High Speed Rail - Transport Committee Contents

Written evidence from Star Alliance Services (HSR 148)

Star Alliance is the largest global airline alliance, carrying more than 600 million passengers each year on a fleet of over 4,000 aircraft, with annual revenues in excess of $150 billion. Our member airlines control one third of slots at Heathrow, one of Star Alliance's main global hubs. We therefore have a keen interest in the Committee's important Inquiry.

Star Alliance believes that there are a number of key principles to be considered in the relationship between Heathrow, HS2 and also classic rail. We are pleased to provide this response to some of the questions posed by the Inquiry.

1.  What are the main arguments either for or against HSR

Taking Europe as an example, our experience is that the European Commission's transport policy and member country transport strategies are well aligned in adopting an integrated, intermodal approach. These policies provide seamless connectivity between air and rail, providing an important argument for HSR by, for example, allowing the most appropriate modal choice for each journey, reducing the environmental impact of air travel by allowing rail access to airports, and releasing scarce capacity at slot constrained airports for long haul flights.

Star Alliance is concerned that the current consultation proposals on HS2 adopt a different approach, treating aviation and HSR in isolation, and with Heathrow served only by a remote rail interchange for at least the first phase of HS2. In our view, this does not assist either the argument or business case for HSR and, when considered alongside other constraints on Heathrow, puts the UK's competitive position at risk.

2.  How does HSR fit with the Government's transport policy objectives

3.  What are the implications for domestic aviation?

Heathrow has seen a steady decline in domestic destinations served, and the frequencies of those services that remain. In the absence of a rail alternative, this makes access from the regions to the UK's only international airport more difficult, directly affecting the UK's competitiveness.

HSR could improve access to Heathrow, which would benefit the UK economy as a whole and strengthen Heathrow's hub operations by enlarging its currently very limited, (principally London and the South East), catchment.

HSR could also potentially allow some domestic flights to be replaced by rail. However, with domestic flights accounting for only 6% of Heathrow's capacity, this would be unlikely to provide significant additional capacity. The majority of domestic destinations currently served from Heathrow would not be connected by HSR until phase 2 of HS2 and journey times, even by HSR, may not be competitive with air.

However, as discussed below, we do see potential for HSR to compete for interline traffic with short haul flights between some UK region's and European hub airports.

3.  Business case

1.  How robust are the assumptions and methodology - for example, on passenger forecasts, modal shifts, fare levels, scheme costs, economic assumptions (eg about the value of time) and the impact of lost revenue on the "classic" network?

HS2's business case appears to be flawed in its assumptions of Heathrow demand. This is significant as it has informed their decisions on the HS2 route, leading to the original proposal to bypass Heathrow altogether and the more recent decision to serve Heathrow via a spur, as a second phase of HS2, (with possible extension to form a loop as a third phase).

HS2 Ltd's have assumed that improving rail access to Heathrow has no effect on the airport's geographic markets and the size of demand within those markets. This appears to misunderstand the reality of airport markets. For example, Birmingham, although only 100 miles from Heathrow, currently generates very few Heathrow passengers. Whilst it is possible to drive to the airport, the UK's congested road network makes journey times unreliable. Rail access is also difficult, requiring a change of train in London, and a cross-London journey by Underground, and another change onto Heathrow Express or the Piccadilly Line. Research, and our experience, clearly shows that even one interchange in an airport access journey acts as a significant disincentive to choosing rail.

Birmingham therefore largely relies on short haul flights to European hub airports to access global markets. This is attractive to those airlines and airports seeking to attract transfer traffic and strengthen their hub operations at European hubs such as Charles de Gaulle, Schiphol and Frankfurt. It also weakens Heathrow's hub operations through reliance on smaller, less well connected markets.

Birmingham, and other UK regions without domestic flights to Heathrow, are also placed at an economic disadvantage in only being able to access global markets by short haul flights and interlining at European hubs. This increases overall journey times, with infrequent connections to hubs without Heathrow's high levels of connectivity and frequency. it also reinforces market perceptions of UK's regions peripheral location within Europe.

If HS2 served Heathrow directly this would provide very short journey times, avoiding interchange penalties, and providing access to Heathrow's global route network and high frequencies. It would also remove the interchange penalty associated with current access journeys, and the proposal for a remote interchange at Old Oak Common.

Taking the example of Birmingham, we would expect to see passengers choosing to travel by HSR to interline through Heathrow, instead of taking short haul flights to European hubs. With a high frequency of HSR services, and recognizing Heathrow's unrivalled service frequency and connectivity, we would also expect overall journey times from the regions to be reduced compared to interlining through European hubs, benefiting UK plc.

European experience clearly demonstrates that improving rail access increases an airports catchment area. For example, Frankfurt airport's direct high speed rail connection has brought much of Germany closer to the nation's hub airport, with almost 20% of air passengers now travelling over long distances to and from the airport by high speed train. This allows German regions to be internationally competitive, with direct access to the global route network and frequency that only a hub airport can provide. Improved accessibility also increases competition between airports, driving up standards and keeping costs competitive.

We would therefore expect an integrated, high frequency HSR service to expand Heathrow's catchment. HS2 Ltd's demand modelling, and the decision that HS2 should bypass Heathrow, therefore requires reassessment.

4.  The strategic route

4.  The Government proposes a link to HS1 as part of Phase 1 but a direct link to Heathrow only as part of Phase 2. Are those the right decisions?

As currently proposed, Heathrow will be reliant on a branch line connection with HS2 via a remote interchange at Old Oak Common until the 2030's. We do not believe this is acceptable, particularly when Heathrow's short term competitive position is threatened by the UK's approach to aviation tax, uncompetitive user charges and lack of capacity.

We would also urge Government to reconsider their proposals for a spur under phase 2 of HS2. Whilst this removes the interchange penalty that is unavoidable with the Old Oak Common interchange, a spur is likely to be served by a relatively infrequent service of trains compared to the main HS2 route between London and the north.

The current consultation does not include any detail of, or request comment on, the proposed spur or loop to Heathrow. We welcome Government's revised remit to HS2 Ltd, which has at least highlighted the flaws in the Old Oak Common interchange. However, it is not credible to proceed in isolation with significant decisions on a first phase of HS2 without considering how best to serve Heathrow, at least cost, with the least environmental impact and with the greatest overall benefits.

Heathrow's airlines and BAA have confirmed that a remote interchange is the least acceptable way of connecting HS2 and Heathrow.

Our analysis also concludes that a spur or loop have inherent disadvantages - they are costly to build and to operate, require two interchange stations at Old Oak Common, (for Crossrail) and Heathrow, and provide a much lower frequency service than a station on a through line. Airlines recognize the resulting service frequency penalty as having a significant effect on demand, comparable to an interchange penalty.

European experience, (Charles de Gaulle, Schiphol and Frankfurt), clearly demonstrates the benefits of HSR directly serving hub airports on through lines, not spurs or loops. Brussels, which has been restricted to access over a spur, is now reconfiguring its rail infrastructure at considerable cost to allow through HSR services. A direct connection between rail and air has also been proven to assist the business case for high speed rail. It also reduces cost and environmental factors, as it requires less route mileage, and only one interchange station.

We believe that proper assessment of an alternative HS2 route is therefore essential. This should assume an HS2 route at or near Heathrow, serving an "on-airport" interchange and providing a one seat ride to the airport from a range of destinations via HSR and classic rail.

We would make the important point that an "on-airport" station does not have to be located within the existing airport boundary, if this results in an unacceptable deviation of the HS2 alignment, significant journey time penalties for non-airport passengers or a significant cost penalty due to the inevitable challenges of major construction in, or under, the operational airfield.

Recognising that Heathrow occupies the smallest site area of any major international airport, and the dispersed nature of Heathrow's terminals, sites outside the existing airport boundary should be explored, particularly if this allows better connectivity and alignment with HS2, the existing rail network - particularly the Great Western Main Line - and the local motorway network.

The over-riding objective is not necessarily to minimise the distance between train and plane, but to balance journey time, seamless connectivity and costs, in order to achieve the best possible passenger experience and least environmental impact.

An integrated, intermodal solution, (along the lines of Arup's Heathrow Hub proposal), could also release valuable space within the airfield, allowing more space for larger aircraft, improving operational efficiency and resilience, improving air quality and enhancing the passenger experience.

We recognise that Government policy has the objective of a better, not bigger Heathrow. However, the reality is that Heathrow's passenger numbers are likely to significantly increase as the economy recovers, even with a two runway airport and without breaching current planning limits. This is outside of Government influence as market forces - in part influenced by changes in BAA's airport user charges - leads to airlines replacing small aircraft on short haul flights with larger aircraft serving long haul routes. We would argue that this, within a supportive and realistic policy framework, can provide significant, if not essential, benefits to the UK economy.

Without an integrated approach to improve Heathrow's surface access, such growth could have significant local impacts on road congestion and local air quality. It could also accelerate the UK's regions competitive disadvantage as domestic connectivity declines. In the worst case, it could herald the start of Heathrow's, and the UK's, decline as an internationally competitive hub.

We therefore believe that there is an urgent need for an integrated, intermodal, affordable and deliverable transport strategy to secure a sustainable future for Heathrow.

5.  Economic rebalancing and equity

4.  How should the Government ensure that all major beneficiaries of HSR (including local authorities and business interests) make an appropriate financial contribution and bear risks appropriately? Should the Government seek support from the EU's TEN-T programme?

Government has made clear that Heathrow's users would be expected to make a financial contribution to the cost of a spur or loop. The comparatively small benefits that could be provided by a limited service over a spur are disproportionate to the very high cost of infrastructure that is, by the nature of a spur or loop, only of benefit to airport users.

It is also not clear whether HS2 services would be required to operate on an entirely commercial basis. If that is indeed the case, we doubt whether Heathrow, although a major traffic generator, could provide the very large numbers of passengers necessary to provide a commercial return on services to a wide range of destinations, operating at a frequency high enough to overcome any service frequency penalty and justifying use of train paths on the main HS2 route, (since each Heathrow service would take up a path that could otherwise be used for London or European services).

There is a significant risk that, if a first phase of HS2 is built as currently envisaged, a spur, or even more expensive loop, may not then follow, as a result of funding and/or the lack of a credible business case. In either case, Heathrow, the country's only hub airport and the busiest international airport in the world, would be relegated to a remote HS2 interchange at Old Oak Common.

We therefore conclude as follows:

—  It is essential that HS2 and Heathrow are fully integrated as part of an affordable and deliverable intermodal strategy. Paris, Frankfurt and Amsterdam all provide precedents for this approach;

—  Heathrow's need for much improved surface access should not be solely focused on HS2, but as part of an integrated approach that includes early surface access improvements through seamless connectivity with Crossrail and classic Great Western Main Line services from the Thames Valley, Wales, the West and South West;

—  Heathrow requires an "on-airport" station on the direct high speed route in the first phase of HS2, not a remote interchange at Oak Common, nor a spur or loop, in order to provide the required range and frequency of services necessary to achieve modal shift, improve market access, and maintain Heathrow's international competitiveness;

—  An "on-airport" station does not have to be located within the existing airport boundary, if this results in an unacceptable deviation of the HS2 alignment or a significant cost penalty, and if an alternative site provides better overall connectivity and benefits.

We trust these comments are helpful and would welcome the opportunity to assist the Inquiry in any way that the Committee may feel appropriate.

May 2011

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Prepared 8 November 2011