Funding streams for Heathrow's third runway?

Discussion in 'Other Public Transport' started by CdBrux, 9 Jun 2018.

  1. CdBrux

    CdBrux Member

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    Mod Note: Posts #1 - #6 originally in this thread.

    how much taxpayers money is to go towards the third runway at Heathrow?
     
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  3. notlob.divad

    notlob.divad Established Member

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    You think the government would let the countries busiest airport shut because the owners go bust? Of course they wouldn't. Therefore the companies 'investment' is ultimately underwritten by the taxpayer.

    Same as with the banks in 2008.

    Add to that, how much associated infrastructure is going to have to be modified to accommodate the expansion. Upgrades to local Roads/water/sewage/power etc are Heathrow Airport Holdings paying for 100% of the associated costs? If no, then the answer to your question is 'Quite a considerable amount'
    This isn't an anti-heathrow post, the people of the South East and its government can decide for themselves if and where to build their extra pollution generator. I really have no opinion on the matter of where. But the fiction that any major infrastructure project like this is not supported by significant amounts of taxpayers money is precisely that. Fictitious wibble.
     
  4. InOban

    InOban Established Member

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    Except that Heathrow is 90% foreign owned - largely Spain and Qatar- so probably pays little or no corporation tax in the UK
     
  5. IanXC

    IanXC Emeritus Moderator

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    Do you have a source for this suggestion?

    I can't say I have any knowledge of the ownership structure of Heathrow Airport Holdings Ltd, but I suspect if there was a story here we probably would have heard it by now.
     
  6. furnessvale

    furnessvale Established Member

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    In 2016 Heathrow paid £24m in corporation tax despite having paid dividends to its foreign owners over previous years of >£2bn.

    I do not pretend to understand our tax system but Heathrow claim the deferment of £1bn corporation tax (which will ultimately be paid to HMRC) has enabled them to invest £11bn in the airport.
     
  7. Mollman

    Mollman Member

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    I know this is going off topic but:
    "Our company, Heathrow Airport Holdings Limited (formerly BAA) owns and runs London Heathrow Airport, Britain's aviation hub.

    Heathrow Airport Holdings Limited is in turn owned by FGP Topco Limited, a consortium owned and led by the infrastructure specialist Ferrovial S.A. (25.00%), Qatar Investment Authority (20.00%), Caisse de dépôt et placement du Québec (CDPQ) (12.62%), GIC (11.20%), Alinda Capital Partners of the United States (11.18%), China Investment Corporation (10.00%) and Universities Superannuation Scheme (USS) (10.00%).

    The company is subject to financial regulation by the Civil Aviation Authority (CAA) and the Competition and Markets Authority (CMA). In matters of safety and security we are regulated by the Government and CAA."

    The corporation tax deferral is probably linked into the argument that the profit isn't really profit as it is contributing towards investment.
     
  8. Dentonian

    Dentonian Established Member

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    Always a messy subject about whether London infrastructure is publicly or privately funded but the point is that it's London and the South East's hub - not Britain's.
     
  9. yorkie

    yorkie Administrator Staff Member Administrator

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    I don't see how anyone can claim Heathrow's catchment area is confined the London & South East area. On several occasions I have assisted people book train tickets to Heathrow from places well outside the LSE area.
     
  10. Starmill

    Starmill Veteran Member

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    I would argue that Heathrow's catchment area is not even confined to England let alone South East England. I'm not even sure it is confined to the UK - people probably travel to it from the Isle of Man and the Republic of Ireland.
     
  11. Dentonian

    Dentonian Established Member

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    Th
    There are a number of reasons for Heathrow (and more recently, Stansted & Luton's) "false demand". In the old days the main one was Travel Agents trying to persuade people to fly via the SE through Northern Supplements or other financial "incentives" or even denying the existence of direct flights from other, more convenient Airports. More recently, some airlines European (overseas airlines are far less discriminatory) still slap on massive hikes from major regional Airports, although to some extent they will argue its Market Forces. For instance, back in 2012, I was planning a trip to Frankfurt and had the whole Summer to choose from (as in any 3-4 days therin). Detailed searching Lufthansa's website showed widespread availability of return fares around £89 from Heathrow throughout June, July and August. Apart from the odd evening flight out/crack of dawn flight back, the cheapest fares from Manchester were £505-530. In the end I scrapped the idea and went to Dusseldorf (with flybe) instead.

    I don't know how true it is overall, but I heard a while back from someone who occasional flies aboard on Business that it is standard policy for British businesses to automatically fly all staff via Heathrow instead of direct (where applicable) to meetings. One wonders how much business Britain loses/lost because their Reps turned up for meetings in such as the States, jet lagged, and/or how much money these companies waste on otherwise unnecessary Accomodation costs.

    Other personal examples; way before last decades bank-initiated Recession, I was entered into a draw through the Royal Bank of Scotland - who at the time had my current account. This was for a "free" break in Paris, with Air France. At the time the RBS was based in Edinburgh (!) and Air France flew regular schedules from no less than 16 UK Airports (and probably still do). However, reading the small print, I discovered that the "free" flights had to be from Heathrow. So, I withdrew my entry in the draw and immediately set about transferring my account to another bank. More generally, with all these Banks, Magazines, TV companies etc doing the same thing, it just makes you ask how genuine the demand is for flights from Heathrow. Meanwhile, I have flown from/to Manchester best part of a 100 times (return) but remember very few flights with more than half a dozen empty seats. A recent survey suggested Manchester was losing over 4 million international passengers to Heathrow for various reasons. And presumably, the principle applies to Birmingham, Glasgow, Edinburgh, Belfast and probably, Cardiff, Newcastle etc. Although, it has been said that for "cultural" (meterological, more like - lol), "Mancunians" have always had a great "propensity to fly" which is presumably why Manchester Airport has grown so rapidly over the last 80 years (give or take 12 days).

    More recently, but when I was still in good health, I planned a RTW trip, and whichever "Alliance" I used I would be stung for flying directly from Manchester, rather than via Heathrow. Predictably, "OneWorld" were the worst with a full 50% mark up.

    As we all know, virtually all websites are financed by adverts, but the vast majority have an "AdChoice" icon, which in theory, means you can tell them why you don't want to see their advert. However, I have *never* been given the choice to opt out of receiving British Airways adverts. Why?
     
  12. radamfi

    radamfi Established Member

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    Manchester happens to be in the right place as there are a lot of people nearby yet it is sufficiently far from London. Birmingham airport is too near to London and especially Heathrow to rival Manchester.

    Manchester's catchment extends way beyond the Greater Manchester boundary. It could be argued that other northern airports are losing passengers to Manchester.

    Heathrow is easily avoided and Amsterdam is a more relevant hub for much of the UK, regardless of an expanded Heathrow. I live less than 50 miles from Heathrow but hardly ever use it, as cheaper fares are usually available elsewhere.
     
    Last edited: 12 Jun 2018
  13. Dentonian

    Dentonian Established Member

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    The larger catchment area is indeed another practical argument, and I would agree that Leeds/Bradford in particular, may lose out - albeit I think its physical location is a natural barrier to growth anywhere. Liverpool. possibly less so as it seems to have more of a complimentary role. For instance, there are very few flights to Eastern Europe from Manchester.

    Amsterdam has always been the most obvious alternative, but my experience last week, backed up by other recent obs on FR24 suggest it is finally losing its reputation as the best European hub of all. Whether this is because the terminal (D in particular) is now too overcrowded and - like Manchester's T1 - resembles more of a massive upmarket shopping centre with a few planes parked outside, than an Airport, I don't know. A more cynical view (noting KLM's ageing fleet of 737s being inderectly blamed for my delay) is that they have sold out to Air France, who of course are based at the nightmare hub of CDG. The only time I connected through there (17 years ago), they literally shut the transit door in my face and I missed my connection. This after a 40+ minute delay was followed by having to literally walk from the one end of T2 to the other. Fortunately, I did get a 10euro voucher and the delay was only 3 hours as I agreed to fly to Linate, rather than the ticketed Malpensa. But it has always been an overcrowded, unfriendly Airport anyway.
     
  14. radamfi

    radamfi Established Member

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    The Heathrow - Manchester situation is arguably a lot less "unfair" than the Amsterdam - Rotterdam situation. There are actually more people in the Rotterdam/The Hague area than in the Amsterdam area, yet Amsterdam airport has at least 30 times the passengers.
     
  15. Dentonian

    Dentonian Established Member

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    Not really; The Hague is as close to Schiphol as Liverpool is to Manchester Airport and Rotterdam is only slightly further away. Plus, you would be the first to say how wonderful public transport is in the Netherlands, noting that frequent trains from The Hague & Rotterdam call at Schiphol on the way to Amsterdam. And I seem to recall from my last visit (many years ago) Rotterdam Airport has/had a pretty good bus service to the city, given the Airport's moderate size.
    Further, Amsterdam/Schiphol is centrally located in the Netherlands, whilst London is right down in the bottom right hand corner of our scepter'd isle - albeit, at least Heathrow is west of London.
     
  16. radamfi

    radamfi Established Member

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    My last post was really tongue in cheek. The point is that the Netherlands long ago decided that they were going to have a huge airport that would serve the whole country and it isn't probably not that big a deal to Rotterdammers that they have to travel about 30 miles to the airport. However, it is really in the far west of the country and somewhere near Utrecht would be more central. People in Groningen and Maastricht have quite a trek to get to Schiphol. Similar to the UK's north-south divide, the Netherlands have a west-east divide. Employment prospects are better in the west but you pay a huge premium in housing costs for the privilege.

    The north of England may complain about being neglected compared to the south-east, but would people in the north choose to pay south-east house prices in return for similarly prosperity?
     
  17. Dentonian

    Dentonian Established Member

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    But this is the classic conundrum of the Free Market. Surely the fundamental reason that SE house prices are so much more expensive is because we have an over centralised Economy. That in turn is further excarbated by the massive investment in Transport and other infrastructure down there, along with higher rates of per capita spending on such as Education and Health. The latter, in turn attracts the "best" Teachers and Doctors, and then we wonder why Londoners (particularly from poorer backgrounds according to recent, widely publicised studies) are better educated and have better health*.

    I always remember a BBC documentary on this subject some years ago, which (I think it was this way round), featured a Fireman "from" Swansea and a School teacher "from" Doncaster. Both were complaining about the high cost of living/commuting in London. These sort of things make me wonder if there is a parrallel universe; Don't they have Fires in Swansea or children in Doncaster????


    *based on similar lifestyles.
     
  18. radamfi

    radamfi Established Member

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    We know that there is a geographical economic imbalance, that is not news. But the question remains, would it actually be preferable (from the point of view of people living in poorer areas) for that to change? They might earn a bit more money and/or be able to get a better job, but would the increase in the cost of living be worth it?

    Yes they do, but there are already people doing those jobs in Swansea and Doncaster. They are doing the job in London instead because it is harder to attract people to do those jobs there because there are more better paid jobs available and you will have less money left over after living expenses if you do those jobs in London compared to elsewhere.
     
  19. mrmartin

    mrmartin Member

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    I think people are really underestimating the crisis of capacity in London area airports:

    • Heathrow is virtually full, and hasn't grown at more than a % or so for many years, despite the A380, etc.
    • Gatwick is in my guess 1-3 years away from being full like Heathrow*
    • City is unlikely to grow significantly because of space constraints. If anything, it may be shut down for housing and office space in the coming years (especially with Crossrail from CW to Heathrow)
    • Stansted has 5-10 years before being full, assuming very aggressive terminal upgrades over the next decade*
    • Luton & Southend are pretty much the only spare capacity, but they are pretty hard to get to and will require very significant upgrades.
    *based on single runway airports maxing out around 45-50million passengers.

    Assuming economic growth and oil prices stay pretty similar, I would expect stansted to grow like crazy over the next few years. Then Luton and Southend to grow, as it's the only place to put the demand that LHR, LGW and STN can't handle anymore.

    By the time Heathrow 3rd runway is complete I could definitely see basically all London area airports being full.
     
  20. Chester1

    Chester1 Established Member

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    The situation has improved though since the gulf airlines entered the market on a large scale. They don't have a culture of being London centric and they struggle to obtain landing slots at Heathrow. Etihad's European HQ is in Manchester and I think that is a reflection on their approach. BA is essentially a London only business and it will milk Heathrow for as long as it can but its market share is progressing declining in the UK as a whole. Manchester Airport is growing at a fast pace including important long haul services. Hainian's Beijing and Cathay Pacific's Hong Kong services have been a success and are now both daily while Hainian is launching a 3 times a week service to Wuhan at the end of the year.
     

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