Examination of Witnesses (Questions 160
- 179)
WEDNESDAY 19 DECEMBER 2001
MR ED
ANDERSON, MR
KEITH JOWETT
AND MR
MIKE TOMS
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.
Chairman
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.
Chairman
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.
Chairman
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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