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Heathrow Spending $850M. On A380?  
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Posted (8 years 2 months 5 days 3 hours ago) and read 4188 times:

Just read that in a Forbes article. Can someone please reassure me that it's a misprint? Surely they can't be blue-ing that sort of money on an aeroplane that hasn't entered service yet, still appears to have several unsolved problems (like suspect wings), and is still only selling in 'market niche' numbers? I make that figure about 15 bucks for every man, woman, and child in the UK?

"Heathrow operator BAA is spending some $850 million to upgrade the airport to accommodate the A380 and other anticipated ultra-large aircraft of the future. Other work has included runway resurfacing, upgrading runway lighting and the construction of new taxiways.

"Douglas said the airport has widened and strengthened a runway to accommodate the A380, which has a list price of $300 million. New, larger baggage carousels also have been installed at Terminal 3 to accommodate the 555 passengers that can travel on the aircraft."


http://www.forbes.com/technology/feeds/ap/2006/05/18/ap2756312.html


"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
44 replies: All unread, showing first 25:
 
User currently offlineFlyLondon From United Kingdom, joined Feb 2004, 377 posts, RR: 0
Reply 1, posted (8 years 2 months 5 days 3 hours ago) and read 4172 times:

It might only be selling in "market niche" numbers but Heathrow is in that niche. As well as Virgin basing several of them at Heathrow, many of the other airlines that have ordered them are expected to fly them to LHR.

It's worth pointing out that of the $850m, much of it would have to be spent anyway simply to renovate Heathrow. Things like the new pier 6 for the A380 really needed doing regardless of the introduction of the new type.


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 2, posted (8 years 2 months 5 days 2 hours ago) and read 4133 times:

You mean the $850M. is CORRECT, FlyLondon?

How much does Heathrow clear per processed passenger? And how many A380 passenger arrivals per annum are they planning for? What is the estimated rate of return? By normal investment 'rules' they should be reckoning on at least an extra $70M. p.a. net revenue?



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlinePavlin From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 2 months 5 days 2 hours ago) and read 4120 times:

Worth meantioning that the Heathrow will see the most A380 service.

User currently offlinePlaneHunter From Germany, joined Mar 2006, 6714 posts, RR: 78
Reply 4, posted (8 years 2 months 5 days 2 hours ago) and read 4120 times:

Quoting NAV20 (Thread starter):
Surely they can't be blue-ing that sort of money on an aeroplane that hasn't entered service yet, still appears to have several unsolved problems (like suspect wings), and is still only selling in 'market niche' numbers?

Should BAA wait for all the upgrades until the first A380 circles around LHR?  eyebrow 

Quoting NAV20 (Thread starter):
I make that figure about 15 bucks for every man, woman, and child in the UK?

I don't think many in the UK would be shocked to hear that number, there are definitely other ventures for the British people to seriously think about...

Quoting FlyLondon (Reply 1):
It might only be selling in "market niche" numbers but Heathrow is in that niche. As well as Virgin basing several of them at Heathrow, many of the other airlines that have ordered them are expected to fly them to LHR.

 checkmark 

EK, QF and SQ will fly to LHR for sure, others like EY, KE, MH, QR or TG are likely to do so.

Quoting FlyLondon (Reply 1):
It's worth pointing out that of the $850m, much of it would have to be spent anyway simply to renovate Heathrow.

 checkmark 


PH



Nothing's worse than flying the same reg twice!
User currently offlineAerosol From Germany, joined Oct 2000, 556 posts, RR: 0
Reply 5, posted (8 years 2 months 5 days 2 hours ago) and read 4115 times:

+more people people shopping at LHR.

Some people know where the future of aviation is, some don't  Smile!


User currently offlineGman94 From United Kingdom, joined May 2004, 1239 posts, RR: 0
Reply 6, posted (8 years 2 months 5 days 2 hours ago) and read 4097 times:

Well BAA are loaded, LHR is just one big cash cow. Just one example of their spending power is that T5 is totally funded by BAA and no UK tax payer money has gone into the cost of building it and that's costing around $2.8bn, $850 is spare change for them. And as others have said LHR is the type of airport that the A380 was designed for, for BAA to not enhance the airport for the plane would be a disastrous business decision.

[Edited 2006-05-20 17:49:12]


British Airways - The Way To Fly
User currently offlineAndz From South Africa, joined Feb 2004, 8442 posts, RR: 10
Reply 7, posted (8 years 2 months 5 days 2 hours ago) and read 4064 times:
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JNB is spending ZAR 450m ($75m) and CPT ZAR 90m ($15m) on improvements just for the A380. LHR is more assured of 380 traffic than we are.


After Monday and Tuesday even the calendar says WTF...
User currently offlineFeroze From India, joined Dec 2004, 794 posts, RR: 3
Reply 8, posted (8 years 2 months 5 days 1 hour ago) and read 3991 times:

www.heathrowairport.com/a380

gives all the details of the work that has gone on at LHR to prepare for the A380, including Pier 6 at T3 which cost £105m (US$190m) alone.


User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 9, posted (8 years 2 months 5 days 1 hour ago) and read 3965 times:

Quoting NAV20 (Reply 2):
How much does Heathrow clear per processed passenger? And how many A380 passenger arrivals per annum are they planning for? What is the estimated rate of return? By normal investment 'rules' they should be reckoning on at least an extra $70M. p.a. net revenue?

Heathrow makes stupendous amounts of profit for BAA, $850m in improvements is a trivial figure especially when the vast majority of those improvements will benefit the majority of traffic regardless of type. Bear in mind that theres a tonne of work being done that would have been done anyway, regardless of the A380 - they are just doing it at the same time.


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 10, posted (8 years 2 months 5 days 1 hour ago) and read 3925 times:

Quoting RichardPrice (Reply 9):
Heathrow makes stupendous amounts of profit for BAA, $850m in improvements is a trivial figure.....

OK, RP, I admit that I'm old-fashioned. In my day, if you geared spending to likely increased turnover, and avoided waste, you maximised profits. Sometimes careful attention to that principle allowed you to reduce prices as well, and thus make those profits more secure. But, from what you say, times have changed, and you can justify excessive spending just by saying, "OK, it's a shitload of money for not much return. But if we hadn't decided to spend it on this project, we'd have spent it on something else anyway."



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 11, posted (8 years 2 months 5 days 1 hour ago) and read 3890 times:

Quoting NAV20 (Reply 10):
But, from what you say, times have changed, and you can justify excessive spending just by saying, "OK, it's a shitload of money for not much return. But if we hadn't decided to spend it on this project, we'd have spent it on something else anyway."

No, Im saying 'If they hadnt spent $850m (which is £500m) on the A380, you would have seen a fairly similiar figure being put into general improvements anyway'. Heathrow needs the investment, its a decrepid, paintpeeling, horrible place and investment has been a long time coming, with Terminal 3 (the focus of the investment mentioned) being one of the most needy.

The baggage carousells needed replacing which will benefit all passengers, A380 bound or not, the runway and taxiways gets a yearly resurfacing which would be done A380 or not. They are literally just bundling together a large number of tasks that needed to be done and putting it under the A380 banner.

The way BAA are marketing this is quite impressive, how else would they have got forums, analysts and industry journalists talking about what is essentially largely housekeeping and maintenance otherwise? By linking it to the A380, they get to capitalise on the press attention.

[Edited 2006-05-20 19:18:49]

User currently offlineAstuteman From United Kingdom, joined Jan 2005, 9975 posts, RR: 96
Reply 12, posted (8 years 2 months 5 days 1 hour ago) and read 3890 times:
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Quoting NAV20 (Thread starter):

FWIW BAA anticipate (even now) that by 2020 10% of all movements at Heathrow will be A380 or A380 sized aircraft.

(I think I've also seen a figure of 60 A380 movements per day within 10 years - others may be able to corroborate)

That's a lot of A380 sized A380's for the facilities to handle  Wink.

Quoting NAV20 (Reply 10):
"OK, it's a shitload of money for not much return"

I don't for one second believe BAA think this. The rules haven't changed, my friend. BAA is very much a profit chasing organisation

BTW, 60 A380 movements per day equals c11M passengers per annum  Smile

Regards


User currently offlineNewark777 From United States of America, joined Dec 2004, 9348 posts, RR: 30
Reply 13, posted (8 years 2 months 5 days 1 hour ago) and read 3879 times:

Honestly, I don't see what the big deal is. For an aircraft such as the WJ that's going to bring so many passengers and service into LHR in all the years to come, $850mil is probably reasonable. And even if they lose some money, one of the largest hubs in the world should still be able to accommodate one of the largest planes in the world.

Harry



Why grab a Heine when you can grab a Busch?
User currently offlineArt From United Kingdom, joined Feb 2005, 3379 posts, RR: 0
Reply 14, posted (8 years 2 months 5 days ago) and read 3850 times:

Quoting NAV20 (Reply 10):
times have changed, and you can justify excessive spending just by saying, "OK, it's a shitload of money for not much return. But if we hadn't decided to spend it on this project, we'd have spent it on something else anyway."

If you read the BAA info on the link, you will see that they are spending about $5billion on what they describe as a "revamp" of Heathrow. The $850 million cost they give to upgrade Heathrow for the A380 is therefore about 15% of what they are throwing at the airport. The BAA info does mention
- resurfacing runways (not A380 specific to me)
- strengthening runway borders for the A380
- widening taxiways for the A380
- building new taxiways
- upgrading runway lighting (not A380 specific to me)
but how that lot coupled with a new pier 6 (costing <$200 million) adds up to $850 million beats me in view of what I read below

Quoting Andz (Reply 7):
JNB is spending ZAR 450m ($75m) and CPT ZAR 90m ($15m) on improvements just for the A380


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 15, posted (8 years 2 months 5 days ago) and read 3833 times:

Quoting Astuteman (Reply 12):
BTW, 60 A380 movements per day equals c11M passengers per annum

Fair enough, Astuteman, I'd be the first to accept that it's a matter of opinion (even just gut feeling) at this stage. But how many airlines have to buy A380s and operate them into Heathrow to generate 60 movements per day? And, as I asked earlier, how much does BAA net out of each passenger?

By coincidence, too, from a different thread, another guy also named Tony Douglas is casting doubt on whether airlines will be much interested in A380s in light of the (now largely admitted) wake vortex problem:-

"Unless the interim rules are relaxed, an A380 carrying 550 passengers would use up the same runway capacity as two 747s carrying 800 people. Tony Douglas, managing director of Heathrow, said: “If the A380 takes two slots it would cause a problem and airlines might not want to use it.”

http://www.timesonline.co.uk/article/0,,2-2187526.html

Well, I'm assuming that it's a different Tony Douglas. It can't POSSIBLY be the same bloke who is spending lots of other peoples' money on accommodating vast numbers of A380s at Heathrow, can it?  Smile



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5363 posts, RR: 7
Reply 16, posted (8 years 2 months 5 days ago) and read 3833 times:

Quoting NAV20 (Reply 10):
But if we hadn't decided to spend it on this project, we'd have spent it on something else anyway."

They could have spent it buying out all those whiny NIMBYs in where? Houndsbreath? Something like that. THAT would have long term payoff.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineTrex8 From United States of America, joined Nov 2002, 4681 posts, RR: 14
Reply 17, posted (8 years 2 months 5 days ago) and read 3799 times:
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Quoting NAV20 (Reply 15):
It can't POSSIBLY be the same bloke who is spending lots of other peoples' money on accommodating vast numbers of A380s at Heathrow, can it?

if this were taxpayer money only , you may have a point - though I don't think a paricularly good one as taxpayer money gets thrown at all sorts of infrastructure projects, if its not taxpayer money, they can spend it any which way they want if they think its a good investment for their organization. which their bean counters obviously think it is, maybe they are wrong but time will tell.
fact is, the A380 is here and its not going away, it may well not be a financial success for Airbus but there will be sufficient numbers in the air that major international airports like LHR will need to cater for their presence.


User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 18, posted (8 years 2 months 5 days ago) and read 3778 times:

Quoting NAV20 (Reply 15):
And, as I asked earlier, how much does BAA net out of each passenger?

I dont have the exact figures and I have no links to back this up (it was explained to me by a BAA employee I was having coffee with a year or so ago), but per passenger costs taken from the airlines and average spend in the lounges comes out to something like £25.00 a passenger round trip, with extra costs being attributed to the aircraft itself. At Astutemans 11 million passengers a year figure, that works out to be about £275m for A380 passengers alone (at 60 movements a day).

Again, take the above figures with some salt, Im only going on what I was told in a discussion.


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 19, posted (8 years 2 months 5 days ago) and read 3767 times:

That's presumably the gross cost, RP? 15% profit on that would be good going. So say 40M. pounds p.a. net? If they ever reach 60 movements per day?

[Edited 2006-05-20 20:14:50]


"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineArsenal@LHR From United Kingdom, joined Mar 2001, 7792 posts, RR: 20
Reply 20, posted (8 years 2 months 5 days ago) and read 3729 times:
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The figure you quoted is in dollars, $850M = £452M, so that's the actual figure. Less than half of that £452M is being spent on A380 facilities, i.e gates, strengthening runways etc. I'd say it's money well spent, within a few years, LHR will see probably see more A380's per day than any other airport in the world.


In Arsene we trust!!
User currently offlineDavid_itl From United Kingdom, joined Jun 2001, 7360 posts, RR: 14
Reply 21, posted (8 years 2 months 4 days 23 hours ago) and read 3713 times:
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Quoting NAV20 (Reply 15):
. But how many airlines have to buy A380s and operate them into Heathrow to generate 60 movements per day

If we assume 6 VS flights , 2 EK flights and 1 SQ flight per day, that equates to 18 movements. Just need another 6 airlines that operate combined 21 flights (possible 4: QF for 2 flights?, MH 1, SA 1?). However, I would not be too surprised if SQ and EK operate more A380 flights to LHR than I've assumed by 2010; perhaps some of the current LHR-operating A380 "wait-and-see" airlines may have ordered some by then.


User currently offlineGDB From United Kingdom, joined May 2001, 13165 posts, RR: 78
Reply 22, posted (8 years 2 months 4 days 23 hours ago) and read 3696 times:

Not the best ever attempt to have a go, by proxy, at the A380.

Nice try, but in context, not quite so 'shock horror'.
As stated in several posts above.

Another 'old fashioned' view might be to consider how LHR had to upgrade for the 747.
Even without figures to hand, I can say with certainty, it was much, much more. In those, it was public money too. Tax £.

So the British taxpayer was subsidising Boeing? Of course not, the idea is stupid.

When this was being done, I guess in the 1968-70 period, were 747 sales greater than A380 so far?
Was it a given in the industry at this time that 747 would be a 'niche' , or would become a mainstay?


User currently offlineB742 From United Kingdom, joined Mar 2005, 3766 posts, RR: 19
Reply 23, posted (8 years 2 months 4 days 23 hours ago) and read 3674 times:

Quoting PlaneHunter (Reply 4):
EK, QF and SQ will fly to LHR for sure, others like EY, KE, MH, QR or TG are likely to do so.

Correct...
QR will be using their A380's to LHR  Smile
One of the main reasons they brought the A380's was for LHR  Smile

Rob!  wave 


User currently offlineAndz From South Africa, joined Feb 2004, 8442 posts, RR: 10
Reply 24, posted (8 years 2 months 4 days 23 hours ago) and read 3668 times:
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Quoting David_itl (Reply 21):
SA 1

I have it on good authority that SAA are not considering the 380.



After Monday and Tuesday even the calendar says WTF...
25 Pavlin : you don't know that. People would expect that American would need most A380 since they travel the most. Infact none has ordered passenger A380. And t
26 Post contains images Astuteman : I'm only quoting BAA figures on the assumption that they make investment decisions based on their knowledge of their business FWIW the only opinion I
27 Post contains images RichardPrice : Would I do a thing like that? Hell, my figures were a hazy recollection, why would I put any weight on yours.... :P
28 Leskova : Not really - the country is large enough to sustain multiple hubs, which scatters air travel enough to not require large planes. The same can not nec
29 Post contains images Leezyjet : I was also going to raise the point about the B747, but GDB beat me too it while I've been at work !!. Also don't forget that back then in the 60's, a
30 Finkenwerder : BAA is a private company and a very profitable one at that, I'm sure they aren't about to make any investments that won't bring good ROI. Just as a m
31 Post contains images NAV20 : Ah yes - I've seen my share of projects where people were 'confident that they will be profitable in the longer term', in both hemispheres. And playe
32 Post contains images Ikramerica : People, please, think for a minute. 60 turns a day (long term projection), but of a jet only 33% larger than the 747, means that we are really talking
33 Post contains images Lehpron : Pavlin said where not what. If people have the audacity to expect anything , they would know most people that travel in the United States do so on sm
34 Post contains images NAV20 : Even beyond that, Ikramerica, I expect that they were assuming that both BA and the relevant US airlines would buy the thing. Which doesn't look like
35 Cloudyapple : If you knew the list of things they have done or they are doing £500m is not a lot. For a start it cost roughtly 50% more to build or do anything in
36 Art : Interesting to see that your airport could be modified for A380 movements for
37 Cloudyapple : Remember if the likes of BA chooses B748s over A388s they wont be able to park them on the existing Code E stands without either some restrictions or
38 Cloudyapple : One more thing - technically speaking - B748s cannot taxi on Code E taxiways - clearance issues with stands - although this may be made an exception.
39 HZ747300 : Boeing has pitched the 748 as an aircraft which will not require major modifications as a replacement to the 744. I would be surprised if there are a
40 RayChuang : Most airports started to modify their airports for the 747 starting in the middle 1960's because everyone knew the 747 was the way to get more passen
41 Post contains links Ikramerica : This is very true, though B has a solution that involves restricting the gate next to you to a 777 or smaller. Thus you'd need to go 748 then 777/787
42 VV701 : Do you have to have any new baggage carousels? No. You can flag up your A380 flight on two adjacent carousels or use a single existing carousel and h
43 JayinKitsap : Heck, SEA was going to spend around $300M redoing the rental car area (and moving it away from the airport so shuttles would be required). That was un
44 Cloudyapple : That's exactly the problem. Every stand will have 3 Code E/F centrelines just a few feet offset from each other according to Boeing's solution. Add t
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