Who depends on whom?

Yesterday bhx got their usual positive headline in the Birmingham Post "Birmingham Airport increases profits after cost-cutting" as they released their annual report.

Behind the spin we can see a picture of a business model that is not exactly going to be the jet engine which drives prosperity to Birmingham, but quite the opposite. In 2004, we showed that their predictions were faulty in terms of job creation and economic benefit:

"there are now about 1,000 fewer jobs than 1994 and there has been only a 20 per cent increase in the airport's contribution to the region's coffers over the decade."

This was after they had promised an 80 per cent increase in jobs over the decade from 1994 at both the airport and in related local industries and a 120 per cent growth in wealth generated for the West Midlands economy. Now this year they are boasting about reducing employee costs by 11% and cutting 75 jobs.

We have been sold the idea that the runway extension is vital for the region as it will bring employment and prosperity and that is why £25 million of public money is being put into subsidising it.

Now though, CEO Paul Kehoe says; "We need the economy of the West Midlands to start to recover faster than other regions. If the West Midlands starts to perform we will start to perform."

Isn't that the wrong way round? If we're putting tax payers' money into building new capacity for this environmentally damaging industry because it's so good for the economy and allows it to grow, why are they no longer promising to bring benefits, but relying on us to all start earning more and flying off to spend our money on flying abroad again (the numbers of flights was well down on last year again, as was turnover).

Are they finally admitting that the airport just takes money out and puts very little in?

Joe Peacock

Rising Oil Prices and the Threat to the Aviation Industry

We've all known about "Peak Oil" for some time and been warning that this will impact on unsustainable fossil-fuel dependent industries. This is starting to hit home already, yet state aid continues to be pumped in to prop them up.

It has been reported, the aviation industry faces danger from fragile consumer confidence and rising oil prices as passenger numbers fall at Stansted and Heathrow Airports. The leisure market, dominated by Ryanair and easyJet and charter operators, remains weak. Stansted and Southampton were BAA's worst performers last month, posting year-on-year falls of 7.4% and 8.7% respectively. Colin Matthews, BAA chief executive, said: "Continued rises in the price of oil are a concern for airlines and passengers in all our markets." John Strickland, an industry consultant, agreed saying: "The big concern in the industry is still the oil price. It is rising rapidly." Rising oil prices means the cost of fares are increasing, thus further reducing passenger numbers. Last week BA increased its fuel surcharges for the third time in less than four months as the price of jet fuel rose to $134 (£82) a barrel – three times its low point in early 2009, in a attempt to survive. Fuel accounts for nearly a quarter of airline operating costs and is largely out of carriers' control.

The spiraling costs of fuel has greatly impacted budget airlines, such as Ryanair. Ryanair said its fuel bill soared by 93% in 2008 and represented almost half of its operating costs, up from 36% 2007. Budget airlines are mitigating the increases by charging higher fees for checking in bags and priority boarding passes. Budget airlines will try to leave the prices of fares untouched, as cheap tickets are key to their business model which use bargain fares to pack passengers on to airplanes. "They cannot afford to raise fares. It would break their model," said Strickland. "Occupancy would fall and they will not make enough money to cover increased fuel costs." Furthermore, the cost of fuelling a transatlantic flight, the most profitable part of BA's business, has quadrupled since 2000 to $44,000 (£22,200). It is estimated many airlines will not survive a combination of expensive fuel and a drop-off in demand as passenger numbers decline due to expensive fares and dwindling consumer confidence.

This ties in with the work Birmingham Friends of the Earth has been doing. We oppose the growth in aviation as it is one of the fastest growing sources of greenhouse gas emissions, plus airports create noise, air pollution and congestion. Rising costs of fuel and increased usage of the aviation industry are highly unsustainable for passengers and the environment. We are against the growth of this industry and would like to see it pay its full environmental costs, not shift them onto the tax-payer. Joe Peacock reacted to the news this week of state aid being provided to subsidise the building of the runway extension at Birmingham Airport through the Regional Growth Fund. "The aviation sector pays no tax on its fuel and no VAT on the sales of tickets and planes but that is not enough it needs our help to build the infrastructure from which it plies its trade.” “These decisions show the hand of the Government and with its financial support of the aviation sector how it can claim to be the Greenest Government ever is beyond us.” It is hoped a process of due diligence on the bids will be open to full public scrutiny.

Extremist? Moi?

The Birmingham Post ran an editorial yesterday attacking our position on the runway extension at BIA and stating, amongst other things, "how out of touch they are with the real world" and asking us to come clean about our agenda.

Now when I was on the radio recently, airport chief Paul Kehoe uttered the legendary phrase "I don't know what planet Friends of the Earth are on" and this seems a remarkably similar line of attack.

The accepted "wisdom" around making economic policy in the West Midlands all seems to be based on there being limitless resources that we can carry on exploiting regardless. What kind of real world is that, exactly?

The real world is the one in which recently the High Court ruled that the Aviation White Paper of 2003, on which all current expansion is based, was obsolete because it does not comply with the Climate Change Act of 2008. It is also based on oil costing $10 a barrel, which is never going to be the case again and the Stern report 2006 also indicates that the economic case for dealing with climate change should be re-examined so as to mitigate now and not allow business as usual.

The concerted efforts by those driven by ideological opposition to government intervention in markets to tackle climate change or short-term business interests to find some real evidence of collusion or fiddling the figures in "climategate" have all failed, so we now have to get on with dealing with this problem. With consensus shown by the leaders of the three main parties on this (if not all the solutions), we are not saying it is time to ground all flights, but that expansion is not the answer when resources are limited and the business case does not stack up.

Localise West Midlands have also blogged on this in support today and their points about "a fuel-scarce future" are as key as any on the impacts of climate change. Prices will only go one way, whether through taxes or demand outstripping supply in the near future, so to rely on affordable oil for air travel is unwise to say the least, as is thinking that biofuels can replace oil without having a devastating effect on the world's eco-systems and capabilities to grow sufficient food.

Unless aviation plays its part in cutting CO2 emissions, other sectors will have to make much deeper cuts, so where would you choose to make those cuts? Also, aviation is currently massively subsidised and ticket prices have fallen compared to the cost of living over the past decade, whereas trains and bus ticket prices have gone up considerably and are among the highest in Europe.

The economic benefits of aviation are wildly exaggerated, as we have pointed out on many occasions. Even Heathrow's claims to make the economy money have been debunked and London is the one place that doesn't have a tourism deficit from aviation. To say only areas that have a large international airport from where people can fly non-stop to destinations all over the world can be successful econmically is also to ignore data from all over the country.

Therefore, our agenda is simple - don't subsidise high carbon polluting forms of transport, such as aviation and give local people a fair deal by spending money from the public purse on projects that have a real benefit.

This doesn't mean we are being extreme, but we want the real story behind the claims on economic benefits to be examined more carefully. If we are to build a long-term sustainable economy that is not dependent on a fast-disappearing resource, we should not be looking to increase airport capacities now, but be planning to use the skills of people in the region to build local markets that are not dependent on aviation.

Once new government guidance is drawn up that relies on the latest scientific and economic data around climate change, oil supplies and low-carbon alternatives we can decide how to best manage demand for aviation. Rushing into decisions to fund extra capacity now would be foolish and waste valuable financial resources at a time when the public purse is being squeezed hard.

Aviation is not the way forward for our nation

We've recently had to step up our aviation campaigning as the issue has stormed back into the headlines.

We ran a high-profile campaign against the runway extension at BIA called flyagra which highlighted the many problems with extending the runway, while trying to use an amusing comparison with the type of dodgy extensions one is often suggested may be a good idea in spam emails. Unfortunately, the planning application was approved by Solihull Council, so until recent events it looked like there was nothing more we could do.

Firstly, there was the high court ruling on Heathrow's 3rd runway stating that the aviation white paper from 2003 is now obsolete (which we've been arguing to be true for a long time).

Then came the scandalous news that BIA are asking for state aid from the local councils to get the A45 moved and make the runway extension possible after AWM pulled out of financing it.

It emerged that Birmingham City Council and Solihull MBC are planning to stump up £16m each at a time of cuts in public expenditure and job losses, especially in Birmingham. However, after seeing that we and the local press are looking at the legality of such a move, the council has made all reports on the matter and all discussions private. Yesterday I attended the cabinet meeting where the ridiculous decision to fund this was approved, but members of the public were excluded from hearing any of the debate around it or seeing any documentation about the route of the road, which we understand will not now be in a tunnel under the runway, but going around the perimeter of the runway.

Obviously, the council are concerned about public scrutiny of this decision as they feel they are on shaky ground so we now need to look into the legality of it, especially when taxpayers in the West Midlands could be getting so much better value for money by the council investing money in more low-carbon job creation schemes that would help tackle fuel poverty, meet climate change targets and improve the area's economy.

We've alway argued that the economic forecasts for the expansion of aviation are flawed and this has been borne out by more recent reports on the loss to the economy potentially resulting from building Heathrow's 3rd runway. There are very well-researched figures showing the tourism deficit from aviation to be very substantial indeed and if the industry's projections of continued growth are correct will lead to £41bn being lost from the West Midlands economy from 2004-2020.

The volcano currently erupting in Iceland has given many people a different view on aviation, even if it is causing problems to many. We should not mess with Mother Nature, as she'll always win and the fragility of our plans involving flying people and good across the planet as the default system for doing business, leisure activities or feeding ourselves has been shown and this cannot be the best way forward.

I agree with this blog post arguing that we can largely live without flying so planning ever-expanding aviation is wrong for everyone. It is essential that we keep up the pressure to ensure that this carbon-hungry white elephant of a scheme is not given the go-ahead.

Press release on BIA's announcement on delaying the runway extension

PRESS RELEASE
FOR IMMEDIATE RELEASE

AIRPORT SHOULD COME CLEAN OVER EXPANSION ASPIRATIONS

Environmental campaigners have welcomed this morning's announcement by BIA chief executive Paul Kehoe that the runway extension will not be built for at least 5 years, but are calling for more clarity over what work is to be completed and who will pay for it.

Recently both Birmingham and Solihull councils have offered to put in £16 million of “state aid” to allow the runway extension to go ahead by paying for work to move the A45, but the details of this have remained private. Birmingham FoE is now calling for all relevant documents to be made available for public scrutiny and for the case to be completely reviewed with regards to the legislation now in place.

Friends of the Earth won huge public support for the 2008 Climate Change Act which has made the aviation white paper of 2003 (on which all runway plans were based) obsolete, and they are now calling for more transparency and a complete review of the plans for expanding aviation in this country.

Joe Peacock from Birmingham Friends of the Earth stated “We now know that aviation expansion plans do not add up for the planet or the people of the West Midlands. New government guidance due next year must take into account the science of climate change that is recognised in law and this will mean expanding aviation can no longer be justified.”

“The airport should now tell the public exactly what their plans are and stop asking for state subsidies for damaging work to be carried out on the greenbelt.”

“Birmingham City Council have recently announced some green measures to get the economy moving, so these should be the focus of investment from the public purse, as the financial return for the area will be far higher.”

ENDS

Notes to Editors

1) Birmingham City Council recently passed the Climate change action plan to cut its £1.5 billion energy bill and generate investment in green jobs http://birminghamnewsroom.com/?p=8336

http://www.birminghampost.net/birmingham-business/birmingham-business-news/environmental-and-sustainable-industry/2010/03/30/climate-change-action-plan-aims-to-slash-1bn-off-birmingham-s-fuel-bills-65233-26134021/

2) The Big Ask Campaign resulted in the climate change act 2008 http://www.foe.co.uk/campaigns/climate/big_ask/

3) Lord Justice Carnwath ruled that the 2003 Air Transport White Paper – the foundation of aiport expansion plans across the country - is obsolete because it is inconsistent with the Climate Change Act 2008. http://www.bailii.org/ew/cases/EWHC/Admin/2010/626.html

4) Birmingham Friends of the Earth campaigns on many environmental issues, including the promotion of sustainable transport.

For more information contact: Joe Peacock (Birmingham Friends of the Earth)