BAA

Heathrow and Stansted expansion even less likely as BAA posts record losses

By Richard on 29/07/2009
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Have you been wondering why BAA has gone quiet on its plans to expand Heathrow and Stansted? Just a few months ago it was keen to stress that both airports would have new runways as soon as the tarmac could be poured, but their latest financial reports shows that BAA is so broke that it is reusing teabags* in the staff canteen.

So far this year BAA has lost over half a billion pounds from the three London airports, with passengers down by 4 million. The biggest decline was at Stansted, which lost 14% of passengers. Domestic flights fell 10% across the airports, with flights to the EU down 8% and international flights down 6%. So what need for the new runway - or for the increase in passenger numbers they twisted arms for last year?

In other BAA news, Gatwick still hasn't sold. BAA wants £1.5 billion, down from £2 billion last year, and has challenged the Competition Commission's demand that it sell Stansted, Gatwick and either Edinburgh or Glasgow within two years. There's some complicated leveraging thing going on with bonds and stuff, but basically it's overvalued the airport and can't sell it.

No cash means no expansion, whatever spin BAA chooses to put on it: bulldozing villages doesn't come cheap, especially when we're digging in to resist. It's perhaps a little too early to start celebrating, but let's face it: we've won**, even if the other side hasn't conceded defeat just yet.

* I am reliabily informed that reusing teabags is a perfectly sensible thing to do. However the image of BAA's staff fighting over a second-hand Tetley while outside the offices hordes of angry residents and anti-expansion campaigners wave placards and chant slogans is so heartening that I thought I'd share it with you.

** Given that I've started doing these little notes, I may as well continue: there plenty of regional airport battles to fight and win, but passengers and profits are down across the sector. Perhaps that iconic symbol of the fight against climate change won't be in Sipson and Harmonsworth, but at Newquay, Doncaster or Birmingham airports instead...

More destruction for your money!

By Anonymous on 02/07/2009
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Source: Flickr

On Monday British Airways launched a new exclusively fat-cat service from one money Mecca to another. The route from London City to JFK airport is designed for high fliers to go 'City to Wall Street'. It's an attempt to win back business passengers (the backbone of BA's market share) to save them from losing £40 million a month.

The new flight comes as we hear about the impacts of BA's plans to pusht their loss onto - no, not the shareholders, silly - their staff. The airline said about 4,000 staff had volunteered for unpaid leave, 1,400 will switch to part-time work and 800 put their names forward for unpaid work, while 740 overseas staff also volunteered for the cost-saving drive. Suggestions that they should just fire the management and run the airline as a workers' co-operative aren't being taken seriously.

It should be obvious that jobs in aviation are unsustainable and insecure. We should using this recession to create and promote jobs in sustainable transport, but instead we could be moments from bailing out a company whose sole efforts to stay afloat involve pandering to the richest while asking their staff to work for free or face the boot.

Luxury, first-class air travel is the most polluting sector of the aviation industry (with the possible exception of jet packs). With a whole 32 passengers per plane, the City-JFK route reaches new heights of the super rich burning money, ignorant of any environmental consequences. Then again climate change won’t affect the rich nearly as much as the poor so why should they worry?

The flight costs up to £5000 per seat for passengers and about 61,127.9 kg of CO2, 24,462.27 kg of H20, 482.6 kg of NOx, and 194.1 kg of CO to the planet. As BA clamour to save themselves it is telling of the industry that they do so in the most damaging way possible. The aviation industry look hard set on destroying the economy and the environment.

Hooray for the climate-credit-crunch-crash!

BAA latest scheme is pedalling greenwash

By Richard on 02/07/2009
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Source: Flickr

One of the delights of the eco-business bandwagon is watching the truly clueless clamber about making absurd claims and promises which they have no hope nor intention of keeping. The carbon-neutral airport is a recent example; only by discounting all the emissions from planes can this feat be achieved, which, of course, renders it entirely meaningless. But it seems that business has been competing to see who can launch the most useless project to cut CO2 emissions... and BAA has surged into the lead.

Not content with pretending that the sole purpose of a new runway at Heathrow is to reduce emissions from stacking, they're now trying to cut the tiny proportion of emissions which come from their staff commutting to work, and have launched a cycle to work scheme. They've got lofty ambitions to reduce the number of people driving to work by... wait for it... 1% year on year.

Two points: firstly, this is not a BAA initiative, but a Government scheme which allows people to offset the cost of a bike against their VAT and NI payments. Every other company in the UK runs it. (If you work for one which doesn't, go and ask your finance department why not. Right now. Seriously, we'll wait for you.)

Secondly, there is no excuse whatsoever for staff working in the daytime to drive to Heathrow. The roads are all gridlocked anyway, and Heathrow is served by: the Heathrow Express from Paddington, the Piccadilly line, buses from Guildford and Woking, free buses into most of Hayes and Harmondsworth, other trains from Paddington, buses from Uxbridge and further buses from the east, west, north and south of the airport. Anyone driving in is so bloody stupid that they ought to be sacked immediately and their innards stretched across Bath Road for all to see. In fact when I've been locked on to BAA I've noticed that the vast majority of staff at their Point West offices arrive by bus anyway...

But don't let me put you off - BAA is still, to their credit, offering people the chance to get a cheap bike. There's just one catch though: as the announcement makes clear, "the scheme is open for sign ups between 1 July and 2 July". I hope that's inclusive, othewise there's only a non-existent metaphysisical nano-second in which to get your form in. It's almost like they don't want any applicants...

BAA rings death knell for Stansted expansion

By Richard on 22/05/2009
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If 2008 went down in the history books as the year of airport expansion plans, then 2009 will be long feted as the year those plans crashed back down to earth. Confirming rumours we've been hearing for several month now, BAA have finally conceded defeat and asked the Government to delay the public inquiry into Stansted Airport's expansion. Although BAA won't admit it yet, this means that the inquiry, and proposed expansion, won't happen. Is that champagne corks tins of cider I hear opening?

There are a few reasons for this, all of them good news for environmentalists. Firstly, BAA has no money and can't afford the inquiry. They are inches from having their credit status downgraded, which would leave them unable to secure their enormous debts. In economics speak, this leaves them "proper fucked"; so fucked, in fact, that the Government has initiated plans to nationalise them should the receivers get called in.

Secondly, BAA has been ordered to sell Stansted by the Competition Commission. In a rising market, with more and more people flying each year, BAA would be aggressively seeking permision to expand, and able to charge a premium for having bullied local objectors out of the way. But in this market, with fewer passengers than before, no one will pay more for someone else's expansion plans. The market for airports has been decimated: BAA wanted £2b for Gatwick, but has only been offered £1.3-1.4b.

The other, more political reason, is the general election next year. The last remnants of the Labour party may remain dedicated to expansion, but short of the whole Tory front bench being exposed as peadogrants, the next Government will be more blue than red. The Tories claim they won't allow expansion at Stansted or Heathrow (although they also claimed they weren't fiddling their expenses). Assuming they aren't lying scumbags then even if the inquiry inspector supported expansion it should be overturned by whoever becomes the Minister for Airport Expansion.

So pity BAA, who flew too high and came unstuck. A lesson in hubris for us all. Oh, and to make matters worse, British Airways, BAA's main client and ruler of all things Heathrow, is also going down the pan. Last year they lost £401 million, and there are no signs that they won't lose the same amount (or more) this year. These losses are despite their having fired around 20,000 staff, but outspoken boss Willie Walsh plans to fire some more in a desperate attempt to keep making money. I'm sure that he'll be doing his bit by taking a big cut in bonus... stop laughing, I'm serious.

Colin Matthews: sneak preview!

By Richard on 14/05/2009
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So yesterday we were proud to announce a collaborative comedy performance starring none other than BAA's Colin Matthews - a man known throughout the business community as a bit of a laughing stock. Colin is performing his one man show at City University on Tuesday the 19th of May - and hundreds of you are eagerly preparing to cancel some pretty hot dates to make it there.

But while the activist community was getting itself nicely worked up, Colin thought you weren't excited enough. After a quick chat with our event department, he decided that what you needed a little more encouragement. So we arranged for a special sneak preview of his forthcoming show on the Guardian's blog site, comedyisfree. A taster, if you will, of all the mirth and merriment that is to come next Tuesday.

And what mirth! What merriment! Who could fail to laugh their socks off when Colin quipped that a third runway was needed because "Leeds/Bradford and Durham Tees Valley airports both lost their links to Heathrow as airlines shuffled their slots"? What a joker: they lost their links because - wait for it - the flight was more expensive and took longer than a nice trip on the train! And I hear that his punch line, "we should all be concerned that Frankfurt has direct links with six Chinese cities" brought the house down in many a West London community.

So cancel your dinner date and ignore that anarchist meeting you were going to attend. Hop on your private jet and fly into City University, Tuesday 19th of March for a one-night-only comedy extravaganza. Tickets are free, but be quick! 

One night only: BAA's Colin Matthews to star in secret comedy performance

By Richard on 13/05/2009
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OK people, get your diaries open. Following extensive talks between Plane Stupid and BAA, we can exclusively reveal that we've arranged for an exclusive gig by none other than all-time comedy legend, Colin Matthews, next Tuesday, at City University. Tickets are free, but strictly limited, so register early (and often!).

To get your free tickets, email eventsrsvp@city.ac.uk. These are dangerous times, so they'll be checking ID on the door, so don't go leaving your driver's license at home!

Colin is BAA's supremo, and well renowned as an excellent wit. We knew he'd be up to a real challenge, so we've asked him to talk about - wait for it - "the planned delivery of a £4 billion capital investment and construction programme and the development of a third runway at Heathrow, built within strict environmental limits", or, as one bright spark put it "the runway I would have built, before it all went so very, very wrong".

Of course, trying to build a runway within strict environmental limits will be hilarious in itself, but we're sure that Colin will bring that extra spark of genius to the table. After all, BAA are known for their hilarious press releases, including "why we tried to stop 5 million people using the Picadilly line" and "sorry our staff got caught impersonating Stansted residents".

So don't miss your once in a lifetime chance to laugh long and hard at Colin Matthews. You can sign up online, and tell your mates! It's guaranteed to be the best stand up performance by any BAA CEO on a Tuesday in May - or your money back!

Government to nationalise Heathrow?

By Richard on 08/05/2009
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It's not a good month to be an airport operator. First we heard that everyone who wanted to buy Gatwick had turned out to be chancers with n'ary a penny to rub together; now a small clause buried in the sort of document no one ever reads (BAA's financial report) reveals that the Government is so worried about BAA's finances that it's ready to take control of the airports should BAA or Ferrovial go bankrupt.

BAA almost went to the wall earlier this year, but scrapped together the mother of all refinancing deals. It's also just narrowly avoided making less than it expected, which would have worried investors no end. Last October BAA predicted that its "adjusted EBITDA" would be no more than 5% below £1,015m, or at least £964m. It only just scrapped through with an adjusted EBITDA of just £968m. Failing to do so would have spooked creditors and lead to loans being withdrawn at the earliest opportunity.

The Department for Transport has been reviewing how it regulates the airport owner, and BAA told its investors that it expects to be subject to a "new duty on the regulator to ensure that licence holders can finance their activities". No money, no license, no airport. Not only does BAA have no money, it owes £11.4 billion to various creditors - the equivalent of at least three bankers' annual bonuses.

People of Britain: you remember the seventies. Rubbish pilling up in the streets, oil shortages, strikes, the three-day week and bloody ABBA. A nationalised airport would clearly be exactly the same. There's only one thing you can do to stop it: fly early, and fly often.

Gatwick bidders are too skint to buy airport

By Richard on 27/04/2009
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After a week in which we learnt that all the Gatwick bidders wanted a second runway we learn that none of them can even afford to buy the airport. Gatwick has turned into a 2-bed flat in Streatham, with buyers lying to get a mortgage and the owner hinting at conservatories and loft extensions.

Which presumably makes the credit rating agency, Standards and Poor's, a bit like the credit crunch in this over-stretched metaphor, shaking the property ladder and laughing as your chain collapses under the weight of its own bluster. They've refused to give any of the bidders an appropriate credit rating if they borrow more than £800 million - half of the airport's already reduced cost. Just last summer Gatwick was meant to cost £2 billion, but it's now down to £1.6 billion; today's news means it's likely to sell for even less.

BAA is clearly unhappy and trying to talk up the value; hence last week's scare stories about more runway potential. Returning to our metaphor, BAA wants buyers to think that Gatwick is a real fixer-upper, despite being poorly served by transport links and probably suffering from subsidence. An airport which can expand is worth more than one which can't, but it's worth nothing if your buyers can't afford it. S&P doesn't think much of these bids: one was described as "an aggressive financial risk profile characterised by relatively high debt leverage as demonstrated by an opening debt/RAB ratio of 54pc". I have no idea what that means, but it doesn't sound very good.

Perhaps now is a good time to remind BAA that Plane Stupid is happy to buy the airport, and that we'll close it and turn it into a newt sanctuary. Stopping all those flights is worth a fortune in carbon credits, and we'll give all the airport's staff jobs looking after our amphibian friends. BAA, if you're listening, just give us a call. Newts are cute and deserve a new home.

Aberdeen airport: BAA's claims ring hollow

By Anonymous on 16/03/2009
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On 3rd March we shut Aberdeen airport for 6 hours, cancelling 19 flights and disrupting a further 20. BAA claim that the disruption cost around £1 million, but strangely claim that it wasn't the airport operator who paid the cost, but the cash-strapped North East of Scotland.

This is clearly ludicrous. Aviation gets off very, very lightly: avoiding fuel tax, escaping without paying VAT on tickets and throwing some token APD about every now and then as tif to compensate. This all adds up: £9 billion annually across the UK. This revenue comes straight from other sectors in the economy and is incredibly regressive. We don't all fly equally; by giving the airlines an easy ride we are transferring cash from those who fly least to those who fly most, from the poorest to the richest.

In a year when schools and hospitals are struggling to keep afloat it makes no sense to let wealthy fliers off so easily. Britain has the most expensive walk-on train fares in Europe and inadequate north-south rail links; meanwhile the Government has reduced rail subsidies and wants to expand all the airports. If BAA really gave a toss about the North East it could always volunteer to be taxed like everyone else. Thought not.

BAA admits lying about third runway

By Richard on 16/12/2008
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Heathrow plane

In 1995 residents who lived near Heathrow received a letter through the post from Sir John Egan, then chief executive of BAA. He stated categorically that BAA did not want a third runway, and that Terminal 5 was not laying the ground for getting any additional airport capacity.

He wrote to them again in 1999 and went even further: "I can now report that we went even further at the Inquiry and call on the Inspector to recommend that, subject to permission being given for T5, an additional Heathrow runway should be ruled out forever." Heathrow boss Mike Roberts also wrote to residents to allay their fears about BAA wanting a third runway.

They were, of course, lying - and now Mike Forster, BAA Director of Strategy, has admitted it was all one big fib. When grilled about Egan's letters before the Heathrow Consultative Committee, Forster replied “Well, that's what he had to say to get permission for Terminal 5.” Well that's alright then. BAA has belatedly started being a bit more honest; last year their CEO refused to rule out a fourth runway when questioned by the London Assembly.