1. Regional Air Access Presentation to NESTRANS February 2013 Laurie Price Aviation Consultant

2. The issues 1) Air access to Heathrow. Implication to: Help the NE Scotland economy UK economy The threat to regional links 2) Airport Charges and the CAA remit: Heathrow Gatwick Implication to travellers, the regions and NE Scotland 3) The EU role and UK policy 4) Night movement policy 5) The Davies Airports Commission

3. Heathrow Movement Allocation Arrivals Summer (Typical Week) Source: Airport Coordination Limited (ACL)

4. Heathrow Movement Allocation Departures Summer (Typical Week) Source: Airport Coordination Limited (ACL)

5. LGW – Summer 2013

6. DfT estimates of key airport capacity Source : Hansard Capacity Available: Heathrow 4000 ATMs - under 1% Gatwick 15,000 ATMs - circa 6%

7. London airport ranking – by type of airline operation Legacy 1.Heathrow 2.Gatwick 3.Stansted 4.Luton LCC / Leisure 1.Gatwick 2.Stansted 3.Luton Primary Connectivity = London Heathrow

8. 8 Market - Total terminal passengers at UK airports 1971 - 2011 2001 Terrorist Attacks 2003 Iraq War / SARS 1995 Introduction of Low-Cost Airlines 1988 Lockerbie 1991 Gulf War 1985/86 Libya/Chernobyl 1983 Europe Deregulation 1979 US Deregulation 1974 Fuel Crisis 1982 Falklands War 1981 Fuel Crisis + Recession 1977 Bermuda II Source: CAA Airport Statistics, OPEC 2008/9 Economic Crisis

9. 9 Terminal Passengers at UK Airports Annual Growth Rates 1971-2011 Source: CAA Airport Statistics, OPEC 1974 Fuel Crisis 1977 Bermuda II 1979 US Deregulation 1982 Falklands War 1983 Europe Deregulation 1985/86 Libya/Chernobyl 1991 Gulf War 1995 Introduction of Low-Cost Airlines 1981 Fuel Crisis + Recession 1988 Lockerbie 2001 Terrorist Attacks 2003 Iraq War / SARS Note: Historic oil price shown in US$ and the exchange rates between USD and GBP were not considered

10. 10 UK Global propensity to fly Source: Airbus

11. Department for Transport: Constrained Demand Forecast Source: DfT UK Air Passenger Demand and CO2 forecasts Latest Traffic Projections : 2030 320M – 345m. 2050 480m – 520m

12. Aberdeen London Links Heathrow – 8 services a day - BA Gatwick – 2 services a day – EZY London City – 3 per day (Mon – Fri) – BA Luton – 1 per day - EZY Only the Heathrow link offers the frequency and global connectivity that Aberdeen needs to sustains its economic development Before Virgin competing service of 3 per day introduced which will reduce BA frequency. Virgin service has only 6 year slot protection at Heathrow

13. London Airports achieve the highest passengers per movement in Europe Achieved at the expense of regional air service links and frequency

14. Lack of Capacity in London Source: Mott MacDonald Analysis of DfT forecasts

15. Runway capacity: London and UK regions London has insufficient runway capacity to meet demand –6 operational runways –130 million passengers –21.7 million passengers per runway Regions have excess runway capacity to meet demand –23 operational runways –88 million passengers –3.8 million passengers per runway But peripheral regions need London access, specifically to the Hub Source: Analysis of CAA Statistics,

16. Slot shortage implication to UK regional links 20 UK regional points lost access to Heathrow in last 30 years Frequency and competition on other UK regional routes to Heathrow reduced Only 7 UK points served to Heathrow – Leeds Bradford precarious. All remaining regional routes into Heathrow vulnerable to service / frequency reduction due slot shortage and increased airport charges Using scarce slot for an A380 is 4+ times more valuable than A319 Aberdeen very valuable for long haul connectivity and yield – Middle East and Houston key connections Government refusal to use EC Public Service Obligation protection Plymouth Airport closed due lack of PSO. Other airports and routes vulnerable 40+ French domestic routes slots protected by PSO

17. Airport Charges 1 UK major airport charges regulated by CAA. But subject to Government Policy :Better not Bigger Charges regulated against set criteria and allowing Return on Investment to efficient operator CAA allowed: –62% increase in Gatwick charges –3 x Inflation increase at Heathrow – Minimum per passenger fee £22 by 2014. Add APD means £35 of charges plus the fare to ABZ! FlyBe already pulled off routes due increased charges including ABZ – LGW. FlyBe blame current losses on APD and airport charges

18. Airport Charges 2 At Heathrow short haul / UK regional passengers paying increased charges to pay for facilities terminal facilities when they need runways and guaranteed connectivity CAA accept that following Government Policy means they discriminate against regional access CAA has no remit to encourage or recognise air service impact on: –Economic development –Employment –Peripherality

19. EU Aviation Policy and Regional Access EU responsible for setting broad policy including aviation and the regions Economically, EC keen to see greater economic and social convergence between periphery and centre Key issues for air transport and the regions The Airports Package and EC Slot Regulation Slot regulation currently being debated in European Parliament Debate over: – Use it or lose it percentage of use proposals –Length of slot series Possible opportunity for Regional lobby? UK odd man out in Europe in not using PSO protection for regional services to key hub airports EC has confirmed that PSO protection is Airport to Airport not City to City as DfT has maintained; fundamental to ABZ connectivity

20. DfT Night Movement Consultation DfT Issued 70 question consultation on Night movement policy in January 2013 Deadline for response 22 April 2013 Focus on Heathrow, Gatwick and Stansted and impact of night flights on sleep disturbance Will establish policy for night flying, feed into broader aviation policy and Davies Commission Initial response from industry and of relevance to NESTRANS Royal Mail and DHL need night flights to meet their service guarantees The Royal Mail used to operate from Gatwick but were forced out due to noise. The same could happen at Stansted, if the offset for more runways is a reduction in night time operations. The key is access time from the sorting centres in London. Move further out and the cut off and delivery times and guarantees worsen. Using East Midlands would add an hour both ways. Serious implication to Scottish business and commerce if night flight regime changed

21. Davies Airports Commission – Questions on Regional Connectivity Impacts on access to aviation connectivity Changes in access to aviation from key business districts and other areas reliant on international connectivity. Changes in access to aviation from major population centres, and areas of expected population growth. Improvements in access to international connectivity from areas previously poorly served. Changes in the overall numbers of people and businesses with access to international aviation services by public transport and by private transport. Impacts upon internal connectivity within the UK, and consequent access to international aviation services, including specific social and economic impacts on Scotland, Wales and Northern Ireland. Source: Airports Commission Discussion Paper February 2013 Page 19

22. Possible actions by NESTRANS Brief MPs, MEPs and MSPs and Lords Seek parliamentary questions / debates on –Air Services access to the hub and slots –PSO protection for UK regions –Airport charges and implication to regions Use EC Transport Commission contact / visit to influence airport policy at EU level and to pressurise UK DfT. Respond to DfT Night Noise Consultation Invite Sir Howard Davies to visit NE Scotland and the Highlands to see problem at first hand and register that NESTRANS will respond to the Commission Consultation Consider affiliation with Airports Regions Conference to gain European peripheral region support