Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 160 - 179)



Mrs Ellman

  160. Have you given any thought to the added costs being experienced by airport services?
  (Mr Jowett) By the service providers?

  161. Yes?
  (Mr Jowett) The Airport Operators Association also represents a lot of those service providers. They are incurring additional costs also: security companies, handling companies, catering companies are all having additional costs. To quantify those, we are not able to do that at this stage. It will take many, many months, I think, before anyone in the industry is able to come up with a good answer for that. It is probably likely to double or treble the costs of £15 million for security I have just mentioned.

  162. How much extra money have you received for security?
  (Mr Jowett) Nothing. From Government support?

  163. From Government?
  (Mr Jowett) No Government support at all and at this stage very few, if any, airports are seeking to pass on those costs to their customer airlines. That is, I have to say, something which probably could not be held for the longer term but for the short term, to help the airlines in a difficult time, obviously those additional costs have been held back.

Mr Donohoe

  164. Would you be prepared to supply us with a breakdown of the figures of the increased level of security as a cost, not today but at a later time?
  (Mr Jowett) We could do that for some of the principal airports perhaps, yes.

  Chairman: It would be helpful where there is a very large throughput.

  165. If you are looking for Government money, you would be prepared obviously, in these circumstance, to have that cost audited, would you not?
  (Mr Jowett) Absolutely.
  (Mr Anderson) Yes.

  166. Can I just ask you, Mr Toms, in connection with the airport development, what impact the events of 11 September has meant to the expansion of Heathrow and in particular T5?
  (Mr Toms) Yes. As you know the Terminal 5 planning approval has just been granted, for which we are extremely pleased, as I am sure you will appreciate. However, the planning approval is subsequently in the six week period during which objectors may appeal on a point of law against the approval and a slightly longer period under which they may appeal for judicial review. I hope you will bear with me if I want to treat this subject slightly delicately. The overall question you are asking I can answer fairly directly. We believe T5 is needed. It was needed before the 11 September. Traffic will return, it will be needed in just the same way. It is a medium term strategic investment project. For that reason we are pursuing it with the same vigour we were pursuing it before the 11 September.

  167. In particular on Gatwick, given the slackness that there is in terms of the number of slots which have been relinquished by British Airways, would you consider allowing a low cost airline into Gatwick?
  (Mr Toms) Certainly.


  168. I think Mr Toms told us easyJet have been talking to you?
  (Mr Toms) That is right. We try not to differentiate or distinguish between different categories of airlines. Any airline which wants to use our airports and can pay the standard rate of charges is welcome to do so.

  169. You are not proud, you take anybody's money, Mr Toms.
  (Mr Toms) Just about.

Mr Donohoe

  170. Why do you think the low cost airlines have never got into Heathrow?
  (Mr Toms) I think the prime issue is being able to build up enough slots to create a network or a frequency of service which allows you to market and sell well. To do that you have to have two or three routes five or six times a day. The difficulty of getting that large pool of slots quickly enough to get your low cost operation up and running is really quite a challenge for any low cost airline. Together with that, there are some low cost airlines for whom cost minimisation is so absolutely critical that they would rather pay the lower level of airport charges at other airports than go into Heathrow.

  171. Do you think there should be any interference by Government in terms of runways where if you look at terminals it is your responsibility to get that but it is Government which has to approve an additional runway, do you think that is right?
  (Mr Toms) I have to put the answer slightly in the negative in the sense that it would be almost impossible for any airport operator to pursue successfully an additional runway planning application without a clear Government policy framework. It is essentially a Government decision which is about public policy and trading off all the broader public issues as to when another runway should be allowed and where it should be. It is the job of the airport operators, if you like, having got that policy framework to pursue it and implement it.


  172. That is mildly disingenuous, is it not, Mr Toms, because the airport is your responsibility, you want to grow the airport, you cannot grow the airport after a certain point without extra runway capacity?
  (Mr Toms) It was not intended to be disingenuous. I find it difficult to encapsulate this more. The brutal truth is our experience from terminal developments is that without strong Government guidance as to when, where and what it wants, the public inquiry process and the planning process is greatly elongated; much more time is taken and it is much more difficult to secure a consensus.

  173. That is the method, Mr Toms. I am sorry to be pedantic. You are suggesting that the runway capacity is a matter for the Government but it must be a matter for the individual airport operator how much runway capacity they have presumably. So the initial decision surely is one for the operator and not for the Government Department?
  (Mr Toms) It is a combination of the two. I think that is well represented by the current serious process which the Government is undertaking. The Government is leading the process and looking towards, as we understand it, a decision which reflects Government policy but, as airport operators, we are supporting that process, giving technical and information support, because we want to get to a decision and because we want to get to a decision which can be successfully implemented.

Mr Donohoe

  174. Given the evidence we heard earlier from the airlines in terms of slots, do you think the ownership of slots should transfer from airlines to airports?
  (Mr Toms) That is a really very difficult question. It is difficult to imagine a structural situation in which suddenly we owned all the slots and we were renting them out to airlines.


  175. You would be a lot richer actually, Mr Toms.
  (Mr Toms) We would be a lot richer but I suspect the industry regulators would find a way to take most of it off us which is why I am not trying to give you an answer.

  176. I am very glad to have that assurance.
  (Mr Jowett) Chairman, I would say in principle we do believe the airports have a major interest in the slots and in financial output from them. The airports are key to providing and developing and delivering the capacity wherever that might be and, therefore, the airports should have a key role in the allocation of the slots and the usage of the slots and, of course, possibly in the way the monies flow in relation to them.

  Mr Donohoe: Why not go the whole way? Why not accept it is the airport which has all the costs. Why not transfer it over? Airlines for years gave us all sorts of strange answers to the suggestion that there was no buying and selling of slots. Now we know there are, surely in these circumstances it would be right for us to consider and for you to give an opinion as to whether or not these slots should be in the ownership of the airlines or the ownership of the airport?

  177. Or have you considered selling, as they do in the United States and as this Committee commented, on the gate facilities which would give you exactly that same control?
  (Mr Jowett) My understanding is that within European legislation we do not have the right to take control of either slots or gates to sell them.

  178. We are asking for an opinion and whether the Association has considered this.
  (Mr Jowett) We have certainly made our position clear to the Government. We believe that the airports should have a prime role in—

Mr Donohoe

  179. But you have not said that you want to take that into ownership?
  (Mr Jowett) No, we have not said that, you are quite correct.

  Mr Donohoe: Would you say that?

  Chairman: No, he is not going to say that.

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