competition at Gatwick from Norwegian. Back at LHR, Singapore are upgrading another flight to an A380, and Qantas is switching their Sydney service back to Singapore. Doesn't sound like airport charges at LHR are much of an issue.

Dobbo said:

The blocked option is LGW runway 2.

Click to expand...

And how exactly are Gatwick going to fund their expansion? Passengers there will be much more price sensitive than at LHR.

Only expanding Gatwick won't provide competition either. New entrants to London (certainly long haul ones anyway) will only be able to fly to Gatwick. Allow both LHR and LGW to expand and see which the market backs.

I'm not against LGW expanding and I'm certainly not advocating putting up charges (although I do believe it is necessary and fair to do so to fund expansion).

Yet in this article it says they'll stay close to current levels.
https://www.businesstraveller.com/b...hrow-unveils-options-save-2-5bn-third-runway/
Also shouldn't all this talk about Heathrow really be on the Heathrow thread?

Coathanger16 said:

Yes I won't deny expanding LGW also would help keep LHR charges down, but as you point out there is already competition at Gatwick from Norwegian. Back at LHR, Singapore are upgrading another flight to an A380, and Qantas is switching their Sydney service back to Singapore. Doesn't sound like airport charges at LHR are much of an issue.



And how exactly are Gatwick going to fund their expansion? Passengers there will be much more price sensitive than at LHR.

Only expanding Gatwick won't provide competition either. New entrants to London (certainly long haul ones anyway) will only be able to fly to Gatwick. Allow both LHR and LGW to expand and see which the market backs.

I'm not against LGW expanding and I'm certainly not advocating putting up charges (although I do believe it is necessary and fair to do so to fund expansion).

Click to expand...

The only option that can credibly be funded is LGW.

The government are blocking LGW from expanding in order to allow LHR to charge monopolistic prices to fund expansion.

I agree both should be allowed to expand, but in that scenario LHR doesn't happen because it: (1) doesn't get to charge monopolistic customer prices; and (2) doesn't get 100% of the incremental capacity increases.

SQ are adding seasonal capacity to LHR as they have done for years. QF are going back to the traditional Kangaroo route now that they don't need to be as closely tied to EK as before. Neither of these airlines are going to upset their existing business at LHR, the issue is new entrants to the market and this is being shaped by the low cost airlines (and the full service ones trying to become more a hybrid between premium and low cost - including SQ who are widely viewed as a sort of "gold standard" airline).

Jerry said:

Yet in this article it says they'll stay close to current levels.
https://www.businesstraveller.com/b...hrow-unveils-options-save-2-5bn-third-runway/
Also shouldn't all this talk about Heathrow really be on the Heathrow thread?

Click to expand...

This is already a change from the basis at which LHR obtained government backing. That they are already admitting, before any vote is taken, that their scheme cannot be delivered using their own economic case is extraordinary.

If they admit this much now, how much do you think their position will change when spades are in the ground and it's too late for the government to change their minds?

Dobbo said:

This is already a change from the basis at which LHR obtained government backing. That they are already admitting, before any vote is taken, that their scheme cannot be delivered using their own economic case is extraordinary.

If they admit this much now, how much do you think their position will change when spades are in the ground and it's too late for the government to change their minds?

Click to expand...

In the end if they do put up the charges the airlines will pay and they know it. The only thing i can think of that might keep down the charges would be if they wanted to attract a significant Easyjet or Ryanair base.

Dobbo said:

The only option that can credibly be funded is LGW.

The government are blocking LGW from expanding in order to allow LHR to charge monopolistic prices to fund expansion.

Click to expand...

I'm afraid I must disagree with you there.

A new runway at LGW is costed at ~£9bn, whilst surface access has been costed at anywhere between £5bn to £10bn. These issues are continuously overlooked as the numbers are higher at LHR. Doesn't mean that Gatwick can be credibly funded:

"A new runway will have mixed credit implications for London airports. A runway at Heathrow would allow the airport to benefit from growth in future traffic volumes, and a new runway at Gatwick would not take significant traffic from Heathrow," says Xavier Lopez del Rincon, a Moody's Vice President -- Senior Analyst and author of the report. "Gatwick, on the other hand, would be vulnerable to airlines switching to an expanded Heathrow, whilst a new runway at Gatwick would increase its airport charges and could alienate its price-sensitive airlines." (Moody's)

https://www.theguardian.com/uk-news/2014/dec/10/new-london-runway-damage-gatwick-creditworthiness

Heathrow have never said Gatwick shouldn't expand, so doubt they're too concerned about the impact expanding Gatwick would have on their ability to alter charges.

How much do LHR & LGW really compete? When Norwegian started flying long haul from Gatwick, did BA counter by doing something at Heathrow?. No - they launched flights from Gatwick. 10 abreast seating on 777s - mostly happening at Gatwick. Norwegian's impact on LHR has been negligible if even existent.

Dobbo said:

I agree both should be allowed to expand, but in that scenario LHR doesn't happen because it: (1) doesn't get to charge monopolistic customer prices; and (2) doesn't get 100% of the incremental capacity increases.

Click to expand...

(1) - it already does when there are other options readily available. Hasn't put many airlines off Heathrow so far!
(2) - Heathrow not having 100% of the new capacity available is hardly an issue for them. When openskies (or whatever the UK/EU - US deal was brought in, airlines at Gatwick switched to Heathrow even though there was space capacity at both. The reason why LHR can charge so much is because there is so much pent-up demand.

Jerry said:

In the end if they do put up the charges the airlines will pay and they know it. The only thing i can think of that might keep down the charges would be if they wanted to attract a significant Easyjet or Ryanair base.

Click to expand...

Don't be so sure. For easyJet to work at Heathrow all they need to do is offer lower fares than BA. Both will have to pay the same airport charges. They're never going to be able to offer cheaper fares at LHR than their flights at LGW. Again implies that LHR & LGW don't really compete.

Jerry said:

In the end if they do put up the charges the airlines will pay and they know it. The only thing i can think of that might keep down the charges would be if they wanted to attract a significant Easyjet or Ryanair base.

Click to expand...

The airlines will pass on the cost (en masse) to passengers. If you are happy to pay, fair enough.

The headline point is that LHR have obtained government support for a proposal they said was deliverable. They are now seeking to move the goalposts and tacitly admit the scheme the government support is not deliverable.

Coathanger16 said:

A new runway at LGW is costed at ~£9bn, whilst surface access has been costed at anywhere between £5bn to £10bn. These issues are continuously overlooked as the numbers are higher at LHR.

Click to expand...

The airport commission estimated £800,000. This seems too low, but whichever way you slice and dice it LGW's surface access is several billion cheaper to taxpayers, which is clearly a positive.

Coathanger16 said:

Doesn't mean that Gatwick can be credibly funded:

"A new runway will have mixed credit implications for London airports. A runway at Heathrow would allow the airport to benefit from growth in future traffic volumes, and a new runway at Gatwick would not take significant traffic from Heathrow," says Xavier Lopez del Rincon, a Moody's Vice President -- Senior Analyst and author of the report. "Gatwick, on the other hand, would be vulnerable to airlines switching to an expanded Heathrow, whilst a new runway at Gatwick would increase its airport charges and could alienate its price-sensitive airlines." (Moody's)

https://www.theguardian.com/uk-news/2014/dec/10/new-london-runway-damage-gatwick-creditworthiness

Click to expand...

This is an opinion from an institution offering employment at Heathrow and is also based on outdated data. You will have noted the disclaimer at the bottom of the document you have cited. As you know, the consultation has been reopened because LGW now offers the best long term economic benefits to the UK.

Also, LGW can be phased to facilitate financing the project. The current LHR scheme cannot (although they now seem to be changing their position on that and we wait to see what their proposal is).

Of course, if the government chose to underwrite LGW as with LHR, this is not a problem.

Coathanger16 said:

Heathrow have never said Gatwick shouldn't expand, so doubt they're too concerned about the impact expanding Gatwick would have on their ability to alter charges.

Click to expand...

Not publicly, but there is a reason the airport commission said one runway only, and that is because there is not enoughfinance and latent demand to build two.

Dobbo said:

As you know, the consultation has been reopened because LGW now offers the best long term economic benefits to the UK.

Click to expand...

You could build an extra 2 runways at gatwick and the airlines will still be queuing to fly into London Heathrow because in the end that is where they want to fly out of. No matter what any consultations say from whoever does them Heathrow will get a 3rd runway in the end because that is where the government want it and more importantly where most of the big airlines want to fly from.

Jerry said:

You could build an extra 2 runways at gatwick and the airlines will still be queuing to fly into London Heathrow because in the end that is where they want to fly out of. No matter what any consultations say from whoever does them Heathrow will get a 3rd runway in the end because that is where the government want it and more importantly where most of the big airlines want to fly from.

Click to expand...

Apologies, I might not have been as clear as I could be. The updated economic case has led to the consultation being reopened, the consultation has had no impact on the economic case.

Quite simply, no matter how many airlines want to fly from LHR, it is economically better for the U.K. to expand LGW (unless the airlines want to pay for it, which they don't).