Fares more likely to be lower with expansion at Heathrow

Heathrow

By Heathrow

Published 18th December 2014

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Expanding Heathrow will deliver greater reductions in ticket prices for passengers than expanding Gatwick, according to new research published today by the Airports Commission.

The findings are contained in new independent analysis conducted for the Airports Commission by the OECD and SEO economic research.

The research finds that even in the most favourable scenario for Gatwick, where the future of aviation is focussed on low-cost long-haul travel, Heathrow expansion will deliver greater benefits for consumers than Gatwick expansion.

The report puts the total benefit to passengers of expanding Heathrow over expanding Gatwick at £821m per annum in this scenario.

Demand outstripping supply at full Heathrow…

When passenger demand to fly exceeds the physical capacity of airports, ticket prices rise to balance capacity and demand. This results in higher prices for consumers than if there was sufficient airport capacity.

The report finds that the reduction in these “airline scarcity rents” is the most important element of the consumer price benefits that will flow from airport expansion.

Heathrow has been full for ten years and this capacity constraint means supply has not been able to keep pace with demand.

In its appraisal document last month the Commission’s recognised that a reduction in excess demand at Heathrow will contribute to lower fares.

It also found that “The potential of Gatwick expansion to reduce fare levels due to constraints in the London airport system is expected to be lower than at Heathrow across all scenarios as excess demand at Gatwick is currently lower than that at Heathrow.”

Today’s new research supports that conclusion.

Heathrow Chief Executive, John Holland-Kaye said: “This research shows that expanding Heathrow will deliver lower fares, new airline competition, and a greater choice of routes. It finds that the consumer benefits of expanding Heathrow are greater than expanding Gatwick in any future scenario” – John Holland-Kaye.

*1. The research “Impacts of expanding airport capacity on competition and connectivity” has been published today by the Airports Commission. The research was conducted by the International Transport Forum of the OECD with SEO Economic Research. 2. Tables 4.1 and 4.2 of the research show that the total benefits to passengers of different expansion options. The ‘Low-cost is King’ scenario, which is that considered most favourable to Gatwick’s case, shows consumer benefits of Heathrow expansion at £3,943m and consumer benefits of Gatwick expansion at £3,122m 3. Airports Commission appraisal document quotes from Business Case and Sustainability Assessment for Heathrow (Para 1.50, p.23) and Gatwick (Para 1.48, p.22).

Read the full report here.

From Heathrow to Mexico, or Aberdeen to Atlanta, 5,250,617 people in total will travel across several continents in the next 7 days to spend Christmas day with their loved ones. We’ve celebrated this with a new animation of their journeys!

This week marks the start of the holidays, with children breaking up from school and joining their families across the globe to spend Christmas together. 116,700 passengers are expected to depart from Heathrow on 19th December, with 698,438 passengers departing between 19th December and Christmas day.

Between 19th and 23rd December, 65% of all passengers from Heathrow will be travelling to visit friends and relatives, nearly double the rest of the year, normally 35.6% of passengers per month.

Over the next week 43,405 flights will depart and arrive from UK airports. Heathrow will account for 22% of these, mainly to long haul destinations, as part of the 64 UK airports helping get people away for Christmas.

Normand Boivin, Chief Operating Officer at Heathrow said, “Heathrow is proud to help take passengers further on their journey around the world for the festive season. This is such a busy and exciting time at the airport and the visualisation captures the service we provide for the world.

“As an added treat, on Christmas day we will also be offering festive flyers specially created boiled sweets in three flavours – turkey, sage and onion stuffing and Christmas pudding – so travellers don’t miss out on their dinner at 30,000 feet,”

Heathrow has today (December 15, 2014) launched the #fly2scotland Instagram competition to celebrate the Visit Britain GREAT campaign, giving our followers a chance to win a weekend away in Glasgow.

The competition has been launched to coincide with four new animated VisitBritain GREAT campaign images of Scotland going live across Heathrow this festive season and attract more international visitors to Scotland.

In a joint initiative combining VisitScotland, VisitBritain and Heathrow, the adverts will be showcased across 326 digital screens in the airport’s five terminals for the next three months.

The animated images make up the fourth round of GREAT campaign advertising to feature across the airport this year as part of a 12-month £4 million advertising package granted by Heathrow to help VisitBritain promote the country’s nations and regions throughout 2014.

How to enter the competition

To celebrate this final stage of the partnership, we are hosting a competition open to all @heathrow_airport Instagram followers encouraging them to share a photo that epitomises Christmas in their region using the hashtag #fly2scotland.

One randomly-selected winner will receive a weekend getaway for two in Glasgow, including return flights from Heathrow to Glasgow and two nights’ accommodation. The competition is open from 15 December until 11:59pm on 28 December 2014.  Terms and conditions are available here.

A boost for Scotland…

The first six months of 2014 equated to the strongest first half of a year for inbound tourism to Scotland since 2008. From January to June 2014 Scotland welcomed 1,119,000 inbound international visits – an uplift of 16% on the same period in 2013 and the highest number of visits for six years.

The amount spent during visits to Scotland in these first six months was £631 million.

Heathrow CEO John Holland-Kaye said: “With 255 weekly departures to Aberdeen, Edinburgh and Glasgow, Scotland is by far one of the airport’s favourite UK destinations. This partnership with VisitBritain was designed to inspire passengers to explore further afield in the UK during their visit – or on future trips and we think it’s been a fantastic success.”

“The variety of adverts that have appeared across the airport over the last nine months have been breath-taking and we know our passengers have found them stunning to look at. Scotland is a beautiful country and we want to play our part to educate and encourage our passengers of the breadth and beauty that the whole of the UK has to offer. We hope these ads will support Scotland to benefit from their direct link to the UK’s only hub airport.” – John Holland-Kaye, Heathrow CEO

The Scotland Office Minister David Mundell said: “Heathrow is a gateway to the globe and a hub for businesses and tourists from across the world and this latest GREAT campaign will showcase the very best of Scotland, from our food and drink to our heritage at the UK’s busiest airport.

“Through the UK’s extensive diplomatic, trade and consular network GREAT has been a tremendous success across the world and I have no doubt this latest campaign will enhance Scotland’s outstanding international profile even further.”

#fly2scotland Competition Terms and Conditions*

Download the competition Terms and Conditions here.

Visit the @Heathrow_Airport Instagram account now.

The flights are booked and the bags are packed. The kids are wrapped in their warmest clothing and the iPad is charged and preloaded with Frozen on repeat. With so many things to think about at Christmas, here’s a few reminders of the little things that can make the world of difference when going on holiday. With a pinch of forward thinking, and our Christmas tips below, you will have a recipe to success ready before you fly:

1. Allow for additional travel time

It may seem obvious, but nothing can dampen your Christmas cheer quite like a rushed journey to the airport. Be sure to leave ample spare time, check for any planned travel disruptions and know your flight departure time. Simple preparations such as ensuring your under-100ml liquids are already placed in a compliant plastic bag, double-checking your airline’s hand luggage allowance, and your flight status on your airline’s website can help streamline the check-in and security screening processes. Check out our recommended check-in times and follow us on Twitter (@Heathrowairport) to for the most up-to-date information.

2. Duty free shopping

Many passengers take advantage of the discounted shopping at Heathrow for last minute stocking fillers. Duty-free alcohol and fragrance purchases are particularly popular. These items can be in addition to your hand luggage however, if your journey involves a transfer or transit in another airport, please let the World Duty Free travel cashier know. This will ensure your items are properly packaged in a sealed bag for your onward journey. World Duty Free have a wealth of information on their website if you’re still unsure about your purchases.

3. Keep your Christmas gifts unwrapped

If you’re packing your Christmas gifts within your hand luggage, we recommend keeping them unwrapped just in case our security team is required to examine the contents. We would hate for late night ribbon curling all to be for naught! We’re offering complimentary gift-wrapping for all items purchased after security – all the more reason to arrive early and enjoy the perks of crossing off your Christmas gift list at Heathrow!

4. Snow globes

Snow globes are always a popular gift item this time of year. If you’ve bought one as a gift, we wouldn’t want to shake things up but they contain liquid and are therefore subject to the standard restrictions. This means they must contain no more than 100ml and be clearly marked. As most globes don’t have the volume listed on the side, we suggest wrapping them carefully and packing them in your hold luggage.

5. Christmas crackers

Crackers are a Christmas tradition and many of you will want to share these with family and friends. Keep them in their original sealed retail packaging to ensure they can be taken through security in your hand luggage. It’s always best to check with your airline directly too, as some may not permit these on board.

Once you arrive at the airport remember our team of Heathrow Ambassadors (they’re dressed in purple) are here to help. You can find them in the departures area and throughout your journey at Heathrow. For further helpful information and a list of FAQs visit our website.

We look forward to seeing you soon.

Follow us on Twitter @HeathrowAirport or Facebook for up to date information on the airport and advice while you’re travelling!

In recognition of its work to improve local air quality, Heathrow Airport has won the title of greenest business of the year at the 2014 West London Business Awards.

In its assessment, the West London Business awards committee considered the goals laid out in Responsible Heathrow, the airport’s sustainability strategy, including the airport’s pledge to reduce ground-based NOx[1] emissions (aircraft, airside vehicles and airport related traffic) by 5% by 2020.

In line with this policy, this year the airport has:

  • Promoted the introduction of next generation aircraft with lower emissions;

  • Added new electric vehicles to those in use at the airport, which already operates one of Europe’s largest airside electric vehicle fleets;

  • Hosted the UK’s first publically accessible hydrogen fuelling station

  • And introduced hybrid buses around the airport, in the UK’s only airport free travel zone.

Through these steps and other activities, Heathrow has reduced NOx emissions from every source since 2009, for example, from airside vehicles by 28%, and from heating plant by 70%.

Heathrow’s Director of Sustainability, Matt Gorman said the benefits Heathrow brings to the region are not at the expense of local air quality.

“Heathrow Airport has and continues to be a major economic driver in our region, and an indispensable part of London’s business community,” Matt Gorman said.

“We believe the benefits Heathrow brings need not come at the expense of local air quality, and we are committed to reducing our environmental impacts and acting a good neighbour to local residents.”

“That is why this recognition is so important to us, and why we will continue to work to maintain our place as West London’s greenest business.”

West London Business

West London Business Chief Executive Frank Wingate praised Heathrow for winning the award.

“Well done to Heathrow for winning the Green Award at the West London Business Awards. The airport has put in a lot of work in recent years to meet its environmental challenges and our judges were impressed by both the scale of the work and the measurable achievements, in what was a very competitive category,” Frank Wingate said.

“This is an aspect of Heathrow’s work that is not generally recognised.”

[1] Emissions of oxides of nitrogen (NOx) are important as they contribute to concentrations of Nitrogen Dioxide (NO2), a pollutant regulated by the EU.

Heathrow’s Primary School Challenge Programme has been awarded the 2014 Malcolm Gibbons Cup in this year’s Spark! Partnership Awards, which highlight leading examples of successful collaboration between education and the local business community.

Heathrow’s Primary School Challenge inspires local students to explore careers in engineering and address a growing national skills gap in this field.

Students learn the engineering story of Heathrow’s Terminal 2, are then encouraged to draw up designs for their own terminal, and finally, turn their designs into a reality using STIXX – an environmentally friendly piece of technology that turns newspapers into building rods.

This year, the 8th annual edition of the Challenge involved an astounding 52 schools and 3,250 students in the five surrounding boroughs to the airport – Ealing, Hounslow, Hillingdon, Slough and Spelthorne.

Over 20,000 students in 8 years…

Sundeep Sangha, Head of Economic Development at Heathrow said it is an honour for Heathrow’s work to be recognised with the prize.

“We are very pleased to be the recipient of this year’s Malcolm Gibbons Cup and see the Heathrow Primary School Challenge recognised as a leader in work-related primary school programmes,” Miss Sangha said.

“Over the years, 20,741 year 5 & 6 students have benefitted from the skills taught in the Challenge and undoubtedly many of them have been inspired to pursue careers in engineering. Raising aspirations and academic achievement is the true mark of success for this programme, and why it is so popular each year.”

Rachel McAdam, Fundraising Manager from Spark! Partnership added, “We were impressed by the focus and commitment from the Heathrow Education Team in helping young people to learn about careers at the airport, and were pleased to be able to hand over the cup to recognise the success of the Primary School Challenge.”

Spark! looks forward to ongoing collaboration and thanks Heathrow for their hard work and support.”

Now entering its 35th year, Spark! is a charity bridging the gap between schools and business, helping young people to understand the world of work. Formerly the Hounslow Education Business Partnership, Spark! held its 28th Annual Partnership Awards event on 20th November 2014.

Schools across the five boroughs neighbouring the airport will soon be receiving an email invite, and contact details for the 2015 Heathrow Primary School Challenge.

Heathrow has launched an over 90ft tall interactive Christmas tree which lights up as users tweet the hashtag #T2Christmas.

Working with Fisher Productions, Heathrow has installed the giant vinyl tree in the courtyard of the new Terminal 2 | The Queen’s Terminal for hundreds of thousands of passengers to enjoy between now and January 6, 2015.

The tree has a vintage feel, reminiscent of the Christmas trees the Queen would have enjoyed as a child, topped with a replica of her iconic coronation crown.

Normand Boivin, Heathrow’s COO said: “Launching the Terminal 2 Christmas tree with the first tweet was brilliant fun. It is a fantastic piece of technology and really adds a festive touch to the terminal. We’re certain our passengers will enjoy taking part in lighting up the tree and look forward to hearing their thoughts through Twitter.”

There’s also an associated competition for Twitter users to win not one, but two iPhone 6 mobile phones. For more details and terms and conditions, visit: http://www.heathrowairport.com/static/Heathrow/Downloads/PDF/t2-christmas-t&cs.pdf .

UPDATE (Oct 25, 2016): The UK Government has today announced its support for expansion at Heathrow as its preferred option for new airport capacity. We’ve launched a new site area for the local community with easy to access information: Heathrow.com/localcommunity

Heathrow has announced plans to extend its property compensation scheme should an additional runway be built at the airport. In May, the airport announced plans for 25% above market value compensation for 750 homes that would be subject to compulsory purchase.

Having listened to local residents, Heathrow is now proposing to extend this offer to cover homes that will be in close proximity to a new runway but will not be compulsorily purchased.

How is the improved scheme different?

Under the improved scheme, residents living in communities close to a new runway will have the choice to either remain in their home or sell their home at 25% above market value once the new runway has been constructed.

Homeowners in Poyle, Colnbrook, Brands Hill, Harmondsworth, Sipson, Harlington and Cranford Cross will be covered by the improved scheme.

Properties in Longford and parts of Sipson and Harmondsworth are covered by the previously announced compulsory purchase area scheme.

Listening to local resident feedback

The proposal is in response to feedback heard at public consultations between 21st July and 12th October of this year. Local people said they:

  • welcome the proposal to offer 25% above market value compensation plus legal fees and stamp duty costs on homes that will be compulsorily purchased;

  • want the airport to recognise that a new runway will have an impact on homeowners close to the new boundary of the extended airport;

  • are concerned that property prices will be blighted in the areas close to the boundary of the extended airport;

  • want to avoid a situation where next door neighbours or homeowners on adjacent streets are entitled to different compensation.

Some people in this area will want to remain in their homes if the airport is expanded, others will want the option of moving out of the area.

You said, Heathrow did

In response to this public feedback, Heathrow is:

  • confirming its intention to offer 25% above market value compensation plus legal fees, plus stamp duty costs for anyone whose home will be compulsorily purchased;

  • extending this scheme to cover homeowners in close proximity to the new airport boundary whose homes do not need to be compulsorily purchased;

  • giving people the choice of remaining in their homes or moving out of the area and receiving compensation;

  • announcing the scheme now and including a 25% above market value premium to avoid blight to property prices and keep the local property market buoyant;

  • proposing a single, simple and easy-to-understand flat rate of 25% above market value compensation rather than different bands of compensation for different communities;

  • applying the proposal to homeowners in Poyle, Colnbrook, Brands Hill, Harmondsworth, Sipson, Harlington and Cranford Cross rather than having scheme boundaries that cut across communities.

People also said they want local villages to retain a vibrant local community feel. Where Heathrow purchases a property from a homeowner it will refurbish and sound insulate the property before reselling it on the open market.

This will give those people who want to leave the area the option of doing so but ensure those who remain still live in a functioning community.

The offer is subject to regulatory approval by the CAA. Approximately 3,750 homeowners’ properties would be eligible for compensation under the revised scheme.

Continuing to work with local communities

John Holland-Kaye, Heathrow’s Chief Executive Officer, said the improved proposal shows how Heathrow is listening to local communities.

“Our proposals for expansion at Heathrow have been developed with input from local communities. We are committed to treating people fairly. People told us that we should extend our offer to local homeowners living close to the airport, and we have listened,” John Holland-Kaye said.

“Now we want to work with local communities to ensure that local people secure the jobs and growth that expansion at Heathrow will bring.”

Heathrow will be issuing its full response to the recent public consultation, including more details on noise and property compensation, in early 2015.

Local community hotline plus Q & A

Heathrow has set up a local community hotline for residents within the adjusted property compensation proposal. If you live in these areas contact 0800 344 844 for more information.

We’ve also published a Q & A on the new proposals which can be found here.

Related information:

Heathrow has today released an updated property compensation proposal in the event of an additional runway.

Why have you made this offer?

A new runway at Heathrow may cause blight to those homes which are located closest to it. That means that there may be some potential loss in value to peoples’ property. We understand this and have developed a property compensation scheme to take account of it. During our recent public consultation on noise and property compensation we undertook to come up with a concrete proposal before the end of 2014 once we had had time to understand peoples’ views.

We have announced it because we believe it is the right thing to do to give local people, as soon as we are able to, clarity about where they would stand if our expansion proposal was to go ahead and give them the information they need to plan their lives.

What is the offer and who is it for?

For homeowners within the scheme boundary we will buy their home at its unblighted market price and give them an additional 25% of that amount to compensate them for the loss of their home. We will also pay their normal costs associated with moving house: stamp duty, legal fees and removal costs.

Home owners who have bought their home since December 2013 (the date the Airports Commission short-listed our scheme) will not be eligible for the offer, unless they have bought a property that was already eligible under the scheme.

Will landlords be eligible?

Social housing landlords (e.g. Local Authorities and Housing Associations) will not be eligible. Private landlords will not be eligible for the offer unless they only own one property. Private Landlords who buy properties from eligible home owners before the scheme closes will receive the 25% home loss payment if they subsequently sell the property to us.

Where is the scheme boundary?

It covers the areas closest to the new runway: Colnbrook, Poyle, Brands Hill, Harmondsworth, Sipson, Harlington and Cranford Cross. Please refer to the attached drawing for the boundary detail.

How many homes will be covered by this offer to buy scheme?

Including the offer already made for the homes within the CPO zone the new offer will cover approximately 4,500 homes.

What take-up rates have you assumed?

We have assumed that between a half and three quarters of those people who are eligible may choose to sell their properties to us.

What does the unblighted market price mean?

Each house will be individually valued to determine its unblighted value at the time of sale. This will be the value the property would have had if a third runway at Heathrow had not been proposed.

What are you going to do with these properties that people sell to you?

Initially we intend to refurbish and appropriately sound insulate all the homes and let them. Subsequently it is likely that we would re-sell the bulk of the properties, but this would need to happen gradually over an extended period so as not to distort the local housing market. Local Authorities and social landlords have expressed interest in purchasing some of these properties from us.

When can those people who are eligible expect you to buy their homes?

We would open the scheme after we have received planning permission and once we begin construction of the new runway. Our current expectation is that this would be in 2020. The scheme would remain open until a year after the new runway has begun operating so that local people have as long as possible to decide whether they wish to move away. The scheme would then be closed and no further purchases will be considered.

What if people need to move away before the scheme opens? Will you buy their home earlier than the date indicated above?

We believe that the nature of the offer we have made will help to keep the housing market in the affected area buoyant and enable people to continue to buy and sell their homes if they wish to do so. In the period before a Government decision on Heathrow expansion we do not believe that it is appropriate at this stage to have in place a “Hardship” scheme.

If people are finding it difficult to sell their home what should they do?

Initially, they should talk to an agent on the Heathrow Property Partnership list who understands our offer and can advise them on how best to market their home, as well as providing prospective purchasers with the details of our scheme. We believe that the nature of the offer we have set out above should mean that there are prospective purchasers who will be interested in buying properties that are eligible for purchase under our scheme.

As the certainty of our scheme going ahead grows, so will the prospect of eligible properties becoming worth 25% more than their unblighted price. This should enable vendors at the very least to achieve the property’s unblighted value. As time progresses it may also be possible for them to achieve even higher values.

If the vendor still experiences problems in selling their home even when correctly marketed and valued, Heathrow may able to assist by putting vendors in contact with prospective purchasers who are already known to us and who are familiar with the terms of our offer.

What role will Estate Agents play in this process?

It will be critical that Agents are able to both correctly value peoples’ homes and correctly market them. This will require an understanding of the terms of our scheme and its effect on the local property market. We hope that this briefing will assist in beginning this process.

Read the full announcement:

Heathrow

By Heathrow

Published 1st December 2014