Birmingham Airport - General Thread

[Ray Finkle]

Apologies for interrupting the discussion but I think this is the best place for this.

A new Twitter account is now live with the aim of promoting Birmingham Airport and showcasing new airlines, new routes and any other events that come along. If anyone is a Twitterer then please take a look, if you know anybody that may be interested then please spread the word.

https://twitter.com/Hello_BHX

Please carry on the discussion as it's an interesting read

 

[Just Birmingham]

I fully understand the hub concept but based on your principle why don't we feed everyone through Heathrow ?

Plus it's a somewhat counter productive argument as the "hub element" is essentially provided by BA , the very airline who stand to have that connectivity diminish!

 

[Just Birmingham]

The new investment required from Heathrow shareholders is enormous: greater than the Regulated Asset Value of the entire existing airport plus there is no real “controlling mind” amongst the shareholders. Ferrovial is the lead investor but has the weakest balance sheet and has run its majority ownership stake down to 25%. The other investors are largely passive institutions (only one of which, owning 10%, is British)2.

While they say they are committed to expansion, there is no clear plan in the public domain as to how finance will be provided ?

Particularly unclear is whether a yet further increase in the debt/equity ratio is envisaged and how the risk of that is to be managed.

Moreover, if the new finance required dilutes Ferrovial’s ownership stake even further (because it fails to add new capital pro rata) there will be real doubts as to the governance of management’s execution of the project, increasing the risks of cost overruns and delays. Another aspect of financial risk which has not yet been addressed is the timing of the finance required. Because of the complications of the project, the great majority of the work associated with expansion at Heathrow, and the financing connected to it, must be committed to at its outset. Whether the markets will be prepared to bear the uncertainty that this entails is an assumption that has yet to be thoroughly tested. (As context, the Airports Commission analysis indicates that in the peak year of spend, Heathrow will need to raise £6 billion, a greater sum than any UK private entity has ever raised in the capital markets in a single year.)

These risks go both to the commercial viability of the project and to the Government’s reputation. In addition, it is possible that, as a project of national significance, a commercial failure in this respect could translate directly into costs to the taxpayer as the Government is called on to rescue the project.

Taxpayer Exposure or is everything in the garden lovely?

Yes £3 or £4 billion for M25 rail etc but at least another billion for "other" elements eg BT data centre.

Take that £4bn plus £6bn if things go belly up in construction stage plus the somewhat notorouis ability of experts to
Under estimate costs and hence my figure of £12bn "exposure"

And thats being generous at the bottom end of the estimate!

 

[Ray Finkle]

After the recent trade mission to Chicago and Toronto we will shortly see something similar heading to Delhi.

Meanwhile Me Kehoe plans to 'promote the hell' out of our region during his two year term as GBCC President.

http://www.insidermedia.com/insider...ands_news_tracker&utm_medium=business_article

 

[Coathanger16]

I fully understand the hub concept but based on your principle why don't we feed everyone through Heathrow ?

Perhaps I didn't explain myself very well - I'll have another go:

For the large majority of flights, people from the regions of course don't need to use Heathrow. Most regional airports have connections to all the popular sunny holiday destinations as well as various cities across Europe. For those wanting to travel outside of Europe, the larger airports (MAN, BHX, EDI, GLA) have flights to the Middle East hubs if you're wanting to travel east, as well as flights to New York if you are wanting to travel West. This doesn't make having a Hub airport in the SE irrelevant or unneeded.

Plus it's a somewhat counter productive argument as the "hub element" is essentially provided by BA , the very airline who stand to have that connectivity diminish!

Whilst its true that most connecting passengers will be flying BA, that's merely because they are the largest operator at Heathrow. I may have missed something, but why would their connectivity diminish? From or as a result of what?

 

[Coathanger16]

The new investment required from Heathrow shareholders is enormous: greater than the Regulated Asset Value of the entire existing airport plus there is no real “controlling mind” amongst the shareholders. Ferrovial is the lead investor but has the weakest balance sheet and has run its majority ownership stake down to 25%. The other investors are largely passive institutions (only one of which, owning 10%, is British)2.

While they say they are committed to expansion, there is no clear plan in the public domain as to how finance will be provided ?

Particularly unclear is whether a yet further increase in the debt/equity ratio is envisaged and how the risk of that is to be managed.

Moreover, if the new finance required dilutes Ferrovial’s ownership stake even further (because it fails to add new capital pro rata) there will be real doubts as to the governance of management’s execution of the project, increasing the risks of cost overruns and delays. Another aspect of financial risk which has not yet been addressed is the timing of the finance required. Because of the complications of the project, the great majority of the work associated with expansion at Heathrow, and the financing connected to it, must be committed to at its outset. Whether the markets will be prepared to bear the uncertainty that this entails is an assumption that has yet to be thoroughly tested. (As context, the Airports Commission analysis indicates that in the peak year of spend, Heathrow will need to raise £6 billion, a greater sum than any UK private entity has ever raised in the capital markets in a single year.)

These risks go both to the commercial viability of the project and to the Government’s reputation. In addition, it is possible that, as a project of national significance, a commercial failure in this respect could translate directly into costs to the taxpayer as the Government is called on to rescue the project.

Taxpayer Exposure or is everything in the garden lovely?

Yes £3 or £4 billion for M25 rail etc but at least another billion for "other" elements eg BT data centre.

Take that £4bn plus £6bn if things go belly up in construction stage plus the somewhat notorouis ability of experts to
Under estimate costs and hence my figure of £12bn "exposure"

And thats being generous at the bottom end of the estimate!

How does the "financial security" of Gatwick investors compare to what you have described at Heathrow?

Given the chair of the Airports Commission has a history of working in the financial sector, I'd find it difficult to believe he'd recommend something that in has such a serious risk of financial failure that you suggest.

Maybe it weakens their financial position, but its worth pointing out that over the last decade Heathrow have built £11bn worth of infrastructure on time and on budget - one of which has been voted the best airport terminal in the world on numerous occasions.

I'd also point out that whilst this is an interesting discussion, this is a Birmingham thread....haha

 

[Coathanger16]

I seem to remember hearing rumours about this happening on other threads:

http://www.mirror.co.uk/news/business/job-loss-fears-one-countrys-8993647

 

[BHXsupporter]

No planned traffic for the Star Trek convention in B'ham? Don't say the cast were taken to Heathrow or were they beamed direct to the meeting hall? Other arrivals may be Klingons but we'll not know it before they uncloak.

 

[JENNYJET]

It is likely that the eminent crew of the Enterprise were coddled in Business Class from LAX if traveling from the USofA but these conventions tend to be travelling circuses and they have used the Channel Tunnel to avoid pesky journalists!!

That said, some have travelled from LA due to commitments for this, the largest convention of the anniversary year. It is more likely that 'trekkies' have travelled from afar to attend this convention.

Had I been aware of this event I would have attempted my attendance however other matters have concentrated my mind. This is not te thread for personal matters so I shall leave the 'stars' to find the varied vessels to return to duty though I expect BHX to look after the 'fans' heading home until the next event, the location perhaps courtesy of CBS Studios.

 

[Ray Finkle]

Heathrow, Gatwick and Birmingham set to get go ahead

It is also understood that government will urge Birmingham airport to advance its proposals for an additional runway.

Birmingham airport was the only non-London based airport to not be entirely discounted by the Airport Commission’s report. The interim report stated that: “It would offer the largest catchment of people within two hours of the airport of all options. This is largely dependent on the journey time assumptions of HS2, which also makes the London airport system easier to access for passengers from Birmingham’s core aviation market.”

https://www.newcivilengineer.com/la...rmingham-set-to-get-go-ahead/10012673.article

 

[Coathanger16]

Heathrow, Gatwick and Birmingham set to get go ahead

It is also understood that government will urge Birmingham airport to advance its proposals for an additional runway.

Birmingham airport was the only non-London based airport to not be entirely discounted by the Airport Commission’s report. The interim report stated that: “It would offer the largest catchment of people within two hours of the airport of all options. This is largely dependent on the journey time assumptions of HS2, which also makes the London airport system easier to access for passengers from Birmingham’s core aviation market.”

https://www.newcivilengineer.com/la...rmingham-set-to-get-go-ahead/10012673.article

Although optimistic, I'd urge caution. There seems to be a few conflicting reports out there at the moment:

Times: Gov officials say PM will make a “clean” decision between Heathrow and Gatwick; not approve runways at each...

http://www.thetimes.co.uk/article/s...cking-to-heathrow-over-third-runway-jds55t52t

 

[Ray Finkle]

There is an interesting Twitter conversation with Mr Daniel Dalton who is the Midlands MEP and a big supporter of BHX.

I hope that copying Tweets isn't a copyright infringement? If it is I'll delete them.

Mr Dalton's Tweets are in bold.

https://twitter.com/ddalton40/with_replies

-The #HS2 station will be 2km from Birmingham Airport, so journey times would be far longer than the 40-minute claim

-no it wouldn't. A new terminal would sit on the #hs2 station, & new runway would be adjacent, scope 4 development is huge

-The proposed #HS2 station is on the other side of the M42!

-yes, new terminal would be on top of the #HS2 station & new runway would be on the other side of that.

-But wouldn't the existing terminal and runway still be used, in which case the transfer issue still stands? #HS2

-yes, as satellite stands,but the main terminal &check in would be above #HS2 station. Would be a very big airport

 

[Coathanger16]

Do you think he's referencing the as of yet unpublished master plan, or the proposal below which surfaced a few years ago and which I believe had since been dismissed.

Even if the new terminal was located on the site of the HS2 station, passengers from the existing International Station would then be faced with a 10 minute transfer to the new terminal.

Whilst HS2 "could" be a game changer for Birmingham by hugely increasing its catchment area, I'd urge caution. Even with a new terminal on the site of HS2, journey times to the airport would only be 40 minutes for those people living immediately around Euston Station in London. Add in the journey time to Euston and its unlikely people travelling up from London would get to the airport in less than an hour - not much better than access to current London airports. Even with HS2, I don't personally see many people travelling up from London, or even down from Manchester, Leeds or Sheffield (each with stations on the HS2 line).

The best use of HS2 for Birmingham airport would be to build new lines adjacent to HS2 connecting the airport (and Birmingham) directly to Leicester, Nottingham and Derby, providing each with an approx. 30 minute journey time to the airport. Think Midlands HS3/Crossrail. Combined with the current convenient connections to Birmingham and Coventry, this would certainly improve connections to the airport.

An even more ambitious proposal would be to build a circular rail route around Birmingham, connecting the Birmingham to Bristol line to HS2 at the airport. Besides giving Worcester, Redditch and Solihull direct rail connections to the airport, it would also provide onward connections to the HS2 network for services to the North. The line could also continue around the M42 to Sutton Coldfield, Walsall and even Wolverhampton.

The airport has recently commented that traffic on the M42 around the airport has meant people missing their flights. The obvious answer to this is get them off the roads and onto public transport.

 

[Ray Finkle]

Do you think he's referencing the as of yet unpublished master plan, or the proposal below which surfaced a few years ago and which I believe had since been dismissed.

Difficult to say, I don't know if he is 'in the loop'.

That plan was released as a vision a couple of years ago but I was under the impression that it was linked to a positive outcome of the Davies Report. Since then Mr Kehoe has commented in interviews that he believes the current site to be far too small for the type of growth that he would like to see, he has also mentioned a new terminal integrated with the HS2 stop.

It will be interesting to see what the master plan reveals when it comes out next year but I get the impression that those at BHX feel that this is too big an opportunity to miss.

 

[nwoody2001]

It's also worth reminding that twitter person that whilst the HS2 station is 2km away from the airport, there will be a high-speed monorail which will provide 4min connections between the station and terminal

 

[Butty]

I think you are right Ray. BHX has not been completely ruled out as an option. The airport would be wise to start planning now even if it is a long term option. Looking at that area the challenges are huge. If it was not for the impact on residential areas the old option of a new runway South of the airport is more practical. But alas we can or speculate.

There are other airports spread over huge distances. A light rail loop will take care of transfer times between terminals or just scrap the existing site and go with one huge terminal or the existing becomes a low cost terminal where there is less propensity to transfer. Lots of options.

Could be very exciting. One thing for sure though, we need that remote pier now.

 

[Coathanger16]

There are other airports spread over huge distances. A light rail loop will take care of transfer times between terminals or just scrap the existing site and go with one huge terminal or the existing becomes a low cost terminal where there is less propensity to transfer. Lots of options.

A single airport terminal will always be more attractive to customers than a multi-terminal, let alone one spread over that bigger site that a second runway at BHX would create.

In terms of feasibility, the best option would be to relocate most of the airport to the new HS2 site, perhaps keeping the existing airport as a low cost terminal aimed at passengers that aren't transferring between flights. Longer term, it would be best to relocate everything to the new site, with the potential for a second new runway to be built (creating 2 new runways at the HS2 site). Then close the existing site and turn it over to property developers and you've got enough brown field space for a new town with regional and national high speed rail, motorway connections and an airport right on your doorstep.

 

[Coathanger16]

It's also worth reminding that twitter person that whilst the HS2 station is 2km away from the airport, there will be a high-speed monorail which will provide 4min connections between the station and terminal

It is also worth pointing out that unless you live at or immediately by Euston station, it will take you much longer than 40 mins to get to BHX using HS2. It'll also probably be more expensive than catching a train to any other London airport.

 

[Ray Finkle]

As far as I'm aware the claims about the journey times are that Birmingham Airport will be within 40 minutes of London? I take that to mean Central London rather than the suburbs, which is likely to be where most inbound traffic would be heading.

A light rail loop will take care of transfer times between terminals or just scrap the existing site and go with one huge terminal or the existing becomes a low cost terminal where there is less propensity to transfer. Lots of options.

There are definitely plenty of options, can't wait to see their plans.

An article from Mr Dalton, excuse the line about Emirates daily A380 along with twice daily A330's

Daniel Dalton: Birmingham can be a new hub airport for London and the UK

 

[BHXsupporter]

Do send to your MPs!