High Speed Rail - Transport Committee Contents

Written evidence from British Airways (HSR 165)


1.  British Airways welcomes the opportunity to contribute to the Transport Select Committee's inquiry into the Strategic Case for High Speed Rail. The inquiry is timely and seeks to address the key themes in the current debate.

2.  In this memorandum, British Airways has focussed its response on the impact of High Speed Rail (HSR) on UK aviation, and in particular, offers a perspective as a Heathrow-based carrier. It has addressed issues of concern to its business and the aviation industry.

3.  British Airways is one of the world's largest international airlines, carrying approximately 32 million passengers worldwide annually on around 750 daily flights. The airline employs almost 40,000 people, the vast majority of these at its sites throughout the UK.

4.  The airline's two main operating bases are London's Heathrow and Gatwick airports, with a smaller base at London City airport serving New York and European business destinations. From these, British Airways flies 237 aircraft to 152 destinations in 75 countries. In addition to passengers, the airline also transports cargo—more than 750,000 tonnes of cargo are carried around the globe each year.

5.  In 2010, the airline completed its merger with Iberia of Spain to create the International Airlines Group (IAG). Our combined business offers flights to 205 destinations throughout the world on a fleet of 415 aircraft. It also commenced a joint business agreement with American Airlines, which further extends the benefits for its customers. The combined network of British Airways, Iberia and American Airlines serves 433 destinations in 105 countries with more than 5,180 daily departures.


6.  British Airways believes the optimal High Speed Rail (HSR) scheme for the UK should operate the mainline via Heathrow between Birmingham and London and include a High Speed 2 (HS2) station at the airport. This would allow all trains to stop at the airport, maximising connectivity to destinations on the network and allowing maximum economic benefits and carbon reductions to be realised. This scheme would have the most compelling business case for airlines and would go furthest to realising the Government aim of air-rail substitution.

7.  The above model is the one used throughout Europe for integrating new high speed rail lines with existing hub airports. At Paris Charles De Gaulle, Frankfurt and Amsterdam the high speed mainline runs via the airport with the station located at the terminal of the main network airline—Air France, Lufthansa and KLM respectively. British Airways believes that this model should be adopted for HS2.

8.  However, the scheme currently proposed would see a spur from the HSR mainline connect to the airport from a northerly direction. This would allow some, but not all, HSR trains from the UK regions to access Heathrow directly. These HSR trains would terminate at the airport, whilst other London-bound high speed trains would not call at it. Heathrow would also be unable to directly serve passengers travelling to and from Europe on High Speed 1 (HS1).

9.  Whilst this scheme may provide adequate capacity for some UK air passenger markets to access Heathrow, it is less desirable when compared to a scheme that has the high speed rail mainline routeing through the airport. The scope for air-rail substitution, economic benefits and carbon reductions will be reduced. The proposed scheme could still be beneficial for airlines in terms of increased connectivity and access to UK and near-Europe markets, however the business case for investment would be much more challenging for airlines.

Section 1: What are the main arguments either for or against HSR?

10.  British Airways supports the strategic case for development of a HSR network in the UK that is directly connected to Heathrow, the UK's only hub airport. Key arguments for such an integrated transport system include:

—  Improved connectivity across the UK and onward to international destinations.

—  Economic benefits from increased connectivity and productivity.

—  Potential for air-rail substitution—dependent on infrastructure, HS2 fares and codeshares (joint airline-rail marketing of services).

—  Reduced carbon emissions.

11.  British Airways intends to respond to the Government's consultation on development of the proposed network to discuss the scheme detail and business case for HSR from an aviation perspective.

Section 2: How does HSR fit with the Government's transport policy objectives?

2.2  Rail funding

12.  British Airways believes the funding of HSR should not detract from investment on the "classic" network. In particular, there are a number of current schemes and proposals that could benefit Heathrow Airport, and it is important these are not sacrificed because of funding constraints. These include electrification of the Great West Mainline; a "Western Connection" from Terminal 5 allowing South West Mainline and Great West Mainline trains to connect directly to the airport; and increases in track capacity between Heathrow and Paddington.

13.  There are also significant benefits that improved rail access in the London area (eg an "Airtrack"-type scheme) and better connectivity to South Wales, the South and South West England would deliver as well.

2.3  What are the implications for domestic aviation?

14.  British Airways has provided detailed responses on the impact for domestic aviation in previous submissions to consultations by High Speed Two Ltd, the Department for Transport and the Mawhinney Review. These are available for the Committee on request.

15.  In summary, we believe HSR will impact on air passengers travelling point-to-point between destinations served directly by the new rail network, for example between London and Newcastle, and Glasgow and Birmingham. Other regional point-point routes such as Southampton to Edinburgh or Exeter to Newcastle would be relatively unaffected.

16.  The restriction of the HSR stations to Central London and the major cities of the UK regions will deter passengers travelling outside of these centres. Indeed, many point-to-point air travellers are not travelling between city centres—the catchment area for domestic passengers using Gatwick Airport is Kent, Sussex, East Surrey and South London. The HSR termini in London are not easily accessed from this area, and domestic air links from Gatwick may continue to operate.

17.  It is worth noting that an HS2 station at Heathrow would provide a significantly more accessible alternative for travellers from the South West, South Wales and Southern England.

18.  An assumption has been made that HS2 fares will be comparable with regular long-distance rail fares. Even if they are, air travel will remain a strongly competitive option for point-to-point passengers, as it is today. For international connecting passengers, the current rail fare offering is uncompetitive and this is unlikely to change.

19.  Domestic flights to Heathrow Airport provide invaluable connectivity for the regions of the UK to the global marketplace, and vice versa. If HS2 is to replace all domestic flights then the network will need to serve the needs of air transfer passengers as well as point-to-point passengers. At Heathrow, an HS2 station at or near the airport is vital. Additionally, if airlines are to codeshare with the high speed rail operator as has been suggested, they will need assurance on the ability of HSR to provide the interline customer experience currently offered.

20.  If these two elements are not in place as part of the HS2 offering, British Airways believes that domestic air links to London will continue, as well as cross-country routes.

21.  HS2 will need to be competitive with both domestic flights and flights from UK regional airports to overseas hub airports as well. As happens today, if a UK air passenger cannot fly to Heathrow, they will fly overseas to make their international connection. HSR must offer a competitive transfer product if it is to capture this market too.

22.  In Phase 1 of the proposed scheme (London-Birmingham) there will not be any direct air-rail substitution impact as there are no flights between these cities. However, there will be opportunities for air passengers who today fly from Birmingham to transfer at overseas hub airports to use HS2 to travel to Heathrow instead and then fly directly to their destination.

23.  In Phase 2 (London & Heathrow-Manchester & Leeds) there is the potential for air-rail substitution between the North of England and London, for instance Manchester—Heathrow flights. The potential for passengers who currently fly from regional airports to transfer at overseas hub airports to switch to Heathrow for connections will also be significantly increased as they gain direct rail access to the UK's hub airport. However, as before, this depends on there being an HS2 station at Heathrow providing a competitive product and codeshare arrangements between airlines and the high speed rail operator.

24.  In the longer term (London & Heathrow-Glasgow & Edinburgh), the scope for air-rail substitution is increased but is again dependent on a Heathrow HS2 station and codeshare arrangements. In particular, for stations located further from London the frequency, journey times, scheduled timings and customer offering of high speed trains will be critical. To compete effectively for domestic air passengers, HSR would need to offer journey times of around three hours and have early and late departures to allow for return day-trips, an important consideration for the business traveller.

25.  Importantly, if there is a link between HS2 and HS1 that allows for through-running rail services from the UK to Europe then Heathrow must be part of the high speed mainline instead of located on a spur.

26.  The proposed spur will only allow Heathrow to effectively serve HS2 passengers travelling from north of the airport. The spur will not allow it to serve passengers travelling to the UK on HS1, as they would need to interchange in London to reach the airport, making the journey unattractive. This would not be equivalent to access enjoyed by competing EU airports such as Paris-Charles De Gaulle, which would effectively gain access to the UK domestic air market under the current proposed scheme. A spur alignment to Heathrow would not support equal access to UK and European air passenger markets for Heathrow and other European hubs.

Section 3: Business case

3.1  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?

27.  British Airways provided analysis to the Mawhinney Review included analysis of High Speed Two Limited's forecasts for an HS2 station at Heathrow. We believe the forecasts underplayed potential demand. British Airways estimated that c 7,000 passengers per day would use a HS2 station at a 2-runway Heathrow by 2030.

28.  The success of HS2 in securing air-rail substitution will depend on:

—  Competitive passenger interchange located at or near Heathrow Airport.

—  Airlines, in particular British Airways as the UK's largest network airline, entering into viable code share arrangements with the high speed rail operator.

29.  One of the key areas for concern is the fare levels for high speed rail services. As mentioned previously, High Speed Two Ltd has assumed that fares will be at a comparable level with regular rail long-distance fares. Whilst fares may be competitive with airline fares for point-to-point trips they are likely to be more expensive than airline fares for transfer passengers on UK domestic flights. Far-reaching commercial codeshare agreements to attract transfer passengers from the regions to Heathrow would be needed before airlines would remove domestic flights and then market and price HSR as a viable alternative. Without these agreements, British Airways is likely to maintain some domestic flights because of the important contribution domestic transfer passengers make to its network.

30.  Simply building a rail network to meet forecast demand is no guarantee of achieving modal shift.

3.3  What would be the pros and cons of alternative means of managing demand for rail travel, for example by price?

31.  From a pure air-rail perspective, there should be no requirement for additional demand management measures to promote high speed rail. The focus should be on ensuring that the estimated £40 billion investment in HSR delivers a competitive product for all passengers, allowing HSR to compete on a level playing field with aviation. There should not be any need for additional subsidy for HSR over and above rail industry norms or increased taxation on UK aviation with the aim of suppressing and then switching demand from air to rail. The quality of HSR rail infrastructure, particularly integration between air and rail at Heathrow, should determine the demand for high speed rail services. Further market interference in HS2 may begin to look like a solution in search of a problem.

3.4  What lessons should the Government learn from other major transport projects to ensure that any new high speed lines are built on time and to budget?

32.  Terminal 5 and the Heathrow Expansion/Runway 3 projects offer important lessons for HS2. It is important that HS2 enjoys long-term planning stability supported by robust policy framework to ensure efficient, timely and successful delivery. Establishing strong cross-party support for the project is crucial to avoid politicisation of the proposed scheme. In the context of taking a hybrid bill through Parliament, this will be essential to maintain the required policy framework and planning stability. An objective and thorough evidence base to support the economic, social and environmental costs and benefits of the scheme is absolutely necessary to ensure investment is appropriately targeted. Alternative funding mechanisms such as EU TEN-T should also be pursued.

Section 4: The strategic route

4.1  The proposed route to the West Midlands has stations at Euston, Old Oak Common, Birmingham International and Birmingham Curzon Street. Are these the best possible locations? What criteria should be used to assess the case for more (or fewer) intermediate stations?

33.  The choice of Euston as the London terminus for HS2 drives the requirement for Old Oak Common—which is needed for passenger dispersal onto the wider London transport network as Euston cannot handle full capacity HS2 trains.

34.  In Phase 1 of the proposed HS2 scheme Old Oak Common will be the interchange for Heathrow. Heathrow Express and Crossrail are assumed to provide the onward connection to the airport. It is uncertain that Heathrow Express will operate in its current form when Phase 1 is complete—Network Rail has indicated a desire to move the service onto slower train paths to allow for increased capacity into Paddington for intercity services. Crossrail will be operational but it will provide a slower, stopping service into Heathrow. Whilst these services will provide good connectivity for passengers in the London area, they are unlikely to provide an attractive option for air passengers travelling from Birmingham and beyond to Heathrow.

35.  British Airways is concerned that no full or proper assessment has been made of the benefits of using Heathrow as a "parkway" station for the wider South of England region. High Speed Two Ltd cites the significant benefits of Birmingham International station serving a far greater catchment area and being more accessible to the wider Midlands area than Birmingham Curzon Street terminus in the city centre. However, in the South of England, which has the largest market for high speed rail, both Old Oak Common and Euston stations are located deep in Central London.

36.  Heathrow is far better-placed than any other London station to serve passengers outside of London as a "parkway" station. The size of its potential catchment market should be properly considered to fully assess the benefits of locating an HS2 station at the airport. A mainline Heathrow station would also make HSR more accessible to the South of England with increased frequency and better connectivity to the UK and Europe.

37.  We believe that in terms of Heathrow's catchment area, the more connectivity that HSR can provide and the greater the level of access that UK cities and regions can get to the airport the better. The challenge for HS2 is to balance the number of stops on the network (maximum passenger catchment and range of destinations) with the speed of the service.

38.  There is no benefit from linking airports via high speed rail (eg Heathrow and Birmingham) to create a so-called "virtual hub airport". This proposition will not deliver competitive minimum connection times or the necessary customer experience for transfer passengers. Without a competitive transfer proposition, passengers will choose to connect at other competing aviation hubs. Only passengers travelling from home to the airport will benefit from high speed rail.

4.2  Which cities should be served by an eventual high speed network? Is the proposed Y configuration the right choice?

39.  From a Heathrow perspective HS2 needs to serve major UK cities that have air links to Heathrow and other overseas hub airports.

40.  This will help to achieve the Government's stated aim of air-rail substitution. HS2 must also make Heathrow more accessible and attractive for air passengers throughout the UK. If there is a sub-optimal link between HS2 and Heathrow, then air passengers in the UK regions will simply fly to foreign hub airports, as at present—thus bypassing HS2 and contributing to UK carbon leakage.

41.  It is important that cities and regions not directly located on the eventual HSR network are connected to Heathrow too. This includes South and South West England and South Wales, which could be better connected through integrating "classic" rail routes with the airport, as well as cities in Europe that could be connected to London and Heathrow through the linkage of HS1 and HS2.

4.3  Is the Government correct to build the network in stages, moving from London northwards?

42.  It is likely that staged development is the best way of delivering the proposed HSR network. A connection to Heathrow in Phase 1 would enable the benefits of integration between the airport and HS2 to be realised sooner. Deployment of dual-use rolling stock that can run on both high speed and "classic" rail lines would allow Heathrow to be connected to more UK cities than those directly served by HSR and effectively enable connections to the UK's hub airport at an earlier date than HS2 itself could deliver.

4.4  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?

43.  No. British Airways believes both connections should be undertaken in the same phase. A link from HS2 to HS1 should not be progressed before Heathrow is directly linked to the HS2 network and is able to connect to HS1 services. Connecting HS1 to HS2 will enable through-running rail services between the UK regions and continental Europe. This will give major European airports direct access to UK air passengers, without a reciprocal benefit for Heathrow. The airport must be able to compete for air passengers in the UK and in Europe too, which requires equivalent access to both HS2 and HS1 services.

44.  Heathrow and UK airlines will be at a disadvantage if a link to HS1 was developed before Heathrow was served by HS2 and if the airport does not have equivalent access to air passengers in Europe via HS1 that other airports such as Paris and Amsterdam would enjoy.

45.  Early construction of links to both Heathrow and HS1 would deliver Government objectives sooner and should be timed together to ensure parity of access for UK and European airports.

Section 5: Economic rebalancing and equity

5.4  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?

46.  Funding for public transport projects is predominantly based on "the beneficiary pays" principle. As far as Heathrow airport and its airline users are concerned, the commercial case for contributing to development of HSR is extremely challenging. Over the likely HSR construction period, airlines will continue to fund a significant capital expenditure programme at Heathrow designed to renew and develop the UK's hub airport. In this context the airline community will not be able to support funding for HSR as their primary focus and responsibility is to the airport itself.

47.  British Airways suggests the Government should seek support from the EU TEN-T programme as HSR has the potential to provide integrated and transformative transport infrastructure.

Section 6: Impact

6.1  What will be the overall impact of HSR on UK carbon emissions? How much modal shift from aviation and roads would be needed for HSR to reduce carbon?

48.  We do not have research of our own to reference, but refer to BAA's second submission to the Mawhinney Review. This details its analysis of UK carbon impacts of HSR development. From this analysis, it is clear the potential to reduce carbon increases if:

—  HSR serves Heathrow directly and an excellent passenger interchange facility supports commercial "codeshare" arrangements between airlines and rail operators.

—  The HSR network is fully developed and balances serving the maximum passenger catchment with speed of service.

—  The UK power grid supplying HSR decarbonises.

49.  BAA's analysis indicates that if HS2 directly serves Heathrow then between 226-262kt per year could be saved. These significant reductions require the above conditions to be met and demonstrate the value of running HS2 to the airport as soon as possible.

6.4  How much disruption will there be to services on the "classic" network during construction, particularly during the rebuilding of Euston?

50.  British Airways believes that disruption to Heathrow Express and Crossrail services should be minimised as much as possible during construction of HS2. Proposals for connectivity in Phase 1 from Old Oak Common to the airport rely on both Heathrow Express and Crossrail services. It is important that fast and effective connections to the airport are maintained throughout construction and this will require co-ordination between Network Rail, franchise operators and HS2 contractors.

51.  In a wider context, it is essential that disruption be kept to a minimum to ensure the smooth and efficient running of London as a world class city. London is a key driver of the UK economy and the impacts of disruption will be keenly felt beyond its border. Euston also provides the major rail link to the north west of England and west of Scotland and it is vital that these links can continue uninterrupted as far as possible.

May 2011

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© Parliamentary copyright 2011
Prepared 8 November 2011