transport

BAA: Wrong Monopoly

Jock — Wed, 20 Aug 2008 19:30:01 +0000

The Competition Commission has suggested, perhaps commanded (I no longer know what sort of power the CC has given that most competition issues are meant to be dealt with on a Europe-wide basis) that BAA ought to sell some of its airports, and in particular two of the three main London ones. I am uneasy about this for two main reasons...

First off I am deeply suspicious about the timing of the Competition Commission's investigation which seemed to be a (possibly coincidental) reaction to those foreigners (Ferrovial) taking over a British company which had owned those airports for a significant time. If there was a problem with monopoly, surely it should have been taken into account when BAA was first privatised.

And second it is a big step to try and force someone to divest themselves of their own property, especially when it's not as if they are "absentee landlords" but working, and presumably working quite successfully (other than the debt burden) the property.

But there is another problem. The monopoly is not really about the airports themselves - and indeed making them compete directly by being owned by separate owners wanting to maximise their income from each individual airport is likely I would have thought to result in heavier use of all of them, increasing the discomfort for the folk who have to live as neighbours of these smelly, filthy, noisy facilities.

It is exacerbated by the fact that what they really control is access to the airlanes that supply those airports. Airlanes that are, in the economic sense, "land" - part of "unimproved" natural resources with finite space - and in this case also time - (though of course safety technologies can increase the capacity a little) for all the potential users. This is part of the commons, and Ferrovial/BAA and the longer established airlines profit directly from the monopolistic enclosure of those airlanes.

Like the Electromagnetic Spectrum they are part of the "commons" and should be leased at their full economic rent from the state for our collective benefit. They are most commonly called "landing slots" and are worth a huge amount of money - Deloittes reckons that peak day time slots at Heathrow are worth up to £30 million per pair in summer, and there are 9,562 (4,781 pairs - one to land and one to take off on) per week in high season, with an overall limit of 480,000 per year at the moment.

The slot situation is currently, by common consent, pretty chaotic. The government has capped the amount BAA can charge and capped the amount by which it can increase the charge, but 97% of all slots at Heathrow for example are not open to effective competition as they are sold at this capped cost to airlines who have been there the longest, so called "grandfather rights". Heathrow is the only airport in Europe at which there is a significant amount of secondary trading in a "grey" market which is where the £30 million per pair arises. All this profit, the economic rent, goes to the airlines and Deloittes goes on to calculate that BA's slot portfolio may be worth up to £2bn if it were included in its balance sheet as an asset compared with its market capitalisation of around £2.7bn!

The CAA should be auctioning airspace rights to all airports at whatever the market will pay, whilst airports themselves should be responsible for charging the airlines for the use of the "improvements" - the terminal access, ground facilities and so on.

This would force traffic that doesn't actually need to use these massively oversubscribed London airports out to existing regional airports first, often reducing travel times - why travel from Lancaster to London to get a plane if the destination you want is available more cheaply from Manchester - as well as bringing increased economic activity to the areas around those regional airports - airports are a huge draw for international businesses. And unless the overall capacity of slots convenient for travelers' points of origin and destination is actually more than required, would generate a goodly sum for the government in a more market efficient way than say fuel taxes.

I hope we will be having a debate at South Central regional conference on Heathrow's third runway proposals. I believe the rigorous eradicating of this money for nothing monopoly on the part of the airports and airlines through nationwide slot auctions would actually obviate the need for the extra imposition this third runway would cause on teh surrounding areas without affecting overall the competitiveness of Heathrow for flights that really need to use it. read more »

Is non-intrusive road pricing possible?

Jock — Mon, 09 Jun 2008 01:27:15 +0000

I have two problems with the recent Lib Dem policy announcement about using road pricing to lower fuel duties and fund spending on infrastructure for more "environmentally friendly" forms of transport. The one, which I will return to in another post, is about the difficulty of solving two problems - paying for roads and trying to force people off them - with this one policy. But for now I want to suggest a solution to those many commenters on the Lib Dem Voice thread that any implementation of road pricing is going to be necessarily an intrusion on our privacy.

In fact, the technology has been around for five decades: the flight data recorder, or "black box". It even ought to cost less as it would mean no additional physical infrastructure such as ANPR gantries or roadside transceivers.

Take a regular GPS Sat-Nav system. Already the technology is being developed to deliver all sorts of content to such devices (see the "Sat-nav for people" section on this BBC Click report). It would be a small step to link this to a billing system in the vehicle that got data about the current price of the road you are travelling on, and on other alternatives to help you make up your mind about what route to use, and to calculate a total bill for a journey and initiate a payment transaction without even telling the billing authority where it has been.

Ah but, people say that's open to abuse or tampering to avoid bills on the one hand, and because there's no central information about how your bill is made up it would not be possible to dispute a bill on the other. Well, this is where the "flight data recorder" comes in. You do have the details of your journeys stored, but not centrally, rather in a box in the vehicle. A box say that has to be audited as part of your annual MOT perhaps. And that can only be accessed when security information is provided by both the person or authority wanting to read it and the owner. That way, if you think it is to your advantage to disclose where you have been, for example to dispute a bill, you are in control of when that data is disclosed.

Again, this technology is already around, and in applications much smaller than aircraft. My security guard in the hall of residence has a little device called a "Deister" which they use to "prove" that they have been doing patrols. There's no live link snooping on where they are going, but the Deister gun will be audited and has logged a patrol if there is any dispute.

Can anyone see any other objections to such a way of doing it non-intrusively? read more »

surveillance state

Let the train take the strain...not!

Jock — Fri, 06 Jun 2008 13:54:53 +0000

A friend, and former council colleague then defector, some of you will know who I mean but I won't name him, got the news early this week that his mother, in Glasgow, had been taken into hospital having been lain at home for the best part of a month not feeling well but doing little about it. Anyway, without going into too many details said friend is not really working full time at the moment and not claiming benefit - because of the irregular work he does for the local TA and ACF. THis is about enough to keep him in bed and board but without anything left over for "shocks" like having to travel to Glasgow from Oxford in a hurry.

Last night I booked him a train ticket for next Wednesday after his next ACF session, paid for with my debit card, and to be collected at Oxford station. At that far off it was £95 return. But this morning he got a call to say she might not last the weekend so we had to try and make some rearrangements for today. So first, trying to cancel the original ticket I found it wasn't possible online because it was an overnight service and had a reservation automatically applied. The cancellation has cost me a tenner as well. Then looking for a new ticket for today we concluded the only deal was to take a standard single, which was itself £85 (because he did not know precisely now when he was going to come back and so an open return was going to be pretty expensive.

Still, again, since I was the one booking it, I had to accompany him to the station to collect the ticket so that I could insert my debit card. And we had to wait for two hours to be able to collect it after the booking was made. So, getting to the station too early to be out before the time limit on the short stay car park I had to park in the long stay. The fee is £4.50 if you use something called "RingGo" and £6.00 if you only have cash. The process of paying via RingGo was quite stressfulm even for a techie like me, requiring some code off the platform (so I was lucky the man let me, the non-passenger, onto the platform to get the code which changes every hour. The instructions on how to pay seemed only to be back at the car park so having collected that code number I had to return to find out how to do it and then go through a most complicated automated system which has now, with no specific authority from me, got my mobile number linked to my car registration number. There was nobody at the car park checking, and no ticket either for the car window or the exit from the car park, so I presume it is monitored by ANPR.

So, it seems that if you are not very well off, don't have a credit or debit card, and need to travel quite quickly, you must be faced with a ticket that would be about 50% higher than even the extortionate "supasava" online and 50% extra on the car park. And this is supposed to be encouraging use of public transport? What a joke!

He texted me after about ten minutes on the train to say that it was like sardines in a tin.

And all that for ninety quid and it would take eight hours if everything went smoothly. I know all about the fixed, annual costs of driving, like my tax and so on, and actually I don't do much mileage a year anyway, so driving up there would have been cheaper at the point of use (I would have got there on two tanks at the most and with two of us in the car that would have been less than half the train price) and helped me justify my annual fixed costs in any case. And when I went looking for a plane ticket for him yesteray I gave up because I could not find a single ticket under £93.

Bonkers. Bonkers and discriminatory. Oh, and why on earth do two type of first class ticket vary by as much as £200 quid for the same (single!) journey - one was £250 or something and another £450. Just what is that about? read more »