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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