Whatever the airports commission's plan, the only way is likely to be Heathrow

Click to enlarge. Photograph: Observer

As the reality dawned last week that Britain's most powerful force in aviation, Heathrow, had convinced regulators it should squeeze its customers a little more, the irate boss of British Airways owner IAG pondered the unthinkable. Could the national carrier decamp elsewhere?
But Willie Walsh's fury was stoked by his impotence. In this "abusive monopoly" there was, he conceded, no alternative in the UK – yet.
On Monday Sir Howard Davies, the man appointed a year ago by David Cameron to deflect the toxic political question of expanding London's airports, gives his first public speech. With more than two months left until the airports commission issues its interim report, on a carefully planned timetable stretching past the next general election, the chairman may not wish to give too much away. But the audience is unlikely to be satisfied without a clear indication of Davies's thinking.
To Davies's credit, the commission – widely regarded as a device to kick aviation's thorniest issue into the long grass – has kept the debate ticking over. A series of pertinent questions has forced the industry to justify its assumptions. Can we trust forecasts for growth? Is Britain lacking connections? Do some airports have a special hub status? When the commission's work is done, it will doubtless leave a powerful body of evidence in its report.
And then, according to Walsh, that report will gather dust in Whitehall. The politicians who struggle to sell HS2 to the nation will have little appetite to launch another unpopular battle. But the rail line (so far) has cross-party backing. The Conservatives' decision in 2010 to scrap the planned Heathrow third runway now looks ever more an opportunistic electoral pledge, when the party's environmental cloak has been discarded.
The first sign of how seriously the coalition intends to take the commission's final report will come in December, when Davies sets out proposals for short-term measures to boost aviation capacity in the south-east. Early noises indicate no rapid action is anticipated. That suggests that either Davies does not believe capacity is a problem, or the only remedies proposed – such as removing limitations on runway use at Heathrow – are beyond the pale.
Or that the government was, is, and will be dodging the question.
Nonetheless, the passage of time does flush out some interesting developments in people's thinking. Some of the backbench Tory MPs who cried aloud for Heathrow expansion have thought twice since new runway and flight path proposals were published by Heathrow's owner.
And London mayor Boris Johnson has started to sound a little more subdued about his Thames estuary plans, as no one – bar paid lieutenants – echoes his idea for a brand new hub.
BA's threat to leave Heathrow sound more like the barbs of a wounded partner than a real statement of intent. But only BA's willingness to move can really make a new hub more attractive and more realistic. If Heathrow expands now, the airport's dominant position will be entrenched for good. That is not a prospect which entices its airline customers, politicians or local residents.
Davies must first be convinced that bigger airports and more flights will bring benefits that outweigh the ill effects. Then the central argument is whether a successful aviation sector depends on the existence of one central hub airport, with enough transfer passengers to make ever more long-haul routes possible. Davies has a chance to recommend that an alternative be built. But in a country where recent history is not on the side of such upheaval, he might well conclude that, like BA, he has nowhere to go but Heathrow.

3 a crowd in telecoms

The map of Europe's mobile networks is slowly being redrawn. Country by country, the number of big operators is falling from four to three and, if mergers in Ireland and Germany are given the green light, Britain could be next.
Speaking off the record last week, one European network boss said small member states would shortly have two operators, and the bigger nations "two plus one" – a couple of big players and one challenger network.
There is every sign that the European competition commissioner, Joaquín Almunia, believes three is company and four may be too much of a crowd to encourage investment in the 4G high-speed mobile data networks that are already carpeting America.
Speaking to reporters in Lithuania last week, Almunia said he had "no concerns" about Telefónica's proposed takeover of E-Plus, a move that would reduce the German market to three competitors. In Ireland, Hutchison Whampoa's 3 network wants to buy O2's local business, a deal that would also leave a choice of three.
Brussels wants Europe to look more like China and America – a single economic region with a few large players. America has four big mobile networks for a population of 313 million. Europe has 500 million inhabitants and maybe 100 networks (although many of them are owned by a handful of large companies).
A once hot industry has been chilled by recession, regulated cuts on call prices, and the internet's ability to offer for free the calls and written messages that once cost real money. Our calculations show the UK's four networks earned less than £19.5bn in 2012, £680m less than the year before.
Vodafone, while in third place, is newly enriched by its Verizon deal and in no mood to sell up in its home market. It wants to spend its money building a 4G network that matches or betters that already being rolled out by the UK's largest operator, EE.
The most likely candidates for a merger are 3 and O2. But for years 3 has argued the UK should be a four-player or even five-player market, saying its presence keeps rivals' prices in check. It argued vociferously for special treatment in the recent government spectrum auction. A merger now would involve an almighty public U-turn.

Queen's bank could be next sell-off

The City still awaits the outcome of the Treasury's review into whether to split up Royal Bank of Scotland into good and bad banks.
The chancellor, George Osborne, knows that the investors who own the 19% of RBS shares that are not in the hands of the taxpayers will take some convincing about a carve-up they would have been happy to see five years ago, when the bailout was taking place.
As it is, investors have watched assets such as the commodities trading arm Sempra and the money transmission business WorldPay sold under instruction from the EU as the price of £45bn of state aid. The spinoff of 314 RBS branches to a consortium involving the Church of England is also at Brussels's behest. Ditto Direct Line.

That is not to say that there is nothing left for new boss Ross McEwan to sell off. The Queen's bank, Coutts, could be next, some believe – if the price is right.

Source

Don't cross the line? But sometimes a cyclist has to to stay safe

A cyclist waiting within an advanced stop line for the lights to turn green. Photograph: Gianni Muratore/Alamy

When Alex Paxton was cycling down the road, he came to an advanced stop line (ASL). Even if the words don't ring a bell, you'll know an ASL, or cycle box, when you see it: typically an area marked by green tarmac and white lines, set aside to allow cyclists to safely position themselves at the front of a queue at traffic lights.
Paxton claims that because the ASL was already occupied by a car which had stopped illegally inside the area, he was unable to stop within it. As he was on a three-lane road and didn't want to have to cross several lanes of moving traffic in order to turn right when the light changed to green, he positioned himself ahead of the car and in front of the ASL.
A police officer who noticed what had happened radioed ahead to a colleague further along the road in Fulham, London, who issued Paxton with a fixed penalty notice (FPN). Although Paxton argued at the time that the car that blocked the ASL meant he wouldn't have been able to obey the law without putting himself in danger, he received an FPN regardless. Paxton claims that because the second police officer didn't actually see what happened, he was unable to assess the greater risk that Paxton would have faced had he remained behind the ASL.
After receiving advice from the Cyclists' Defence Fund (CDF), set up by the national cycling charity, CTC, to fight legal cases involving cycling, Paxton decided to contest the fine in court. The CDF hopes the case will set a precedent around the enforcement of ASLs. The CDF set up a fundraising page to assist him with his legal costs, which quickly exceeded its target of £2,000. The case is due to be heard at Lavender Hill magistrates court on Wednesday 16 October.
According to CDF's Rhia Weston:

"When the first FPNs for cyclists (targeting those who cycled on footways) were first introduced, the CTC sought assurance that fines would only be given out when a cyclist's actions were reckless and would endanger pedestrians – not, for example, when a cyclist uses an empty pavement to avoid a dangerous section of road. It's important that the same sensible enforcement is applied to cyclists who don't use ASLs when it's unsafe to do so, especially given how frequently ASLs are blocked by illegally positioned vehicles."

Transport for London (TfL) pledged to enforce rules that prohibit drivers from stopping in ASLs more strictly in April 2013, after Andrew Gilligan, London's cycling commissioner, announced plans to use CCTV cameras to catch wayward motorists.

Weston continued:

"ASLs are there for a good reason: around 70% of cyclists' collisions occur at or near junctions. They're by no means perfect, but when used properly, we do believe that they have the potential to save lives. We understand that the Department for Transport is planning to update regulation around ASLs to overcome the considerable problems with their access, which does give us some hope for the future."

If successful, the case could have important implications for UK cyclists: it would compel police officers to use their discretion when issuing FPNs to cyclists who, in order to stay safe, must occasionally act contrary to the law, and press the DfT to clarify the law governing what cyclists should do if an ASL is illegally occupied by a vehicle.
Contrary to the belief of some, ASLs are provided for cycles only, and motorcyclists are specifically prohibited from using them (Highway Code rule 178).
It's worth noting, though, that there is some leeway for drivers: if the light turns red as the driver's vehicle is already within the ASL, the driver must wait within the ASL until the light turns green.
 

Source

 

Rail fare rises condemned by commuters and unions

The government says it will cap the highest rail fare rises at inflation plus 2% from next year. Photograph: Dominic Lipinski/PA

Consumer groups and unions have condemned plans for inflation-busting hikes in rail fares in England, despite an overhaul of the pricing system intended to curb the biggest rises.
The government has announced that the highest rises will be capped from next year in an attempt to take the sting out of ticket prices increasing above inflation. While average fares will still go up by 4.1% in January, the ability of train operators to increase individual fares will be limited to an extra 2% above inflation, rather than the current 5% – removing a power that has meant some commuters have had to pay almost 10% more for their season tickets in recent years.
The government will also insist on the introduction of season tickets for part-time workers, so that people who make the same journey three or four days a week can qualify for substantial discounts, and a pilot scheme will test the sale of all long-distance tickets; currently, many single train journeys cost almost as much as a return.
The fares and ticketing review published by Patrick McLoughlin, the transport secretary, will set out a code of conduct for train companies, to be overseen by the regulator, to ensure passengers know they are getting the best deal for their journey. Consumer groups have warned that many passengers fail to buy the best option from ticket machines.
The Campaign for Better Transport welcomed the fares curb but said there was "still a gaping hole", with no change on annual above-inflation fare increases. Stephen Joseph, the campaign's chief executive, said: "Whilst trials for things like part-time season tickets are very welcome, the biggest issue has always been annual above-inflation fare increases and there is no change of policy on this. This is bitter news for everyone who relies on the train to get to work."
Andrew Adonis, a former Labour transport secretary, said the cap was less tight than the one he had imposed in 2009-10, dismissing it as "too little too late".

Guardian Money editor Patrick Collinson shares his tips on how to cut the costs of your rail travel Link to video: How to cut the cost of your rail tickets Bob Crow, leader of the RMT transport union, said: "This is a total con that will still leave the vast majority paying inflation-busting fares to pump up the profits of the private train operators.
"For a few it will feel like having your wallet nicked with the mugger then handing you a few bob back to buy a pint. Nobody will be fooled by this political stunt."
The government will also start testing "shoulder" fares at either end of the rush hour in an attempt to push commuters on to quieter trains. However, it has ruled out matching increases for the busiest commuter trains because fears were raised of politically toxic "superpeak" fares.
The coalition is trying to package the fares announcement as part of a broader campaign to position the government as trying to keep down the cost of living for "hardworking people".
McLoughlin said: "We're taking this action because we know how hard-pressed rail users are. They have had to shoulder some of the cost for our essential rail modernisation programme – without which the network would soon grind to a halt.

"Yet most rail commuters do not have an alternative way of getting to work. So it's right that, as our economy recovers, we try and relieve some of the burden they bear."

McLoughlin said the government remained "as determined as ever to end the era of above-inflation fares". Regulated fares, set by the government – season tickets and off-peak return tickets – have risen by 1% above inflation for the past decade. However, the coalition, like Labour before it, has signalled it believes a greater proportion of the cost of rail travel should be borne by passengers. Taxpayer subsidies are running at around £4bn a year.
The Association of Train Operating Companies welcomed the announcement, saying: "Although the level of flex has always been a matter of government policy, the reduction being proposed is in line with that suggested by train companies and should help to encourage greater rail use."
Manuel Cortes, leader of the TSSA rail union, said: "There is no action whatsoever to actually end inflation-plus fare increases.
"McLoughlin is merely offering to hold passengers' coats while they keep getting mugged every year by the same set of spivs – the private rail firms."
Mary Creagh, the shadow transport secretary, said: "Over the last three years David Cameron has failed to stand up for working people, allowing train companies to hit passengers with inflation-busting fare rises of up to 9%. Far from addressing his failure, this is cold comfort for commuters – it has taken 18 months, delivers fare increases of up to 6% and is too little too late."
Commuters in Scotland will be spared real-terms price hikes, with fares set to rise in January by 3.1%, based on the formula of RPI plus 0%. The Welsh new year fare rise has yet to be announced.
Source

Rail Project At Los Angeles Port Draws Environmentalists' Ire

Shipping companies report the volume of container shipments from Asia to the United States is rising. So are their rates. The world's largest freight line says thanks to high demand; it's boosting its trans-Pacific price by $500 per 40-foot container.

In California, a high-profile lawsuit is seeking to halt construction of a new $500 million rail yard next to the Port of Los Angeles. Activists, including a national environmental group that's spearheading the opposition, say the massive project would mean even more pollution for nearby neighborhoods that already have some of the worst air in the country.
The planned is part of a multibillion-dollar effort that aims to ensure that L.A.'s sprawling port doesn't lose business once the expansion of the Panama Canal is completed.
Combined, the side-by-side ports of Long Beach and Los Angeles handle almost half of all the consumer goods shipped into the U.S., and this clearinghouse of globalization takes up a lot of real estate.
Drive over the Vincent Thomas Bridge and stacks of blue and red cargo containers stretch for miles in every direction.
"Of course, when you come over the bridge it is unbelievable. We have so many terminals here," says Wally Baker, who is spearheading an effort with local unions called Beat the Canal. Job No. 1 is to get a new rail yard built a few miles east of the docks.
"We have a huge amount of capacity, and you would think that's going to be enough, but the reality is, it won't be enough." It's not enough, he says, to compete with a wider Panama Canal, which industry analysts say could send about 20 percent to 30 percent of the Port of L.A.'s business to the Gulf and East Coast.
"That's a big advantage — that you can take stuff off the ship, have it there in a couple of hours, build a train and go to Chicago, and you don't stop," Baker says.
Right now, most cargo has to be trucked offsite to rail yards 25 miles away, and in some cases, farther. "Sometimes when the traffic's terrible, we have to drive three, four hours to come back from San Bernardino to here, to the L.A. port," Baker says.
Jose Machuca is one of the thousands of truck drivers who move the freight from the ships to those rail yards every day. He thinks a new rail yard closer in is a good idea because shorter trips would mean fewer hours stuck in traffic and more money in his pocket.
"We like to work, eight, 10 hours a day but not 14, 16," Machuca says. "It's a lot."
But where people like Machuca or Baker see commerce and the potential for new jobs, others see a much bleaker scene if the rail yard gets built.
There are predictions that the rail yard would add up to 5,000 new truck trips a day, belching more diesel exhaust into air that's already polluted by ships, power plants and oil refineries. And that's at the heart of the lawsuits to stop the project.
"When something's wrong, you gotta stand up and say, 'This is wrong. We cannot allow it to move forward,' " says Angelo Logan, who runs a group called East Yard Communities for Environmental Justice. The group is joining with the Natural Resources Defense Council in one of the court challenges. He isn't buying the port and the city's promises that the new rail yard will be a green facility and help reduce pollution.
"It's like saying, 'Don't worry about it. It's a cigarette, but it's a filtered cigarette,' " Logan says.
Exhibit A for the opposition's case: West Long Beach, which lies just a couple of hundred yards from the proposed site. The working-class neighborhood is a mix of African-Americans and immigrants from Mexico. Here, have long found alarmingly high rates of asthma and cardiovascular disease.
At the Westside Christian Church, Veronica Guerrero, the wife of the pastor here, says she and her neighbors are well aware of the risks of living downwind of all this industrial activity. "But on top of that, we have this project that are trying to get closer to the neighborhoods than they already are. And that really bothers me. That really worries me," she says.
Whether the port can stay competitive is not Guerrero's concern. Guerrero says she and many of her neighbors feel powerless. Backers of the rail yard project, she says, can't appreciate their situation. "I have heard other arguments like, 'If you don't like it here, why don't you leave?' It's not that easy," she says.
So you've got locals talking about environmental justice, and the businessmen and unions talking about economic growth. And both sides have their own studies that show pollution increasing or decreasing if the rail yard gets built. One of the only certainties at this point is that the lawsuits will slow everything down.
And back at the Port of Los Angeles, Wally Baker says that sends the wrong message. "That it takes eight years or 12 years to get your project in place, and that somebody can sue you even though you did everything they wanted to do. You spent $40 million, and then somebody still wants to sue you," he says. "That's a really bad message."
Even without a court battle, the proposed $500 million rail yard wouldn't be built in time for the expected opening of the widened Panama Canal. That's scheduled for later next year, just about the time the Los Angeles project hoped to break ground.
Source

Why Is The Global Shipbuilding Business Struggling?

There's news this week that shipbuilder STX Finland will close what it describes as "the world's leading ferry builder," small cruise ships, icebreakers and naval craft.
The company blamed economic conditions for the closure of the Rauma Shipyard. Work from there will be shifted to the company's facility in Turku. About 700 people will lose their jobs.
"The anticipated volume of future demand is not enough to sustain two shipyards at STX Finland," the company . "The Turku Shipyard is able to build all types of vessels. The restructuring will not limit the company's offering or reduce the volume of its operations."
A Global Problem
The troubles at STX Finland mirror much of what's happening in the global shipbuilding industry.
The company is a subsidiary of South Korea's STX PanOcean, which . At the time, the company said a "combination of a sharp decline in freight rates, a delayed industry recovery, oversupply of ships due to an increased production at Chinese shipyards and higher fuel costs drove up debt and squeezed margins."
The problems aren't confined to South Korea, the world's second-largest shipbuilder.
Quartz about the difficulties faced by China's Rongsheng Heavy Industries, China's largest private shipbuilder. Here's more:

"China's shipbuilding industry as a whole is suffering a divergence of supply and demand — new orders fell 23% at the end of May from a year earlier and the ships that are being sold have fallen in price. To compound problems further, an ongoing liquidity crisis has diminished access to loans, squeezing shipbuilders even more."

up to one-third of the country's yards may close in five years amid a glut of vessels. China is the world's top shipbuilding nation.
A Cyclical Business
These failures come even as some companies continue efforts to build ever-larger vessels.
reported that Danish shipping line Maersk and South Korea's Daewoo are building the world's biggest boat — a gigantic container vessel that will travel between China and Northern Europe. Here's how the magazine described the project:

"The new class of ship is called the Triple-E, and Maersk has ordered 20, at a cost of $185 million each. They're 1,312 feet long, 194 feet wide, and weigh 55,000 tons empty. Stand one on its stern next to the Empire State Building, and its bow would loom over the heads of those on the observation deck; a single link from its anchor chain weighs 500 pounds."

But shipping is a cyclical industry, and, Bloomberg Businessweek says, it might be a while before anyone else builds ships this big.

"When the global economy is booming and trade healthy, shippers scramble to meet demand with more and bigger ships. But the time it takes to build them is just long enough, in many cases, for booms to end and global trade to sputter. As more and more new vessels come online, the glut exacerbates the collapse in shipping prices, the industry scales back, companies go out of business, and the process begins again. Somewhere in the trough of that cycle is where the Triple-E is being born. A year ago, according to the British shipping consultancy Drewry, it cost $2,900 to ship a container from Hong Kong to Los Angeles. Since then rates have dropped by a third."

A Glimmer Of Hope?
But it may not be all bad news for shipping, an industry that transports we buy.
Global shipping freight rates to their highest level in more than 18 months. The measure, known as the Baltic Dry Index, is seen as a key indicator of global economic growth. The index tracks how much it costs for ships to carry dry-bulk commodities such as iron ore and coal. It reached a peak in 2008, but collapsed in 2008 a record program of shipbuilding around the world.
The latest rise in the index was attributed to China's demand for iron ore, but analysts cautioned The Wall Street Journal not to read too much into the latest jump.
Source