Wednesday, 6 August 2008

Airlines axe 60 million seats. And Heathrow terminal 5 was built over
a stable oil price, and a big increase in travel, as the base assumptions
that made it viable.
Here's your sign.

Civilisation in denial, as Monbiot has been known to say.

Don't know why psychologists haven't done more papers about the
denial complex we have about the future.

The details from The Guardian

Costs of expansion The economic case for expansion calculates net benefits to the UK economy of £5bn over 60 or 70 years if a third runway is built by 2020 and if restrictions on landings and take-offs are lifted. The key to this argument is so-called generated user benefits, which estimate the value of flights that are created by extra runway capacity and are valued at £9bn. Without their contribution, the SEI report states, the costs of expansion would outweigh the benefits.
The £9bn figure is calculated by estimating the difference between the maximum fare a passenger would pay to travel through Heathrow and the lower fare they would pay if a third runway unleashed a fresh supply of cheap tickets. That figure is then multiplied by the number of new customers that an expanded Heathrow could attract.
However, the argument starts to look fragile if prices do not fall and more people do not fly, the SEI report adds. "If demand for flights is smaller than the DfT expects, or if airfare is higher (owing to increases in fuel prices, for example), then generated user benefits will be smaller, and so too will the total benefits of airport expansion," said SEI. The government predicts that the number of air passengers using UK airports will double at least from 228 million a year to between 460 million and 540 million in 2030, with the number of Heathrow flights rising from 480,000 a year to 702,000 if a new runway is added.
Passenger growth forecasts also came under attack. The predictions in the consultation document are based on a projected oil price that varies from $65 a barrel in 2006 to $53 a barrel in 2030, which in turn underpins predictions of low ticket prices that will boost demand for air travel.
The SEI report said the government is "strangely out of step with common predictions for oil prices", going against a futures market that predicts a price of $140 a barrel in 2016.

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