City airport may help others to take flight

Planning decisions always upset someone. Still, credit to housing secretary Angela Rayner and the transport supremo Louise Haigh for annoying all sides with one of the first from the new Labour government: allowing London City airport to lift its cap on permitted passengers a year to nine million from the present 6.5 million.
Their verdict hacked off Newham council, which has long opposed the airport’s expansion, leaving it “deeply concerned” over the noise impact on local residents. It angered environmental campaigners, with Greenpeace saying it’d “undermine the UK’s climate leadership”. And it even “disappointed” the airport’s boss, Alison FitzGerald, who wanted an end to the 24-hour flight curfew from 12.30pm on Saturday but failed to get it pushed out to 6.30pm.
Yet, despite all that, our “growth-focused” government has got this decision about right. To boot, it may offer some clues to its thinking over trickier airport planning applications to come — not least over Heathrow’s politically fraught third runway, a landing strip Britain has been failing to build since 1968.
Crucially, the City ruling does not permit new infrastructure. Nor does it raise the present 111,000 cap on the maximum number of flights a year. All that’s allowed at an airport that handled 3.4 million passengers last year is three more flights a day before 7am in the week. And then only if City adheres to what it calls “a UK airport first”: “a commitment that only cleaner, quieter, next-generation aircraft”, such as the Airbus A220 or Embraer’s E2 jets, can fly in this extended period. In short, City has been authorised to maximise the capacity it’s got, while minimising the impact on local residents. Isn’t that a fair compromise? True, it won’t satisfy Greenpeace. But a growth economy needs to fly and cannot wait until all planes run on sustainable aviation fuels. How, though, to make sure growth does least damage?
Britain isn’t short of airports. It has 50 regional ones outside London’s six: Heathrow, Gatwick, Stansted, Luton, City and, at a stretch, Southend. About 30, spanning Inverness to Exeter, take international flights. So shouldn’t the priority be to utilise regional capacity better, via airline and airport incentives if necessary, to minimise journey times to airports and spread the noise and air pollution around? Only then should ministers consider big new projects.
Here, there is a vast difference between the plans of Gatwick for a £2 billion second runway and Heathrow’s for a third, which could easily cost 15 times as much. Gatwick merely wants to bring its existing northern relief runway into routine use, lifting capacity to 75 million passengers by the late 2030s versus the 40.9 million handled last year. By contrast, the most recent “£14 billion” plan from
Heathrow, which is forecasting 82.4 million passengers this year, involved demolishing 750 homes, diverting five rivers and bringing Greater London to a halt by rerouting all 12 lanes of the M25. Labour has said it is “open-minded” to runway expansion as long at it meets UK climate, noise and air pollution targets and brings economic growth.
But even before debating whether Heathrow, with £16.7 billion of net debt, could afford to build a third runway, it’s hard to see it passing all those tests. A better solution perhaps? Lifting the cap slightly above its allowed 480,000 flights a year, but only for cleaner, quieter planes. City looks a template for the sort of expansion that could fly.
That’s one response to being jilted at the altar twice: go out and run up a $983 million loss. What dumped groom wouldn’t feel better after that sort of blowout?
Sadly, for the top bods at Wood Group, things are more prosaic. Chief executive Ken Gilmartin is only halfway into his three-year turnaround, but already he’s seen two bidders look at the books and scarper: first buyout firm Apollo, then private outfit Sidara, which a fortnight ago junked its mooted £1.6 billion offer at 230p, moaning about “rising geopolitical risks and financial market uncertainty”.
It means Gilmartin, now with a share price of 134½p, will have to deliver on his promises to revamp a group whose strengths, he says, are in “highly complex process engineering”: the likes of carbon capture or blue hydrogen projects.
Look at the headline losses and you’d wonder about progress, too. Yet the last half is more a testament to new finance chief Arvind Balan lopping $815 million off goodwill, now down to about $3.2 billion, and bottoming out losses from large-scale projects: another $140 million hit. Adjusted ebitda rose 8.5 per cent to $219 million, with margins up from 6.8 per cent to 7.7 per cent.
The issue for investors, though, is the lack of free cashflow — another $168 million outflow last half — at a group focused for too long on sales, not cash. Balan’s presentation included an “uncomfortable” slide, he said, showing Wood has missed cash guidance six times since 2022. His response? Incentives to focus workers on cash targets plus the elimination of “cash drags”, such as one-off charges and fines. The result? The top duo insist Wood will deliver “significant” free cash next year. Seeing is believing, but the shares rose 1 per cent. There’s still a chance a solo Wood works.
Another day, another low for Trump Media & Technology Group: now below $22 a share and almost halving since The Donald survived last month’s assassination attempt. Maybe the fall is linked to fears that with the lock-up expiring on September 20, he could start selling down his 60 per cent stake in a company, now valued at $4.3 billion. Yet, if it’s a proxy for his electoral hopes, there’s no missing the direction of travel.
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