Ascend survey reveals industry has little appetite for a new London airport; BAA takes the heat
Heathrow, London, 8th July 2008
London’s airports do not have capacity to cope with growth of the next five years
Relieving congestion at London airports means improving airport access and expanding Heathrow and Gatwick
BAA’s operational and customer service performance – not good enough
These are the key findings of a survey among aviation industry professionals, conducted by Ascend , the world’s leading provider of information and consultancy to the global aerospace industry. The Ascend survey reports on the views of over 100 industry insiders on many of issues being explored by the UK Competition Commission in their current investigation into ownership of UK airports.
Running out of room
The survey reveals that more than 60% of aviation professionals think there is insufficient capacity at London’s airports to cope with increases in demand in the next five years. Some 26% feel there will be enough room at the capital’s airports. Figures from the CAA show that London’s airports are already operating close to capacity and air passenger growth at airports in the south east of England is currently projected at around 2% per annum.
Transportation not taxation
For those surveyed, access to airports is a big issue. In particular respondents highlight the need for improved rail access to airports and better regional links to major airports. Many also pointed to the need to expand capacity at Heathrow and Gatwick, while the potential of a completely new London airport received little support. There was also little enthusiasm for tactics to suppress demand through increasing ticket prices or landing fees.
“I think it will surprise a lot of people that aviation professionals see access to airports as a major barrier to dealing with the UK’s airport congestion,” says Gehan Talwatte, Managing Director, Ascend. “All too often the industry is painted as only ever calling for more and bigger airports, yet here we see there are other priorities. Yes there is an argument for expansion at Heathrow and Gatwick, but at the same time a lower priority is given by respondents to expansion of Luton or Stansted, and there is only limited interest in a totally new London Airport.”
BAA under fire
The survey delivers a highly critical assessment of BAA’s performance. The airport operator’s operational performance is ranked as ‘poor’ or ‘very poor’ by 70% of the professionals who responded to Ascend’s survey. On customer-service, 80% ranked BAA’s performance as ‘poor’ or ‘very poor’. At the same time there was recognition of the financial performance of BAA, with 46% considering it satisfactory.
On the question of how to deal with BAA’s poor performance the survey sends a strong message to the Competition Commission. Over 70% of respondents disagreed or strongly disagreed with the statements: ‘The current ownership structure of airports in London serves the best interest of the travelling public’ and ‘The current ownership structure of airports in London serves the best interest of the travelling public’.
“What we see here is a real vindication of the Competition Commission’s decision to press ahead with its inquiry into BAA,” says Talwatte. “There is clearly a feeling among the aviation professionals surveyed that while BAA’s financial performance has been adequate, the price of this has been too high, and that passengers and the airlines have all suffered as a result.”
Cautious about growth
Looking at industry prospects for the next five years, respondents indicate their view that low cost carriers and long haul scheduled services show the strongest prospects, while the prospects for growth among charter services and other short haul scheduled services are much less.
-ENDS-
Notes to editors:
Respondents to the Ascend Survey, June 08, survey come from a cross section of the industry and include aviation financiers, lessors, insurers, major aircraft manufacturers, and airline fleet analysts.
