Financial News

A third runway at Heathrow should be used to cut the "excessive" stacking of aircraft over the airport, according to a report published by MPs on Friday.

The transport select committee says a third runway would offer "a real opportunity to add resilience into the air traffic management system" and to help reduce the environmental impact of jets queuing in the skies waiting for a slot to land.

Louise Ellman, Labour MP for Liverpool Riverside and chairman of the committee, believes that if a third runway were to be built the government should set targets to cut stacking and the Civil Aviation Authority should be given responsibility to monitor delivery of the reforms.

The report says aircraft were "routinely" kept waiting above Heathrow, because the airport was operating at 99 per cent of its capacity from the existing two runways.

The issue of a third runway at Heathrow remains highly controversial. The project was approved earlier this year by the government, which called for BAA, the operator of Heathrow, to apply for planning permission to build both a third runway and a sixth terminal.

The Conservative party firmly opposes a third runway and has vowed to block the project if it were to win the next election, which is due to be held within the next 10 months. Members of the select committee themselves are split over the merits of a third runway at Heathrow.

The report on the use of UK airspace also expresses concerns about increasing aviation activity over sensitive areas such as national parks and areas of outstanding natural beauty.

MPs suggest the government should examine the case for adopting maximum limits on noise levels and on numbers of aircraft permitted to fly over such areas. The report supports moves by the European Union to rationalise European airspace and to reduce the number of national air traffic management providers, but it expresses concerns that the growing role to be played by the European Aviation Safety Agency rather than by national agencies such as the CAA "may tend to lower safety standards".

• British Airways (LSE: BAY.L - news) ' credit rating was downgraded on Thursday by Moody's for the second time this year, under pressure from the airline's sharply deteriorating financial performance.

BA lost its investment grade rating earlier this year, when both Moody's and rival ratings agency Standard & Poor's lowered its debt to junk bond status, as the airline faces a second year of losses.