expansion

Call me a softy, but I'm starting to feel sorry for the aviation industry. Last weekend we learnt that one airline a week is going out of business in the US, while oil prices have forced Australian flagship Quantus to ground some of its fleet. Then came the cherry on the cake: BAA, the UK's least popular airport owner, made a loss of £62 million in the first three months of 2008.

Quick to rustle up an excuse, the Heathrow bosses blamed the fiasco at T5, although seeing as this was entirely their fault, is a bit like saying "we're broke because we're crap" - not an excuse, but a reason. Apparently they were so determined to get the opening right that they spent £24 million on security and the like - presumably to keep out the scruffy protesters who flash mobbed them.

Sadly this loss just makes their selling Gatwick or Stansted all the more likely, increasing competition between airports and, as the Competition Commission made clear, increasing the calls for unbridled airport expansion - although if BAA keep losing money like this, they'll have to scale back their plans to bury Sipson under the tarmac...

Despite my last post on peak oil (and why we shouldn't rely on it) rising oil prices do impact transport and aviation growth. With oil currently hovering around the $128 / barrel mark, and widely predicted to hit $150 or even $200 / barrel by the end of the year, airlines are having to up their prices to avoid bankruptcy.

With no tax on aviation fuel the industry has no buffer zone: every dollar hike is another dollar that needs to be squeezed out of ever tighter margins. This weekend Richard Branson joined the doom-and-gloomers, predicting $200 / barrel oil in the very near future. Meanwhile BA is planning to ground planes because of rising fuel costs. The American market is widely tipped to implode if prices keep rising, and the British outlook is not so rosy either.

Meanwhile the government wants to expand airports all over the place, because demand for flights will keep going up - even if there's no airlines left to supply them. They claim that demand is inelastic - i.e. that it will remain constant no matter how hard it is stretched by rising prices. A Parliamentary Question last week showed the cause of their market-defying confidence: the government's modellers are working on the assumption that by 2010, oil will have rised to... $65 dollars a barrel. By 2020, the government is assuming that oil will have reached the staggering price of $75 / barrel. No wonder they think people will keep flying regardless...

London City Airport (LCA) is a small airport with big ideas. It submitted an application to expand flights by 50%; another application (due in June) will take flights to 176,000 by 2010. LCA claims to have brought prosperity to Newham but walking from North Woolwich to Silvertown shows no sign of it: roaring jets over head, no open spaces for recreation, a poor bus service, streets full of derelict buildings and a constant stream of taxis and chauffeur driven cars bound for the airport. The 'prosperity' LCA is so proud of arrives and departs in a car, leaving nothing for Newham residents - apart from the fumes and noise and inconvenience.

London City Airport and Newham Council claim to have carried out "extensive consultations", but many residents who live in the Royal Docks and surrounding areas have no idea about the expansion plans. They claim that the 50% increase in flights would only affect a very small area - wishful thinking, as the expansion will extend the noise contours over 26,000 residents in east and south-east London. Newham already has the worst housing shortage in the country and the highest asthma mortality levels in under 30s in the whole of the country - how much more suffering can the Council heap on it's constituents?

At the end of this month thousands of people are gathering at Hatton Cross to oppose the third runway and airport expansion. We'll be there of course, but the marchers might have a very special guest: rumour has it that God will be joining them.

OK, so maybe that's an exaggeration: God may or may not be there (it is, admittedly, hard to tell), but the Archbishop of Canterbury has given his backing for the demonstration, sending a letter of support to be read out during the rally. The Archbishop's spokesman told the Evening Standard: "He acknowledges the strength of support (against a third runway). He is aware of the problems encountered by churches on the ground across London. He is trying not to fly if he can help it. He has not flown at all this year."

As Bob Dylan explained back in 1964, having God on your side does make things a bit easier. Flippancy aside, the coalition of the unlikely is growing stronger and broader every day. Even the Evening Standard, voice of conservative capitalism, has switched sides, with a recent editorial opposing expansion. Ruth Kelly, Secretary of State for Transport, is well known as to be deeply religious. Will the Archbishop's support for the campaign sway her?