Cheap flights bad...

[Moo]

as a business which is supporting the regeneration of seaside towns,

At a huge cost to itself and its shareholders, of course.

 

[Nemesis]

Well, naturally - as with all hotels, but the spin offs will be that numerous historic assets can be visited and retained if folks stay in this country and visit. They don't have to stay in Travelodges.

 

[Moo]

I take your point about spin-offs, but was just questioning the objectivity and level of philanthropic altruism that prompted them to conduct the enquiry.

All excellent PR for the firm that has recently ruined yet more of Norwich with its horrid buildings.

 

[Nemesis]

Well that's up to the planners and local people to seek a higher standard of design.

 

[Nemesis]

However, back to Stansted:

PRESS RELEASE

ISSUED BY STOP STANSTED EXPANSION 31 January 2008



MORE "IFS" and "BUTS" ON STANSTED NEW RUNWAY PLANS



In a further sign that BAA cannot make up its mind on the viability of a second runway at Stansted, the airport operator has warned its economic regulator the CAA of the need for a price settlement which delivers investment in new runway capacity. (Note 1) The clear implication is that BAA won’t build a new runway at Stansted unless the CAA allows a dramatic increase in the prices BAA is allowed to charge airlines and passengers.



In 2006 BAA told the CAA that a second Stansted runway was not commercially viable because it would not generate a sufficient rate of return even to cover its cost of capital. (Note 2) Since then BAA had been pinning its hopes on having Stansted removed from the regulatory framework so that it could raise airport charges to justify the cost of a second runway. However, Transport Secretary Ruth Kelly vetoed that proposal earlier this month. (Note 3)



Stop Stansted Expansion (SSE) Economics Adviser Brian Ross commented: "From our point of view there is nothing new or surprising in this latest statement from BAA but it completely contradicts the message coming from BAA management at Stansted, namely that "BAA is absolutely committed to the G2 project". (Note 4)



Mr Ross continued "Either BAA is trying to bluff the CAA or it is not "absolutely committed" to a second runway."



It is not only the CAA who are receiving this ambivalent message from BAA. The airport operator has also been assuring its lenders that its investment plans represent "an option to build, not a commitment to build." (Note 5)



BAA has a debt mountain of over £12 billion, and its Spanish parent company, Ferrovial, has net debt of £23.4 billion. Ferrovial's share price has halved over the past nine months and its debt is now a staggering 5.2 times the market value of the business. (Note 6)



Mr Ross concluded "This latest statement from BAA is the clearest evidence yet that its resolve to build a second runway at Stansted is faltering and, given all the circumstances, we do not find that at all surprising."



BAA is expected to submit its much-delayed planning application for a second runway at Stansted in March. SSE views this as a speculative exercise rather than a genuine signal of BAA's intent.



ENDS



NOTES FOR EDITORS



1. See BAA's formal response to the CAA's consultation on prices at Stansted, issued on 25 January 2008 and available on BAA website at http://www.baa.com/portal/page/Corporate%5EMedia+Centre%5ENews+releases/



2. Source: 'Airports Price Control Review: Initial Proposals for Heathrow, Gatwick and Stansted', CAA, Dec 2006 http://www.caa.co.uk/docs/5/ergdocs/airportsdec06/section4.pdf. Para 21.16 states: "BAA did not provide a view as to the future cost of capital at Stansted in its September 2006 regulatory submission, instead pointing out that its assumptions about the opening date and price resulted in a rate of return of just over 8% pre-tax real over Q5 and Q6. However, BAA subsequently wrote to the CAA indicating that in its current view the cost of capital at Stansted (on a pre-tax, real basis) was 8.79%."



3. Announcement by Secretary of State for Transport on 15 January 2008. See Department for Transport website: http://www.dft.gov.uk.



4. For example BAA Stansted Bulletin 30 November 2007. Copy available from SSE upon request.



5. BAA 'Debt Roadshow' Slide Presentation, 2006. Copy available from SSE on request.



6. Latest published financial accounts for Grupo Ferrovial SA can be found on Ferrovial's website at http://www.ferrovial.com/en/index.asp?MP=16&MS=284&MN=2 and show €31.1bn net debt (£23.4). Ferrovial's current market capitalisation is €5.9bn (£4.5bn) BAA/ADI's latest published accounts can be obtained from Companies House or from SSE upon request.





FURTHER INFORMATION



(Primary contact for this story) Brian Ross, Economics Adviser, Stop Stansted Expansion, 01279 814961, M 07850 937143, brian.ross@lineone.net
Carol Barbone, Campaign Director, Stop Stansted Expansion M 0777 552 3091, cbarbone@mxc.co.uk
http://www.stopstanstedexpansion.com

 

[skier-hughes]

Mr Ross continued "Either BAA is trying to bluff the CAA or it is not "absolutely committed" to a second runway."

Good business sense.

It is not only the CAA who are receiving this ambivalent message from BAA. The airport operator has also been assuring its lenders that its investment plans represent "an option to build, not a commitment to build." (Note 5)

Good business sense.

Means nothing at all, just propaganda, why don't they just stick to facts?

 

[Nemesis]

Well you have his e-mail address, maybe you can write and tell him? I'm sure he'll be thrilled to have your advice.

 

[skier-hughes]

I'm sure he won't even take an interest, so like many other people, blinkered in his views.

 

[middi]

Businesses in the travel industry shouldn't present " facts" to try and instigate debates as to how and where joe public should spend their hard earned free time. Even if their figures are correct Joe public will have the last word.

AS to their timing, well!, totally amateurish, middle of winter?

Take today, for example. Mr Joe, with a bit of money to spend and a few days off, has to decide what is best for his family mini break, after a small conference and 10 minutes on the web pages, and for hardly any difference in costs, they have a choise of travelling to the south coast or go to " costa plenty" or " lanzagrotty". The children and Mrs Joe are all for " a cheap flight abroad" whilst Mr Joe, a bit of a "green" person, would prefer a trip to the south " good old English food, what!".

Undecided he steps ouside the back door to take the rubbish bin to the front of the house for collection, it is raining heavily and to make matters worse a gust of wind blows him and the dustbin against the newly erected fence and totally demolishes it.

His reaction to the decision ?. No contest. " could you book that cheap flight, darling ?"

 

[Nemesis]

But Middi - you seem to have missed the point that this is a Commons Select Committee investigating this country's tourism industry - the timing is not of anyone else's choosing.

Graham - if you are so blinkered as to think not... well, sit and mutter into your beer. I think he probably knows quite well what he 's doing.

 

[skier-hughes]

Ok, if he replies I will, if not then I expect to see no more posts on Stopping Stanstead from you, deal?

Graham

 

[Nemesis]

Graham - your views on anything are of such supreme indifference to me that whatever you say just makes me smile with wry amuement. If you wish to tell him he is wrong do so, if not, don't. But it's a campaign press release.

But I will carry on posting exactly what I wish to post, within the rules of this forum. Other may wish to read it, in fact I know they do.

You are aware SPAB is part of all this I presume? Maybe tell SPAB it is wrong too?

 

[skier-hughes]

I see your faith in him replying to me has diminished!!

But it's a campaign press release.

And that is all it is, a campaign and he looks for the worst possible scenario in anything, I was just putting another side to it.

I don't see the connection with SPAB and the fact that a guy says that because a company has said it has an option to do something, rather than actually do something, is a victory to him, please explain.

 

[Nemesis]

I have no idea - try him. I am just one of the many supporters of this campaign, don't know him personally.

SPAB is part of the Stop Stansted campaign. Appeared at the public inquiry. Aren't you a member?

But this uncertainty is blighting people's lives, I gather you don't care about that.

 

[skier-hughes]

You've obviously forgotten what I was writing about, or chosen to ignore it.

Please re-read my posts and give a relevant answer rather than changing the topic, SPAB has nothing to do with it.

 

[Nemesis]

Not really - I think you've not totally understood what I've been posting about, clearly the whole issue you need to read up about, and I'm not at all interested in spending any time arguing with you.

Agree, don't agree, write, don't write, up to you.

 

[Flyfisher]

But this uncertainty is blighting people's lives,

Absolutely. I'm having all sorts of discussions regarding where to sow our cover crops for the next shooting season. Still, it doesn't look like they'll start building another runway until next year, so we should be OK for the time being.

 

[Nemesis]

I see school's out.

 

[skier-hughes]

Not really - I think you've not totally understood what I've been posting about, clearly the whole issue you need to read up about, and I'm not at all interested in spending any time arguing with you.

Agree, don't agree, write, don't write, up to you.

No, you see my arguement as being unbeatable and choose to ignore it and change the subject.

At least you won't be replying again, so we are sorted, phew!

 

[Nemesis]

Graham - I don't see what you are arguing about, I can't see any point in what you are saying as I thiink that you are simply contriving something out of nothing, and frankly I don't care what you think anyhow. I haven't the time to waste on you,and your silliness, I've got more important arguments to make than here with you, out in the real world.

If you want to go and argue with Mr Ross do, if not don't.