Stansted Airport owner BAA has summoned legal big guns to fight an order to sell the Essex hub, which is attracting major global businesses to the Cambridge UK technology cluster.BAA confirmed today that it had been granted permission to appeal against the Competition Appeal Tribunal’s judgement of February 1, which found in favour of the Competition Commission’s decision requiring BAA to sell Stansted.
“We are pleased that permission to appeal has been granted and look forward to presenting our arguments before the Court of Appeal,” a BAA spokesperson said.
BAA believes Stansted has much to offer to the future of UK plc – or even a new owner. Its core infrastructure investment has been completed, the capacity and opportunities are there – it’s now a question of unlocking potential.
A source revealed: “The airlines and passengers will benefit as our costs won’t rise a great deal because there aren’t huge sums needing to be spent to get the airport up to scratch.
“We can take the world’s biggest jets, we have the spare capacity, we just need the Government and others to see the potential and make sure it’s to the fore of their thinking when they put in place the roadmap for the future of aviation in this country.”
Stansted MD Nick Barton told executives at a Suffolk Chamber event today that the airport was vital to the East of England region’s growth ambitions.
He said that Stansted was “not just a regional airport; we’re a key national asset with world class infrastructure - a true catalyst for economic growth and productivity.
“We employ over 10,200 people across 200 on-airport companies and are the biggest single site employer in the East of England, contributing £400 million in wages and salaries alone. We provide international connections that are vital for growth in UK trade and investment and are the third biggest cargo hub in the country.
“In 2011 alone we handled over 200,000 tonnes of cargo helping to support regional SMEs and UK Plc. That’s the equivalent of 1,300 jumbo jets full of cargo, importing and exporting goods from as far afield as Memphis and Hong Kong.
“Over the last few months we have taken delivery of four new generation Boeing 747- 8F – these are one of the most energy efficient aircraft in the world.
“They are 30 per cent quieter and produce 16 per cent less emissions than the aircraft they replace and they will be based permanently at Stansted, helping to export companies’ products around the globe.
“But I won’t beat around the bush – the past few years have been tough for us – hitting the airlines harder, probably, than any other industry. We are in the midst of the worst economic depression in modern times.
“Stansted has seen passenger numbers decline from a high watermark of 23.7 million in 2007 to just below 18 million today. Alongside steep rises in oil prices and Air Passenger Duty, the sector has found itself operating in the toughest conditions since civil aviation began.
“Only last month, the International Air Transport Association forecast that European airlines will collectively lose €600 million this year. This is damning news.
“Stansted has arguably seen the best of the good times, and we are consequently feeling the worst of the bad. But our response is not to simply stand still and wait for the world to change.
“Aviation slumps are nothing new and we always have to take a long term view – 20 to 30 years – and improve our offer. As a result of ongoing investment in our infrastructure, we are now one of only three airports in the UK (Heathrow and Manchester are the others) that can now handle ‘Code F’ planes – the Airbus A380 and 747-8 cargo aircraft – the largest commercial planes operating from anywhere in the world.
“Perhaps most importantly, one of the biggest advantages we have over our competitors is that we have the space, infrastructure and permissions in place to serve 35 million passengers a year on the existing single runway. We are only half full.
“In my view Stansted is the short to medium term solution for growth in point-to-point air travel in the capacity constrained south-east airports system.”
Barton said aviation had a vital role to play in generating the export-led economic recovery that the Government wanted to see. Making use of the spare capacity at Stansted should be a key component of any sustainable aviation policy, he argued.
“We already serve over 150 destinations across Europe – more than any other airport in the world – but we are ambitious and are striving to attract more passengers and airlines, serving more point-to-point destinations across the world to help business access more markets and grow more quickly.”
Barton called on the Government to accept the damage Air Passenger Duty (APD) was inflicting on the economy and the UK’s ability to trade abroad.
“APD is a regressive tax that means higher fares on our holidays or business trips,” he said.
“A typical British family of four travelling in economy class pays £260 more than most European countries to fly to the US and almost £80 more to fly to Europe. The UK’s standard rate is some 8.5 times the average of other countries in Europe which still levy a charge.
“But it is also the detrimental economic impact that APD is having that is so damaging. At a time when politicians are searching for ways to stimulate economic growth they would do well to look at ways to make the UK more competitive by removing the high costs that aviation tax places on air travel to Britain - a tax that is the highest in the world.
“Let’s follow the lead of the Netherlands who recently scrapped their version of aviation tax – the tax actually cost the Dutch economy four times more than the revenue it raised. High aviation taxes are not a recipe for growth - it is a constraint on growth.
“Only last week, one of our biggest airlines, Ryanair noted in their annual results that APD has caused traffic to decline by six per cent since 2007. This is not good news for Stansted or UK plc as low cost carriers, like Ryanair and easyJet, have the flexibility to move their operation to other bases across Europe avoiding APD and having a damaging effect on our economy.
“It is time Government looked closely at the effects of APD and put growth and competitiveness first and scrapped it once and for all.”
Barton added that infrastructure investment in this region, whether rail or road, was long overdue and the situation should be addressed by the Government in its future growth strategies.
“The Government just needs to take some simple and cost effective measures in the coming months that will enable us to deliver on this,” he concluded.