Examination of Witnesses (Questions 80
WEDNESDAY 19 DECEMBER 2001
80. Out of 179?
(Mr Cahn) No. We have relinquished for this season
179 weekly slots and for the coming summer season we have already
announced that we will relinquish 132 weekly slots.
81. And you have got the total as well?
(Mr Cahn) But I do not, unfortunately, have the total
of our slot numbers, I will let you have a note on that.
Two-thirds of what you asked.
82. The break down of freight?
(Mr Cahn) Cargo was certainly badly affected.
Mr Donohoe: Is that scared to travel as well?
83. And the other factors I mentioned.
(Mr Cahn) I would certainly agree with you that foot
and mouth disease was a particularly major impact on our traffic
prior to 11 September and it is something that affected the United
Kingdom airlines and did not affect continental airlines. It is
noteworthy that prior to 11 September inbound tourists into countries
like Spain and France registered substantial percentage increases
and we were experiencing substantial reductions, I believe, of
the order of 10 per cent because of foot and mouth. We were coming
out of that, which after all by its nature was a temporary phenomenon,
a very important one but temporary, when we were hit by 11 September.
84. Does anybody else have freight figures?
(Mr Humphreys) Sorry, we do not.
85. I take the point Mr Wiltshire made about
an attack on the state, yet I think the most alarming thing was
that it was a civilian target, a civilian plane and civilian passengers
that really affected everybody. In writ10 evidence that we have
had from BMI they are particularly concerned that there should
be a co-ordinated approach to security across Europe. Does the
panel think that we have seen sufficient recognition of this through
the EU measures that have been proposed?
(Mr Wiltshire) We would agree with that approach and
activity is taking place in Europe. We would hope and wish that
well and a speedy confirmation. I believe there is a meeting due
in March of Ministers that should ensure that those standards
86. I am particularly alarmed to see an announcement
that 200 security officers, some of them are permanent, some of
them are temporary, are going to lose their jobs at Manchester
Airport. Is that a recognition of the fact that they are not expecting
as much charter holiday traffic from airports like Manchester
(Mr Parker-Eaton) I think this is a question that
you are going to have to address to the airports when they come
and give evidence. From our understanding of it, we do not believe
that there is any reduction in security efficiency because we
are obviously very concerned about that and have had assurances
from Manchester that they are reflecting the realities of Manchester
and the requirements that the Government has laid down for security.
The question really needs to be addressed to Manchester.
87. Mr Cahn?
(Mr Cahn) Chairman, I may be a bit slow but I do now
have some figures for cargo if you would find those useful.
88. It is very nice to have people with second
sight, Mr Cahn.
(Mr Cahn) British Airways does do everything with
a five minute delay. In September our cargo measured in cargo
tonne kilometres fell by 38 per cent, by October in cargo tonne
kilometres it was falling by 23.8 per cent. Obviously it is improving
but it is still a very, very substantial reduction.
Miss McIntosh: To Virgin, would you agree with
BMI that the Government should pressure the European Commission
to set a mandate to remove foreign ownership and control restrictions
in air transportation?
89. Now, there is a simple question, yes or
no, Mr Parker-Eaton?
(Mr Parker-Eaton) Yes, but it was addressed to Mr
90. Mr Humphreys, yes or no?
(Mr Humphreys) Yes.
91. In view of what we have heard about the
freight figures, could I ask easyJet, do you think in part their
figures have been so good, not just easyJet but low cost carriers
generally, because their percentage of freight is relatively less
(Mr Nicol) Absolutely. We carry an absolute fraction
in terms of freight, it is occasional newspapers on an occasional
route. The business model is built around not carrying freight,
not holding up the aircraft and getting them away quickly.
Mr Donohoe: How many slots are unused at present?
92. Mr Parker-Eaton is indicating none.
(Mr Humphreys) I am sorry, where do you mean?
93. Say at Heathrow, how many slots are unused?
(Mr Humphreys) Very, very few.
94. How is it possible in these circumstances
to have a 50 per cent drop?
(Mr Humphreys) What has happened is a lot of services
have transferred from other airports, particularly Gatwick to
Heathrow. There has not been the same reduction at Heathrow as
there has been at Gatwick.
95. Has there been any drop in Heathrow traffic?
(Mr Wiltshire) I think the drop in traffic reflects
a reduction in the load factor, in other words the number of passengers
on a flight rather than the number of flights.
96. To Mr Nicol, when you talk about your business
growing, it is my experience that there are people flying now
that never flew before and that is the mainstay of your business,
is that the case?
(Mr Nicol) It is not necessarily the mainstay. Certainly
it is true that if you offer fares at a significantly lower price
than people used to pay, you just get people saying "I will
not do my decorating this weekend, I will go to Barcelona".
It does happen, people who use to take a train will fly, people
who used to drive will fly.
97. What proportion of your business is in that
(Mr Nicol) I would say, over the history of the airline,
probably in the regionthis is slightly off the top of the
head but an educated guessof 50 per cent of the traffic
is new. It traditionally comes at the leisure end of the market
and people that might go and buy a second home in the South of
France, for example, because the flights are so cheap, and they
have never been able to afford it beforehand
Chairman: You are telling me a flight to Barcelona
is an alternative to a second home in France. Oh, I see what you
mean. You had me there for a moment, Mr Nicol.
98. On a general point, do you not think that
the airlines over reacted to the events of 11 September?
(Mr Humphreys) As far as Virgin Atlantic is concerned,
I do not think so at all. We identified the problem. We took the
corrective action. We have brought in outside financial advisers
to review what we did. Their conclusion was we did exactly what
was needed. The underlying business is viable, we have a long
term future, and unless we had done what we did that would not
have been the case.
99. Mr Cahn, different from that?
(Mr Cahn) Yes. I simply want to say I believe that
the crisis of 11 September was either one of or the most grave
crisis faced by the industry globally over the last 50 years.
The very fact that over 120,000 jobs have been lost in the industry
globally shows that. I think our reactions were swift, they were
appropriate. All of us have been focusing on making our businesses
effective and able to pick up the upturn when it comes, but it
was a remarkable and grave crisis at the time.
1 Note by witness: In the Winter 2001-02 season, 5369
slots are available at Gatwick between the hours of 0600 and 2200.
Following the recent return of a considerable number of slots
to the pool, British Airways now controls 1825 slots, representing
34 per cent of the total. These figures are applicable for the
peak week of the season, that is 11-17 March 2002. A further 980
slots are available between the hours of 2300 and 0500. British
Airways has one slot in this period. Back